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Pennington, James (17771862), writer on currency and banking, born at Kendal, Westmorland, on 23 February 1777, was the son of William Pennington, a bookseller, and his wife, Agnes Wilson. Educated first at Kendal grammar school, he afterwards became a pupil of John Dalton (17661844) of Manchester. Subsequently Pennington worked in business in London. In 1811 he married Mary Anne, eldest daughter of John Harris of Clapham; they had four sons and three daughters.
At the end of 1831 Pennington was appointed to investigate the accounts of the East India Company, but the appointment was cancelled when the administration changed. Thrown out of employment Pennington devoted himself to the study of currency and finance, and attracted the favourable notice of William Huskisson, David Ricardo, and Thomas Tooke. On Tooke's recommendation he joined the Political Economy Club in 1828; he also contributed appendices to Tooke's Letter to Lord Grenville (1829), and to his History of Prices (2, appx C). When, on the emancipation of slaves in 1833, it became necessary to regulate the currency of the West Indies, Pennington was employed for that purpose by the Treasury, and framed the measures which were adopted. In 1848 he published The Currency of the British Colonies, which was printed for official use, and which contains much detail of historical interest.
As early as 1827 Pennington had urged, in a paper submitted to Huskisson, the desirability of some restriction on the issue of notes by the Bank of England. He had further explained his views in a pamphlet addressed to Kirkman Finlay (1840). During the preparation of the Bank Act (1844) he was confidentially consulted by Sir Robert Peel. Though he accepted the principle of that legislation, he was not in entire agreement with Peel, and disapproved of the separation of the banking and issue departments of the Bank of England. From this time until his death he was frequently consulted by the government on currency and finance, on which he was regarded as a leading authority. He died on 23 March 1862 at his home in Clapham Common. His son Arthur Robert became canon of Lincoln and rector of Utterby, Louth.
W. A. S. Hewins, rev. H. C. G. Matthew
Sources
The Economist (19 April 1862) The Times (25 March 1862) A. R. Pennington, Recollections of persons and events (1895) J. R. McCulloch, The literature of political economy: a classified catalogue (1845) Archives
BL, corresp. with Sir Robert Peel, Add. MSS 4054340610 Derbys. RO, letters to Sir R. J. Wilmot-Horton
Wealth at death under £3000: probate, 1 July 1862, CGPLA Eng. & Wales
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THE ANNUAL REGISTER OF HISTORY AND POLITICS OF THE YEAR 1862
DEATH - March 23 At Clapham Common, aged 85, James Pennington, Esq.
We owe a tribute," says The Economist of the 19th April, " to the memory of the late Mr. James Pennington, a diligent and successful labourer in the field of political economy, who died at Clapham Common on the 23rd ultimo, at the advanced age of 85. Though well known to some of our readers, his pursuits were of too quiet and unobtrusive a character to attract general attention, and those only who were in intimate intercourse with him, and were enabled to watch bis useful career, could fully appreciate the extent of his information and capacity of mind.
"Mr. Pennington was in early life engaged in mercantile pursuits; but having been employed by the President of the India Board towards the end of the year 1831 in the investigation of the financial accounts of the East India Company, on the occasion of the abolition of its trading privileges, he shortly after gave up his private business, in order to accept an appointment under Government. This appointment was, however, cancelled in consequence of a change of Administration, and the accession of Lord Kilenborough to the India Board, who entertained different views from his predecessor on the subject.
"Being thus for a time thrown out of active pursuits, be gave himself up fully to the study of currency and finance. The science of Political Economy had, indeed, at a very early period engaged his attention, and the acquaintance with its principles which he had acquired had already obtained the favourable notice of Mr. David Ricardo and of Mr. Huskisson. When, therefore, he was enabled to devote a greater portion of his time to such subjects, those of his friends who took an interest in his investigations became impressed with the great extent of his information and acquirements. Among the foremost of these friends was the late Mr. Tooke, on whose recommendation he joined the Political Economy Club in 1828, of which he continued to be a member for 28 years, his resignation having only taken place in 1856, when he was in his eightieth year. It was through Mr. Tooke that his earlier contributions to the science were made known to the public. That author's letter to Lord Grenville on the Currency, published in 1829, contains in the Appendix a valuable paper by Mr. Pennington, which presented the first clear exposition of the principle on which deposits with bankers become the means of dispensing with other circulating medium, and affect, accordingly as they are used or abused, the general prices of commodities. This principle, which is the key to the refined system of credit reared in this country, was further elucidated by him in a communication to Mr. Tooke, which is to be found in the second volume of his 'History of Prices' (Appendix C, page 360).
The use of the expression 'deposit money', in illustration of this theory, placed Mr. Pennington in apparent antagonism with the more rigid advocates of the Bank Act of 1844, who contend that the word 'money' is properly applied only to coin and to bank notes which fulfil all the functions of money. But, in truth, the distinction is a mere verbal one. If the word 'money' is applied to any form of credit, even to bank notes, the attempt to define the limits of its application can only lead to fruitless controversy, quite wide of the real question at issue. Mr. Pennington was among the first to perceive the necessity for imposing a restriction on the issue of notes by the Bank of England, and stated his views on the subject in a paper submitted to Mr. Huskisson in 1827, extracts from which were published, in the year 1840, with a letter addressed to Kirkman Finlay, esq., on the probable effect of a moderate fixed duty on corn upon currency and prices.
"The views expressed by Mr. Pennington so early as 1827, contain the germ of the Bank Act of 1844; but, although he supported the principle of that Act, he was of opinion that the object could be accomplished without the separation of the Departments of Banking and Issue. Upon this point, and upon others connected with the measure, he was confidentially consulted by Sir Robert Peel during the preparation of the Bill, and the correspondence between, them shows the high estimation in which his opinions were held by that statesman.
"The pamphlet addressed to Mr. Finlay upon the Corn Laws was confined to a view of the question scarcely understood by the commuuity at large, and little calculated, therefore, to attract the attention of the ardent controversialists o£ the day upon that vital question ; but events have proved the truth of the conclusions which a calm review of the subject, uninfluenced by party bias, had led the writer to form.
"Previously to this period, the services of Mr. Pennington had been engaged by the Treasury for the important object of regulating the currency of the West Indian Colonies. It is well known that in all the British Colonies in America the local currencies, though expressed in the common denominations of pounds, shillings, and pence, became involved in confusion from incorrect attempts to adjust the value at which Spanish coins, the principal medium of exchange, should circulate in reference to the money of account. This confusion was greater in the West Indies than in the Colonies on the American Continent. Arbitrary valuations were assigned to the doubloon, in the vain hope of counteracting the effect of an unfavourable condition of the exchanges. With the same object, the gold coins in use were, in some of the Islands deteriorated by punching holes in them and filling up the vacancies with copper. 'Be these our doubloons!' they said, forgetting that the world would test there value, not by the name, but by the quantity of gold left in them. Broken dollars supplied the place of small coins under the terms of 'dogs' and 'bits.' The pound of colonial currency was greatly depreciated in all these Colonies, and in no island did the term ' pound ' express the same value as in the rest. A vain attempt was made by the Government in 1825 to correct these evils by a Proclamation, declaring the rate at which the dollar should be issued to the troops; but so unsuccessful was the attempt that at one time a mutiny was imminent on account of the depreciation of their pay.
"The emancipation of the negroes in 1837, and the consequent increased requirement for a sound circulating medium for the payment of wages, forced the subject on the attention of the Government, and the credit is due to Mr. Pennington of having framed under direction of the Board of Treasury, the measures by which the utter confusion which prevailed at the time was, in a short time, effectually removed, and the currency of the West Indies reduced to a system which, with trifling exceptions, has worked well up to tho present day.
" He was subsequently consulted in the regulation of the currency of the Colonies, and the result of his labours was compile in a volume, printed for official use in 1848, entitled 'The Currency of the British Colonies.' In this work Mr. Pennington clearly pointed out the causes of the mistakes which had previously arisen, from a want of reference to the changes in the coinage of different mints, and the gradual alteration which had taken place in the course of a century in the relative value of gold and silver. This clear analysis of the value of different coins, according to their ascertained contents of precious metals, and his exposition of the principles on which alone they can obtain concurrent circulation, will render this work a safe guide for all time to those into whose hands the settlement of questions connected with colonul exchanges and currencies may fall.
Mr. Pennington was consulted by the Treasury up to the time of his death on questions of this character. In spite of bodily infirmities incident to great age, he retained to the last his clear intellect ; and, but a short time before he fell quietly into his last sleep, ho drew up a report upon an intricate subject, which was distinguished by that clearness of exposition which characterized his writings in the days of his prime vigour.
"His style of writing was generally too deep for the instruction of those who are not acquainted with the fundamental principles of the science of which he treated; but to those who were able to follow his train of reasoning, his dissertations were of great value. He loved to test theory by practical results, and to build up from ascertained facts inevitable conclusions. Accuracy of thought and accuracy of analysis were his chief characteristics : invaluable qualities at all times, but mostly so when applied to a science in which apparently trivial mistakes may lead to fatal error. These qualities, joined with an amiable temper, led those who once communicated with him in confidence to continue to resort to him for advice; and it may be truly said of this unobserved old man, that, both as a private friend and a public servrant, he will be greatly missed."
Mr. Pennington married in 1811 Mary Anne, the eldest daughter of the late John Harris, esq., of Clapham, by whom he leaves issue four sons and three daughters.