Continental currency

“ There should be but one form for, and one source of, the currency. It should emanate from a source where the power cannot be abused, and where the interests of the people at large, and not of individuals, will be consulted.
The people have thus an interest at stake. It is for their benefit that a national circulation, of a perfectly reliable character, should be established. The remark made by Sir Robert Peel, in parliament, in May, 1844, at the time of the recharter of the bank, applies with equal force to the national currency of this or any other country. ”

“ Sir Robert Peel wisely comprehended the powers and attributes of a national currency, and we may wisely adopt his idea that such a national currency, controlled by the national legislature, for the use and benefit of the people, is the only one that can be safely adopted. ”

“ They must receive either ducats, or a crown of the sun and a groat, for every ducat, or the same in angellets. The best thing would be for one or two of their factors to see you (Wolsey) . The gold can be kept at home for [Pg 118] 2 or 3 more per cent., for they would be glad to give that to take it out of the realm."
The new coinage of 1527 was in complete accordance with the proclamation of the preceding November. As far as the tariff or absolute exchange was concerned, it served to redress the balance, and thus to bring the English coin abreast of the continental. ”

“ The first contemplates the gradual withdrawal from circulation of the notes of private corporations and for the issue, in their stead of United States notes, payable in coin on demand, in amounts sufficient for the useful ends of a representative currency. The second contemplates the preparation and delivery, to institutions and associations, of notes prepared for circulation under national direction, and to be secured as to prompt convertibility into coin by the pledge of United States bonds and other needful regulations. ”

“ For international payments, so far as specie is concerned, France and the United States depend ultimately on the international medium of exchange, which is gold. In the last resort, it is their gold which, acting through the foreign exchanges, maintains the whole mass of their currency at its nominal value for internal purposes. ”

“ Pierre is a profitable pursuit provided one's wallet is filled with American coin or bank-notes. Though articles are priced in francs and centimes, the currency of the United States, Canada, Newfoundland, England and Switzerland is accepted, and change is made in any one or all of these. Strangely, very little French money is in circulation, and a bonus of two per cent, is demanded on French gold wherewith to pay customs fees. An American dollar, silver or paper, is worth 108 sous. ”

“ It thus appears, that a depreciation of the currency does not affect the foreign trade of the country: this is carried on precisely as if the currency maintained its value. But though the trade is not affected, the exchanges are. When the imports and exports are in equilibrium, the exchange, in a metallic currency, would be at par; a bill on France for the equivalent of five sovereigns, would be worth five sovereigns. But five sovereigns, or the quantity of gold contained in them, having come to be worth in England 6l., it follows that a bill on France for 5l. ”

“ Money and banks were as necessary to develop intercourse as roads and canals. Until after the War of 1812, when army gold and army bills ran freely, money was rare and barter served pioneer needs. For many years after the war a jumble of English sovereigns and shillings, of Spanish dollars, French crowns, and American silver, made up the currency in use, circulating sometimes by weight and sometimes by tale, at rates that were constantly shifting. The position of the colonies as a link between Great Britain and the United States, was curiously illustrated in the currency system. ”

“ But how are we of the interior to come to the Atlantic cities to purchase our supplies of foreign and domestic commodities, without a general medium? The paper of our own banks will not be received but at an enormous discount. We want a general currency, which will serve at home and enable us to carry on our accustomed trade with our brethren of the Atlantic states. ”

“ If the currency system of England had been of silver alone, a single enactment lessening the content of the unit coin, or crying up its denomination, would have stopped any outflow caused by under-valuation as compared with foreign money value. ”

“ Surprisingly, history demonstrates that a monetary union is not necessarily predicated on the existence of a single currency. A monetary union could incorporate "several currencies, fully and permanently convertible into one another at irrevocably fixed exchange rates". ”

“ Likewise the degree of civilization to which a country has attained is reflected by the perfection of its monetary machinery. After having tried nearly every unwise experiment condemned by the teachings of history, the United States has finally reached a position where its currency meets the two fundamental requirements of sound finance, namely, (1) the standard of value is that in use among the great commercial states of the world; (2) all of the currency is either directly or indirectly convertible into the standard coin. ”

“ The British West Indies, as also Guiana, make British gold legal tender. United States gold also circulates freely. There are a few banks with limited note-issuing power, and minor coins are similar to those of England. There is a growing use of United States currency. ”

“ The willingness of the government to sell foreign exchange at a fixed price, and to lock up the silver it receives thereby, takes that much currency out of circulation just as effectively as though the equivalent of gold had been exported. ”

“ Exchange Standard arises out of the discovery that, so long as gold is available for payments of international indebtedness at an approximately constant rate in terms of the national currency, it is a matter of comparative indifference whether it actually forms the national currency. ”

“ As A plentiful Currency will occasion a less Consumption of European Goods, in Proportion to the Number of the People, so it will be a means of making the Balance of our Trade more equal than it now is, if it does not give it in our Favour because our own Produce will be encouraged at the same Time. And it is to be observed, that tho' less Foreign Commodities are consumed in Proportion to the Number of People, yet this will be no Disadvantage to the Merchant, because the Number of People increasing, will occasion an increasing Demand of more Foreign Goods in the Whole. ”

“ Under the most favorable state of trade between the east and west an exchange of one per cent. was demanded from drafts and bills of exchange. With a national currency, uniform and equal throughout the country, this cost for exchange would not exist or would be greatly reduced. I called attention to the then increasing volume of local currency in the United States. When the United States had issued $250,000,000 of notes, the banks had largely increased their circulation. ”

“ There still remains to be considered the effect of depreciated currency on our trade with other nations. By raising prices at home higher than they are abroad, imports are largely increased beyond the exports; our coin must go abroad; or, what is far worse for us, our bonds, which have also suffered depreciation, and are purchased by foreigners at seventy cents on the dollar. ”

“ From the date of its enactment England has been withdrawn from that action of bimetallic law which had been her bane for centuries. The flow of gold in or out became automatic, representing the natural flow of world-balances, and therefore proving the greatest trade help and indicator; and such commercial crises as have come upon her have arisen from the peculiarly sensitive organisation of credit which distinguishes the modern system, and are to be classed with banking rather than metallic currency phenomena. ”

“ Hungary, Russia, Italy, Sweden, or Holland, while most of these countries have a gold currency and an official Bank Rate, in none of them is gold the principal medium of exchange, and in none of them is the bank rate their only habitual support against an outward drain of gold. ”

“ We have had to learn a new money system in Germany. France, Italy, Switzerland and Belgium have what is called a “Latin league,” with interchangeable currency, the unit being the franc (France, Switzerland, and Belgium) , and the lire (Italy) . But Germany joins no Latin leagues. The unit of the German currency is the “mark,” equivalent to twenty-five cents American. This is divided into one hundred pfennigs. Prices are carried out to the pfennig, and one-pfennig coins (in value one-fourth of one cent) are seen more than our one-cent pieces at home. ”

“ On account of the new money which had been made in Flanders and Scotland, he advised that all Scottish monies should be forbidden by proclamation, and also all other monies from beyond the sea, so that they should have no currency in England; and that no one should take them in payment, except at their value as bullion and for the King's coinage; that no one should export gold or silver, according to the statute in that case made, etc. ”

“ As the result of deliberation of the Privy Council, assisted by the Commissioners of Trade and officers of the Mint, who all attributed the export to the higher price of gold abroad, it was determined to raise the price of the gold coins to or near the value which they had on the Continent at the moment. Accordingly, by proclamation of the 26th August 1661, the value of the gold unite was raised from 22s. to 23s. 6d., and other gold coins in proportion, the silver currency being left unaltered. ”

“ Notwithstanding such limitations, however, it still remains true that the monetary history of the modern world dates from the thirteenth and not the seventh century, and from the little commercial states of Italy rather than from Byzantium. Previous to the minting of the gold florin of Florence there is no trace of any independent minting of gold coins on a commercial scale by any state of mediæval central Europe. The currency system of England, for instance, from the time of the Saxons to the days of Henry III. was based entirely on silver. ”

“ Nevertheless, until the British Government completely clamped down on the use of this free sterling in payment of exports it was possible to pay for such exports in sterling purchased at a lower rate than that which the British Government believed to be a reflection of the true value of the pound and officially fixed at such.
Plainly enough, a single currency having multiple values has important bearings upon the flow of goods and upon international economic relations. ”

“ In Germany, as in the Netherlands, France, and England, the influence of the discovery of America only begins to express itself about 1520, and in the usual way—influx, movements and disorders in the currency and ratio, and general complaints. ”

“ The essential characteristics of the British [19] monetary system are, therefore, the use of cheques as the principal medium of exchange, and the use of the bank rate for regulating the balance of immediate foreign indebtedness (and hence the flow, by import and export, of gold) .
5. The development of foreign monetary systems into their present shapes began in the last quarter of the nineteenth century. At that time London was at the height of her financial supremacy, and her monetary arrangements had stood the test of time and experience. ”

“ The truth is that safe and desirable as is our currency system in many respects, it is not properly related. The supply of currency is but remotely, if at all, influenced by the ever changing requirements of trade and industry. It is related most largely, if not entirely, to the price of Government bonds in the market. ”

“ If in the progress towards wealth, one nation advanced more rapidly than the others, that nation would require and obtain a greater proportion of the money of the world. Its commerce, its commodities, and its payments, would increase, and the general currency of the world would be divided according to the new proportions. All countries therefore would contribute their share to this effectual demand.
In the same manner if any nation wasted part of its wealth, or lost part of its trade, it could not retain the same quantity of circulating medium which it before possessed. ”

“ Not that it is a mere dream,—the evidence of its power is fast developing, and this at the present moment is daily seen by the change taking place, more particularly in France and Germany, where the circulation of gold is fast causing the disappearance of the spurious coin of the country, and the extensive circulation of the small-paper currency, always considered detrimental in establishing thorough confidence in the reciprocal monetary transactions between nations. ”

“ What do you conceive to be the advantage of an inconvertible note of that kind over a convertible note payable to bearer on demand?—It would prevent a drain of bullion, when it is required for foreign trade; and it would give us, what is so very essential, a domestic currency which is not influenced by any foreign transactions whatever. If France or America wants a quantity of gold, it ought not to interfere with our domestic currency. Our merchants and all our trade surely should not suffer because America wants gold. ”