comfortable before these conversations began. Everything that I believed, or thought I believed, was unquestioned, because it was a priori unquestionable. I had what bookkeepers call the footings of all accounts, and felt perfectly posted as to the balance of the pros and cons of every question under discussion. But you have so ruthlessly run the ploughshare of cultivation through the surface of the flowery field, and torn it open for the seed and cross-harrowing of industrial culture, that I am turned into a painstaking laborer, when I had thought that I was a leisurely inspector of a gathered harvest of results. But I thank you for all the trouble you have given me. By the help of your method of study I have the hope that hereafter I may know assuredly the things that I shall learn, and be so much the less inclined to assume the things that I do not assuredly know.

P. I had no prepossessions to embarrass me, because I did not suppose that I knew anything. But I needed to be disembarrassed of an irreflective reverence for the popular or accepted authorities, which checked inquiry and growth in appropriated knowledge. I feel obliged to our teacher for a wholesome release from the hackney logic of the economic sects, generally used to assure their disciples, though incapable of convincing anybody else. I confess, however, that I am in some danger of laughing at the currency logic of the illustrious system makers, and of doubting the exercise of reasoning in the data of statistics.

T. I have not intended in these conversations to teach you an unreasoning skepticism in respect to figures or facts, but to use your reason under common sense rules. If I have been critical in the study of our subjects, and of opinions concerning them, I intended only to put up cautionary warnings, where theories were driving along at railroad speed, that you should "look out for the engine" at the cross-roads and switch-tracks that stand open, endangering accidents by the way.

APPENDIX A.

PROPORTION OF BANK CHEQUES, BANK NOTES, BILLS, DRAFTS, AND COIN RESPECTIVELY IN THE banking business of England and the United States.

In Sept. 1865, Sir John Lubbock reported that of £19,000,000 received at his bank, the cheques and bills constituted 96.8 per cent., bank. notes 2.2 per cent., country notes 0.4 per cent. (all notes 2.6 per cent.), and of coin 0.6 per cent.; or of credit money 99.4 per cent. and of coin only six-tenths of one per cent.!!

In 1880 Mr. John B. Martin gives a table of the receipts of all the London banks at 99 per cent. of bills, cheques, and notes, and 1 per cent. of coin.

In November, 1877, the late President Garfield, then a member of Congress, requested the Comptroller of the national banking system to institute an inquiry upon this subject, which resulted in the fact that in six days, of $157,000,000 received over the counters of 52 national banks, only 12 per cent. was in cash, and 88 per cent. in cheques, drafts, and commercial bills.

In this investigation the Comptroller of the Currency, Mr. Knox, has taken a leading position, which is accorded to him by the London Institute of Bankers. He has pursued this subject with great industry and success in the last two or three years.

In his annual official report of December 5, 1881, he gives the results of the reports made to him, which show that, on September 17, 1881, the total receipts of all the National Banks were in cheques, drafts, and bills—an average of 94.1 per cent. of the total; those of the city of New York 98.8 per cent., while those of banks elsewhere than in the principal cities amounted to 81.7 per cent.

This difference of proportions between the receipts in places where the business of exchange is best organized and those less well arranged, shows the force and use of system in the credit business of the country,

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and shows, besides, how greatly the precious metals and their representative circulating notes are eliminated from the marts of general

commerce.

As I cannot transcribe the report of the Comptroller in all its instructive details (which are all given with their full effect), I must refer the inquirer to his Annual Report for 1881, which, I am allowed to say, will be forwarded on application to whomsoever may require it. I add a comparative table of these percentages, compiled by Mr. Pownall, and read before the London Banker's Institute in November, 1881; to which Mr. Knox has prefixed the report of the National Banks of New York City for September 17, 1881.

"It will be seen that the proportion of cheques and drafts used in London does not vary greatly from that of the same items shown in the receipts of the banks in New York City. The proportions used in the banking business of the country districts is less, as in the United States it is less in the banks outside the cities; but the use of cheques and drafts in the country districts in the United States is nearly nine per cent. greater than in the corresponding districts in England."

Mr. Knox gives another statement derived from official reports of the National Banks, collected under his orders, showing the proportions of their receipts on the 17th day of September, 1881, thus:

The Bank of France, with its 90 branches, has the entire control of the note circulation of the Empire, and is, therefore, in the position to report the proportions of its own different kinds of circulation, paid and received; but the business system of cheques and drafts, and other instruments of the set-off settlements, so largely used in England and the United States, have been very partially introduced in France, and its bank reports do not afford us a useful comparison, otherwise than as they illustrate the effects of the unlike usages of the different systems of currency.

For the data of this really important statistical question in the monetary system, I cannot too emphatically refer the studious inquirer to the report of the Comptroller of the Currency of the date December 5, 1881, pp. 11-26.

The Journal of the Institute of Bankers (London) of December, 1881, estimating the service of Mr. Knox in this inquiry, and anticipating his promised last report, says: "There can be little doubt that with his great ability and grasp of details, he will extract from them all the information which they can be made to yield."