112

NO. X.

CURRENCY.

Money is the measure of Commerce, and of the rate of every thing; and, therefore, ought to be kept (as all other measures) as steady and invariable as may be.-Locke's considerations of the lowering of interest and raising the value of money.

THE SUBJECT RESUMED.

THE foregoing abstract is given as containing the ultimate results of the labours of the committee of the Assembly of 1830, on the Currency of the Province.

In point of fact, that bill did not pass into a law. A bill more partial in its extent, and differing in its principle, was subsequently introduced into the Assembly, passed the Legislative Council, and received the Governor's sanction. The heads of this last mentioned bill we will give at the close of this paper.

The subject was about the same time taken up in the Legislative Council, and a bill was introduced to assimilate the monies of account and circulation of this province, to the monies of account and circulation of the United Kingdom of Great Britain and Ireland, and to prevent the falsifying, counterfeiting and impairing the coins thereby made current, and for repealing the acts and ordinances therein mentioned, which was referred to a committee, whereof the late Hon. John Richardson was chairman, and his name affords a sufficient guarantee that the subject would be fully, elabo

rately and ably investigated. The report signed by that gentleman, as chairman, bears date the 15th March, 1830, and is to the following effect :

"The committee reported that they had to enter upon the consideration of the matters referred to them, under circumstances inapplicable to the usual procedure upon bills when committed, and therefore some enquiry into the monetary system, and its relation to our circulating medium became necessary.

"That system has occupied the attention of men of first rate talents. Treatises and pamphlets without number have been written thereon; and before their authors could come to a conclusion upon the subject, facts occurred, which either overturned or shook their premises, and left the matter in as doubtful state as before they began their attempt to find a solid foundation for the superstructure which they intended

to erect.

"The bullion question in England was of this description, and the farther the committee thereon proceeded, the more unsatisfactory the result of their enquiries became, until, finally, opinions were entertained, and insisted upon, dianetrically opposite to each other.

"It is not for your committee to presume to think that they can throw new light upon a subject of such acknowledged intricacy, and wherein so many have failed of arriving at any thing like certainty.

"All they pretend to is to lay before the house a statement of facts obtained from the information of others, or from their own knowledge and consideration of the subject, with some observations thereon.

"Your committee thought it expedient, in order to assist the investigation, to frame a series of questions, to be submitted to several gentlemen, namely, the Commissary General, Mr. Freer, Cashier of the Quebec Bank, Mr. Simpson, Cashier of the branch here of the Bank of Montreal, Mr. Finlay, Chairman of the Committee of Trade at Quebec, Mr. Lemesurier and Mr. Leather, merchants, and Mr. Keys, a dealer in exchange."

The questions, and the answers thereto, are inserted in the appendix, exclusive of the questions No. 1 to 20, generally submitted; some others were sent to the Commissary General, which are also inserted therein.

"The following facts were obtained from parliamentary documents, to wit: that the pound Troy of the old British silver standard consists of eleven ounces two pennyweights, or 5328 grains of pure silver, and 18 pennyweights, or 432 grains of alloy, making 5760 grains in the said pound; consequently, an ounce Troy of standard silver contains 444 grains of pure silver, and 36 grains of alloy.

"This pound weight was coined into crowns, half crowns, shillings and sixpenny pieces, together equal to sixty-two shillings sterling, which is equal to 5s. 2d. sterling per ounce.

"A new silver coinage was made under the 36th Geo. III., cap. 68, whereby, without altering the standard, as to the proportion of pure silver and alloy in the pound Troy, it was divided into 66 shillings, or 5s. 6d. the ounce, instead of 5s. 2d., as before, consisting also of crown, half crown, shilling and sixpenny pieces; and thus making an intrinsic difference of value between the old and new silver coinage, of about six and a half per centum.

"The standard of British gold coin is 22 carats fine—that is to say, any quantity of gold is divided into 24 parts, 22 whereof are of pure gold, and two of alloy. Portugal and United States gold coins are of the like purity, or nearly so; Spanish and French gold coins have a greater proportion of alloy.

"An old British crown contains 430 grains of pure silver. "A new ditto ditto, 404 ditto.

"A Spanish and a United States dollar, as found by assays at the British mint, contain each 370 grains and a small fraction of a grain of pure silver.

"Republican and Imperial Mexican dollars are about two ounces per one thousand dollars heavier, and

"The weights of the coins, as above, were ascertained by actually weighing the quantity thereof so specified, respectively taken at hazard.

"From those assays and weights, it is found that at the old standard of 5s. 2d. sterling per ounce, an old crown is

worth 5s. sterling, and a dollar only 4s. 3d. sterling; so that a dollar at present passes for about 4 per cent. beyond its intrinsic worth.

"By the new standard, or coinage, of 5s. 6d. sterling per ounce, a new crown is made 5s. sterling, whilst it is intrinsically worth, according to the old standard of 5s. 2d. per ounce, only 4s. 84d. sterling, being 34d. under its nominal value; whereas, in the proportion of that nominal value, a dollar would require to be 4s. 7d. sterling, or 33d. beyond 4s. 3 d. sterling, its intrinsic worth by the said old standard. If the dollar was established at 4s. 2d. sterling a new British crown would intrinsically be worth only 4s. 6d 3-5 sterling, which in the ratio of 4s. 2d. to 4s. 6d. the present par value of a dollar would be equal to a premium of eight per centum.

"The new silver coinage being, as above said, about 6 per centum inferior to the old standard, and 21 per centum being, as after mentioned, the expense of the silver coinage, it is matter well worthy of consideration whether the difference be beyond a fair premium or inducement, to give preference to a national over a foreign coin, and thereby contribute to its remaining in the country.

"Mr. Muschet, an officer of the British mint, in a pamphlet written by him about the time of the Bullion Committee, states, that the expense of the British gold coinage is one and a half per centum, and of the new silver coinage, two and a half per centum.

"If the money of account and circulation were changed to sterling, the rule of conversion from the present currency would be, if the dollar were reduced to 4s. 4d. sterling, a deduction from the present value thereof of 2-15ths, or an addition of the new value of 2-13ths, or if the dollar was made 4s. 2d. then the deduction would be 1.6th or addition 1-5th part.

"It is an admitted principle that the real par of exchange between different countries, whatsoever the denomination of their coins may be, is the relative proportion of pure gold and silver contained in the coins of those countries, respectively compared with each other, and according to theoretic reasoning, the premium or discount upon bills of exchange should only be what would cover the expense of conveyance of portions of the precious metals from one country to another, insurance thereon, and commission inclusive, and adding somewhat more, for avoidance of trouble. Theory also says, that the rate of exchange will be regulated by the disproportion between imports and exports, as also by the drain occasioned by the means afforded by one country being expended in another.

"All this, however, is contradicted or rendered doubtful by facts. During the long and eventful war consequent upon the French revolution, Great Britain furnished heavy subsidies to other nations, whereby very large sums of money, raised in the United Kingdom, were sent and expended abroad; and the exchange being then almost uniformly greatly against us, the Bullion Committee ascribed the very unfavourable state of the exchange to those subsidies.

"Since the general peace the exchange has almost uniformly been in favour of the United Kingdom, whilst it is notorious that inhabitants thereof, residing or travelling in foreign countries, have expended there, from British sources, according to well grounded estimates, ten millions sterling annually, being above threefold the amount of monies sent abroad for subsidies in any one year.

"This, indeed, is inexplicable, and has confounded the most extensive and acute money dealers who are unable to assign any good reason for a fact which overturns all previous theoretical calculation upon the subject.

"All this proves that it is impossible to regulate exchange by statute, or by affixing a specific value to coins, permanently to control the rate of exchange. Such specific value may have a temporary effect, but the exchange must, and will in the end, regulate and find its level, by a combination of circumstances beyond calculation, and not susceptible of previous ascertainment.

"In all countries, however, there must be some fixed standard of reference, as to value, whether it be in the shape of a guinea, a sovereign, a crown or a dollar, or under any other denomination. In Great Britain, the general standard is gold; in some other countries silver.

"In the United Kingdom, there is no seigniorage upon gold coin, the nation defraying the expense of the coinage thereof; so that an individual carrying to the mint a quantity. of standard gold bullion, will receive an equal weight in coin, but it is not so in most other countries. The British mint price of gold is stationary at £3 17s. 10d. sterling per ounce Troy of the standard above mentioned, of 22 carats fine. A guinea from the mint weighs five pennyweights nine and one-third grains; and a sovereign, five pennyweights three and one fourth grains. This, however, does not always regulate the price of gold bullion-at least it did not sowhilst the prohibition of export of British gold coin existed. -When the price of gold bullion exceeded the mint price