JOURNAL OF BANKING, CURRENCY, AND FINANCE. Business of the United States Mints from organization to 1851.-Public debt of Ohio... PAGE. 465 466 Condition of Banks and Banking Associations in the State of New York at five periods of 1851. 467 Gold dust and coin shipped from San Francisco in 1851. New York, Philadelphia, and Boston Banks: their capital and dividends compared.. United States Treasury Notes outstanding, March 1, 1851.. United States Treasurer's statement, February, 1852.-Ingenious fraud in gold coins... Import and export of gold and silver from New York in 1851. Catechism of the Free Banking Law of Illinois... COMMERCIAL STATISTICS. Foreign and coasting trade of the United Kingdom în 1851.. Trade of the United Kingdom with foreign countries and British possessions.. 469 471 472 474 475 473 476 477 477 479 479 479 481 481 Commerce of Western Towns compared.-Imports of France in 1851.. Prices of Pork in Cincinnati in 1850-51-52.. Commerce and navigation of Tampico in 1851.-British trade with the West Indies.. British commercial statistics.-Commerce of Belgium........:.. COMMERCIAL REGULATIONS. 453 454 485 486 487 488 Rates of commissions, charges, etc., at San Francisco...... 489 Of the transport of merchandise between the U. S. and Canada on railroads-a Treasury Circular 490 Reduction of Spanish tonnage dues.-The new Anstrian tariff.. Of the importation of English newspapers: a Treasury Circular.... : Vessels wrecked at Key West in 1851.-Vessels touching at Elsineur... NAUTICAL INTELLIGENCE. 491 492 493 494 494 495 495 Port of Leghorn.-Barnard Island, coast of Norfolk.-Dolphin Rock, in the Java Sea.. 496 496 RAILROAD, CANAL, AND STEAMBOAT STATISTICS. The Railroad Car, a poem, by CHARLES R. SHIRAS... Operations of the railways of Massachusetts.. 497 Freight tariff of Ohio and Pennsylvania Railroad in 1852.. Rates of tolls on the canals of New York in 1852.-Proposed Hudson River Tunnel. 497-499 500 502 Tolls on James River Canal in 1852.-Public works of Pennsylvania.. 503 Railroad progress in Virginia.-Loss of life on railroads of Massachusetts..... 503 The coal productions of Ohio. Trade of our interior commercial centers.-Influence of railroads, by Hon. CHARLES SUMNER.. 506 Drugs, dyes, &c., used in manufactures.-Cultivation of silk.... The manufactures of Chicago in 1851. 505 JOURNAL OF MINING AND MANUFACTURES. Cannel coal of the Kenawha Valley.-Gold mines in Virginia... 507 509 511 512 513 513 Statistics of the Great Exhibition.-Production of California Gold.. Discovery of a silver mine in New Mexico.-New process of washing gold in California... Improvement in the manufacture of oxilate of potash.-Onondaga and Turks' Island salt....... 514 Brick making in the South..... STATISTICS OF POPULATION. Mortality of Chicago, Illinois... Progress of population in Massachusetts.-Progress of population in Chicago Population of British Guiana... MERCANTILE MISCELLANIES. Discipline in the merchant service... Commerce vs. the National Defense.. The Mercantile Beneficial Association of Philadelphia. The Mercantile Library Association of Cincinnati.. Fraud of Druggists.-Business hours in Boston............... 514 515 516 316 517 519 520 52 HUNT'S MERCHANTS' MAGAZINE AND COMMERCIAL REVIEW. APRIL, 1852. Art.I.-MONEY OF ACCOUNT-ITS NATURE AND FUNCTIONS. PART I. THE ENGLISH MONEY OF ACCOUNT-HISTORY OF THE GOLD STANDARD OF GREAT BRITAIN -OUR OWN MONEY SYSTEM, DOUBLE STANDARD, COINAGE, AND PROPOSED MODIFICATIONS -EXPORT OF THE PRECIOUS METALS-FOREIGN EXCHANGE. THE subjects of money and coinage have by turns occupied some of the ablest minds of which civilization can boast: we have the results of their decisions in some cases, and in many we have their deliberate opinions as given to the world in their works. Yet on these subjects there is no agreement, no general consent, and no acknowledged authority. It can hardly be claimed that much progress has been made for a century in the solution of the different questions involved. There may be less interest in these questions than formerly, now that so large a proportion of our payments are made without any agency of the precious metals, but so long as the present system of money prevails, questions pertaining to the proper regulation of coinage must retain their importance, and call for their just solution. Where so much contrariety of opinion prevails on subjects of such moment to every civilized community, and among men so capable of deciding correctly, it is safe to conjecture that some necessary element of the subject has been omitted, or that some wrong one has been included, which has vitiated our conclusions. Capable men err more frequently in adopting their premises than in their processes of deduction. It is in this way, as we believe, the difficulties have arisen on the subjects of money and coinage. One of the chief mistakes has consisted in not appreciating the scope and agency, and in not observing the functions of MONEY OF ACCOUNT. As this agency is widely operative and efficient it can neither be overlooked nor thrust aside in any just view of the subject of money. If it has not been wholly neglected its relations with coinage remain to be adequately shown and comprehended. We take the following definition of money of account from a work of admitted authority among merchants and dealers in coin and exchange, Kelly's Universal Cambist.* Moneys are distinguished into real and imaginary. Real moneys are coins, bank-notes, or any other tokens of credit that have a currency. "Imaginary moneys, also called ideal moneys, are not represented by any coin, but are used in keeping accounts: they are understood to have had their foundation in real coins or weights, which were the original units adopted as measures of value, and which have been continued under the same denominations, notwithstanding the changes that may have taken place in their intrinsic value. Although moneys of account be not represented by real coins, yet their intrinsic value may be determined by their known relation or proportion to certain coins. "Moneys of account may be considered with respect to coins as weights and measures with respect to goods, or as a mathematical scale with respect to maps, lines, or other geometrical figures. Thus they serve as standards of the value both of merchandise and the precious metals themselves. It should, however, be remarked that moneys of account, though they are uniform as a scale of divisions and proportions, yet they fluctuate in their intrinsic value with the fluctuation of the coins they measure or represent." In another place (vol. ii., p. 148) he introduces a TABLE OF MONEYS OF ACCOUNT in the following words : "In the following table of moneys of account, it may be observed that some of these moneys are real coins, the value of which may be computed from the mint regulations, or from assays; but when they are imaginary moneys, which is generally the case, their value must be found by their established proportion to real coins." The table furnishes a list of more than a hundred different moneys of account, with their value in silver and gold, stated in English pence. These moneys of account are those of the principal countries of the world. The table is closed with this remark: "The foregoing table has been computed from the proportion which the moneys of account bear to the coins of each place respectively." Where there are no coins in a country corresponding in denomination and subdivision to its money of account, the people readily apprehend the difference between coins and money of account. In England and in this country, unfortunately for our clear comprehension of their difference, the coins correspond with the money of account, and many cannot readily make the required distinction. With attention, however, the distinction may be mastered. When an Englishman visits the continent he carries in his mind his own money of account, and by its aid values every coin he meets, and expresses the value in its terms which are so familiar to him; and thus the foreign price of every article can only be tested when mentally turned into pounds, shillings, and pence. The foreign coins he carries in his pocket are all measured in that way, and it will require a long familiarity with foreign prices before he can think in any money of account but his own. The mental operation is similar to what he uses in learning to speak a foreign language, he thinks first in his own what he may express afterwards in a foreign tongue. If the English traveler is familiar with the home prices of articles submitted to him abroad, he will, without hesitation, annex prices to all the I. Vol. xxxiii. Introduction. foreign goods he sees in English money of account. He does not, in this instance, use his domestic coins as a measure of value; the operation of fixing such prices is not a comparison of his domestic coins with the foreign goods, it is the expression of their value in English money of account. During the time of the suspension of payments by the Bank of England, between 1797 and 1822, such was the demand for gold on the continent, for army purposes, that it became, for most of that period, merely an article of Commerce, in great demand for export. The price of gold rose under this continued demand from £3 17s. 101d., an ounce, to over £5. All gold coins bore a market value in proportion to their weight. During this period of suspension an immense development of industry and Commerce took place in Great Britain, and yet nearly the sole expression or measure o value was this money of account, and nearly the sole medium of paymen was bank-notes and checks. It must be perfectly plain to those who are familiar with the history of that period, that if every coin of gold and silver had been swept by the foreign demand from that country, the people would not the less have continued to transact their business and make payments in pounds, shillings, and pence. So they would have done also if platina had been introduced as a medium of payment. A whole generation of men came into business during this suspension who were not familiar with coins, and seldom ever saw a guinea or a sovereign; yet they never had any difficulty in buying and selling by pounds, shillings, and pence. Did they in every instance use coin as their measure of value? If we have attained a clear perception of the functions of the money of account, we are able to answer the question, WHAT IS A POUND? by simply replying that it is the unit of the money of account of Great Britain. The value of that unit, or its power, everybody in that country knows. The statute which fixes the mint price of gold in England is an application of the money of account by Parliament to the article of gold, and it really no more changes the nature of the money of account, when applied by law to express the value of an ounce of gold, than if a merchant had so used it. The price of an ounce of gold is declared by statute to be permanently at £3 17s. 10 d., and the Bank of England is required to purchase it from all who offer, at £3 17s. 9d. Although the effect of thus declaring permanently the value of gold may confuse the minds of many, and lead them to infer that the ounce of gold is the £3 17s. 101d., it does not remain the less true that it is a simple expression of value, and that the ounce of gold and the £3 17s. 101d. are not convertible terms, because the latter expresses the value of the former. It may be asked what did £3 17s. 10d. mean before it was used by the statute to denote the value of an ounce of gold? Did not people understand by £3 17s. 10d. the same thing after its use in the statute as before? And how many thousands reckon familiarly in pounds, shillings, and pence, who know nothing about the mint price of gold." If a British statute declares the gold Napoleon of France to be worth 15s. 10 d., that is not merely declaring the Napoleon to be worth its weight in gold, it is the expression of the value in English money of account; it is not the same as if it had declared the Napoleon, weighing one hundred and seventy-nine grains, is equal in value to one hundred and seventy-nine grains of gold. Such a declaration as this would only be intelligible to those familiar with the process of weighing gold. To say that a Napoleon is worth 15s. 104d. is perfectly intelligible to every English ear; but if you were to ask the exact weight in gold which would be equivalent to 15s. 10 d. not one person in a thousand could reply without a calculation, or consulting some authority. In England gold is the only legal tender for sums over forty shillings. If you enter a warehouse in London and ask the price of any number of articles over that sum the salesman will inform you instantly; but if you ask him how much gold you shall weigh him for any article, he cannot answer. When the English farmer asks fifty shillings a quarter for his wheat, does he measure the value by a mental reference to fifty silver shillings, or to twoand-a-half sovereigns in gold? Or does he on the instant think of either silver or gold? Does he think of anything beyond expressing a price? And did he not with equal readiness give the rate before the mint price of gold was fixed as at present? If, as some say, the naming a price is strictly a comparison of the article priced with its equivalent in the gold standard, why is wheat continually quoted in shillings, of which there is no equivalent in gold, instead of in pounds and fractions? Why say fifty shillings instead of £2 10s.? If the process of naming a price was strictly a comparison with gold, the mind would naturally cling to the pound or sovereign, and its fractions, especially where there are equivalents in gold, and say twoand-a-half sovereigns. THE UNIT AND MONEY OF ACCOUNT IN THE UNITED STATES. In the United States the unit of our money of account is a dollar, with decimal subdivisions. By the use of DOLLARS AND CENTS the prices of the thousands of millions of dollars worth of goods which change hands annually are expressed, valued, and sold; and as many transactions take place with the same goods, it is probable that tens of thousands of millions would come short of the annual business of the country. The actual payments in coin do not, it may be supposed, reach 1 per cent of the whole amount; nor is it expected while the business is progressing that a greater proportion will be paid in coins. In all the countless application of our money unit and its hundredths, is there an invariable reference made to the dollar coin? So far from it, that the presence of silver dollars as samples would, so far from aiding, embarras the operation. Does the active salesman who is continually naming prices from morning to night carry the image of the silver dollar in his mental vision all the time? Suppose when he pronounces the price of a bale of goods to be two hundred dollars, a quantity of silver coins were thrown before his astonished vision, he would be very apt to say, "Carry them to the bank or the broker-I am no judge of coins, they may be too light, or they may be counterfeit for aught I know." The purchaser may reply, "Take them by weight and return any that may be condemned as false coins." But the answer would be in almost every such instance, "I know not the value of a pound, ounce, pennyweight, or grain of silver." Did this merchant measure the value of his goods by coins? Let us suppose this lot of miscellaneous coins to be carried to the counter of a dealer in the precious metals; it will be immediately inspected, classed, and valued in dollars, precisely as the merchant valued his goods. Some dollar coins may be worth one dollar and one, two, or three cents; some worth one, two, or three cents less than a dollar: the various classes into which they may be assorted will be separately valued, and the whole being added together will make the sum |