make. Where the issue of them is free, it is absolutely certain that their amount will greatly exceed the amount of gold and silver coin that But the universality

ever would have circulated. of this Witness' assertion is fatal to his argument in other ways. On the Continent silver is the legal standard of value. In Great Britain silver, like copper, is merely coined into small tokens, called shillings, etc., which are made to pass current above their intrinsic value, and are only a legal tender for a very trifling amount, hence it cannot be used in the adjustment of all transactions, therefore it is not received equally at "all times, between all parties, and in all places:" therefore, it is not Currency.

There are other countries where Gold is not a legal tender, therefore it fails to satisfy Lord Overstone's test, therefore, gold is not Currency.

It is easy to see that there is no substance, or material whatever that will not fail under this test, and therefore, there is no such thing as currency.

The fact is, that the only difference between a Bill of Exchange, and a Bank Note is, that the former is a promise of a deferred payment, and the latter that of an immediate one; and there is less risk in taking the latter than the former. From these circumstances a Bank Note possesses

a greater degree of circulating power than a Bill of Exchange. To all those who hold the doctrine that Bills of Exchange are not currency, or circulating medium, the answer is short and simple-that even if the allegation were true, it is nothing to the purpose, because it only goes to show that there are different species of currency, or circulating medium, some of more eligible descriptions than others. But the allegation is not true, and the fallacy and absurdity of it are here shown. To prove the entire fallacy of Lord Overstone's doctrine on this subject;he maintains that only Promissory Notes payable on demand are currency. But would not Notes payable one day, one hour, or one minute, after demand be currency? Are not Bank Post Bills, payable seven days after sight, currency Where is it possible to draw the line? The same argument applies to one month, two months, three months, or any longer period. The answer is clear, that they are all species of currency, though differing in degree, and the distinction between them is untenable.

But though Lord Overstone's criterion of a Currency be fatal to his own view, what would he gain by it if it were admitted? For, what is it that exists in all places, in all times, and among almost all persons?

The answer is-DEBT OR SERVICES DUE.

And what is it that is universally required to measure, record, and transfer them?

Some material.

But we see that all Currencies are more or less local, none are universal. The idea, or want, alone is universal. The notes of a Country Banker, only circulating in his own neighbourhood, are like a country patois; each district has its own. A national currency rises to the dignity of a language. But even that is only local on a larger scale. The ideas only expressed in the language are universal. The only true idea of a Currency is, that it is the-REPRESENTATION OF TRANSFERABLE DEBT; and that, WHATEVER REPRESENTS TRANSFERABLE DEBT IS CURRENCY.

All persons, except those who advocate an inconvertible paper currency, agree that a paper currency must represent some article of value, and bullion has been generally chosen for that purpose. Now, the idea has occurred to a great many persons, that if it be necessary only that a paper currency should represent some article of value, why should it not represent any or all articles of value, such as Land, Corn, Silk, or any other commodity, and among others, the public funds? And this has actually been tried

in several instances, yet they have universally failed, and in many cases have been attended with the most dreadful calamities. Now, as this has uniformly happened, and must happen, it necessarily follows that there must be some radical error in the principle, and that it must must oppose some great law of nature.

And this is, beyond all comparison, the most momentous problem in political economy :-Why is it improper to issue a paper currency on any other basis than that of bullion ?

All the most eminent British Statesmen have instinctively resisted such proposals, although repeatedly pressed to do so. No doubt, it has been a most fortunate instinct for the country; but certainly all their reasonings on the subject have not followed their instinct.

The Bank Act of 1844 was the first occasion on which a small bit of this fatal theory was introduced, which, if only followed out to its legitimate conclusion would reproduce in this country the horrors of the Mississippi scheme in France. But though the British Parliament, by a blind unreasoning instinct, has always, with the exception just named, resisted such fatal advice, this will not satisfy the demands of Science. This was the error which brought the name of John Law into such unhappy notoriety, about 160

years ago.

is now the

He was the great advocate of what popular cry-basing a paper currency upon any article of value besides bullion. The only difference between him and our greatest statesmen is, that he carried out their arguments to their legitimate conclusion. He had the opportunity of carrying this theory into effect, and the result was ruin.

This has been so fully and clearly shown by Mr. Macleod, in his admirable work on "The Theory and Practice of Banking," etc., that it is only necessary to refer to that work,* from which these remarks on Currency are, for the most part, abridged. As the same writer adds:-" A moment's consideration will show that the theory of basing a paper currency on commodities involves this palpable contradiction in terms, that one can buy commodities, and also have the money

as well."

The origin of the Public Debt of this country was Bank of England Stock, which was advanced to the Government, in consideration of privileges conferred, and as these advances were made from time to time, increasing the Public Debt to the same amount, the Bank was allowed to issue notes to the exact amount of its capital, i. e.

"The Theory and Practice of Banking." By Henry Dunning Macleod, Esq. Longman and Co. 1855.