LAISSEZ FAIRE
+ The expectations of Sir Robert Peel were soon to be
jut this did falsified, however; before three years had elapsed a very
pot prevent serious crisis occurred. This had not been brought about by
ence of over-trading and the inflation of prices; indeed it followed
th a period of commercial depression, which was chiefly due to
the vigour with which railway enterprise was taken up, and
she fact that the ordinary course of commercial transactions
was dislocated. In the autumn of 1845, 2,069 miles of
railway were opened, with a capital of £64,288,600; while
3,543 miles of railway were in progress, involving capital to
the amount of £74,407,520. Of course there was no im-
mediate return on this large amount of capital; it was for
the time absolutely sunk ; the investment of so much money,
in forms that were not immediately productive, had the
result of injuring many branches of industry, and depressing
commerce. In so far as the wealth devoted to railway enter-
prise was withdrawn from circulation in the form of wares, the
sffects were for the time being disastrous. The proprietors
had less means available to purchase goods. Capitalists
found that their sales diminished; they were unable to
replace their stock of materials, or to continue to pay wages,
until their stores of finished goods were realised; and a
general stagnation resulted? As Mr Wilson puts it.— Let
27)
word ‘a Pound,’ with which we are all familiar? What is the engagement to pay
» ‘Pound’? Unless we ars agreed on the answer to these questions it is in vain
we attempt to legislate on the subject. If a ‘Pound’ is a mere visionary
abstraction, a something which does not exist either in law or in practice, in that
:ase one class of measures relating to Paper Currency may be adopted ; but if the
word ¢ Pound,’ the common denomination of value, signifies something more than
i mere fiction—if a ‘Pound’ means a quantity of the precious metals of certain
weight and certain fineness—if that be the definition of a ‘Pound,’ in that case
nother class of measures relating to Paper Currency will be requisite. Now, the
whole foundation of the proposal I am about to make rests upon the assumption
‘hat according to practice, according to law, according to the ancient monetary
policy of this country, that which is implied by the word ‘Pound’ is a certain
lefinite quantity of gold with a mark upon it to determine its weight and fineness,
and that the engagement to pay a Pound means nothing, and can mean nothing
alse, than the promise to pay to the holder, when he demands it, that definite
quantity of gold. * * * We want only a certain quantity of paper, not indeed fixed
and definite in nominal amount, but just such a quantity, and that only, as shall be
rquivalent in value to the coin it represents.” 8 Hansard, Lxxrv. 723. 736.
\ Wilson, Capital, Currency and Banking, p. vi.
3 The doctrine that demand for commodities is not demand for labour, is often
stated in a form which neglects the necessity for the replacement of capital bv the
