Political Economy and Representative Government in Australia (Paperback)

This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1855 edition. Excerpt: ...by changing the currency in which payments were agreed to be made. Engagements between tenant and landlord, master and servant, debtor and creditor, were made payable in sterling coin. The Bullion Act makes these payable in notes convertible into ingots. So long as the value of the It. note remained at par with the sovereign no injustice was done, but this soon ceased to be the case. The Banks, conscious that the measure, brought about mainly at their instigation, was open to this grave objection, for a time continued to grant bills on the neighbouring colonies at par. While they did so their notes continued as valuable as sovereigns, but the demand for Bills on Melbourne for the purchase of Bullion, there selling at 21. 18&, soon exceeded the amount which the Banks could conveniently meet Bills on Melbourne rose to a premium, and thus immediately the currency in which contracts were redeemable in South Australia became depreciated in comparison with that in which they were entered into, and to the extent of that depreciation recipients under these contracts are prejudiced. The report of the Chairman of the Chamber of Commerce, before referred to, denies that any depreciation has taken place, using the following arguments: --"The best practical proof that our currency is not depreciated is to be found in the fact that Bank bills can be purchased on London at 5 per cent, discount; in other words, that lOOi. of our currency will buy a bill on London for 105V Now, as the Banks have been purchasing sovereigns at two and a-half per cent, premium, 100 sovereigns will purchase a Bill on London for 107A 10s., and the above argument falls to the ground. The fact is, however, undeniable, that sovereigns have for some time past been selling...