render it a substantive, and, in a great measure, an independent argument. Now, though the circumstance may be made use of as an auxiliary argument, as an independent one, it goes for nothing. It greatly depends upon the primary question, which we conceive to be just as unsettled as ever-Is a currency in small notes in any degree necessary to the commercial and manufacturing prosperity of the country? Should that question be decided upon right principles in the affirmative, then it might follow that the injury inflicted on commerce and manufactures, by the suppression of small notes, is a national evil which would much exceed that of the occasional sufferings inflicted on the working classes by the failures of banks; and also, that such injury would drag in its train a greater amount of suffering to the working classes themselves than they have been ever exposed to from any incident connected with the small note system.

The subject, as it concerns the working classes, appears to us to have been altogether most crudely and hastily considered. We conceive that the pictures of distress caused to those classes by the failures of banks, with which the newspapers occasionally harrow the imagination, are grossly exaggerated. It must be a very small proportion of those classes, who are in possession of the smallest amount of bank notes. And as to the savings of the few who do save, we suspect they either take the form of large notes, or are invested in saving banks. But further, it must be admitted, that the distress caused by an occasional solitary bank failure, is not a case which warrants a legislative interference with the national currency. The honourable persons who made use of the argument to which we have been adverting, must have contemplated the case of an extensive crash

of country banks-of the simultaneous breaking down of forty, sixty, eighty, or an hundred of them. Such a catastrophe, if not caused by a general derangement of manufactures and commerce, must necessarily and instantaneously produce such a derangement, in which case the working classes, like their betters, will doubtless suffer severely; and in the sum total of their distress, which includes a partial, if not an entire deprivation of employment, the loss of the few small notes of insolvent banks which they may have among them, will form a very contemptible item.

With regard to the merits of a paper currency generally, we would observe, that if paper actually represent value in the hands of the banker who issues it, (which is supposing that he does not issue beyond his means of retiring,) and is really convertible into that value on demand, we conceive it to be by far the best and cheapest currency of any. Were all banks properly constituted, it may be assumed, that there would seldom, if ever, be an over issue; because these bankers would limit their issues to their means of retiring, and would be scrupulous in issuing their paper only in exchange for real value, or personal obligations equivalent to, and convertible into, such value; and thus would exactly proportion their issues to the legitimate wants of commerce. In the case we are supposing, then, a bank note represents value as faithfully as is done by gold; it discharges as well, in every respect, the functions of gold; and, like gold, its amount must be exactly commensurate with the wants of the commercial world. Where, we should wish to know, is the difference between a 1. bank note under the system we are supposing, and a sovereign? Gold, no doubt, besides being a representative of value, has an intrinsic value, which bank paper has

not; but if the note can purchase the same value as a sovereign, and if it is issued by the banker for the same equivalent for which he would part with a sovereign, the two, to all intents and purposes of a circulating medium, must be precisely the same; the amount of the one kind of curren cy must be governed by the same laws as the other, and consequently there can be no greater danger of an excess of the one than of the other; and by a farther consequence, prices and the rates of exchange are as little liable to be affected by the one as by the other.

However, banks upon the system we have been supposing, did not exist in England. In that country, where all other trading establishments have been brought to a height of perfection, banks, owing to the mischievous partiality of government to the Bank of England, never were upon a right footing, and the science of banking was comparatively neglected. By a sort of monopoly conferred on the national bank, no other banking establishment, consisting of more than six partners, was permitted to be formed, by which the object of the monopoly was very effectually attained. There were few country banks of such amount of capital, and extent of connexions, as could secure the public confidence, especially during periods of alarm; while there were many scarcely possessed of capital at all, but which, by a variety of practices, some of them not very creditable, contrived to push their notes into circulation. That fact alone proves, not that the country was deceived with regard to the value of their notes, but that it required, and could not dispense with, a paper currency of one kind or other; and that, since it was not supplied in sufficient quantities with a good kind, e. g. Bank of England notes, it was obliged to have recourse to that which

was spurious. It is easy to conceive that the members of banks of such limited construction, could not escape being infected by every new fever in the mercantile world; and that, with the money of their customers in their hands, and an unlimited command of their own paper money, they would rush into all manner of extraneous speculations. It is easy to conceive, that to get their paper into more extended circulation, they would be liberal to excess in the discounting of bills. And in these two ways, the currency could not fail to be swelled beyond its proper limits; and, besides that much of it was base in its own nature as imperfectly representing value, the excess would necessarily depreciate the whole mass.

Such a state of things loudly called for a speedy correction; but, considering the source and nature of the disease, the cure was to be found, not in regulating the banking system, which was done by the small note bill, but by unregulating it, which was done, to a certain extent, by the bill for abridging the extensive privileges of the Bank of England-a bill which has our entire approbation.

In the course of the discussions, Mr Peel took occasion to express his regret that in 1793, the latter measure had not been resorted to, instead of the Cash Payment Restriction Bill, in which regret we cordially concur. When we consider the gigantic scale of the various trading establishments of England, the enormous capital invested in them, and the skill with which they are conducted, we cannot suffer ourselves to doubt, that, had the banking trade in 1793 been freed from restrictions, the admirable example of Scotland being in full view, banking establishments on the broadest bases-of abundant capitals, and conducted upon the most sound and legitimate principles-banks, in short,

like the Scotch chartered ones, would, ere this, have sprung up in England, and supplanted the rickety and delusive banking concerns which there prevailed, simply because no others, excepting the Bank of England, were permitted by law to exist.*

The attempt to extend the measure of suppressing the small note circulation to Scotland, created in that country an universal ferment, and was universally resisted by all classes, without any distinction of parties. The Scotch were justly attached to their banking system, which rested upon the firmest basis, and to a naturally poor country, was fraught with innumerable advantages. They ascribed to it, and justly too, the advances which the country had made in wealth and improvement; and believed its best interests to be identified with the existence of the system. They were the more attached to it, because a bank failure in Scotland was almost unknown, and had never occasioned a loss to the public-a circumstance, we may observe, which proceeds, not altogether from the superior skill with which Scotch banks are conducted, but partly from the superior equity of the Scotch law of debtor and creditor, with regard to the real estate of the debtor, as compared with that of England. With these impressions and feelings, they could not but resent a proposal to punish them for the sins of English bankers, arising out of vicious English legislation, by depriving them of a currency which could not be charged with any of the evils imputed to that of the sister kingdom, and to themselves was highly benefi

cial. As to the incompatibility which was alleged of the two different currencies in the two kingdoms, they pleaded that when formerly England had its gold, and Scotland its paper currency, the latter did not clash with or affect the state of the former in the least; and that Scotch notes never did circulate much beyond the English border, excepting at a heavy discount; and besides, that were there any danger of, or any injury to result to England, from the circulation in it of Scotch notes, either might be provided against by penal enactments. The measure also appeared to them the more uncalled for, since, according to the views entertained by them regarding currency, the Bank Charter Bill, if passed, would eventually lead to such an improvement of the banking system in England, as to render it safe and advisable to permit even there the circulation of small notes.

We do not purpose here to enter upon an explanation of the system of Scotch banking, and its peculiar advantages. These are fully set forth in the reports by the committees of the two Houses of Parliament, upon the small note circulation of Scotland and Ireland. But the tirade of Mr Tierney against ministers for complying with the recommendations of these committees, not to disturb at present the currencies of Scotland and Ireland, calls for a few observations. He contended that the currency which might properly have been permitted to Scotland when she was poor, had become improper since she had grown rich. Now the prosperity of Scotland is by most people ascribed to the nature of

its currency; and a cautious politician might have reasoned, that with the cause the effect would necessarily cease. The banking system and the prosperity of that country have grown up together, and are so entwined, as to be inseparable. Since its commercial transactions have greatly increased, so much greater need has the country of that currency, which has been truly naturalized to it, and the place of which it could not supply, but by some inconceivable effort. Mr Tierney, with astonishing littleness of thought, alluded to the wealth which was imported into Scotland by those of its natives who had realized fortunes in the East Indies. He might have allowed that Scotland should have some chance of keeping pace

with England in riches; and allowing that, he might also have allowed that natives of England, as well as of Scotland, have realized fortunes in the East Indies; and that all the wealth imported into Scotland from that country, is as nothing, compared with the wealth derived by England from the East India Company's trade, of which the port of London has the monopoly. He might also have reflected, that any little gold which Scotland may attract within its territory, must be exported from it to pay its taxes, a very small proportion of which only is expended within it, the rest being expended in England and Ireland; and to pay the rents of its absentee landed proprietors, who reside and expend their rents in England.

THE state of our finances, interesting at all times, had become more so from the recent and still existing embarrassments in trade and commerce. As the revenue is an indicator of the actual condition of the bulk of the people, there was an eagerness to know, from the exposé to be made by the Chancellor of the Exchequer, whether, in the course of the year, their comforts had been greatly encroached upon, or the stamina of the national prosperity seriously impaired; and what, in the opinion of government, were the actual prospects of the country. But, notwithstanding all that eagerness, the subjects immediately connected with finance underwent, this session, comparatively little discussion, the attention of Parliament having been almost entirely engrossed by the measures brought forward by Ministers for rectifying the currency, and relieving the public distress.

On Monday, March, 13, the House of Commons having resolved itself into a committee of ways and means, the Chancellor of Exchequer spoke as follows:

Although the circumstances under which we are now placed, differ in some material respects from those which

existed at the corresponding period of the last year, there is nothing to create either alarm or despondency. In the course of the discussions which have taken place with regard to the commercial distress of the country, there has been a great deal of very unneces sary contest between those who are sneeringly denominated philosophers, and those who designate themselves by the more humble title of practical men. I call it "unnecessary contest," because I consider it to be the bounden duty of the legislature to endeavour at all times to render available the sound reasoning and theory of one class, by applying to them the practical experience of the other. If those who have to prepare their minds for the consideration of subjects of this nature, are to be told that books must be thrown aside, and elementary reasoning rejected, I know not at what fountain they are to drink, if they are to be driven from those springs where science and knowledge are the presiding deities. And, sir, when we find that in every class of the community knowledge has extended, and is extending itself to a degree, which, but half a century ago, would have been deemed impossible,-are we to be behind-hand in