with a great number of branches to each. To shew how the system has a natural tendency to become concentrated among a few great establishments, we may compare the existing number of separate institutions, at different periods. In 1826, there were 32 independent banks, of which 13 had less than 10 partners, 10 had less than 100, and the remaining 9 had more than 100. Fourteen of these had no branches, 17 had not more branches than 5, and the highest number that any bank had was 30, which was the Commercial Bank. The total number of offices was 159. In 1848, there were 391 branches; in 1855, there were 462 branches and 17 principal offices; in 1857, there were the same number of head offices, with 666 branches; and in 1859, there were 14 separate banks-one, the Union, having 4 head officesand 597 branches, making, altogether, 615 offices.

The following table exhibits the banks at present existing in Scotland, upon which we shall make some remarks in a future chapter

CHAPTER XII.

ON SOME THEORIES OF CURRENCY.

1. It now becomes our essential and most important duty to investigate some Theories of Currency, which have acquired great celebrity, not only from their historical interest, as having led to some of the most extraordinary and heartrending public calamities on record, but because they are still extensively believed in at the present day. It is of essential importance not only to lay the true foundations of monetary science, but also to point out the fundamental fallacies upon which some specious, but fatally delusive, theories rest, which have brought the most disastrous consequences upon those nations which have adopted them, as will always be the case when the eternal laws of nature are systematically and perseveringly violated.

2. The first of these theories we shall designate as LAWISM, not because John Law was the original deviser of it, but because he was the first who wrote the most formal treatise on it, and he had the opportunity of carrying it out on the most extensive scale. His name, therefore, must always be most prominently associated with it; and it is one so specious, but so dangerous, and so widely prevalent at the present time, that it requires to be branded with a distinctive name, and to be combated with all the power of argument that can be brought against it.

3. The question shortly stated is this. All persons, except those who advocate an inconvertible paper currency, agree that a paper currency must represent some article of value, and bullion has been generally chosen for that purpose. Now, the idea has occurred to a great many persons-If it is only necessary that a paper currency should represent some article of value, why should it not represent any or all articles of value, such as land, corn, silk, or any other commodities, and, among others, the public funds? And this has actually been tried in several

instances, yet they have universally failed, and in many cases have been attended with the most dreadful calamities. Now, as this has uniformly happened, and, as we shall shew further on, it must happen, it necessarily follows that there must be some radical error in the principle, and that it must violate some great law of nature. And this is beyond all comparison the most momentous problem in Economics-Why is it improper to issue a paper currency on any other basis than that of bullion ? All the most eminent British statesmen have instinctively resisted such proposals, although repeatedly pressed to do so. No doubt it has been a most fortunate instinct for the country; but all their reasonings on the subject, if only pursued to their legitimate consequences, tend to that result. The Bank Act of 1844 was the first occasion on which a small bit of this theory was introduced, which, if only followed out to its legitimate conclusion, would produce in this country the horrors of the Mississippi scheme in France. But though the British Parliament, by a blind, unreasoning instinct, has always, with the exception just named, resisted such fatal advice, this will not satisfy the demands of science. Science imperatively demands a reason why such a plan is wrong; she will not be satisfied with a simple dogmatic assertion that it is wrong, even though that dogma may be right, but she must know the reason why; and, until a true, scientific, reason is given why such plans are fatal, there will be a constant demand for them.

4. It is, moreover, the thing which has brought the name of Law into such unhappy notoriety. Law has, in many respects, very great merit as a writer. In many respects he had clearer, and sounder views on monetary science; he had infinitely more practical insight and scientific knowledge of what he was writing about, than the most eminent of modern political economists. In his various writings is to be found the refutation of all the absurd follies of the Government and of the Bank of England in 1811. But all this was marred by a single defect. He was the great advocate of what is now the popular crybasing a paper currency upon any article of value beside bullion. The only difference between him and our greatest statesmen is that he carried out their arguments to their legitimate conclusion. He had the opportunity of carrying this theory

CHAPTER XII.

ON SOME THEORIES OF CURRENCY.

1. It now becomes our essential and most important duty to investigate some Theories of Currency, which have acquired great celebrity, not only from their historical interest, as having led to some of the most extraordinary and heartrending public calamities on record, but because they are still extensively believed in at the present day. It is of essential importance not only to lay the true foundations of monetary science, but also to point out the fundamental fallacies upon which some specious, but fatally delusive, theories rest, which have brought the most disastrous consequences upon those nations which have adopted them, as will always be the case when the eternal laws of nature are systematically and perseveringly violated.

2. The first of these theories we shall designate as LAWISM, not because John Law was the original deviser of it, but because he was the first who wrote the most formal treatise on it, and he had the opportunity of carrying it out on the most extensive scale. His name, therefore, must always be most prominently associated with it; and it is one so specious, but so dangerous, and so widely prevalent at the present time, that it requires to be branded with a distinctive name, and to be combated with all the power of argument that can be brought against it.

3. The question shortly stated is this. All persons, except those who advocate an inconvertible paper currency, agree that a paper currency must represent some article of value, and bullion has been generally chosen for that purpose. Now, the idea has occurred to a great many persons-If it is only necessary that a paper currency should represent some article of value, why should it not represent any or all articles of value, such as land, corn, silk, or any other commodities, and, among others, the public funds? And this has actually been tried in several