clerks had to be sent out to collect the sums due to the firm from banks or others who did not work through the clearing house. A small portfolio and a trustworthy clerk used to gather and bring home thousands, possibly a hundred thousand pounds; but what was to be done with those dreadful sovereigns now that there were no bank-notes? Who was to carry them? a porter, or a cab? If a cab, two clerks must go, for one must stay in the cab on guard whilst the other stepped into a house to receive payment. And then the weighings across the counter, the time lost, the risk of robbery, the sight of the bullion bags as they were shot into the cab. Is it supposed that any banking-house could endure this? Is it not obvious that fresh appeals would be made to additional clearing-houses, and to the mightiest of instruments, the cheque-that sovereigns would be eschewed by every man of business-that the disappearance of the note would scarcely have enlarged the use of coin, but that the cheque, the unprotected cheque, which no Act of Parliament renders safe by a pre-required stock of bullion, would dominate sole and all-powerful in the City?

And then the confusion and perplexity in every household! The gentleman who loved to carry a score or two of pounds in his pocket, what was he to do with all this weight? Could he despise the laws of gravity? The gambler, too, who staked hundreds or thousands every night, and from whom instantaneous ready money payment was demanded, his perplexity would be great indeed. Would the winner be content with his cheque ? would he like his banker to find such cheques coming in every morning? The fine lady also, on her shopping

rounds, what was she to do? She might be buying where she was unknown-what must be done with that dreadful bag of sovereigns? More buyers on credit, fewer purchasers with ready money, more banking and more cheques, would be the only escape from such embarrassment.

No doubt, the covered notes from the issue department vary as a purely metallic circulation, for they are themselves metal; the notes out are only their tickets. But what of the uncovered fifteen millions? Suppose them to be suppressed; can any one imagine that fifteen fresh millions of sovereigns would be bought from the miners to do the work previously performed by the notes? If he does, he must have peculiar ideas on the effects produced by weight and exposure to robbery on the human brain.

Of this

One omission the Bank Act has committed; it is silent on the denomination of the bank notes. It does not raise the one pound notes from their graves. the ill-will of the bankers, there can be little doubt, was the cause. Their objection was a mechanical one. They hated the countings and, if need be, the taking the numbers of these paper-heaps. It meant more

trouble, more clerks, and more expense. The question was mooted in the Select Committee, but the bankers refused to turn their eyes to the long established success which these notes had established in Scotland and Ireland-how useful they had proved themselves to be, how they were actually and daily preferred by sellers to sovereigns. They were so much lighter and so much easier to guard. What was the saving which the nation would gain by using a very cheap instead of a very ex

pensive tool for performing the same work in comparison with the worry inflicted on cashiers?

Small notes have proved successful over a wide range of countries. In some the two shillings note is found to work exceedingly well. Mr James Wilson, when Financial Member of Council, proposed a ten shillings note for India. One pound notes were put down in England mainly on account of the losses incurred by many comparatively poor persons in the great breakdown of 1825. But those losses came from the bad quality of the issuers. The issuing bank took people's money, repaid them with paper, then did bad business and lost their capital, and serious misfortune overtook the note-holders. The argument of a bad issuer applies quite as much to a £5 or a £100 note, as to the £1. There is, it must be admitted, greater danger of forgery. The persons who take a £5 note and above are more careful in examining the paper than the mass of those who would take a five or ten shillings note. But the admitted good working, on that score, of small notes in America, Austria, Italy, and elsewhere is a complete reply to the objection. With so perfect a convertibility as that guaranteed by the Act of 1844, why not restore the old one pound note? But prejudice and ignorance are not likely to be soon overcome.

INCONVERTIBLE NOTES.

We have now reached the plague spot of paper currency-the inconvertible bank-note. Fortunately in England its true character has long been understood. It lingered awhile in theory after the nation had

acquired a thoroughly sound currency; so fond, so irrepressible are the dreams of relieving distresses of trade by experiments in currency. It is a most satisfactory proof of how thoroughly the people of England have discerned the nature of a currency built up of promises to pay without payment that during the severe commercial depression, which still weighs on the country with unexampled duration, no quack doctor has proposed in any quarter either the repeal of the Bank Charter Act, and still less remedies drawn from the inconvertible note.

A long statement is not needed to make known its qualities, though volumes would be required to answer in detail the ever streaming and irrepressible pleas advanced in support of proposals for its adoption. The marvel is that so many ingenious and acute things can be urged in behalf of such a client.

The inconvertible note is a bad tool. It does bad work, but yet not always. It is capable, under particular circumstances, of doing good work, but then that is not the object of which its advocates are in search. We know that the work of money, of every tool of exchange, is to effect buying and selling by means of an intermediate instrument which gives to the seller a sure guarantee that he will be able, by means of it, to acquire other goods, at his own choice, of equal value with those which he has sold. We have seen that the guarantee furnished by coin is the value of the metal of which it is made. Further, we know that men will give away their goods on credit, relying on payment on a future day; in fact, they take a debt as a guarantee of future payment. The same motive persuades them

to accept the debt expressed on a bank-note. That motive acts on all other sellers, and thus the bank-note circulates as currency, and is not presented for payment, if wanted for circulating use. Then we have seen that the public makes no other use of the metal of coin than as a guarantee of value. Similarly it employs the debt pledged in the note for the same identical purpose of guarantee. It does not seek to sell the gold of the coin to a jeweller, nor to ask payment for the debt, so long as it thinks that debt trustworthy.

This explanation is necessary in order to arrive at a right understanding of the fact, that the inconvertible note, in spite of the hollow principle on which it stands, can, under a special condition, do good work as currency. When the debt is thoroughly trusted, and when no more of these inconvertible notes are issued than the public requires for actual use, and consequently which it feels no desire to send in for payment, they remain in circulation on a full level of value with coin. Thus it happened that after the passing of the Act of Parliament which forbade the Bank of England to pay its notes in coin, those notes suffered no depreciation. The Bank was perfectly trusted as a debtor, there was no excess of issue, and the notes retained their full value of twenty shillings undiminished.

But the situation became vitiated at its very core when too many notes were issued. Their fall of value went on to the extent that a sovereign became worth twenty-seven shillings in notes. Thus one hundred guineas were worth one hundred and thirty-five one pound notes.

That the inconvertible notes should be limited to the