Refutations refuted. A reply to pamphlets put forth in answer to "The currency question considered." / by George Combe.

  • Combe, George, 1788-1858.
Date:
1856
Catalogue details

Licence: Public Domain Mark

Credit: Refutations refuted. A reply to pamphlets put forth in answer to "The currency question considered." / by George Combe. Source: Wellcome Collection.

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    while the existing Banks are protected by the Act of 1844 in the enjoyment of this privilege, no new Bank, however extensive its capital, and no non-issuing Bank, however indisputable its security, is endowed with a similar prerogative. Farther, the Banks of issue, considered as a whole, are permitted to contract their issues un- represented by gold, at their own discretion, while they are absolutely prohibited from increasing them beyond the statutory limits, under any circumstances of monetary pressure. Mr. Haslam holds that the issue of paper money, like coining, should be a function of the State, and the profits of it appropriated to the national service. To withdraw the privilege of issuing notes unrepresented by gold is not to interfere with private rights or the freedom of trade. The issue of unrepresented paper money is, in its nature, essentially distinct, not only from the ordinary operations of trade, but of banking. “ The banker, in common with the merchant or manufacturer, derives his profits from the reproductive employment of his own capital, together with as much of the capital of his customers, as he can induce them to intrust to his care. But unrepresented paper money is not capital, and is no more the property of the banker or his customers, than it is of the merchant and manufacturer, or their respective customers. In effect, however, it. is equivalent to capital, and its employment is equally profitable; any transfer, therefore, of the profits arising out of its issue to a number of private individuals, is not only an act of injustice to all the rest of the community, but is a real source of injury to every banker or dealer in money, who is excluded from the enjoyment of the privilege. For it is clearly impossible for one who is limited to the employment of his capital and credit, to compete on equal terms with rivals who are thus authorised to operate, not only on their capital and credit combined, but also on a species of fictitious capital, which they are permitted to create at pleasure. And the only mode in which this injury can be successfully averted, is by securing the profits arising out of the privilege of issue to the general body of the community at lai’ge.” In this country, there are constitutional objections to investing the Government with the power of issuing paper money, and, there- fore, Mr. Haslam proposes that this should be accomplished by one distinct establishment, authorised and duly regulated by Act of Par- liament, and-, on the whole, he prefers remodelling and employing the Bank of England to discharge this function. The most essential features of his proposal are the following:—■ “ 1st. That the total paper issues of England and Wales be gradually concentrated in the Bank of England. “ 2nd. That the latter be required to render a fair equivalent for the exclusive privilege of issue in the form of certain Treasury charges to be imposed on the total amount of its unrepresented circulation—i. e. its circulation of notes unrepresented by bullion.