“In defiance of the punishments of the law,” added Mrs. Berkeley, again sighing.
“One would think,” observed her husband, “that there are crimes and misdemeanours enough for the law to take notice of, without treating as such contracts which, after all, are as much overruled by the natural laws of distribution as by the will of the contractors. It would be as wise to pillory by the side of a sheep-stealer, a man who sells potatoes dear after a bad season, as to fine a man for getting a little with his depreciated money, rather than get nothing at all. Your mother could tell you of something worse than any fine that has been inflicted for such a factitious offence.”
“Melea gives us up, I see,” said Horace. “She can never esteem us again, father, while we are aiding and abetting in circulating this horrible paper money. She would make a bonfire of all the bank notes in Great Britain as they are returned to the bankers. Would not you, Melea?”
“I do not see why I should run into such an extreme,” she replied. “If there were no means of limiting the quantity of paper money, I might speculate on such a bonfire; but if a moderate amount of bank notes saves the expense of using gold and silver, I do not see why the saving should not be made.”
“If white ware and glass answered all the purposes of gold and silver plate,” observed Fanny, “it would be wise to set apart our gold and silver to make watches, and other things that are better made of the precious metals than of anything else.—What do you suppose to be the expense of a metallic currency to this country, Horace?”
Horace believed that the expense of a gold currency was about one million to every ten millions circulated: that is, that the 10 per cent. profit which the metal would have brought, if employed productively, is lost by its being used as a circulating medium. This, however, is not the only loss to the country, the wear of coin, and its destruction by accidents, being considerable; besides which, much less employment is afforded by coining, than by working up gold for other purposes. Supposing the gold currency of the country to be thirty millions, the expense of providing it could scarcely be reckoned at less than four millions; a sum which it is certainly desirable to save, if it can be done by fair means.
“The metals being bought by our goods,” observed Fanny, “it seems to be a clear loss to use them unproductively. The only question therefore appears to be whether bank notes make a good substitute. They might, I suppose, by good management, be made sufficiently steady in value. They might, by common agreement, be made to signify any variety of convenient sums. They may be much more easily carried about; a note for the largest sum being no heavier than for the smallest. There is not the perfect likeness of one to another that there is in coins of the same denomination, but the nature of the promise they bear upon their faces serves as an equivalent security. As to their durability and their beauty, there is little to be said.”
“As to their beauty, very little,” replied Horace; “for, if a new bank note is a pretty thing, few things are uglier than a soiled, and pasted, and crumpled one. But, with respect to their durability, you should remember that it signifies little in comparison with that of a medium which is also a commodity. If a bank note is burned, the country loses nothing. It is the misfortune of the holder, and a gain to the banker from whose bank it was issued.”
“Like a guinea being dropped in the street, and presently picked up,” observed Melea.—“It is not lost, but only changes hands by accident. Yet it seems as if there must be a loss when a 100l. bank note goes up the chimney in smoke, leaving only that below with which children may play ‘there goes the parson, and there goes the clerk.’”
“Nay,” said Horace, “consider what a bank note is. What are the essentials of a bank note, Melea?”