PART I.

DANGERS.

"Take heed and beware of covetousness: for a man's life consisteth not in the

abundance of the things which he possesseth."

LUKE xii. 15.

MONEY AND

AND MORALS.

CHAPTER I.

THE PROBLEM.

"Milton, thou shouldst be living at this hour;

England hath need of thee."-WORDSWORTH.

"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