MONEY AND CHAPTER I. THE PROBLEM. "Milton, thou shouldst be living at this hour; "How will the gold get into the currency?" is, just now, a question of considerable interest. It involves a good deal more than it appears to do at first sight. There is evidently some difficulty in the process. The old notion was, that new gold had only to appear in a country, and straightway it became currency, raising prices and producing other remarkable changes. Mr. Tooke, in his pamphlet of 1844, showed that old notion to be wrong; but he still never thought of denying that new gold might, and under some circumstances must, get into the currency, and make its appearance, whether as cause or effect, along with increased prices. This happened on a great scale in the sixteenth century, and, of course, might happen again; but the precise manner in which such a thing could happen has not been elucidated, nor any attempt made to show that a process which was easy in this country in the sixteenth century, when gold and silver were the whole of her money, is equally easy or even practicable in the nineteenth, when exchanges a hundred-fold greater are affected by a credit system so perfect, that, for some twenty years, England was able to part with nearly all her gold, and to enjoy very high prosperity B in its absence. It is plain just now that there is a hitch somewhere. We imagine it to be a sort of necessity that this gold, of which we have already so much, and of which so much more is yet to come, must find its way into the currency; that prices must, sooner or later, be doubled; that fundholders will have to lay down their carriages; and that Birmingham will attain the summit of human felicity; but however these things are to come to pass, it is certain that they will not come to pass either easily or very soon. For, first, we have the gold, and it does not go into circulation. We have no exact knowledge of the number of sovereigns in circulation in England, but we do know the number of one-pound notes in Scotland, which the people of that country, by a peculiar taste, prefer to the sovereign, though to the eye and to the touch of the English visitor, they are less agreeable than the bullion. Now, as the one-pound note circulation of Scotland does not materially increase, it seems fair to infer that the sovereign circulation of England, which must be subject to very similar influences, has suffered no important alteration. At all events, twenty millions in the Bank is a good round sum, full one-half of it being of no sort of use there. Why does it not move out, and make a beginning of those rising prices? It does not move out, and one may say does not show any tendency to do so. This, then, is a curious question. Our circumstances are wholly different from those which, in the end of the last century, depreciated in France the paper currency of assignats. The precise steps of that change have yet to be traced by careful historians; but even if they were known to us, they would only suggest, by a highly-foreshortened representation, that long perspective of deeper and more dangerous change which must be involved in any considerable depreciation of our own currency. This, then, would be a curious question, merely as a matter of scientific interest; and in this light it appeared to the present writer in the year 1847, when it suggested itself as a problem to be solved, in connection with certain conflicting theories of Bank management, and more faintly in 1844 as a preliminary to the settlement of a controversy respecting the laws of international exchange, between Mr. Mill and Colonel Torrens on one side, and Mr. Senior, representing the great body of free-traders, on the other. But now it is no longer a question of merely curious science, but a question of very practical and even urgent importance. What if that event, which seems with so much reason to be expected, should involve great changes in the distribution of wealth in England, enriching some, impoverishing others, prostrating often the best, exalting others not the best, breaking up innumerable old relations, and scattering disorder and obstruction over many of those ancient ways in which the life of England has so long loved to tread? This would indeed be much; but what if, beyond merely material changes, there should concur with them still deeper and more important changes of a moral kind, changes in the feelings, habits, and tastes of men, which would constitute that most awful of all events, a decay in the fibre of national character? This is, indeed, a question, the very thought of which is enough to strike us pale, and to make this hand tremble as it writes. But such things are not impossible. The descendants of those who fought at Marathon and Leuctra were the pliant sycophants and quacks upon whom, even in the corrupter days of Rome, a Juvenal could look down. Greater still, those same Romans, who practised, by a noble instinct, the stoicism which the Greeks only taught-who also, true prototypes of the English, knew both how to conquer and how to govern that great nation had for its representatives none but liars, swindlers, and cowards, in the days of Luitprand the Lombard. I cannot pursue this strain; it is enough to show that there is or may be here a question of far higher moment than any which divides our parties. I invite all honest men to its consideration; I think I can promise them that whether any clear solution of our problem be gained or not, their time will not be wasted. To you especially, youth of England, who, with clear intellect and firm will, at Oxford, Cambridge, London, or else where, are striving, by the highest culture, to become fit for the tasks of a future, yet lying bright before you in all the colours of hope; to you, heirs to an illustrious ancestry and a priceless inheritance ;-to you, to whom belong as your own both the Saxon and the Norman-the mailed crusaders and the peasant archers-the great churchmen and the great thinkers of the times which Mr. Digby has depicted as the "ages of faith,”— the riper and nobler glories of the Reformation-that Ridley and that Latimer, whose fire has been lit up in England, and shall never be extinguished-the wondrous galaxy of poets, statesmen, discoverers, and commanders of Elizabeth-the Falklands and the Hydes, and, nobler still, the Eliots, Vanes, and Hampdens;-to you, who are sensitive to all that was beautiful in the martyr Charles, who "Nothing common did or mean, Upon that memorable scene," and all that was grand in the character and career of his great destroyer; or to you, whose sympathies may be by choice with the men of later time, whether with either of the great rivals whose jar in the Senate " shook realms and nations ;" or with the heroes of charity and faith, the Clarksons, the Wilberforces, the Buxtons, the Wesleys, the Whitefields; or those purehearted outspoken men, brave in the midst of obloquy, the Prices and the Priestleys;-to you comes this appeal from one whom a singular destiny has led to dwell in turn upon each and all of these glories with loving admiration, and who can interpret much of your conflicting aims in this perplexing time, out of the conflicts and perplexities of his own experience. To you, English by birth, comes this appeal, from one who, though not born on the soil, is bound to it by the strongest ties of domestic affection-of friendships dearer than life-of a love which the meditations of years have continually augmented. It comes from one prepared, by long habits of lonely thought, to speak to you at this solemn time. Believe me, it is no common call. Here is no demagogue, seeking to kindle and then fawn upon the baser appetites-no leader, desiring to use you for his ambition-no turbid excitement for the hustings-no stimulant to party passions. All shall be clear and calm. The pulses of the national life already begin to beat with the fire of an old and well-known disorder. The flush is on the cheek, the unhealthy lustre in the eye. Each paroxysm of that malady, if not more painful, is always morally more destructive, than the preceding. There is too much reason to dread another. You are called, therefore, to a consultation, not, I trust, to one which is without hope-for the issue will rest mainly with yourselves-but to a consultation which concerns even the existence of whatever you hold most dear. The Problem stated. The immediate problem, then, is to determine by what steps the new gold can find its way, to any great extent, into the English currency. Such gold, when it arrives in England, must come into the hands of persons who will either seek to employ it as capital or to spend it as income. The course, then, must be, to determine what is capital and what is income; to see how the two are related, how far increase of one is connected with increase of the other; and, those relations being once made clear, to trace in what way the incoming flood of new gold may affect them. A man who is about to commence any industrial undertaking must first have his capital in the form of money. His income is also estimated by him, and spent in the form of money. The first step is to mark out, as accurately as possible, what is the actual and general acceptation of the word, and therefore its true meaning. I mean, then, by Money, not simply gold or bank-notes, but THAT, whatever it may be, which is money in the money market and on the Stock Exchange-money with the draper, the grocer, and the butcher. |