over commerce and as the trader becomes more and more a power in the state. Hence it is, that the supply of money and its value become more and more irregular in India, Portugal, and other countries which follow in the lead of England—including therein the United States, in all those periods in which their policy is that which is taught in the English books. The policy of England, at home and abroad, tends always to the separation of the producers and consumers of the world— thus increasing the power of trade, and augmenting the proportion borne by the middleman class to the producing population. With every step in that direction, the circulation of society becomes less rapid-consumption follows more slowly in the wake of production — masses of property tend more and more to accumulate in vaults and warehouses - the proportion of the trader, whether in money, cloth, or cotton, tends more and more to increase, while that of the producer declines and the trading classes become more and more a power in the state. That is centralization leading always to the subjection of the men who labor, to the control of those who live by the exercise of their powers of appropriation. That way now tends England, and among the measures which have most contributed to head the ship in that direction have been those of 1819 and 1844 - the first of which changed the standard of value, while the last increased the power of the Bank of England. - 22. The superior soundness of the Scottish banking system. has given it a strength which has enabled it to maintain its ground against the opponents of one-pound notes, despite the repeated manifestations of determination on the part of the government to compel the Scottish people to dispense with their use. The latter understand, as Sir Robert Peel did not, the difference between the iransportation of money and its circulation. The small note facilitates the circulation of the gold of which it is the representative-permitting it to remain quietly in the vaults of the bank by which the note is issued, and relieving the community from any loss consequent upon abrasion. The use of the note enables a le piece of gold, remaining thus quiet, to do more than is ted by a hundred, where property in money is transferred only means of actual delivery of the coin. It is worthy of remark, that the most strenuous advocates of freedom of trade in cotton, cloth, and sugar, are the most determined opponents of the exercise by the people of their own judgment as to the sort of instrument they will use, when desiring to maintain commerce among themselves. 23. Instability is the necessary attendant upon the system above described; and hence it is that the annual losses by failures are stated at the enormous sum of £50,000,000. Great as it is. it is yet trivial when compared with the loss inflicted upon foreign nations by the unceasing changes to which they are subjected. The crash of 1815, and those of 1825, 1836, 1839, and 1847. had there their origin; and their effect was that of injuring the farmers and planters of the world to the extent of thousands of millions. Of all the monetary institutions that now exist, that of England contains within itself least of the elements required for the production of stability and regularity; and therefore it is, that nations prosper least whose dependence upon it is greatest. Trading centralization, nevertheless, seeks to render the English currency - ever varying as it is the measure of values for the world at large! * * The London Morning Post, after enumerating various facts tending to prove "the futility and mischief of the act of 1844," speaks as follows of the movements of 1856:-"We have arrived now at a state of things far more remarkable, as concerns monetary theories, than of those of which we have made mention. In 1856, with the drain of war at an end, with commerce sound, although rapidly increasing and widely extending, with speculation quiescent, here is again a great pressure-operations are checked, if not paralyzed; traders and merchants are subjected to great and serious losses; their profits are mulcted; and there is not access to capital and credit sufficient for the carriage of the current and legitimate enterprise of the country. And why? Because again the Bank of England has created violent and sudden alterations in the rate of interest, not influenced by any policy in respect of commerce, but simply for the purpose of preventing bulliondealers from selling gold to the Bank of France, whose directors, rightly or wrongly, deem it better to buy bullion, when necessity drives them, just as they would any other commodity, than to expose trade to the disturbances in which they see it so constantly involved by the practices resorted to among ourselves. Surely this is a hard case upon the commercial world, and one which it is the proper functions of a good banking system to avert, not to create." The effect of all such alterations increases geometrically, as the distance from the centre increases arithmetically a change of one per cent, at the centre of operations producing changes of ten or twenty per cent. in the value of the commodities produced in India and other countries for the English market. The tendency of English political economy is, nevertheless, that of proving the advantages of close connection with a system of such infinite. variability! § 1. IN the natural world, the real power exerted is always in the inverse ratio of the apparent one the rumbling earthquake limiting itself to the shattering of city walls, while the silent frost, by disintegrating rocks and levelling hills, is enabled to supply to a microscopic world the material by means of which to build up islands, out of which, eventually, continents will probably be formed. So, too, is it in the moneyed world - the skilful financier always finding his most productive taxes in those exchanges for whose performance pence and halfpence are required, and not in those which need the aid of gold. Tobacco, salt, and beer, therefore, pay heavily, while silks and velvets, pearls and diamonds, contribute little to any public revenue. Chief, however, among the subjects of taxation is the instrument which enters into all exchanges money. The laborer needs its aid when he requires salt, tobacco, beer, or cloth. The capitalist must have it if he would add to his lands, and without it the woman of fashion would be compelled to forego the indulgence of her taste for parties, balls, and operas. Nowhere has this been more thoroughly understood than in France. Nowhere has the policy of a country more tended to the expulsion of the precious metals than was there the case, throughout those dreary centuries which intervened between the accession of the House of Valois and that of Bourbon. Nowhere, consequently, has centralization been more complete the poverty of the government more uniform—or its necessities more urgent. Nowhere, therefore, has the fraud involved in the falsification of the coin of the realm been more systematically or more enduringly practised-the last appearance of such proceedings being found in the reign of Louis XVI. Scarcely, however, had it disappeared from the proceedings of the mint, until we meet with it in another form, that of the assignats, or paper money of the Revolution so freely issued that they gradually declined in value until the sum of six hundred francs, or the equivalent of more than a hundred dollars, would pay for only a single pound of butter. Of all the instruments of taxation, that afforded by the regulation of the currency is the most searching in its effects-the most productive in times of need the most demoralizing in its action - and the most ruinous in the end. By means of Continental money, at first issued in small quantities and at par, but afterwards so much increased in quantity that hundreds of dollars were required to purchase a single barrel of flour, it was, that the early Congresses were enabled to impose an amount of taxation greatly exceeding that which could in any other manner have been accomplished. By means of assignats it was, that the early revolutionary government of France was enabled to collect the taxes by help of which its armies repelled the invasion of 1792. By similar means it has been, that the Austrian government has added hundreds of millions to its revenue during the present century calling in depreciated paper money and replacing it with that which was promised to be good, and then repeating the operation so many times, that the original holder of dollars now holds little more than pence. § 2. With the growth of wealth and population, power over the currency has passed gradually from the hands of government to those of traders in money-seeking to exercise it for their own benefit, and that of those with whom they are connected. So has it been in England, and so is it now in France. At the close of the Revolution - credit having no existence money was scarce, and the rate of interest was very high. This, of course, furnished strong inducement for the opening of shops at which money could be bought and sold; or, in other words, banks. Several were, therefore, opened; and had the government abstained from interference, no doubt can now be entertained that competition among themselves would gradually have furnished a remedy for the then existing monetary evils. Napoleon had, however, a strong belief in the necessity for the main tenance and extension of that same centralization to which his predecessor owed the forfeiture of his throne; and it furnishes, therefore, no cause for surprise, that we find him, in 1804, decreeing their consolidation into the single Bank of France, and securing to that institution a monopoly of the power of issuing circulating notes. The soldier and the trader are thus ever found in close alliance with each other-both seeking to be enriched at the expense of commerce. Scarcely, however, had the alliance been completed, when it proved that the former had used the latter for his own purposes alone- the bank having little more than come into existence, before it was required to grant to the state so large a portion of its capital as to involve it in difficulty so serious as to render necessary a total change of system. Then (1806) came the definitive organization of the institution on the footing it now maintains, with a capital of 90,000,000 francs, or about $17,000,000. While thus centralizing the monetary power in the capital, the government retained the right of authorizing the creation of local banks, and thus producing counter-attraction among the provinces. So little, however, was this power exercised, that the ensuing forty years witnessed the formation of only ten such institutions; all of them, too, of a character so entirely insignificant, that their joint capital was but 24,000,000 francs-$4,500,000and the whole amount of their loans less than 80,000,000 = $15,000,000. Such was the machinery of exchange provided for a country with a population far more numerous than that of either Great Britain or the United States. That the cause of this was to be found in an excessive centralization, is shown in the following passage from a work to which the attention of the reader has already more than once been called : "There is not, probably, a single town of any consideration in France that has not, at one time or another, desired to have a bank. To comprehend why they have found themselves compelled to rest content, deprived of the advantage of such institutions, it is only required that the reader should understand the endless and inextricable formalities through which it is required to pass -the obstacles that are to be overcome-the measures to be pursued the delays that are to be submitted to before such a |