NotesNotes
1840. Delivered.Received.
May 1, £51,000£43,000
19,(Term)132,000173,000
26, 38,00033,000
Nov. 3, 38,00032,000
13,(Term)99,000138,000
27, 66,00042,000

There is also, we ought to remark, a considerable rise of the issue during the weeks which immediately precede and follow these terms. Now the same fluctuation occurs in every one of our banks, which about term-time are called upon to furnish accommodation to an extent of nearly three times their ordinary issue. No allowance was made in the act of 1845 for this inevitable expansion, and consequently the Scottish banker is forced to do one of two things. Either he must permanently hold during the whole year a much larger amount of gold than is necessary to satisfy the legal requirement for his ordinary over issue, or he must provide gold from London twice a-year, in boxes, which arrive sealed at his place of business, to be returned within a fortnight with the seals unbroken! Such is part of the absurd and ridiculous machinery, which it has been the study of Sir Robert Peel during half a lifetime to elaborate; and the practical result is, that nearly the whole of the gold required to balance the transactions of Scotland for the term weeks, is withdrawn from the ordinary circulation. Indeed, gold to the extent of the whole term payments would be required, save for the proviso in the act which allows the circulation to be calculated at the end of every week; but, as we have said already, the rise is gradual, not being limited to the term days, and for two weeks at least, the circulation, that is, the amount of the notes issued, is much larger than the ordinary average of the year. It thus follows that the bullion to represent the term issues, must either lie in the coffers of the Scottish banks, or in the hands of their correspondents in London, ready to be sent down whenever the appointed seasons shall arrive!

Here then is another drain, or rather suspension of a large proportion of our circulating medium, which has been most unnecessary. The Scottish public suffers from the want of accommodation; the Scottish banker suffers from the enormous expense which this juggle entails upon him; and the Englishman suffers by the gold which was formerly his currency, being kept in pawn at the period when he requires it most. Besides, it is well worthy of remark, and known to every banker here, that the circulation of Scotland during the year when the average was taken, had been reduced to its very lowest possible ebb. The frugality of the country, the extension of the branch banks, the efficient mode of interchange, and, above all, the interest allowed upon all deposits, were the causes which had led to this; and it seems now to be universally admitted by all writers on currency, that a more admirable and perfect system could not have been invented by the ingenuity of man. All this, however, has been overturned by Sir Robert Peel, to the great injury of Scotland, and the positive detriment of England; and had he succeeded in pushing his bullion theories further, and replaced the one pound note circulation in this country by the sovereign, a double amount of calamity would have been inflicted at the present moment. We entreat the attention of the English currency-reformers to this; for they may rely upon it, that the abolition and total repeal of the Scottish and Irish banking acts of 1845, without any new legislative enactment at all, would be an inestimable boon, not only to these countries, but to England, which is now compelled to furnish gold, which is neither used nor required, and so to cripple and impede materially her own circulation.

The hoarding, therefore, by the railway labourer, and the reserves nominally kept for the use of Scotland and Ireland, will account for the disappearance of a large proportion of the coinage from the circle. These are only primary causes of the scarcity, yet they are material elements in inducing that want of confidence, which, as we have already said, is the mighty evil that is now oppressing and bearing us to the ground. Whenever want of confidence is manifested, the circulation must farther contract. Joint-stock and private bankers, for their own security, maintain a large reserve of Bank of England paper and bullion, and there are always terrified persons enough to occasion a partial run for gold. We do not charge the bankers with impolicy in thus abetting the general contraction. Situated as they are, it becomes a matter of necessity to look to their own interests in preference to the accommodation of the public; but it is right that the public should be made aware of the mischief which is caused thereby. The results are surely patent to the apprehension of all. In proportion as circulation contracts, interest rises; and the wary capitalist, foreseeing the advent of the dark hour, realises while he can, in the knowledge that his money hereafter, when things are at the worst, will enable him to drive the most exorbitant and usurious bargains. This is the class of men for whom Peel has uniformly legislated, and it is they who, under our present miserable monetary system, must ultimately absorb the hard-won earnings of thousands of their fellow-creatures. They are not enemies of speculation—on the contrary, they fatten upon it. They strive for a time to stimulate industry to its utmost, and then use every exertion to depreciate the industrial result. Hard times are their harvest, and prosperous years their seed-time; and never, so long as they can hold it, will they relax their pressure of the screw.

The sacrifices of good solid property which have been made during the last few months, and which were occasioned solely by the baneful contraction of the currency, have been positively enormous. It is common to hear the capitalists remark with a sneer, that such is the inevitable result of over-trade and over-speculation. It needs no prophet to tell us, that the man who has not a farthing in the world can neither buy nor sell; and we admit that, in the present monetary convulsion, as in every other, much ripe fruit has fallen to the ground. But we deny that present prices have been the result of over-speculation. We maintain that, sooner or later, the country must have been brought to this unhappy condition, simply by the operation of these currency restriction laws; and if we are insane enough to allow them to continue, we shall inevitably be plunged into the same abyss, even though temporary measures should effect a temporary rally. It is calculated, and with great appearance of probability, that the depreciation which has already taken place, is larger than the whole amount of our national debt!

It is necessary that we should grapple boldly with the proposition, that over-speculation in our home works, that is, the expenditure upon the railways in progress, is the cause of our present embarrassment. In order to do this, we must have recourse to statistics, and we shall now lay before our readers tables exhibiting the state of our revenue and population, for two periods of five years each.

Year.Population.Taxation.Year.Population.Taxation.
181118,547,720£64,342,741184126,895,518£47,650,809
181218,812,29463,179,164184227,181,95545,978,391
181319,076,86867,189,287184327,468,39250,894,129
181419,331,44170,103,344184427,754,82953,069,245
181519,606,01571,372,515184528,041,26651,496,534
Total,95,374,338336,187,051 137,341,960249,069,108
Average,19,074,86767,237,410 27,468,39249,917,821

But, in addition to the taxes which were levied during the years 1811-15, there were loans contracted as follows:

Year.Loan.Year.Loan.
1811£19,143,9531841 Nil.
181224,790,6971842 ...
181339,649,2821843 ...
181434,563,6031844 ...
181520,241,8071845 ...
Total,£138,389,342 ...
Average,27,277,868

We thus arrive at the following results. About thirty years ago, with a population of nineteen millions, we were able to raise an annual sum of ninety-four and a half millions of pounds, whereof more than one-half was expended abroad in subsidies and the maintenance of an army, and little or none of it was returned in the shape of capital to this country.