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
Catalogue details

Licence: Public Domain Mark

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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    can be improved. All we contend for is a currency convertible into gold on demand ; and that the convertibility shall be real and direct, and not a sham. To render convertibility real, we hold that there must he restriction on the issue of paper-currency. In 1840, Lord Overstone showed that the mere promise by bankers to pay gold on demand afforded no adequate guarantee for their being actually able to do so; and in his speech on the Bill of 1844, Sir Robert Peel demonstrated this fact by proofs unanswerable. It is an open ques- tion how the restriction may be imposed with the least inconvenience and the greatest advantages; but we repeat that, in our judgment, restriction is indispensable to ensure real convertibility. The present clamourers for suspension carefully conceal the facts that every commercial convulsion that has occurred since the re- sumption of cash payments in 1819, was preceded by two or three years of speculative excitement and over-trading ; and that the great sufferers were the imprudent persons who had engaged in these transactions, and their creditors. Their Magnus Apollo, Malachi Malagrowther, is an example of the class. Not satisfied with the large gains acquired by his splendid talents, he bought land, built a miniature baronial castle, and became bookseller and publisher, chiefly on borrowed money ; and when the banks declined to continue his supply of currency, he was forced to suspend pay- ments himself. What the opponents of the Bank Restriction Act appear to us to require is, a currency that shall give ardent men, who have little or no capital, a supply of it on easy terms; a cur- rency, moreover, possessed of the magic virtue of fostering produc- tion, and yet rendering over-production impossible: of enabling men to speculate rashly, and yet saving them from the consequences of miscalculation; a currency, in short, which shall enable them to disregard the laws appointed by Providence to regulate human { transactions, and still preserve to them all the prosperity which Divine Wisdom attaches to the observance of these laws. When the Chamber of Commerce and Mr. J. F. Macfarlan shall enable Parliament to furnish such a currency, we shall hail them as beings greater than men. [From the Scotsman of December 22, 1855.] In another column we have published a letter from Mr. W. Little on the Currency,* in which he approves of bank notes being made payable in gold on demand, but maintains that, “ in place of the present system of centralisation, wre want full and free competition all over the kingdom among bankers and money-lenders. With perfect freedom of action, all evils will finally correct and adjust themselves. Who can be so able to regulate the extent of liability or credit between lenders and borrowers as the person directly interested? .... If I prefer the security of a single person or * See Appendix.