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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.