a demand for bullion in some or any foreign country should arise--the disturbance, confusion, and ruin, that such contraction might spread might be incalculable.

Suppose, at the time now present in the year 1844-the Bank-having 10 millions of bullion and 4 millions of coin in its vaults and coffers-that the circulating medium of coin and paper-money in the United Kingdom is in due supply, which may safely be assumed as an unquestionable fact.

If a demand for gold were never hereafter to arise in any foreign country-those 10 millions of bullion (78.7 tons weight, if all in gold), must remain buried, idle, and unproductive in the vaults and coffers of the bank for ever.

Suppose that a demand for gold were to arise in some foreign country or countries-which would be indicated or known only by the Exchange with such foreign country or countries becoming what is technically called against the United Kingdom-and that, to supply such demand, half or the whole of the 10 millions of bullion in the bank were exported—and the bank, as bullion merchants, were thereby relieved from the loss of having the half or the whole of such an amount of bullion lying idle and unproductive in vaults and coffers in Threadneedle-street.

It is not easy to see upon such suppositions-why it should be admitted, believed, or thought-that the quantity of the circulating medium in due supply to the people of the United Kingdom should be contracted, and some or a large part of that due supply be withdrawn-merely because-forsooth

some foreign country had wanted and had got a supply of bullion from the United Kingdom, to the great relief and profit of the bank.

Yet such, and no other, is the admission which the Prime-minister requires to have made to suit his theory touching Foreign-exchanges-upon which theory, founded on delusions and fallacies-it is proposed by the Bill, to legislate-and ultimately to create, by law, a single bank of issue for the whole United Kingdom, to regulate (i. e. disturb) the circulating medium throughout the realm, whenever, and at every time when, some foreign country has a demand for gold lying idle and unproductive in the Bank of England.

It has been already shown, that in practice, the directors of the Bank (although for reasons best known to themselves they acquiesce in and argue in support of the theory of the Primeminister) always act in direct opposition to that theory-and as fast as the notes of the bank are brought in for bullion to be exported in consequence of the state of foreign exchanges, always immediately re-issue such notes, and often with increase!

Such increase or expansion of issue of papermoney in the United Kingdom on the efflux of gold by exportation therefrom-i. e. when Exchange with some foreign country or countries is what is called against the United Kingdom-in violation of and in direct opposition to the theory of the prime minister may not only be expedient, judicious, and wise, but almost indispensable, in order to prevent undue and unnatural contraction of the

circulating medium of the United Kingdom, and for the following reasons, viz:

:

On silver coined at the Royal mint, in pursuance of the 57 Geo. III, cap. 68, a seignorage is charged of four shillings on every pound troy-weight. The silver-coin of the realm, therefore, contains a quantity of silver less by 6 (6.06) per cent. than it passes current for as money within the United Kingdom.

Such silver-coin is, therefore, never melted nor exported, because if any one were to melt it, or to export it as bullion—he would by either operation lose six per cent. on the quantity melted or exported.

But gold is coined at the royal mint for nothing to all comers or customers. Whoever carries gold to the mint, has delivered out to him the same weight of pure gold in coin as he took in bullion, and a present is made to him of the alloy.

By the coinage-the weight and the fineness of each piece of gold coin is ascertained and certified by Royal and legislative authority-and gold, after being coined, passes by tale as money, without the trouble of weighing or assaying each piece at every transfer of it.

That the weight and the fineness of gold-coin should be ascertained and certified by Royal and legislative authority-by the metal undergoing delicate, laborious, and expensive processes at the mint for nothing-seems as incomprehensible, as it would be to hear of a goldsmith who, being found the metal, would form it into a teapot or a candlestick of gold for nothing.

The coinage of gold-money at the Royal mint is, moreover, attended with an immense annual expense-after giving credit for the profit of the seignorage taken on the coinage of silver and of copper-for the indulgence of the fancy of coining gold for nothing.

The consequence of the indulgence of that fancy is that any given weight of gold in coin, and the same weight of gold bullion of equal fineness, are, in the United Kingdom, of equal value for the purpose of the goldsmith, or other worker in gold, or for exportation,-and gold in coin (as it can be commanded by constraining the Bank and Bankers in London to give it forth for notes and cheques payable to bearer in coin on demand), is sure, therefore, to go first for exportation-when there is any sudden demand of gold for exportation, or when there is any scarcity of gold bullion—and the goldsmith, or other worker in gold, throws the coin into his crucible, and so provides himself with what gold bullion he is in want of, without the trouble of going to market for it, or of weighing or assaying it.*

To coin gold for nothing-i. e. to ascertain and

* Gold in coin-although, only of equal value for melting or for exportation, with the same weight of gold-bullion—is, in fact, really of greater value; possessing, as it does, the extrinsic value of the coinage, by which the weight and fineness of each piece of coin is ascertained and certified by Royal and legislative authority. The Royal mint is, therefore, by the fancy of coining there for nothing, kept at work to provide, at an immense expense to the public, gold weighed and assayed for melters and exporters of that metal.

certify, by Royal and legislative authority, the weight and fineness of masses of gold for nothingis to give a bounty on the exportation of gold in coin.

The quantity of paper-money OUT, multiplied by the velocity of its circulation, forms, as has before been observed, by very much the larger part of the power of the circulating medium,— and paper-money never is withdrawn from circulation to be exported! But when, from the circulating medium duly supplied with power of currency, part of the gold coin is withdrawn for exportation-unless the place of the coin so withdrawn were supplied with paper-money of power in the currency equal to the power so withdrawn -there would be an unnatural and distressing contraction of the circulating medium. It follows, therefore, that instead of contraction of the paper currency, when gold is in demand for exportation (i. e. when Exchange with any foreign country is what is called against the United Kingdom), that expansion of such paper currency may not only be proper, but indispensable, in order to preserve or restore the equilibrium of the circulating medium disturbed by gold coin being withdrawn from it for exportation.

If that proposition be admitted, or be true, whether admitted or not,-the whole theory on which the Bill proceeds, as stated in the speech of the Prime minister,-viz. "that there ought to be contractions (early contractions) of paper on the efflux of gold,"-falls to the ground,-and it would

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