APPENDIX B. RATE OF WAGES IN JAMAICA.* Abridged, with the exception of the last column, from the half-yearly reports of the stipendiary magistrates, published in " Papers relative to the affairs of the Island of Jamaica; presented to both Houses of Parliament, August 10th, 1854." These reports extend to sixteen of the twenty-two parishes into which the island is divided, and were drawn up in the beginning of 1854. Observations of Magistrates. People willing to work if sure of being paid. At the newly formed copper mines, earnings Is. 6d. a day. Day's work from five to seven hours. Wages of women, 9d. a day. Domestics earn from 3s. to 10s. a week. People unwilling to work and getting worse. (N.B.-Wages in the report are stated to be for mechanics, "per diem, from 6d. to 3s. a week.' The last word is introduced probably by mistake. The report is very brief, and drawn up apparently in a hurry.) " Labourers increase their wages by stealing what they can from their employers. More done for a day's work now than formerly. Supply of labour ample IS. IS. 9d. to Is. 6d. People prefer working the shortest time for which they can get 9d. or Is. The maximum paid for a day's labour is Is. By task work Is. can be earned by ten or eleven in the morning. (That Women earn from Is. to Is. 6d. per diem. See p. 242. Day's work but three or four hours. People set themselves against task work. No confidence between employers and men. Production of sugar paid for by the job, and yields more per day than Is. 6d. Labour scarce, but seems efficient as far as it goes. (In this report no particulars given.) & St. John IV. Sir Robert Peel's Bank Act of 1844 explained and defended.By W. Neilson Hancock, LL.D. [Read December 17th, 1855.] THERE are few acts of parliament more important in themselves, or which have given rise to more discussion, than Sir Robert Peel's celebrated Bank Act of 1844 (7 and 8 Victoria, cap. 32). I am anxious to take an opportunity of expressing my strong opinion in favour of the provisions of that act, and to explain at the same time the scientific grounds on which that opinion rests. The object of the act was to regulate the issue of bank notes. Its chief provisions are-First, That no new bank of issue was to be created after 1844. Secondly, All banks of issue then in operation, besides the Bank of England, were absolutely prohibited against issuing beyond a fixed amount ascertained under the act. Thirdly, That the issue department of the Bank of England should be separated from the banking department. Fourthly, The issue of Bank of England notes should be regulated by requiring all notes issued beyond £14,000,000 to be issued in exchange for gold. Now, in order to explain the effect of these provisions, and the policy on which they are founded, it will be necessary to state the scientific method of measuring the effect of any given issue, and then to apply this method to explain the facts that have been observed with respect to the Bank of England from before the Bank Restriction Act of 1797, to the enactment of Sir Robert Peel's measure in 1844. For this purpose, I have constructed a table which I will now proceed to explain.* The principle on which this table is constructed, is the dictinction between the total issue of bank notes and the portion of that issue which is really effective on prices. The total issue of Bank of England notes for fifty-one years, from 1793 until 1843, is given in millions in column No. 4, as stated in Mc Culloch's Commercial Dictionary; the total amount of bullion in column No. 5, as stated in the same authority; and these are the figures commonly used in discussions on the currency. It is plain, however, that the entire issue of a bank does not act upon prices, but that portion only against which no bullion is held. Let us take the case when a bank is first started in any country. Suppose the whole circulation of gold and silver in the hands of bankers, merchants, shopkeepers, and all other classes, whether hoarded or not, to be £50,000,000, and suppose a bank to issue £9,000,000 of notes in exchange for gold; if all the gold, as in the case of the old Bank of Amsterdam, was kept in the bank, such an issue would have no effect upon the quantity of gold and silver, or upon the circulation, and consequently would have no effect upon prices. If the bank proceeded, as the Bank of England does, to Ïend out the gold which it received in exchange for notes, to the extent say of two thirds, or £6,000,000, the effect of such loans * See Table on next page. would be to increase the circulation by that amount; the notes having supplied the place of the gold received by the bank, the gold now issued would be an increase to the circulation. This increase would cause a local fall in the value of gold, and a local rise of prices; as the notes could not be exported, the gold would be exported, and the circulation would permanently settle down at its original amount, only there would be in all £6,000,000 less of gold and silver in the country. In short, a very slight consideration of the matter will satisfy any one who thinks of the subject, that it is only those notes for which no gold is held by the bank that really displace gold or really act upon prices, and it is that portion of the issue that I propose to call the effective issue. If the Bank of England had held no deposits from 1793 till 1843, the effective issue might be calculated at once, by deducting the total bullion (column No. 5) from the total issue (column No. 4). But the bank held large deposits, varying from £4,000,000 to £13,000,000, during that time; to meet which they should, according to sound banking principles, have held bullion to the extent of one third the amount of the deposits. As there was no separation of the banking and issue departments of the bank, we have no return of how much of the bullion was held to meet deposits, and how much was held to meet issue. In order to calculate the effective issue of the Bank of England under such circumstances, I have resorted to a very simple hypothesis. I have taken one third of the deposits, as stated by Mr. McCulloch,and set this amount out (column 6) as the amount of bullion that was held, or that ought to have been held, by the bank to meet deposits; where the total bullion in the bank exceeded this amount, I have set out the excess (in column 3) as the quantity of bullion held against the issue. Then, by deducting this part of the bullion (column 3) from the total issue (column 4), I have calculated the effective issue (set out in column 2). Having thus explained the principle on which the table is constructed, I proceed to notice the conclusions indicated by the table: The first conclusion indicated by the table is the extraordinary increase of the effective issue of the Bank of England during nearly the entire period of the operation of the Bank Restriction Act. That act was passed in 1797, and continued in force until the restoration of cash payments, adopted by the bank in 1821, under Sir Robert Peel's act of 1819. From 1793 until 1799, the effective issue of the Bank of England ranged from £6,000,000 to £10,000,000, and was on an average about £9,000,000; from 1800 until 1808, the effective issue ranged from £13,000,000 to £16,000,000, and was, on an average, about £14,500,000, being an increase of 50 per cent.; from 1809 until 1816, the effective issue ranged from £17,000,000 to 27,000,000, and averaged about £23,500,000, being an increase of 60 per cent. From the minimum of £6,000,000 in 1794, to the maximum of £27,009,000 in 1814, there was an increase of 350 per cent.; from 1817 until 1820, the effective issue ranged from £19,000,000 to £23,000,000, and gave an average of £21,000,000, showing a fall of 10 per cent.; from the restoration of cash payments in 1821 until 1843, the effective issue ranged from £9,000,000 to £25,000,000, and the average was about £14,000,000, being a fall of 33 per cent. The small quantity of gold held by the bank is no less remarkable, as will be at once perceived by comparing column 3 with column 2. There is one column (No. 1) of the table which I have not hitherto explained; it is the average depreciation of the currency during the Bank Restriction Act, as stated by Mr. McCulloch in his Commercial Dictionary. This is calculated from the price of gold as estimated in paper currency. Its price, which with a gold standard could not change, rose from £3 17s. 10d. per ounce, to £5 4s. per ounce. The connection between the depreciation of the currency and the state of the issue of the banks is so completely established by the report of the Gold Bullion Committee of 1810, and which may be taken as a model of the application of scientific principles to a question of statesmanship; and by Mr. Huskisson in his celebrated pamphlet, "The Question Stated," that I will not enter into any argument in favour of one of the best established truths of economic science. A comparison of the column of depreciation of the currency (No. 1) with that of the effective issue (No. 2), illustrates the coincidences which we would expect to find of an increase of the depreciation consequent on an increase of the effective issue. There are, however, some apparent anomalies in the fluctuations of depreciation, which this table does not enable us to explain. For a complete account of the depreciation of the currency during the Bank Restriction Act, we ought to have the effective issue of the country banks as well as that of the bank of England, so as to have the total effective issue in England. We ought also to have some estimate of the gold and silver used as money. Unfortunately we have no accurate statistics except what relates to the Bank of England. There can, however, be no doubt that the number of the country banks and the total amount of their issue increased in a remarkable manner during the Bank Restriction Act. The Gold Bullion Committee estimate an increase of £3,000,000 in one year, 1809-10, as great as the Bank of England in the same year. It is equally certain that the issue of one pound notes by both the Bank of England and the country banks, after 1797, drove gold out of the country. It is also well known that it was the destruction of the country bank paper and the purchase of gold by the Bank of England in 1817 that reduced the total amount of the currency, and nearly put an end to the depreciation. The state of the country circulation is thus noticed by M'Culloch : "At the period when the restriction of cash payments took place in 1797 it is supposed that there were about 280 country banks in existence; but so rapidly were these establishments multiplied, that they amounted to above 900 in 1813. Prices sustained a heavy fall in the latter part of 1813 and the beginning of 1814; and this fall having ruined a considerable number of farmers, and produced a |
