And who ever found any difficulty in converting his notes into gold to any amount, since notes were payable in gold?

When has the Bank of England note been of less value than the sovereign?

At no time has the sovereign been preferred to the bank-note, since it was made payable in gold on demand.

The Banking Department of the Bank of England has often been severely pressed to supply the demands, but the difficulty has always been as much to find the notes as the gold, and to the public it was a matter of indifference which of the two they carried away.

The greatest run ever made on the Bank of England was in 1825, and then it was saved from. stoppage only by the accidental discovery of one million of unburnt one-pound notes. These were eagerly taken by the public, so perfectly, at that momentous crisis, was the note held equal to the gold. Great authorities say that, the bank-note was then in imminent peril, but on what ground they say so does not appear, for the very reverse was then proved to be the truth.

Since 1819, the Bank of England note has never been exposed to the slightest risk of depreciation.

This fact, proved by experience, is confirmed. by science.

We see and know that the solvency of a responsible issuer is a complete and sufficient guarantee for convertibility.

We accept the evidence from experience, that the Bank of England and the Bank of Scotland have been solvent and responsible issuers, and have furnished practical and trust-worthy security for solvency and convertibility.

The Bank of England, when so near a stoppage in 1825, was then, and always has been, solvent.

It wanted then, what it accidentally found, the notes. These it has often wanted since, but if it had found them since, the Act of 1844 would have rendered them useless.

The radical defect of this Act is that, it prevents the means of supplying the want. It secures a solvent and convertible currency, but that was secure before.

The machinery of the Issue Department has secured solvency and convertibility, which were already secure; but it has, on several occasions, spread insolvency throughout the kingdom, and has retarded the progress of the greatest commercial country in the world, by an undue and wholly unnecessary restriction of the circulating

medium, thereby enhancing the price of money and lowering credit.

Lord Overstone says:-"It is the universal law of human affairs that every good must be purchased at its appointed price, and no country can expect to enjoy the double advantages of a currency regulated by a fixed metallic standard, without submitting to the occasional inconveniences and pressure which are the indispensable means for accomplishing that end."

This long sentence begins and ends with a simple truism.

The appointed price, and the indispensable means, constitute the question, which Lord Overstone seems to think he has answered by a general truism. This is the more strange when compared with his explanation of the object of a paper-circulation, before given in his own words.

It will be shown that, the occasional inconveniences and pressure are not the appointed price of a paper-circulation regulated by a fixed metallic standard, if properly regulated, and that, when the occasional inconveniences and pressure do occur, the fixed metallic standard will be in no manner the cause.

With regard to the separation of the Issue and Banking Departments, Lord Overstone says:

"The only object of the proposed separation of the departments of the Bank of England is, to obtain an effectual security for the regulation of the amount of the paper-circulation of the country. in correspondence with the fluctuations of the bullion, such regulation being deemed essential for the certain maintenance, under all circunstances, of the convertibility of paper issues and specie."

The true answer to this is that, it is the business of a Bank that administers a paper-currency in exchange for gold, or in lieu of gold, to have no other end in view than that of preserving its paper strictly, correctly, and invariably, upon a level with the value of gold.

The separation of the departments of the Bank of England can never obtain an effectual security for the regulation of the amount of the papercirculation of the country in correspondence with the fluctuations of the bullion.

Experience was not required to show the fallacy of Lord Overstone's extraordinary assertion, the more extraordinary when made by a banker of his experience.

The fallacy has been already shown in the actual fluctuations between Bank of England Notes and Bullion; but when the amount of the paper circulation of the country is brought into

the question, it is difficult to find words to express the astonishment at such a statement as this by Lord Overstone.

Sir Robert Peel, as Chairman of the Parliamentary Committee of Inquiry on the Bank Act of 1844, said:-"I anticipate from the adoption of this measure a less fluctuation in the amount of the circulation-a less fluctuation in the range of prices; but I am not so unreasonably sanguine as to suppose that it will put an end to all speculation, and to all miscalculation in commercial matters. . . . We can prevent an additional stimulus being given to a rise of prices, and undue speculations by the influence of an ill-regulated currency, and this it is the duty of the legislature to attempt."

These anticipated effects have been in no way realised. The fluctuations in the amount of the circulation have not been less; nor have the fluctuations in the range of prices been less; but in both cases greater.

It is not the duty of the legislature to attempt to influence prices by regulations of the currency, nor is it possible to do so by any such means. Prices must necessarily vary according to the relative supply and demand, and can be in no way affected by the amount of notes in circulation. All experience confirms this principle.

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