new arrangement might be made, which would present a metallic basis of intrinsic value, payable on demand, but at the same time would leave the currency governed, as to its quantity, by the real wants of the community, and not by the forced par of the Mint and Market price of Gold.
Two plans suggest themselves. The first is, to make Gold Coin circulate at the market price of Bullion,—the prices to be fixed from period to period at the Royal Exchange—the duration of each period to be limited, as may be found adviseable, and the prices to remain fixed during each period.
The second is, to enable the Bank to pay in Bullion all demands for exchange of their Paper if above the sum (for instance) of £.25, at the market price of Gold.
Bank Notes should circulate as at present, representing Gold Coin, at the standard of 3 l. 17 s. 10½ d. per ounce, which is the legal standard, and which they were issued to represent, and do represent.
By either of these plans, the Bank could always afford to supply themselves and the public with any quantity of Coin or Bullion, because they could not lose in the purchase.
And the necessary quantity of circulating medium could be always measured by the criteria above stated, and which are now acted upon; and would not be restricted by the absurd necessity of contracting or increasing the issues of Bank Notes, by the variations of price in one single commodity.
The first plan would be most agreeable to those who wish to re-introduce Gold Coin into circulation.
The second, to those who prefer a Bank Note circulation founded upon a basis of intrinsic value, payable on demand.