it is surmised that one-fourth of the paper in circulation is Accommodation Paper; and in times of great speculation the proportion is far greater than that.

The Legislature has imposed rigid limits on the issues of notes by banks, and many persons think that it might be possible to curb the creation of this pestilent kind of paper by law.

But, unfortunately, such a thing is not possible. The difficulty consists in determining what is really Accommodation Paper. As a matter of Economics, all these cross acceptances are pure Accommodation Paper; but they are not so in jurisprudence.

The whole question turns on the Consideration. An accommodation bill in law is a bill to which the drawer, acceptor, or indorser, as the case may be, puts his name, without consideration, for the purpose of benefiting or accommodating some other party, who is to provide funds to meet the bill when due. But the consideration may be of many sorts. It does not by any means necessarily imply a sale of goods at the time. Moreover, a bill may be an accommodation bill at the time it is created, but if any consideration is given for it during the period of its currency, it ceases to be an accommodation bill.

Moreover, the consideration may be of many sorts. If A draws a bill upon B, who accepts it for A's accommodation for the express purpose of enabling him to get it discounted by a bank, that is a pure accommodation bill. But if B draws an exactly similar bill upon A, who accepts it for the accommodation of B, to enable him to get it discounted by a bank, then neither of the bills is an accommodation bill, but they are each of them given for a good consideration. The liability which each incurs by accepting the other's bill is the consideration for his own acceptance.

To an unlearned reader this may seem somewhat strange doctrine, but, nevertheless, it is firmly established law.

In Rolfe v. Caslon (2 H. Blacks. 571), A and B being desirous to accommodate each other, each drew a bill upon the other, and accepted one in return, the two bills being precisely alike in date, amount, and time of payment, neither party having any effects of the other in his hands. The Court was clearly of opinion that the two bills were mutual engagements, constituting on each part a Debt, the one being the consideration for the other.

In another case, Cowley v. Dunlop (7 T.R. 565), Grose, J., said, "The instant the bills were exchanged, each was indebted to the other in the sum which was the amount of their respective acceptances; for the counter-acceptances were a good consideration to found a

Debt upon either side respectively. In the case of a single accommodation acceptance, there is no debt to the acceptor; the Debt only accrues by the payment of the money. The acceptor quà acceptor can never be a creditor, his acceptance imports the admission of a debt from him to another; and when he has paid as acceptor, if he paid for any other person, in consequence of any request from that other, he becomes a creditor, not on the face of the bill, but by a contract collateral to the bill. When two persons exchange acceptances, each becomes the debtor of the other upon his accepted bill. But when a man accepts without consideration, he is never a creditor of the person for whom he accepts till he pays - from that payment arises the Debt. But when the acceptances were exchanged, the debts arise from these acceptances." These doctrines were repeated and confirmed by the whole Court of King's Bench, in the subsequent cases of Rose v. Sims (1 B. and Ald. 521), and Buckler v. Buttivant (3 East, 72).

This doctrine, which is quite unanswerable, shows how impossible it is to deal legislatively with this kind of Accommodation Paper. At least, they must be very poor rogues indeed who cannot manufacture any amount of bonâ-fide bills they please. Two ragamuffins have only to get as many bills as they fancy-if they can only pay for the stamps. One engages to pay £1000 to the order of the other; that would be an Accommodation Bill. The second then engages to pay £1000 to the order of the first. These are no longer Accommodation Bills, but are two good bonâ-fide bills, each given for a good consideration. If two such bills are good, then two thousand, or any larger number of similar bills, are equally good. Bankers would look askance at such paper; but jurisprudence declares them all to be good boná-fide bills, given for a good consideration.

Stated in the above form, the doctrine may seem somewhat startling to some persons; but when we consider the principle of the case, and not the accidental circumstance that the two persons who may do it are insolvent, the difficulty disappears, for it is just what happens every day in banking. It is quite common for a banker to discount the simple promissory note of a well-to-do customer. The note given by the customer constitutes the consideration for the Deposit, Credit, or Right of Action created by the banker; and the Right of Action or the Deposit created by the banker is the consideration given to purchase the note of the customer. Each, therefore, is the consideration for the other-each party gives value to the other.

It is precisely the same principle in the other case. If the issuers of the bills are able to purchase goods with them, they may be paid off at maturity. If they cannot do so, the re-exchange of the securities is the mutual payment of each debt, precisely in the same manner as when two bankers exchange notes, or when a merchant pays his acceptance to a banker in the banker's own notes. The two contracts are extinguished by Compensation. The accident that both the creators of the bills are insolvent does not affect the juridical principles of the case.

In times of great speculation, these cross acceptances are manufactured to an enormous extent among merchants; and the more cross acceptances they can manufacture and get discounted by bankers, the more funds the adventurers have to speculate with. But such things are always sure to be overdone. As soon as any new and extensive market is suddenly opened up, multitudes of speculators are sure to rush in, and create vast amounts of paper which can never be redeemed. And when this is done on a sufficiently large scale, a commercial crisis is produced; and if this commercial crisis is not properly and judiciously met, and it reaches a certain degree of intensity, it produces a monetary panic, in which merchants and bankers fall together.

ANNUITY.

An Annuity is the Right to demand and receive a series of payments.

The lowest form of an Annuity is the Right to receive one future payment, such as a Bank-note or a Bill of Exchange. The highest form of an Annuity is to receive a series of future payments for ever, such as an estate in land or the Funds. An Annuity to receive a series of payments intermediate between these extreme terms is called a Terminable Annuity.

We shall now show the great practical importance of applying the Positive and Negative signs to Property (Property), and of denoting the Right to Property in things which have already come into possession as Positive, and the Right or Property to things which will only come into possession at some future time as Negative. Because many species of Property are of a mixed nature; that is, the entire Property in them consists partly of Corporeal Property and partly of Incorporeal Property.

Property in Land is the highest of all, and to understand the nature of Property in Land is the grammar of Property in general. Suppose that we saw a piece of Land, on which there were actually existing products of the value of £3000. Suppose that we wished to purchase that piece of Land. Would the owner of the Land be content to sell it to us for £3000? Most assuredly he would not. He would say that, though there were only products of the value of £3000 on the Land in actual existence at the present time, yet the Land would produce a similar amount of products to the end of time. He would say that we must purchase not only the right to the existing products of the land, but also the Right to the annual products of the land to the end of time; that is, an infinite series of future products, which will only come into existence year by year.

Thus, Property in Land consists of two perfectly distinct partsthe Right to the products which have already come into existence, and the Right to the products which will only come into existence in future.

Thus, Property in Land may be conveniently denoted thus:

Existing products of the land ( + £3000), together with (- £3000, -£3000, -£3000. . . for ever).

Where the Positive Sign denotes the products which have already come into existence, and the Negative Sign denotes the products which will only come into existence year by year for ever.

But though the yearly products of the land will only come into existence at future intervals of time, the Right, or Property, to them when they do come into existence is Present, and it may be bought and sold like any material chattel-like a watch or a horse. That is to say, each of these annual products has a Present Value, and the purchase money of the land is simply the Sum of the Present Values of this infinite series of future products.

Again, although this series of future products is infinite, a simple Algebraical formula shows that it has a finite limit; and that finite limit depends chiefly on the usual average Rate of Interest. When the usual average Rate of Interest is 3 per cent., the theoretical value of the land would be about 33 times its annual value. Consequently, of the total value of land, one part only is Corporeal, the remaining 32 parts are Incorporeal.

Now, when a purchaser has bought an estate in land, it may be said, without any great metaphor, that it Owes him a series of annual payments for ever; because he only bought it in the belief, or expectation, that it would yield these profits. Hence, we may

call the Right to receive the future profits of the land the Credit of the land, and by the notation we have adopted, it is a Negative Economic Quantity.

Thus the purchase of an estate in land is simply the purchase of a Perpetual Annuity.

Every Sum of Money is Equivalent to the Sum of the Present Values of an Infinite Series of Future Payments.

The investigation of the Theory of the Value of Land demonstrates a proposition of great importance in Economics.

It is seen that the £100,000 given to purchase the estate in land, expected to produce £3000 a year, is, in reality, the sum of the Rights to its future products for ever. Every annual product has a Present Value, and the value of the land is simply the Sum of this infinite series of Present Values.

But the same is evidently true of every sum of money. Hence, every sum of money is not only equal in value to a certain quantity of material goods, or to a certain quantity of services, but also to a Perpetual Annuity.

Hence, an Annuity, or the Right to receive a series of future payments, is an Economic Quantity, which may be bought and sold, or exchanged, or whose value may be measured in money, like any material chattel.

As when a sum of Money is given to purchase Land, or the Funds, or Municipal or other Obligations, such as Railway Debentures.

So an Annuity may be paid to secure a certain sum of money at a given time, or on a given contingency, such as a Life or Fire Insurance.

It is thus seen that Economics comprehends Three great departments (1) Material Things; (2) Personal Qualities, both in the form of Labour and Credit; (3) Annuities.

The first school of Economists restricted their attention to the first of these departments, and refused to take any notice of the other two. Adam Smith, J. B. Say, and J. S. Mill have given much attention to the second, and treated Labour as a marketable commodity. They have also noticed the existence of the third. department, but they never made any attempt to exhibit the commerce in Rights. And yet, at the present day, it is the most extensive of any.

Hence, it is seen that all Annuities, or Rights to receive a series