STAMP DUTIES.

Cheques drawn by Trustees in Bankruptcy.

The following letter has been received from the Secretary of the Board of Inland Revenue on this subject:

"Inland Revenue,

Somerset House, London, W.C.,

12th January, 1882.

SIR, I have laid before the Board of Inland Revenue your letter of the 30th ult., requesting to be informed whether cheques given by trustees in bankruptcy require the ordinary penny stamps or whether the provisions of Sec. 43 of the Act 32 and 33 Vict., c. 71, exempt such cheques from stamp duty.

In reply I am directed to state that the Board are of opinion that the cheques in question fall within the exemption contained in the section to which you refer, and that this exemption would apply also to cheques given by the trustees in the case of a liquidation by arrangement under Part VI. of The Bankruptcy Act,

1869.

I am, Sir,

Your obedient servant,

(Signed) F. B. GARNETT.

The Secretary,

The Institute of Bankers."

ANNUAL REPORT OF THE DIRECTOR OF THE MINT OF THE UNITED STATES.*

THE following extracts are reprinted from the above Report, which has been only lately received in this country, although the information has for some time past been known by telegraph :

"INTERNATIONAL MONETARY CONFERENCE.

"The Monetary Conference called by France and the United States to consider propositions for an international agreement to coin gold and silver at a common fixed ratio, met at the city of Paris in April of the present year.

66

'Although much instructive discussion occurred, and valuable facts were presented, no practical conclusions were reached, and

* Washington, U.S.A., November, 1881.

finally, on the 8th of July, the Conference was adjourned to meet in April, 1882, at the same place.

Delegates from several European countries gave little encouragement for the expectation of any effective aid from their Governments in the effort to restore silver to its former place in the monetary circulation. The hope, however, seems to have been entertained that further deliberation, and a consideration of the inevitable complications and disturbances to commercial exchanges between Asiatic countries and the western world to be feared from the exclusion of silver from coinage, will enlist the co-operation of those nations in this, possibly the final, effort to retain silver conjointly with gold as a measure of values. In view, however, of the failure of the Conference to agree upon any practical measure, and while awaiting its future action, it is a question for our serious and early consideration, whether it is not desirable to suspend the further coinage of silver until, by international agreement and effective legislation, the unlimited coinage of silver and gold at a common fixed ratio shall have been authorised by the principal commercial nations of Europe and America.

"The silver circulation of this country, before the close of this fiscal year, will amount to $200,000,000, and will suffice for the needs of our people, for coins of the denomination of one dollar and less.

"The United States has done its part towards retaining silver as a monetary agent for measuring and exchanging values. For three years it has appropriated to coinage purposes one-third of the world's production of silver, and maintained its average bullion price nearly to the average of 1878. As was said in my first report, should the $650,000,000 of silver coin now full legal tender in Europe be demonetized, the United States could not single-handed among commercial nations, with no European co-operation or allies, sustain the value of silver from the inevitable fall.'

"With that danger menacing us we cannot, without serious embarrassment, continue such coinage, unless other commercial nations will agree upon the general use of silver as well as gold.

"But should such international agreement be secured, neither our ratio of comparative valuation nor even one based upon the present exchangeable value of gold and silver will probably be adopted. The ratio of fifteen and a half to one, already approved and in use among the nations composing the Latin Union, would doubtless be chosen. This would, if the coinage of silver as well as gold at all the mints of the world were made free, as bi-metallism implies, cause the voluntary withdrawal from circulation of the standard dollars, and their re-coinage. In such case the further coinage of silver dollars of the present weight unless needed for circulation,i s a useless expenditure."

NOTES ON SOME RECENT PAPERS.

How Money does its Work. An Answer to M. DE LAVELEYE by PROFESSOR BONAMY PRICE. Contemporary Review, Feb., 1882.

In an article which appeared lately* by M. de Laveleye, that gentleman made special reference to Professor Bonamy Price as an exponent of the views of " Economists" in contra-distinction to bankers, merchants and the practical school of every-day business men. It was scarcely probable that, under such circumstances, he would not say a good deal that the Professor would wish to answer, and here he seizes his opportunity. Answering the question, What is Money? by the reply that "it is obviously a tool, an instrument, nothing else," he proceeds to show how it came into the world. The cost of production" value is then boldly entered upon and upheld; and, here he begins to fall upon his opponent heavily. M. de Laveleye said that "law has an influence over the demand for gold quite different from that which it exercises over the demand for any other commodity, for " and this is a statement for which no forgiveness can be found, "the State buys gold in unlimited quantities and at a fixed price." At this "assertion so rash and unfounded" the Professor is very indignant, and a very considerable space is devoted to a refutation of the heresy. It is fair game for his prowess, but why try to kill it over and over again? Later on M. de Laveleye to a certain extent explains his meaning by saying that "if you made too much cast-iron or cloth, you cannot sell it all.... this is not the case with monetary metal, thanks to free coinage, it can always be converted into money... With money you can purchase, and pay for, anything and everything, with goods you must wait to sell before purchasing or paying." To refute this and follow out in detail the events which occur when a large importation of gold makes its appearance in England, Professor Price supposes a case of a merchant who, with English goods, buys and imports five millions of Australian gold. "With what" he asks "does he buy them? With English goods, incontestably; neither he nor England has anything else to buy them with. Five millions' worth of English wealth, English commodities, have gone away from England to

* Commonplace Fallacies concerning Money. See Journal for January last,

page 38, vol. 3.

one.

Australia. England, clearly, has lost those goods, that wealth. But compensation has been given in metal of equal value. Those goods will be highly serviceable to Australia; they will be capital available for clothing her workmen, sustaining her industry, and developing her wealth. On the other hand, the gold reaches England; to the Bank of England straight it goes; there is no other place where it can stay, unless Rothschild carries it off for export abroad. Is England a gainer by this gold? M. de Laveleye contrasts it with too much cloth and cast-iron, which the market cannot clear away, and which make their owner a loser. Granted that the importer of the five millions is no loser; he has metal worth the goods he took away. Granted that he can buy what he chooses by means of that metal which he has converted into sovereigns at the Mint; the transaction for him may be an excellent But how fares it with England and her people? Australia, by the help of her gold, has won capital-she has wealth available for producing more wealth, whilst her precious metal she could apply to no useful purpose. M. de Laveleye retorts that monetary metal is never dead capital; but the five millions of sovereignsunneeded for currency, and lying idle in the bank's vaults-are they capital at all? Are they at work, as all capital is assumed to be? Are they not wealth for the time annihilated, existing only as possessing value, but, as useful wealth, not better than so many stones? The merchant's purchases will not draw the vast stock of gold out of the cellar. He will pay for what he buys with cheques on the Bank of England; they will be settled at the Clearing House. Those who sold the goods will buy others with the credit now standing in their names; buying and selling, exchanging, will go on, but cheques will do all the work, and idle and dead the five millions remain. Thus England has lost wealth, capital, capable of being applied to augmented production, and in its place she has heaps of metal hoarded in a cellar."

To a certain point this is admirable, but with all respect for the Professor, it is asked whether he goes far enough? The metal itself may be "hoarded in a cellar," but it is immediately represented by notes. The merchant may as he says, "pay for what he buys with cheques on the Bank of England," but what balance would he have had on his account, had he imported, on M. de Laveleye's hypothesis, iron or cloth, instead of gold, which, even before it is melted, can be placed in the form of money to his credit?

Whatever Professor Bonamy Price writes is clever, and has that charm of language, that even so dry a subject as this, is made readable; but it must be doubted whether the truth is much advanced by academical discussions in which the ordinary practice, well described up to a certain point, is followed up no further than will suit the theoretical conclusions. The foregoing is only one instance of this procedure.

For, again, following up the subject, and still endeavouring to show that this metal will lie useless in the bank cellars, he says, "There is one force, and one force only, which will draw out these Sovereigns-an increase of cash payments requiring the specific use of coins. The enlarged industries will need more shillings and sovereigns for wages and small purchases in shops; but how much of the five millions will this increase of cash payments draw forth?" And then, assuming that instead of five millions it had been fifty, he says, "They never will come forth into circulation in England until the sovereign is worthless, and more of them become necessary for carrying on the same work in purchasing. In its despair the Bank will make every effort to send these useless millions of metal abroad." Can it really be the case that the Professor has never heard of what is called the foreign exchanges, and how that, in obedience to the laws which they represent, gold may be, and actually is exported, even in its uncoined state, without any effort whatever on the part of the Bank?

But the bi-metallic question, which has been looming throughout, soon comes in for all the fire of the Professor's artillery. The space in this Journal is too limited to re-produce the arguments, and in in truth, it must be admitted that there is not much that is new in them. As the stock answers of an opponent of the theory, they have done duty often before. This Journal is not a place in which to express an opinion on a subject which neither the Council nor the Members have yet considered; but whilst there is not the least wish to do this, or to depart from the line of strict neutrality, it must be asked whether the course pursued here, which has been too often noticed as that pursued by the opponents of the bi-metallic system, of merely repeating old arguments as if nothing had been said in refutation of them, is quite candid, or can conduce to a satisfactory result. Thus, in the early part of the paper, when speaking of barter, and urging with great force that "every debtor or every creditor may be cruelly wronged by a false or a varying value attaching to money," Professor Price breaks out into the exclamation that "It would be well if the advocates of bi-metallism were to ponder over what steadiness of value is for money." One asks with astonishment whether bi-metallists indeed have altogether omitted this from their consideration. Whether, right or wrong in their mode of attaining this "steadiness of value," they have not gone to the extent of forming an association in which this very object is put forward as the head and front of the purposes they have in view.

So also, when reiterating the mono-metallists' argument that gold would be gradually withdrawn from circulation, the Professor says, "Silver would be imported into the country, would be turned into coins, and then be exchanged for gold coins in many operations of trade. It would be instantly melted back into ingots, and then