ceeding imports and bringing a balance of gold into the country, gold that no one wants except he can get it as a gift. Nevertheless the mercantile theory lives on unblushingly, with a vitality absolutely indestructible; so difficult is it for shopkeepers and merchants to get rid of the feeling that trade is to sell for money, even though in London alone there is business transacted to the extent of one hundred millions of pounds a week, without a single piece of money being touched; it is all carried on by small pieces of paper called cheques. When the shopkeepers cry out that trade is very bad, and that there is no money, they only show their ignorance. The fact that what their customers really buy with is not sovereigns and shillings or bank-notes either, but the means of procuring these coins and notes is unperceived. The power of buying resides in the incomes of purchasers, and those incomes consist of goods, of corn and iron and other wealth. Trade may be very brisk or very slack with identically the same quantity of gold and silver and bank-notes existing in the country. But in bad times, the shopkeepers do not find these coins and notes making their way into their shops, so they exclaim that there is no money. In America and other nations that love inconvertible notes, a loud call arises for the issue of more money, more notes. As well might the owners of mines, who cannot sell their coal or iron, cry out that there are no buyers for lack of carts.

The same mode of thought has given rise to expressions of constant recurrence in speaking and writing which are greatly to be regretted. Great discussions are at this moment going forward on the excess of im

ports over exports in the trade of England. England receives more goods than she sells to foreign countries; the difference of value, it is assumed, is paid for in gold; and then the universal language affirms that the balance is against England. If this is so, must we then declare that every purchase creates a balance against the buyer? The man who procures bread from a baker must pay the bill; has he been acting against himself? Is it not as clear as the sun at noonday that every purchaser prefers what he buys to the money he gives for it? Still more—and the question is most pertinentwhat conceivable service does money do for anyone but to leave him in order to pay a balance in exchange for a service or for goods? When England has an excess of imports, it is undeniable that she has obtained that for which money was procured; so far the balance is in her favour, because she has got the things which alone can give any value to her money. This way of speaking has the mercantile theory itself for its essence.

Doubtless, on an excess of trade imports, England must have sent away, or owes, money. But to buy on credit, to obtain meat to be paid for at Christmas, is not to do an act against one's self, or to be in the position of having a balance against one. The balance is in his favour till he pays, for he has acquired wealth and given nothing for it. When he pays, he only restores equilibrium; there is neither for nor against in the completed exchange. When imports exceed exports— not by receiving payments of interest and dividends due by foreign countries, but in regular trade,-the real question to be asked, if we wish to learn whether England as a balance really against her, is, can she afford to pay

for the wealth which she has obtained, whether on payment with gold or on credit? If she can, there is no against in the matter, except as a misleading expression to indicate that she has not yet paid for what she has got. If she cannot afford to pay, then the word against starts up into real life, for she has consumed and she has enjoyed what belonged to others and has taken up the position of an insolvent debtor.

We may be asked in reply, Does not this view land us in the absurd inference that a country which has nothing else wherewith to make purchases of England but the produce of its gold mines has no economical value for, can confer no commercial advantage on, England? The answer to this retort is easy: such gold comes in as merchandise, and does not come in as money. It is money as coin which is useless, when there is enough of it in a country for the work it has to do; but gold, as a metal, may be applied to many useful purposes, and, further, may enable England to carry on additional trade with a third country. It may largely extend her commerce, if Australian miners bought her manufactures with bullion, and she in her turn purchased French or American commodities with that bullion. It practically becomes international money, except that a very large portion of it is ultimately arrested and made use of in many arts. Much of the Californian and Australian supplies of gold, it cannot be doubted, has been absorbed in this manner; otherwise, if it had been devoted exclusively to the manufacture of coin, an enormous depreciation of its value must have ensued.

What may be the consequences of a large influx of gold suddenly poured into a country, let Germany

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teach us. I hope I may again venture on the liberty of quoting from the "Contemporary Review" : *— "Germany became engaged in a gigantic war with France. In these modern days the cost of armies and of their armaments is enormous, far exceeding that of preceding ages. Immense numbers of troops took to the field, and their maintenance alone created a vast consumption of wealth, without any return for it in the shape of fresh wealth. Men were taken away from their labour in the fields and factories in huge hosts, paralyzing domestic industry and devouring the existing stock of the national wealth. No more rapidly impoverishing process can be conceived than such a war. That commercial distress should follow such destruction can create no surprise. Suffering and impoverishment are the natural offspring of war. But did not the indemnity make all right for Germany? Two hundred and twenty millions of English pounds might seem enough to lift any people to the summit of prosperity. But it is not sums of money which enrich and bestow welfare and happiness, but what is done with them. A large portion of this money was applied to the making of fortifications and to other military works. No improvement of their condition, no relief to their distress was got out of that by the nation. On the contrary, such an application of the French gold made matters distinctly worse for Germany. German labour, and German food and clothing were taken away from that production of wealth which would have brought better times, and were applied to the filling up of military stores in a very unproductive way.

"But gold is riches-and riches supply every kind of necessaries and of comforts. Gold, we answer, is not riches till it is made use of by being parted with; that is all the good which can be obtained from it, unless it is applied in the arts to gold ornaments. Gold exchanges commodities-enables a manufacturer to procure coals in return for his cloth. But the gold itself and by itself confers no other benefit whatever than its services as tool. Germany would have been most truly and permanently the richer for the French gold had she given it away to foreign countries in the purchase of their wealth; it would have brought into the country what her people wanted. But Germany could get no gain by obtaining gold solely to move German things about.

"Then it is believed that a considerable portion of this French gold has been hoarded as a reserve against future war. That gold does nothing to clear the commercial depression. It sets no mills to work, gives employment to no labourers, imports no supplies of corn, meat, coffee, and clothing for the people, or raw materials for their industry; it is idle, and absolutely no better than if it were non-existent.

"But there is another portion of this French gold, of which there is yet worse to tell. Its action is full of instruction, especially for the city, if the city were only willing to gather it up. The German Governments were embarrassed with the excess of this metallic stock, and lent much of it to traders and speculators. To what better purpose could they have applied it? it will be asked. To none, but upon one condition-that it should be sent out of Germany. Its export would have