many ages to deposit and consolidate at the bottom of the sea, will last for centuries. The mighty ribs of oak which have, through a millennium, sustained the roofs of those noble fanes which mark the architectural genius, the art, and I will say, after a fashion, the piety of medieval times-the pine "hewn on Norwegian hills to be the mast of some great admiral”-are the growth of centuries, and attain their stature and consistence by a process too slow to be detected by any sense of ours. The enlightened advocate of human progress, and of the welfare of the many, feels, indeed, that all the great processes of nature, and all the lessons of history, are a rebuke to human impatience. His faith will not be shaken by ages of seeming reverse and retrogression. He knows that the evolution of a reign of Justice, depending so much as it does on individual character and agency-on the individual character and agency of such beings as men are-must be slow. If amongst the industrial classes he saw a rapid advancement in knowledge, self-control and high disinterested principle, just in proportion would his hopes rise of a speedy destruction of wrong, oppression, and injustice among But whilst for the building up of forms of social symmetry and beauty he feels that a living agency is requisite, for the breaking up of forms of oppression and wrong, however solid may seem their foundations, or strong their bulwarks, physical forces are sufficient; every form of evil carries in it the seeds of destruction from its birth, and every social or political fabric, founded on injustice and wrong, will go to pieces through a destiny which no power nor policy can avert. Evil is selfdestructive, the good perennial and eternal.

men.

NOTES AND ILLUSTRATIONS.

NOTE A., page 9.

As it was the author's object in these lectures to aim as much as possible at simplicity, and to divest the subject discussed of technicalities, reference was frequently made for illustration to the simpler states of society. It may, however, now be desirable, when these disquisitions are presented to the public through the press, to give some exposition of the mode in which the law of Interest, laid down in the text, operates in an advanced social state, and in communities of great commercial activity. A want of capital for commercial purposes operates just in the same way as a want of capital (in a more primitive social state) for domestic or agricultural purposes. In seasons of great commercial activity and of speculative excitement, a great amount of capital being called into use, the rate of interest rises, or the price of the use of money increases, though the price of capital, absorbed in commodities (even staple ones) may not increase, because money is the readily available form of capital, especially in all new or unwonted enterprises and speculations. But when there is a plentiful supply of the great necessaries of life, capital, or its representative, money, is now so abundantly at the command of the commercial classes, that a great activity in business, pushed even to a considerable extent into speculative channels, may occur-as has been the case during this very last year (1851)—and yet money be abundantly procurable at a low charge. Recently, home industrial enterprise has been low, and all the great staples of food cheap. But at such a period (e.g. 1846-7) when food is dear, and capital is withdrawn on all sides to feed a fever of speculative industry, then it is that the commercial community feel the difficulty of procuring money; and the price of "accommodation" rises to exorbitant rates. Through

H

their immensely enhanced price, an unusual amount of money was then absorbed in the trade in articles of human food; an unusual proportion of floating capital was converting into fixed capital in railways; the community was, at one and the same time, both consuming and fixing an unwonted proportion of its available capital; and a serious withdrawal of it from the more wonted commercial channels could not but occur. The want of real capital was supplied by nominal-by paper-to an unusual extent; and when real payment could no longer be deferred, the crash came. that era, with its unwonted consumption and unwonted conversion of capital-a great amount going abroad for food on the one hand, and an immense amount becoming fixed railroads on the otherthe nation was in the condition of an individual whose resources are inadequate to meet his wants; and, in the trading section, chiefly from its being most dependent on credit, and most liable to unforeseen reverses, the fabric gave way.

At

But the use of a representative currency, as far as it represents fixed property, lowers the rate of interest to the owners of real spare capital; as such a currency, serving the purpose of real capital, yet only represents that which could not itself be lent. The man who has real capital to lend gets less for the use of it, because the banker and the bill-granter generate a factitious capital,— an instrument by which property performs the functions of floating capital, whilst itself yet remains fixed. Yet, the person who wants "accommodation" (the borrower) does not, perhaps, pay less for it. The paper-issuing banker steps in between the borrower and the owner of real, spare capital, supplying him with a factitious kind from a source which would not else have been available, charging a rate of interest which would make the business highly profitable, were it not for the risks which the banker incurs in his accommodations. The rate of interest charged must be such as to cover those risks, as well as meet the expenses of the banker's business, at the least. And the cost of those risks, and of an altogether unnecessary multiplicity of banking establishments, comes as tax on the returns of the real capitalist, and on the profits of the honourable borrower. Were our banks merely a medium for the circulation of real capital, receiving from the lender and supplying to the borrower, the return to the real capitalist would be much greater; and the field of risk would be much narrowed, as there would then be only real spare capital to lend. By extending the principle of Sir R. Peel's late banking act, and making it imperative that the paper issued by the bank should never exceed the bullion in its coffers, paper money would be made a cheap and equitable instrument of exchange; but such an arrangement would cut off the peculiar source of profit of our banks of issue, and

would probably reduce their numbers within narrow limits, by rendering many of them at once unprofitable and unnecessary.

This, however, is a monetary revolution which the vast supplies of gold now opening up to us would enable a wise legislator to effect, perhaps, more easily than the establishment of a paper currency on the basis suggested in the text. It would not be so cheap a currency, but it would be free from some difficulties that might attach to the satisfactory management of one founded on the basis there suggested. This would be, in fact, but the carrying out, in the case of all paper issues, of the plan proposed by the late Mr. Ricardo, in reference to the Bank of England, which was, to make the notes of the bank a legal tender under an obligation imposed on the directors to pay them on demand in gold bars of the proper standard. Though he-to prevent a run on the bank by holders of notes to a small amount-would have made these notes thus convertible, only when presented to the amount of the value of 60 ounces of gold or upwards;-a quite arbitrary limit, and in seasons of diminished public confidence, unfair towards small capitalists and the poor.

That the immense supplies of gold which we have in prospect to receive from California and Australia should be applied to the superseding of a currency representing fixed capital, by one representing free and spare capital, is an object of such importance, that the wisdom of our legislators will be sadly at fault if they do not entertain and make provision for it. A gradual absorption of the supplies of gold in this way would tend greatly to prevent the derangement of values which must ultimately ensue if these supplies continue, without provision made for their application to such use. The precious metals have been the sound recognised instruments of exchange throughout all ages; and whilst I believe that their amount will be found adequate to the increasing wants of the civilized world for such a purpose, I have no opinion that they will ever be obtained in such quantities as to reduce their value inconveniently low for that use. The value of gold may be reduced as compared with that of silver; but gold will continue gold, and iron, iron, to the end of time.

By the arrangement under contemplation, everybody would have a claim on commodities of tangible recognised value. Honest work could not be so often baulked of its rewards, nor dishonest idleness so often intercept and clutch those rewards. The stimulus of industry, the instrument of commerce, would be a sound, real, available capital; those fearful derangements would be obviated, which arise from enterprises sustained mainly by credit, enterprises which call trade and industry into feverish activity for a time, only

ultimately to break down and deprive the worker of much of his due. Commerce would be steadied and rendered secure by being confined to its natural channels, and carried on by its natural instruments.

And in connexion with the increase of gold, the facilities of rapid transmission are rendering this every day more practicable. With the exception of our Australian colonies, facilities are already presented, or in progress, by which it would take only a very short time to convey real payment to any part of the civilized world. Where goods cannot be exchanged for goods, gold would be subject to only a very brief period of unproductiveness in the transmission. In fact, all the advances of civilization-all the great discoveries-all the facilities of production, which distinguish our day-are but supplying the means of extinguishing that huge modern system of credit which inevitably issues in wide-spread periodical ruin, and lands in its ultimate pressure on the industrial

masses.

The great distinctive feature in such a monetary revolution would be, to make money a real payment instead of a mere claim on fixed capital (as a great proportion of paper money now is) of floating capital absorbed in other uses, or of a merely nominal capital based on the public credit, as is the case with the 14,000,000l. of notes issued by the Bank of England" against public securities ;" and which, in fact, represent, not capital, but so much of the national debt, the Bank having a claim to that amount on the national funds, and the security of that claim being the continued solvency of the Government; the stock of the Bank to about that amount having been lent to the Government, and consumed, like an immense amount of other capital, in the late war. Thus it will be seen that the Bank of England rests to this large extent on the same kind of basis as that indicated in the portion of the text on which this note bears, but with a very inferior sort of security to what the Crown lands would constitute; for such another expenditure as that of the French revolutionary war would, in fact, render the nation insolvent.

NOTE B., page 30.

"They," (the economists,) says Mr. Mayhew, "attribute almost every evil in the land to the fact of there being 4,000,000 workmen to supply nearly 20,000,000 of individuals with food, clothing, shelter, warmth, light, and, indeed, every necessary and luxury that human nature can either demand or desire-declaring that one-fifth of the population are far too many to create the wealth required for the sustenance and enjoyment of the whole, and a