« PreviousContinue »
No. 207.] JANUARY 1, 1811. [6 of Vol. 30.
A: look us thore who write are ambitious of making converts, and of giving their Opinions a Maximum of
Iofuence and Celebrity, the mott extenfively circulated Miscellany will repay with the greateEfect the Curiolty of thure who read either for Ainu semept or Ingruition.--JOHNSON.
ORIGINAL COMMUNICATIONS. For the Monthly Magazine. Amsterdam were depressed as low as ABSTRACT of the REPORT of the yf®,ECT from 16 to 20 per cent below par; and
COMMITTEE of the HOUSE of COMMONS, that on Paris still lower.
on the HIGH PRICE of GOLD BULLION. So extraordinary a rise in the market V OUR committee have found that price of gold in this country, coupled with
the price of gold bullion, which, by so remarkable a depression of our exa the regulations of his Majesty's mint, is changes with the continent, very clearly, 31. 173. 104d. per ounce of standard fine in the judgment of your committee, Dess, was, daring the years 1806, 1807 pointed to something in the state of our and 1803, as high as 41. in the market. own domestic currency as the cause of Towards the end of 1808 it began to ad. both appearances. But, before they vance very rapidly, and continued very adopted that conclusion, which seemed high during the whole year 1809; the agreeable to all former reasonings and market price of standard gold in bars experience, they thought it proper to fluctuating from 41. 9s. to 41, 12s. per oz. enquire more particularly into the cire The market price at 41. 10s. is about 154 cumstances connected with each of those per cent, above the mint price,
two facts; and to hear, froin persons of · It appeared to your committee, that it commercial practice and detail, what might be of use, in judging of the cause explanations they had to offer of so unof this high price of gold bullion, to be usual a state of things. informed also of the prices of silver du. It will be found, by the evidence, that ning the same period. The price of the high price of gold is ascribed, by standard silver in his Majesty's mint is most of the witnesses, entirely to an 53, 2d, per ounce; at this standard price, alleged scarcity of that article, arising the value of a Spanish dollar is 45. 4d. out of an unusual demand for it upon the or, which comes to the same thing, Spa- continent of Europe. This unusual de: nish dollars are, at that standard price, mand for gold upon the continent is worth 4$. 11 d. per ounce. It is stated described by some of thein as being in Wettenhali's Tables, that throughout chiefly for the use of the French armics, the year 1809, the price of new dollars though increased also by that state of fluctuated from 54. 5d. to 55. 7d. per alarn), and failure of confidence, which ounce, or from 10 to 18 per cent. above leads to the practice of hoarding. the mint price of standard silverIn Your commitice are of opinion, that; the course of the last month, new dollars in the sound and natural state of the Brihave been quoted as high as 5s, 8d. per tish currency, the foundation of which is ounce, or more than $5 per cent, above gold, oo increased demand for gold front the mint price.
other parts of the world, however great, or Your committee have likewise found, from whatever causes arising, cannot have that towards the end of the year 1808, the effect of producing here, for a con. the exchanges with the continent be siderable period of tinc, a material rise came very unfavourable to this country, in the inarket price of gold. But, before and continued still more unfavourable they proceed to explain the grounds of through the whole of 1809, and the three that general opinion, they wish to state first months of the present year,
some other reasons, which alone would Ilamburgh, Amsterdam, and Paris, have led them to doubt whether, in point are the principal places with which the of fact, such a demand for gold as is exchanges are established at presente alleged, has operated in the manner During the last six months of 1809, and supposed. the three first months of the present If there were an unusual demand for year, the exchanges on Hamburgh and gold upon the continent, such as could MONTHLY Mac, No. 207.
influence its market price in this country, remark upon this point, that the evidence it would of course influence also, and laid before them has led them to enter. indeed in the first instance, its price in tain much doubt of the alleged fact, the continental inarkets; and it was to be that a scarcity of gold bullion has been expected that those who ascribed the recently experienced in this country. bigh price here to a great demand That guineas have disappeared from the abroad, would have been prepared to circulation, there can be no question ; state that there was a corresponding high but that does not prove a scarcity of bol. price abroad. Your committee did not lion, any more than the higo price proces find that they grounded their inference that scarcity. If gold is rendered dear upon any such information; and so far by any other cause than scarcity, those as your committee have been enabled to who cannot purchase it without paying ascertain, it does not appear that during the figh price, will be very apt to conthe period when the price of gold bullion clade that it is scarce. A very extensive was rising here, as valued in our paper, home dealer who was examined, and there was any corresponding rise in the who spoke very much of the scarcity of price of gold bullion in the market of the gold, acknowledged that he found no continent, as valued in their respective difficulty in getting any quantity he wantcurrencies.
ed, if he was willing to pay the price for With respect to the alleged demand it. And it appears to your committee, for gold upon the continent for the sup- that, though in the course of the last year ply of the French armies, your committee there have been large exportations of inust further observe, that, if the wants gold to the continent, there have been of the military chest have been latterly also very considerable importations of it much increased, the general supply of into this country froin South America, Europe with gold has been augmented by chiefly through the West Indies. all that quantity which this great com. It is important also to observe, that the mercial country has spared in conse- rise in the market price of silver in this quence of the substitution of another me- country, which has nearly corresponded dium of circulation, And your com- to that of the market price of gold, canmittee cannot omit remarking, that not in any degree be ascribed to a scat. though the circumstances which might city of silver. The importations of siloccasion such an increased demand may ver have of late years been unusually recently have existed in greater force large, while the usual drain for India and than at former periods, yet in the former Chma has been stopped. wars and convulsions of the continent, Since the suspension of cash payments they must have existed in such a degree in 1797, it is certain, that, even if gold is as to produce some effect.
still our measure of value and standard The two most remarkable periods of prices, it has been exposed to a vew prior to the present, when the market cause of variation, from the possible ex Price of gold in this country has exceeded cess of that paper which is not convert: our mint price, were in the reign of king ible into gold at will; and the limit of William, when the silver coin was very this new variation is as indefinite as the much worn below its standard, and in the excess to which that paper will be issued. early part of his present Majesty's reign, It may indeed be doubled, whether, since when the gold coin was very much worn the new system of Bank of England pay. below its standard. In both those pe- ments has been fully established, gold riods, the excess of the market price of has in truth continued to be our measure gold above its mint price was found to be of value; and whether we bare any other owing to the bad state of the currency; standard of prices than that circulating and in boch instances, the reformation mediuın, issued primarily by the Bank of of the currency effectually lowered the England and in a secondary manner by market price of gold to the level of the the country banks, the variations of mint price, During the whole of the which in relative value may be as ide: years 1796 and 1797, in which there was finite as the possible excess of that circusuch a scarcity of yold, occasioned by the Jating mediuin. But whether cur pre great demands of the country-bankers in sent ineasure of value, and standard of order to encrease their deposits, the mar. prices, be this paper currency thus varia. ket price of gold never rose above the ble in its relative value, or continues seill mint price.
to be gold, but gold rendered more wanita Your committee have still further to ble ihan it was before in consequence of
being interchangeable for a paper cur- two countries to the disadvantage of the Tency which is not at will convertible former. into gold, it is, in either case, most desie In this manner, a general rise of all rable for the public that our circulating prices, a rise in the market price of gold, medium should again be conformed, as and a fall of the foreign exchanges, will speedily as circumstances will permit, to be the effect of an excessive quantity of its real and legal standard, gold bullion. circulating medium in a country which
If the gold coin of the country were at has adopted a currency, not exportable any time to become very much worn and to other countries, or not convertible at lessened in weight, or if it should suffer will into a coin which is exportable. " a debasement of its standard, it is evi- It appears to your committee to have dent that there would be a proportione been long settled and understood as a able rise of the market price of gold bule principle, that the difference of exchange Jion above its mint price: for the mint resulting from the state of trade and payprice is the sum in coin, which is equie ments between two countries is limited valent in intrinsic value to a given quan. by the expense of conveying and insuring tity, an ounce for example, of the metal the precious metals from one country to in bullion; and if the intrinsic value of the other: at least, that it cannot for any that sum of coin be lessened, it is equis considerable length of time exceed that valent to a less quantity of bullion than limit. The real difference of exchange, before. The same rise of the market resulting from the state of trade and payprice of gold above its mint price will ments, never can fall lower than the take place if the local currency of this amount of such expence of carriage, inparticular country, being no longer con- cluding the insurance. The truth of this vertible into gold, should at any time be position is so plain, and it is so uniformly issued to excess. That excess cannot be agreed to by all the practical authorities, exported to other countries, and, not both commercial and political, that your being convertible into specie, it is not committee will assume it as indisputable, necessarily returned upon those who Your committee are disposed to think issued it, it remains in the channel of from the result of the whole evidence, circulation, and is gradually absorbed by contradictory as it is, that the circumincreasing the prices of all cominodities. stances of the trade of this country, in An increase in the quantity of the local the course of the last year, were such as currency of a particular country, will to occasion a real fall of our exchanges raise prices in that country exactly in the with the continent to a certain extent, same inanner as an increase in the gene- and perhaps at one period almost as low ral supply of precious metals raises prices as the limit fixed by the expense of reall over the world. By means of the in- mitting gold from hence to the respective crease of quantity, the value of a given markets. And your committee is inportion of that circulating medium, in clined to this opinion, boch hy what is exchange for other commodities, is low. stated regarding the excess of imports ered; in other words, the money prices from the continent above the exports, of all other commodities are raised, and though that is the part of the subject that of bullion with the rest. In this which is left most in doubt: and also by manner, an excess of the local currency what is stated respecting the mode in of a particular country will occasion a which the payments in our trade bave rise of the market price of gold above its been latterly effected, an advance being mint price. It is no less evident, that, paid upon the imports from the continent in the event of the prices of commodities of Europe, and a long credit being given being raised in one country by an auge upon the exports to other parts of the mentation of its circulating medium, world. while po similar augmentation in the cir. Your committee, observing how enculating medium ot' a neighbouring coun. tirely the present depression of our ex. try has led to a similar rise of prices, the change with Europe is referred by many currencies of those two countries will no persons to a great excess of our imports longer continue to bear the same relative above our exports, have called for an value to each other as before. The in. account of the actual value of those for trinsic value of a given portion of the the last five years; and Mr. Irving, the one currency being lessened, while that Inspector-general of Customs, has accore of the other remains unaltered, the ex- dingly furnished the most accurate esti. change will be computed between chose date of burb that he has been enabled to
form. He has also endeavoured to fore and capital, remitted to proprietors in this ward the object of the committee, by country. The balance of trade in favour calculating how much should be deducted of this country, upon the face of the from the value of goods imported, on account thus made up, was account of articles in return for which In 180.5 about - 6,616 0001. nothing is exported. These deductions
1806 . . . 10,437,000/. consist of the produce of fisheries, and of
1807 , - 5,866,000l. imports from ihe East and West Indies,
1808 - . - 12,481,00ml. which are of the nature of rents, profits, 1809 - -'. 14,8S4,000l.
The following is an Account of the official Value of our Imporls and Exports with the Continent of Europe alone, in each of the last five Years:
Balance in favour of
reckoned in Official Value.
1805 1806 1807 1808 1809
15,465,430 13,216,386 12,689,590 11,280,490 23,722,615
5,450,781 5,019,130 4,716,080 7,069,819 14,170,758
The balances with Europe alone in becomes so low as to be likely to afford & favour of Great Britain, as exhibited in profit on the purchase and exportation of this imperfect statement, are not far these commodities, an actual exportation from corresponding with the general and nearly proportionate to the amount of more accurate balances before given. the bills drawn can scarcely fail to take The favourable balance of 1809 with place. It follows, that there cannot be, Europe alone, if computed according to for any long period, either a highly fathe actual value, would be much more vourable or unfavourable balance of considerable than the value of the same trade; for the balance no sooner affects year, in the foriner general statement, the price of bills, than the price of bills,
A favourable balance of trade on the by its re-action on the state of trade, face of the account of exports and im- proniotes an equalization of commercial ports, presented annually to parliament, exports and imports. Your committee is a very probable consequence of large have here considered cash and bullion 2 drafts on government for foreign expen- forming a part of the general mass of exditure; an augmentation of exports, and ported or imported articles, and as trans in diminution otiinports, being promoted, ferred according to the state both of the and even enforced, by the means of such supply and the demand; forming, howa drafts. For if the supply of bills drawn ever, under certain circumstances, and abroad, either by the agents of govern, especially in the case of great fluctuations ment, or by individuals, is disproporti- in the general commerce, a peculiarly onate to the demand, the price of them commodious remittance. in foreign money falls, until it is so low as from the foregoing reasonings relative to invite purchasers; and the purchasers, to the state of the exchanges, your colt who are generally foreigners, not wishing mittee find it difficult to resist an interto transfer their property permanently to ence that a portion at least of the great England, have a reference to the terms tall which the exchanges lately suficred, on which the bills on England will pur. niust have resulted not from the state of chase those British commodities which trade, but from a change in the relative are in deinand, either in their own coun. salue of our domestic currency. But try, or in intermediate places, with when this dcduction is joined with that wiiich the account may be adjusted. which your coinmittee have stated, re: Thus, the price of the bills being regu- specting the change in the market price lated in some degrec by that of British of gold, that inference appears to be cogitaudities, and continuing tu fall till it demonstrated,