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diff --git a/.gitattributes b/.gitattributes new file mode 100644 index 0000000..6833f05 --- /dev/null +++ b/.gitattributes @@ -0,0 +1,3 @@ +* text=auto +*.txt text +*.md text diff --git a/33331-8.txt b/33331-8.txt new file mode 100644 index 0000000..7e72202 --- /dev/null +++ b/33331-8.txt @@ -0,0 +1,2504 @@ +Project Gutenberg's An Example of Communal Currency, by J. Theodore Harris + +This eBook is for the use of anyone anywhere at no cost and with +almost no restrictions whatsoever. You may copy it, give it away or +re-use it under the terms of the Project Gutenberg License included +with this eBook or online at www.gutenberg.org + + +Title: An Example of Communal Currency + The facts about the Guernsey Market House + +Author: J. Theodore Harris + +Release Date: August 2, 2010 [EBook #33331] + +Language: English + +Character set encoding: ISO-8859-1 + +*** START OF THIS PROJECT GUTENBERG EBOOK AN EXAMPLE OF COMMUNAL CURRENCY *** + + + + +Produced by Barbara Kosker and the Online Distributed +Proofreading Team at http://www.pgdp.net (This file was +produced from images generously made available by The +Internet Archive/American Libraries.) + + + + + + + +-----------------------------------------------+ + | | + | Bolded text has been marked =like so=. | + | | + +-----------------------------------------------+ + + + + + LONDON SCHOOL OF ECONOMICS AND + POLITICAL SCIENCE + + + + + AN EXAMPLE OF COMMUNAL CURRENCY + + + + + By + + J. THEODORE HARRIS, B.A. + + + + + With a Preface by + SIDNEY WEBB, LL.B. + + + + + 1/- NET + + + + + LONDON + P. S. KING & SON + ORCHARD HOUSE, WESTMINSTER + 1911 + + + + + PEOPLE'S BANKS + + A RECORD OF SOCIAL AND ECONOMIC SUCCESS + + By H. W. WOLFF + + _Third Edition, Newly Revised and Enlarged_ + _Demy 8vo, Cloth, 600 pp._ =6s.= _net_ + + CONTENTS--Introduction, The General Idea, The Two Problems, The Two + Aspects of the Question, Credit to Agriculture, The "Credit + Associations" of Schulze-Delitzsch, Raiffeisen Village Banks, + Adaptations, "Assisted" Co-operative Credit, Co-operative + Credit in Austria and Hungary, The "Banche Popolari" Italy, The + "Casse Rurali" of Italy, Co-operative Credit in Belgium, + Co-operative Credit in Switzerland, Co-operative Credit in + France, Offshoots and Congeners, Co-operative Credit in India, + Conclusion. + + "We may confidently refer those who desire information on the + point to the book with which Mr. Wolff has provided us. It will + be a most useful thing if it is widely read, and the lessons which it + contains are put in practice."--_Athenæum._ + + "The book is the most systematic and intelligent account of these + institutions which has been published."--_Banker's Magazine (New + York)._ + + "It is the most complete book on the subject."--_Mr. G. N. + Pierson, late Dutch Prime Minister and Minister of Finance._ + + "There was manifest need of just such a book.... A mine of + valuable information."--_Review of Reviews._ + + "This is an excellent book in every way, and thoroughly deserves + the careful attention of all who are concerned for the welfare of the + people."--_Economic Review._ + + + LONDON: P. S. KING & SON + ORCHARD HOUSE, WESTMINSTER + + + + + STUDIES IN ECONOMICS AND POLITICAL SCIENCE + + Edited by the Hon. W. PEMBER REEVES, + Director of the London School of Economics + + No. 21 in the Series of Monographs by Writers connected + with the London School of Economics and Political Science + + + + + AN EXAMPLE OF COMMUNAL CURRENCY + + + + + AN EXAMPLE OF COMMUNAL CURRENCY: + + THE FACTS ABOUT THE GUERNSEY MARKET HOUSE + + + + + COMPILED FROM ORIGINAL DOCUMENTS + BY + J. THEODORE HARRIS, B.A. + + WITH A PREFACE BY + SIDNEY WEBB, LL.B. + + + + + LONDON + P. S. KING & SON + ORCHARD HOUSE, WESTMINSTER + 1911 + + + + +CONTENTS + + PAGE + + PREFACE vii + + INTRODUCTION 1 + + CHAP. + + I. CONSTITUTION OF GUERNSEY 4 + + II. THE SECURITY OF THE NOTES 6 + + III. MUNICIPAL ENTERPRISE--THE ISSUE OF THE NOTES 9 + + IV. THE UTILITY OF THE NOTES 20 + + V. FIRST RUMBLINGS OF OPPOSITION 25 + + VI. THE REPLY OF THE STATES 30 + + VII. THE CRISIS 45 + + VIII. THE END 55 + + CONCLUSION 59 + + APPENDIX 61 + + + + +PREFACE + + +Those who during the past thirty or forty years have frequented working +men's clubs or other centres of discussion in which, here and there, an +Owenite survivor or a Chartist veteran was to be found, will often have +heard of the Guernsey Market House. Here, it would be explained, was a +building provided by the Guernsey community for its own uses, without +borrowing, without any toll of interest, and, indeed, without cost. To +many a humble disputant the Guernsey Market House seemed, in some +mysterious way, to have been exempt from that servitude to previously +accumulated capital in which the whole creation groaneth and travaileth. +By the simple expedient of paying for the work in Government +notes--issued to the purveyors of material, the master-workmen and the +operatives, accepted as currency throughout the island, and eventually +redeemed out of the annual market revenues--all tribute to the +capitalist was avoided. In face of this successful experiment, the fact +that we, in England, continued to raise loans and subject ourselves to +"drag at each remove a lengthening chain" of interest on public debt, +often seemed so perplexingly foolish as to be inexplicable, except as +the outcome of some deep-laid plot of "the money power." + +When first I heard of this Guernsey Market House, as in some mysterious +way exempted from the common lot, I was curious to enquire what +transaction had, in fact, taken place in an island which was, after all, +not so far removed in space or time from the Lombard Street that I knew. +In all the writings of the economists (for which my estimate was at that +time, as indeed it is now, such as I could not easily put into +appropriate words), I found no mention of this Phoenix among +market-houses. I fear that, too hastily, I dismissed the story as +mythical. + +Now Mr. J. Theodore Harris--having, I suspect, a warmer feeling for the +incident than he has allowed to appear in these scientific pages--has +done what perhaps I or some other economic student of the eighties or +nineties ought to have done, namely, gone to Guernsey to dig up, out of +the official records, the incident as it actually occurred. What is +interesting is that he has found that the myth of the veteran Owenite or +Chartist is, in all essentials, confirmed by the documents. The story is +true. The Guernsey Market House was built without a loan and without the +payment of interest. + +It does not follow, however, that it was any more built without the aid +of capital, than was St. Paul's Cathedral or the Manchester Ship Canal. +Mr. Harris, contenting himself with the austerely exact record drawn +from the documents, does not indulge in any speculative hypothesis as to +who provided the capital, or who bore the burden that would otherwise +have been interest. Let me use the fuller privilege of the +preface-writer, and supply some hypothetical elucidations. + +What the Guernsey community did was that which nearly every community +has done at one time or another, namely, issue paper money. The part of +the story that we do not know is (_a_) what thereupon happened to the +aggregate amount of "currency" of all kinds then in circulation within +the island, in relation to the work which that currency had to do; (_b_) +what happened to the prices of commodities. + +It may well have been that the issue of paper money was promptly +followed by some shipments of metallic money to England or +France--perhaps even in payment for imported materials for the market +house--so that the aggregate amount of "currency" in the island was not +in fact increased. Accordingly, no change of prices may have taken +place. In such a case, Guernsey would merely have substituted paper for +gold in its currency. The gold-capital heretofore in use as currency, +and there, of course, yielding no capitalist any toll of interest, +would, in effect, have been borrowed to expend upon the building of the +Market House. And, as paper money probably served the purposes of the +island every bit as well as gold, nobody was any the worse. By giving up +the needless extravagance of using gold coins as counters, and by taking +to paper counters instead, Guernsey really got its Market House without +cost. The same resource is open to any community already possessing a +gold currency, and becoming civilised and self-restrained and sensible +enough to arrange to do without gold counters in its internal trade. But +Guernsey could not have gone on equipping itself with endless municipal +buildings as out of a bottomless purse. The resource is a limited one. +This is a trick which can only be played once. When the gold has once +been withdrawn from the currency, and diverted to another use, there is +no more left with which to repeat the apparent miracle. + +On the other hand, there may easily have been no special shipments of +metallic money from the island, and the aggregate "currency" may have +been increased, in relation to the work that it had to do, by the amount +of the note issue. In that case, the economist would, for reasons into +which I have no space to go on the present occasion, expect to see a +gradual and silent rise of prices. Such a rise would seem, to the +ordinary Guernsey housekeeper and shopkeeper, as inevitable, and at the +same time as annoying as any other of those mysterious increases in the +cost of eggs and meat that Anthony Trollope described with such +uneconomic charm in _Why Frau Frohmann raised her prices_--a work which +I do not find prescribed, as it might well be, for undergraduate +reading. + +There is even a third hypothesis, to which Mr. Harris has directed my +attention. There may have been, before the note issue, an actual dearth +of currency, or a growing disproportion between the amount of the +currency and the work that it had to do. Mr. Harris infers from his +reading that such a stringency had been actually experienced in +Guernsey, and that it was for this reason that successive attempts were +made to prevent foreign coins from being gradually withdrawn from the +island. Such a stringency, the economist would infer, would produce a +progressive fall of prices, leading, by the silent operations of +external trade, to a gradual readjustment of the amount of currency in +circulation, by influx of gold from outside, until a new equilibrium had +been reached. If the Guernsey Government's note issue happened to be +made at such a moment, it may well have taken the place of the +hypothetical inflow of gold, so far as the island currency was +concerned. It may even have averted a fall in prices that would +otherwise have taken place, the economic effect on the consumer's +pockets being in that case much the same as if an actual rise had +occurred. But the Guernsey Government, on this hypothesis, would, by +substituting paper for gold, have gained for the community the +equivalent of the cost of the addition to the gold currency which +expanding population and trade were making necessary; and this gain was +expended in building the Market House. + +Unfortunately we do not know how prices behaved to the Guernsey +housekeeper between 1815 and 1837. Perhaps another student will look +this up. What is interesting to us in this argument is the fact that, +_if prices generally did rise_, in consequence of the issue of the paper +money, even by only one half-penny in the shilling--if eggs, for +instance, sold twenty-four for a shilling, instead of twenty-five--this +represented a burden laid on the Guernsey people as consumers, exactly +analogous to a tax (say an octroi duty) of four per cent. on all their +purchases. On this hypothesis, which I carefully abstain from presenting +as anything but hypothetical, because we are unable to verify it by +comparison with the facts, the economist would say that this burden or +tax was what they imposed on themselves, and notably upon the poor, by +increasing the currency, instead of borrowing the capital from +elsewhere. Instead of paying interest on a loan (to be levied, perhaps, +as an income tax on incomes over a certain minimum) they unwittingly +chose to pay more for their bread and butter. The seriousness of this +possible result lies in the definitely ascertained fact that salaries +and wages rise more slowly, and usually to a smaller extent, than the +prices of commodities. + +Now, which of these speculative explanations is the true one does not +greatly matter to-day when all the consumers, rich and poor, are dead +and gone. What does concern us is that we should not misconstrue the +Guernsey example. We already use paper money in this country to a small +extent. We could certainly with economic advantage save a great part of +the cost (three or four millions sterling a year) that we now pay for +the luxury of having so many gold sovereigns wandering about in our +pockets. We may one day find the uncounted reserve of capital that in +our gold currency we already possess, virtually in common ownership, +come in very usefully on an emergency (which is, perhaps, what happened +at Guernsey). But we must beware of thinking that the issue of paper +money offers some magical way of getting things without having to use +capital, or we may find ourselves one day, to the unmeasured hardship of +the poor among us, stupidly burdening ourselves as consumers with higher +prices and increased cost of living all round. + +There are, of course, other reasons in favour (_a_) of paper money being +issued by the Government, instead of this valuable and responsible +prerogative being abandoned to individual bankers or joint stock +companies, to the great financial loss of the community as a whole; and +(_b_) of the whole business of banking--which means the organising of +credit and the custody of savings--being conducted by the Government +itself, in order that the power which banking gives may be exercised +exclusively under public control, and for corporate instead of for +individual ends, and in order that the profit which banking yields may +accrue to the benefit of the community as a whole, instead of to +particular capitalists. But that is another story. The Guernsey +Government stopped short at the issue of paper money--which is not +banking--and even gave up this right at the bidding of private banking +companies. + + SIDNEY WEBB. + + 41, Grosvenor Road, Westminster. + _December, 1910._ + + + + +AN EXAMPLE OF COMMUNAL CURRENCY + + + + +INTRODUCTION + + +There are many persons who have heard from one source or another of the +way in which the States of Guernsey built their Market House by means of +non-interest-bearing notes. Some of these--enthusiasts for the reform of +the currency--can dilate for hours on the wisdom of the financial policy +of Daniel de Lisle Brock, can tell how, at the opening of the Market he +"sprinkled the packages (of redeemed notes) with perfume, and while the +band was playing a dirge he laid them on the fire, where they were +quickly consumed," and can even quote from his famous speech on that +occasion. + +A few years ago some members of the Co-operative Brotherhood Trust, +which is a Society that has among its objects a desire to revive the +principles of Robert Owen's Labour Exchange, thought it worth while to +make enquiries as to the Guernsey scheme. They realised that an ounce of +fact was worth a ton of theory. But what were the facts? Were these +notes circulated in the island as a medium of exchange? How were they +redeemed? Could a citizen demand gold for them? When the above mentioned +enthusiasts were tackled with these practical questions, there was +suddenly noticed a certain hesitancy; and when asked point blank what +was the year in which this famous Market House was built, no one could +say. + +Enquiries were then made from inhabitants of the island itself. The +information gathered was vague and not much to the point. With a few +notable exceptions, the average Guernseyman seems to know or care little +of the financial policy of the island at the beginning of the nineteenth +century. Even from those interested nothing very definite was to be +learned. The enquirers at last came near to doubting whether the +non-interest-bearing notes had ever existed except in the imagination of +the enthusiasts. Only first-hand enquiry on the spot would suffice. + +One Guernseyman, a teacher, kindly encouraged the writer to visit the +island himself, promising him introductions and access to all the +official documents and newspapers of the time. Through the courtesy of +the Greffier and the Librarian of the Guille-Allés Library every +facility was granted to the writer and his wife to carry out their +research. The politeness and kindness of these officials and other +inhabitants of Guernsey are hereby most cordially acknowledged. + +In the following pages it is the writer's desire to place the facts +before the public as he has gleaned them from the official records of +the States and the newspapers of the time. He feels tempted to discuss +the _pros_ and _cons_ of the system adopted by the States of Guernsey +for over twenty years; but this little treatise will probably be of most +use if it is confined to a mere narration of facts. Incidentally, +however, it will be seen that some of the queries which led to the +research have been answered. From the nature of the case this narration +will consist largely of quotations. It must inevitably fail to convey to +the reader the thrilling interest aroused as the story, exceeding all +the romance of the enthusiasts, led its slow but fascinating course +through many volumes, and the quaint old French documents gave up their +secrets in the modern well-equipped Record Office. + + + + +CHAPTER I + +CONSTITUTION OF GUERNSEY. + + +Guernsey is the second in size of the four Channel Isles, Jersey, +Guernsey, Alderney and Sark, which one used to repeat with such gusto in +one's schoolboy days. The Channel Isles are the last remnant of our +French possessions. Or rather, as the Islanders might claim--and as it +is reported some do--England belongs by right of conquest to the Channel +Isles. However that may be, for all practical purposes, the government +of Guernsey is autonomous--and very jealously does the Guernseyman guard +this autonomy. + +It has its own Parliament, "The States" (Les États), consisting to-day +of 49 Members. At the time of which we write there were 32 Members, as +follows:-- + +The Bailiff, who, as at the present time, acted as President. + +The Procureur du Roi, corresponding to our Attorney-General. + +12 Jurats or Magistrates, appointed for life by the "States of +Election." + +8 Rectors. + +10 Connétables or Parishioners. + +The Rectors as spiritual leaders and the Connétables as civil +functionaries represented the ten parishes of the island, and though the +latter were elected to office they were always from the leading +families, which formed an extremely close oligarchy. Bailiff, Jurats and +Rectors still sit in this undifferentiated Parliament, to which has been +added a slightly more democratic element however, nine Deputies being +elected by the Ratepayers of the whole Island. + +It was, and still is, the Bailiff's duty to summon this "States of +Deliberation," formerly at his own discretion, now at regular intervals. +He does this by means of issuing a _Billet d'Etat_, in which he comments +on the business to come before the States and in which he formulates +certain resolutions. On these resolutions the States only vote _for_ or +_against_. This Billet d'Etat is in French, still the official +language--the only one used in the deliberations in former days. + +The whole takes us back in thought to Norman or early English times. +Probably even the Norman patois of the modern rural deputies is the +speech of the present time nearest to that in which our ancestors +transacted their business. + +This legislative body represents the King's Council, in the same way +that the supreme judicial body, still bearing the name of La Cour +Royale, represents the King's Court. + +The decisions of the States are subject to the approval of the Privy +Council, to whom there is a right of appeal. + + + + +CHAPTER II + +THE SECURITY OF THE NOTES + + +Guernsey, like other places, fell on evil days early in the nineteenth +century, the period of history with which we have to deal; and the +islanders suffered from the burden of a heavy debt and from the +depression and want of employment which followed the close of the +Napoleonic wars. + +Its condition at this time is graphically described in the following +extracts taken from a document presented by the States to the Privy +Council in 1829. + +"In this Island, eminently favoured by nature, antecedently to the new +roads first projected by Sir John Doyle, Bart., nothing had been done by +art or science towards the least improvement; nothing for the display or +enjoyment of local beauties and advantages; not a road, not even an +approach to Town, where a horse and cart could pass abreast; the deep +roads only four feet six inches wide, with a footway of two to three +feet, from which nothing but the steep banks on each side could be seen, +appeared solely calculated for drains to the waters, which running over +them rendered them every year deeper and narrower. Not a vehicle, +hardly a horse kept for hire; no four-wheeled carriage existed of any +kind, and the traveller landing in a town of lofty houses, confined and +miserably paved streets, from which he could only penetrate into the +country by worse roads, left the island in haste and under the most +unfavourable impressions. + +"In 1813 the sea, which had in former times swallowed up large tracts, +threatened, from the defective state of its banks, to overflow a great +extent of land. The sum required to avert the danger was estimated at +more than £10,000, which the adjoining parishes subject to this charge +were not in a condition to raise. The state of the finance was not more +consolatory with a debt of £19,137, and an annual charge for interest +and ordinary expenses of £2,390, the revenue of £3,000 left only £600 +for unforeseen expenses and improvements. + +"Thus at the peace, this Island found itself with little or no trade; +little or no disposable revenue, no attraction for visitors, no +inducement for the affluent to continue their abode, and no prospect of +employment for the poor." + +After considering various means of raising a revenue, the States asked +the Privy Council for permission to levy a duty on spirituous liquors. +Notwithstanding some opposition by the inhabitants, permission was +granted by an Order in Council of the 23rd July, 1814, to raise 1s. per +gallon on spirituous liquors consumed in the Island. This was granted +for a period of five years. + +A second Order in Council, dated 19th June, 1819, renewed the duty for +ten years. Again there was opposition from a section of the inhabitants. +This made itself felt by the insertion in the Order of the following +words:--"That One Thousand Pounds per annum of the produce of the said +duty be applied solely to the liquidation of the present debt, together +with such surplus as shall remain out of the produce of the tax in any +year after defraying the expenses of roads and embankments and +unforeseen contingencies. And that the States of the said Island do not +exceed in any case the amount of their annual income without the consent +previously obtained of His Royal Highness in Council. And the said +States are hereby directed to return annually to the Privy Council an +account of the produce and application of the said Tax." + +In 1825 the Lieutenant-Governor, Sir John Colborne, desired to erect a +new College and to carry on other important works. But these plans could +not be accomplished without the assurance of the renewal of the duty. A +third Order in Council of 30th September, 1825, gave this permission for +a period of fifteen years, that is to say, from 1829 to 1844. On this +occasion there was no opposition from any of the inhabitants. + +As will be seen in the next chapter, it was this duty on spirituous +liquors that formed the security on which the notes were issued. + + + + +CHAPTER III + +MUNICIPAL ENTERPRISE--THE ISSUE OF NOTES + + "_Guernsey should make up only one great family whose + interests are common. Only by union and concord can she + enjoy firm and lasting prosperity._" + + +Although, as we shall see, the first notes that were issued were not for +the Market, it is interesting to find that there is some foundation for +the tradition identifying them with it. The plan was first suggested in +connection with a scheme for the enlarging of the Market. + +This was a much needed improvement. "Humanity cries out, every +Saturday," reports a States Committee, "against the crush, which it is +difficult to get out of; and every day of the week against the lack of +shelter for the people who, often arriving wet or heated, remain exposed +for whole hours to wind and rain, to the severity of cold and to the +heat of the sun." + +A Committee, appointed 12th April, 1815, to consider the question, +having brought in a scheme for enlarging the Market, recommended the +issue of State Notes. The Bailiff submitted the following resolution for +the consideration of the States at their meeting on 29th March, +1816:--"Whether in order to meet the expenditure it would not be +desirable to issue State Notes of One Pound each (_Billets des États +d'une Livre Sterling_) up to £6,000, the States undertaking not to issue +any, under any pretext whatever, beyond the said sum before having +previously cancelled the said £6,000." + +Notwithstanding the Committee's opinion that the enlargement of the +Market could not be recommended without this issue, and the precautions +suggested for the issue of the Notes, the States rejected the +proposition. + +However, the promoters of the idea appear to have been nothing daunted, +and to have met with success on their second attempt. For we find that +on the 17th October of the same year the Finance Committee reported that +£5,000 was wanted for roads, and a monument to the late Governor, while +only £1,000 was in hand. They recommended that the remaining £4,000 +should be raised by State Notes of £1, 1,500 of which should be payable +on 15th April, 1817, or any Saturday after by the Receiver of the Duty, +1,250 on 15th October, 1817, and 1,250 on 15th April, 1818. + +"In this manner, without increasing the debt of the States, we can +easily succeed in finishing the works undertaken, leaving moreover in +the coffers sufficient money for the other needs of the States." + +The States agreed to this and appointed a Committee of three (Nicolas +Maingy, Senior, Jean Lukis and Daniel de Lisle), who were exclusively +charged with the duty of issuing the Notes, taking all the precautions +they thought necessary. They were to pay them out on the order of M. le +Superviseur (Jean Guille), and to receive them back from the Receiver of +the Duty when paid in, in order to cancel them. + +These Notes seem to have served their purpose; for in the record of the +decisions of the States on the 18th June, 1818, is found the following +entry:--"The said States unanimously authorise the issue of new Notes up +to £1,250, to be put at the disposal of Jean Guille, Esq., Jurat, for +the needs of the State; and they ask the said gentlemen, Daniel de +Lisle, Nicolas Maingy and Jean Lukis, kindly to help in the matter. +Which Notes shall be payable at a fixed time to be determined by the +States' Committee named for this purpose at the time of the last issue +of Notes." + +The need for enlarging and covering the Market was meanwhile being more +and more pressed, the site and certain buildings having been purchased +on 10th April, 1817, for £5,000, which was borrowed at 4-½ per +cent.[1] A Committee reported on this subject to the meeting of the +States on 6th October, 1819. In their recommendation they proposed "the +issue of Notes of £1 sterling, payable at different times on the receipt +of the part of the Duty left at the disposal of the States." +Notwithstanding the pathetic appeal already recorded, the proposal of +the Committee to enlarge and to cover the Market was lost by a majority +of one. + +The advocates for improving the Market, however, persevered, and +presented to the States Meeting of 12th May, 1820, five plans. The plan +of John Savery Brock at a cost of £5,500 was agreed to by a majority of +19 to 10. + +The following quotation from the Committee's report shows the benefits +which they considered would arise from their scheme for raising the +£5,500 required. + + "The means of meeting this would be to apply to + it the sums now in litigation with the town £1,000 + + Twenty-shilling Notes put at the disposal of + the Committee 4,500 + ------- + £5,500 + + +But provision must be made for the repayment of the Notes issued, and +the means recommended by your Committee are as follows-- + + "The 36 shops, built for butchers according to + the plan recommended, would produce at £5 + sterling per annum £180 + + From this must be deducted £20 for hiring the + house at the corner and £10 for repairs 30 + ------ + £150 + + The States should grant for 10 years after the + first year 300 + ------ + This would give an income of £450 + +This sum would be spent each year in paying off and cancelling as many +Notes. + +"Thus, at the end of ten years, all the Notes would be cancelled and the +States would be in possession of an income of £150 per annum, which +would be a return for the £3,000 spent by them. + +"Looked at from all sides the scheme shows nothing but the greatest +advantage for the public and for the States. It should please those who +have at heart the diminution of the debt, since the States in addition +to the £1,000 set aside for this purpose, take a further £300 out of +their treasury in order to increase their income (_en prenant 300l. de +plus sur leurs épargnes pour accroître leur revenu_)." + +Thus it appears that the money for building the Meat Market, still +standing, was raised without a loan, the States paying off the Notes at +the rate of £450 a year as the duty on spirits and the rents came in. +The Market is described in Jacob's _Annals of the British Norman Isles_, +Part I., published in 1830, as a handsome new building, "one of the most +convenient, both for the buyers and sellers, that can be found in any +part of the world." "For the mode of raising the funds for its erection +and support (well worth the attention of all corporate bodies)" we are +referred to an Appendix IV. which was to appear at the end of Part II., +to be published in December, 1831.[2] + +Diligent search in contemporary records showed no trace of the elaborate +ceremony described in the tradition current among enthusiasts, though +the _Mercury_ of the 5th October, 1822, announced in its advertisement +column that the opening would take place on Saturday, 12th October, +1822. + +The following week the _Mercury_ chronicles the handing over by the +Committee of the keys of the new Market to the butchers. "A large crowd +gathered in the square, of whom only a few succeeded in entering the +enclosure. A speech was made by one of the Committee, to which one of +the butchers made a reply. The band of the East Regiment took part and +the church bells rang till five in the evening." + +The next issue of Notes seems to have been to pay off the floating debt. +On 14th June, 1820, the States authorised the issue of 4,000 £1 Notes +for this purpose. In recommending this course the Finance Committee +makes some interesting reflections. "Respecting the floating debt, which +consists of sums payable at times more or less distant, it would be easy +to discharge it by £1 Notes put into circulation as need requires. The +extinction of the whole of the floating debt could thus be brought about +without the necessity of new loans. If loans should be raised it would +be necessary to provide for payment both of the principal and of the +interest. If, on the contrary, recourse is had to £1 Notes, the interest +alone which would have been paid will suffice." + +On 23rd June, 1821, the States authorise the issue of 580 £1 Notes to +buy a house whose site is wanted for the new Market. + +On 15th September of the same year the issue is authorised of 4,500 £1 +Notes to diminish the interest-bearing debt of the States. In +recommending this, the Finance Committee remarks:--"The States could +increase the number [of Notes in circulation] without danger up to +10,000 in payment of the debt, and the Committee recommends this course +as most advantageous to the States' finance, as well as to the public, +who, far from making the slightest difficulty in taking them, look for +them with eagerness." + +On 30th June, 1824, on the united recommendation of the Market and +Finance Committees, 5,000 £1 Notes are issued to pay off the £5,000 +originally paid for the Market in 1817 (see p. 11). "By this means the +interest of £200 (_sic_) a year will be saved and applied moreover every +year to withdraw from circulation £1 Notes issued for the construction +of the Market." + +On 29th March, 1826, a further issue is authorised for the purpose of +Elizabeth College and Parochial Schools, provided that the total number +of Notes in circulation shall not exceed £20,000. In summoning the +States on this occasion, the Bailiff, Daniel de Lisle Brock,[3] +expresses the opinion that paper money is of great use to the States. +There is no inconvenience because the Notes are issued with great care. + +This statement as to great care is borne out by the words of the +resolution passed 12th May, 1826, authorising the issue of £5 Notes, not +exceeding £8,000 worth, voted for the Isle of Sark and other purposes. +After asking Nicolas Maingy, Jean Lukis and Daniel de Lisle "to sign the +said Notes in the name and under the guarantee of the States," it goes +on to say, "and in default of one or other of these gentlemen through +absence or illness, the States authorise the remainder of the three, the +Finance Committee and M. le Superviseur to choose conjointly another +reputable person for the signature of the said Notes. Which said Finance +Committee Supervisor and those authorised to sign are charged and +requested to watch over and be present at (_veiller et assister à_) the +destruction of the said Notes at the times fixed for their repayment." + +Extra precautions seem to have been taken 28th June, 1826, when another +issue, not exceeding £2,000 worth of £5 Notes was authorised. For we +find that "The States appoint Josias le Marchant, Pierre le Cocq, +Jurats, and the Rev. Thomas Grut, a Special Committee, whose duty it is +to see to the liquidation of all the anticipations at the times fixed by +the States, and where these anticipations consist in Notes of one or +five pounds to see to the destruction of the very Notes or of earlier +Notes to the same amount. Which Committee is commanded to make a report +to the States at least once each year certifying the liquidation and +destruction of the said anticipations and of the said Notes." + +Further care is shown by the fact that on 26th March, 1828, the States +appointed the Finance Committee "to replace the used and worn-out Notes +by new Notes, payable at the same time as the destroyed notes would +have been." Testimony is borne by this wear and tear to the extent to +which the Notes circulated. + +Plans for the improvements in Rue de la Fontaine, a street adjoining the +Markets, being adopted on 15th November, 1827, an issue of £1 Notes up +to £11,000 was authorised to be cancelled by the proceeds of rents. + +In 1828 and 1829 issues of Notes were authorised for various purposes, +including £8,500 for the College and £11,000 in connection with the Rue +de la Fontaine scheme. + +At one of the sittings of the States in the year 1829, William Collings, +a member of the Finance Committee, stated that there were 48,183 Notes +in circulation. + +On 18th March, 1834, £1,000 was voted for cholera precautions, to be +raised either at 3 per cent. interest or in £1 Notes. The latter course +seems to have been adopted. + +From the foregoing it will be noticed that during the 20 years over +£80,000 worth of Notes were authorised by the States to be issued. These +were mostly of the value of £1, though some £5 Notes were authorised. + +In 1837 there were still in circulation 55,000, which in that year were +reduced, as will be seen in a subsequent chapter, by 15,000. + +It may be asked whether there is any evidence that the Notes were +destroyed as directed. From various sources we found records of at +least 18,000 being destroyed. For instance, in the _Gazette_ of 3rd +March, 1827, there is the following:-- + + "Market Accounts for 1826. + Notes to Bearer of £1 destroyed. + 22 March, 1826 £400 + 7 November, 1826 £420 + 1 March, 1827 £122 + ----- + £942 + + Total of Notes issued for the Market, £11,296 + " " destroyed " " 3,626 + ------- + Leaving in circulation £7,670." + +FOOTNOTES: + +[1] This purchase was in itself an interesting piece of municipal +history. "By an Order in Council," says Jacob in his _Annals of British +Norman Isles_, p. 153, "the Meat Market Company were to be allowed by +the States, certain duties on all the cattle killed, so long as they +remained proprietors of the Market; but the States were allowed at any +future time to take the same into their own possession on the payment of +what the proprietors had advanced. The States did this on the 10th +April, 1817, at an expense of £5,000." (See p. 16.) + +[2] We have been unsuccessful in our efforts to obtain Part II. either +in Guernsey or in London, and wonder whether it was ever published. + +[3] Daniel de Lisle Brock was Bailiff from 24th May, 1821, to 12th +January, 1843. + + + + +CHAPTER IV + +THE UTILITY OF THE NOTES + + +There is abundant evidence throughout the records that the system was +appreciated. + +Jacob's _Annals_ (1830), in a chapter on Currency, mentions the Notes +incidentally. "All these, with the one pound Guernsey States' Notes, are +in much request, being very commodious for the internal affairs of the +island." + +The Bailiff, Daniel de Lisle Brock, who seems undoubtedly to have been +the inspiring genius of the scheme, says in his _Billet d'Etat_, 15th +November, 1827-- + +"An individual with an income of £9,000, who spends only half of it +wishes to build a house at a cost of £13,000. He therefore makes an +arrangement with his timber merchant, his mason, his carpenter and +others to pay them out of his savings, so that they shall receive a part +each year for five years. Can it be said that he is contracting debts? +Will he not have at the end of the five years both his house and his +original income of £9,000? + +"The States are precisely in the same position as regards the £13,000 +which they have to pay out of their income during the five years +included in the said table. This sum will be paid in instalments of +£2,600 per annum, with as much ease as were much heavier engagements in +1826 and 1827. + +"The time has passed when the public could be frightened by exaggerated +reports about the debt; most complete publicity keeps everyone +acquainted with the real state of affairs; my greatest wish is that +nothing should be hidden." + +Frequent references to the saving of interest are to be found, and to +the fact that improvements in the island could not have been carried out +but for this system. + +Wm. Collings, speaking at the States Meeting, 26th March, 1828, on a +financial proposition, gives it as his opinion that interest now paid +might be spared if the States issued more Notes. The Rev. T. Brock at +the same meeting supports the contention, as Notes can be issued without +inconvenience. + +In the _Billet d'Etat_ for 21st September, 1836, in a long discourse on +the circulation, Daniel de Lisle Brock says, "To bring about the +improvements, which are the admiration of visitors and which contribute +so much to the joy, the health and the well-being of the inhabitants, +the States have been obliged to issue Notes amounting to £55,000. If it +had been necessary, and if it were still necessary to pay interest on +this sum, it would be so much taken from the fund ear-marked to pay for +the improvements made and to carry out new ones. This fund belongs +especially to the industrious poor who execute the works and generally +to the whole island which enjoys them. It ought to be sacred to all." + +Mr. John Hubert, in the debate at this meeting, is reported by the +_Comet_ to have referred to the fact that "the roads and other works had +been constructed for the public good," and to have said that "without +issuing Notes for the payment of those works it would have been +impossible to have executed them." + +Mr. H. O. Carré, in the same debate, said, "The States, by having Notes +to the amount of £55,000 in circulation, effected a saving of £1,600 per +annum. Here, then, was a revenue of £1,600 raised without causing a +farthing's expense to any individual of the public generally, for not +one could urge that he suffered a farthing's loss by it. It was +therefore the interest of every one to support, not the credit, but the +interest of the States. Those who wished to traffic on the public +property were in fact laying a tax on that public, for they were +diminishing, by so much as they forced States' Notes out of circulation, +the public revenue, for if the States, in consequence of a diminished +revenue by the effect of Bank paper, have to make loans, those loans +must in the end be repaid by the public--which would be a taxing of the +public for the benefit of private individuals." + +Further contemporary testimony to the estimation in which the Notes were +held may be gleaned from the papers of the time, of which there were +three, issued at least once a week. In these occur letters from +Publicola, Verax, Vindex, Un ami de son pays, Un Habitant, Campagnard, +etc. Some of these were probably inspired, and sometimes they show a +partisan bias. The references of most value are the incidental ones +occurring in discussions on the improvements or in the criticisms of +_ordonnances_ on the currency. The coinage at this time was in a +confused state, there being both English and French money, some of it of +very poor quality, in circulation. + +The _Gazette_ of 22nd July, 1826, refers to allegations made by the +Jersey authorities as a reason for their refusing to register an Act +authorising the issue of £5,000 in Notes. The opponents of the measure +had alluded to supposed evils arising therefrom in Guernsey. But the +_Gazette_ emphatically declares that "these Notes have neither directly +nor indirectly burdened commerce in any way, nor contributed to the rise +in exchange that is experienced." + +A letter in the _Gazette_ of 25th April, 1829, on the subject of +"Monnaie," written at the request of Sir J. Colborne, the +Lieutenant-Governor, suggests that people in authority in Jersey +interested in Banks oppose State Notes, lest these should be preferred +to theirs. The leader of the same issue of the _Gazette_ states that +"the generality of the inhabitants have confidence in the States' Notes +(it being always understood that the issue of Notes shall be kept within +just limits) because they know that the whole property of the island +forms the guarantee for their payment." + +"Campagnard" in the _Gazette_ of 28th February, 1829, suggests the need +of some other currency than States' Notes for trade in France or with +London and Paris, but feels alarm at anything that might stop the public +works in the island. + +The difficulty of getting cash for notes is alluded to only when the +period of controversy referred to in the next chapter is reached. But +for about the first ten years of their issue it would appear that no +exception was taken to the notes nor difficulty experienced in their +use. External exchange seems to have flourished side by side with this +internal currency. + + + + +CHAPTER V + +FIRST RUMBLINGS OF OPPOSITION + + +The feeling in favour of the system was not however entirely unanimous. +In 1826 we find the first trace of opposition which gradually grew and +grew until, as we shall see later, it was decided in 1837 that the +States should not issue any more Notes. + +Whether the opposition was entirely due to this financial system as such +is open to question. Errors of judgment with reference to the Fountain +Street improvement may have been made. Self-interest on the part of some +may have been one of the factors. Into these questions the writer cannot +enter here. All that he wishes to point out is that it seems to him from +studying the records that there were various currents of opposition +which centred round the issue of Paper Money by the States. + +In September, 1826, three members of the States, Josias le Marchant, +James Carey and Jean le Marchant, the two latter being members of the +Finance Committee, thought that the King's consent should be obtained +for works to be undertaken in Fountain Street. They considered that the +anticipations of future revenues were "not only fatal to their credit +but contrary to the order of His Majesty in Council, 19th June, 1819, +viz., 'that the States of the said Island do not exceed in any case the +amount of their annual income without the consent previously obtained of +His Royal Highness in Council.'" + +Daniel de Lisle Brock, after consulting La Cour Royale (the Supreme +Court of Judicature), writes his views in a _Billet d'Etat_, and summons +the States to meet 22nd November, 1826. In his words, which we quote at +some length, are seen both his enthusiasm and his caution. + +"It was not possible, as every one must admit, to do without +anticipations; but these differ from a debt in that a certain clear and +definite income is appropriated for meeting them, at certain fixed +times. They are only assignations on assured funds ear-marked for their +payment. Watch must be kept, it is true, that they are paid from these +same funds. For by letting the period during which they should end pass, +and by spending on anything else the income appropriated to them, they +would become a permanent debt. The experience of several years has shown +us that these assignations may be used without danger, and that they +have been fully paid off as they fell due. + +"The advantage which has resulted is manifest. If we had had to wait +till funds were in hand to set to work at Fountain Street, who could +have foreseen when, if ever, this moment would arrive. Is it nothing, +in the midst of this short life, when it is a question of an object of +the first necessity among the wants of the community, to have +anticipated by sixteen or seventeen years the enjoyment of this object? +Doubtless evil is close to good: the abuse of the best things is always +possible. Is this a reason for forbidding the use of what is good and +profitable? Is it not better to procure it as soon as possible whilst +availing ourselves of the means at our disposal to avoid its abuse? +Whilst these means are employed, and so long as the income is +sufficient, there is only one possible danger--that of allowing the time +for meeting these anticipations to pass without paying them, and thus of +seeing the debt increased by the amount of the non-cancelled +obligations. This danger is seen to vanish when we consider the +precaution taken by the States, the watchfulness of all their Members, +the Committee which they have appointed specially for this purpose, when +we think of the publicity, of the exact acquaintance from year to year +which all the inhabitants have of the liabilities, the receipts and +expenditure of the States. All this watchfulness and all this publicity +are the strongest safeguard that could be given against any danger in +this respect." + +The Resolution to refer the matter to the King was lost, only five +voting for it; and a resolution was carried expressing confidence in the +present method. + +In the following year, 1827, the Guernsey Banking Company, now known as +the Old Bank, was founded from the firm of Priaulx, Le Marchant, Rougier +& Company. Jean le Marchant was Vice-President of this Bank. It is said +that at the States Meeting on 15th November, when objections were raised +lest the States' Notes should suffer, the Bailiff seemed to foresee no +danger. "Good Bills are better than bad coin." + +Notwithstanding the decision of the States in 1826, the three Jurats, +Josias le Marchant, James Carey and Jean le Marchant were still uneasy, +and on 10th April, 1829, complained direct to Whitehall that "the States +had exceeded their annual revenues for works of public utility without +the express sanction of the superior authority, and had for these same +works contracted liabilities which exceeded the means of the States." + +The Privy Council on the 19th June forwarded the complaint to the States +and asked for an explanation. + +The States, at their meeting, 27th August, 1829, instructed a Committee +to examine the charges, draw up a report and answer, and submit the same +to the States. The Committee selected was the Finance Committee, which +was revised at this time, the chief change being the omission of the two +complainants, James Carey and Jean le Marchant. + +A guess may be hazarded that this Committee appointed Daniel de Lisle +Brock to draft the reply. + +This interesting document fortunately exists not only in French but in +English (doubtless for the benefit of the Privy Council). In +characteristic language, enthusiastic and patriotic, while clear and +matter of fact, it sets out the present situation and sketches the +history of the Island since the close of the War. The greater part of it +appears in the next chapter. + + + + +CHAPTER VI + +THE REPLY OF THE STATES + + +With a few slight omissions the following is the official translation of +"The Answer of the States of Guernsey to the Complaint of three of their +Members dated the 10th April, and transmitted by their Lordships's Order +of 19th June, 1829. + +"My Lords, + +Discarding from their minds allusions and topics of a personal nature +and every sentiment of recrimination, the States of Guernsey are +desirous of vindicating themselves in the manner most becoming the +respect due to your Lordships, and the consciousness of right, by +setting facts against errors, reason against fears, 'honest deeds +against faltering words.' + +"To judge of the States by any particular act or period would be to +dismiss all consideration of previous motives and future benefits, of +connecting causes and effects. Comprehensive views of the general policy +of the States can alone enable them to prove, and your Lordships to +judge, of the wisdom and propriety of their measures. Taking, therefore, +a retrospect of the period which immediately preceded the grant of the +duty on Spirituous Liquors first graciously conceded in 1814; they deem +it necessary to lay before your Lordships a summary account of the state +of this Island, at, and from that period. + +"The steps taken during the war for the prevention of smuggling had +deprived this Island of the trade which the supply of that traffic +occasioned, and a great portion of the inhabitants of their usual +occupation, consisting not in smuggling themselves, but in importing the +goods and making the small packages in which those goods were sold in +the Island; Privateering, adventurous speculations, and the great +expenditure of fleets and garrisons compensated in some measure for the +loss of this occupation, but when the war ceased also, a general want of +employment and consequent distress ensued. + + * * * * * + +"In 1813 the sea which had in former times swallowed up large tracts, +threatened from the defective state of its banks to overflow a great +extent of land. The sum required to avert the danger was estimated at +more than £10,000, which the adjoining parishes subject to this charge +were not in a condition to raise. The state of the finance was not more +consolatory, with a debt of £19,137, and an annual charge for interest +and ordinary expenses of £2,390, the revenue of £3,000 left only £600 +for unforeseen expenses and improvements. + +"Thus at the peace, this Island found itself with little or no trade; +little or no disposable revenue; no attraction for visitors, no +inducement for the affluent to continue their abode, and no prospect of +employment for the poor. No wonder, therefore, if emigration became the +object of the rich in search of those good roads, carriages and other +comforts which they could not find at home, and the only resource of the +other classes, whose distress was likely to be aggravated by the +non-residence of the former. Misery and depopulation appeared +inevitable, from the peace to the year 1819 inclusive, more than five +hundred native and other British subjects embarked for the United +States, and more prepared to follow. + +"It is said, the powers of the human mind in society lie at times torpid +for ages; at others, are roused into action by the urgency of great +occasions, and astonish the world by their effects. This has, in some +measure, been verified in this Island, for though nothing done in so +small a community can cause a general sensation, its exertions may yet +produce wonderful results, within its own sphere. It is the duty of the +States to show that, roused by the deplorable situation above described, +they took, and have since pursued the steps best adapted to meet the +exigency of the case, and that those steps have been attended with +complete success. + +"To increase the revenue was an indispensable preliminary, but to do +so, no other means lay within the power of the States than a tax on the +several parishes according to the rates at which they were respectively +assessed, and to this tax there were insuperable objections.... + +"Under these circumstances was the application made for the duty on +spirituous liquors: and notwithstanding the opposition of many of the +inhabitants His Royal Highness the Prince Regent, was graciously pleased +by an Order in Council of 23rd July, 1814 to authorise the States to +raise 1s. per Gallon on all such liquors consumed in this Island for the +term of 5 years. The same duty was renewed for 10 years by virtue of a +second Order in Council of 19th June, 1819 after similar opposition. And +on the declaration at Your Lordships' bar of the advocate deputed by the +opponents that a clause to the following effect would reconcile them to +the measure, and no objection being made to it on the part of the +States, these words were inserted in the gracious Order in question: +viz.:--'That One Thousand Pounds per annum of the produce of the said +duty be applied solely to the liquidation of the present debt, together +with such surplus as shall remain out of the produce of the tax in any +year after defraying the expenses of roads and embankments and +unforeseen contingencies. And that the States of the said Island do not +exceed in any case the amount of their annual income without the consent +previously obtained of His Royal Highness in Council: and the said +States are hereby directed to return annually to the Privy Council an +account of the produce and application of the said tax.' + +"In 1825 the Lt. Governor Sir John Colborne, and the States, having +extended their views to the erection of a new College and other +important works which could not be undertaken without the assurance of a +renewal of the duty, constituting the chief part of the revenue, a third +Order in Council of the 30th September, 1825, conceded to the States the +right of levying the same for 15 years, beginning on the 1st September, +1829, and this without the smallest opposition from any of the +inhabitants, and without the conditions annexed to the second Order. + +"With gratitude for the means placed at their disposal the States feel +an honest pride in the recital of the manner in which those means have +been applied. First, considering the danger arising from the bad state +of the sea embankments, and the hardship of subjecting particular +parishes to a charge for the general safety to which they were unequal, +the States took on themselves the present repairs, and future +maintenance of those embankments. This essential object connected with +the paved slips or avenues to the beach, has been attended with an +expence of £14,681 19s., without including five or six thousand for a +breakwater to defend the line of houses at Glatney, on the North side +of the Town. + +"Independently of the sums contributed by Government towards the +military roads, from twenty-nine to thirty thousand pounds have been +expended by the Island on the roads, so that in lieu of those before +described, there are now fifty-one miles of roads of the first class, as +good as those of any country, with excellent footways on all of them, +and 17 miles of the second class. + +"Not only the main Harbour, Piers, Quays, Buoys and Sea Marks have been +attended to, and at a great expense, but, in order to facilitate the +exportation of the granite from the North of the Island, the Harbour of +St. Sampson has been rendered secure and convenient by a new Breakwater +and Quay. + +"The situation and state of the Town were thought to preclude all hopes +of much amelioration, but the widening of High Street, and other +streets, the reducing the precipitous ascent to the Government and Court +House, the clearing away of the unsightly buildings that obstructed the +view and approach to those public edifices, the new sewers, pavements, +and, above all, the Public Markets and new Fountain Street, attest the +solicitude of the States towards the Town, and surprise those who return +to it after a few years absence. Add to these the enlarging and +improving of the Court House and Record Office, where the public have +daily access, and where are kept the contracts and registry of all the +real property (of) the Island. Add also the New College, which, with +the laying out of its grounds and the roads round its precincts, +contributes to the embellishment of the town, induces families from +other places to settle in the Island, on account of their children, and +affords to the inhabitants the ready means of a good education. + +"The advantage resulting from all these improvements has not been +confined to their utility, or to the increased activity given to +industry, and the circulation of money by the public expenditure: they +have excited in all classes a similar spirit of improvement, which +displays itself in the embellishment of the premises already built upon, +and above all in the number of handsome dwellings since erected. In the +Town parish alone 401 houses have been built since the year 1819 at an +expense of upwards of £207,000, and few towns do now present a more +animated scenery around them, or one where ornament and comfort are more +generally united; the same comfort and improvement are witnessed in +every direction, and at the greatest distances from town. And thus it +is, that the public works have not only given life and activity to every +species of industry by the immediate effects of their utility, as for +example to the building of a number of mills in the Island, before +supplied with most of its flour from abroad, and now enabled to +manufacture it for exportation, but and still more by the consequent +impulse communicated on all sides, prompting the wealthy to lay out for +private mansions greater sums than were expended for public works and +creating a permanent source of employment, by the future expenses which +the repairs and occupations of those mansions will require. + +"The extent of benefits conferred is sufficiently attested by the +concurrent testimony of inhabitants and strangers. The sole objects of +His Majesty and of His Most Honorable Privy Council are the public good +and general happiness; the States might therefore, confidently look for +indulgence, even if, in promoting those objects, they had fallen into +some little deviation from the strict letter of any particular Order. +But implicit obedience to the Royal Authority in Council being their +paramount duty, they cannot rest satisfied under the imputation of +having, even unintentionally, derogated from that duty. + +"The words of the second Order in Council have already been cited. The +right of levying the duty on spirituous liquors is granted for ten +years: a condition is annexed purporting that the States shall not +exceed their annual income, and on the contrary that out of the produce +of the duty, one thousand pounds shall be applied annually to the +extinction of the debt; that condition is naturally in force for the +same period, and for the same period only, as the grant to which it is +annexed; it is necessarily so limited, because the means by which it is +to be fulfilled, the produce of the duty, ceases at the end of the ten +years for which the duty is granted. + +"The States are bound to prove that they have complied with the +conditions of that Order; they did so comply, when wishing to erect a +new Market, they applied for and obtained the order of 10th October, +1820, which imposed on them, at their own request, the further +obligation of an annual payment of £450 for 10 years; + + This sum began to be paid in 1822, and has been paid + for 8 years, during which the obligation amount to £3,600 0 0 + + The former obligation amounts, for the 10 years + now elapsed to £10,000 0 0 + ------------- + Total amount of the two obligations imposed £13,600 0 0 + + The debt at the commencement of the 10 years + elapsed amounted in rents and money, including + the cost of the Market, to £43,668 15 2 + + The Debt, Rents and Market included, has been + reduced to £27,740 0 0 + ------------- + + Total amount of the sums actually applied to the + payment of the Debt £15,928 15 2 + +"The conditions of the second Order in Council have thus been more than +fulfilled, by the application of £2,328 15s. 2d. to the payment of the +debt over and above the obligations imposed. Those conditions, +incidentally introduced in the second Order, do not in any way form a +part of the third Order now in force. + +"Though released from the positive conditions of the former Order, the +States have shown no intention, and do by no means desire to depart from +its general spirit; graciously offered by the third Order in Council to +continue their improvements, they came to the following resolution on +22nd November, 1826: 'That far from entertaining any wish of augmenting +the Debt the States recognise the principle that it should not exceed, +at the end of the 15 years for which the duty is further granted, the +sum to which the Debt shall amount at the end of the 10 years present +duty: they impose on themselves that obligation anew, and bind +themselves by the most solemn engagement not to increase the debt.' + + * * * * * + +"What cause of alarm can there then possibly exist? What prospect, on +the contrary, the States humbly ask, can be more gratifying than that of +remaining with our New College, new Harbours built and to be built, new +Markets of every description, new Roads in every direction, new streets, +one of thirty feet instead of seven in the greatest thoroughfare between +town and country, in short, with nearly all the greatest improvements +that can be desired, paid for to the last shilling; and all this +according to the statement of the plaintiffs themselves, with the debt +reduced to £15,000, and the revenue augmented £1,700 per annum, by those +very improvements. + + * * * * * + +"In the Markets and Fountain Street, the States have undertaken works +essentially necessary. The cost might be supposed to exceed the means of +the States, if credit did not in the first instance furnish the chief +expense without the charge of interest, and if the works themselves did +not provide for the extinction of the engagements incurred. + +"The views of the States are to render these public improvements a +source of future revenue, which shall again afford the means of further +and greater improvements. + +"The same plan has been acted upon with success in several places, and +particularly at Bath and Liverpool,[4] to the permanent increase of +their revenues, and to the general benefit of those places, and of the +country at large. It is difficult indeed to conceive whence can arise +the objections to measures, which without laying the least burthen on +anyone, surely and quietly operate to the general good, except it be +from the disinclinations of most persons to enter into that close +examination of figures necessary to a right understanding, and the +distrust consequent on the need of that examination and comprehension. +In our case, it may be added, that accustomed, on the subject of +improvement, to a long apathy confirmed by the state of a revenue +inadequate to the least undertaking, works of magnitude when first +proposed created the greatest alarm. The new roads were opposed by the +far greater number of those who were to derive the most benefit from +their use, and who from experience are now clamorous for more. The +Market was only voted the third time it was offered to the consideration +of the States, although it was represented that independently of its +various advantages, it would in a short time permanently add to the +revenue. Experience has proved the correctness of that view of the +question, and opening the eyes of the public, has turned their +sentiments of fear and distrust to one of perfect confidence. Hence it +was that the public voice called on the States to realise the benefits +likely to result from the substitution of a street thirty feet wide, in +lieu of one of seven feet, in the heart, and connecting the two +extremities of the Town, and forming the principal avenue from the +Country to the Harbour; twenty to thirty carts frequently waited at one +end until those from the other had passed. Such a thoroughfare in the +most populous quarter could not but be fraught with danger, and the +accidents that occurred were numerous, while the closeness of the +street, height of the houses, and filth collected at the back of them +were a constant source of nuisance and disease. Never was a measure +voted with so much unanimity and general satisfaction as the removal of +this public nuisance, and rebuilding Fountain Street, notwithstanding it +to be now the ground of the complaint before your Lordships. + + * * * * * + +"Relatively to so small a section of the Empire, great things have been +done with slender means; that so much has been done may with truth be +ascribed to the fairness and disinterestedness which have marked every +resolution of the States, and its execution; to the vigilant and +gratuitous superintendence of their Committees, and to the public spirit +of the inhabitants. + +"Devoted to the good of His Majesty's service, and not resting on +isolated facts, the States have laid open the whole of their conduct and +views, and beg leave to refer to their worthy and highly respected +Lieutenant-Governor Major General Ross for the correctness of their +statement, and for the situation of the Island. They have the approval +of their fellow-subjects and of their conscience, but they would feel +deeply humiliated if they did not merit and obtain the commendation of +your Lordships." + +The Reply is accompanied by five appendices giving detailed figures to +substantiate the argument and point out errors in the figures of the +complainants. It is not necessary to weary the reader with these. +Appendix I., however, is interesting, as it shows that more than half +the Debt of the States consisted of these Notes on which no Interest was +paid. + + +"APPENDIX I. + + Debt of the States:-- + + To the Savings Bank at 3 per cent. first vote £10,000 + + To individuals 557 + ------- + At 3 per cent. interest £10,557 + + In Notes of 20s. each 14,443 + + 135 Quarters 2 Bushels 8 Denerels, and 18 + sous 8 Deniers Rents equal to 2,740 + ------- + £27,740 + + Deduct from this the balance still due by the + Market, and carried to the joint account of + the Market and Fountain Street 6,100 + ------- + £21,640[5]" + +The scope of the remaining Appendices is shown by their titles:-- + +Appendix II.: Plan of Finance adopted by the States and to be pursued +during the fifteen years from this date, ending in 1844 inclusive. + +Appendix III.: Remarks on the Statement of account making part of the +complaint presented against the States. + +Appendix IV.: Joint account of Fountain Street and the Market. + +Appendix V.: Amount of the Produce on the Duty of 1s. per Gal. on all +spirits consumed in the Island of Guernsey, and the manner in which it +has been expended during the Ten years for which the said Duty was +granted, beginning September 1st, 1819. In obedience to Order of H.M. in +Council of June, 1819. + +This reply was very favourably received by the States at their Meeting +23rd December 1829 and adopted almost unanimously. One of the Rectors +spoke of it as "most judicious and consolatory, especially considering +that room had been given for the exercise of opposite feelings." + +The leader writer in the _Gazette_ recommended the reply to "the +particular attention of every true Guernseyman." Improvements in the +Island were due to M. le Bailiff, against whom and whom alone the +complaint is directed. "As a wise administrator he has known how to +contrive the means of effecting this great good without imposing the +least tax or inconveniencing his fellow citizens." + +FOOTNOTES: + +[4] See Appendix. + +[5] Market. + + The cost was £12,748 + Paid off since 1822 6,648 + ------- + Balance due on Market 6,100 + + + + +CHAPTER VIII + +THE CRISIS + + +No trace was found of any reply or acknowledgment by the Privy Council. +Presumably they were satisfied with the answer submitted by the States. + +But not so the opponents. + +In addition to the Old Bank already mentioned, another Bank, the +Commercial Bank, had been started in 1830. Both of these appear to have +issued notes at their own discretion. Consequently the Island seems to +have been flooded with paper money, and an awkward situation had arisen. +The Commercial Bank claimed an equal right with the Old Bank and even +with the States to issue notes. The Finance Committee, it was stated, +had refused to confer with the Commercial Bank. So long as the Banks had +a right to issue notes they appear to have had it in their power to put +pressure on the States. For they could thus put into circulation a +currency beyond that required for the internal needs of the Island. + +Daniel de Lisle Brock summoned the States to consider the matter, +evidently with the intention of obtaining an injunction against the +issue of notes by the Banks. + +His message to the States Meeting, held 21st September, 1836, is very +spirited and defends the rights of the States as against private +individuals, as will be seen from the following lengthy quotation. + +"If there is one incontestable principle it is that all matters relating +to the current coin of any country have their source in the supreme +prerogative, and that no one has the right to arrogate to himself the +power of circulating a private coinage on which he imprints for his own +profit an arbitrary value. If this is true for metal coins still more so +is it for paper money which in itself has no value whatever. + +"Has not experience shown us the danger of private paper money? Can we +have forgotten the disastrous period when payment of one hundred +thousand one-pound notes put into circulation by two banks enjoying good +credit was suddenly stopped? Have we forgotten the ruin of some, the +distress of others, the embarrassment of all? Have we not quite recently +seen a bank established by people considered immensely rich, advancing +large sums for distilleries, steam boats and other projects, and coming +to an end in less than two years with a composition with its creditors +who thought themselves lucky to get a few shillings in the pound? + +"With these facts before our eyes we must realise the necessity of +limiting the issue of paper money to the needs, the custom, and the +benefit of the community in general. Permission cannot be granted to +certain individuals to play with the wealth and prosperity of society, +to take from it its hard cash and to give it in exchange rags of paper. +What incentive can they offer to persuade the public to give up to them +valuable bills for worthless ones, certainty for uncertainty? What +advantage can they pretend will accrue to the public from the loss of +its currency and the possible depreciation of their paper? These general +reflections will find their application. Let no one exclaim against the +possibility of the supposed danger. The wealth of the present +stockholders of our banks is well known, their names suffice to inspire +the greatest confidence; but apart from extraordinary events, the +ordinary casualties of life may bring about in a short time the change +of all these names, and there may remain in their place only men of +straw. + + * * * * * + +"The States are met in order to take counsel together on measures for +its defence. For an object so important they ought to count on the help +of all friends of their country. + +"Speaking of the present banks, and it is necessary to refer to them, no +one desires more than I do to see them flourish, provided that it is not +at the expense of the public interest. Several of the stockholders seem +to rely for success on the issue of paper-money, as if this were the +principal aim of the business of banking. This aim, on the contrary, is +quite foreign to real bankers--one finds them in all the great towns of +Europe enjoying colossal fortunes--they never dream of paper-money; +their functions are confined to discounting bills, furnishing bills on +all countries, taking money on deposit at low interest to lend it again +at the legal rate on landed estates, or property of assured value, and +to a number of other services required by commerce: each transaction +yields a profit which should suffice. A bank of this kind was wanting in +the Island. The first of the two existing ones was formed under the most +favourable auspices, nothing could exceed its credit: although it issued +paper money it did not seem inclined to push this circulation to the +point of annoyance to the States. It even made common cause with them +when it was a question of replacing the old coins with new, and +contributed half the expense. If it had shown itself more obliging and +ready at any time to supply bills for those who, money in hand, wanted +them to meet engagements in London or Paris, it would have continued the +only bank for all business. But as it would not put itself out in any +way, the second bank was started by merchants in order to escape from +the domination and caprice of the first. + +"The second bank should have kept, and still ought to keep, to the +legitimate business of banking transactions. It appeared to have for its +principal object the issue of paper money; even on its origin it +suggested that the States and the two banks should weekly make a mutual +exchange of their respective notes, each party paying interest for the +balance of notes remaining against it; in this way all the notes of the +States would have found themselves in the coffers of the Banks and +paying interest to them. Though this proposition was not accepted, the +States were not the less troubled with requests for cash in payment of +their notes, and these requests are daily--not only for the ordinary +household needs, as might have been expected, but for sending abroad, +for if there are drafts to be cashed by the bank for anyone who wishes +for money to send to France or to Jersey, the drafts are paid in States +Notes, in order that the money shall ultimately come from this last +named source. The Bank makes no secret of its pretensions: there are, it +says, three parties for issuing paper money; this issue cannot rise +above £90,000 since the circulation in the country does not allow for +more, the States ought to have only one-third of the issue, the two +banks the two remaining thirds. This is a fine way of making the +division, and very convenient certainly for the Commercial Bank. It +would even have some show of justice if the parties had equal rights, +and if the public had no interest in the matter; but the rights are not +equal--the bank has none to put forward, that of the States is +incontestable: they exercise it for the welfare and advantage of the +whole Island which they represent. Consequently the public has the +greatest interest in preserving for the States the power of issuing +paper-money without interruption. Let the bank reply to the questions +already put; let it say what inducement it can offer the public to drive +out of circulation the States Notes, the profit on which benefits all, +especially the productive classes, and substitute for it Bank notes, the +profit on which benefits only individuals of the unproductive classes? +Now is the time to ask the proprietors themselves and ascertain whether +in starting a bank they ever had the intention of letting it work to the +detriment of their country? The public Treasury is the heart of the +State--did they ever wish, do they to-day wish to strike it with a +dagger? I know that we live in a financial age, that it is reproached +with indifference to every generous sentiment, and that the love of +money and the lust for gain absorb all other passions. In spite of that +I have not lost all confidence in the patriotism of the members of the +bank, they have the greatest personal interest in supporting the States +in their efforts for the improvement of their country, efforts which +contribute so greatly to the prosperity of internal commerce, to the +residence of inhabitants of means, and to the wealth of strangers. +Finance is the pivot on which turns the administration of affairs. The +least disturbance imposes on me the duty of sounding the alarm and +summoning the States. What I have said will be sufficient, I hope, to +persuade the bank to maintain a friendly course. The bank should feel +that it is not enough to intend not to injure, but that it is necessary +to abandon any step which, even without its wish, would be prejudicial +to the interests of the country. It should recognise that, as regards +the circulation of paper-money, the States have, for a long time and for +the common good, been in possession of the ground which it seems to wish +to invade, which, however, it cannot occupy without injustice. + +"Every war, it is said, ends where it should have begun--in peace. I am +firmly convinced of this truth; and experience has shown me that in +civil life as in political, war might almost always be avoided to the +great advantage of both parties, and that lawsuits, like wars, have for +end rather the injury of the adverse party than good to oneself. The +States are on the defensive, and such war is just and inevitable if any +war is. It is, moreover, a war in which all the inhabitants who are the +friends of their country will eagerly unite for the defence of the +States in their just rights--thus united they will defend them with +complete success. For this purpose the States will doubtless appoint a +Committee with the fullest powers to propose, in case of need, measures +which may ultimately become necessary. + +"I do not forsee that the case will require it, and I should wish to +avoid, as far as possible, any foreign intervention--but if the efforts +of the States were not sufficient to defend their rights there would be +no alternative, they would find themselves obliged to petition His +Majesty in Council to consent to restrict the issue of one pound notes, +and only to permit the putting into circulation of the number absolutely +required by the States. Under the present circumstances this would be an +indispensable measure, and it can scarcely be doubted that a humble +request to this effect would be graciously received." + +The debate, reported at length in the local papers, was a heated one. It +first raged round the third proposition, which appealed in general terms +to the islanders to rally round the States. The following is the +proposition as translated by the _Comet_ of 22nd September, 1836:--"That +in execution of the numerous ameliorations that have taken place during +the last 20 or 30 years, the States having put into circulation about +55,000 One Pound Notes, as a financial measure in favour of the public +generally, if they are of opinion to defend the rights of the States +against those who wish, for the advantage of a few individuals only, to +hinder the circulation of the States Notes, for the purpose of +substituting those of private individuals in lieu thereof; and whether +it would not be proper to make an appeal to all the inhabitants, who are +the friends of their country, to invite them to afford their assistance +in supporting with all their might the notes belonging to the States." + +This was carried by 18 votes to 11. The minority represented chiefly +town rather than country parishes, the Jurats being equally divided, and +included at least two persons closely connected with the Banks. The +victory of States Notes seemed complete, and the fourth Proposition +appointing a Committee to give effect to the decision was carried by a +large majority. It is as follows:-- + +"If they are of opinion to name a Committee that shall be authorised in +a special manner to defend the rights and interests of the States, and +of the public:--to do their utmost by every conciliatory measure in +their power, and above all, to agree to an arrangement that shall screen +the States from all interruption in the circulation of their Notes, +which have been issued for the benefit and advantage of the public, with +the design of gradually diminishing the number annually. And in the +event of such an arrangement not taking place, to adopt every measure, +and make every necessary sacrifice for supporting the circulation of the +States Notes. And finally, should the case require it, to propose to the +States the adoption of those ulterior measures deemed requisite by the +Committee, for the general interests of the island." + +The meeting ended with a fine fighting speech from the Bailiff. He +reiterated the principle of the States being the sovereign power in +issuing currency, claimed that the Cour Royale had the right of stopping +the private issue of notes, and pointed to the example of England, where +only £5 notes were permitted in the country, and these under a heavy +tax, while only the Bank of England might issue notes in and around +London. He showed that it was a choice between notes issued for the +benefit of individuals and notes issued for the public good. He defended +the improvements carried out by the States, and once again declared that +they had been advantageous in giving employment to the poor, security to +the rich and encouragement to commerce. + + + + +CHAPTER VIII + +THE END + + +One can imagine the enthusiasm and the satisfaction with which the +majority returned home. One anticipates a triumphant report in the +Bailiff's best vein; and expects that the banks will in future have to +confine themselves to the operations permitted to English banks, while +the States restore equilibrium by causing the withdrawal of superfluous +notes and confining future issues, once again entirely in their own +hands, to quantities proportioned to the needs of the island. + +With surprise, the subsequent proceedings are found to be on quite +different lines. Truth is stranger than fiction. The prosaic facts are +as follows:-- + +The Bailiff in presenting his _Billet d'Etat_ to the States Meeting, +29th March, 1837, reported on the arrangement made by the Committee with +the two Banks. He brought forward no proposition on the matter on which +the States should deliberate. He simply states that:-- + +"After some preliminary conferences the Committee received the following +letter:-- + + 'To D. De Lisle Brock, Esq., + Bailiff, etc., etc., etc., + Guernsey, 8th Oct., 1836. + + Sir, + +To settle the differences now existing between the States and the Banks, +and to promote an amicable adjustment between them, we propose: + +That the States should withdraw immediately £15,000 of their Notes, nor +have at any time more than £40,000 in circulation, give up all Banking +transactions, and cease to collect the notes of the Banks. + +In consideration thereof the Banks engage whenever they draw bills +either on London or Paris, to take States' Notes for one half at least +of their amount and to pass them to the public as their own. + +The Banks further engage to supply the States annually with £10,000 in +cash, each bank to provide for one half, by payments of £250 at a time, +and this free of expence and in exchange for States' Notes. + +The above agreement to remain in force until three months notice be +given by either party to the others to annul the same. + + We remain respectfully, Sir, + + _Signed_ for Priaulx, Le Marchant & Co. + Thomas D. Utermarck, + Abraham J. Le Mesurier. + + For the Commercial Banking Co., + H. D. G. Agnew } + T. De Putron } Managers.' + +"And asked M. Le Bailiff to reply as follows:-- + + 'Court House, Guernsey, + 9 Oct., 1836. + + Gentlemen, + +The Committee named by the States on the 21st September for the purpose +of conferring with the Banks which you represent, on the subject of the +one pound notes current in this island, have taken into consideration +the proposals which you have transmitted to them, under yesterday's +date, 8th Oct. + +The Committee adopt those proposals as the basis of the arrangement so +desirable to be entered into, and from this day to be in force between +the States and the Banks.--They do so, because the States may at any +time, within 3 months, release themselves from the obligations which +that arrangement imposes; and above all, because the sacrifice of +pecuniary gain on the part of the States which it may deem to occasion, +will be more than compensated by the harmony and good feeling which it +will tend to promote among the inhabitants, and which constituting the +chief happiness of a well regulated community, can hardly be too highly +estimated. + +With sentiments of a like friendly nature, sincerely entertained by the +Committee towards yourselves, and the rest of their fellow citizens, + + I have the honour to be, Gentlemen, + + Your obedient humble servant + + Daniel De Lisle Brock, + President of the States' Committee.' + +"In consequence of this arrangement the Committee decided that £10,000 +sterling of the total one pound notes in circulation on account of +Fountain Street should be withdrawn as a Savings Bank loan at an +interest of 3 per cent. per annum. Also that five thousand of those +forming part of the old debt, called the Permanent Debt, should be +withdrawn to be converted into obligations at 3 per cent. per annum." + +In the discussion at the States Meeting on a proposition to authorise +the payment of a sum spent on repairs to the coasts, there were +references by three Members of the States to the fact that the +expenditure of the States would be increased by having to pay interest +on the 15,000 £1 notes withdrawn from circulation. + +The same fact is alluded to in a few words by Daniel De Lisle Brock +himself in his _Billet d'Etat_ to the States, 20th September, 1838. +Commenting on the Finance Committee's Report, he tabulates five items of +annual loss, among which is found the terse remark, "The founding of the +commercial banks causes an annual loss of £450." + +Although the States thus agreed not to issue any more Notes, to complete +the history it should be recorded that these £40,000--to be perfectly +accurate the total amount in 1906 was £41,318--are still in circulation +in the Island. + + + + +CONCLUSION + + +As stated in the Introduction, the writer has determined, though +somewhat tempted, not to discuss the interesting and debatable points +that arise from a consideration of this subject. He is satisfied, for +the present, with placing the facts before the public. He leaves those +facts for abler minds than his to make such use of as they may desire. +Great care has been taken to record only that for which there is chapter +and verse. + +But he would like, in conclusion, to remark that it seems to him that +the States, even to-day, still derive some little benefit from having a +portion of their "Debt" on which they pay no interest. This may be +gathered from the following table made up from facts taken from the +_Billet d'Etat_ presented to the States 22nd August, 1906, at which +meeting the writer was an interested spectator. + +Summary of the indebtedness of the States of Guernsey:-- + + ------------------------------------+------------------+--------------- + | Balance 31 Dec., | Interest paid + | 1905. | during 1905. + ------------------------------------+------------------+--------------- + | £ | £ + States General Account Obligations | 68,570 | 1,953 19 3 + Special Loan Obligations | 57,500 | 2,295 0 0 + Notes of _20s._ each payable to | | + Bearer | 41,318 | nil + "Rentes" estimated capitalised | | + indebtedness thereon | 7,059 | nil + Departmental borrowings | 33,000 | 965 8 0 + | | Paid by Depts. + | | to General + | | Account. + +------------------+--------------- + Total indebtedness | £207,447 | ---- + ------------------------------------+------------------+--------------- + +The circulation of these Notes in the Island to-day is, if nothing more, +an interesting relic of an interesting financial policy which certainly +was in vogue in Guernsey for over 20 years (1816-1837). + +The mystery surrounding the abrupt catastrophe is yet undeciphered and +is likely to remain so, as there seems no material from which to glean +what took place during those few but momentous days between the 21st +September and 9th October. Was there treachery? was it but the +inevitable fate of the "best-laid schemes o' mice and men"? or was it a +unique and deplorable economic tragedy? + + + + +APPENDIX + + +We have not yet discovered anything with reference to a successful plan +at Bath to which Daniel de Lisle Brock here alludes (see page 40). We +assume the reference to Liverpool is to the fact that during a time of +financial panic the Liverpool Corporation was empowered by Statute 33, +Geo. III., c. 31 (10th May, 1793), to issue notes of £5, £10, £50 and +£100 for value received or other due security. + +This Act entitled "An Act to enable the Common Council of the Town of +Liverpool in the County of Lancaster on behalf of and on account of the +Corporation of the said Town to issue negotiable notes for a limited +time and to a limited amount," was passed after the Corporation of +Liverpool had failed to obtain a loan of £100,000 from the Bank of +England. + +The £50 and £100 notes bore interest not exceeding the lawful rate and +at 12 months' date. The £5 and £ 10 notes were payable to bearer on +demand without interest. The total issue was at no time to exceed +£300,000. Returns had to be forwarded to the House of Commons from time +to time. From one of these returns we learn that the notes issued to +28th February, 1795, amounted to £140,390, based on security valued at +£155,907 16s. 6d. In a report forwarded 23rd April, 1794, it was stated +that £52,985 worth of notes were in circulation at that date. + +Great care was taken in the issue of the notes. The Committee of the +Corporation that was responsible for the same met daily. + +In order to give a wider utility to the notes, London correspondents +were appointed and a large number were made payable in London. This made +it possible for the Corporation itself to apply to the Committee for a +large loan of £50,000. + +The security on which advances were made were very various. It included +cotton, timber, iron, hops, whale oil, bills of exchange, ships on the +stocks and the Alt rates. + + * * * * * + +For further particulars of this interesting incident, the reader is +referred to Sidney and Beatrice Webb's _English Local Government_: "The +Manor and the Borough," p. 485, and to E. C. K. Gonner's Article, +"Municipal Bank Notes in Liverpool, 1793-95," which appeared in the +_Economic Journal_, Vol. VI., 1896, pp. 484-487, to whom the writer is +largely indebted for the above facts. + + + + +STUDIES IN ECONOMICS AND POLITICAL SCIENCE + +_A Series of Monographs by Lecturers and Students connected with the +London School of Economics and Political Science_ + +EDITED BY THE DIRECTOR OF THE LONDON SCHOOL OF ECONOMICS AND POLITICAL +SCIENCE + +=1. The History of Local Rates in England.= The substance of five +lectures given at the School in November and December, 1896. By +EDWIN CANNAN, M.A., LL.D. 1896; 140 pp., Cr. 8vo, cloth, 2s. +6d. _P. S. King & Son._ + +=2. Select Documents Illustrating the History of Trade Unionism.= +I.--THE TAILORING TRADE. By F. W. GALTON. With a Preface by SIDNEY +WEBB, LL.B. 1896; 242 pp., Cr. 8vo, cloth. 5s. _P. S. King & Son._ + +=3. German Social Democracy.= Six lectures delivered at the School in +February and March, 1896. By the Hon. BERTRAND RUSSELL, B.A., +late Fellow of Trinity College, Cambridge. With an Appendix on Social +Democracy and the Woman Question in Germany. By ALYS RUSSELL, +B.A. 1896; 204 pp., Cr. 8vo, cloth. 3s. 6d. _P. S. King & Son._ + +=4. The Referendum in Switzerland.= By M. SIMON DEPLOIGE, +University of Louvain. With a letter on the Referendum in Belgium by +M. J. VAN DEN HEUVEL, Professor of International Law in the +University of Louvain. Translated by C. P. TREVELYAN, M.A., +Trinity College. Cambridge, and edited with Notes, Introduction, +Bibliography, and Appendices, by LILIAN TOMN (Mrs. Knowles), of +Girton College, Cambridge, Research Student at the School. 1898; x. and +334 pp., Cr. 8vo, cloth. 7s. 6d. _P. S. King & Son._ + +=5. The Economic Policy of Colbert.= By A. J. SARGENT, M.A., +Senior Hulme Exhibitioner, Brasenose College, Oxford; and Whately +Prizeman, 1897, Trinity College, Dublin. 1899; viii. and 138 pp., Cr. +8vo, cloth. 2s. 6d. _P. S. King & Son._ + +=6. Local Variations in Wages.= (The Adam Smith Prize, Cambridge +University, 1898.) By F. W. LAWRENCE, M.A., Fellow of Trinity +College, Cambridge. 1899; viii. and 90 pp., with Index and 18 Maps and +Diagrams. Quarto, 11 in. by 8-½ in., cloth. 8s. 6d. _Longmans, Green & +Co._ + +=7. The Receipt Roll of the Exchequer for Michaelmas Term of the +Thirty-first Year of Henry II. (1185).= A unique fragment transcribed +and edited by the Class in Palæography and Diplomatic, under the +supervision of the Lecturer, HUBERT HALL, F.S.A., of H.M. +Public Record Office. With thirty-one Facsimile Plates in Collotype and +Parallel readings from the contemporary Pipe Roll. 1899; vii. and 37 +pp.; Folio, 15-½ in. by 11-½ in., in green cloth; 5 copies left. +Apply to the Director of the London School of Economics. + +=8. Elements of Statistics.= By ARTHUR L. BOWLEY, M.A., F.S.S., +Cobden and Adam Smith Prizeman, Cambridge; Guy Silver Medallist of the +Royal Statistical Society; Newmarch Lecturer, 1897-98. 1901; _Third +edition_, 1907; viii. and 336 pp. Demy 8vo, cloth, 40 Diagrams. 10s. 6d. +net. _P. S. King & Son._ + +=9. The Place of Compensation in Temperance Reform.= By C. P. +SANGER, M.A., late Fellow of Trinity College, Cambridge; +Barrister-at-Law. 1901; viii. and 136 pp., Cr. 8vo, cloth. 2s. 6d. _P. +S. King & Son._ + + (_Out of print._) + +=10. A History of Factory Legislation, 1802-1901.= By B. L. +HUTCHINS and A. HARRISON (Mrs. SPENCER), B.A., D.Sc. (Econ.), +London. Second Edition. With a Preface by SIDNEY WEBB, LL.B. +1911; xviii. and 372 pp., Demy 8vo, cloth. 6s. net. _P. S. +King & Son._ + +=11. The Pipe Roll of the Exchequer of the See of Winchester for the +Fourth Year of the Episcopate of Peter Des Roches (1207).= Transcribed +and edited from the original Roll in the possession of the +Ecclesiastical Commissioners by the Class in Palæography and Diplomatic, +under the supervision of the Lecturer, HUBERT HALL, F.S.A., of +H.M. Public Record Office. With a Frontispiece giving a Facsimile of the +Roll. 1903; xlviii. and 100 pp., Folio, 13-½ in. by 8-½ in., green +cloth. 15s. net. _P. S. King & Son._ + +=12. Self-Government in Canada and How it was Achieved: The Story of +Lord Durham's Report.= By F. BRADSHAW, M.A., Senior Hulme +Exhibitioner, Brasenose College, Oxford. 1903; 414 pp., Demy 8vo, cloth. +3s. 6d. net. _P. S. King & Son._ + +=13. History of the Commercial and Financial Relations Between England +and Ireland from the Period of the Restoration.= By ALICE EFFIE +MURRAY (Mrs. Radice), D.Sc. (Econ.), former Student at Girton +College, Cambridge; Research Student of the London School of Economics +and Political Science. 1903; 486 pp., Demy 8vo, cloth. 3s. 6d. net. _P. +S. King & Son._ + +=14. The English Peasantry and the Enclosure of Common Fields.= By +GILBERT SLATER, M.A., St. John's College, Cambridge; D.Sc. +(Econ.), London. 1906; 337 pp., Demy 8vo, cloth. 10s. 6d. net. +_Constable & Co., Ltd._ + +=15. A History of the English Agricultural Labourer.= By DR. W. +HASBACH, Professor of Economics in the University of Kiel. With a +Preface by Sidney Webb, LL.B. Translated from the Second Edition (1908), +by Ruth Kenyon. Cloth, 7s. 6d. net. _P. S. King & Son._ + +=16. A Colonial Autocracy: New South Wales under Governor Macquarie, +1810-1821.= By MARION PHILLIPS, B.A., Melbourne, D.Sc. (Econ.), +London. 1909; xxiii., 336 pp., Demy 8vo, cloth, 10s 6d. net. _P. S. King +& Son._ + +=17. India and the Tariff Problem.= By Professor H. B. LEES SMITH, +M.A., M.P. 1909; 120 pp., Crown 8vo, cloth. 3s. 6d. net. _Constable +& Co., Ltd._ + +=18. Practical Notes on the Management of Elections.= Three Lectures +delivered at the School in November, 1909, by ELLIS T. POWELL, +LL.B., B.Sc. (Econ.), Fellow of the Royal Historical and Royal +Economic Societies, of the Inner Temple, Barrister-at-Law. 1909; 52 pp., +8vo, paper, 1s. 6d. net. _P. S. King & Son._ + +=19. The Political Development of Japan.= By G. E. UYEHARA, +B.A., Washington, D.Sc. (Econ.) London. 1910 xxiv., 296 pp., Demy +8vo, cloth. 8s. 6d. net. _Constable & Co., Ltd._ + +=20. National and Local Finance.= By J. WATSON GRICE, B.Sc. +(Econ.), London. With a Preface by Sidney Webb, LL.B. 1910; 428 pp., +Demy 8vo, cloth. 10s. 6d. net. _P. S. King & Son._ + +=21. An Example of Communal Currency.= By J. THEODORE HARRIS, +B.A. With a Preface by Sidney Webb, LL.B. Crown 8vo. 1s. net. _P. +S. King & Son._ + + +_Series of Bibliographies by Students of the School._ + +=1. A Bibliography of Unemployment and the Unemployed.= By F. ISABEL +TAYLOR, B.Sc. (Econ.), London. With a Preface by Sidney Webb, LL.B. +1909; xix., 71 pp., Demy 8vo, cloth, 2s. net; paper, 1s. 6d. net. _P. S. +King & Son._ + + +_Series of Geographical Studies._ + +=1. The Reigate Sheet of the One-inch Ordnance Survey.= A Study in the +Geography of the Surrey Hills. By ELLEN SMITH. Introduction by +H. J. Mackinder, M.A., M.P. 1910; xix., 110 pp., 6 maps, 23 +illustrations, Crown 8vo, cloth. 3s. 6d. net. _A. & C. Black._ + + + + +100 YEARS AGO + +Guernsey Experimented Successfully with Communal Currency, + +TO-DAY + +The Co-operative Brotherhood Trust, Ltd., + +is Experimenting with Co-operative Currency. + +It has a small circle of Manufacturers, Merchants and Private +Individuals using and circulating its currency. If you believe in its +practicability, join it and help to ensure its success. If you want to +know more about it, write for full information to-- + +THE SECRETARY, + +37, NEWINGTON GREEN ROAD, LONDON, N. + + + + +WORKS BY HENRY W. WOLFF + +Co-operative Banking + +Its Principles and its Practice, with a Chapter on Co-operative Mortgage +Credit + +_Demy 8vo, Cloth_, =7s. 6d.= _net_ + +"Mr. Wolff is the author of a successful work."--_Times._ + + +A Co-operative Credit Handbook + +Demy 8vo, 96 pages. 1s. net + + CONTENTS--Preface, General Remarks, Banks based upon Shares + (Limited Liability Societies), Model Rules for such (with + Annotations), Village Banks (Unlimited Liability Societies), + Model Rules for such (with Annotations). Appendix: Form of + Application, Forms of Bond for Borrower, Form of Fortnightly + Balance Sheet, Model Cash Book. + + +Co-operative Credit Banks + +A Help for the Labouring and Cultivating Classes. 6d. + + +Village Banks + +How to Start Them--How to Work Them--What the Rich may do to Help Them, +etc. 6d. + + +LONDON: P. S. KING & SON + +ORCHARD HOUSE, WESTMINSTER + + + + +-----------------------------------------------+ + | Transcriber's Note: | + | | + | Inconsistent hyphenation and spelling in the | + | original document have been preserved. | + | | + | Typographical errors corrected in the text: | + | | + | Page 11 isue changed to issue | + | Page 61 VIII changed to VII | + +-----------------------------------------------+ + + * * * * * + + + + + + +End of the Project Gutenberg EBook of An Example of Communal Currency, by +J. 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Theodore Harris + +This eBook is for the use of anyone anywhere at no cost and with +almost no restrictions whatsoever. You may copy it, give it away or +re-use it under the terms of the Project Gutenberg License included +with this eBook or online at www.gutenberg.org + + +Title: An Example of Communal Currency + The facts about the Guernsey Market House + +Author: J. Theodore Harris + +Release Date: August 2, 2010 [EBook #33331] + +Language: English + +Character set encoding: ISO-8859-1 + +*** START OF THIS PROJECT GUTENBERG EBOOK AN EXAMPLE OF COMMUNAL CURRENCY *** + + + + +Produced by Barbara Kosker and the Online Distributed +Proofreading Team at http://www.pgdp.net (This file was +produced from images generously made available by The +Internet Archive/American Libraries.) + + + + + + +</pre> + + +<br /> +<br /> +<br /> +<br /> + +<h3> LONDON SCHOOL OF ECONOMICS AND + POLITICAL SCIENCE</h3> +<hr style="width: 93%;" /> + +<br /> +<br /> +<br /> +<br /> + +<h1>AN EXAMPLE OF COMMUNAL CURRENCY</h1> + +<br /> +<br /> +<br /> +<br /> + +<h4> By</h4> + +<h2>J. THEODORE HARRIS, B.A.</h2> + +<br /> +<br /> +<br /> +<br /> + +<h4> With a Preface by<br /> + SIDNEY WEBB, LL.B.</h4> + +<br /> +<br /> +<br /> +<br /> + +<h4> 1/- NET</h4> + +<br /> +<br /> +<br /> +<br /> + +<h4> LONDON<br /> + P. S. KING & SON<br /> + ORCHARD HOUSE, WESTMINSTER<br /> + 1911</h4> + +<br /> +<br /> +<br /> +<br /> + +<h2>PEOPLE'S BANKS</h2> + +<h3>A RECORD OF SOCIAL AND ECONOMIC SUCCESS<br /> + +By H. W. WOLFF</h3> +<br /> + + +<p class="cen"><i>Third Edition, Newly Revised and Enlarged</i><br /> +<i>Demy 8vo, Cloth, 600 pp.</i> <b>6s.</b> <i>net</i></p> +<br /> + +<div class="blockquot"> +<p class="hang">The Two Aspects of the Question, Credit to Agriculture, +The "Credit Associations" of Schulze-Delitzsch, Raiffeisen +Village Banks, Adaptations, "Assisted" Co-operative +Credit, Co-operative Credit in Austria and Hungary, The +"Banche Popolari" Italy, The "Casse Rurali" of Italy, +Co-operative Credit in Belgium, Co-operative Credit in +Switzerland, Co-operative Credit in France, Offshoots and +Congeners, Co-operative Credit in India, Conclusion.</p></div> + +<hr /> + +<p>"We may confidently refer those who desire information on the +point to the book with which Mr. Wolff has provided us. It will +be a most useful thing if it is widely read, and the lessons which it +contains are put in practice."—<i>Athenæum.</i></p> +<br /> +<p>"The book is the most systematic and intelligent account of these +institutions which has been published."—<i>Banker's Magazine (New</i> +<i>York).</i></p> +<br /> +<p>"It is the most complete book on the subject."—<i>Mr. G. N. +Pierson, late Dutch Prime Minister and Minister of Finance.</i></p> +<br /> +<p>"There was manifest need of just such a book.... A mine of +valuable information."—<i>Review of Reviews.</i></p> +<br /> +<p>"This is an excellent book in every way, and thoroughly deserves +the careful attention of all who are concerned for the welfare of the +people."—<i>Economic Review.</i></p> +<hr /> +<h3>LONDON: P. S. KING & SON<br /> +ORCHARD HOUSE, WESTMINSTER</h3> + +<br /> +<br /> +<br /> +<br /> + +<p class="cen">STUDIES IN ECONOMICS AND POLITICAL SCIENCE</p> +<br /> +<p class="cen">Edited by the Hon. W. PEMBER REEVES,<br /> +Director of the London School of Economics</p> +<br /> +<p class="cen">No. 21 in the Series of Monographs by Writers connected<br /> +with the London School of Economics and Political Science</p> + +<hr style="width: 70%;" /> +<br /> +<br /> +<br /> +<br /> +<h2>AN EXAMPLE OF COMMUNAL CURRENCY</h2> + +<br /> +<br /> +<br /> +<br /> + +<h2>AN EXAMPLE OF COMMUNAL CURRENCY:</h2> +<br /> +<h3>THE FACTS ABOUT THE GUERNSEY MARKET HOUSE</h3> +<br /> +<br /> +<br /> +<br /> +<h4>COMPILED FROM ORIGINAL DOCUMENTS<br /> +BY</h4> +<h3>THEODORE HARRIS, B.A.</h3> + +<br /> +<br /> +<br /> +<br /> + +<h4><span class="smcap">With a Preface by</span><br /> +SIDNEY WEBB, LL.B.</h4> +<br /> +<br /> +<br /> +<br /> +<h4>LONDON<br /> +P. S. KING & SON<br /> +ORCHARD HOUSE, WESTMINSTER<br /> +1911</h4> + +<br /> +<br /> +<br /> +<br /> + +<hr /> +<br /> +<h2>CONTENTS</h2> + +<div class="centered"> +<table border="0" width="70%" cellpadding="2" cellspacing="0" summary="Table of Contents"> + <tr> + <td class="tdrp" width="10%"> </td> + <td class="tdl" width="80%"> </td> + <td class="tdr" width="10%" style="font-size: 80%;">PAGE</td> + </tr> + <tr> + <td class="tdrp"> </td> + <td class="tdl smcap">Preface</td> + <td class="tdr"><a href="#Page_vii">vii</a></td> + </tr> + <tr> + <td class="tdrp"> </td> + <td class="tdl smcap">Introduction</td> + <td class="tdr"><a href="#Page_1">1</a></td> + </tr> + <tr> + <td class="tdrp" style="font-size: 80%;">CHAP.</td> + <td class="tdl smcap"> </td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdrp">I.</td> + <td class="tdl smcap">Constitution of Guernsey</td> + <td class="tdr"><a href="#Page_4">4</a></td> + </tr> + <tr> + <td class="tdrp">II.</td> + <td class="tdl smcap">The Security of the Notes</td> + <td class="tdr"><a href="#Page_6">6</a></td> + </tr> + <tr> + <td class="tdrp">III.</td> + <td class="tdl smcap">Municipal Enterprise—The Issue of the Notes</td> + <td class="tdr"><a href="#Page_9">9</a></td> + </tr> + <tr> + <td class="tdrp">IV.</td> + <td class="tdl smcap">The Utility of tne Notes</td> + <td class="tdr"><a href="#Page_20">20</a></td> + </tr> + <tr> + <td class="tdrp">V.</td> + <td class="tdl smcap">First Rumblings of Opposition</td> + <td class="tdr"><a href="#Page_25">25</a></td> + </tr> + <tr> + <td class="tdrp">VI.</td> + <td class="tdl smcap">The Reply of the States</td> + <td class="tdr"><a href="#Page_30">30</a></td> + </tr> + <tr> + <td class="tdrp">VII.</td> + <td class="tdl smcap">The Crisis</td> + <td class="tdr"><a href="#Page_45">45</a></td> + </tr> + <tr> + <td class="tdrp">VIII.</td> + <td class="tdl smcap">The End</td> + <td class="tdr"><a href="#Page_55">55</a></td> + </tr> + <tr> + <td class="tdrp"> </td> + <td class="tdl smcap">Conclusion</td> + <td class="tdr"><a href="#Page_59">59</a></td> + </tr> + <tr> + <td class="tdrp"> </td> + <td class="tdl smcap">Appendix</td> + <td class="tdr"><a href="#Page_61">61</a></td> + </tr> +</table> +</div> + +<br /> +<br /> +<br /> +<br /><span class='pagenum'><a name="Page_vii" id="Page_vii">[Pg vii]</a></span> + +<hr /> +<br /> +<h2>PREFACE</h2> + + +<p>Those who during the past thirty or forty years have frequented working +men's clubs or other centres of discussion in which, here and there, an +Owenite survivor or a Chartist veteran was to be found, will often have +heard of the Guernsey Market House. Here, it would be explained, was a +building provided by the Guernsey community for its own uses, without +borrowing, without any toll of interest, and, indeed, without cost. To +many a humble disputant the Guernsey Market House seemed, in some +mysterious way, to have been exempt from that servitude to previously +accumulated capital in which the whole creation groaneth and travaileth. +By the simple expedient of paying for the work in Government +notes—issued to the purveyors of material, the master-workmen and the +operatives, accepted as currency throughout the island, and eventually +redeemed out of the annual market revenues—all tribute to the +capitalist was avoided. In face of this successful experiment, the fact +that we, in England, continued to raise loans and subject ourselves to +"drag at each remove a lengthening chain" of interest on public debt, +often seemed so perplexingly foolish as to be inexplicable, <span class='pagenum'><a name="Page_viii" id="Page_viii">[Pg viii]</a></span>except as +the outcome of some deep-laid plot of "the money power."</p> + +<p>When first I heard of this Guernsey Market House, as in some mysterious +way exempted from the common lot, I was curious to enquire what +transaction had, in fact, taken place in an island which was, after all, +not so far removed in space or time from the Lombard Street that I knew. +In all the writings of the economists (for which my estimate was at that +time, as indeed it is now, such as I could not easily put into +appropriate words), I found no mention of this Phœnix among +market-houses. I fear that, too hastily, I dismissed the story as +mythical.</p> + +<p>Now Mr. J. Theodore Harris—having, I suspect, a warmer feeling for the +incident than he has allowed to appear in these scientific pages—has +done what perhaps I or some other economic student of the eighties or +nineties ought to have done, namely, gone to Guernsey to dig up, out of +the official records, the incident as it actually occurred. What is +interesting is that he has found that the myth of the veteran Owenite or +Chartist is, in all essentials, confirmed by the documents. The story is +true. The Guernsey Market House was built without a loan and without the +payment of interest.</p> + +<p>It does not follow, however, that it was <span class='pagenum'><a name="Page_ix" id="Page_ix">[Pg ix]</a></span>any more built without the aid +of capital, than was St. Paul's Cathedral or the Manchester Ship Canal. +Mr. Harris, contenting himself with the austerely exact record drawn +from the documents, does not indulge in any speculative hypothesis as to +who provided the capital, or who bore the burden that would otherwise +have been interest. Let me use the fuller privilege of the +preface-writer, and supply some hypothetical elucidations.</p> + +<p>What the Guernsey community did was that which nearly every community +has done at one time or another, namely, issue paper money. The part of +the story that we do not know is (<i>a</i>) what thereupon happened to the +aggregate amount of "currency" of all kinds then in circulation within +the island, in relation to the work which that currency had to do; (<i>b</i>) +what happened to the prices of commodities.</p> + +<p>It may well have been that the issue of paper money was promptly +followed by some shipments of metallic money to England or +France—perhaps even in payment for imported materials for the market +house—so that the aggregate amount of "currency" in the island was not +in fact increased. Accordingly, no change of prices may have taken +place. In such a case, Guernsey would merely have substituted paper for +gold in its currency. The gold-capital <span class='pagenum'><a name="Page_x" id="Page_x">[Pg x]</a></span>heretofore in use as currency, +and there, of course, yielding no capitalist any toll of interest, +would, in effect, have been borrowed to expend upon the building of the +Market House. And, as paper money probably served the purposes of the +island every bit as well as gold, nobody was any the worse. By giving up +the needless extravagance of using gold coins as counters, and by taking +to paper counters instead, Guernsey really got its Market House without +cost. The same resource is open to any community already possessing a +gold currency, and becoming civilised and self-restrained and sensible +enough to arrange to do without gold counters in its internal trade. But +Guernsey could not have gone on equipping itself with endless municipal +buildings as out of a bottomless purse. The resource is a limited one. +This is a trick which can only be played once. When the gold has once +been withdrawn from the currency, and diverted to another use, there is +no more left with which to repeat the apparent miracle.</p> + +<p>On the other hand, there may easily have been no special shipments of +metallic money from the island, and the aggregate "currency" may have +been increased, in relation to the work that it had to do, by the amount +of the note issue. In that case, the economist would, for reasons into +which I have <span class='pagenum'><a name="Page_xi" id="Page_xi">[Pg xi]</a></span>no space to go on the present occasion, expect to see a +gradual and silent rise of prices. Such a rise would seem, to the +ordinary Guernsey housekeeper and shopkeeper, as inevitable, and at the +same time as annoying as any other of those mysterious increases in the +cost of eggs and meat that Anthony Trollope described with such +uneconomic charm in <i>Why Frau Frohmann raised her prices</i>—a work which +I do not find prescribed, as it might well be, for undergraduate +reading.</p> + +<p>There is even a third hypothesis, to which Mr. Harris has directed my +attention. There may have been, before the note issue, an actual dearth +of currency, or a growing disproportion between the amount of the +currency and the work that it had to do. Mr. Harris infers from his +reading that such a stringency had been actually experienced in +Guernsey, and that it was for this reason that successive attempts were +made to prevent foreign coins from being gradually withdrawn from the +island. Such a stringency, the economist would infer, would produce a +progressive fall of prices, leading, by the silent operations of +external trade, to a gradual readjustment of the amount of currency in +circulation, by influx of gold from outside, until a new equilibrium had +been reached. If the Guernsey Government's note issue happened to be +made at <span class='pagenum'><a name="Page_xii" id="Page_xii">[Pg xii]</a></span>such a moment, it may well have taken the place of the +hypothetical inflow of gold, so far as the island currency was +concerned. It may even have averted a fall in prices that would +otherwise have taken place, the economic effect on the consumer's +pockets being in that case much the same as if an actual rise had +occurred. But the Guernsey Government, on this hypothesis, would, by +substituting paper for gold, have gained for the community the +equivalent of the cost of the addition to the gold currency which +expanding population and trade were making necessary; and this gain was +expended in building the Market House.</p> + +<p>Unfortunately we do not know how prices behaved to the Guernsey +housekeeper between 1815 and 1837. Perhaps another student will look +this up. What is interesting to us in this argument is the fact that, +<i>if prices generally did rise</i>, in consequence of the issue of the paper +money, even by only one half-penny in the shilling—if eggs, for +instance, sold twenty-four for a shilling, instead of twenty-five—this +represented a burden laid on the Guernsey people as consumers, exactly +analogous to a tax (say an octroi duty) of four per cent. on all their +purchases. On this hypothesis, which I carefully abstain from presenting +as anything but hypothetical, because we are unable to verify it by +comparison with the facts, the economist <span class='pagenum'><a name="Page_xiii" id="Page_xiii">[Pg xiii]</a></span>would say that this burden or +tax was what they imposed on themselves, and notably upon the poor, by +increasing the currency, instead of borrowing the capital from +elsewhere. Instead of paying interest on a loan (to be levied, perhaps, +as an income tax on incomes over a certain minimum) they unwittingly +chose to pay more for their bread and butter. The seriousness of this +possible result lies in the definitely ascertained fact that salaries +and wages rise more slowly, and usually to a smaller extent, than the +prices of commodities.</p> + +<p>Now, which of these speculative explanations is the true one does not +greatly matter to-day when all the consumers, rich and poor, are dead +and gone. What does concern us is that we should not misconstrue the +Guernsey example. We already use paper money in this country to a small +extent. We could certainly with economic advantage save a great part of +the cost (three or four millions sterling a year) that we now pay for +the luxury of having so many gold sovereigns wandering about in our +pockets. We may one day find the uncounted reserve of capital that in +our gold currency we already possess, virtually in common ownership, +come in very usefully on an emergency (which is, perhaps, what happened +at Guernsey). But we must beware of thinking that the issue of paper +<span class='pagenum'><a name="Page_xiv" id="Page_xiv">[Pg xiv]</a></span>money offers some magical way of getting things without having to use +capital, or we may find ourselves one day, to the unmeasured hardship of +the poor among us, stupidly burdening ourselves as consumers with higher +prices and increased cost of living all round.</p> + +<p>There are, of course, other reasons in favour (<i>a</i>) of paper money being +issued by the Government, instead of this valuable and responsible +prerogative being abandoned to individual bankers or joint stock +companies, to the great financial loss of the community as a whole; and +(<i>b</i>) of the whole business of banking—which means the organising of +credit and the custody of savings—being conducted by the Government +itself, in order that the power which banking gives may be exercised +exclusively under public control, and for corporate instead of for +individual ends, and in order that the profit which banking yields may +accrue to the benefit of the community as a whole, instead of to +particular capitalists. But that is another story. The Guernsey +Government stopped short at the issue of paper money—which is not +banking—and even gave up this right at the bidding of private banking +companies.</p> + +<p class="right smcap">Sidney Webb.</p> +<p class="noin" style="margin-left: .5em;">41, Grosvenor Road, Westminster.<br /> +<i>December, 1910.</i></p> + +<br /> +<br /> +<br /> +<br /><span class='pagenum'><a name="Page_1" id="Page_1">[Pg 1]</a></span> + +<hr /> +<br /> +<h2>AN EXAMPLE OF COMMUNAL CURRENCY</h2> +<br /> + +<h2>INTRODUCTION</h2> + + +<p>There are many persons who have heard from one source or another of the +way in which the States of Guernsey built their Market House by means of +non-interest-bearing notes. Some of these—enthusiasts for the reform of +the currency—can dilate for hours on the wisdom of the financial policy +of Daniel de Lisle Brock, can tell how, at the opening of the Market he +"sprinkled the packages (of redeemed notes) with perfume, and while the +band was playing a dirge he laid them on the fire, where they were +quickly consumed," and can even quote from his famous speech on that +occasion.</p> + +<p>A few years ago some members of the Co-operative Brotherhood Trust, +which is a Society that has among its objects a desire to revive the +principles of Robert Owen's Labour Exchange, thought it worth while to +make enquiries as to the Guernsey scheme. They realised that an ounce of +fact was worth a ton of theory. But what were the facts? Were these +notes <span class='pagenum'><a name="Page_2" id="Page_2">[Pg 2]</a></span>circulated in the island as a medium of exchange? How were they +redeemed? Could a citizen demand gold for them? When the above mentioned +enthusiasts were tackled with these practical questions, there was +suddenly noticed a certain hesitancy; and when asked point blank what +was the year in which this famous Market House was built, no one could +say.</p> + +<p>Enquiries were then made from inhabitants of the island itself. The +information gathered was vague and not much to the point. With a few +notable exceptions, the average Guernseyman seems to know or care little +of the financial policy of the island at the beginning of the nineteenth +century. Even from those interested nothing very definite was to be +learned. The enquirers at last came near to doubting whether the +non-interest-bearing notes had ever existed except in the imagination of +the enthusiasts. Only first-hand enquiry on the spot would suffice.</p> + +<p>One Guernseyman, a teacher, kindly encouraged the writer to visit the +island himself, promising him introductions and access to all the +official documents and newspapers of the time. Through the courtesy of +the Greffier and the Librarian of the Guille-Allés Library every +facility was granted to the writer and his wife to carry out their +research. The politeness and kindness of these officials and other +inhabitants of Guernsey are hereby most cordially acknowledged.</p> + +<p><span class='pagenum'><a name="Page_3" id="Page_3">[Pg 3]</a></span>In the following pages it is the writer's desire to place the facts +before the public as he has gleaned them from the official records of +the States and the newspapers of the time. He feels tempted to discuss +the <i>pros</i> and <i>cons</i> of the system adopted by the States of Guernsey +for over twenty years; but this little treatise will probably be of most +use if it is confined to a mere narration of facts. Incidentally, +however, it will be seen that some of the queries which led to the +research have been answered. From the nature of the case this narration +will consist largely of quotations. It must inevitably fail to convey to +the reader the thrilling interest aroused as the story, exceeding all +the romance of the enthusiasts, led its slow but fascinating course +through many volumes, and the quaint old French documents gave up their +secrets in the modern well-equipped Record Office.</p> + +<br /> +<br /> +<br /> +<br /><span class='pagenum'><a name="Page_4" id="Page_4">[Pg 4]</a></span> + +<hr /> +<br /> +<h2>CHAPTER I</h2> + +<h2>CONSTITUTION OF GUERNSEY.</h2> + + +<p>Guernsey is the second in size of the four Channel Isles, Jersey, +Guernsey, Alderney and Sark, which one used to repeat with such gusto in +one's schoolboy days. The Channel Isles are the last remnant of our +French possessions. Or rather, as the Islanders might claim—and as it +is reported some do—England belongs by right of conquest to the Channel +Isles. However that may be, for all practical purposes, the government +of Guernsey is autonomous—and very jealously does the Guernseyman guard +this autonomy.</p> + +<p>It has its own Parliament, "The States" (Les États), consisting to-day +of 49 Members. At the time of which we write there were 32 Members, as +follows:—</p> + +<p>The Bailiff, who, as at the present time, acted as President.</p> + +<p>The Procureur du Roi, corresponding to our Attorney-General.</p> + +<p>12 Jurats or Magistrates, appointed for life by the "States of +Election."</p> + +<p>8 Rectors.</p> + +<p>10 Connétables or Parishioners.</p> + +<p>The Rectors as spiritual leaders and the Connétables as civil +functionaries represented the ten parishes of the island, and though the +latter <span class='pagenum'><a name="Page_5" id="Page_5">[Pg 5]</a></span>were elected to office they were always from the leading +families, which formed an extremely close oligarchy. Bailiff, Jurats and +Rectors still sit in this undifferentiated Parliament, to which has been +added a slightly more democratic element however, nine Deputies being +elected by the Ratepayers of the whole Island.</p> + +<p>It was, and still is, the Bailiff's duty to summon this "States of +Deliberation," formerly at his own discretion, now at regular intervals. +He does this by means of issuing a <i>Billet d'Etat</i>, in which he comments +on the business to come before the States and in which he formulates +certain resolutions. On these resolutions the States only vote <i>for</i> or +<i>against</i>. This Billet d'Etat is in French, still the official +language—the only one used in the deliberations in former days.</p> + +<p>The whole takes us back in thought to Norman or early English times. +Probably even the Norman patois of the modern rural deputies is the +speech of the present time nearest to that in which our ancestors +transacted their business.</p> + +<p>This legislative body represents the King's Council, in the same way +that the supreme judicial body, still bearing the name of La Cour +Royale, represents the King's Court.</p> + +<p>The decisions of the States are subject to the approval of the Privy +Council, to whom there is a right of appeal.</p> + +<br /> +<br /> +<br /> +<br /><span class='pagenum'><a name="Page_6" id="Page_6">[Pg 6]</a></span> + +<hr /> +<br /> +<h2>CHAPTER II</h2> + +<h2>THE SECURITY OF THE NOTES</h2> + + +<p>Guernsey, like other places, fell on evil days early in the nineteenth +century, the period of history with which we have to deal; and the +islanders suffered from the burden of a heavy debt and from the +depression and want of employment which followed the close of the +Napoleonic wars.</p> + +<p>Its condition at this time is graphically described in the following +extracts taken from a document presented by the States to the Privy +Council in 1829.</p> + +<p>"In this Island, eminently favoured by nature, antecedently to the new +roads first projected by Sir John Doyle, Bart., nothing had been done by +art or science towards the least improvement; nothing for the display or +enjoyment of local beauties and advantages; not a road, not even an +approach to Town, where a horse and cart could pass abreast; the deep +roads only four feet six inches wide, with a footway of two to three +feet, from which nothing but the steep banks on each side could be seen, +appeared solely calculated for drains to the waters, which running over +<span class='pagenum'><a name="Page_7" id="Page_7">[Pg 7]</a></span>them rendered them every year deeper and narrower. Not a vehicle, +hardly a horse kept for hire; no four-wheeled carriage existed of any +kind, and the traveller landing in a town of lofty houses, confined and +miserably paved streets, from which he could only penetrate into the +country by worse roads, left the island in haste and under the most +unfavourable impressions.</p> + +<p>"In 1813 the sea, which had in former times swallowed up large tracts, +threatened, from the defective state of its banks, to overflow a great +extent of land. The sum required to avert the danger was estimated at +more than £10,000, which the adjoining parishes subject to this charge +were not in a condition to raise. The state of the finance was not more +consolatory with a debt of £19,137, and an annual charge for interest +and ordinary expenses of £2,390, the revenue of £3,000 left only £600 +for unforeseen expenses and improvements.</p> + +<p>"Thus at the peace, this Island found itself with little or no trade; +little or no disposable revenue, no attraction for visitors, no +inducement for the affluent to continue their abode, and no prospect of +employment for the poor."</p> + +<p>After considering various means of raising a revenue, the States asked +the Privy Council for permission to levy a duty on spirituous liquors. +Notwithstanding some opposition by the inhabitants, permission was +granted by an Order in Council of the 23rd July, 1814, to raise 1s. per +gallon on spirituous liquors consumed in the <span class='pagenum'><a name="Page_8" id="Page_8">[Pg 8]</a></span>Island. This was granted +for a period of five years.</p> + +<p>A second Order in Council, dated 19th June, 1819, renewed the duty for +ten years. Again there was opposition from a section of the inhabitants. +This made itself felt by the insertion in the Order of the following +words:—"That One Thousand Pounds per annum of the produce of the said +duty be applied solely to the liquidation of the present debt, together +with such surplus as shall remain out of the produce of the tax in any +year after defraying the expenses of roads and embankments and +unforeseen contingencies. And that the States of the said Island do not +exceed in any case the amount of their annual income without the consent +previously obtained of His Royal Highness in Council. And the said +States are hereby directed to return annually to the Privy Council an +account of the produce and application of the said Tax."</p> + +<p>In 1825 the Lieutenant-Governor, Sir John Colborne, desired to erect a +new College and to carry on other important works. But these plans could +not be accomplished without the assurance of the renewal of the duty. A +third Order in Council of 30th September, 1825, gave this permission for +a period of fifteen years, that is to say, from 1829 to 1844. On this +occasion there was no opposition from any of the inhabitants.</p> + +<p>As will be seen in the next chapter, it was this duty on spirituous +liquors that formed the security on which the notes were issued.</p> + +<br /> +<br /> +<br /> +<br /><span class='pagenum'><a name="Page_9" id="Page_9">[Pg 9]</a></span> + +<hr /> +<br /> +<h2>CHAPTER III</h2> + +<h2>MUNICIPAL ENTERPRISE—THE ISSUE OF NOTES</h2> + +<div class="blockquot"><p>"<i>Guernsey should make up only one great family whose +interests are common. Only by union and concord can she +enjoy firm and lasting prosperity.</i>"</p></div> + + +<p>Although, as we shall see, the first notes that were issued were not for +the Market, it is interesting to find that there is some foundation for +the tradition identifying them with it. The plan was first suggested in +connection with a scheme for the enlarging of the Market.</p> + +<p>This was a much needed improvement. "Humanity cries out, every +Saturday," reports a States Committee, "against the crush, which it is +difficult to get out of; and every day of the week against the lack of +shelter for the people who, often arriving wet or heated, remain exposed +for whole hours to wind and rain, to the severity of cold and to the +heat of the sun."</p> + +<p>A Committee, appointed 12th April, 1815, to consider the question, +having brought in a scheme for enlarging the Market, recommended the +issue of State Notes. The Bailiff submitted the following resolution for +the consideration of <span class='pagenum'><a name="Page_10" id="Page_10">[Pg 10]</a></span>the States at their meeting on 29th March, +1816:—"Whether in order to meet the expenditure it would not be +desirable to issue State Notes of One Pound each (<i>Billets des États +d'une Livre Sterling</i>) up to £6,000, the States undertaking not to issue +any, under any pretext whatever, beyond the said sum before having +previously cancelled the said £6,000."</p> + +<p>Notwithstanding the Committee's opinion that the enlargement of the +Market could not be recommended without this issue, and the precautions +suggested for the issue of the Notes, the States rejected the +proposition.</p> + +<p>However, the promoters of the idea appear to have been nothing daunted, +and to have met with success on their second attempt. For we find that +on the 17th October of the same year the Finance Committee reported that +£5,000 was wanted for roads, and a monument to the late Governor, while +only £1,000 was in hand. They recommended that the remaining £4,000 +should be raised by State Notes of £1, 1,500 of which should be payable +on 15th April, 1817, or any Saturday after by the Receiver of the Duty, +1,250 on 15th October, 1817, and 1,250 on 15th April, 1818.</p> + +<p>"In this manner, without increasing the debt of the States, we can +easily succeed in finishing the works undertaken, leaving moreover in +the coffers sufficient money for the other needs of the States."</p> + +<p><span class='pagenum'><a name="Page_11" id="Page_11">[Pg 11]</a></span>The States agreed to this and appointed a Committee of three (Nicolas +Maingy, Senior, Jean Lukis and Daniel de Lisle), who were exclusively +charged with the duty of issuing the Notes, taking all the precautions +they thought necessary. They were to pay them out on the order of M. le +Superviseur (Jean Guille), and to receive them back from the Receiver of +the Duty when paid in, in order to cancel them.</p> + +<p>These Notes seem to have served their purpose; for in the record of the +decisions of the States on the 18th June, 1818, is found the following +entry:—"The said States unanimously authorise the issue of new Notes up +to £1,250, to be put at the disposal of Jean Guille, Esq., Jurat, for +the needs of the State; and they ask the said gentlemen, Daniel de +Lisle, Nicolas Maingy and Jean Lukis, kindly to help in the matter. +Which Notes shall be payable at a fixed time to be determined by the +States' Committee named for this purpose at the time of the last issue +of Notes."</p> + +<p>The need for enlarging and covering the Market was meanwhile being more +and more pressed, the site and certain buildings having been purchased +on 10th April, 1817, for £5,000, which was borrowed at 4½ per +cent.<a name="FNanchor_1_1" id="FNanchor_1_1"></a><a href="#Footnote_1_1" class="fnanchor">[1]</a> <span class='pagenum'><a name="Page_12" id="Page_12">[Pg 12]</a></span>A Committee reported on this subject to the meeting of the +States on 6th October, 1819. In their recommendation they proposed "the +issue of Notes of £1 sterling, payable at different times on the receipt +of the part of the Duty left at the disposal of the States." +Notwithstanding the pathetic appeal already recorded, the proposal of +the Committee to enlarge and to cover the Market was lost by a majority +of one.</p> + +<p>The advocates for improving the Market, however, persevered, and +presented to the States Meeting of 12th May, 1820, five plans. The plan +of John Savery Brock at a cost of £5,500 was agreed to by a majority of +19 to 10.</p> + +<p>The following quotation from the Committee's report shows the benefits +which they considered would arise from their scheme for raising the +£5,500 required.</p> + +<div class="centered"> +<table border="0" width="70%" cellpadding="2" cellspacing="0" summary="png 028"> + <tr> + <td class="tdl" width="85%">"The means of meeting this would be to apply to it<br /> the sums now + in litigation with the town</td> + <td class="tdrb" width="15%">£1,000</td> + </tr> + <tr> + <td class="tdl">Twenty-shilling Notes put at the disposal of the Committee</td> + <td class="tdrb" style="text-decoration: underline;"> 4,500</td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdrb">£5,500</td> + </tr> +</table> +</div> + + +<p><span class='pagenum'><a name="Page_13" id="Page_13">[Pg 13]</a></span>But provision must be made for the repayment of the Notes issued, and +the means recommended by your Committee are as follows—</p> + +<div class="centered"> +<table border="0" width="70%" cellpadding="2" cellspacing="0" summary="png 029"> + <tr> + <td class="tdl" width="85%">"The 36 shops, built for butchers according to the plan recommended, + would produce at £5 sterling per annum</td> + <td class="tdrb" width="15%">£180</td> + </tr> + <tr> + <td class="tdl">From this must be deducted £20 for hiring the house at the corner and + £10 for repairs</td> + <td class="tdrb" style="text-decoration: underline;"> 30</td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdrb">£150</td> + </tr> + <tr> + <td class="tdl">The States should grant for 10 years after the first year</td> + <td class="tdrb" style="text-decoration: underline;">300</td> + </tr> + <tr> + <td class="tdl">This would give an income of</td> + <td class="tdrb">£450</td> + </tr> +</table> +</div> + +<p>This sum would be spent each year in paying off and cancelling as many +Notes.</p> + +<p>"Thus, at the end of ten years, all the Notes would be cancelled and the +States would be in possession of an income of £150 per annum, which +would be a return for the £3,000 spent by them.</p> + +<p>"Looked at from all sides the scheme shows nothing but the greatest +advantage for the public and for the States. It should please those who +have at heart the diminution of the debt, since the States in addition +to the £1,000 set aside for this purpose, take a further £300 out of +their treasury in order to increase their income (<i>en <span class='pagenum'><a name="Page_14" id="Page_14">[Pg 14]</a></span>prenant 300l. de +plus sur leurs épargnes pour accroître leur revenu</i>)."</p> + +<p>Thus it appears that the money for building the Meat Market, still +standing, was raised without a loan, the States paying off the Notes at +the rate of £450 a year as the duty on spirits and the rents came in. +The Market is described in Jacob's <i>Annals of the British Norman Isles</i>, +Part I., published in 1830, as a handsome new building, "one of the most +convenient, both for the buyers and sellers, that can be found in any +part of the world." "For the mode of raising the funds for its erection +and support (well worth the attention of all corporate bodies)" we are +referred to an Appendix IV. which was to appear at the end of Part II., +to be published in December, 1831.<a name="FNanchor_2_2" id="FNanchor_2_2"></a><a href="#Footnote_2_2" class="fnanchor">[2]</a></p> + +<p>Diligent search in contemporary records showed no trace of the elaborate +ceremony described in the tradition current among enthusiasts, though +the <i>Mercury</i> of the 5th October, 1822, announced in its advertisement +column that the opening would take place on Saturday, 12th October, +1822.</p> + +<p>The following week the <i>Mercury</i> chronicles the handing over by the +Committee of the keys of the new Market to the butchers. "A large crowd +<span class='pagenum'><a name="Page_15" id="Page_15">[Pg 15]</a></span>gathered in the square, of whom only a few succeeded in entering the +enclosure. A speech was made by one of the Committee, to which one of +the butchers made a reply. The band of the East Regiment took part and +the church bells rang till five in the evening."</p> + +<p>The next issue of Notes seems to have been to pay off the floating debt. +On 14th June, 1820, the States authorised the issue of 4,000 £1 Notes +for this purpose. In recommending this course the Finance Committee +makes some interesting reflections. "Respecting the floating debt, which +consists of sums payable at times more or less distant, it would be easy +to discharge it by £1 Notes put into circulation as need requires. The +extinction of the whole of the floating debt could thus be brought about +without the necessity of new loans. If loans should be raised it would +be necessary to provide for payment both of the principal and of the +interest. If, on the contrary, recourse is had to £1 Notes, the interest +alone which would have been paid will suffice."</p> + +<p>On 23rd June, 1821, the States authorise the issue of 580 £1 Notes to +buy a house whose site is wanted for the new Market.</p> + +<p>On 15th September of the same year the issue is authorised of 4,500 £1 +Notes to diminish the interest-bearing debt of the States. In +recommending this, the Finance Committee remarks:—"The States could +increase the number [of Notes in circulation] without danger up to +10,000 in <span class='pagenum'><a name="Page_16" id="Page_16">[Pg 16]</a></span>payment of the debt, and the Committee recommends this course +as most advantageous to the States' finance, as well as to the public, +who, far from making the slightest difficulty in taking them, look for +them with eagerness."</p> + +<p>On 30th June, 1824, on the united recommendation of the Market and +Finance Committees, 5,000 £1 Notes are issued to pay off the £5,000 +originally paid for the Market in 1817 (see p. 11). "By this means the +interest of £200 (<i>sic</i>) a year will be saved and applied moreover every +year to withdraw from circulation £1 Notes issued for the construction +of the Market."</p> + +<p>On 29th March, 1826, a further issue is authorised for the purpose of +Elizabeth College and Parochial Schools, provided that the total number +of Notes in circulation shall not exceed £20,000. In summoning the +States on this occasion, the Bailiff, Daniel de Lisle Brock,<a name="FNanchor_3_3" id="FNanchor_3_3"></a><a href="#Footnote_3_3" class="fnanchor">[3]</a> +expresses the opinion that paper money is of great use to the States. +There is no inconvenience because the Notes are issued with great care.</p> + +<p>This statement as to great care is borne out by the words of the +resolution passed 12th May, 1826, authorising the issue of £5 Notes, not +exceeding £8,000 worth, voted for the Isle of Sark and other purposes. +After asking Nicolas Maingy, Jean Lukis and Daniel de Lisle "to sign the +said Notes in the name and under the <span class='pagenum'><a name="Page_17" id="Page_17">[Pg 17]</a></span>guarantee of the States," it goes +on to say, "and in default of one or other of these gentlemen through +absence or illness, the States authorise the remainder of the three, the +Finance Committee and M. le Superviseur to choose conjointly another +reputable person for the signature of the said Notes. Which said Finance +Committee Supervisor and those authorised to sign are charged and +requested to watch over and be present at (<i>veiller et assister à</i>) the +destruction of the said Notes at the times fixed for their repayment."</p> + +<p>Extra precautions seem to have been taken 28th June, 1826, when another +issue, not exceeding £2,000 worth of £5 Notes was authorised. For we +find that "The States appoint Josias le Marchant, Pierre le Cocq, +Jurats, and the Rev. Thomas Grut, a Special Committee, whose duty it is +to see to the liquidation of all the anticipations at the times fixed by +the States, and where these anticipations consist in Notes of one or +five pounds to see to the destruction of the very Notes or of earlier +Notes to the same amount. Which Committee is commanded to make a report +to the States at least once each year certifying the liquidation and +destruction of the said anticipations and of the said Notes."</p> + +<p>Further care is shown by the fact that on 26th March, 1828, the States +appointed the Finance Committee "to replace the used and worn-out Notes +by new Notes, payable at the <span class='pagenum'><a name="Page_18" id="Page_18">[Pg 18]</a></span>same time as the destroyed notes would +have been." Testimony is borne by this wear and tear to the extent to +which the Notes circulated.</p> + +<p>Plans for the improvements in Rue de la Fontaine, a street adjoining the +Markets, being adopted on 15th November, 1827, an issue of £1 Notes up +to £11,000 was authorised to be cancelled by the proceeds of rents.</p> + +<p>In 1828 and 1829 issues of Notes were authorised for various purposes, +including £8,500 for the College and £11,000 in connection with the Rue +de la Fontaine scheme.</p> + +<p>At one of the sittings of the States in the year 1829, William Collings, +a member of the Finance Committee, stated that there were 48,183 Notes +in circulation.</p> + +<p>On 18th March, 1834, £1,000 was voted for cholera precautions, to be +raised either at 3 per cent. interest or in £1 Notes. The latter course +seems to have been adopted.</p> + +<p>From the foregoing it will be noticed that during the 20 years over +£80,000 worth of Notes were authorised by the States to be issued. These +were mostly of the value of £1, though some £5 Notes were authorised.</p> + +<p>In 1837 there were still in circulation 55,000, which in that year were +reduced, as will be seen in a subsequent chapter, by 15,000.</p> + +<p>It may be asked whether there is any evidence that the Notes were +destroyed as directed. From various sources we found records of at +least <span class='pagenum'><a name="Page_19" id="Page_19">[Pg 19]</a></span>18,000 being destroyed. For instance, in the <i>Gazette</i> of 3rd +March, 1827, there is the following:—</p> + +<div class="centered"> +<table border="0" width="70%" cellpadding="2" cellspacing="0" summary="png 035"> + <tr> + <td class="tdc" colspan="4">"Market Accounts for 1826.</td> + </tr> + <tr> + <td class="tdc" colspan="4">Notes to Bearer of £1 destroyed.</td> + </tr> + <tr> + <td class="tdl" width="13%"> </td> + <td class="tdl" width="50%">22 March, 1826</td> + <td class="tdl" width="17%">£400</td> + <td class="tdr" width="20%"> </td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdl"> 7 November, 1826</td> + <td class="tdl">£420</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdl"> 1 March, 1827</td> + <td class="tdl" style="text-decoration: underline;">£122</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdl"> </td> + <td class="tdl">£942</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdl" colspan="2">Total of Notes issued for the Market,</td> + <td class="tdl"> </td> + <td class="tdl">£11,296 </td> + </tr> + <tr> + <td class="tdl" colspan="2">Total of Notes destroyed for the Market,</td> + <td class="tdl"> </td> + <td class="tdl" style="text-decoration: underline;"> 3,626</td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdl">Leaving in circulation</td> + <td class="tdl"> </td> + <td class="tdl"> £7,670."</td> + </tr> +</table> +</div> + + +<h4>FOOTNOTES:</h4> + +<div class="footnote"><p class="noin"><a name="Footnote_1_1" id="Footnote_1_1"></a><a href="#FNanchor_1_1"><span class="label">[1]</span></a> This purchase was in itself an interesting piece of +municipal history. "By an Order in Council," says Jacob in his <i>Annals +of British Norman Isles</i>, p. 153, "the Meat Market Company were to be +allowed by the States, certain duties on all the cattle killed, so long +as they remained proprietors of the Market; but the States were allowed +at any future time to take the same into their own possession on the +payment of what the proprietors had advanced. The States did this on the +10th April, 1817, at an expense of £5,000." (See p. 16.)</p></div> + +<div class="footnote"><p class="noin"><a name="Footnote_2_2" id="Footnote_2_2"></a><a href="#FNanchor_2_2"><span class="label">[2]</span></a> We have been unsuccessful in our efforts to obtain Part II. +either in Guernsey or in London, and wonder whether it was ever +published.</p></div> + +<div class="footnote"><p class="noin"><a name="Footnote_3_3" id="Footnote_3_3"></a><a href="#FNanchor_3_3"><span class="label">[3]</span></a> Daniel de Lisle Brock was Bailiff from 24th May, 1821, to +12th January, 1843.</p></div> + +<br /> +<br /> +<br /> +<br /><span class='pagenum'><a name="Page_20" id="Page_20">[Pg 20]</a></span> + +<hr /> +<br /> +<h2>CHAPTER IV</h2> + +<h2>THE UTILITY OF THE NOTES</h2> + + +<p>There is abundant evidence throughout the records that the system was +appreciated.</p> + +<p>Jacob's <i>Annals</i> (1830), in a chapter on Currency, mentions the Notes +incidentally. "All these, with the one pound Guernsey States' Notes, are +in much request, being very commodious for the internal affairs of the +island."</p> + +<p>The Bailiff, Daniel de Lisle Brock, who seems undoubtedly to have been +the inspiring genius of the scheme, says in his <i>Billet d'Etat</i>, 15th +November, 1827—</p> + +<p>"An individual with an income of £9,000, who spends only half of it +wishes to build a house at a cost of £13,000. He therefore makes an +arrangement with his timber merchant, his mason, his carpenter and +others to pay them out of his savings, so that they shall receive a part +each year for five years. Can it be said that he is contracting debts? +Will he not have at the end of the five years both his house and his +original income of £9,000?</p> + +<p>"The States are precisely in the same position as regards the £13,000 +which they have to <span class='pagenum'><a name="Page_21" id="Page_21">[Pg 21]</a></span>pay out of their income during the five years +included in the said table. This sum will be paid in instalments of +£2,600 per annum, with as much ease as were much heavier engagements in +1826 and 1827.</p> + +<p>"The time has passed when the public could be frightened by exaggerated +reports about the debt; most complete publicity keeps everyone +acquainted with the real state of affairs; my greatest wish is that +nothing should be hidden."</p> + +<p>Frequent references to the saving of interest are to be found, and to +the fact that improvements in the island could not have been carried out +but for this system.</p> + +<p>Wm. Collings, speaking at the States Meeting, 26th March, 1828, on a +financial proposition, gives it as his opinion that interest now paid +might be spared if the States issued more Notes. The Rev. T. Brock at +the same meeting supports the contention, as Notes can be issued without +inconvenience.</p> + +<p>In the <i>Billet d'Etat</i> for 21st September, 1836, in a long discourse on +the circulation, Daniel de Lisle Brock says, "To bring about the +improvements, which are the admiration of visitors and which contribute +so much to the joy, the health and the well-being of the inhabitants, +the States have been obliged to issue Notes amounting to £55,000. If it +had been necessary, and if it were still necessary to pay interest on +this sum, it would be so much taken from the fund <span class='pagenum'><a name="Page_22" id="Page_22">[Pg 22]</a></span>ear-marked to pay for +the improvements made and to carry out new ones. This fund belongs +especially to the industrious poor who execute the works and generally +to the whole island which enjoys them. It ought to be sacred to all."</p> + +<p>Mr. John Hubert, in the debate at this meeting, is reported by the +<i>Comet</i> to have referred to the fact that "the roads and other works had +been constructed for the public good," and to have said that "without +issuing Notes for the payment of those works it would have been +impossible to have executed them."</p> + +<p>Mr. H. O. Carré, in the same debate, said, "The States, by having Notes +to the amount of £55,000 in circulation, effected a saving of £1,600 per +annum. Here, then, was a revenue of £1,600 raised without causing a +farthing's expense to any individual of the public generally, for not +one could urge that he suffered a farthing's loss by it. It was +therefore the interest of every one to support, not the credit, but the +interest of the States. Those who wished to traffic on the public +property were in fact laying a tax on that public, for they were +diminishing, by so much as they forced States' Notes out of circulation, +the public revenue, for if the States, in consequence of a diminished +revenue by the effect of Bank paper, have to make loans, those loans +must in the end be repaid by the public—which would be a taxing of the +public for the benefit of private individuals."</p> + +<p><span class='pagenum'><a name="Page_23" id="Page_23">[Pg 23]</a></span>Further contemporary testimony to the estimation in which the Notes were +held may be gleaned from the papers of the time, of which there were +three, issued at least once a week. In these occur letters from +Publicola, Verax, Vindex, Un ami de son pays, Un Habitant, Campagnard, +etc. Some of these were probably inspired, and sometimes they show a +partisan bias. The references of most value are the incidental ones +occurring in discussions on the improvements or in the criticisms of +<i>ordonnances</i> on the currency. The coinage at this time was in a +confused state, there being both English and French money, some of it of +very poor quality, in circulation.</p> + +<p>The <i>Gazette</i> of 22nd July, 1826, refers to allegations made by the +Jersey authorities as a reason for their refusing to register an Act +authorising the issue of £5,000 in Notes. The opponents of the measure +had alluded to supposed evils arising therefrom in Guernsey. But the +<i>Gazette</i> emphatically declares that "these Notes have neither directly +nor indirectly burdened commerce in any way, nor contributed to the rise +in exchange that is experienced."</p> + +<p>A letter in the <i>Gazette</i> of 25th April, 1829, on the subject of +"Monnaie," written at the request of Sir J. Colborne, the +Lieutenant-Governor, suggests that people in authority in Jersey +interested in Banks oppose State Notes, lest these should be preferred +to theirs. The leader of the <span class='pagenum'><a name="Page_24" id="Page_24">[Pg 24]</a></span>same issue of the <i>Gazette</i> states that +"the generality of the inhabitants have confidence in the States' Notes +(it being always understood that the issue of Notes shall be kept within +just limits) because they know that the whole property of the island +forms the guarantee for their payment."</p> + +<p>"Campagnard" in the <i>Gazette</i> of 28th February, 1829, suggests the need +of some other currency than States' Notes for trade in France or with +London and Paris, but feels alarm at anything that might stop the public +works in the island.</p> + +<p>The difficulty of getting cash for notes is alluded to only when the +period of controversy referred to in the next chapter is reached. But +for about the first ten years of their issue it would appear that no +exception was taken to the notes nor difficulty experienced in their +use. External exchange seems to have flourished side by side with this +internal currency.</p> + +<br /> +<br /> +<br /> +<br /><span class='pagenum'><a name="Page_25" id="Page_25">[Pg 25]</a></span> + +<hr /> +<br /> +<h2>CHAPTER V</h2> + +<h2>FIRST RUMBLINGS OF OPPOSITION</h2> + + +<p>The feeling in favour of the system was not however entirely unanimous. +In 1826 we find the first trace of opposition which gradually grew and +grew until, as we shall see later, it was decided in 1837 that the +States should not issue any more Notes.</p> + +<p>Whether the opposition was entirely due to this financial system as such +is open to question. Errors of judgment with reference to the Fountain +Street improvement may have been made. Self-interest on the part of some +may have been one of the factors. Into these questions the writer cannot +enter here. All that he wishes to point out is that it seems to him from +studying the records that there were various currents of opposition +which centred round the issue of Paper Money by the States.</p> + +<p>In September, 1826, three members of the States, Josias le Marchant, +James Carey and Jean le Marchant, the two latter being members of the +Finance Committee, thought that the King's consent should be obtained +for works to be undertaken in Fountain Street. They considered that the +anticipations of future revenues were <span class='pagenum'><a name="Page_26" id="Page_26">[Pg 26]</a></span>"not only fatal to their credit +but contrary to the order of His Majesty in Council, 19th June, 1819, +viz., 'that the States of the said Island do not exceed in any case the +amount of their annual income without the consent previously obtained of +His Royal Highness in Council.'"</p> + +<p>Daniel de Lisle Brock, after consulting La Cour Royale (the Supreme +Court of Judicature), writes his views in a <i>Billet d'Etat</i>, and summons +the States to meet 22nd November, 1826. In his words, which we quote at +some length, are seen both his enthusiasm and his caution.</p> + +<p>"It was not possible, as every one must admit, to do without +anticipations; but these differ from a debt in that a certain clear and +definite income is appropriated for meeting them, at certain fixed +times. They are only assignations on assured funds ear-marked for their +payment. Watch must be kept, it is true, that they are paid from these +same funds. For by letting the period during which they should end pass, +and by spending on anything else the income appropriated to them, they +would become a permanent debt. The experience of several years has shown +us that these assignations may be used without danger, and that they +have been fully paid off as they fell due.</p> + +<p>"The advantage which has resulted is manifest. If we had had to wait +till funds were in hand to set to work at Fountain Street, who could +have foreseen when, if ever, this moment would <span class='pagenum'><a name="Page_27" id="Page_27">[Pg 27]</a></span>arrive. Is it nothing, +in the midst of this short life, when it is a question of an object of +the first necessity among the wants of the community, to have +anticipated by sixteen or seventeen years the enjoyment of this object? +Doubtless evil is close to good: the abuse of the best things is always +possible. Is this a reason for forbidding the use of what is good and +profitable? Is it not better to procure it as soon as possible whilst +availing ourselves of the means at our disposal to avoid its abuse? +Whilst these means are employed, and so long as the income is +sufficient, there is only one possible danger—that of allowing the time +for meeting these anticipations to pass without paying them, and thus of +seeing the debt increased by the amount of the non-cancelled +obligations. This danger is seen to vanish when we consider the +precaution taken by the States, the watchfulness of all their Members, +the Committee which they have appointed specially for this purpose, when +we think of the publicity, of the exact acquaintance from year to year +which all the inhabitants have of the liabilities, the receipts and +expenditure of the States. All this watchfulness and all this publicity +are the strongest safeguard that could be given against any danger in +this respect."</p> + +<p>The Resolution to refer the matter to the King was lost, only five +voting for it; and a resolution was carried expressing confidence in the +present method.</p> + +<p><span class='pagenum'><a name="Page_28" id="Page_28">[Pg 28]</a></span>In the following year, 1827, the Guernsey Banking Company, now known as +the Old Bank, was founded from the firm of Priaulx, Le Marchant, Rougier +& Company. Jean le Marchant was Vice-President of this Bank. It is said +that at the States Meeting on 15th November, when objections were raised +lest the States' Notes should suffer, the Bailiff seemed to foresee no +danger. "Good Bills are better than bad coin."</p> + +<p>Notwithstanding the decision of the States in 1826, the three Jurats, +Josias le Marchant, James Carey and Jean le Marchant were still uneasy, +and on 10th April, 1829, complained direct to Whitehall that "the States +had exceeded their annual revenues for works of public utility without +the express sanction of the superior authority, and had for these same +works contracted liabilities which exceeded the means of the States."</p> + +<p>The Privy Council on the 19th June forwarded the complaint to the States +and asked for an explanation.</p> + +<p>The States, at their meeting, 27th August, 1829, instructed a Committee +to examine the charges, draw up a report and answer, and submit the same +to the States. The Committee selected was the Finance Committee, which +was revised at this time, the chief change being the omission of the two +complainants, James Carey and Jean le Marchant.</p> + +<p>A guess may be hazarded that this Committee <span class='pagenum'><a name="Page_29" id="Page_29">[Pg 29]</a></span>appointed Daniel de Lisle +Brock to draft the reply.</p> + +<p>This interesting document fortunately exists not only in French but in +English (doubtless for the benefit of the Privy Council). In +characteristic language, enthusiastic and patriotic, while clear and +matter of fact, it sets out the present situation and sketches the +history of the Island since the close of the War. The greater part of it +appears in the next chapter.</p> + +<br /> +<br /> +<br /> +<br /><span class='pagenum'><a name="Page_30" id="Page_30">[Pg 30]</a></span> + +<hr /> +<br /> +<h2>CHAPTER VI</h2> + +<h2>THE REPLY OF THE STATES</h2> + + +<p>With a few slight omissions the following is the official translation of +"The Answer of the States of Guernsey to the Complaint of three of their +Members dated the 10th April, and transmitted by their Lordships's Order +of 19th June, 1829.</p> + +<p>"My Lords,</p> + +<p>Discarding from their minds allusions and topics of a personal nature +and every sentiment of recrimination, the States of Guernsey are +desirous of vindicating themselves in the manner most becoming the +respect due to your Lordships, and the consciousness of right, by +setting facts against errors, reason against fears, 'honest deeds +against faltering words.'</p> + +<p>"To judge of the States by any particular act or period would be to +dismiss all consideration of previous motives and future benefits, of +connecting causes and effects. Comprehensive views of the general policy +of the States can alone enable them to prove, and your Lordships to +judge, of the wisdom and propriety of their measures. Taking, therefore, +a retrospect of the <span class='pagenum'><a name="Page_31" id="Page_31">[Pg 31]</a></span>period which immediately preceded the grant of the +duty on Spirituous Liquors first graciously conceded in 1814; they deem +it necessary to lay before your Lordships a summary account of the state +of this Island, at, and from that period.</p> + +<p>"The steps taken during the war for the prevention of smuggling had +deprived this Island of the trade which the supply of that traffic +occasioned, and a great portion of the inhabitants of their usual +occupation, consisting not in smuggling themselves, but in importing the +goods and making the small packages in which those goods were sold in +the Island; Privateering, adventurous speculations, and the great +expenditure of fleets and garrisons compensated in some measure for the +loss of this occupation, but when the war ceased also, a general want of +employment and consequent distress ensued.</p> + +<hr style='width: 45%;' /> + +<p>"In 1813 the sea which had in former times swallowed up large tracts, +threatened from the defective state of its banks to overflow a great +extent of land. The sum required to avert the danger was estimated at +more than £10,000, which the adjoining parishes subject to this charge +were not in a condition to raise. The state of the finance was not more +consolatory, with a debt of £19,137, and an annual charge for interest +and ordinary expenses of £2,390, the revenue of £3,000 left only £600 +for unforeseen expenses and improvements.</p> + +<p><span class='pagenum'><a name="Page_32" id="Page_32">[Pg 32]</a></span>"Thus at the peace, this Island found itself with little or no trade; +little or no disposable revenue; no attraction for visitors, no +inducement for the affluent to continue their abode, and no prospect of +employment for the poor. No wonder, therefore, if emigration became the +object of the rich in search of those good roads, carriages and other +comforts which they could not find at home, and the only resource of the +other classes, whose distress was likely to be aggravated by the +non-residence of the former. Misery and depopulation appeared +inevitable, from the peace to the year 1819 inclusive, more than five +hundred native and other British subjects embarked for the United +States, and more prepared to follow.</p> + +<p>"It is said, the powers of the human mind in society lie at times torpid +for ages; at others, are roused into action by the urgency of great +occasions, and astonish the world by their effects. This has, in some +measure, been verified in this Island, for though nothing done in so +small a community can cause a general sensation, its exertions may yet +produce wonderful results, within its own sphere. It is the duty of the +States to show that, roused by the deplorable situation above described, +they took, and have since pursued the steps best adapted to meet the +exigency of the case, and that those steps have been attended with +complete success.</p> + +<p>"To increase the revenue was an indispensable <span class='pagenum'><a name="Page_33" id="Page_33">[Pg 33]</a></span>preliminary, but to do +so, no other means lay within the power of the States than a tax on the +several parishes according to the rates at which they were respectively +assessed, and to this tax there were insuperable objections....</p> + +<p>"Under these circumstances was the application made for the duty on +spirituous liquors: and notwithstanding the opposition of many of the +inhabitants His Royal Highness the Prince Regent, was graciously pleased +by an Order in Council of 23rd July, 1814 to authorise the States to +raise 1s. per Gallon on all such liquors consumed in this Island for the +term of 5 years. The same duty was renewed for 10 years by virtue of a +second Order in Council of 19th June, 1819 after similar opposition. And +on the declaration at Your Lordships' bar of the advocate deputed by the +opponents that a clause to the following effect would reconcile them to +the measure, and no objection being made to it on the part of the +States, these words were inserted in the gracious Order in question: +viz.:—'That One Thousand Pounds per annum of the produce of the said +duty be applied solely to the liquidation of the present debt, together +with such surplus as shall remain out of the produce of the tax in any +year after defraying the expenses of roads and embankments and +unforeseen contingencies. And that the States of the said Island do not +exceed in any case the amount of their annual income without the consent +previously <span class='pagenum'><a name="Page_34" id="Page_34">[Pg 34]</a></span>obtained of His Royal Highness in Council: and the said +States are hereby directed to return annually to the Privy Council an +account of the produce and application of the said tax.'</p> + +<p>"In 1825 the Lt. Governor Sir John Colborne, and the States, having +extended their views to the erection of a new College and other +important works which could not be undertaken without the assurance of a +renewal of the duty, constituting the chief part of the revenue, a third +Order in Council of the 30th September, 1825, conceded to the States the +right of levying the same for 15 years, beginning on the 1st September, +1829, and this without the smallest opposition from any of the +inhabitants, and without the conditions annexed to the second Order.</p> + +<p>"With gratitude for the means placed at their disposal the States feel +an honest pride in the recital of the manner in which those means have +been applied. First, considering the danger arising from the bad state +of the sea embankments, and the hardship of subjecting particular +parishes to a charge for the general safety to which they were unequal, +the States took on themselves the present repairs, and future +maintenance of those embankments. This essential object connected with +the paved slips or avenues to the beach, has been attended with an +expence of £14,681 19s., without including five or six thousand for a +breakwater to defend the line of <span class='pagenum'><a name="Page_35" id="Page_35">[Pg 35]</a></span>houses at Glatney, on the North side +of the Town.</p> + +<p>"Independently of the sums contributed by Government towards the +military roads, from twenty-nine to thirty thousand pounds have been +expended by the Island on the roads, so that in lieu of those before +described, there are now fifty-one miles of roads of the first class, as +good as those of any country, with excellent footways on all of them, +and 17 miles of the second class.</p> + +<p>"Not only the main Harbour, Piers, Quays, Buoys and Sea Marks have been +attended to, and at a great expense, but, in order to facilitate the +exportation of the granite from the North of the Island, the Harbour of +St. Sampson has been rendered secure and convenient by a new Breakwater +and Quay.</p> + +<p>"The situation and state of the Town were thought to preclude all hopes +of much amelioration, but the widening of High Street, and other +streets, the reducing the precipitous ascent to the Government and Court +House, the clearing away of the unsightly buildings that obstructed the +view and approach to those public edifices, the new sewers, pavements, +and, above all, the Public Markets and new Fountain Street, attest the +solicitude of the States towards the Town, and surprise those who return +to it after a few years absence. Add to these the enlarging and +improving of the Court House and Record Office, where the public have +daily access, and where are kept the contracts and registry of all the +real <span class='pagenum'><a name="Page_36" id="Page_36">[Pg 36]</a></span>property (of) the Island. Add also the New College, which, with +the laying out of its grounds and the roads round its precincts, +contributes to the embellishment of the town, induces families from +other places to settle in the Island, on account of their children, and +affords to the inhabitants the ready means of a good education.</p> + +<p>"The advantage resulting from all these improvements has not been +confined to their utility, or to the increased activity given to +industry, and the circulation of money by the public expenditure: they +have excited in all classes a similar spirit of improvement, which +displays itself in the embellishment of the premises already built upon, +and above all in the number of handsome dwellings since erected. In the +Town parish alone 401 houses have been built since the year 1819 at an +expense of upwards of £207,000, and few towns do now present a more +animated scenery around them, or one where ornament and comfort are more +generally united; the same comfort and improvement are witnessed in +every direction, and at the greatest distances from town. And thus it +is, that the public works have not only given life and activity to every +species of industry by the immediate effects of their utility, as for +example to the building of a number of mills in the Island, before +supplied with most of its flour from abroad, and now enabled to +manufacture it for exportation, but and still more by the consequent +impulse communicated on all sides, prompting <span class='pagenum'><a name="Page_37" id="Page_37">[Pg 37]</a></span>the wealthy to lay out for +private mansions greater sums than were expended for public works and +creating a permanent source of employment, by the future expenses which +the repairs and occupations of those mansions will require.</p> + +<p>"The extent of benefits conferred is sufficiently attested by the +concurrent testimony of inhabitants and strangers. The sole objects of +His Majesty and of His Most Honorable Privy Council are the public good +and general happiness; the States might therefore, confidently look for +indulgence, even if, in promoting those objects, they had fallen into +some little deviation from the strict letter of any particular Order. +But implicit obedience to the Royal Authority in Council being their +paramount duty, they cannot rest satisfied under the imputation of +having, even unintentionally, derogated from that duty.</p> + +<p>"The words of the second Order in Council have already been cited. The +right of levying the duty on spirituous liquors is granted for ten +years: a condition is annexed purporting that the States shall not +exceed their annual income, and on the contrary that out of the produce +of the duty, one thousand pounds shall be applied annually to the +extinction of the debt; that condition is naturally in force for the +same period, and for the same period only, as the grant to which it is +annexed; it is necessarily so limited, because the means by which it is +to be fulfilled, <span class='pagenum'><a name="Page_38" id="Page_38">[Pg 38]</a></span>the produce of the duty, ceases at the end of the ten +years for which the duty is granted.</p> + +<p>"The States are bound to prove that they have complied with the +conditions of that Order; they did so comply, when wishing to erect a +new Market, they applied for and obtained the order of 10th October, +1820, which imposed on them, at their own request, the further +obligation of an annual payment of £450 for 10 years;</p> + +<div class="centered"> +<table border="0" width="70%" cellpadding="2" cellspacing="0" summary="png 54"> + <tr> + <td class="tdl" width="75%">This sum began to be paid in 1822, and has been paid for 8 years, during which + the obligation amount to</td> + <td class="tdrb" width="25%">£3,600 0 0</td> + </tr> + <tr> + <td class="tdl">The former obligation amounts, for the 10 years now elapsed to</td> + <td class="tdrb" style="text-decoration: underline;">£10,000 0 0</td> + </tr> + <tr> + <td class="tdl">Total amount of the two obligations imposed</td> + <td class="tdrb" style="text-decoration: underline;">£13,600 0 0</td> + </tr> + <tr> + <td class="tdl">The debt at the commencement of the 10 years elapsed amounted in rents and + money, including the cost of the Market, to</td> + <td class="tdrb">£43,668 15 2</td> + </tr> + <tr> + <td class="tdl">The Debt, Rents and Market included, has been reduced to</td> + <td class="tdrb" style="text-decoration: underline;">£27,740 0 0</td> + </tr> + <tr> + <td class="tdl">Total amount of the sums actually applied to the payment of the Debt</td> + <td class="tdrb">£15,928 15 2</td> + </tr> +</table> +</div> + +<p><span class='pagenum'><a name="Page_39" id="Page_39">[Pg 39]</a></span>"The conditions of the second Order in Council have thus been more than +fulfilled, by the application of £2,328 15s. 2d. to the payment of the +debt over and above the obligations imposed. Those conditions, +incidentally introduced in the second Order, do not in any way form a +part of the third Order now in force.</p> + +<p>"Though released from the positive conditions of the former Order, the +States have shown no intention, and do by no means desire to depart from +its general spirit; graciously offered by the third Order in Council to +continue their improvements, they came to the following resolution on +22nd November, 1826: 'That far from entertaining any wish of augmenting +the Debt the States recognise the principle that it should not exceed, +at the end of the 15 years for which the duty is further granted, the +sum to which the Debt shall amount at the end of the 10 years present +duty: they impose on themselves that obligation anew, and bind +themselves by the most solemn engagement not to increase the debt.'</p> + +<hr style='width: 45%;' /> + +<p>"What cause of alarm can there then possibly exist? What prospect, on +the contrary, the States humbly ask, can be more gratifying than that of +remaining with our New College, new Harbours built and to be built, new +Markets of every description, new Roads in every direction, new streets, +one of thirty feet instead of seven in the greatest thoroughfare between +town and country, <span class='pagenum'><a name="Page_40" id="Page_40">[Pg 40]</a></span>in short, with nearly all the greatest improvements +that can be desired, paid for to the last shilling; and all this +according to the statement of the plaintiffs themselves, with the debt +reduced to £15,000, and the revenue augmented £1,700 per annum, by those +very improvements.</p> + +<hr style='width: 45%;' /> + +<p>"In the Markets and Fountain Street, the States have undertaken works +essentially necessary. The cost might be supposed to exceed the means of +the States, if credit did not in the first instance furnish the chief +expense without the charge of interest, and if the works themselves did +not provide for the extinction of the engagements incurred.</p> + +<p>"The views of the States are to render these public improvements a +source of future revenue, which shall again afford the means of further +and greater improvements.</p> + +<p>"The same plan has been acted upon with success in several places, and +particularly at Bath and Liverpool,<a name="FNanchor_4_4" id="FNanchor_4_4"></a><a href="#Footnote_4_4" class="fnanchor">[4]</a> to the permanent increase of +their revenues, and to the general benefit of those places, and of the +country at large. It is difficult indeed to conceive whence can arise +the objections to measures, which without laying the least burthen on +anyone, surely and quietly operate to the general good, except it be +from the disinclinations of most persons to enter into that close +examination of figures necessary to a right <span class='pagenum'><a name="Page_41" id="Page_41">[Pg 41]</a></span>understanding, and the +distrust consequent on the need of that examination and comprehension. +In our case, it may be added, that accustomed, on the subject of +improvement, to a long apathy confirmed by the state of a revenue +inadequate to the least undertaking, works of magnitude when first +proposed created the greatest alarm. The new roads were opposed by the +far greater number of those who were to derive the most benefit from +their use, and who from experience are now clamorous for more. The +Market was only voted the third time it was offered to the consideration +of the States, although it was represented that independently of its +various advantages, it would in a short time permanently add to the +revenue. Experience has proved the correctness of that view of the +question, and opening the eyes of the public, has turned their +sentiments of fear and distrust to one of perfect confidence. Hence it +was that the public voice called on the States to realise the benefits +likely to result from the substitution of a street thirty feet wide, in +lieu of one of seven feet, in the heart, and connecting the two +extremities of the Town, and forming the principal avenue from the +Country to the Harbour; twenty to thirty carts frequently waited at one +end until those from the other had passed. Such a thoroughfare in the +most populous quarter could not but be fraught with danger, and the +accidents that occurred were numerous, while the closeness of the +street, height of the <span class='pagenum'><a name="Page_42" id="Page_42">[Pg 42]</a></span>houses, and filth collected at the back of them +were a constant source of nuisance and disease. Never was a measure +voted with so much unanimity and general satisfaction as the removal of +this public nuisance, and rebuilding Fountain Street, notwithstanding it +to be now the ground of the complaint before your Lordships.</p> + +<hr style='width: 45%;' /> + +<p>"Relatively to so small a section of the Empire, great things have been +done with slender means; that so much has been done may with truth be +ascribed to the fairness and disinterestedness which have marked every +resolution of the States, and its execution; to the vigilant and +gratuitous superintendence of their Committees, and to the public spirit +of the inhabitants.</p> + +<p>"Devoted to the good of His Majesty's service, and not resting on +isolated facts, the States have laid open the whole of their conduct and +views, and beg leave to refer to their worthy and highly respected +Lieutenant-Governor Major General Ross for the correctness of their +statement, and for the situation of the Island. They have the approval +of their fellow-subjects and of their conscience, but they would feel +deeply humiliated if they did not merit and obtain the commendation of +your Lordships."</p> + +<p>The Reply is accompanied by five appendices giving detailed figures to +substantiate the argument and point out errors in the figures of the +complainants. It is not necessary to weary the <span class='pagenum'><a name="Page_43" id="Page_43">[Pg 43]</a></span>reader with these. +Appendix I., however, is interesting, as it shows that more than half +the Debt of the States consisted of these Notes on which no Interest was +paid.</p> + + +<p class="cen">"<span class="smcap">Appendix I.</span></p> + +<div class="centered"> +<table border="0" width="70%" cellpadding="2" cellspacing="0" summary="png 59"> + <tr> + <td class="tdl" colspan="3">Debt of the States:—</td> + </tr> + <tr> + <td class="tdl" width="8%"> </td> + <td class="tdl" width="77%">To the Savings Bank at 3 per cent. first vote</td> + <td class="tdrb" width="15%">£10,000 </td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdl">To individuals</td> + <td class="tdrb"><span style="text-decoration: underline;"> 557 </span> </td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdl"> At 3 per cent. interest</td> + <td class="tdrb">£10,557 </td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdl">In Notes of 20s. each</td> + <td class="tdrb">14,443 </td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdl">135 Quarters 2 Bushels 8 Denerels, and 18 sous 8 Deniers Rents equal to</td> + <td class="tdrb"><span style="text-decoration: underline;"> 2,740 </span> </td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdl"> </td> + <td class="tdrb">£27,740 </td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdl">Deduct from this the balance still due by the Market, and carried to the joint + account of the Market and Fountain Street</td> + <td class="tdrb"><span style="text-decoration: underline;"> 6,100 </span> </td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdl"> </td> + <td class="tdrb">£21,640<a name="FNanchor_5_5" id="FNanchor_5_5"></a><a href="#Footnote_5_5" class="fnanchor">[5]</a>"</td> + </tr> +</table> +</div> + +<p>The scope of the remaining Appendices is shown by their titles:—</p> + +<p>Appendix II.: Plan of Finance adopted by the <span class='pagenum'><a name="Page_44" id="Page_44">[Pg 44]</a></span>States and to be pursued +during the fifteen years from this date, ending in 1844 inclusive.</p> + +<p>Appendix III.: Remarks on the Statement of account making part of the +complaint presented against the States.</p> + +<p>Appendix IV.: Joint account of Fountain Street and the Market.</p> + +<p>Appendix V.: Amount of the Produce on the Duty of 1s. per Gal. on all +spirits consumed in the Island of Guernsey, and the manner in which it +has been expended during the Ten years for which the said Duty was +granted, beginning September 1st, 1819. In obedience to Order of H.M. in +Council of June, 1819.</p> + +<p>This reply was very favourably received by the States at their Meeting +23rd December 1829 and adopted almost unanimously. One of the Rectors +spoke of it as "most judicious and consolatory, especially considering +that room had been given for the exercise of opposite feelings."</p> + +<p>The leader writer in the <i>Gazette</i> recommended the reply to "the +particular attention of every true Guernseyman." Improvements in the +Island were due to M. le Bailiff, against whom and whom alone the +complaint is directed. "As a wise administrator he has known how to +contrive the means of effecting this great good without imposing the +least tax or inconveniencing his fellow citizens."</p> + +<h4>FOOTNOTES:</h4> + +<div class="footnote"><p class="noin"><a name="Footnote_4_4" id="Footnote_4_4"></a><a href="#FNanchor_4_4"><span class="label">[4]</span></a> See Appendix.</p></div> + +<div class="footnote"><p class="noin"><a name="Footnote_5_5" id="Footnote_5_5"></a><a href="#FNanchor_5_5"><span class="label">[5]</span></a> Market. +</p> + +<div class="centered"> +<table border="0" width="70%" cellpadding="2" cellspacing="0" summary="png 60"> + <tr> + <td class="tdl"> </td> + <td class="tdl">The cost was</td> + <td class="tdrb">£12,748</td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdl">Paid off since 1822</td> + <td class="tdrb" style="text-decoration: underline;"> 6,648</td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdl"> Balance due on Market</td> + <td class="tdrb">6,100</td> + </tr> +</table> +</div> +</div> + +<br /> +<br /> +<br /> +<br /><span class='pagenum'><a name="Page_45" id="Page_45">[Pg 45]</a></span> + +<hr /> +<br /> +<h2>CHAPTER VII</h2> + +<h2>THE CRISIS</h2> + + +<p>No trace was found of any reply or acknowledgment by the Privy Council. +Presumably they were satisfied with the answer submitted by the States.</p> + +<p>But not so the opponents.</p> + +<p>In addition to the Old Bank already mentioned, another Bank, the +Commercial Bank, had been started in 1830. Both of these appear to have +issued notes at their own discretion. Consequently the Island seems to +have been flooded with paper money, and an awkward situation had arisen. +The Commercial Bank claimed an equal right with the Old Bank and even +with the States to issue notes. The Finance Committee, it was stated, +had refused to confer with the Commercial Bank. So long as the Banks had +a right to issue notes they appear to have had it in their power to put +pressure on the States. For they could thus put into circulation a +currency beyond that required for the internal needs of the Island.</p> + +<p>Daniel de Lisle Brock summoned the States to consider the matter, +evidently with the intention of obtaining an injunction against the +issue of notes by the Banks.</p> + +<p><span class='pagenum'><a name="Page_46" id="Page_46">[Pg 46]</a></span>His message to the States Meeting, held 21st September, 1836, is very +spirited and defends the rights of the States as against private +individuals, as will be seen from the following lengthy quotation.</p> + +<p>"If there is one incontestable principle it is that all matters relating +to the current coin of any country have their source in the supreme +prerogative, and that no one has the right to arrogate to himself the +power of circulating a private coinage on which he imprints for his own +profit an arbitrary value. If this is true for metal coins still more so +is it for paper money which in itself has no value whatever.</p> + +<p>"Has not experience shown us the danger of private paper money? Can we +have forgotten the disastrous period when payment of one hundred +thousand one-pound notes put into circulation by two banks enjoying good +credit was suddenly stopped? Have we forgotten the ruin of some, the +distress of others, the embarrassment of all? Have we not quite recently +seen a bank established by people considered immensely rich, advancing +large sums for distilleries, steam boats and other projects, and coming +to an end in less than two years with a composition with its creditors +who thought themselves lucky to get a few shillings in the pound?</p> + +<p>"With these facts before our eyes we must realise the necessity of +limiting the issue of paper money to the needs, the custom, and the +benefit <span class='pagenum'><a name="Page_47" id="Page_47">[Pg 47]</a></span>of the community in general. Permission cannot be granted to +certain individuals to play with the wealth and prosperity of society, +to take from it its hard cash and to give it in exchange rags of paper. +What incentive can they offer to persuade the public to give up to them +valuable bills for worthless ones, certainty for uncertainty? What +advantage can they pretend will accrue to the public from the loss of +its currency and the possible depreciation of their paper? These general +reflections will find their application. Let no one exclaim against the +possibility of the supposed danger. The wealth of the present +stockholders of our banks is well known, their names suffice to inspire +the greatest confidence; but apart from extraordinary events, the +ordinary casualties of life may bring about in a short time the change +of all these names, and there may remain in their place only men of +straw.</p> + +<hr style='width: 45%;' /> + +<p>"The States are met in order to take counsel together on measures for +its defence. For an object so important they ought to count on the help +of all friends of their country.</p> + +<p>"Speaking of the present banks, and it is necessary to refer to them, no +one desires more than I do to see them flourish, provided that it is not +at the expense of the public interest. Several of the stockholders seem +to rely for success on the issue of paper-money, as if this were the +principal aim of the business of banking. This aim, <span class='pagenum'><a name="Page_48" id="Page_48">[Pg 48]</a></span>on the contrary, is +quite foreign to real bankers—one finds them in all the great towns of +Europe enjoying colossal fortunes—they never dream of paper-money; +their functions are confined to discounting bills, furnishing bills on +all countries, taking money on deposit at low interest to lend it again +at the legal rate on landed estates, or property of assured value, and +to a number of other services required by commerce: each transaction +yields a profit which should suffice. A bank of this kind was wanting in +the Island. The first of the two existing ones was formed under the most +favourable auspices, nothing could exceed its credit: although it issued +paper money it did not seem inclined to push this circulation to the +point of annoyance to the States. It even made common cause with them +when it was a question of replacing the old coins with new, and +contributed half the expense. If it had shown itself more obliging and +ready at any time to supply bills for those who, money in hand, wanted +them to meet engagements in London or Paris, it would have continued the +only bank for all business. But as it would not put itself out in any +way, the second bank was started by merchants in order to escape from +the domination and caprice of the first.</p> + +<p>"The second bank should have kept, and still ought to keep, to the +legitimate business of banking transactions. It appeared to have for its +principal object the issue of paper money; even <span class='pagenum'><a name="Page_49" id="Page_49">[Pg 49]</a></span>on its origin it +suggested that the States and the two banks should weekly make a mutual +exchange of their respective notes, each party paying interest for the +balance of notes remaining against it; in this way all the notes of the +States would have found themselves in the coffers of the Banks and +paying interest to them. Though this proposition was not accepted, the +States were not the less troubled with requests for cash in payment of +their notes, and these requests are daily—not only for the ordinary +household needs, as might have been expected, but for sending abroad, +for if there are drafts to be cashed by the bank for anyone who wishes +for money to send to France or to Jersey, the drafts are paid in States +Notes, in order that the money shall ultimately come from this last +named source. The Bank makes no secret of its pretensions: there are, it +says, three parties for issuing paper money; this issue cannot rise +above £90,000 since the circulation in the country does not allow for +more, the States ought to have only one-third of the issue, the two +banks the two remaining thirds. This is a fine way of making the +division, and very convenient certainly for the Commercial Bank. It +would even have some show of justice if the parties had equal rights, +and if the public had no interest in the matter; but the rights are not +equal—the bank has none to put forward, that of the States is +incontestable: they exercise it for the welfare and advantage <span class='pagenum'><a name="Page_50" id="Page_50">[Pg 50]</a></span>of the +whole Island which they represent. Consequently the public has the +greatest interest in preserving for the States the power of issuing +paper-money without interruption. Let the bank reply to the questions +already put; let it say what inducement it can offer the public to drive +out of circulation the States Notes, the profit on which benefits all, +especially the productive classes, and substitute for it Bank notes, the +profit on which benefits only individuals of the unproductive classes? +Now is the time to ask the proprietors themselves and ascertain whether +in starting a bank they ever had the intention of letting it work to the +detriment of their country? The public Treasury is the heart of the +State—did they ever wish, do they to-day wish to strike it with a +dagger? I know that we live in a financial age, that it is reproached +with indifference to every generous sentiment, and that the love of +money and the lust for gain absorb all other passions. In spite of that +I have not lost all confidence in the patriotism of the members of the +bank, they have the greatest personal interest in supporting the States +in their efforts for the improvement of their country, efforts which +contribute so greatly to the prosperity of internal commerce, to the +residence of inhabitants of means, and to the wealth of strangers. +Finance is the pivot on which turns the administration of affairs. The +least disturbance imposes on me the duty of sounding the alarm and +summoning <span class='pagenum'><a name="Page_51" id="Page_51">[Pg 51]</a></span>the States. What I have said will be sufficient, I hope, to +persuade the bank to maintain a friendly course. The bank should feel +that it is not enough to intend not to injure, but that it is necessary +to abandon any step which, even without its wish, would be prejudicial +to the interests of the country. It should recognise that, as regards +the circulation of paper-money, the States have, for a long time and for +the common good, been in possession of the ground which it seems to wish +to invade, which, however, it cannot occupy without injustice.</p> + +<p>"Every war, it is said, ends where it should have begun—in peace. I am +firmly convinced of this truth; and experience has shown me that in +civil life as in political, war might almost always be avoided to the +great advantage of both parties, and that lawsuits, like wars, have for +end rather the injury of the adverse party than good to oneself. The +States are on the defensive, and such war is just and inevitable if any +war is. It is, moreover, a war in which all the inhabitants who are the +friends of their country will eagerly unite for the defence of the +States in their just rights—thus united they will defend them with +complete success. For this purpose the States will doubtless appoint a +Committee with the fullest powers to propose, in case of need, measures +which may ultimately become necessary.</p> + +<p>"I do not forsee that the case will require <span class='pagenum'><a name="Page_52" id="Page_52">[Pg 52]</a></span>it, and I should wish to +avoid, as far as possible, any foreign intervention—but if the efforts +of the States were not sufficient to defend their rights there would be +no alternative, they would find themselves obliged to petition His +Majesty in Council to consent to restrict the issue of one pound notes, +and only to permit the putting into circulation of the number absolutely +required by the States. Under the present circumstances this would be an +indispensable measure, and it can scarcely be doubted that a humble +request to this effect would be graciously received."</p> + +<p>The debate, reported at length in the local papers, was a heated one. It +first raged round the third proposition, which appealed in general terms +to the islanders to rally round the States. The following is the +proposition as translated by the <i>Comet</i> of 22nd September, 1836:—"That +in execution of the numerous ameliorations that have taken place during +the last 20 or 30 years, the States having put into circulation about +55,000 One Pound Notes, as a financial measure in favour of the public +generally, if they are of opinion to defend the rights of the States +against those who wish, for the advantage of a few individuals only, to +hinder the circulation of the States Notes, for the purpose of +substituting those of private individuals in lieu thereof; and whether +it would not be proper to make an appeal to all the inhabitants, who are +the friends of their country, to invite them to afford their <span class='pagenum'><a name="Page_53" id="Page_53">[Pg 53]</a></span>assistance +in supporting with all their might the notes belonging to the States."</p> + +<p>This was carried by 18 votes to 11. The minority represented chiefly +town rather than country parishes, the Jurats being equally divided, and +included at least two persons closely connected with the Banks. The +victory of States Notes seemed complete, and the fourth Proposition +appointing a Committee to give effect to the decision was carried by a +large majority. It is as follows:—</p> + +<p>"If they are of opinion to name a Committee that shall be authorised in +a special manner to defend the rights and interests of the States, and +of the public:—to do their utmost by every conciliatory measure in +their power, and above all, to agree to an arrangement that shall screen +the States from all interruption in the circulation of their Notes, +which have been issued for the benefit and advantage of the public, with +the design of gradually diminishing the number annually. And in the +event of such an arrangement not taking place, to adopt every measure, +and make every necessary sacrifice for supporting the circulation of the +States Notes. And finally, should the case require it, to propose to the +States the adoption of those ulterior measures deemed requisite by the +Committee, for the general interests of the island."</p> + +<p>The meeting ended with a fine fighting speech from the Bailiff. He +reiterated the principle of <span class='pagenum'><a name="Page_54" id="Page_54">[Pg 54]</a></span>the States being the sovereign power in +issuing currency, claimed that the Cour Royale had the right of stopping +the private issue of notes, and pointed to the example of England, where +only £5 notes were permitted in the country, and these under a heavy +tax, while only the Bank of England might issue notes in and around +London. He showed that it was a choice between notes issued for the +benefit of individuals and notes issued for the public good. He defended +the improvements carried out by the States, and once again declared that +they had been advantageous in giving employment to the poor, security to +the rich and encouragement to commerce.</p> + +<br /> +<br /> +<br /> +<br /><span class='pagenum'><a name="Page_55" id="Page_55">[Pg 55]</a></span> + +<hr /> +<br /> +<h2>CHAPTER VIII</h2> + +<h2>THE END</h2> + + +<p>One can imagine the enthusiasm and the satisfaction with which the +majority returned home. One anticipates a triumphant report in the +Bailiff's best vein; and expects that the banks will in future have to +confine themselves to the operations permitted to English banks, while +the States restore equilibrium by causing the withdrawal of superfluous +notes and confining future issues, once again entirely in their own +hands, to quantities proportioned to the needs of the island.</p> + +<p>With surprise, the subsequent proceedings are found to be on quite +different lines. Truth is stranger than fiction. The prosaic facts are +as follows:—</p> + +<p>The Bailiff in presenting his <i>Billet d'Etat</i> to the States Meeting, +29th March, 1837, reported on the arrangement made by the Committee with +the two Banks. He brought forward no proposition on the matter on which +the States should deliberate. He simply states that:—</p> + +<p>"After some preliminary conferences the Committee received the following +letter:—</p> + +<p class="noin"> +'To D. De Lisle Brock, Esq.,<br /><span class='pagenum'><a name="Page_56" id="Page_56">[Pg 56]</a></span> +<span style="margin-left: 2em;">Bailiff, etc., etc., etc.,</span><br /> +<span style="margin-left: 4em;">Guernsey, 8th Oct., 1836.</span><br /> +<br /> +<span style="margin-left: 0.5em;">Sir,</span><br /> +</p> + +<p>To settle the differences now existing between the States and the Banks, +and to promote an amicable adjustment between them, we propose:</p> + +<p>That the States should withdraw immediately £15,000 of their Notes, nor +have at any time more than £40,000 in circulation, give up all Banking +transactions, and cease to collect the notes of the Banks.</p> + +<p>In consideration thereof the Banks engage whenever they draw bills +either on London or Paris, to take States' Notes for one half at least +of their amount and to pass them to the public as their own.</p> + +<p>The Banks further engage to supply the States annually with £10,000 in +cash, each bank to provide for one half, by payments of £250 at a time, +and this free of expence and in exchange for States' Notes.</p> + +<p>The above agreement to remain in force until three months notice be +given by either party to the others to annul the same.</p> + +<p class="right"> +<span style="padding-right: 10em;">We remain respectfully, Sir,</span><br /> +<br /> +<span style="padding-right: 0.5em;"><i>Signed</i> for Priaulx, Le Marchant & Co.</span><br /> +<span style="padding-right: 4em;">Thomas D. Utermarck,</span><br /> +<span style="padding-right: 3.2em;">Abraham J. Le Mesurier.</span><br /> +<span style="padding-right: 2.4em;">For the Commercial Banking Co.,</span><br /> +<span style="padding-right: 6.4em;">H. D. G. Agnew}</span><br /> +<span style="padding-right: 2em;">T. De Putron } Managers.'</span><br /> +</p> + +<p><span class='pagenum'><a name="Page_57" id="Page_57">[Pg 57]</a></span>"And asked M. Le Bailiff to reply as follows:—</p> + +<p class="right"> +<span style="padding-right: 0.5em;">'Court House, Guernsey,</span><br /> +<span style="padding-right: 1.5em;">9 Oct., 1836.</span><br /></p> + +<p class="noin">Gentlemen,</p> + +<p>The Committee named by the States on the 21st September for the purpose +of conferring with the Banks which you represent, on the subject of the +one pound notes current in this island, have taken into consideration +the proposals which you have transmitted to them, under yesterday's +date, 8th Oct.</p> + +<p>The Committee adopt those proposals as the basis of the arrangement so +desirable to be entered into, and from this day to be in force between +the States and the Banks.—They do so, because the States may at any +time, within 3 months, release themselves from the obligations which +that arrangement imposes; and above all, because the sacrifice of +pecuniary gain on the part of the States which it may deem to occasion, +will be more than compensated by the harmony and good feeling which it +will tend to promote among the inhabitants, and which constituting the +chief happiness of a well regulated community, can hardly be too highly +estimated.</p> + +<p>With sentiments of a like friendly nature, sincerely entertained by the +Committee towards yourselves, and the rest of their fellow citizens,</p> + +<p> +I have the honour to be, Gentlemen,</p> + +<p class="right"> +<span style="padding-right: 6.2em;">Your obedient humble servant</span><br /> +<span style="padding-right: 6em;">Daniel De Lisle Brock,</span><br /> +<span style="padding-right: 4em;">President of the States' Committee.'</span><br /> +</p> + +<p><span class='pagenum'><a name="Page_58" id="Page_58">[Pg 58]</a></span>"In consequence of this arrangement the Committee decided that £10,000 +sterling of the total one pound notes in circulation on account of +Fountain Street should be withdrawn as a Savings Bank loan at an +interest of 3 per cent. per annum. Also that five thousand of those +forming part of the old debt, called the Permanent Debt, should be +withdrawn to be converted into obligations at 3 per cent. per annum."</p> + +<p>In the discussion at the States Meeting on a proposition to authorise +the payment of a sum spent on repairs to the coasts, there were +references by three Members of the States to the fact that the +expenditure of the States would be increased by having to pay interest +on the 15,000 £1 notes withdrawn from circulation.</p> + +<p>The same fact is alluded to in a few words by Daniel De Lisle Brock +himself in his <i>Billet d'Etat</i> to the States, 20th September, 1838. +Commenting on the Finance Committee's Report, he tabulates five items of +annual loss, among which is found the terse remark, "The founding of the +commercial banks causes an annual loss of £450."</p> + +<p>Although the States thus agreed not to issue any more Notes, to complete +the history it should be recorded that these £40,000—to be perfectly +accurate the total amount in 1906 was £41,318—are still in circulation +in the Island.</p> + +<br /> +<br /> +<br /> +<br /><span class='pagenum'><a name="Page_59" id="Page_59">[Pg 59]</a></span> + +<hr /> +<br /> +<h2>CONCLUSION</h2> + + +<p>As stated in the Introduction, the writer has determined, though +somewhat tempted, not to discuss the interesting and debatable points +that arise from a consideration of this subject. He is satisfied, for +the present, with placing the facts before the public. He leaves those +facts for abler minds than his to make such use of as they may desire. +Great care has been taken to record only that for which there is chapter +and verse.</p> + +<p>But he would like, in conclusion, to remark that it seems to him that +the States, even to-day, still derive some little benefit from having a +portion of their "Debt" on which they pay no interest. This may be +gathered from the following table made up from facts taken from the +<i>Billet d'Etat</i> presented to the States 22nd August, 1906, at which +meeting the writer was an interested spectator.</p> + +<p><span class='pagenum'><a name="Page_60" id="Page_60">[Pg 60]</a></span>Summary of the indebtedness of the States of Guernsey:—</p> + +<div class="centered"> +<table border="0" width="90%" cellpadding="2" cellspacing="0" summary="png 76"> + <tr> + <td class="tdctlb" width="50%"> </td> + <td class="tdctlb" width="25%">Balance 31 Dec., 1905</td> + <td class="tdctlrb" width="25%">Interest paid during 1905.</td> + </tr> + <tr> + <td class="tdll"> </td> + <td class="tdcl">£</td> + <td class="tdclr">£</td> + </tr> + <tr> + <td class="tdll" style="padding-left: .5em;">States General Account Obligations</td> + <td class="tdcl"> 68,570</td> + <td class="tdclr">1,953 19 3</td> + </tr> + <tr> + <td class="tdll" style="padding-left: .5em;">Special Loan Obligations</td> + <td class="tdcl"> 57,500</td> + <td class="tdclr">2,295 0 0</td> + </tr> + <tr> + <td class="tdll" style="padding-left: .5em;">Notes of <i>20s.</i> each payable to Bearer</td> + <td class="tdcl"> 41,318</td> + <td class="tdclr">nil</td> + </tr> + <tr> + <td class="tdll" style="padding-left: .5em;">"Rentes" estimated capitalised indebtedness thereon</td> + <td class="tdcl"> 7,059</td> + <td class="tdclr">nil</td> + </tr> + <tr> + <td class="tdll" style="padding-left: .5em; vertical-align: top;">Departmental borrowings</td> + <td class="tdcl" style="vertical-align: top;"> 33,000</td> + <td class="tdclr"> 965 8 0<br />Paid by Depts. to General Accouont.</td> + </tr> + <tr> + <td class="tdll" style="border-bottom: .5pt black solid;"> Total indebtedness</td> + <td class="tdctlb" style="border-top: .5pt black solid;">£207,447</td> + <td class="tdctlrb" style="border-top: .5pt black solid;">—</td> + </tr> +</table> +</div> + +<p>The circulation of these Notes in the Island to-day is, if nothing more, +an interesting relic of an interesting financial policy which certainly +was in vogue in Guernsey for over 20 years (1816-1837).</p> + +<p>The mystery surrounding the abrupt catastrophe is yet undeciphered and +is likely to remain so, as there seems no material from which to glean +what took place during those few but momentous days between the 21st +September and 9th October. Was there treachery? was it but the +inevitable fate of the "best-laid schemes o' mice and men"? or was it a +unique and deplorable economic tragedy?</p> + +<br /> +<br /> +<br /> +<br /><span class='pagenum'><a name="Page_61" id="Page_61">[Pg 61]</a></span> + +<hr /> +<br /> +<h2>APPENDIX</h2> + + +<p>We have not yet discovered anything with reference to a successful plan +at Bath to which Daniel de Lisle Brock here alludes (see page 40). We +assume the reference to Liverpool is to the fact that during a time of +financial panic the Liverpool Corporation was empowered by Statute 33, +Geo. III., c. 31 (10th May, 1793), to issue notes of £5, £10, £50 and +£100 for value received or other due security.</p> + +<p>This Act entitled "An Act to enable the Common Council of the Town of +Liverpool in the County of Lancaster on behalf of and on account of the +Corporation of the said Town to issue negotiable notes for a limited +time and to a limited amount," was passed after the Corporation of +Liverpool had failed to obtain a loan of £100,000 from the Bank of +England.</p> + +<p>The £50 and £100 notes bore interest not exceeding the lawful rate and +at 12 months' date. The £5 and £ 10 notes were payable to bearer on +demand without interest. The total issue was at no time to exceed +£300,000. Returns had to be forwarded to the House of Commons from time +to time. From one of these returns we learn that the notes issued to +28th February, 1795, amounted to £140,390, based on security valued at +£155,907 16s. 6d. In a report forwarded 23rd April, 1794, it was stated +that £52,985 worth of notes were in circulation at that date.</p> + +<p><span class='pagenum'><a name="Page_62" id="Page_62">[Pg 62]</a></span>Great care was taken in the issue of the notes. The Committee of the +Corporation that was responsible for the same met daily.</p> + +<p>In order to give a wider utility to the notes, London correspondents +were appointed and a large number were made payable in London. This made +it possible for the Corporation itself to apply to the Committee for a +large loan of £50,000.</p> + +<p>The security on which advances were made were very various. It included +cotton, timber, iron, hops, whale oil, bills of exchange, ships on the +stocks and the Alt rates.</p> + +<hr style='width: 45%;' /> + +<p>For further particulars of this interesting incident, the reader is +referred to Sidney and Beatrice Webb's <i>English Local Government</i>: "The +Manor and the Borough," p. 485, and to E. C. K. Gonner's Article, +"Municipal Bank Notes in Liverpool, 1793-95," which appeared in the +<i>Economic Journal</i>, Vol. VI., 1896, pp. 484-487, to whom the writer is +largely indebted for the above facts.</p> + +<br /> +<br /> +<br /> +<br /> + +<hr /> +<br /> +<h2>STUDIES IN ECONOMICS AND POLITICAL SCIENCE</h2> + +<p class="cen"><i>A Series of Monographs by Lecturers and Students<br /> connected with the +London School of<br /> Economics and Political Science</i></p> + +<h4>EDITED BY THE</h4> + +<h3>DIRECTOR OF THE LONDON SCHOOL OF<br /> ECONOMICS AND POLITICAL SCIENCE</h3> + +<p><b>1. The History of Local Rates in England.</b> The substance of five +lectures given at the School in November and December, 1896. By +<span class="smcap">Edwin Cannan, M.A., LL.D.</span> 1896; 140 pp., Cr. 8vo, cloth, 2s. +6d. <i>P. S. King & Son.</i></p> + +<p><b>2. Select Documents Illustrating the History of Trade Unionism.</b> +I.—<span class="smcap">The Tailoring Trade.</span> By <span class="smcap">F. 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Cambridge, and edited with Notes, Introduction, +Bibliography, and Appendices, by <span class="smcap">Lilian Tomn</span> (Mrs. Knowles), of +Girton College, Cambridge, Research Student at the School. 1898; x. and +334 pp., Cr. 8vo, cloth. 7s. 6d. <i>P. S. King & Son.</i></p> + +<p><b>5. The Economic Policy of Colbert.</b> By <span class="smcap">A. J. Sargent</span>, M.A., +Senior Hulme Exhibitioner, Brasenose College, Oxford; and Whately +Prizeman, 1897, Trinity College, Dublin. 1899; viii. and 138 pp., Cr. +8vo, cloth. 2s. 6d. <i>P. S. King & Son.</i></p> + +<p><b>6. Local Variations in Wages.</b> (The Adam Smith Prize, Cambridge +University, 1898.) By <span class="smcap">F. W. Lawrence, M.A.</span>, Fellow of Trinity +College, Cambridge. 1899; viii. and 90 pp., with Index and 18 Maps and +Diagrams. Quarto, 11 in. by 8½ in., cloth. 8s. 6d. <i>Longmans, Green & +Co.</i></p> + +<p><b>7. The Receipt Roll of the Exchequer for Michaelmas Term of the +Thirty-first Year of Henry II. (1185).</b> A unique fragment transcribed +and edited by the Class in Palæography and Diplomatic, under the +supervision of the Lecturer, <span class="smcap">Hubert Hall, F.S.A.</span>, of H.M. +Public Record Office. With thirty-one Facsimile Plates in Collotype and +Parallel readings from the contemporary Pipe Roll. 1899; vii. and 37 +pp.; Folio, 15½ in. by 11½ in., in green cloth; 5 copies left. +Apply to the Director of the London School of Economics.</p> + +<p><b>8. Elements of Statistics.</b> By <span class="smcap">Arthur L. Bowley, M.A.</span>, F.S.S., +Cobden and Adam Smith Prizeman, Cambridge; Guy Silver Medallist of the +Royal Statistical Society; Newmarch Lecturer, 1897-98. 1901; <i>Third +edition</i>, 1907; viii. and 336 pp. Demy 8vo, cloth, 40 Diagrams. 10s. 6d. +net. <i>P. S. King & Son.</i></p> + +<p><b>9. The Place of Compensation in Temperance Reform.</b> By <span class="smcap">C. P. +Sanger, M.A.</span>, late Fellow of Trinity College, Cambridge; +Barrister-at-Law. 1901; viii. and 136 pp., Cr. 8vo, cloth. 2s. 6d. <i>P. +S. King & Son. (Out of print.</i>)<br /></p> + +<p><b>10. A History of Factory Legislation, 1802-1901.</b> By <span class="smcap">B. L. +Hutchins</span> and <span class="smcap">A. Harrison</span> (Mrs. <span class="smcap">Spencer</span>), B.A., +D.Sc. (Econ.), London. Second Edition. With a Preface by <span class="smcap">Sidney +Webb, LL.B.</span> 1911; xviii. and 372 pp., Demy 8vo, cloth. 6s. net. <i>P. +S. King & Son.</i></p> + +<p><b>11. The Pipe Roll of the Exchequer of the See of Winchester for the +Fourth Year of the Episcopate of Peter Des Roches (1207).</b> Transcribed +and edited from the original Roll in the possession of the +Ecclesiastical Commissioners by the Class in Palæography and Diplomatic, +under the supervision of the Lecturer, <span class="smcap">Hubert Hall, F.S.A.</span>, of +H.M. Public Record Office. With a Frontispiece giving a Facsimile of the +Roll. 1903; xlviii. and 100 pp., Folio, 13½ in. by 8½ in., green +cloth. 15s. net. <i>P. S. King & Son.</i></p> + +<p><b>12. Self-Government in Canada and How it was Achieved: The Story of +Lord Durham's Report.</b> By <span class="smcap">F. Bradshaw, M.A.</span>, Senior Hulme +Exhibitioner, Brasenose College, Oxford. 1903; 414 pp., Demy 8vo, cloth. +3s. 6d. net. <i>P. S. King & Son.</i></p> + +<p><b>13. History of the Commercial and Financial Relations Between England +and Ireland from the Period of the Restoration.</b> By <span class="smcap">Alice Effie +Murray</span> (Mrs. Radice), D.Sc. (Econ.), former Student at Girton +College, Cambridge; Research Student of the London School of Economics +and Political Science. 1903; 486 pp., Demy 8vo, cloth. 3s. 6d. net. <i>P. +S. King & Son.</i></p> + +<p><b>14. The English Peasantry and the Enclosure of Common Fields.</b> By +<span class="smcap">Gilbert Slater, M.A.</span>, St. John's College, Cambridge; D.Sc. +(Econ.), London. 1906; 337 pp., Demy 8vo, cloth. 10s. 6d. net. +<i>Constable & Co., Ltd.</i></p> + +<p><b>15. A History of the English Agricultural Labourer.</b> By <span class="smcap">Dr. W. +Hasbach</span>, Professor of Economics in the University of Kiel. With a +Preface by Sidney Webb, LL.B. Translated from the Second Edition (1908), +by Ruth Kenyon. Cloth, 7s. 6d. net. <i>P. S. King & Son.</i></p> + +<p><b>16. A Colonial Autocracy: New South Wales under Governor Macquarie, +1810-1821.</b> By <span class="smcap">Marion Phillips, B.A.</span>, Melbourne, D.Sc. (Econ.), +London. 1909; xxiii., 336 pp., Demy 8vo, cloth, 10s 6d. net. <i>P. S. King +& Son.</i></p> + +<p><b>17. India and the Tariff Problem.</b> By Professor <span class="smcap">H. B. Lees Smith, +M.A., M.P.</span> 1909; 120 pp., Crown 8vo, cloth. 3s. 6d. net. <i>Constable +& Co., Ltd.</i></p> + +<p><b>18. Practical Notes on the Management of Elections.</b> Three Lectures +delivered at the School in November, 1909, by <span class="smcap">Ellis T. Powell, +LL.B.</span>, B.Sc. (Econ.), Fellow of the Royal Historical and Royal +Economic Societies, of the Inner Temple, Barrister-at-Law. 1909; 52 pp., +8vo, paper, 1s. 6d. net. <i>P. S. King & Son.</i></p> + +<p><b>19. The Political Development of Japan.</b> By <span class="smcap">G. E. Uyehara, +B.A.</span>, Washington, D.Sc. (Econ.) London. 1910 xxiv., 296 pp., Demy +8vo, cloth. 8s. 6d. net. <i>Constable & Co., Ltd.</i></p> + +<p><b>20. National and Local Finance.</b> By <span class="smcap">J. Watson Grice</span>, B.Sc. +(Econ.), London. With a Preface by Sidney Webb, LL.B. 1910; 428 pp., +Demy 8vo, cloth. 10s. 6d. net. <i>P. S. King & Son.</i></p> + +<p><b>21. An Example of Communal Currency.</b> By <span class="smcap">J. Theodore Harris, +B.A.</span> With a Preface by Sidney Webb, LL.B. Crown 8vo. 1s. net. <i>P. +S. King & Son.</i></p> + + +<p class="cen"><i>Series of Bibliographies by Students of the School.</i></p> + +<p><b>1. A Bibliography of Unemployment and the Unemployed.</b> By <span class="smcap">F. Isabel +Taylor</span>, B.Sc. (Econ.), London. With a Preface by Sidney Webb, LL.B. +1909; xix., 71 pp., Demy 8vo, cloth, 2s. net; paper, 1s. 6d. net. <i>P. S. +King & Son.</i></p> + + +<p class="cen"><i>Series of Geographical Studies.</i></p> + +<p><b>1. The Reigate Sheet of the One-inch Ordnance Survey.</b> A Study in the +Geography of the Surrey Hills. By <span class="smcap">Ellen Smith</span>. Introduction by +H. J. Mackinder, M.A., M.P. 1910; xix., 110 pp., 6 maps, 23 +illustrations, Crown 8vo, cloth. 3s. 6d. net. <i>A. & C. Black.</i></p> + +<br /> +<br /> +<br /> +<br /> + +<hr /> +<br /> +<h2>100 YEARS AGO</h2> + +<p class="cen">Guernsey Experimented Successfully with Communal Currency,</p> + +<h2>TO-DAY</h2> + +<h2>The Co-operative Brotherhood Trust, Ltd.,</h2> + +<p class="cen">is Experimenting with Co-operative Currency.</p> + +<hr style="width: 15%;" /> + +<p>It has a small circle of Manufacturers, Merchants and Private +Individuals using and circulating its currency. If you believe in its +practicability, join it and help to ensure its success. If you want to +know more about it, write for full information to—</p> + +<p class="cen">THE SECRETARY,</p> + +<p class="cen">37, NEWINGTON GREEN ROAD, LONDON, N.</p> + +<br /> +<br /> +<br /> +<br /> + +<h3>WORKS BY HENRY W. WOLFF</h3> + +<h3>Co-operative Banking</h3> + +<p class="cen">Its Principles and its Practice, with a Chapter on Co-operative Mortgage +Credit</p> + +<p class="cen"><i>Demy 8vo, Cloth</i>, <b>7s. 6d.</b> <i>net</i></p> + +<p>"Mr. Wolff is the author of a successful work."—<i>Times.</i></p> + +<hr /> + +<p class="noin">A Co-operative Credit Handbook</p> + +<p>Demy 8vo, 96 pages. 1s. net</p> + +<div class="blockquot"><p class="hang">CONTENTS—Preface, General Remarks, Banks based upon Shares +(Limited Liability Societies), Model Rules for such (with +Annotations), Village Banks (Unlimited Liability Societies), +Model Rules for such (with Annotations). Appendix: Form of +Application, Forms of Bond for Borrower, Form of Fortnightly +Balance Sheet, Model Cash Book.</p></div> + + +<p class="noin">Co-operative Credit Banks</p> + +<p>A Help for the Labouring and Cultivating Classes. 6d.</p> + + +<p class="noin">Village Banks</p> + +<p>How to Start Them—How to Work Them—What the Rich may do to Help Them, +etc. 6d.</p> + +<hr /> + +<h4>LONDON: P. S. KING & SON<br /> + +ORCHARD HOUSE, WESTMINSTER</h4> + +<div class="tr"> +<p class="cen"><a name="TN" id="TN"></a>Transcriber's Note</p> +<br /> + +Typographical errors corrected in the text:<br /> +<br /> +Page 11 isue changed to issue<br /> +Page 61 VIII changed to VII +</div> + + + + + + + + +<pre> + + + + + +End of the Project Gutenberg EBook of An Example of Communal Currency, by +J. 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You may copy it, give it away or +re-use it under the terms of the Project Gutenberg License included +with this eBook or online at www.gutenberg.org + + +Title: An Example of Communal Currency + The facts about the Guernsey Market House + +Author: J. Theodore Harris + +Release Date: August 2, 2010 [EBook #33331] + +Language: English + +Character set encoding: ASCII + +*** START OF THIS PROJECT GUTENBERG EBOOK AN EXAMPLE OF COMMUNAL CURRENCY *** + + + + +Produced by Barbara Kosker and the Online Distributed +Proofreading Team at http://www.pgdp.net (This file was +produced from images generously made available by The +Internet Archive/American Libraries.) + + + + + + + +-----------------------------------------------+ + | | + | Bolded text has been marked =like so=. | + | | + +-----------------------------------------------+ + + + + + LONDON SCHOOL OF ECONOMICS AND + POLITICAL SCIENCE + + + + + AN EXAMPLE OF COMMUNAL CURRENCY + + + + + By + + J. THEODORE HARRIS, B.A. + + + + + With a Preface by + SIDNEY WEBB, LL.B. + + + + + 1/- NET + + + + + LONDON + P. S. KING & SON + ORCHARD HOUSE, WESTMINSTER + 1911 + + + + + PEOPLE'S BANKS + + A RECORD OF SOCIAL AND ECONOMIC SUCCESS + + By H. W. WOLFF + + _Third Edition, Newly Revised and Enlarged_ + _Demy 8vo, Cloth, 600 pp._ =6s.= _net_ + + CONTENTS--Introduction, The General Idea, The Two Problems, The Two + Aspects of the Question, Credit to Agriculture, The "Credit + Associations" of Schulze-Delitzsch, Raiffeisen Village Banks, + Adaptations, "Assisted" Co-operative Credit, Co-operative + Credit in Austria and Hungary, The "Banche Popolari" Italy, The + "Casse Rurali" of Italy, Co-operative Credit in Belgium, + Co-operative Credit in Switzerland, Co-operative Credit in + France, Offshoots and Congeners, Co-operative Credit in India, + Conclusion. + + "We may confidently refer those who desire information on the + point to the book with which Mr. Wolff has provided us. It will + be a most useful thing if it is widely read, and the lessons which it + contains are put in practice."--_Athenaeum._ + + "The book is the most systematic and intelligent account of these + institutions which has been published."--_Banker's Magazine (New + York)._ + + "It is the most complete book on the subject."--_Mr. G. N. + Pierson, late Dutch Prime Minister and Minister of Finance._ + + "There was manifest need of just such a book.... A mine of + valuable information."--_Review of Reviews._ + + "This is an excellent book in every way, and thoroughly deserves + the careful attention of all who are concerned for the welfare of the + people."--_Economic Review._ + + + LONDON: P. S. KING & SON + ORCHARD HOUSE, WESTMINSTER + + + + + STUDIES IN ECONOMICS AND POLITICAL SCIENCE + + Edited by the Hon. W. PEMBER REEVES, + Director of the London School of Economics + + No. 21 in the Series of Monographs by Writers connected + with the London School of Economics and Political Science + + + + + AN EXAMPLE OF COMMUNAL CURRENCY + + + + + AN EXAMPLE OF COMMUNAL CURRENCY: + + THE FACTS ABOUT THE GUERNSEY MARKET HOUSE + + + + + COMPILED FROM ORIGINAL DOCUMENTS + BY + J. THEODORE HARRIS, B.A. + + WITH A PREFACE BY + SIDNEY WEBB, LL.B. + + + + + LONDON + P. S. KING & SON + ORCHARD HOUSE, WESTMINSTER + 1911 + + + + +CONTENTS + + PAGE + + PREFACE vii + + INTRODUCTION 1 + + CHAP. + + I. CONSTITUTION OF GUERNSEY 4 + + II. THE SECURITY OF THE NOTES 6 + + III. MUNICIPAL ENTERPRISE--THE ISSUE OF THE NOTES 9 + + IV. THE UTILITY OF THE NOTES 20 + + V. FIRST RUMBLINGS OF OPPOSITION 25 + + VI. THE REPLY OF THE STATES 30 + + VII. THE CRISIS 45 + + VIII. THE END 55 + + CONCLUSION 59 + + APPENDIX 61 + + + + +PREFACE + + +Those who during the past thirty or forty years have frequented working +men's clubs or other centres of discussion in which, here and there, an +Owenite survivor or a Chartist veteran was to be found, will often have +heard of the Guernsey Market House. Here, it would be explained, was a +building provided by the Guernsey community for its own uses, without +borrowing, without any toll of interest, and, indeed, without cost. To +many a humble disputant the Guernsey Market House seemed, in some +mysterious way, to have been exempt from that servitude to previously +accumulated capital in which the whole creation groaneth and travaileth. +By the simple expedient of paying for the work in Government +notes--issued to the purveyors of material, the master-workmen and the +operatives, accepted as currency throughout the island, and eventually +redeemed out of the annual market revenues--all tribute to the +capitalist was avoided. In face of this successful experiment, the fact +that we, in England, continued to raise loans and subject ourselves to +"drag at each remove a lengthening chain" of interest on public debt, +often seemed so perplexingly foolish as to be inexplicable, except as +the outcome of some deep-laid plot of "the money power." + +When first I heard of this Guernsey Market House, as in some mysterious +way exempted from the common lot, I was curious to enquire what +transaction had, in fact, taken place in an island which was, after all, +not so far removed in space or time from the Lombard Street that I knew. +In all the writings of the economists (for which my estimate was at that +time, as indeed it is now, such as I could not easily put into +appropriate words), I found no mention of this Phoenix among +market-houses. I fear that, too hastily, I dismissed the story as +mythical. + +Now Mr. J. Theodore Harris--having, I suspect, a warmer feeling for the +incident than he has allowed to appear in these scientific pages--has +done what perhaps I or some other economic student of the eighties or +nineties ought to have done, namely, gone to Guernsey to dig up, out of +the official records, the incident as it actually occurred. What is +interesting is that he has found that the myth of the veteran Owenite or +Chartist is, in all essentials, confirmed by the documents. The story is +true. The Guernsey Market House was built without a loan and without the +payment of interest. + +It does not follow, however, that it was any more built without the aid +of capital, than was St. Paul's Cathedral or the Manchester Ship Canal. +Mr. Harris, contenting himself with the austerely exact record drawn +from the documents, does not indulge in any speculative hypothesis as to +who provided the capital, or who bore the burden that would otherwise +have been interest. Let me use the fuller privilege of the +preface-writer, and supply some hypothetical elucidations. + +What the Guernsey community did was that which nearly every community +has done at one time or another, namely, issue paper money. The part of +the story that we do not know is (_a_) what thereupon happened to the +aggregate amount of "currency" of all kinds then in circulation within +the island, in relation to the work which that currency had to do; (_b_) +what happened to the prices of commodities. + +It may well have been that the issue of paper money was promptly +followed by some shipments of metallic money to England or +France--perhaps even in payment for imported materials for the market +house--so that the aggregate amount of "currency" in the island was not +in fact increased. Accordingly, no change of prices may have taken +place. In such a case, Guernsey would merely have substituted paper for +gold in its currency. The gold-capital heretofore in use as currency, +and there, of course, yielding no capitalist any toll of interest, +would, in effect, have been borrowed to expend upon the building of the +Market House. And, as paper money probably served the purposes of the +island every bit as well as gold, nobody was any the worse. By giving up +the needless extravagance of using gold coins as counters, and by taking +to paper counters instead, Guernsey really got its Market House without +cost. The same resource is open to any community already possessing a +gold currency, and becoming civilised and self-restrained and sensible +enough to arrange to do without gold counters in its internal trade. But +Guernsey could not have gone on equipping itself with endless municipal +buildings as out of a bottomless purse. The resource is a limited one. +This is a trick which can only be played once. When the gold has once +been withdrawn from the currency, and diverted to another use, there is +no more left with which to repeat the apparent miracle. + +On the other hand, there may easily have been no special shipments of +metallic money from the island, and the aggregate "currency" may have +been increased, in relation to the work that it had to do, by the amount +of the note issue. In that case, the economist would, for reasons into +which I have no space to go on the present occasion, expect to see a +gradual and silent rise of prices. Such a rise would seem, to the +ordinary Guernsey housekeeper and shopkeeper, as inevitable, and at the +same time as annoying as any other of those mysterious increases in the +cost of eggs and meat that Anthony Trollope described with such +uneconomic charm in _Why Frau Frohmann raised her prices_--a work which +I do not find prescribed, as it might well be, for undergraduate +reading. + +There is even a third hypothesis, to which Mr. Harris has directed my +attention. There may have been, before the note issue, an actual dearth +of currency, or a growing disproportion between the amount of the +currency and the work that it had to do. Mr. Harris infers from his +reading that such a stringency had been actually experienced in +Guernsey, and that it was for this reason that successive attempts were +made to prevent foreign coins from being gradually withdrawn from the +island. Such a stringency, the economist would infer, would produce a +progressive fall of prices, leading, by the silent operations of +external trade, to a gradual readjustment of the amount of currency in +circulation, by influx of gold from outside, until a new equilibrium had +been reached. If the Guernsey Government's note issue happened to be +made at such a moment, it may well have taken the place of the +hypothetical inflow of gold, so far as the island currency was +concerned. It may even have averted a fall in prices that would +otherwise have taken place, the economic effect on the consumer's +pockets being in that case much the same as if an actual rise had +occurred. But the Guernsey Government, on this hypothesis, would, by +substituting paper for gold, have gained for the community the +equivalent of the cost of the addition to the gold currency which +expanding population and trade were making necessary; and this gain was +expended in building the Market House. + +Unfortunately we do not know how prices behaved to the Guernsey +housekeeper between 1815 and 1837. Perhaps another student will look +this up. What is interesting to us in this argument is the fact that, +_if prices generally did rise_, in consequence of the issue of the paper +money, even by only one half-penny in the shilling--if eggs, for +instance, sold twenty-four for a shilling, instead of twenty-five--this +represented a burden laid on the Guernsey people as consumers, exactly +analogous to a tax (say an octroi duty) of four per cent. on all their +purchases. On this hypothesis, which I carefully abstain from presenting +as anything but hypothetical, because we are unable to verify it by +comparison with the facts, the economist would say that this burden or +tax was what they imposed on themselves, and notably upon the poor, by +increasing the currency, instead of borrowing the capital from +elsewhere. Instead of paying interest on a loan (to be levied, perhaps, +as an income tax on incomes over a certain minimum) they unwittingly +chose to pay more for their bread and butter. The seriousness of this +possible result lies in the definitely ascertained fact that salaries +and wages rise more slowly, and usually to a smaller extent, than the +prices of commodities. + +Now, which of these speculative explanations is the true one does not +greatly matter to-day when all the consumers, rich and poor, are dead +and gone. What does concern us is that we should not misconstrue the +Guernsey example. We already use paper money in this country to a small +extent. We could certainly with economic advantage save a great part of +the cost (three or four millions sterling a year) that we now pay for +the luxury of having so many gold sovereigns wandering about in our +pockets. We may one day find the uncounted reserve of capital that in +our gold currency we already possess, virtually in common ownership, +come in very usefully on an emergency (which is, perhaps, what happened +at Guernsey). But we must beware of thinking that the issue of paper +money offers some magical way of getting things without having to use +capital, or we may find ourselves one day, to the unmeasured hardship of +the poor among us, stupidly burdening ourselves as consumers with higher +prices and increased cost of living all round. + +There are, of course, other reasons in favour (_a_) of paper money being +issued by the Government, instead of this valuable and responsible +prerogative being abandoned to individual bankers or joint stock +companies, to the great financial loss of the community as a whole; and +(_b_) of the whole business of banking--which means the organising of +credit and the custody of savings--being conducted by the Government +itself, in order that the power which banking gives may be exercised +exclusively under public control, and for corporate instead of for +individual ends, and in order that the profit which banking yields may +accrue to the benefit of the community as a whole, instead of to +particular capitalists. But that is another story. The Guernsey +Government stopped short at the issue of paper money--which is not +banking--and even gave up this right at the bidding of private banking +companies. + + SIDNEY WEBB. + + 41, Grosvenor Road, Westminster. + _December, 1910._ + + + + +AN EXAMPLE OF COMMUNAL CURRENCY + + + + +INTRODUCTION + + +There are many persons who have heard from one source or another of the +way in which the States of Guernsey built their Market House by means of +non-interest-bearing notes. Some of these--enthusiasts for the reform of +the currency--can dilate for hours on the wisdom of the financial policy +of Daniel de Lisle Brock, can tell how, at the opening of the Market he +"sprinkled the packages (of redeemed notes) with perfume, and while the +band was playing a dirge he laid them on the fire, where they were +quickly consumed," and can even quote from his famous speech on that +occasion. + +A few years ago some members of the Co-operative Brotherhood Trust, +which is a Society that has among its objects a desire to revive the +principles of Robert Owen's Labour Exchange, thought it worth while to +make enquiries as to the Guernsey scheme. They realised that an ounce of +fact was worth a ton of theory. But what were the facts? Were these +notes circulated in the island as a medium of exchange? How were they +redeemed? Could a citizen demand gold for them? When the above mentioned +enthusiasts were tackled with these practical questions, there was +suddenly noticed a certain hesitancy; and when asked point blank what +was the year in which this famous Market House was built, no one could +say. + +Enquiries were then made from inhabitants of the island itself. The +information gathered was vague and not much to the point. With a few +notable exceptions, the average Guernseyman seems to know or care little +of the financial policy of the island at the beginning of the nineteenth +century. Even from those interested nothing very definite was to be +learned. The enquirers at last came near to doubting whether the +non-interest-bearing notes had ever existed except in the imagination of +the enthusiasts. Only first-hand enquiry on the spot would suffice. + +One Guernseyman, a teacher, kindly encouraged the writer to visit the +island himself, promising him introductions and access to all the +official documents and newspapers of the time. Through the courtesy of +the Greffier and the Librarian of the Guille-Alles Library every +facility was granted to the writer and his wife to carry out their +research. The politeness and kindness of these officials and other +inhabitants of Guernsey are hereby most cordially acknowledged. + +In the following pages it is the writer's desire to place the facts +before the public as he has gleaned them from the official records of +the States and the newspapers of the time. He feels tempted to discuss +the _pros_ and _cons_ of the system adopted by the States of Guernsey +for over twenty years; but this little treatise will probably be of most +use if it is confined to a mere narration of facts. Incidentally, +however, it will be seen that some of the queries which led to the +research have been answered. From the nature of the case this narration +will consist largely of quotations. It must inevitably fail to convey to +the reader the thrilling interest aroused as the story, exceeding all +the romance of the enthusiasts, led its slow but fascinating course +through many volumes, and the quaint old French documents gave up their +secrets in the modern well-equipped Record Office. + + + + +CHAPTER I + +CONSTITUTION OF GUERNSEY. + + +Guernsey is the second in size of the four Channel Isles, Jersey, +Guernsey, Alderney and Sark, which one used to repeat with such gusto in +one's schoolboy days. The Channel Isles are the last remnant of our +French possessions. Or rather, as the Islanders might claim--and as it +is reported some do--England belongs by right of conquest to the Channel +Isles. However that may be, for all practical purposes, the government +of Guernsey is autonomous--and very jealously does the Guernseyman guard +this autonomy. + +It has its own Parliament, "The States" (Les Etats), consisting to-day +of 49 Members. At the time of which we write there were 32 Members, as +follows:-- + +The Bailiff, who, as at the present time, acted as President. + +The Procureur du Roi, corresponding to our Attorney-General. + +12 Jurats or Magistrates, appointed for life by the "States of +Election." + +8 Rectors. + +10 Connetables or Parishioners. + +The Rectors as spiritual leaders and the Connetables as civil +functionaries represented the ten parishes of the island, and though the +latter were elected to office they were always from the leading +families, which formed an extremely close oligarchy. Bailiff, Jurats and +Rectors still sit in this undifferentiated Parliament, to which has been +added a slightly more democratic element however, nine Deputies being +elected by the Ratepayers of the whole Island. + +It was, and still is, the Bailiff's duty to summon this "States of +Deliberation," formerly at his own discretion, now at regular intervals. +He does this by means of issuing a _Billet d'Etat_, in which he comments +on the business to come before the States and in which he formulates +certain resolutions. On these resolutions the States only vote _for_ or +_against_. This Billet d'Etat is in French, still the official +language--the only one used in the deliberations in former days. + +The whole takes us back in thought to Norman or early English times. +Probably even the Norman patois of the modern rural deputies is the +speech of the present time nearest to that in which our ancestors +transacted their business. + +This legislative body represents the King's Council, in the same way +that the supreme judicial body, still bearing the name of La Cour +Royale, represents the King's Court. + +The decisions of the States are subject to the approval of the Privy +Council, to whom there is a right of appeal. + + + + +CHAPTER II + +THE SECURITY OF THE NOTES + + +Guernsey, like other places, fell on evil days early in the nineteenth +century, the period of history with which we have to deal; and the +islanders suffered from the burden of a heavy debt and from the +depression and want of employment which followed the close of the +Napoleonic wars. + +Its condition at this time is graphically described in the following +extracts taken from a document presented by the States to the Privy +Council in 1829. + +"In this Island, eminently favoured by nature, antecedently to the new +roads first projected by Sir John Doyle, Bart., nothing had been done by +art or science towards the least improvement; nothing for the display or +enjoyment of local beauties and advantages; not a road, not even an +approach to Town, where a horse and cart could pass abreast; the deep +roads only four feet six inches wide, with a footway of two to three +feet, from which nothing but the steep banks on each side could be seen, +appeared solely calculated for drains to the waters, which running over +them rendered them every year deeper and narrower. Not a vehicle, +hardly a horse kept for hire; no four-wheeled carriage existed of any +kind, and the traveller landing in a town of lofty houses, confined and +miserably paved streets, from which he could only penetrate into the +country by worse roads, left the island in haste and under the most +unfavourable impressions. + +"In 1813 the sea, which had in former times swallowed up large tracts, +threatened, from the defective state of its banks, to overflow a great +extent of land. The sum required to avert the danger was estimated at +more than L10,000, which the adjoining parishes subject to this charge +were not in a condition to raise. The state of the finance was not more +consolatory with a debt of L19,137, and an annual charge for interest +and ordinary expenses of L2,390, the revenue of L3,000 left only L600 +for unforeseen expenses and improvements. + +"Thus at the peace, this Island found itself with little or no trade; +little or no disposable revenue, no attraction for visitors, no +inducement for the affluent to continue their abode, and no prospect of +employment for the poor." + +After considering various means of raising a revenue, the States asked +the Privy Council for permission to levy a duty on spirituous liquors. +Notwithstanding some opposition by the inhabitants, permission was +granted by an Order in Council of the 23rd July, 1814, to raise 1s. per +gallon on spirituous liquors consumed in the Island. This was granted +for a period of five years. + +A second Order in Council, dated 19th June, 1819, renewed the duty for +ten years. Again there was opposition from a section of the inhabitants. +This made itself felt by the insertion in the Order of the following +words:--"That One Thousand Pounds per annum of the produce of the said +duty be applied solely to the liquidation of the present debt, together +with such surplus as shall remain out of the produce of the tax in any +year after defraying the expenses of roads and embankments and +unforeseen contingencies. And that the States of the said Island do not +exceed in any case the amount of their annual income without the consent +previously obtained of His Royal Highness in Council. And the said +States are hereby directed to return annually to the Privy Council an +account of the produce and application of the said Tax." + +In 1825 the Lieutenant-Governor, Sir John Colborne, desired to erect a +new College and to carry on other important works. But these plans could +not be accomplished without the assurance of the renewal of the duty. A +third Order in Council of 30th September, 1825, gave this permission for +a period of fifteen years, that is to say, from 1829 to 1844. On this +occasion there was no opposition from any of the inhabitants. + +As will be seen in the next chapter, it was this duty on spirituous +liquors that formed the security on which the notes were issued. + + + + +CHAPTER III + +MUNICIPAL ENTERPRISE--THE ISSUE OF NOTES + + "_Guernsey should make up only one great family whose + interests are common. Only by union and concord can she + enjoy firm and lasting prosperity._" + + +Although, as we shall see, the first notes that were issued were not for +the Market, it is interesting to find that there is some foundation for +the tradition identifying them with it. The plan was first suggested in +connection with a scheme for the enlarging of the Market. + +This was a much needed improvement. "Humanity cries out, every +Saturday," reports a States Committee, "against the crush, which it is +difficult to get out of; and every day of the week against the lack of +shelter for the people who, often arriving wet or heated, remain exposed +for whole hours to wind and rain, to the severity of cold and to the +heat of the sun." + +A Committee, appointed 12th April, 1815, to consider the question, +having brought in a scheme for enlarging the Market, recommended the +issue of State Notes. The Bailiff submitted the following resolution for +the consideration of the States at their meeting on 29th March, +1816:--"Whether in order to meet the expenditure it would not be +desirable to issue State Notes of One Pound each (_Billets des Etats +d'une Livre Sterling_) up to L6,000, the States undertaking not to issue +any, under any pretext whatever, beyond the said sum before having +previously cancelled the said L6,000." + +Notwithstanding the Committee's opinion that the enlargement of the +Market could not be recommended without this issue, and the precautions +suggested for the issue of the Notes, the States rejected the +proposition. + +However, the promoters of the idea appear to have been nothing daunted, +and to have met with success on their second attempt. For we find that +on the 17th October of the same year the Finance Committee reported that +L5,000 was wanted for roads, and a monument to the late Governor, while +only L1,000 was in hand. They recommended that the remaining L4,000 +should be raised by State Notes of L1, 1,500 of which should be payable +on 15th April, 1817, or any Saturday after by the Receiver of the Duty, +1,250 on 15th October, 1817, and 1,250 on 15th April, 1818. + +"In this manner, without increasing the debt of the States, we can +easily succeed in finishing the works undertaken, leaving moreover in +the coffers sufficient money for the other needs of the States." + +The States agreed to this and appointed a Committee of three (Nicolas +Maingy, Senior, Jean Lukis and Daniel de Lisle), who were exclusively +charged with the duty of issuing the Notes, taking all the precautions +they thought necessary. They were to pay them out on the order of M. le +Superviseur (Jean Guille), and to receive them back from the Receiver of +the Duty when paid in, in order to cancel them. + +These Notes seem to have served their purpose; for in the record of the +decisions of the States on the 18th June, 1818, is found the following +entry:--"The said States unanimously authorise the issue of new Notes up +to L1,250, to be put at the disposal of Jean Guille, Esq., Jurat, for +the needs of the State; and they ask the said gentlemen, Daniel de +Lisle, Nicolas Maingy and Jean Lukis, kindly to help in the matter. +Which Notes shall be payable at a fixed time to be determined by the +States' Committee named for this purpose at the time of the last issue +of Notes." + +The need for enlarging and covering the Market was meanwhile being more +and more pressed, the site and certain buildings having been purchased +on 10th April, 1817, for L5,000, which was borrowed at 4-1/2 per +cent.[1] A Committee reported on this subject to the meeting of the +States on 6th October, 1819. In their recommendation they proposed "the +issue of Notes of L1 sterling, payable at different times on the receipt +of the part of the Duty left at the disposal of the States." +Notwithstanding the pathetic appeal already recorded, the proposal of +the Committee to enlarge and to cover the Market was lost by a majority +of one. + +The advocates for improving the Market, however, persevered, and +presented to the States Meeting of 12th May, 1820, five plans. The plan +of John Savery Brock at a cost of L5,500 was agreed to by a majority of +19 to 10. + +The following quotation from the Committee's report shows the benefits +which they considered would arise from their scheme for raising the +L5,500 required. + + "The means of meeting this would be to apply to + it the sums now in litigation with the town L1,000 + + Twenty-shilling Notes put at the disposal of + the Committee 4,500 + ------- + L5,500 + + +But provision must be made for the repayment of the Notes issued, and +the means recommended by your Committee are as follows-- + + "The 36 shops, built for butchers according to + the plan recommended, would produce at L5 + sterling per annum L180 + + From this must be deducted L20 for hiring the + house at the corner and L10 for repairs 30 + ------ + L150 + + The States should grant for 10 years after the + first year 300 + ------ + This would give an income of L450 + +This sum would be spent each year in paying off and cancelling as many +Notes. + +"Thus, at the end of ten years, all the Notes would be cancelled and the +States would be in possession of an income of L150 per annum, which +would be a return for the L3,000 spent by them. + +"Looked at from all sides the scheme shows nothing but the greatest +advantage for the public and for the States. It should please those who +have at heart the diminution of the debt, since the States in addition +to the L1,000 set aside for this purpose, take a further L300 out of +their treasury in order to increase their income (_en prenant 300l. de +plus sur leurs epargnes pour accroitre leur revenu_)." + +Thus it appears that the money for building the Meat Market, still +standing, was raised without a loan, the States paying off the Notes at +the rate of L450 a year as the duty on spirits and the rents came in. +The Market is described in Jacob's _Annals of the British Norman Isles_, +Part I., published in 1830, as a handsome new building, "one of the most +convenient, both for the buyers and sellers, that can be found in any +part of the world." "For the mode of raising the funds for its erection +and support (well worth the attention of all corporate bodies)" we are +referred to an Appendix IV. which was to appear at the end of Part II., +to be published in December, 1831.[2] + +Diligent search in contemporary records showed no trace of the elaborate +ceremony described in the tradition current among enthusiasts, though +the _Mercury_ of the 5th October, 1822, announced in its advertisement +column that the opening would take place on Saturday, 12th October, +1822. + +The following week the _Mercury_ chronicles the handing over by the +Committee of the keys of the new Market to the butchers. "A large crowd +gathered in the square, of whom only a few succeeded in entering the +enclosure. A speech was made by one of the Committee, to which one of +the butchers made a reply. The band of the East Regiment took part and +the church bells rang till five in the evening." + +The next issue of Notes seems to have been to pay off the floating debt. +On 14th June, 1820, the States authorised the issue of 4,000 L1 Notes +for this purpose. In recommending this course the Finance Committee +makes some interesting reflections. "Respecting the floating debt, which +consists of sums payable at times more or less distant, it would be easy +to discharge it by L1 Notes put into circulation as need requires. The +extinction of the whole of the floating debt could thus be brought about +without the necessity of new loans. If loans should be raised it would +be necessary to provide for payment both of the principal and of the +interest. If, on the contrary, recourse is had to L1 Notes, the interest +alone which would have been paid will suffice." + +On 23rd June, 1821, the States authorise the issue of 580 L1 Notes to +buy a house whose site is wanted for the new Market. + +On 15th September of the same year the issue is authorised of 4,500 L1 +Notes to diminish the interest-bearing debt of the States. In +recommending this, the Finance Committee remarks:--"The States could +increase the number [of Notes in circulation] without danger up to +10,000 in payment of the debt, and the Committee recommends this course +as most advantageous to the States' finance, as well as to the public, +who, far from making the slightest difficulty in taking them, look for +them with eagerness." + +On 30th June, 1824, on the united recommendation of the Market and +Finance Committees, 5,000 L1 Notes are issued to pay off the L5,000 +originally paid for the Market in 1817 (see p. 11). "By this means the +interest of L200 (_sic_) a year will be saved and applied moreover every +year to withdraw from circulation L1 Notes issued for the construction +of the Market." + +On 29th March, 1826, a further issue is authorised for the purpose of +Elizabeth College and Parochial Schools, provided that the total number +of Notes in circulation shall not exceed L20,000. In summoning the +States on this occasion, the Bailiff, Daniel de Lisle Brock,[3] +expresses the opinion that paper money is of great use to the States. +There is no inconvenience because the Notes are issued with great care. + +This statement as to great care is borne out by the words of the +resolution passed 12th May, 1826, authorising the issue of L5 Notes, not +exceeding L8,000 worth, voted for the Isle of Sark and other purposes. +After asking Nicolas Maingy, Jean Lukis and Daniel de Lisle "to sign the +said Notes in the name and under the guarantee of the States," it goes +on to say, "and in default of one or other of these gentlemen through +absence or illness, the States authorise the remainder of the three, the +Finance Committee and M. le Superviseur to choose conjointly another +reputable person for the signature of the said Notes. Which said Finance +Committee Supervisor and those authorised to sign are charged and +requested to watch over and be present at (_veiller et assister a_) the +destruction of the said Notes at the times fixed for their repayment." + +Extra precautions seem to have been taken 28th June, 1826, when another +issue, not exceeding L2,000 worth of L5 Notes was authorised. For we +find that "The States appoint Josias le Marchant, Pierre le Cocq, +Jurats, and the Rev. Thomas Grut, a Special Committee, whose duty it is +to see to the liquidation of all the anticipations at the times fixed by +the States, and where these anticipations consist in Notes of one or +five pounds to see to the destruction of the very Notes or of earlier +Notes to the same amount. Which Committee is commanded to make a report +to the States at least once each year certifying the liquidation and +destruction of the said anticipations and of the said Notes." + +Further care is shown by the fact that on 26th March, 1828, the States +appointed the Finance Committee "to replace the used and worn-out Notes +by new Notes, payable at the same time as the destroyed notes would +have been." Testimony is borne by this wear and tear to the extent to +which the Notes circulated. + +Plans for the improvements in Rue de la Fontaine, a street adjoining the +Markets, being adopted on 15th November, 1827, an issue of L1 Notes up +to L11,000 was authorised to be cancelled by the proceeds of rents. + +In 1828 and 1829 issues of Notes were authorised for various purposes, +including L8,500 for the College and L11,000 in connection with the Rue +de la Fontaine scheme. + +At one of the sittings of the States in the year 1829, William Collings, +a member of the Finance Committee, stated that there were 48,183 Notes +in circulation. + +On 18th March, 1834, L1,000 was voted for cholera precautions, to be +raised either at 3 per cent. interest or in L1 Notes. The latter course +seems to have been adopted. + +From the foregoing it will be noticed that during the 20 years over +L80,000 worth of Notes were authorised by the States to be issued. These +were mostly of the value of L1, though some L5 Notes were authorised. + +In 1837 there were still in circulation 55,000, which in that year were +reduced, as will be seen in a subsequent chapter, by 15,000. + +It may be asked whether there is any evidence that the Notes were +destroyed as directed. From various sources we found records of at +least 18,000 being destroyed. For instance, in the _Gazette_ of 3rd +March, 1827, there is the following:-- + + "Market Accounts for 1826. + Notes to Bearer of L1 destroyed. + 22 March, 1826 L400 + 7 November, 1826 L420 + 1 March, 1827 L122 + ----- + L942 + + Total of Notes issued for the Market, L11,296 + " " destroyed " " 3,626 + ------- + Leaving in circulation L7,670." + +FOOTNOTES: + +[1] This purchase was in itself an interesting piece of municipal +history. "By an Order in Council," says Jacob in his _Annals of British +Norman Isles_, p. 153, "the Meat Market Company were to be allowed by +the States, certain duties on all the cattle killed, so long as they +remained proprietors of the Market; but the States were allowed at any +future time to take the same into their own possession on the payment of +what the proprietors had advanced. The States did this on the 10th +April, 1817, at an expense of L5,000." (See p. 16.) + +[2] We have been unsuccessful in our efforts to obtain Part II. either +in Guernsey or in London, and wonder whether it was ever published. + +[3] Daniel de Lisle Brock was Bailiff from 24th May, 1821, to 12th +January, 1843. + + + + +CHAPTER IV + +THE UTILITY OF THE NOTES + + +There is abundant evidence throughout the records that the system was +appreciated. + +Jacob's _Annals_ (1830), in a chapter on Currency, mentions the Notes +incidentally. "All these, with the one pound Guernsey States' Notes, are +in much request, being very commodious for the internal affairs of the +island." + +The Bailiff, Daniel de Lisle Brock, who seems undoubtedly to have been +the inspiring genius of the scheme, says in his _Billet d'Etat_, 15th +November, 1827-- + +"An individual with an income of L9,000, who spends only half of it +wishes to build a house at a cost of L13,000. He therefore makes an +arrangement with his timber merchant, his mason, his carpenter and +others to pay them out of his savings, so that they shall receive a part +each year for five years. Can it be said that he is contracting debts? +Will he not have at the end of the five years both his house and his +original income of L9,000? + +"The States are precisely in the same position as regards the L13,000 +which they have to pay out of their income during the five years +included in the said table. This sum will be paid in instalments of +L2,600 per annum, with as much ease as were much heavier engagements in +1826 and 1827. + +"The time has passed when the public could be frightened by exaggerated +reports about the debt; most complete publicity keeps everyone +acquainted with the real state of affairs; my greatest wish is that +nothing should be hidden." + +Frequent references to the saving of interest are to be found, and to +the fact that improvements in the island could not have been carried out +but for this system. + +Wm. Collings, speaking at the States Meeting, 26th March, 1828, on a +financial proposition, gives it as his opinion that interest now paid +might be spared if the States issued more Notes. The Rev. T. Brock at +the same meeting supports the contention, as Notes can be issued without +inconvenience. + +In the _Billet d'Etat_ for 21st September, 1836, in a long discourse on +the circulation, Daniel de Lisle Brock says, "To bring about the +improvements, which are the admiration of visitors and which contribute +so much to the joy, the health and the well-being of the inhabitants, +the States have been obliged to issue Notes amounting to L55,000. If it +had been necessary, and if it were still necessary to pay interest on +this sum, it would be so much taken from the fund ear-marked to pay for +the improvements made and to carry out new ones. This fund belongs +especially to the industrious poor who execute the works and generally +to the whole island which enjoys them. It ought to be sacred to all." + +Mr. John Hubert, in the debate at this meeting, is reported by the +_Comet_ to have referred to the fact that "the roads and other works had +been constructed for the public good," and to have said that "without +issuing Notes for the payment of those works it would have been +impossible to have executed them." + +Mr. H. O. Carre, in the same debate, said, "The States, by having Notes +to the amount of L55,000 in circulation, effected a saving of L1,600 per +annum. Here, then, was a revenue of L1,600 raised without causing a +farthing's expense to any individual of the public generally, for not +one could urge that he suffered a farthing's loss by it. It was +therefore the interest of every one to support, not the credit, but the +interest of the States. Those who wished to traffic on the public +property were in fact laying a tax on that public, for they were +diminishing, by so much as they forced States' Notes out of circulation, +the public revenue, for if the States, in consequence of a diminished +revenue by the effect of Bank paper, have to make loans, those loans +must in the end be repaid by the public--which would be a taxing of the +public for the benefit of private individuals." + +Further contemporary testimony to the estimation in which the Notes were +held may be gleaned from the papers of the time, of which there were +three, issued at least once a week. In these occur letters from +Publicola, Verax, Vindex, Un ami de son pays, Un Habitant, Campagnard, +etc. Some of these were probably inspired, and sometimes they show a +partisan bias. The references of most value are the incidental ones +occurring in discussions on the improvements or in the criticisms of +_ordonnances_ on the currency. The coinage at this time was in a +confused state, there being both English and French money, some of it of +very poor quality, in circulation. + +The _Gazette_ of 22nd July, 1826, refers to allegations made by the +Jersey authorities as a reason for their refusing to register an Act +authorising the issue of L5,000 in Notes. The opponents of the measure +had alluded to supposed evils arising therefrom in Guernsey. But the +_Gazette_ emphatically declares that "these Notes have neither directly +nor indirectly burdened commerce in any way, nor contributed to the rise +in exchange that is experienced." + +A letter in the _Gazette_ of 25th April, 1829, on the subject of +"Monnaie," written at the request of Sir J. Colborne, the +Lieutenant-Governor, suggests that people in authority in Jersey +interested in Banks oppose State Notes, lest these should be preferred +to theirs. The leader of the same issue of the _Gazette_ states that +"the generality of the inhabitants have confidence in the States' Notes +(it being always understood that the issue of Notes shall be kept within +just limits) because they know that the whole property of the island +forms the guarantee for their payment." + +"Campagnard" in the _Gazette_ of 28th February, 1829, suggests the need +of some other currency than States' Notes for trade in France or with +London and Paris, but feels alarm at anything that might stop the public +works in the island. + +The difficulty of getting cash for notes is alluded to only when the +period of controversy referred to in the next chapter is reached. But +for about the first ten years of their issue it would appear that no +exception was taken to the notes nor difficulty experienced in their +use. External exchange seems to have flourished side by side with this +internal currency. + + + + +CHAPTER V + +FIRST RUMBLINGS OF OPPOSITION + + +The feeling in favour of the system was not however entirely unanimous. +In 1826 we find the first trace of opposition which gradually grew and +grew until, as we shall see later, it was decided in 1837 that the +States should not issue any more Notes. + +Whether the opposition was entirely due to this financial system as such +is open to question. Errors of judgment with reference to the Fountain +Street improvement may have been made. Self-interest on the part of some +may have been one of the factors. Into these questions the writer cannot +enter here. All that he wishes to point out is that it seems to him from +studying the records that there were various currents of opposition +which centred round the issue of Paper Money by the States. + +In September, 1826, three members of the States, Josias le Marchant, +James Carey and Jean le Marchant, the two latter being members of the +Finance Committee, thought that the King's consent should be obtained +for works to be undertaken in Fountain Street. They considered that the +anticipations of future revenues were "not only fatal to their credit +but contrary to the order of His Majesty in Council, 19th June, 1819, +viz., 'that the States of the said Island do not exceed in any case the +amount of their annual income without the consent previously obtained of +His Royal Highness in Council.'" + +Daniel de Lisle Brock, after consulting La Cour Royale (the Supreme +Court of Judicature), writes his views in a _Billet d'Etat_, and summons +the States to meet 22nd November, 1826. In his words, which we quote at +some length, are seen both his enthusiasm and his caution. + +"It was not possible, as every one must admit, to do without +anticipations; but these differ from a debt in that a certain clear and +definite income is appropriated for meeting them, at certain fixed +times. They are only assignations on assured funds ear-marked for their +payment. Watch must be kept, it is true, that they are paid from these +same funds. For by letting the period during which they should end pass, +and by spending on anything else the income appropriated to them, they +would become a permanent debt. The experience of several years has shown +us that these assignations may be used without danger, and that they +have been fully paid off as they fell due. + +"The advantage which has resulted is manifest. If we had had to wait +till funds were in hand to set to work at Fountain Street, who could +have foreseen when, if ever, this moment would arrive. Is it nothing, +in the midst of this short life, when it is a question of an object of +the first necessity among the wants of the community, to have +anticipated by sixteen or seventeen years the enjoyment of this object? +Doubtless evil is close to good: the abuse of the best things is always +possible. Is this a reason for forbidding the use of what is good and +profitable? Is it not better to procure it as soon as possible whilst +availing ourselves of the means at our disposal to avoid its abuse? +Whilst these means are employed, and so long as the income is +sufficient, there is only one possible danger--that of allowing the time +for meeting these anticipations to pass without paying them, and thus of +seeing the debt increased by the amount of the non-cancelled +obligations. This danger is seen to vanish when we consider the +precaution taken by the States, the watchfulness of all their Members, +the Committee which they have appointed specially for this purpose, when +we think of the publicity, of the exact acquaintance from year to year +which all the inhabitants have of the liabilities, the receipts and +expenditure of the States. All this watchfulness and all this publicity +are the strongest safeguard that could be given against any danger in +this respect." + +The Resolution to refer the matter to the King was lost, only five +voting for it; and a resolution was carried expressing confidence in the +present method. + +In the following year, 1827, the Guernsey Banking Company, now known as +the Old Bank, was founded from the firm of Priaulx, Le Marchant, Rougier +& Company. Jean le Marchant was Vice-President of this Bank. It is said +that at the States Meeting on 15th November, when objections were raised +lest the States' Notes should suffer, the Bailiff seemed to foresee no +danger. "Good Bills are better than bad coin." + +Notwithstanding the decision of the States in 1826, the three Jurats, +Josias le Marchant, James Carey and Jean le Marchant were still uneasy, +and on 10th April, 1829, complained direct to Whitehall that "the States +had exceeded their annual revenues for works of public utility without +the express sanction of the superior authority, and had for these same +works contracted liabilities which exceeded the means of the States." + +The Privy Council on the 19th June forwarded the complaint to the States +and asked for an explanation. + +The States, at their meeting, 27th August, 1829, instructed a Committee +to examine the charges, draw up a report and answer, and submit the same +to the States. The Committee selected was the Finance Committee, which +was revised at this time, the chief change being the omission of the two +complainants, James Carey and Jean le Marchant. + +A guess may be hazarded that this Committee appointed Daniel de Lisle +Brock to draft the reply. + +This interesting document fortunately exists not only in French but in +English (doubtless for the benefit of the Privy Council). In +characteristic language, enthusiastic and patriotic, while clear and +matter of fact, it sets out the present situation and sketches the +history of the Island since the close of the War. The greater part of it +appears in the next chapter. + + + + +CHAPTER VI + +THE REPLY OF THE STATES + + +With a few slight omissions the following is the official translation of +"The Answer of the States of Guernsey to the Complaint of three of their +Members dated the 10th April, and transmitted by their Lordships's Order +of 19th June, 1829. + +"My Lords, + +Discarding from their minds allusions and topics of a personal nature +and every sentiment of recrimination, the States of Guernsey are +desirous of vindicating themselves in the manner most becoming the +respect due to your Lordships, and the consciousness of right, by +setting facts against errors, reason against fears, 'honest deeds +against faltering words.' + +"To judge of the States by any particular act or period would be to +dismiss all consideration of previous motives and future benefits, of +connecting causes and effects. Comprehensive views of the general policy +of the States can alone enable them to prove, and your Lordships to +judge, of the wisdom and propriety of their measures. Taking, therefore, +a retrospect of the period which immediately preceded the grant of the +duty on Spirituous Liquors first graciously conceded in 1814; they deem +it necessary to lay before your Lordships a summary account of the state +of this Island, at, and from that period. + +"The steps taken during the war for the prevention of smuggling had +deprived this Island of the trade which the supply of that traffic +occasioned, and a great portion of the inhabitants of their usual +occupation, consisting not in smuggling themselves, but in importing the +goods and making the small packages in which those goods were sold in +the Island; Privateering, adventurous speculations, and the great +expenditure of fleets and garrisons compensated in some measure for the +loss of this occupation, but when the war ceased also, a general want of +employment and consequent distress ensued. + + * * * * * + +"In 1813 the sea which had in former times swallowed up large tracts, +threatened from the defective state of its banks to overflow a great +extent of land. The sum required to avert the danger was estimated at +more than L10,000, which the adjoining parishes subject to this charge +were not in a condition to raise. The state of the finance was not more +consolatory, with a debt of L19,137, and an annual charge for interest +and ordinary expenses of L2,390, the revenue of L3,000 left only L600 +for unforeseen expenses and improvements. + +"Thus at the peace, this Island found itself with little or no trade; +little or no disposable revenue; no attraction for visitors, no +inducement for the affluent to continue their abode, and no prospect of +employment for the poor. No wonder, therefore, if emigration became the +object of the rich in search of those good roads, carriages and other +comforts which they could not find at home, and the only resource of the +other classes, whose distress was likely to be aggravated by the +non-residence of the former. Misery and depopulation appeared +inevitable, from the peace to the year 1819 inclusive, more than five +hundred native and other British subjects embarked for the United +States, and more prepared to follow. + +"It is said, the powers of the human mind in society lie at times torpid +for ages; at others, are roused into action by the urgency of great +occasions, and astonish the world by their effects. This has, in some +measure, been verified in this Island, for though nothing done in so +small a community can cause a general sensation, its exertions may yet +produce wonderful results, within its own sphere. It is the duty of the +States to show that, roused by the deplorable situation above described, +they took, and have since pursued the steps best adapted to meet the +exigency of the case, and that those steps have been attended with +complete success. + +"To increase the revenue was an indispensable preliminary, but to do +so, no other means lay within the power of the States than a tax on the +several parishes according to the rates at which they were respectively +assessed, and to this tax there were insuperable objections.... + +"Under these circumstances was the application made for the duty on +spirituous liquors: and notwithstanding the opposition of many of the +inhabitants His Royal Highness the Prince Regent, was graciously pleased +by an Order in Council of 23rd July, 1814 to authorise the States to +raise 1s. per Gallon on all such liquors consumed in this Island for the +term of 5 years. The same duty was renewed for 10 years by virtue of a +second Order in Council of 19th June, 1819 after similar opposition. And +on the declaration at Your Lordships' bar of the advocate deputed by the +opponents that a clause to the following effect would reconcile them to +the measure, and no objection being made to it on the part of the +States, these words were inserted in the gracious Order in question: +viz.:--'That One Thousand Pounds per annum of the produce of the said +duty be applied solely to the liquidation of the present debt, together +with such surplus as shall remain out of the produce of the tax in any +year after defraying the expenses of roads and embankments and +unforeseen contingencies. And that the States of the said Island do not +exceed in any case the amount of their annual income without the consent +previously obtained of His Royal Highness in Council: and the said +States are hereby directed to return annually to the Privy Council an +account of the produce and application of the said tax.' + +"In 1825 the Lt. Governor Sir John Colborne, and the States, having +extended their views to the erection of a new College and other +important works which could not be undertaken without the assurance of a +renewal of the duty, constituting the chief part of the revenue, a third +Order in Council of the 30th September, 1825, conceded to the States the +right of levying the same for 15 years, beginning on the 1st September, +1829, and this without the smallest opposition from any of the +inhabitants, and without the conditions annexed to the second Order. + +"With gratitude for the means placed at their disposal the States feel +an honest pride in the recital of the manner in which those means have +been applied. First, considering the danger arising from the bad state +of the sea embankments, and the hardship of subjecting particular +parishes to a charge for the general safety to which they were unequal, +the States took on themselves the present repairs, and future +maintenance of those embankments. This essential object connected with +the paved slips or avenues to the beach, has been attended with an +expence of L14,681 19s., without including five or six thousand for a +breakwater to defend the line of houses at Glatney, on the North side +of the Town. + +"Independently of the sums contributed by Government towards the +military roads, from twenty-nine to thirty thousand pounds have been +expended by the Island on the roads, so that in lieu of those before +described, there are now fifty-one miles of roads of the first class, as +good as those of any country, with excellent footways on all of them, +and 17 miles of the second class. + +"Not only the main Harbour, Piers, Quays, Buoys and Sea Marks have been +attended to, and at a great expense, but, in order to facilitate the +exportation of the granite from the North of the Island, the Harbour of +St. Sampson has been rendered secure and convenient by a new Breakwater +and Quay. + +"The situation and state of the Town were thought to preclude all hopes +of much amelioration, but the widening of High Street, and other +streets, the reducing the precipitous ascent to the Government and Court +House, the clearing away of the unsightly buildings that obstructed the +view and approach to those public edifices, the new sewers, pavements, +and, above all, the Public Markets and new Fountain Street, attest the +solicitude of the States towards the Town, and surprise those who return +to it after a few years absence. Add to these the enlarging and +improving of the Court House and Record Office, where the public have +daily access, and where are kept the contracts and registry of all the +real property (of) the Island. Add also the New College, which, with +the laying out of its grounds and the roads round its precincts, +contributes to the embellishment of the town, induces families from +other places to settle in the Island, on account of their children, and +affords to the inhabitants the ready means of a good education. + +"The advantage resulting from all these improvements has not been +confined to their utility, or to the increased activity given to +industry, and the circulation of money by the public expenditure: they +have excited in all classes a similar spirit of improvement, which +displays itself in the embellishment of the premises already built upon, +and above all in the number of handsome dwellings since erected. In the +Town parish alone 401 houses have been built since the year 1819 at an +expense of upwards of L207,000, and few towns do now present a more +animated scenery around them, or one where ornament and comfort are more +generally united; the same comfort and improvement are witnessed in +every direction, and at the greatest distances from town. And thus it +is, that the public works have not only given life and activity to every +species of industry by the immediate effects of their utility, as for +example to the building of a number of mills in the Island, before +supplied with most of its flour from abroad, and now enabled to +manufacture it for exportation, but and still more by the consequent +impulse communicated on all sides, prompting the wealthy to lay out for +private mansions greater sums than were expended for public works and +creating a permanent source of employment, by the future expenses which +the repairs and occupations of those mansions will require. + +"The extent of benefits conferred is sufficiently attested by the +concurrent testimony of inhabitants and strangers. The sole objects of +His Majesty and of His Most Honorable Privy Council are the public good +and general happiness; the States might therefore, confidently look for +indulgence, even if, in promoting those objects, they had fallen into +some little deviation from the strict letter of any particular Order. +But implicit obedience to the Royal Authority in Council being their +paramount duty, they cannot rest satisfied under the imputation of +having, even unintentionally, derogated from that duty. + +"The words of the second Order in Council have already been cited. The +right of levying the duty on spirituous liquors is granted for ten +years: a condition is annexed purporting that the States shall not +exceed their annual income, and on the contrary that out of the produce +of the duty, one thousand pounds shall be applied annually to the +extinction of the debt; that condition is naturally in force for the +same period, and for the same period only, as the grant to which it is +annexed; it is necessarily so limited, because the means by which it is +to be fulfilled, the produce of the duty, ceases at the end of the ten +years for which the duty is granted. + +"The States are bound to prove that they have complied with the +conditions of that Order; they did so comply, when wishing to erect a +new Market, they applied for and obtained the order of 10th October, +1820, which imposed on them, at their own request, the further +obligation of an annual payment of L450 for 10 years; + + This sum began to be paid in 1822, and has been paid + for 8 years, during which the obligation amount to L3,600 0 0 + + The former obligation amounts, for the 10 years + now elapsed to L10,000 0 0 + ------------- + Total amount of the two obligations imposed L13,600 0 0 + + The debt at the commencement of the 10 years + elapsed amounted in rents and money, including + the cost of the Market, to L43,668 15 2 + + The Debt, Rents and Market included, has been + reduced to L27,740 0 0 + ------------- + + Total amount of the sums actually applied to the + payment of the Debt L15,928 15 2 + +"The conditions of the second Order in Council have thus been more than +fulfilled, by the application of L2,328 15s. 2d. to the payment of the +debt over and above the obligations imposed. Those conditions, +incidentally introduced in the second Order, do not in any way form a +part of the third Order now in force. + +"Though released from the positive conditions of the former Order, the +States have shown no intention, and do by no means desire to depart from +its general spirit; graciously offered by the third Order in Council to +continue their improvements, they came to the following resolution on +22nd November, 1826: 'That far from entertaining any wish of augmenting +the Debt the States recognise the principle that it should not exceed, +at the end of the 15 years for which the duty is further granted, the +sum to which the Debt shall amount at the end of the 10 years present +duty: they impose on themselves that obligation anew, and bind +themselves by the most solemn engagement not to increase the debt.' + + * * * * * + +"What cause of alarm can there then possibly exist? What prospect, on +the contrary, the States humbly ask, can be more gratifying than that of +remaining with our New College, new Harbours built and to be built, new +Markets of every description, new Roads in every direction, new streets, +one of thirty feet instead of seven in the greatest thoroughfare between +town and country, in short, with nearly all the greatest improvements +that can be desired, paid for to the last shilling; and all this +according to the statement of the plaintiffs themselves, with the debt +reduced to L15,000, and the revenue augmented L1,700 per annum, by those +very improvements. + + * * * * * + +"In the Markets and Fountain Street, the States have undertaken works +essentially necessary. The cost might be supposed to exceed the means of +the States, if credit did not in the first instance furnish the chief +expense without the charge of interest, and if the works themselves did +not provide for the extinction of the engagements incurred. + +"The views of the States are to render these public improvements a +source of future revenue, which shall again afford the means of further +and greater improvements. + +"The same plan has been acted upon with success in several places, and +particularly at Bath and Liverpool,[4] to the permanent increase of +their revenues, and to the general benefit of those places, and of the +country at large. It is difficult indeed to conceive whence can arise +the objections to measures, which without laying the least burthen on +anyone, surely and quietly operate to the general good, except it be +from the disinclinations of most persons to enter into that close +examination of figures necessary to a right understanding, and the +distrust consequent on the need of that examination and comprehension. +In our case, it may be added, that accustomed, on the subject of +improvement, to a long apathy confirmed by the state of a revenue +inadequate to the least undertaking, works of magnitude when first +proposed created the greatest alarm. The new roads were opposed by the +far greater number of those who were to derive the most benefit from +their use, and who from experience are now clamorous for more. The +Market was only voted the third time it was offered to the consideration +of the States, although it was represented that independently of its +various advantages, it would in a short time permanently add to the +revenue. Experience has proved the correctness of that view of the +question, and opening the eyes of the public, has turned their +sentiments of fear and distrust to one of perfect confidence. Hence it +was that the public voice called on the States to realise the benefits +likely to result from the substitution of a street thirty feet wide, in +lieu of one of seven feet, in the heart, and connecting the two +extremities of the Town, and forming the principal avenue from the +Country to the Harbour; twenty to thirty carts frequently waited at one +end until those from the other had passed. Such a thoroughfare in the +most populous quarter could not but be fraught with danger, and the +accidents that occurred were numerous, while the closeness of the +street, height of the houses, and filth collected at the back of them +were a constant source of nuisance and disease. Never was a measure +voted with so much unanimity and general satisfaction as the removal of +this public nuisance, and rebuilding Fountain Street, notwithstanding it +to be now the ground of the complaint before your Lordships. + + * * * * * + +"Relatively to so small a section of the Empire, great things have been +done with slender means; that so much has been done may with truth be +ascribed to the fairness and disinterestedness which have marked every +resolution of the States, and its execution; to the vigilant and +gratuitous superintendence of their Committees, and to the public spirit +of the inhabitants. + +"Devoted to the good of His Majesty's service, and not resting on +isolated facts, the States have laid open the whole of their conduct and +views, and beg leave to refer to their worthy and highly respected +Lieutenant-Governor Major General Ross for the correctness of their +statement, and for the situation of the Island. They have the approval +of their fellow-subjects and of their conscience, but they would feel +deeply humiliated if they did not merit and obtain the commendation of +your Lordships." + +The Reply is accompanied by five appendices giving detailed figures to +substantiate the argument and point out errors in the figures of the +complainants. It is not necessary to weary the reader with these. +Appendix I., however, is interesting, as it shows that more than half +the Debt of the States consisted of these Notes on which no Interest was +paid. + + +"APPENDIX I. + + Debt of the States:-- + + To the Savings Bank at 3 per cent. first vote L10,000 + + To individuals 557 + ------- + At 3 per cent. interest L10,557 + + In Notes of 20s. each 14,443 + + 135 Quarters 2 Bushels 8 Denerels, and 18 + sous 8 Deniers Rents equal to 2,740 + ------- + L27,740 + + Deduct from this the balance still due by the + Market, and carried to the joint account of + the Market and Fountain Street 6,100 + ------- + L21,640[5]" + +The scope of the remaining Appendices is shown by their titles:-- + +Appendix II.: Plan of Finance adopted by the States and to be pursued +during the fifteen years from this date, ending in 1844 inclusive. + +Appendix III.: Remarks on the Statement of account making part of the +complaint presented against the States. + +Appendix IV.: Joint account of Fountain Street and the Market. + +Appendix V.: Amount of the Produce on the Duty of 1s. per Gal. on all +spirits consumed in the Island of Guernsey, and the manner in which it +has been expended during the Ten years for which the said Duty was +granted, beginning September 1st, 1819. In obedience to Order of H.M. in +Council of June, 1819. + +This reply was very favourably received by the States at their Meeting +23rd December 1829 and adopted almost unanimously. One of the Rectors +spoke of it as "most judicious and consolatory, especially considering +that room had been given for the exercise of opposite feelings." + +The leader writer in the _Gazette_ recommended the reply to "the +particular attention of every true Guernseyman." Improvements in the +Island were due to M. le Bailiff, against whom and whom alone the +complaint is directed. "As a wise administrator he has known how to +contrive the means of effecting this great good without imposing the +least tax or inconveniencing his fellow citizens." + +FOOTNOTES: + +[4] See Appendix. + +[5] Market. + + The cost was L12,748 + Paid off since 1822 6,648 + ------- + Balance due on Market 6,100 + + + + +CHAPTER VIII + +THE CRISIS + + +No trace was found of any reply or acknowledgment by the Privy Council. +Presumably they were satisfied with the answer submitted by the States. + +But not so the opponents. + +In addition to the Old Bank already mentioned, another Bank, the +Commercial Bank, had been started in 1830. Both of these appear to have +issued notes at their own discretion. Consequently the Island seems to +have been flooded with paper money, and an awkward situation had arisen. +The Commercial Bank claimed an equal right with the Old Bank and even +with the States to issue notes. The Finance Committee, it was stated, +had refused to confer with the Commercial Bank. So long as the Banks had +a right to issue notes they appear to have had it in their power to put +pressure on the States. For they could thus put into circulation a +currency beyond that required for the internal needs of the Island. + +Daniel de Lisle Brock summoned the States to consider the matter, +evidently with the intention of obtaining an injunction against the +issue of notes by the Banks. + +His message to the States Meeting, held 21st September, 1836, is very +spirited and defends the rights of the States as against private +individuals, as will be seen from the following lengthy quotation. + +"If there is one incontestable principle it is that all matters relating +to the current coin of any country have their source in the supreme +prerogative, and that no one has the right to arrogate to himself the +power of circulating a private coinage on which he imprints for his own +profit an arbitrary value. If this is true for metal coins still more so +is it for paper money which in itself has no value whatever. + +"Has not experience shown us the danger of private paper money? Can we +have forgotten the disastrous period when payment of one hundred +thousand one-pound notes put into circulation by two banks enjoying good +credit was suddenly stopped? Have we forgotten the ruin of some, the +distress of others, the embarrassment of all? Have we not quite recently +seen a bank established by people considered immensely rich, advancing +large sums for distilleries, steam boats and other projects, and coming +to an end in less than two years with a composition with its creditors +who thought themselves lucky to get a few shillings in the pound? + +"With these facts before our eyes we must realise the necessity of +limiting the issue of paper money to the needs, the custom, and the +benefit of the community in general. Permission cannot be granted to +certain individuals to play with the wealth and prosperity of society, +to take from it its hard cash and to give it in exchange rags of paper. +What incentive can they offer to persuade the public to give up to them +valuable bills for worthless ones, certainty for uncertainty? What +advantage can they pretend will accrue to the public from the loss of +its currency and the possible depreciation of their paper? These general +reflections will find their application. Let no one exclaim against the +possibility of the supposed danger. The wealth of the present +stockholders of our banks is well known, their names suffice to inspire +the greatest confidence; but apart from extraordinary events, the +ordinary casualties of life may bring about in a short time the change +of all these names, and there may remain in their place only men of +straw. + + * * * * * + +"The States are met in order to take counsel together on measures for +its defence. For an object so important they ought to count on the help +of all friends of their country. + +"Speaking of the present banks, and it is necessary to refer to them, no +one desires more than I do to see them flourish, provided that it is not +at the expense of the public interest. Several of the stockholders seem +to rely for success on the issue of paper-money, as if this were the +principal aim of the business of banking. This aim, on the contrary, is +quite foreign to real bankers--one finds them in all the great towns of +Europe enjoying colossal fortunes--they never dream of paper-money; +their functions are confined to discounting bills, furnishing bills on +all countries, taking money on deposit at low interest to lend it again +at the legal rate on landed estates, or property of assured value, and +to a number of other services required by commerce: each transaction +yields a profit which should suffice. A bank of this kind was wanting in +the Island. The first of the two existing ones was formed under the most +favourable auspices, nothing could exceed its credit: although it issued +paper money it did not seem inclined to push this circulation to the +point of annoyance to the States. It even made common cause with them +when it was a question of replacing the old coins with new, and +contributed half the expense. If it had shown itself more obliging and +ready at any time to supply bills for those who, money in hand, wanted +them to meet engagements in London or Paris, it would have continued the +only bank for all business. But as it would not put itself out in any +way, the second bank was started by merchants in order to escape from +the domination and caprice of the first. + +"The second bank should have kept, and still ought to keep, to the +legitimate business of banking transactions. It appeared to have for its +principal object the issue of paper money; even on its origin it +suggested that the States and the two banks should weekly make a mutual +exchange of their respective notes, each party paying interest for the +balance of notes remaining against it; in this way all the notes of the +States would have found themselves in the coffers of the Banks and +paying interest to them. Though this proposition was not accepted, the +States were not the less troubled with requests for cash in payment of +their notes, and these requests are daily--not only for the ordinary +household needs, as might have been expected, but for sending abroad, +for if there are drafts to be cashed by the bank for anyone who wishes +for money to send to France or to Jersey, the drafts are paid in States +Notes, in order that the money shall ultimately come from this last +named source. The Bank makes no secret of its pretensions: there are, it +says, three parties for issuing paper money; this issue cannot rise +above L90,000 since the circulation in the country does not allow for +more, the States ought to have only one-third of the issue, the two +banks the two remaining thirds. This is a fine way of making the +division, and very convenient certainly for the Commercial Bank. It +would even have some show of justice if the parties had equal rights, +and if the public had no interest in the matter; but the rights are not +equal--the bank has none to put forward, that of the States is +incontestable: they exercise it for the welfare and advantage of the +whole Island which they represent. Consequently the public has the +greatest interest in preserving for the States the power of issuing +paper-money without interruption. Let the bank reply to the questions +already put; let it say what inducement it can offer the public to drive +out of circulation the States Notes, the profit on which benefits all, +especially the productive classes, and substitute for it Bank notes, the +profit on which benefits only individuals of the unproductive classes? +Now is the time to ask the proprietors themselves and ascertain whether +in starting a bank they ever had the intention of letting it work to the +detriment of their country? The public Treasury is the heart of the +State--did they ever wish, do they to-day wish to strike it with a +dagger? I know that we live in a financial age, that it is reproached +with indifference to every generous sentiment, and that the love of +money and the lust for gain absorb all other passions. In spite of that +I have not lost all confidence in the patriotism of the members of the +bank, they have the greatest personal interest in supporting the States +in their efforts for the improvement of their country, efforts which +contribute so greatly to the prosperity of internal commerce, to the +residence of inhabitants of means, and to the wealth of strangers. +Finance is the pivot on which turns the administration of affairs. The +least disturbance imposes on me the duty of sounding the alarm and +summoning the States. What I have said will be sufficient, I hope, to +persuade the bank to maintain a friendly course. The bank should feel +that it is not enough to intend not to injure, but that it is necessary +to abandon any step which, even without its wish, would be prejudicial +to the interests of the country. It should recognise that, as regards +the circulation of paper-money, the States have, for a long time and for +the common good, been in possession of the ground which it seems to wish +to invade, which, however, it cannot occupy without injustice. + +"Every war, it is said, ends where it should have begun--in peace. I am +firmly convinced of this truth; and experience has shown me that in +civil life as in political, war might almost always be avoided to the +great advantage of both parties, and that lawsuits, like wars, have for +end rather the injury of the adverse party than good to oneself. The +States are on the defensive, and such war is just and inevitable if any +war is. It is, moreover, a war in which all the inhabitants who are the +friends of their country will eagerly unite for the defence of the +States in their just rights--thus united they will defend them with +complete success. For this purpose the States will doubtless appoint a +Committee with the fullest powers to propose, in case of need, measures +which may ultimately become necessary. + +"I do not forsee that the case will require it, and I should wish to +avoid, as far as possible, any foreign intervention--but if the efforts +of the States were not sufficient to defend their rights there would be +no alternative, they would find themselves obliged to petition His +Majesty in Council to consent to restrict the issue of one pound notes, +and only to permit the putting into circulation of the number absolutely +required by the States. Under the present circumstances this would be an +indispensable measure, and it can scarcely be doubted that a humble +request to this effect would be graciously received." + +The debate, reported at length in the local papers, was a heated one. It +first raged round the third proposition, which appealed in general terms +to the islanders to rally round the States. The following is the +proposition as translated by the _Comet_ of 22nd September, 1836:--"That +in execution of the numerous ameliorations that have taken place during +the last 20 or 30 years, the States having put into circulation about +55,000 One Pound Notes, as a financial measure in favour of the public +generally, if they are of opinion to defend the rights of the States +against those who wish, for the advantage of a few individuals only, to +hinder the circulation of the States Notes, for the purpose of +substituting those of private individuals in lieu thereof; and whether +it would not be proper to make an appeal to all the inhabitants, who are +the friends of their country, to invite them to afford their assistance +in supporting with all their might the notes belonging to the States." + +This was carried by 18 votes to 11. The minority represented chiefly +town rather than country parishes, the Jurats being equally divided, and +included at least two persons closely connected with the Banks. The +victory of States Notes seemed complete, and the fourth Proposition +appointing a Committee to give effect to the decision was carried by a +large majority. It is as follows:-- + +"If they are of opinion to name a Committee that shall be authorised in +a special manner to defend the rights and interests of the States, and +of the public:--to do their utmost by every conciliatory measure in +their power, and above all, to agree to an arrangement that shall screen +the States from all interruption in the circulation of their Notes, +which have been issued for the benefit and advantage of the public, with +the design of gradually diminishing the number annually. And in the +event of such an arrangement not taking place, to adopt every measure, +and make every necessary sacrifice for supporting the circulation of the +States Notes. And finally, should the case require it, to propose to the +States the adoption of those ulterior measures deemed requisite by the +Committee, for the general interests of the island." + +The meeting ended with a fine fighting speech from the Bailiff. He +reiterated the principle of the States being the sovereign power in +issuing currency, claimed that the Cour Royale had the right of stopping +the private issue of notes, and pointed to the example of England, where +only L5 notes were permitted in the country, and these under a heavy +tax, while only the Bank of England might issue notes in and around +London. He showed that it was a choice between notes issued for the +benefit of individuals and notes issued for the public good. He defended +the improvements carried out by the States, and once again declared that +they had been advantageous in giving employment to the poor, security to +the rich and encouragement to commerce. + + + + +CHAPTER VIII + +THE END + + +One can imagine the enthusiasm and the satisfaction with which the +majority returned home. One anticipates a triumphant report in the +Bailiff's best vein; and expects that the banks will in future have to +confine themselves to the operations permitted to English banks, while +the States restore equilibrium by causing the withdrawal of superfluous +notes and confining future issues, once again entirely in their own +hands, to quantities proportioned to the needs of the island. + +With surprise, the subsequent proceedings are found to be on quite +different lines. Truth is stranger than fiction. The prosaic facts are +as follows:-- + +The Bailiff in presenting his _Billet d'Etat_ to the States Meeting, +29th March, 1837, reported on the arrangement made by the Committee with +the two Banks. He brought forward no proposition on the matter on which +the States should deliberate. He simply states that:-- + +"After some preliminary conferences the Committee received the following +letter:-- + + 'To D. De Lisle Brock, Esq., + Bailiff, etc., etc., etc., + Guernsey, 8th Oct., 1836. + + Sir, + +To settle the differences now existing between the States and the Banks, +and to promote an amicable adjustment between them, we propose: + +That the States should withdraw immediately L15,000 of their Notes, nor +have at any time more than L40,000 in circulation, give up all Banking +transactions, and cease to collect the notes of the Banks. + +In consideration thereof the Banks engage whenever they draw bills +either on London or Paris, to take States' Notes for one half at least +of their amount and to pass them to the public as their own. + +The Banks further engage to supply the States annually with L10,000 in +cash, each bank to provide for one half, by payments of L250 at a time, +and this free of expence and in exchange for States' Notes. + +The above agreement to remain in force until three months notice be +given by either party to the others to annul the same. + + We remain respectfully, Sir, + + _Signed_ for Priaulx, Le Marchant & Co. + Thomas D. Utermarck, + Abraham J. Le Mesurier. + + For the Commercial Banking Co., + H. D. G. Agnew } + T. De Putron } Managers.' + +"And asked M. Le Bailiff to reply as follows:-- + + 'Court House, Guernsey, + 9 Oct., 1836. + + Gentlemen, + +The Committee named by the States on the 21st September for the purpose +of conferring with the Banks which you represent, on the subject of the +one pound notes current in this island, have taken into consideration +the proposals which you have transmitted to them, under yesterday's +date, 8th Oct. + +The Committee adopt those proposals as the basis of the arrangement so +desirable to be entered into, and from this day to be in force between +the States and the Banks.--They do so, because the States may at any +time, within 3 months, release themselves from the obligations which +that arrangement imposes; and above all, because the sacrifice of +pecuniary gain on the part of the States which it may deem to occasion, +will be more than compensated by the harmony and good feeling which it +will tend to promote among the inhabitants, and which constituting the +chief happiness of a well regulated community, can hardly be too highly +estimated. + +With sentiments of a like friendly nature, sincerely entertained by the +Committee towards yourselves, and the rest of their fellow citizens, + + I have the honour to be, Gentlemen, + + Your obedient humble servant + + Daniel De Lisle Brock, + President of the States' Committee.' + +"In consequence of this arrangement the Committee decided that L10,000 +sterling of the total one pound notes in circulation on account of +Fountain Street should be withdrawn as a Savings Bank loan at an +interest of 3 per cent. per annum. Also that five thousand of those +forming part of the old debt, called the Permanent Debt, should be +withdrawn to be converted into obligations at 3 per cent. per annum." + +In the discussion at the States Meeting on a proposition to authorise +the payment of a sum spent on repairs to the coasts, there were +references by three Members of the States to the fact that the +expenditure of the States would be increased by having to pay interest +on the 15,000 L1 notes withdrawn from circulation. + +The same fact is alluded to in a few words by Daniel De Lisle Brock +himself in his _Billet d'Etat_ to the States, 20th September, 1838. +Commenting on the Finance Committee's Report, he tabulates five items of +annual loss, among which is found the terse remark, "The founding of the +commercial banks causes an annual loss of L450." + +Although the States thus agreed not to issue any more Notes, to complete +the history it should be recorded that these L40,000--to be perfectly +accurate the total amount in 1906 was L41,318--are still in circulation +in the Island. + + + + +CONCLUSION + + +As stated in the Introduction, the writer has determined, though +somewhat tempted, not to discuss the interesting and debatable points +that arise from a consideration of this subject. He is satisfied, for +the present, with placing the facts before the public. He leaves those +facts for abler minds than his to make such use of as they may desire. +Great care has been taken to record only that for which there is chapter +and verse. + +But he would like, in conclusion, to remark that it seems to him that +the States, even to-day, still derive some little benefit from having a +portion of their "Debt" on which they pay no interest. This may be +gathered from the following table made up from facts taken from the +_Billet d'Etat_ presented to the States 22nd August, 1906, at which +meeting the writer was an interested spectator. + +Summary of the indebtedness of the States of Guernsey:-- + + ------------------------------------+------------------+--------------- + | Balance 31 Dec., | Interest paid + | 1905. | during 1905. + ------------------------------------+------------------+--------------- + | L | L + States General Account Obligations | 68,570 | 1,953 19 3 + Special Loan Obligations | 57,500 | 2,295 0 0 + Notes of _20s._ each payable to | | + Bearer | 41,318 | nil + "Rentes" estimated capitalised | | + indebtedness thereon | 7,059 | nil + Departmental borrowings | 33,000 | 965 8 0 + | | Paid by Depts. + | | to General + | | Account. + +------------------+--------------- + Total indebtedness | L207,447 | ---- + ------------------------------------+------------------+--------------- + +The circulation of these Notes in the Island to-day is, if nothing more, +an interesting relic of an interesting financial policy which certainly +was in vogue in Guernsey for over 20 years (1816-1837). + +The mystery surrounding the abrupt catastrophe is yet undeciphered and +is likely to remain so, as there seems no material from which to glean +what took place during those few but momentous days between the 21st +September and 9th October. Was there treachery? was it but the +inevitable fate of the "best-laid schemes o' mice and men"? or was it a +unique and deplorable economic tragedy? + + + + +APPENDIX + + +We have not yet discovered anything with reference to a successful plan +at Bath to which Daniel de Lisle Brock here alludes (see page 40). We +assume the reference to Liverpool is to the fact that during a time of +financial panic the Liverpool Corporation was empowered by Statute 33, +Geo. III., c. 31 (10th May, 1793), to issue notes of L5, L10, L50 and +L100 for value received or other due security. + +This Act entitled "An Act to enable the Common Council of the Town of +Liverpool in the County of Lancaster on behalf of and on account of the +Corporation of the said Town to issue negotiable notes for a limited +time and to a limited amount," was passed after the Corporation of +Liverpool had failed to obtain a loan of L100,000 from the Bank of +England. + +The L50 and L100 notes bore interest not exceeding the lawful rate and +at 12 months' date. The L5 and L 10 notes were payable to bearer on +demand without interest. The total issue was at no time to exceed +L300,000. Returns had to be forwarded to the House of Commons from time +to time. From one of these returns we learn that the notes issued to +28th February, 1795, amounted to L140,390, based on security valued at +L155,907 16s. 6d. In a report forwarded 23rd April, 1794, it was stated +that L52,985 worth of notes were in circulation at that date. + +Great care was taken in the issue of the notes. The Committee of the +Corporation that was responsible for the same met daily. + +In order to give a wider utility to the notes, London correspondents +were appointed and a large number were made payable in London. This made +it possible for the Corporation itself to apply to the Committee for a +large loan of L50,000. + +The security on which advances were made were very various. It included +cotton, timber, iron, hops, whale oil, bills of exchange, ships on the +stocks and the Alt rates. + + * * * * * + +For further particulars of this interesting incident, the reader is +referred to Sidney and Beatrice Webb's _English Local Government_: "The +Manor and the Borough," p. 485, and to E. C. K. Gonner's Article, +"Municipal Bank Notes in Liverpool, 1793-95," which appeared in the +_Economic Journal_, Vol. VI., 1896, pp. 484-487, to whom the writer is +largely indebted for the above facts. + + + + +STUDIES IN ECONOMICS AND POLITICAL SCIENCE + +_A Series of Monographs by Lecturers and Students connected with the +London School of Economics and Political Science_ + +EDITED BY THE DIRECTOR OF THE LONDON SCHOOL OF ECONOMICS AND POLITICAL +SCIENCE + +=1. The History of Local Rates in England.= The substance of five +lectures given at the School in November and December, 1896. By +EDWIN CANNAN, M.A., LL.D. 1896; 140 pp., Cr. 8vo, cloth, 2s. +6d. _P. S. King & Son._ + +=2. Select Documents Illustrating the History of Trade Unionism.= +I.--THE TAILORING TRADE. By F. W. GALTON. With a Preface by SIDNEY +WEBB, LL.B. 1896; 242 pp., Cr. 8vo, cloth. 5s. _P. S. King & Son._ + +=3. German Social Democracy.= Six lectures delivered at the School in +February and March, 1896. By the Hon. BERTRAND RUSSELL, B.A., +late Fellow of Trinity College, Cambridge. With an Appendix on Social +Democracy and the Woman Question in Germany. By ALYS RUSSELL, +B.A. 1896; 204 pp., Cr. 8vo, cloth. 3s. 6d. _P. S. King & Son._ + +=4. The Referendum in Switzerland.= By M. SIMON DEPLOIGE, +University of Louvain. With a letter on the Referendum in Belgium by +M. J. VAN DEN HEUVEL, Professor of International Law in the +University of Louvain. Translated by C. P. TREVELYAN, M.A., +Trinity College. Cambridge, and edited with Notes, Introduction, +Bibliography, and Appendices, by LILIAN TOMN (Mrs. Knowles), of +Girton College, Cambridge, Research Student at the School. 1898; x. and +334 pp., Cr. 8vo, cloth. 7s. 6d. _P. S. King & Son._ + +=5. The Economic Policy of Colbert.= By A. J. SARGENT, M.A., +Senior Hulme Exhibitioner, Brasenose College, Oxford; and Whately +Prizeman, 1897, Trinity College, Dublin. 1899; viii. and 138 pp., Cr. +8vo, cloth. 2s. 6d. _P. S. King & Son._ + +=6. Local Variations in Wages.= (The Adam Smith Prize, Cambridge +University, 1898.) By F. W. LAWRENCE, M.A., Fellow of Trinity +College, Cambridge. 1899; viii. and 90 pp., with Index and 18 Maps and +Diagrams. Quarto, 11 in. by 8-1/2 in., cloth. 8s. 6d. _Longmans, Green & +Co._ + +=7. The Receipt Roll of the Exchequer for Michaelmas Term of the +Thirty-first Year of Henry II. (1185).= A unique fragment transcribed +and edited by the Class in Palaeography and Diplomatic, under the +supervision of the Lecturer, HUBERT HALL, F.S.A., of H.M. +Public Record Office. With thirty-one Facsimile Plates in Collotype and +Parallel readings from the contemporary Pipe Roll. 1899; vii. and 37 +pp.; Folio, 15-1/2 in. by 11-1/2 in., in green cloth; 5 copies left. +Apply to the Director of the London School of Economics. + +=8. Elements of Statistics.= By ARTHUR L. BOWLEY, M.A., F.S.S., +Cobden and Adam Smith Prizeman, Cambridge; Guy Silver Medallist of the +Royal Statistical Society; Newmarch Lecturer, 1897-98. 1901; _Third +edition_, 1907; viii. and 336 pp. Demy 8vo, cloth, 40 Diagrams. 10s. 6d. +net. _P. S. King & Son._ + +=9. The Place of Compensation in Temperance Reform.= By C. P. +SANGER, M.A., late Fellow of Trinity College, Cambridge; +Barrister-at-Law. 1901; viii. and 136 pp., Cr. 8vo, cloth. 2s. 6d. _P. +S. King & Son._ + + (_Out of print._) + +=10. A History of Factory Legislation, 1802-1901.= By B. L. +HUTCHINS and A. HARRISON (Mrs. SPENCER), B.A., D.Sc. (Econ.), +London. Second Edition. With a Preface by SIDNEY WEBB, LL.B. +1911; xviii. and 372 pp., Demy 8vo, cloth. 6s. net. _P. S. +King & Son._ + +=11. The Pipe Roll of the Exchequer of the See of Winchester for the +Fourth Year of the Episcopate of Peter Des Roches (1207).= Transcribed +and edited from the original Roll in the possession of the +Ecclesiastical Commissioners by the Class in Palaeography and Diplomatic, +under the supervision of the Lecturer, HUBERT HALL, F.S.A., of +H.M. Public Record Office. With a Frontispiece giving a Facsimile of the +Roll. 1903; xlviii. and 100 pp., Folio, 13-1/2 in. by 8-1/2 in., green +cloth. 15s. net. _P. S. King & Son._ + +=12. Self-Government in Canada and How it was Achieved: The Story of +Lord Durham's Report.= By F. BRADSHAW, M.A., Senior Hulme +Exhibitioner, Brasenose College, Oxford. 1903; 414 pp., Demy 8vo, cloth. +3s. 6d. net. _P. S. King & Son._ + +=13. History of the Commercial and Financial Relations Between England +and Ireland from the Period of the Restoration.= By ALICE EFFIE +MURRAY (Mrs. Radice), D.Sc. (Econ.), former Student at Girton +College, Cambridge; Research Student of the London School of Economics +and Political Science. 1903; 486 pp., Demy 8vo, cloth. 3s. 6d. net. _P. +S. King & Son._ + +=14. The English Peasantry and the Enclosure of Common Fields.= By +GILBERT SLATER, M.A., St. John's College, Cambridge; D.Sc. +(Econ.), London. 1906; 337 pp., Demy 8vo, cloth. 10s. 6d. net. +_Constable & Co., Ltd._ + +=15. A History of the English Agricultural Labourer.= By DR. W. +HASBACH, Professor of Economics in the University of Kiel. With a +Preface by Sidney Webb, LL.B. Translated from the Second Edition (1908), +by Ruth Kenyon. Cloth, 7s. 6d. net. _P. S. King & Son._ + +=16. A Colonial Autocracy: New South Wales under Governor Macquarie, +1810-1821.= By MARION PHILLIPS, B.A., Melbourne, D.Sc. (Econ.), +London. 1909; xxiii., 336 pp., Demy 8vo, cloth, 10s 6d. net. _P. S. King +& Son._ + +=17. India and the Tariff Problem.= By Professor H. B. LEES SMITH, +M.A., M.P. 1909; 120 pp., Crown 8vo, cloth. 3s. 6d. net. _Constable +& Co., Ltd._ + +=18. Practical Notes on the Management of Elections.= Three Lectures +delivered at the School in November, 1909, by ELLIS T. POWELL, +LL.B., B.Sc. (Econ.), Fellow of the Royal Historical and Royal +Economic Societies, of the Inner Temple, Barrister-at-Law. 1909; 52 pp., +8vo, paper, 1s. 6d. net. _P. S. King & Son._ + +=19. The Political Development of Japan.= By G. E. UYEHARA, +B.A., Washington, D.Sc. (Econ.) London. 1910 xxiv., 296 pp., Demy +8vo, cloth. 8s. 6d. net. _Constable & Co., Ltd._ + +=20. National and Local Finance.= By J. WATSON GRICE, B.Sc. +(Econ.), London. With a Preface by Sidney Webb, LL.B. 1910; 428 pp., +Demy 8vo, cloth. 10s. 6d. net. _P. S. King & Son._ + +=21. An Example of Communal Currency.= By J. THEODORE HARRIS, +B.A. With a Preface by Sidney Webb, LL.B. Crown 8vo. 1s. net. _P. +S. King & Son._ + + +_Series of Bibliographies by Students of the School._ + +=1. A Bibliography of Unemployment and the Unemployed.= By F. ISABEL +TAYLOR, B.Sc. (Econ.), London. With a Preface by Sidney Webb, LL.B. +1909; xix., 71 pp., Demy 8vo, cloth, 2s. net; paper, 1s. 6d. net. _P. S. +King & Son._ + + +_Series of Geographical Studies._ + +=1. The Reigate Sheet of the One-inch Ordnance Survey.= A Study in the +Geography of the Surrey Hills. By ELLEN SMITH. Introduction by +H. J. Mackinder, M.A., M.P. 1910; xix., 110 pp., 6 maps, 23 +illustrations, Crown 8vo, cloth. 3s. 6d. net. _A. & C. Black._ + + + + +100 YEARS AGO + +Guernsey Experimented Successfully with Communal Currency, + +TO-DAY + +The Co-operative Brotherhood Trust, Ltd., + +is Experimenting with Co-operative Currency. + +It has a small circle of Manufacturers, Merchants and Private +Individuals using and circulating its currency. If you believe in its +practicability, join it and help to ensure its success. If you want to +know more about it, write for full information to-- + +THE SECRETARY, + +37, NEWINGTON GREEN ROAD, LONDON, N. + + + + +WORKS BY HENRY W. WOLFF + +Co-operative Banking + +Its Principles and its Practice, with a Chapter on Co-operative Mortgage +Credit + +_Demy 8vo, Cloth_, =7s. 6d.= _net_ + +"Mr. Wolff is the author of a successful work."--_Times._ + + +A Co-operative Credit Handbook + +Demy 8vo, 96 pages. 1s. net + + CONTENTS--Preface, General Remarks, Banks based upon Shares + (Limited Liability Societies), Model Rules for such (with + Annotations), Village Banks (Unlimited Liability Societies), + Model Rules for such (with Annotations). Appendix: Form of + Application, Forms of Bond for Borrower, Form of Fortnightly + Balance Sheet, Model Cash Book. + + +Co-operative Credit Banks + +A Help for the Labouring and Cultivating Classes. 6d. + + +Village Banks + +How to Start Them--How to Work Them--What the Rich may do to Help Them, +etc. 6d. + + +LONDON: P. S. KING & SON + +ORCHARD HOUSE, WESTMINSTER + + + + +-----------------------------------------------+ + | Transcriber's Note: | + | | + | Inconsistent hyphenation and spelling in the | + | original document have been preserved. | + | | + | Typographical errors corrected in the text: | + | | + | Page 11 isue changed to issue | + | Page 61 VIII changed to VII | + +-----------------------------------------------+ + + * * * * * + + + + + + +End of the Project Gutenberg EBook of An Example of Communal Currency, by +J. 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