The currency question : considered in relation to the Act of the 7th & 8th Victoria, chap. 32, commonly called the Bank Restriction Act / by George Combe.

Combe, George, 1788-1858.

Date:: 1856

Credit: The currency question : considered in relation to the Act of the 7th & 8th Victoria, chap. 32, commonly called the Bank Restriction Act / by George Combe. Source: Wellcome Collection.

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$be payable, not in securities, but in dollars. The bankers had neither gold nor silver; and those who had pledged stocks and given mortgages for their issues, told the holders that the Comptroller held securities, and that the notes were perfectly safe, and equal in value to dollars in hard cash. Jonathan, however, could not believe this, for two reasons, which bear directly on our present circum- stance, and which we shall state in the course of some further remarks we intend to offer on the subject. \_From the Scotsman of November 24, 1855.] In speaking on Wednesday of the present aspect of the Currency question, in relation to the recent strange resolutions of the Edin- burgh Chamber of Commerce, we used as illustration the experience of the United States, and brought up the narrative to the point at which Jonathan found that the banks could give him neither silver nor gold for the notes, but referred him to the amount of “ securi- ties,” such as state stock and mortgages, which they had deposited in the hands of the “ Public Comptroller.” Let us now see the two reasons—reasons bearing closely on our own circumstances at this moment—for which Jonathan found himself unable to believe these assurances: — 1st. He found that bank notes secured on property situated in one state did not command confidence in another. In like manner, bank notes not payable in specie, but secured on Scotch property, would not command confidence in England and Ireland, and vice versa. 2ndly. Jonathan had bought to a larger amount than he had sold in the markets of Europe, and he discovered that nobody in Europe would receive his bank notes, secured or unsecured, in pay- ment of the balances due by him. In a similar way, bank notes not payable in gold, but secured on property situated in Great Britain, would not be received as currency in France, Germany, the United States, Italy, India, and China—(the notes of the Bank of England are now received by the money-changers and the bankers of the Continent only because they are payable in gold). When, therefore, Britain owed a balance to these nations, or wished to buy from them at a time when they did not desire to buy from her, if she had nothing to offer them except bank notes not payable in gold, but only secured on British property, her commerce with them would come altogether to a close. We have not yet, however, exhausted the American experiment. The enormous rises in the prices of goods and property of every description, consequent on the issue of bank notes, led the merchants of the commercial ports of the United States to give very large orders for goods in Europe. At the same time, these extravagant prices deterred the European merchants from buying largely in the American markets. The consequence was the creation of a large balance due by America to Europe. The American bank notes were$