Joseph Theodore Harris

“ One can imagine the enthusiasm and the satisfaction with which the majority returned home. One anticipates a triumphant report in the Bailiff's best vein; and expects that the banks will in future have to confine themselves to the operations permitted to English banks, while the States restore equilibrium by causing the withdrawal of superfluous notes and confining future issues, once again entirely in their own hands, to quantities proportioned to the needs of the island.
With surprise, the subsequent proceedings are found to be on quite different lines. Truth is stranger than fiction. ”

“ Instead of paying interest on a loan (to be levied, perhaps, as an income tax on incomes over a certain minimum) they unwittingly chose to pay more for their bread and butter. The seriousness of this possible result lies in the definitely ascertained fact that salaries and wages rise more slowly, and usually to a smaller extent, than the prices of commodities.
Now, which of these speculative explanations is the true one does not greatly matter to-day when all the consumers, rich and poor, are dead and gone. What does concern us is that we should not misconstrue the Guernsey example. ”

“ There are many persons who have heard from one source or another of the way in which the States of Guernsey built their Market House by means of non-interest-bearing notes. Some of these—enthusiasts for the reform of the currency—can dilate for hours on the wisdom of the financial policy of Daniel de Lisle Brock, can tell how, at the opening of the Market he "sprinkled the packages (of redeemed notes) with perfume, and while the band was playing a dirge he laid them on the fire, where they were quickly consumed," and can even quote from his famous speech on that occasion. ”

“ Now is the time to ask the proprietors themselves and ascertain whether in starting a bank they ever had the intention of letting it work to the detriment of their country? The public Treasury is the heart of the State—did they ever wish, do they to-day wish to strike it with a dagger? ”

“ The States are on the defensive, and such war is just and inevitable if any war is. It is, moreover, a war in which all the inhabitants who are the friends of their country will eagerly unite for the defence of the States in their just rights—thus united they will defend them with complete success. For this purpose the States will doubtless appoint a Committee with the fullest powers to propose, in case of need, measures which may ultimately become necessary. ”

“ What advantage can they pretend will accrue to the public from the loss of its currency and the possible depreciation of their paper? These general reflections will find their application. Let no one exclaim against the possibility of the supposed danger. The wealth of the present stockholders of our banks is well known, their names suffice to inspire the greatest confidence; but apart from extraordinary events, the ordinary casualties of life may bring about in a short time the change of all these names, and there may remain in their place only men of straw. ”

“ The new roads were opposed by the far greater number of those who were to derive the most benefit from their use, and who from experience are now clamorous for more. The Market was only voted the third time it was offered to the consideration of the States, although it was represented that independently of its various advantages, it would in a short time permanently add to the revenue. Experience has proved the correctness of that view of the question, and opening the eyes of the public, has turned their sentiments of fear and distrust to one of perfect confidence. ”

“ Doubtless evil is close to good: the abuse of the best things is always possible. Is this a reason for forbidding the use of what is good and profitable? Is it not better to procure it as soon as possible whilst availing ourselves of the means at our disposal to avoid its abuse? Whilst these means are employed, and so long as the income is sufficient, there is only one possible danger—that of allowing the time for meeting these anticipations to pass without paying them, and thus of seeing the debt increased by the amount of the non-cancelled obligations. ”

“ The state of the finance was not more consolatory with a debt of £19,137, and an annual charge for interest and ordinary expenses of £2,390, the revenue of £3,000 left only £600 for unforeseen expenses and improvements.
"Thus at the peace, this Island found itself with little or no trade; little or no disposable revenue, no attraction for visitors, no inducement for the affluent to continue their abode, and no prospect of employment for the poor." ”

“ It should recognise that, as regards the circulation of paper-money, the States have, for a long time and for the common good, been in possession of the ground which it seems to wish to invade, which, however, it cannot occupy without injustice.
"Every war, it is said, ends where it should have begun—in peace. I am firmly convinced of this truth; and experience has shown me that in civil life as in political, war might almost always be avoided to the great advantage of both parties, and that lawsuits, like wars, have for end rather the injury of the adverse party than good to oneself. ”

“ If they are of opinion to name a Committee that shall be authorised in a special manner to defend the rights and interests of the States, and of the public:—to do their utmost by every conciliatory measure in their power, and above all, to agree to an arrangement that shall screen the States from all interruption in the circulation of their Notes, which have been issued for the benefit and advantage of the public, with the design of gradually diminishing the number annually. ”

“ Those who wished to traffic on the public property were in fact laying a tax on that public, for they were diminishing, by so much as they forced States' Notes out of circulation, the public revenue, for if the States, in consequence of a diminished revenue by the effect of Bank paper, have to make loans, those loans must in the end be repaid by the public—which would be a taxing of the public for the benefit of private individuals. ”

“ No wonder, therefore, if emigration became the object of the rich in search of those good roads, carriages and other comforts which they could not find at home, and the only resource of the other classes, whose distress was likely to be aggravated by the non-residence of the former. Misery and depopulation appeared inevitable, from the peace to the year 1819 inclusive, more than five hundred native and other British subjects embarked for the United States, and more prepared to follow. ”

“ Not a vehicle, hardly a horse kept for hire; no four-wheeled carriage existed of any kind, and the traveller landing in a town of lofty houses, confined and miserably paved streets, from which he could only penetrate into the country by worse roads, left the island in haste and under the most unfavourable impressions. ”

“ Unfortunately we do not know how prices behaved to the Guernsey housekeeper between 1815 and 1837. Perhaps another student will look this up. What is interesting to us in this argument is the fact that, if prices generally did rise, in consequence of the issue of the paper money, even by only one half-penny in the shilling—if eggs, for instance, sold twenty-four for a shilling, instead of twenty-five—this represented a burden laid on the Guernsey people as consumers, exactly analogous to a tax (say an octroi duty) of four per cent. on all their purchases. ”

“ With these facts before our eyes we must realise the necessity of limiting the issue of paper money to the needs, the custom, and the benefit [Pg 47] of the community in general. Permission cannot be granted to certain individuals to play with the wealth and prosperity of society, to take from it its hard cash and to give it in exchange rags of paper. What incentive can they offer to persuade the public to give up to them valuable bills for worthless ones, certainty for uncertainty? ”

“ If there is one incontestable principle it is that all matters relating to the current coin of any country have their source in the supreme prerogative, and that no one has the right to arrogate to himself the power of circulating a private coinage on which he imprints for his own profit an arbitrary value. ”

“ It is said, the powers of the human mind in society lie at times torpid for ages; at others, are roused into action by the urgency of great occasions, and astonish the world by their effects. This has, in some measure, been verified in this Island, for though nothing done in so small a community can cause a general sensation, its exertions may yet produce wonderful results, within its own sphere. ”

“ The right of levying the duty on spirituous liquors is granted for ten years: a condition is annexed purporting that the States shall not exceed their annual income, and on the contrary that out of the produce of the duty, one thousand pounds shall be applied annually to the extinction of the debt; that condition is naturally in force for the same period, and for the same period only, as the grant to which it is annexed ”

“ The leader of the [Pg 24] same issue of the Gazette states that "the generality of the inhabitants have confidence in the States' Notes (it being always understood that the issue of Notes shall be kept within just limits) because they know that the whole property of the island forms the guarantee for their payment."
"Campagnard" in the Gazette of 28th February, 1829, suggests the need of some other currency than States' Notes for trade in France or with London and Paris, but feels alarm at anything that might stop the public works in the island. ”

“ The advantage resulting from all these improvements has not been confined to their utility, or to the increased activity given to industry, and the circulation of money by the public expenditure: they have excited in all classes a similar spirit of improvement, which displays itself in the embellishment of the premises already built upon, and above all in the number of handsome dwellings since erected. ”

“ In the Markets and Fountain Street, the States have undertaken works essentially necessary. The cost might be supposed to exceed the means of the States, if credit did not in the first instance furnish the chief expense without the charge of interest, and if the works themselves did not provide for the extinction of the engagements incurred. ”

“ This was a much needed improvement. "Humanity cries out, every Saturday," reports a States Committee, "against the crush, which it is difficult to get out of; and every day of the week against the lack of shelter for the people who, often arriving wet or heated, remain exposed for whole hours to wind and rain, to the severity of cold and to the heat of the sun."
A Committee, appointed 12th April, 1815, to consider the question, having brought in a scheme for enlarging the Market, recommended the issue of State Notes. ”

“ In the Town parish alone 401 houses have been built since the year 1819 at an expense of upwards of £207,000, and few towns do now present a more animated scenery around them, or one where ornament and comfort are more generally united; the same comfort and improvement are witnessed in every direction, and at the greatest distances from town. ”

“ In 1826 we find the first trace of opposition which gradually grew and grew until, as we shall see later, it was decided in 1837 that the States should not issue any more Notes.
Whether the opposition was entirely due to this financial system as such is open to question. Errors of judgment with reference to the Fountain Street improvement may have been made. Self-interest on the part of some may have been one of the factors. ”

“ Though this proposition was not accepted, the States were not the less troubled with requests for cash in payment of their notes, and these requests are daily—not only for the ordinary household needs, as might have been expected, but for sending abroad, for if there are drafts to be cashed by the bank for anyone who wishes for money to send to France or to Jersey, the drafts are paid in States Notes, in order that the money shall ultimately come from this last named source. The Bank makes no secret of its pretensions: there are, it says, three parties for issuing paper money ”

“ President of the States' Committee.'
[Pg 58] "In consequence of this arrangement the Committee decided that £10,000 sterling of the total one pound notes in circulation on account of Fountain Street should be withdrawn as a Savings Bank loan at an interest of 3 per cent. per annum. Also that five thousand of those forming part of the old debt, called the Permanent Debt, should be withdrawn to be converted into obligations at 3 per cent. per annum." ”