Page:The American Cyclopædia (1879) Volume XI.djvu/763

MONEY MONGE 745 of specie payment by the bank of England, Feb. 27, 1797, and the decade following re- sumption in 1823, which gave rise to discus- sions which, in the opinion of Mr. J. R. McCul- loch, " all but perfected the theory of money." A particularly striking feature in the literature of the discussions of that time is that which is known as the "Bullion Report," i. e., the report from the select committee appointed to inquire into the cause of the high prices of gold bullion, and to take into consideration the state of the circulating medium and the exchanges between Great Britain and foreign parts. This report was ordered by the house of commons to be printed June 8, 1810. The conclusions of the committee were, " that there is at present an excess in the paper circulation of this country, of which the most unequivocal symptom is the very high price of bullion, and next to that the low [high according to the American mode of expression] state of the continental exchanges; that this is to be as- cribed to the want of a sufficient check and control in the issues of paper from the bank of England, and originally to the suspension of cash payments, which removed the natural control. For upon a general view of the sub- ject your committee are of opinion that no safe, certain, and constantly adequate provision against an excess of paper currency, either occasional or permanent, can be found except in the convertibility of such paper into specie." The committee "doubted whether, since the new system of bank of England payments has been fully established, gold has in truth con- tinued to be our measure of value, and wheth- er we have any other standard of prices than that circulating medium issued primarily by the bank of England, and in a secondary man- ner by the country banks, the variations of which in relative value may be as indefinite as the possible excess of that circulating me- dium ;" and thought that " an increase in the quantity of the local currency of a particular country will raise prices in that country, exactly in the same manner as an increase in the gen- eral supply of precious metals raises prices all over the world." Briefly, the report was, and probably is still, the most carefully elabora- ted and consistent statement of the doctrines of Montesquieu and Hume to be found in the language. It was far, however, from setting the subject at rest. There was then a large school, and there is now perhaps a larger one, which argues against all the conclusions of the committee, as well as against the reasoning by which those conclusions are reached. It has been contended by this latter school that money has a fructifying influence upon industry, and that an increase in its volume may increase production, trade, and commerce, and, so far from necessarily increasing prices, in some cases actually reduce them ; that if the theory were true, no increased production in a coun- try, were it two, five, ten, or twenty fold, without a corresponding increase in the vol- ume of money, could increase the aggregate value of these productions a single dollar. There are those who contend, in opposition to the bullion report, that " money should be a thing of a country, of a people, and not of the world ;" and that the financial and business affairs of a country should in no wise be based upon the precious metals, which are, it is con- tended, liable to export, beyond the control of the people or the authorities of a state. There have long been a considerable number of wri- ters in Great Britain holding these opinions, but it is in this country and within a compara- tively recent period that such views have ta- ken most decided and original shape. By no means all of these writers contend for an arbi- trary volume of such money, only limited by the wants of the state or of the people at a particular time. Several of their plans have contemplated the conversion of this money by means of funding to any extent which a cur- tailment in the monetary wants of the people may demand. Probably the earliest advocate of such a system as is here referred to was Ed- ward Kellogg, who in September, 1843, pub- lished in New York a pamphlet entitled " Cur- rency, the Evil and the Remedy." He proposed as a remedy for usury, that the United States government should establish a national safety fund, which should lend money on mortgage of real estate at 3 per cent, per annum, in the form of " circulating medium or safety fund notes," which notes were to be payable or fundable at the pleasure of the holder in "trea- sury notes " or bonds, bearing interest at the rate of 2 per cent, per annum, and payable on and after one year from a given day, in cir- culating medium or safety fund notes. This idea was elaborated by him in subsequent works ; and immediately before and after the passage of the act of Feb. 25, 1862, providing for the issue of United States legal-tender notes, it was strongly urged upon the govern- ment by prominent financiers that these notes should be made interconvertible at the plea- sure of the holder with United States bonds. This scheme of finance, called the " 3-65 bond plan," has attracted much attention. Its friends maintain that the interchangeability of national paper money with government bonds bearing a fixed rate of interest will give an automatic, self-adjusting volume of currency at all times, commensurate with the wants of the people and of business ; and that it will preclude the possibility of financial crises by introducing a cash system of business instead of the credit one which at present exists. In entire consis- tency with the history of all financial schemes and theories, old as well as new, this plan is opposed with a vigor nearly if not quite equal to that with which it is advocated. MOIVGE, Gaspard, a French mathematician, born in Beaune in 1746, died July 28, 1818. He became assistant to Bossut, and also to the abbe Nollet at Mezieres, whom he succeeded in the chair of natural philosophy. He made nu-