also certain expedients for economising the use of the Currency; you would call both one and the other of those portions of the circulating medium?-Precisely.

3287. "Do you include, in the word 'Currency,' bills of exchange ?—No.

3288. "If you include, in the term 'Currency,' a crossed cheque, payable at a banker's, to be presented, therefore, at the Clearing House, and having, therefore, before presentation not more than seven or eight hours to run, why is it that you do not include in the term 'Currency' a bill of exchange payable also at a banker's, falling due to-morrow, and having, probably, not more than about 24 hours to run ?-It is only a question of the general acceptance of the term; there is no essential distinction. in the particular case. I may, perhaps, be allowed to say, that the only question as to the employment of different descriptions of circulating medium is referable to the combined considerations of economy, convenience, and security.

3289. "If the cheque, according to the supposition in the former question, be included in the term Currency,' will not a bill of exchange, due to-day, payable at a banker's, be entitled also to be included in that term ?-It is only a question of convenience in the classification; I am not aware that it is of any importance in practical operation.

3290. "Bills of Exchange having, previous to maturity, one, two, three, four, or more days to run, differ in character by insensible degrees from a crossed cheque, a crossed cheque being that bill which has the shortest time to run?-They differ in character by insensible degrees, and likewise in the trifling difference of convenience from their not being used till maturity, unless under a calculation of discount."

Mr. Tooke then started a theory which, like many others, is true in some cases, and which, we believe, he was the first to notice; but which he pushed to an extreme, which drew out some just strictures from Colonel Torrens.

3292. Mr. Hume: "Will you state what part of the Currency, or circulating medium, affects prices, under the definitions which you have now given ?—No one part of them affects the prices of commodities more than any of the other parts.

3293. Mr. Grote: "Do you mean not more in degree, or not in any different way ?-Not more in degree.

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3294. "You mean that every portion of that which you have described under the name 'circulating medium' is perfectly equal to every other portion in the effect which it produces upon prices?-Perfectly so.

3295. Mr. Hume: "Do you mean that every transaction of purchase or sale by any of the means which you have mentioned, as included in the circulating medium, equally affects prices?— Yes; and that was my reason for caring so little about making a distinction among them. I doubt whether they operate upon prices at all.

3296. Mr. Grote: "You mean that none of these items which you have enumerated under the general term 'circulating medium' have in your opinion any effect upon prices ?-Yes; I mean that they are not operative causes of prices.

3297. Mr. Hume: "What is it, then, which does affect prices? -The cost of production limiting the supply on the one hand, and the pecuniary means of the consumer limiting the demand on the other.

3298. "Will not the variations in the quantity of the circulating medium affect prices?—No.

3299. "Will it not, if abundant, be more at the disposal of individuals for purchases than when it is scarce ?-It will be more easily disposable, but it will not be necessarily so disposed of. I believe that the amount of the circulating medium is the effect, and not the cause, of variations in prices."

16. Lastly, we may quote Colonel Torrens, because he was not only one of the most influential of this school, but it was sometimes alleged that he was in reality the author of the scheme which Sir Robert Peel adopted in his Bank Charter Act of 1844. He says1"The terms money and Currency have hitherto been employed to denote those instruments of exchange which possess intrinsic or derivative value, and by which, from law or custom, debts are discharged and transactions finally closed. Bank Notes, payable in specie on demand, have been included under these terms as well as coin, because, by law and custom, the acceptance of the notes of a solvent bank, no less than the acceptance of coin, liquidates debts and closes transactions; while bills of The Principles and Practical Operation of Sir Robert Peel's Act of 1844, explained and defended, p. 79.

exchange, bank credits, cheques, and other instruments by which the use of money is economised, have not been included under the terms money and Currency, because the acceptance of such instruments does not liquidate debts. and finally close transactions."

Again he says, in reply to some perfectly just observations of Mr. Fullarton-"It is an obvious departure from ordinary language to say that whether a purchase is effected by a payment in bank notes, or by a bill of exchange, the result is the same. According to the meaning of the term, Money and Credit, as established by the universal usage of the market, a purchase effected by a payment in bank notes is a ready money purchase, while a transaction negotiated by the payment of a bill of exchange is a purchase upon credit. In the former case the transaction is concluded, and the vendor has no further claim upon the purchaser; in the latter case the transaction is not concluded, and the vendor continues to have a claim upon the purchaser until a further payment has been made in satisfaction of the bill of exchange. A bank note liquidates a debt, a bill of exchange records the existence of a debt, and promises liquidation a future day. Mr. Fullarton not only inverts language, but misstates facts, when he says that the transactions of which bank notes have been the instruments must remain incomplete until the notes shall be returned upon the issuing bank, or discharged in cash. A bank note for £100 may pass from purchasers to vendors many times a day, finally closing on the instant, each successive transaction. A bill of exchange may also pass from purchasers to vendors many times a day, but no one of the successive transactions of which it is the medium can be finally closed until the last recipient has received in coin or in bank notes the amount it represents.

"Now it is the necessity of ultimate re-payment which constitutes the main point of distinction, which marks the boundary between forms of credit and money. It is a necessity which applies to bills of exchange and cheques, but which does not apply to bank notes; and, therefore, upon Mr. Fullarton's own shewing, upon his own definitions and his own conditions, as to what constitutes money, bank notes come under the head of money while bills of exchange and bankers' cheques, and such other instruments as require ultimate payments, transfers, and

settlements, do not come under the phrase money.

Сроп Mr. Fullarton's own shewing money consists of those instruments only by which decos are discharged. balances adjusted, and transactions finally closed: and, therefore, Mr. Fullarton, unless he should choose to ecctine to contradict himself, must admit that bank notes are, and that bills of exchange, cash credits, and cheques are not, money."

17. We have now given sufficient extracts to shew the chaos of conflicting and contradictory opinions which prevailed. Not a single witness had the remotest idea of the true legal meaning of the word Currency. And we must now point out the necessary logical consequences to which the doctrines of these persons lead.

Mr. NORMAN said that money, or Currency, should possess fixed value, and be a perfect numerator. But how can money, or any thing, possess fixed value, when its value is changing from hour to hour?-An instrument of credit may preserve an equality of value with respect to money, but not with respect to anything else, unless it is expressed to be payable in it. He said that he meant by a numerator that which measured the value of other commodities with the greatest facility. Why does a promise to pay £50 measure the value of things with less facility than £50 itself?

It is not a little amusing to find the celebrated phrase of the Roman Catholic Church-Quod semper, quod ubique, quod ab omnibus, starting up and meeting us in a discussion on Currency. In Lord Overstone's opinion money and Currency are identical, and include the coined metallic money, and the paper notes promising to pay the bearer coin on demand; and, he says, that the characteristic of their being money is, that they are received equally at "all times, between all persons, and in all places." For the sake of shortness, let us designate this phrase by 3A, from the three alls in it. He excludes Bills of Exchange from the designation of Currency, because "they do not possess that power of universal exchangeability which belongs to the money of the country." This definition is fatal to Lord Overstone's own view. In fact, if it be true, there is no such thing as money or Currency at all. In the first place, it at once excludes the whole of bank notes. The notes of a bank in the remote

district of Cumberland would not be current in Cornwall; therefore they are not 3A; therefore they are not Currency. Again, the notes of a bank in Cornwall would not be current in Cumberland; therefore they are not Currency. Similarly there are no country bank notes which have a general Currency throughout England; therefore no country bank notes are 3A; therefore no country bank notes are Currency. Till within the last fifty years or so, Bank of England notes had scarcely any Currency beyond London and Lancashire; in country districts a preference was universally given to local notes; therefore Bank of England notes were not 3A; they had not a power of "universal exchangeability;" "therefore they were not Currency. Bank of England notes would, even now, not pass throughout the greater part of Scotland. If, therefore, the test of 3A and "universal exchangeability" be applied, the claims of all bank notes to be considered as Currency are annihilated at once. The acceptance of a Baring or a Rothschild, would be received in payment of a debt by a far larger circle of persons than the notes of an obscure and remote country bank.

But the universality of Lord Overstone's assertion is fatal to his argument in other ways. On the Continent, silver is the legal standard of value; in England, silver, like copper, is merely coined into small tokens, called shillings, &c., which are made to pass current above their natural value, and are only legal tender for a very trifling amount, hence it cannot be used in the adjustment of all transactions; therefore it is not 3A; therefore it is not Currency. There are other countries where gold is not a legal tender, therefore it fails to satisfy Lord Overstone's test, therefore it is not Currency. If, then, the test proposed by Lord Overstone be considered as correct, it is easy to see that there is no substance or material whatever that will not fail under it; and, therefore, there is no such thing as Currency.

The fact is, that the only difference between a Bill of Exchange and a Bank Note is, that the former is a promise of a deferred payment, and the latter that of an immediate one, and there is less risk in taking the latter than the former. From these circumstances, a Bank Note possesses a greater degree of circulating power than a Bill of Exchange. But, in the Midland Counties of England, it used to be quite common for the banks to issue the bills of exchange they had discounted with their own