Part 17 (1/2)
[89] It is difficult to estimate the curious futility of discussions such as that which lately occupied a section of the British a.s.sociation, on the absorption of gold, while no one can produce even the simplest of the data necessary for the inquiry. To take the first occurring one,--What means have we of ascertaining the weight of gold employed this year in the toilettes of the women of Europe (not to speak of Asia); and, supposing it known, what means of conjecturing the weight by which, next year, their fancies, and the changes of style among their jewellers, will diminish or increase it?
[90] See, in Pope's epistle to Lord Bathurst, his sketch of the difficulties and uses of a currency literally ”pecuniary”--
”His Grace will game--to White's a bull he led,” etc.
[91] Perhaps both; perhaps silver only. It may be found expedient ultimately to leave gold free for use in the arts.
As a means of reckoning, the standard might be, and in some cases has already been, entirely ideal.--See Mill's ”Political Economy,” book iii., chap. 7, at beginning.
[92] The purity of the drachma and sequin were not without significance of the state of intellect, art, and policy, both in Athens and Venice;--a fact first impressed upon me ten years ago, when, in daguerreotypes of Venetian architecture, I found no purchasable gold pure enough to gild them with, but that of the old Venetian sequin.
Whatever the article or articles may be which the national currency promises to pay, a premium on that article indicates bankruptcy of the Government in that proportion, the division of the a.s.sets being restrained only by the remaining confidence of the holders of notes in the return of prosperity to the firm. Incontrovertible currencies, those of forced acceptance, or of unlimited issue, are merely various modes of disguising taxation, and delaying its pressure, until it is too late to interfere with its causes. To do away with the possibility of such disguise would have been among the first results of a true economical science, had any such existed; but there have been too many motives for the concealment, so long as it could by any artifices be maintained, to permit hitherto even the founding of such a science.
And, indeed, it is only through evil conduct, wilfully persisted in, that there is any embarra.s.sment either in the theory or the working of currency. No exchequer is ever embarra.s.sed, nor is any financial question difficult of solution, when people keep their practice honest, and their heads cool. But when Governments lose all office of pilotage, protection, scrutiny, and witness; and live only in magnificence of proclaimed larceny, effulgent mendacity, and polished mendicity; or when the people choosing Speculation (the S usual redundant in the spelling) instead of Toil, pursue no dishonesty with chastis.e.m.e.nt, that each may with impunity take his dishonest turn; and enlarge their l.u.s.t of wealth through ignorance of its use, making their harlot of the dust, and setting Earth, the Mother, at the mercy of Earth, the Destroyer, so that she has to seek in h.e.l.l the children she left playing in the meadows,--there are no tricks of financial terminology that will save them; all signature and mintage do but magnify the ruin they r.e.t.a.r.d; and even the riches that remain, stagnant or current, change only from the slime of Avernus to the sand of Phlegethon;--quicksand at the embouchure;--land fluently recommended by recent auctioneers as ”eligible for building leases.”
Finally, then, the power of true currency is fourfold.
1. Credit power. Its worth in exchange, dependent on public opinion of the stability and honesty of the issuer.
2. Real worth. Supposing the gold, or whatever else the currency expressly promises, to be required from the issuer, for all his notes; and that the call cannot be met in full. Then the actual worth of the doc.u.ment (whatever its credit power) would be, and its actual worth at any moment is to be defined as being, what the division of the a.s.sets of the issuer, and his subsequent will work, would produce for it.
3. The exchange power of its base. Granting that we can get five pounds in gold for our note, it remains a question how much of other things we can get for five pounds in gold. The more of other things exist, and the less gold, the greater this power.
4. The power over labour, exercised by the given quant.i.ty of the base, or of the things to be got for it. The question in this case is, how much work, and (question of questions) whose work, is to be had for the food which five pounds will buy. This depends on the number of the population; on their gifts, and on their dispositions, with which, down to their slightest humours and up to their strongest impulses, the power of the currency varies; and in this last of its ranges,--the range of pa.s.sion, price, or praise (converso in pretium Deo), is at once least, and greatest.
Such being the main conditions of national currency, we proceed to examine those of the total currency, under the broad definition, ”transferable acknowledgment of debt”;[93] among the many forms of which there are in effect only two, distinctly opposed; namely, the acknowledgments of debts which will be paid, and of debts which will not. Doc.u.ments, whether in whole or part, of bad debt, being to those of good debt as bad money to bullion, we put for the present these forms of imposture aside (as in a.n.a.lysing a metal we should wash it clear of dross), and then range, in their exact quant.i.ties, the true currency of the country on one side, and the store or property of the country on the other. We place gold, and all such substances, on the side of doc.u.ments, as far as they operate by signature;--on the side of store as far as they operate by value. Then the currency represents the quant.i.ty of debt in the country, and the store the quant.i.ty of its possession. The owners.h.i.+p of all the property is divided between the holders of currency and holders of store, and whatever the claiming value of the currency is at any moment, that value is to be deducted from the riches of the store-holders, the deduction being practically made in the payment of rent for houses and lands, of interest on stock, and in other ways to be hereafter examined.
[93] Under which term, observe, we include all doc.u.ments of debt which, being honest, might be transferable, though they practically are not transferred; while we exclude all doc.u.ments which are in reality worthless, though in fact transferred temporarily as bad money is. The doc.u.ment of honest debt, not transferred, is merely to paper currency as gold withdrawn from circulation is to that of bullion. Much confusion has crept into the reasoning on this subject from the idea that withdrawal from circulation is a definable state, whereas it is a gradated state, and indefinable. The sovereign in my pocket is withdrawn from circulation as long as I choose to keep it there. It is no otherwise withdrawn if I bury it, nor even if I choose to make it, and others, into a golden cup, and drink out of them; since a rise in the price of the wine, or of other things, may at any time cause me to melt the cup and throw it back into currency; and the bullion operates on the prices of the things in the market as directly, though not as forcibly, while it is in the form of a cup, as it does in the form of a sovereign. No calculation can be founded on my humour in any ease. If I like to handle rouleaus, and therefore keep a quant.i.ty of gold, to play with, in the form of jointed basaltic columns, it is all one in its effect on the market as if I kept it in the form of twisted filigree, or steadily amicus lamnae, beat the narrow gold pieces into broad ones, and dined off them.
The probability is greater that I break the rouleau than that I melt the plate; but the increased probability is not calculable. Thus, doc.u.ments are only withdrawn from the currency when cancelled, and bullion when it is so effectually lost as that the probability of finding it is no greater than that of finding new gold in the mine.
At present I wish only to note the broad relations of the two great cla.s.ses--the currency-holders and store-holders.[94] Of course they are partly united, most monied men having possessions of land or other goods; but they are separate in their nature and functions. The currency-holders as a cla.s.s regulate the demand for labour, and the store-holders the laws of it; the currency-holders determine what shall be produced, and the store-holders the conditions of its production. Farther, as true currency represents by definition debts which will be paid, it represents either the debtor's wealth, or his ability and willingness; that is to say, either wealth existing in his hands transferred to him by the creditor, or wealth which, as he is at some time surely to return it, he is either increasing, or, if diminis.h.i.+ng, has the will and strength to reproduce. A sound currency, therefore, as by its increase it represents enlarging debt, represents also enlarging means; but in this curious way, that a certain quant.i.ty of it marks the deficiency of the wealth of the country from what it would have been if that currency had not existed.[95] In this respect it is like the detritus of a mountain; a.s.sume that it lies at a fixed angle, and the more the detritus, the larger must be the mountain; but it would have been larger still, had there been none.
[94] They are (up to the amount of the currency) simply creditors and debtors--the commercial types of the two great sects of humanity which those words describe; for debt and credit are of course merely the mercantile forms of the words ”duty”
and ”creed,” which give the central ideas: only it is more accurate to say ”faith” than ”creed,” because creed has been applied carelessly to mere forms of words. Duty properly signifies whatever in substance or act one person owes to another, and faith the other's trust in his rendering it.
The French ”devoir” and ”foi” are fuller and clearer words than ours; for, faith being the pa.s.sive of fact, foi comes straight through fides from fio; and the French keep the group of words formed from the infinitive--fieri, ”se fier,”
”se defier,” ”defiance,” and the grand following ”defi.” Our English ”affiance,” ”defiance,” ”confidence,” ”diffidence,”
retain accurate meanings; but our ”faithful” has become obscure, from being used for ”faithworthy,” as well as ”full of faith.” ”His name that sat on him was called Faithful and True.”
Trust is the pa.s.sive of true saying, as faith is the pa.s.sive of due doing; and the right learning of these etymologies, which are in the strictest sense only to be learned ”by heart,” is of considerably more importance to the youth of a nation than its reading and ciphering.
[95] For example, suppose an active peasant, having got his ground into good order and built himself a comfortable house, finding still time on his hands, sees one of his neighbours little able to work, and ill lodged, and offers to build him also a house, and to put his land in order, on condition of receiving for a given period rent for the building and t.i.the of the fruits. The offer is accepted, and a doc.u.ment given promissory of rent and t.i.the. This note is money. It can only be good money if the man who has incurred the debt so far recovers his strength as to be able to take advantage of the help he has received, and meet the demand of the note; if he lets his house fall to ruin, and his field to waste, his promissory note will soon be valueless: but the existence of the note at all is a consequence of his not having worked so stoutly as the other. Let him gain as much as to be able to pay back the entire debt; the note is cancelled and we have two rich store-holders and no currency.
Finally, though, as above stated, every man possessing money has usually also some property beyond what is necessary for his immediate wants, and men possessing property usually also hold currency beyond what is necessary for their immediate exchanges, it mainly determines the cla.s.s to which they belong, whether in their eyes the money is an adjunct of the property, or the property of the money. In the first case, the holder's pleasure is in his possessions, and in his money subordinately, as the means of bettering or adding to them. In the second, his pleasure is in his money, and in his possessions only as representing it. In the first case, the money is as an atmosphere surrounding the wealth, rising from it and raining back upon it; but in the second, it is a deluge, with the wealth floating, and for the most part peris.h.i.+ng in it. The shortest distinction between the men is that the one wishes always to buy and the other to sell.
Such being the great relations of the cla.s.ses, their several characters are of the highest importance to the nation; for on the character of the store-holders depends the preservation, display, and serviceableness of its wealth;--on that of the currency-holders its nature, and in great part its distribution; and on both its production.
The store-holders are either constructive, or neutral, or destructive; and in subsequent papers we shall, with respect to every kind of wealth, examine the relative power of the store-holder for its improvement or destruction; and we shall then find it to be of incomparably greater importance to the nation in whose hands the thing is put, than how much of it is got; and that the character of the holders may be conjectured by the quality of the store, for such and such a thing; nor only asks for it, but if to be bettered, betters it: so that possession and possessor reciprocally act on each other through the entire sum of national possession. The base nation asking for base things sinks daily to deeper vileness of nature and of use; while the n.o.ble nation, asking for n.o.ble things, rises daily into diviner eminence in both; the tendency to degradation being surely marked by [Greek: ataxia], carelessness as to the hands in which things are put, compet.i.tion for the acquisition of them, disorderliness in acc.u.mulation, inaccuracy in reckoning, and bluntness in conception as to the entire nature of possession.
Now, the currency-holders always increase in number and influence in proportion to the bluntness of nature and clumsiness of the store-holders; for the less use people can make of things the more they tire of them, and want to change them for something else, and all frequency of change increases the quant.i.ty and power of currency; while the large currency-holder himself is essentially a person who never has been able to make up his mind as to what he will have, and proceeds, therefore, in vague collection and aggregation, with more and more infuriate pa.s.sion, urged by complacency in progress, and pride in conquest.