year, and call the aggregate currency. Less reasonable, indeed; for by the latter process you would get the sum of all the transactions, by the former you get at the sum only of those money payments of which bills of exchange are the warrants and the vouchers.

If I have been so fortunate as to carry with me the convictions of my readers in the foregoing reasoning, they will be prepared to acquiesce in the following conclusions.

That whatever portion of the precious metals existing in the world, England, agreeably to the laws to which I have referred, could retain for her use as money,* will,-under our present monetary system-be represented as follows:

* It is quite certain that England will always have the full share to which she is entitled; there will generally, indeed, be a tendency to excess, because England, above all other countries, produces things which all men desire to obtain. That excess will not, of course, for reasons already referred to, remain in the country, but such will be the tendency, The facts are in accordance with this supposition. The late Mr. Rothschild was so struck with the tendency he had observed in the precious metals always to flow towards this country, that in his evidence before the Committee on the last renewal of the Bank Charter, he said that, but for a bad harvest now and then, British investments in foreign loans, mining adventures, &c. &c. the money of the world would centre in England. The enormous accumulation of specie in the Bank of England, now that discredit has fallen on investments in foreign stocks is a curious corroboration of the truth of his remark.

1st, by Gold and Silver coin.
2ndly, by Bank Notes.

3rdly, by Banking deposits.

And that if we could learn the exact amount of these three items, and deduct from the aggregate, first, the amount of specie held against her issues of notes and deposits by the Bank of England; and secondly, the amount of specie, and of bank notes (whether of the Bank of England or of other issuing banks) held by the London and Country bankers against their deposits and issues; we should acquire the knowledge of the precise amount of money, paper and metallic, necessary to, and used by, England for her pecuniary transactions. We have no means of ascertaining what that amount may be; were I to hazard a guess on the subject from data which, though in great part conjectural, may not be very remote from the truth, I should estimate the amount at from £150,000,000 to £175,000,000-an estimate in which I think those who have paid attention to the subject might not be indisposed to agree with me. If the above estimate be an approximation to the true state of the facts, it would furnish a curious incidental corroboration of the soundness of the views I have stated; inasmuch as the amount assumed as the aggregate sum of money required by this country, would be not very

dis-similar in amount to the sum which we know to be used in France, where the money is almost wholly metallic-the issue of notes being but trifling, and our system of banks of deposit almost unknown. The most recent inquiries give £120,000,000 sterling as the amount of gold and silver money in France-the bank notes are from £12,000,000 to £15,000,000—the amount of banking deposits I am without the means of even conjecturing, but it would probably not raise the total of money, paper and metallic, in France above the lower sum, and would certainly leave it below the larger of the two sums I have named as the amount in England.

CHAPTER II.

ON THE LEGISLATIVE REGULATIONS TO WHICH OUR MONETARY SYSTEM MAY BE SUBJECTED-MR. TOOKE'S RECENT PAMPHLET NOTICED.

Or the constituent portions-agreeably to the view we have taken--of our paper money-there is one and that the larger portion, namely, banking deposits, which I fear we must admit at once to be beyond the reach of direct legal control. I know not by what principles any legislative interference with this important element of our monetary system could be guided, or if such could be found, by what species of supervision their practical operation could be insured. We might, it is true, following the example of the Legislatures of the United States in this particular, prescribe certain limits in relation to paid up capital, which banks should not exceed either in their liabilities or their advances; but I am aware of no à priori reasons for the selection of one limit rather than another, and the experience of America would not lead us to expect much practical benefit from the operation of any such restrictions.* It is as

*

By the "Revised Statutes of Massachusets," "The total amount of debts, which any bank shall, at any time, owe, shall not exceed twice the amount of its capital stock actually paid in,

clear, I think, that the most reckless mismanagement of the funds of a bank whether its own, or entrusted to it by its customers, might take place within any limits to banking operations which could be prescribed by the Legislature, as that such limits might often be exceeded with perfect safety and propriety. It is unnecessary, however, to pursue this subject further-no desire existing in any quarter, so far as I am informed, for Legislative interference with banking operations apart from the issuing notes.

But if we can exercise no direct control over so important an element of our monetary system as banking deposits, are we equally without the power of subjecting it to indirect restraint? On the contrary, I entertain the firm conviction, that we have the power, by a double process, of providing very efficient safeguards against abuse in the administration of banking deposits; first, by an amended constitution of banking associations, to which I shall hereafter advert; but secondly, and mainly by restricting to the State alone the power of issuing notes payable to bearer. We have seen that bank notes constitute the smaller portion of our exclusive of sums due on account of deposits not bearing interest;" (not a large item according to the American system of banking), "nor shall there be due to such bank, at any time, more than double the amount of its capital actually paid in." Provisions of similar character, though varying occasionally in the proportions prescribed, are to be found in the laws relating to Banks of every State in the Union.