| | | , says Hazlitt, . And there is no calamity | which people are so loth to confess, even in its milder | forms. It is the rarest thing in the world for a man to plead | want of money as a motive for economy. One would think | that the English nation, with its vast and undoubted wealth, | might afford to be candid in this respect, and to | acknowledge any occasional scarcity of cash under which | it may chance to labour. Yet the fact is never frankly | admitted. At the

“tightest”

epochs, it is never | poverty that we complain of ~~ it is the Bank of England, it | is the House of Commons, it is the Chancellor of the | Exchequer ~~ it is great X, in short. Somebody is doing | something. England like Thackeray’s Mr. Smith , | is

“kept out of her money.”

It may seem odd, at | first sight, that a rich country should be poor, but it will not | puzzle those who are practically acquainted with economic | and monetary questions. says the Count in one | of Mr. Disraeli’s tales, | The reserve in the Bank of England is the pocket-money of | the nation. If we put into theoretical language the | distinction taken in the passage just quoted, we may say | that wealth exists in two forms ~~ mutable and immutable. | The immutable are the most numerous, and, for nearly all | purposes, the most valuable. of this sort are broad acres, | factories, warehouses, palaces, mansions ~~ in short, | nine-tenths of the realized and accumulated labour which | is the pride of civilized society, and the material of new | forms of production. This kind of wealth is infinitely various; | but, even where its value does not largely consist in the | pretium affectionis set upon it by individual | wants and tastes, it has the inconvenience of being locally | fixed, and consequently inconvertible. Mutable | wealth, on the other hand, has no such characteristics. Of | this, the type is money. Political Economists are always | giving us some new definition of this mysterious entity, but | we need not go into these thorny controversies. it is | enough for our purpose that there is something | ~~ it may be a bank-note, or cash credit, or a sovereign, or | a shilling ~~ which is daily transferable, and is desired by | all who desire anything. Its essence is to have no

| “earmark.”

Nobody singles out for preference a | particular part or specimen of this description of wealth ~~ | all the industrial portion of mankind are alike engaged in | the pursuit and acquisition of this universally recognised | and impartially appreciated commodity. Of course, it is | evident that people who are rich in immutable wealth may, | at any given time, be poor in that which is mutable ~~ in | other words, a man may have much that he does not want, | and yet not have money, which he does want. | It is so likewise with nations. It is quite possible that a | nation may abound in particular kinds of wealth, and yet | want, for the moment, the mutable kind which will | interchange for what it does want. This is what we mean by | saying that the bullion in the Bank of England is the | pocket-money of the country ~~ it is that familiar, indefatigable, | transmigratory substance which will turn into whatever we | desire. The nature of money is, indeed, more easily | definable in the case of nations than in that of individuals. If, | owing to the operations of trade, a balance is payable from | one country to another, it must be paid in actual bullion. | The numerous forms of currency and credit which circulate | among a people have a special, defined purpose, and must | be kept to that purpose.

“You can’t conceive,”

| said an indolent friend of ours,

“how I hate my postage | stamps when I have no money.”

To attempt to pay a | balance to France in bank-notes would be like trying to buy | oxen with Queen’s heads. | These are no new considerations ~~ indeed, in an | exaggerated form, they prevailed before our received | systems of political economy were heard of. Readers of | Adam Smith will remember that his treatise has a | destructive as well as a constructive thesis. The Mercantile | System, as it used to be called, which confined the name | of wealth to the precious metals, did not rest on theoretical | argument ~~ for, as Adam Smith easily shows, gold is no | more exclusively entitled to that designation than brass or | iron ~~ but was grounded on the superstitions of the | money-market. In spite of all argument, people in | Lombard-street will be dismal when gold is leaving the country, | however much iron or brass may remain. They are aware | that, though bullion is not the sole kind of wealth, it is the | most efficient specimen of mutable wealth. They know, too, | that this sort of riches is as necessary to commerce as the | fixed sort ~~ that without it we could neither lend, nor buy, | nor borrow. Deeply as the doctrines of Adam Smith have | penetrated into the English mind, we may still hear, in the | daily talk of men of business, turns of thought and | expression which savour of the system he overthrew. | These considerations have a peculiar application to a state | of war. It has been said that war is a

“sensible thing” |

~~ which, we suppose, means that it likes hard cash. | According to Louis XIV., the last guinea will always win. As | the Duke of Wellington said ; and he might well | say this at a time when there was not a guinea circulating | in the country, and when he was much troubled to find | money for the payment of soldiers and store-dealers. The | present war is peculiarly covetous of coin. It is carried on at | an enormous distance from home, among Oriental and | semi-Oriental nations, to whom gold and silver have | always been dear, who have little trade with us, who do not | care for our manufactures, and to whom western cash | seems a blissful dream. The hoarding propensities of those | races make the matter worse. All observers of Oriental life | notice, as a predominant feature, the tendency of the | people not to spend any trifling money they may chance to | get, but to store it up against an evil day; and it is a serious | addition to the practical expensiveness of the present war | that it is waged among nations of this peculiar taste. | The result of the export of all this

“mutable wealth” |

from England is a scarcity of it in England. | We cannot send our money to the shores of the Euxine | and retain it in Threadneedle-street. The effect of this | migration of coin on our commerce is obvious. The hoard | in the Bank of England is not like the treasures | accumulated by Eastern princes ~~ it is of daily use in | trade. For every ounce of gold in the great reservoir called | the issue department, there is somewhere or other a | corresponding sum of bank-paper. This is either in the | banking reserve on the other side of the establishment, or | it is out in active circulation among merchants and traders; | and for the purposes of commerce it is immaterial to which | of these two uses it is for the moment applied. It is of | course necessary that there should be a certain amount of | the purchasing medium in the hands of the public, but it is | equally necessary that banks which hold other people’s | money till they want it should have the means of meeting | their wants. if you reduce either of these amounts, you | injure trade, but you injure it most by diminishing that part | of the circulation which apparently does least. The moment | a banker’s reserve falls off to any serious extent, he begins | to diminish his loans ~~ he must let out less, in order to | keep in more. This is the meaning of the

“tightness of | money.”

Tat mutable wealth, that

“loanable | capital,”

that

“something,”

whatever it is, | which most people desire to have at their banker’s, and | which merchants must have to meet their bills, is | reduced; and merchants will consequently have more | difficulty in meeting their bills ~~ must pay higher rates of | discount ~~ must, in the end, stop payment, if the pressure | continues long enough, and if they have not private funds | of their own. | This is evidently independent of any peculiar legislation on | the subject. Suppose there were no legislation about it at | all. Imagine ~~ what would be possible, though | inconvenient ~~ that Government took no care of the | currency, metallic or unmetallic. What would be the result? | We should, no doubt, have a private coinage ~~ we should | have sovereigns with Rothchild’s mark, and shillings with | Lord Overstones head. But this would not help us. We | must send “Overstones” to the Crimea, and cosmopolitan | gentlemen would have, perhaps, a prejudice in favour of | “Rothschild’s.” We may, it is true, depreciate our currency | ~~ we may say, in our own dominions, that a merchant | who has promised to pay a sum of gold, value 100 L., shall | pay only a quantity of paper, value ninepence. And this no | doubt, will aid the particular merchant in question. But we | cannot do this in the Crimea. Unless we make bank-notes |

“bayonet-tender,”

they will be of no use among | the Tartars. As we go to the Africans with beads and | knives, we must go to the Asiatics with silver and gold. it is | evidently absurd, therefore, to impute the present scarcity | of money to the Act of 19=844. Many ingenious | speculators are endeavouring to do so, but they will not | convince the plain sense of plain men, who know that, if | cash goes to the East, it will be scarce in the West ~~ that | under no code can money which is hid in a hut at Varna be | used in discounting bills at Liverpool. Sir Robert Peel was a | great man, but he did not invent poverty. Under | every kind of legislation, under the Act of 1844, or the Act | of 1944, there will be a difference between poverty and | wealth ~~ between times when money is sent beyond sea, | and times when it is employed within the seas.