What his

Has it saved the country from the sufferings of a commercial and monetary panic? Would it have saved the Bank of England itself from suspension, if we had supposed that still another five millions (as we might properly have done) were called for to pay for food? Certainly not. lordship proposes is not a remedy, but a palliative; a partial and futile effort to control the issues of a mixed currency, in such a manner as to prevent mischief. That never has been done; and in the nature of things never can be. If the Bank of England is permitted to issue £14,0 ›0,000 of credit currency, without a shilling for its redemption, man cannot "regulate" its operations in such a way as to save the public from harm. The probabilities of mischief may be lessened; the force of a great panic may be broken; but come it will in spite of the act of 1844, or the most faithful discharge of "the one duty" on which the Rt. Hon. gentleman relies. A "short crop" is the constant terror of England, as we all know; and the price of consols rises and falls with the indications of the barometer: rather a curious fact, and very suggestive-a currency which depends upon the weather!" But we need suppose no famine, or war in India, or any great calamity, to bring about an explosion of the mixedcurrency system. The experience of the United States during the year 1857, is a case in point. In the midst of apparent prosperity, with an immense crop of all agricultural productions coming forward, with every department of manufactures in full and successful operation, the currency broke down by its own weight. It fell though no one touched it. Yet the banking system of the United States was being conducted in strict obedience to law, and was in the natural exercises of its legitimate functions. Such a currency will collapse periodically, in virtue of its own inherent weakness.

How, pray, could his lordship's principle have saved the mixed currency of the United States from explosion in 1857? He says that "banks must contract their circulation as they lose their specie." Very well; that was just what the banks of this country did. Their circulation at the commencement of the demand for specie was about two hundred and fourteen millions, and they contracted it to about one hundred and fiftyfive millions as fast as possible. The banks of Massachusetts alone had out twenty millions of paper, and they took it in at the rate of a million a week. Did that save them? No; but it ruined their customers by thousands. And finally, banks and customers suspended together! But they did all that his lordship requires. He may say in reply to this, that they did not commence the contraction in season; and were therefore obliged to contract with too great rapidity. But how were the bank managers to know -how can they know-unless they are omniscient, when the precise moment arrives to begin the contraction?

The mixed currency of England is essentially the same as that of the United States. It is better managed, and better regulated by law, than ours, we admit; but that which England experienced in 1847 and 1857, she is to experience hereafter, in a degree more or less severe, with every alternation of her mixed currency. AND ALL FOR WHAT? To allow the stockholders of its banks to realize an extra profit by issuing some twenty or twenty-five millions of paper money, without any specie on hand to redeem it with! For that poor, paltry pittance, England is to be kept in continual ferment; her markets disturbed; her standard of value vitiated; and her industry alternately stimulated to madness, or paralyzed by stagnation. Can that, Lord Overstone, be economy?

Of what consequence can this one million (or more truly half-million) of pounds, which bankers may realize in the shape of increased dividends, (if they don't lose too much by the failures which their own contraction of the currency has caused,) be, compared with the total income of all the agriculture, commerce, and manufactures of England? And yet, in a single year its trade and industry may suffer more loss than the whole amount of credit currency circulated in the United Kingdom!

Why will the intelligent capitalists, merchants, manufacturers, and landholders of Great Britain suffer such a monstrous nuisance to exist? Not, certainly, because it is an evil which cannot be removed, for but a slight revolution in the currency of England would be necessary in order to give her a sound, pure currency, instead of an unsound, mixed one. Let us look at it for a moment. The general average amount of credit currency we have assuined not to exceed twenty-five millions. Then it would require but twenty-five millions of gold, in addition to what the banks of the United Kingdom ordinarily have, in order to make the whole currency metallic. Would it be very difficult to obtain that amount of bullion? How much gold does England get from Australia every year? Some twelve millions, we believe. Then, at the utmost, it would require the products of her own mines for only about two years to furnish a solid substitute for all her credit currency. Suppose, for example, that Parliament should, in accordance with the principle of the act of 1844, provide that the "authorized circulation" of the Bank of England, and the other British, Scotch, and Irish banks, should be diminished to the extent of twelve-and-a-half per cent annually, for eight years. At the end of that time, there would be a perfectly sound currency, and it would have required only about three millions, or one-fourth part of her Australian product; the other three-fourths flowing off in other directions.

We will not even venture to suggest what the British Government ought to do; but we may, without great impropriety, present our views of what might be done.

The Bank of England, it is well known, has no "available capital,” and never has had any since it was chartered. All it ever loaned to the mercantile community was its credit, if we except a small amount of accumulated profits. All the assistance it could ever give the business world was by loaning its notes, promising to pay specie, which it did not possess, or the deposits which individuals or the government had left in its charge. This is a striking fact, and one very little realized by the public generally. And what is true in this respect of the Bank of England, is true to a great extent of all other banks in the nation.

Now, the great difficulty in the way of the reform we propose is, that the banks really possess but little available capital to invest in gold, and could only obtain it by selling their government securities. This they might do gradually, and thus secure the required amount of bullion. But this would not appear to us to be the best way to accomplish the result. We regard it as an excellent feature of the English banking system, that it rests so much on the credit of the government. gives it prestige and strength, and should be retained. How, then, shall the banks be able to keep up their needful circulation, and yet have all that circulation based on an equal amount of bullion! We reply, by increasing the capital of the banks. Suppose that the act of Parliament, which provided for the decrease of twelve-and-a-half per cent annually

This

of the credit currency, should also provide that the Bank of England, and all other banks, might increase their capital to the same amount, they decreased their authorized circulation. We apprehend that such an increase would be entirely feasible; that the stock would be taken up, as fast as offered, at very considerable premium to the banks. There is, surely, no want of capital in England. A nation that can subsidize half Europe, and loan its money to everybody; good, bad, and indifferent; that can supply Russian, or Spanish, or South American loans; build railroads in France, and hold American stocks, as it does, (according to a late Parliamentary report,) to the. amount of $400,000,000, can certainly raise without much difficulty twenty or twenty-five millions sterling for her banking system; and, if so, there can be no obstacle to the carrying out the plan we have suggested. It is quite preposterous to question that England has sufficient available resources to afford a sound currency, and equally preposterous that, with her mighty commerce, she should have any other.

If it should be asked at this point, in the form of an objection, how the Bank of England could make satisfactory dividends if she issued no credit currency? we reply, our present purpose is not to show in what manner banks can make the largest profit, but how injurious to the interests of society a mixed currency is, and how easily it may be got rid of; nevertheless, we will say, that if the Bank of England should get the current rate of interest on all the loans of her real capital, as she most assuredly would; and also on all the loans she was able to make on her public and private deposits; and also her usual annual allowance of £130,000, (if we recollect aright,) for managing the national debt; and such other pay for services performed for the government as might be just and proper, although her stock might not be 100 to 150 per cent above par, it would nevertheless, if offered in market, command what, on this side the Atlantic, would be regarded as a very high premium; so that England would not be without a national bank, because such an institution was not sufficiently profitable, even if she issued no notes, for which she had not a full specie basis. The bare premium which its stock would command, even under the circumstances we have supposed, would, we conjecture, amount to a sum larger than the largest private fortune ever accumulated in the United States.

Again; it may be urged (and such a plea would have greater force in England than in America) that the Bank of England especially, has acquired prescriptive, or vested rights, and that these must not be interfered with. If it be true that the bank has rights paramount to the rights of the British people-if, to gain enormous dividends for a few bank stockholders, the whole commerce of a great empire must be kept in perpetual disquietthen indeed, we must give up all hopes of a reform. But we have too much confidence in the justice of the British government, and in the good sense of the British people, to suppose that such a plea would be admitted. There are too many precedents in English history, in which the rights and interests of the many have been recognized as superior to the claims of the monopolizing few, to leave room for fear that any successful opposition can be made upon such grounds. We recollect, too well, the incidents of the great struggle in which the corn laws were abolished, to have any doubt that if the people of England demand a sound currency, they will have it.

The British Parliament is, traditionally, "omnipotent." It can, we are sure, do anything that is right, which the people demand.

But it may be asked, why should we interfere? "Physician heal thyself." We reply, that we think we have good and sufficient reasons for doing so.

1st. Because the mixed-currency system, now so prevalent and pernicious, originated in England in the establishment of her great bank, July 27th, 1694. Prior to this, there had been banks, but no successful mixed-currency banking. This bank, although it made its first suspension within four years of the date of its charter, resumed and went on for a century, gradually increasing its capital from £1,200,000 to about £11,000,000. On the 27th of February, 1797, at a time when it had acquired vast prestige and power, it again stopped specie payments, and remained in a state of suspension till May 1st, 1823, twenty-four years, two months, and three days.

Notwithstanding the vicissitudes through which it has passed, and enormous mischiefs it has inflicted on the commerce and industry of England by its credit currency, it has, on the whole, been eminently successful as a banking institution, and may justly be regarded as the parent of all other mixed-currency banks.

2d. Another reason we give, is, that England is the center of the mixed-currency system; that her power over it throughout the world is greater than that of any other nation, and therefore we may rightfully look to her to initate the reform.

3d. That reform of the British currency is evidently a more feasible matter than that of the United States. The banks of Great Britain all derive their charters from one source, and are amenable to one tribunal. In this country, we have more than fourteen hundred banks, chartered by no less than thirty two independent State sovereignties, and existing under different laws and regulations. To bring all these States to act uniformly and simultaneously for a radical change of the whole system, (and no other action is of any avail,) is clearly, if not impracticable, at least a very difficult matter. It can never be done until the masses of the whole nation are aroused to the absolute necessity of the reform, and not alone a majority of the votes of the whole people, but of every one of the States, demand it.

In England it is otherwise. Whenever its intelligent capitalists, bankers, and business men become convinced of the pernicious influence of a mixed currency and demand its extinction, Parliament will do it, we doubt not, with a very good grace.

4th. We believe that if England were to lead off, the United States would speedily follow. There is a growing sentiment in this country in favor of the proposed change. We have no obstacle arising from the want of "available capital" on the part of our banks. Almost, without exception, they have full capital paid in; and loaned out, not on government security, but directly to the people; so that to enable them to furnish a pure currency, it would not be necessary to increase their capital stock; although, if desirable, it would be readily done. Besides, we have an annual product of gold of more than fifty millions of dollars, and if only one-fifth part of it were added to our bank currency for ten years, it might be made wholly metallic, or, in other words, a paper currency resting entirely on a metallic basis.

5th. The example of England would be seen and felt everywhere in the improvement of her trade, because, having a high, i. e., a correct, standard of value, she would, other things being equal, by the simple operation of the laws of trade, send her products to every country whose currency was less valuable than her own. This would greatly extend her commerce, especially with nations whose currency, like that of the United States, had a very low value. It would operate like a bounty on all her exports. All this would soon be apparent to the world, and would lead to the universal establishment of a sound currrency, since no people could well afford, in the great competition of trade, to be without such a currency.

It may be urged as an answer to what we have heretofore said, that the city of Hamburg, which has a currency entirely on a metallic basis, suffered as severely as any of the mixed-currency countries. The fact is admitted; but there are circumstances in her case which not only fully explain the matter, but prove the truth of our position. Hamburg is banker for all Germany and the northern States, Denmark, Norway, and Sweden. She is always deeply involved with the United States and England. Her fate becomes inevitably the fate of the mixed-currency countries, with whom she has such intimate connection. When protested bills were poured back upon her from London and Liverpool, from New York and Boston, to the amount of millions on millions, how could it be otherwise than that she, a single city, breasting the storm alone, "paying both sides of the ledger," should, however sound her currency, be crushed with the debts of half the world! We extract from a newspaper published in the city of New York the following sensible remarks on the position of Hamburg during the late monetary crisis :-"The friends of paper money are pointing with exultation to the disasters at Hamburg, a hard-money city. They forget, or else are willfully blind to the fact, that Hamburg is not a great country, but simply an isolated city, separate in government from all those who do business with it. She has no internal trade, as we and all other great countries have, the soundness of which (in our own case especially) is of more importance to our prosperity than that of all other trade. Hamburg, having no trade of her own, has no business but that of foreign countries; over the currency, customs, and laws of which she has no control. So far as her own local business is concerned, which can only be the internal retail trade of the city itself, we venture to say that the panic has wrought no bankruptcies nor disorders. Engaged, as far as her large commerce is concerned, exclusively as the agent of other countries, she must of course suffer sadly when these other countries fail to pay her." Such is the fair explanation of the case of "hard-money Hamburg."

And now to return to the particular point under our notice, we think that the reasons we have given fully justify-nay, compel us, to look to England to commence the great work of establishing a sound currency. We hope we have shown that the measure is as feasible as it is important, not only to England but the whole civilized world. We have been greatly encouraged to present the foregoing considerations from the very enlightened and liberal views which Lord Overstone himself has given us in all his writings. It seems to us that the way is already prepared in Great Britain for the commencement of the much-needed reform. That, with the experience of 1857, added to what had before been gained in relation to the inevitable effects of an ever-fluctuating mixed currency, the