and were in various stages of construction. During the same period our capitalists, curtailed in their interest at home, had entered into a vast speculation in North American securities. The usual results followed: the money was spent. Interest rose; the principal American merchants could not realize their securities, and stopped payment. Then came the struggle between money for temporary and recurring purposes, and money for fixed investment; railways attempted to carry on their works by the issue of preference shares and other irregular securities. Crisis, panic, and everything that everybody ought to have expected ensued. But instead of this, everybody wondered how it could be. It was not one-pound notes-it must be either the Bank of England or joint-stock banks. The Chamber of Commerce in Manchester said it was all the Bank of England, and demanded a parliamentary commission, and to be allowed to give evidence before it. And they did give evidence, in pages almost interminable; and they said that the Bank of England sported with their property, and made them richer or poorer by millions at its pleasure. And the Scotch bankers gave evidence, and the English bankers, and the Directors of the Bank of England, and Mr. Muntz, and Mr. S. Jones Loyd, and Mr. Page (a pet, we believe, of Mr. Joseph Hume's), and Mr. Thompson. And all the great men attended diligently-six present and past, and perhaps two or three future, Chancellors of the Exchequer. Then there was much wise discussion in the Commons. Sir William Clay we think (if we wrong the honourable Baronet we beg his pardon) discovered that the evil arose because there was no king in Israel: every man did that which was right in his own eyes.' The remedy was to have only one bank of issue. The present Chancellor of the Exchequer said that the joint-stock banks re-discounted their bills; and we believe he repeated this statement with much horror in the last session of Parliament. Much wise care was expended on the bullion in the Bank of England and on the foreign exchanges; returns were invented so minute that they would let us know almost from hour to hour what the Bank was doing; and many sage fears were expressed; but almost by a miracle the law escaped alteration. In five years, while we were busying ourselves with other things, as if by magic, the bullion in the Bank of England was fourteen millions, and the interest of money was from three to two per cent. And what was going on elsewhere? Brother Jonathan, troubled with no vested interests or residential cases, had in his cursory way completed 1000 miles of railway. Every nation on the continent was astir. British patriots were alarmed, and British statesmen advised the straight course and turned the first sod. Great bankers and capitalists

capitalists appeared as chairmen and directors of various lines of railway, and as projectors of others. From this moment reserve and caution were abandoned, and the cry was, The devil take the hindmost! A provisional committee, an ordnance map, and a straight-edge were all that was necessary for laying down a line of railway. Everything came out at a premium. The discreetest, the wisest, the richest, the most noble, sued to men of straw for allotments of shares, in terms the urgency of which would have astounded the independent, and, when refused, expressed their resentment in terms which would have shocked the polite. doubt it was very provoking to have demeaned oneself to such people, and to have got nothing by it.

No

Next came the demand for food. We spent our money, and we know all the rest. Indeed, we are playing the return game at this moment.

Hitherto we have spoken only of the increment and decrement of realized, but floating and unfixed, capital; but another element enters too largely into the value of money to be overlooked. In this country an always large, but very variable, amount of credit is used as capital; and its fluctuations are probably more ope rative in stimulating the very high and very low values of money than the more regular movements of realized capital. This credit is, in fact, an anticipation of capital, a using of capital before it is created. It is probably capital in course of creation, and with respect to which there is at the time good faith that it will be created. By certain mercantile and money-broking manœuvres this anticipated capital is enabled to liquidate engagements for which realized capital must otherwise have been employed, and for which the requisite amount must have been constantly kept floating. Perhaps instances, similar in principle to those with which we have unhappily become too familiar, may explain this more clearly than any mere attempt at abstract description.

The great house of Bamboo and Co. trade with the East Indies, and the great house of Cockleshell and Co. with the Mauritius, being much engaged in indigo and sugar respectively. Each house keeps a loose 50,000l., in order to insure regularity and ease in the conduct of its business. This money it employs in short investments, having it always within reach in case of emergency. Of course, when money is abundant, short investments give a low rate of interest, perhaps 1 or 2 per cent. several years previous to each of the years 1825, 1835, and 1845, bills of lading, or some certificate of produce en route from distant parts of the world, or the six months' acceptances of great houses in London, were cash in Lombard Street on some moderate terms:

For

the

the rate of discount might vary per cent. from month to month, or at shorter intervals; but somewhere within 5 per cent. they were always cash. In the course of business such documents came regularly into the hands of B. and Co. and C. and Co. While matters stand thus, some great indigo-planters come to B. and Co., and say, 'We are prepared to offer to you our agency, but we expect that our agents should advance us 50,000l. You will always be amply covered by goods. The interest on the 50,000l. will be 5, or 6, or 8 per cent., according to the rate which money may bear in India at the time; and the profits of the agency are very large.' The offer is tempting. On one side is 15007., which the 50,0007. may make by short investments; on the other is 40007. of interest, many thousands of commission, and a new connexion. But B. and Co. possess no money except the 50,0007. hitherto employed for the ease, convenience, and regularity of their business. With many resolutions to establish forthwith a reserved fund to replace the 50,000l., they hand over that sum to the indigo-planters, and carry on their previous trade by raising money on their documents and long-dated bills. Things go on smoothly, and they do establish a reserved fund; but almost inevitably, before pressure begins to be felt or even suspected by them in London, they find how much more advantageous it will be that the reserved fund should follow the 50,0007. than that it should remain in England. We need not pursue the similar course of C. and Co. in the Mauritius. Their capital is fixed, and the squeeze comes: the lenders are fewer and daintier, the borrowers as numerous and more urgent than before. First the doubtful names, and then the long bills, are thrown out. There is not money to be lent for every one who wants to borrow. Documents and six months' bills are no longer cash on any terms. Neither they nor the indigo and sugar plantations will liquidate mature engagements; and our friends B. and Co. and C. and Co. are compelled to stop payment. In this instance we see, first, how credit is admitted in times of ease to act the part of realized capital; and, secondly, how in times of pressure it is expelled.

We have thus cursorily touched on the main facts of the three great pecuniary crises, and find in them all the same marked features: the patient exhausted by the late attack; great caution and timidity; a coyish abstinence from extraordinary enterprise; consequent accumulation of loose capital; the struggle which drives down the rate of interest; the general rebellion against the low rate; much wise investment which yields an adequate return, but which is eventually driven into the background and obscured by reckless speculation. Then come money spent and gone; the

mortal

mortal struggle for the use of what remains; diminished production; private ruin; a falling revenue; and other national evils.

How easy it would be to put on paper a nice scheme by which all this fluctuation and evil should be avoided-by which, as accumulation took place, leaving enough loose capital to keep the market healthy, the accumulation should every year be profitably expended and fixed; railway A should be made this year, and B next; docks and harbours the third, just as the accumulation of capital permitted; and so, everything in its turn, till we come to the canal through the isthmus of Darien, and the railway from Cairo to Suez. Well! cannot this be effected? From time to time the Legislature has been of opinion that it might-from time to time it has passed bills having that object--from time to time the authors have assured us, with the utmost confidence, that the object would be obtained. We have no wish to remind any gentleman, who may survive, of his childish ignorance and opinions; but the matter is recorded, and it is of importance now to remember, that, when one-pound notes were cried down, those who were then esteemed greatest and wisest expressed the strongest conviction that, with a metallic small circulation, and a fixed gold standard, pecuniary fluctuations would altogether cease.

We always feel some sentiment for one-pound notes, because subsequent events have shown that they were totally innocent of all the grave charges which were brought against them. We can produce evidence solemnly delivered, and statements deliberately printed, and great names attached to each, to declare that onepound notes brought this great empire to the verge of ruin. We do not want to extenuate their failings, nor to determine in what proportions any evils which resulted from them should be apportioned between banking and law. We remember that no one defended them; and we believe that with the great body of the nation their vulgarity stood much in their way-a one-pound note issued by a grocer, and smelling of tobacco and figs, usurping the King's prerogative!

The standard having been fixed, and one-pound notes removed, nothing else quite so prominent remained. But, as money still continued its vagaries, something else must be tried; and we think the next discovery which was adopted by the Legislature was that perfect publicity must make us secure. Of course there was much opposition. The same stupid and humbug policy of secrecy and concealment, which has brought so many joint-stock banks into trouble, had many advocates. But common sense and publicity prevailed: partially at first-averages, and returns of a preceding quarter-then of a preceding month-and now, we think, of the preceding week. We believe Mr. Joseph Hume contends that

every M.P. ought to have a full account of the Bank of England transactions of the preceding day laid on his breakfast-table.

We have a perfect right to make useful publicity a condition of the charter which we grant to the Bank of England; and in this case we have a good security for correctness. Where you have no security for correctness, publicity-that is to say, returns professing to give publicity-may be more doubtful. The Legislature generally does harm when it professes to people that it is protecting them, not really having the power to do so. But let that pass. All we say of publicity is that it has not prevented speculation, nor panic, nor very severe pecuniary pressure. Let us not omit to mention that several very absurd and pernicious restrictions on banking have been removed, though others have been permitted to remain.

Then we come to 1844, and the last great remedial measure— a measure passed neither in haste nor in adversity-matured by counsel-sustained by numbers-as it seemed, a measure for ages -and certainly urged on, more than any other philosophical measure we ever knew, with all the insolence of assured success. Of this measure we have declared our opinion in a previous Number; we do not now wish to say much. In the first place, we could not rediscuss it without getting into the question of currency, which we have carefully avoided, and we hope with advantage to our argument; in the next place, this bill is probably passively abandoned. When a minister of the Crown applies for a committee on a very important bill, which was passed only three years before with his full concurrence, it looks very like abandonment. This we may say, that the bill did not prevent atrocious speculation, panic, crisis, private calamity, or public loss. Now we are going to try again. Our rulers must suppose that there does exist somewhere a remedy for pecuniary fluctuation, and they are going to fish for it in a parliamentary committee.

After all this publicity-after returns from the Bank of England-how much gold bullion-how much silver-how many notes-where they are-public securities-private securitiespublic deposits-private deposits-rest: in short, a weekly balance-sheet and taking of stock ;-returns from joint-stock banks and private banks-how many notes and how much bullion—and a weekly summary in the Times, showing the increase or decrease of every article since the last return, and since the corresponding week of the previous year—and a statement, weekly or oftener, in the Times, showing to a minute fraction how much dearer or cheaper gold is in London than in New York, Hamburgh, or Paris: after a public exposition, to a degree quite unprecedented, but vouched by public accountants, and tested by open meetings,

of