commercial relations and union between all the nations, on the only secure foundation of mutual interests.

The author has reason to believe that, the adoption of this suggestion by the British Government would be very gratefully received by the French Government at this time, when the whole subject is under consideration in relation to the Bank of France, also by the Emperor and a large and influential party in France, with the leaders of which the Author is in communication. This party, seeking to establish the Bank of France on the broad and liberal principles here laid down, and to which the Emperor is supposed to be favorable, comprises some of the most distinguished names connected with the trade and industry of that great Empire.

To keep money at a low, and as nearly as possible, uniform rate of interest throughout all the nations, must be conducive to the general prosperity of commerce, and to no countries in the world can the importance of this object be so great as to England and France. With these two countries united for this object, all other countries must follow. The two National Banks of England and France established on the same sound principles would, in effect, be like the establishment of one Bank for the regulation

and control of all the national Banks of Europe, if not of the whole of the civilised world.

As M. Isaac Pereire observes, the Banks act upon the rate of interest not only by the reunion, by the concentration of a gross capital destined to discount, but also by the employment of credit money.

Money is necessary to exchanges, since it is the common measure of all values, but money, as money, is steril capital, as land taken for railways is steril land, producing nothing by itself. The domestic uses for which the precious metals are used is another thing. Money, used as money, acts only as a medium in the exchange of products, and, as such, has no intrinsic value.

The capital that all society employs for this purpose is considerable, and it can be procured only by means of products of a corresponding value. Credit money costing nothing, and replacing in part this money, which represents effectively the value for which it circulates, there results from its employment a very great economy. Besides, credit money is much more convenient than coined money. Credit money acts, finally, in the service of the Banks as a powerful means for lowering the rate of interest, since it furnishes the means of discounting, almost without expense, the promises of industry. Credit money

is nothing else than the means by which the powerful credit of the Banks supersedes the obscure credit of the private houses. The bank note is nothing else, in effect, than the conjointly responsible representation of a certain number of bills of exchange.

The pretext for considering credit money as diminishing, by its mass, the value of the metallic money, and, consequently, as necessarily raising the price of all things, is a pretext completely devoid of foundation; it is only a paradox.

The credit money is, in effect, the equivalent, the representation exact of the real money, the value of which has nothing arbitrary, since it is only the expression of the cost of production of the precious metals, and that value is universally recognised.

The credit money postpones itself to the money of gold and silver; supplies and replaces it, and there remains in each country of the one or the other only that which is necessary for the wants of the exchanges.

The character of credit money augments with the development of affairs. Its employment is not unlimited, but it is indefinite. It is impossible to say, beforehand, within what limits it ought to be confined: it has no other limits than those of the development of affairs.

Credit develops itself at the same time, in a manner parallel, as much by the issue of notes as by the help of compensations at the clearinghouse, accounts current, cheques, etc.

In proportion as a nation enters more forward in the ways of credit, she has more recourse to the modes of clearing and compensation, which are, in effect, means of regulation very simple and very convenient. But the bank note is appropriate to all uses, to others even to which the cheque cannot be applied; it is employed as money of which it is the appendix. Thus, with a cheque, which represents only an individual engagement, you cannot easily buy all the things. which you are in want of, whilst with a bank note, which represents money, each can procure in all places all that is necessary for his wants.

The system of clearings or compensations ought not to hurt the development of the circulation of notes, nor will it diminish the use of money, the quantity of which augments every day. This system is in practice much more in England than in France; but, as affairs develop, this system must be more practised in France.

In England it is by a sort of compression that the use of cheques generalizes itself. It is in consequence of the adoption of the extremely restrictive system applied to the Bank of England

that the circulation of the notes has languished, and this restrictive system, from which commerce suffers, is the principal cause of the crises which occur almost daily in London. If we adopted more liberal ideas, the circulation of the notes would be developed, parallel with the use of the clearing-houses, in a considerable proportion.

In England it is the notes that want development; in France the clearing-houses.

But it is essential that credit money should be constantly convertible into real money. Without the control of money, there would be not only instability, but a continual degradation of prices, the depreciation of paper money being always produced in direct ratio to its multiplication. Money is for the Banks a counterpoise, an indispensable touchstone; it permits us to recognise if there be too much or too little paper. When there is too much, we naturally call it in, and the real level of the wants of circulation is immediately restored. We are thus sure that, with the constant convertibility of the bank note, there cannot be excessive issue. When there is not enough, you carry money to the bank to take out notes, or else you issue new notes with the same funds in the treasury. There is no excess, unless when the paper has a forced circulation, than which nothing can be more detestable.