Illustrations of political economy, Volume 5 (of 9)

by Harriet Martineau

When Enoch had been brought to give a shy promise that he would look in at the widow’s at spare hours, Hester was hurried home and to rest by her happy mother.

“How fagged you must be, my dear!” she cried, as she saw her daughter stopping before some palings, and supposed it was to rest.

“Very little indeed,” replied Hester. “This mignionette smells so sweet in the night air, I must try whether it is not within reach. That in my window at home is always either black with smoke or brown with dust: and what is dew in London?”

So saying, she stole a few sprigs through the paling, promising to call and confess the next day.

“I am so glad we went out!” said she, at bed-time, cherishing her mignionette till the last moment before putting out her light. “It would have been a pity to lose one whole evening out of a single week.”

“And will you stay no more than a week? We shall not let you go so soon as that, I rather think.”

Hester kept down a sigh, hoped that Edgar’s indulgent mood might last, and went to sleep to dream that she was called home the very next day.

Chapter II.
THE WIFE’S HOLIDAY

So complete a revulsion in the affairs of individuals had taken place throughout Haleham, that it would have been surprising if, while all other people were busy talking about the state of the currency, the Haleham folks had not been pre-eminently occupied with it. A grand crisis was thought to be at hand, and those who had profited and those who had suffered by past changes were equally eager, the one party to look forward, the other to look back, in order to gain some degree of insight into their state and prospects. All had dearly purchased the knowledge that bank-paper is not all alike, however carelessly one sort or another may pass from hand to hand. Everybody in Haleham now knew the difference between a paper currency that depends on confidence, and one that rests on authority. Both are in fact circulating credit; but the credit of Bank of England notes is avouched by government authority, and that of private banks rests only on private confidence. It was pretty clear that confidence had been in both cases betrayed. The Bank of England had not wisely regulated its issues, and had thereby impaired the sanction of government authority. Cavendish had acted knavishly, and thus injured commercial credit. Out of the evils of the system it arose that the honourable, and (at the time) solvent firm of the D—— bank had stopped, and been thus compelled to aggravate the decline of public confidence. The consequences of these shocks tended to ruin the classes who had kept their ground during the former alterations in the currency, while they could not be said to repair former injuries. Some people were at first very ready to say, that the sudden reduction of the quantity of money was a fine thing, because all who had suffered from there being too much would now win back again what they had lost; but this was soon found not to be the case, so far as to make the new change anything but an evil. In many instances, the suffering parties had suffered beyond the reach of reparation. Besides those who had died, and those who had failed, and those who had mortgaged and sold their property, there were multitudes whose contracts (originally advantageous and ultimately ruinous) had expired; and multitudes more whose loss of credit precluded them from sharing the advantages of a change in the amount of currency. Nobody had suffered more in proportion than the owners of house property, during the superabundance of money: but they did not profit by the reduction of its amount, for it was difficult to let houses at such a time of wavering credit; and house-rents fell with the prices of other things. All who had incurred debts through the previous rise of prices were injured anew by their fall; because, though their income might be increased, their debts were increased in the same proportion; and the injury outweighed the advantage by so much exactly as the debts exceeded the portion of income which was spared from consumption to pay them. A capricious good fortune attended those who had just made new contracts; but this was at the expense of the other party to the contracts. Annuitants and stipendiaries were richer than before, and thought it all very fair, in return for their season of adversity; but the productive classes felt it to be very unfair: and this very difference of opinion and feeling, by giving a new shock to mutual confidence, destroyed the partial advantages which might otherwise have arisen. Thus, while manufacturers, who had bought their raw material dear, and now had to sell it, in its manufactured state, cheap, pointed enviously to the owners of the houses they dwelt in, those owners would have been glad if things had remained as they were, rather than that they should have the prospect of lowering their rents, or having their buildings stand empty. While the shopkeeper, who had bought his stock dear, and was now selling under prime cost, was grumbling at his physician’s fees, the physician would have been well pleased to buy as little as formerly with his guineas, on condition of having as many patients. They declared that the present was a fine harvest-time for quack doctors; and that the undertakers were likely to profit by the numbers who killed themselves, or let themselves die, from not being able to afford a doctor. Few were contented; and the content of these was of a kind to impair and not strengthen the security of society; for it did not spring out of the recompense of toil and prudence. Their prosperity seemed to come by chance, and had therefore no good effect on themselves or others: while it weighed light in the balance against the evils which the same revulsion brought to ten times their number. One action on the currency, all wise men agreed, is a tremendous evil. A second, though of a strictly antagonist character, can be no reparation, but only a new infliction; and a third, if any one could harbour so preposterous an idea for a moment, can only augment the confusion, and risk the entire forfeiture of public faith,—the annihilation of commercial credit.

At the then present time, in 1818, it was no longer a question whether a change should or should not take place. The change was perfectly involuntary. It had already taken place to a large extent, as the natural and unavoidable consequence of the previous action on the currency. The over-issue of former years had caused a tremendous destruction of bank-paper, and had made all banking firms cautious about issuing more. Whether there should be a reduction of the quantity of money was, therefore, no more a matter of debate. There had been, in two years, such a reduction as had raised bank-paper to within 2½ per cent. of the value of gold. The only question was, whether advantage should be taken of this existing reduction to oblige the Bank of England to return to the old system of convertibility. Many who had prophesied for years that the Bank of England never would return to cash payments, persisted still that it was impossible. Others, who believed that to have plenty of money was to have plenty of everything, protested that the privilege of inconvertibility ought to remain. Others foretold a dreadful increase of the crime of forgery, and did not perceive that there would be a proportionate decrease in that of coining, and an end to the offences of melting and selling gold coin. Not a few prepared themselves to forget their chronology, and to declaim in future years on the effect of the return to cash payments in impoverishing half the traders in the country; as if this return had not been the consequence instead of the cause of a reduction in the quantity of the currency. Some who had been concerned in procuring the Restriction Act, and had borne their share in that measure with fear and trembling, were now not a little astonished to find that one party of debaters took what they had meant as merely an unavoidable expedient to be a permanent improvement in the currency system; and that they regarded the return to cash payments with an evil eye, not only as inflicting immediate hardship, but as a going back from an enlightened to a barbarous system. If all had thought like this party, the originators of the Restriction measure might have spared themselves their scruples and apprehensions in introducing a state of things during which light guineas were worth more, in a legal way, than heavy ones; during which men were tried, convicted, and punished for getting less in exchange for a heavy guinea than they might lawfully have gained for a light one; during which there was no measure for proportioning the amount of the circulating medium to the quantity of commodities; during which the most tremendous and incessant fluctuations of price might take place without any check; during which the commercial credit of the whole nation rested between the hands of the Directors of the Bank of England. Some of our legislators thought that nothing but a desperate state of affairs could have warranted the adoption of so desperate an expedient; and were simple enough to think that the sooner it could be obviated, with safety to public credit, the better; and they would have been amused, if they had not been shocked, at hearing that the state out of which the currency was then able to emerge, was actually better than the system of security by checks which they now wished to substitute.