EDWIN HILL'S PRINCIPLES OF cunnaxeir.
Sm—I hope you will allow me to explain, with reference to your notice of the above work, that in expressing an opinion that the standard of value has not met with the attention its importance deserves, I was perfectly aware that the quantity of pure gold in the pound sterling is accurately defined by law. Were it a standard of weight, therefore, instead of one of value, I might not have thought it neglected. But in choosing a standard of value, it seems to me incumbent on the Legislature to take every pains to ascertain, first, what substance, simple or com- pound, is least liable to suffer changes in its value ; and, second, in what manner to employ such standard .so as to preserve its uni- formity unimpaired. I think such pains have not been taken. My impression is, that a compound standard of gold and silver mixed in cer- tain proportions would be more likely to maintain a uniform value than can be obtained by gold alone ; silver being both more genernUy pro- duced throughout the world, and more generally used than gold, and per- haps less under the-influence of fashion ; at the same time, however, that it is obviously inferior to gold in portability. Lord Liverpool's im- pression was that gold -is the best substance for this purpose.. I -think that no man's mere impression should be taken upon a subject of so much importance, but that the matter should be made the subject of an elaborate and public inquiry, conducted by the best-qualified men who can be found to undertake it, as inquiries regarding the standards of weight, extension, capacity, and time, have been conducted • under Governmental authority. I have mentioned, too, that although gold is the legal standard of value for most purposes, yet, as concerns the col- lege rents and the tithe commutations gold isnot the standard at all, corn being in these cases the only legal standard. The law itself, therefore, lias evidently not quite made up its mind upon this subject. As to the mode of employing the standard, I believe the Legislature has yet to learn that there is more than one mode possible ; but an inquiry respecting the French law upon the subject, (now or lately existing,) would, I believe, enlighten them greatly on this point, and show that much valuable information lies within our reach, the very existence of which Ims been hitherto unsuspected, simply because we have not yet taken the pre- luminary step of discovering our own ignorance upon the subject. Our mode of-employing our standard substance, gold, leaves it exposed to the disturbing influence of all changes in monetary demand, (an increase in such demand raising its value and a decrease lowering it,) whilst the French mode of employing their standard, silver, by admitting of the use of geld as an auxiliary medium of payment, (though not as a standard,) greatly diminishes the force of all changes in monetary demand in disturbing the value of the silver standard, the gold helping the silver effectually in its hour of need.
Regarding the alleged use of bills of exchange as currency, and the rate of interest custom assigns to them, I can state from my own knowledge, that years ago, bills of exchange indorsed over from one manufacturer or dealer to another, again and again, were in the North almost the only currency employed in certain very large classes of transactions • and that the cus- tomary interest was then five per cent: a. bill being cluirgeable, in a current account, with that rate of interest for the time it bad to run when trans- ferred from a payer to a payee. Thus, a two-months bill, which at its birth is liable to a deduction of two months' interest, becomes at the end of its career worth its full nominal value : its value, therefore, increases day by day from first to last. It is therefore truly an interest-bearing security, as I have stated ; and that such bills, when reaching the hands of those who have no immediate use for them for purposes of payment are retained, for the purpose of gathering interest, is, I presume, a matter of daily expe- rience ; at least it often happened to me when I was engaged in the kind of trinstions in question.
informed that the practice of using bills of exchange as currency in the Northern districts prevails now, though less extensively than it did formerly.
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