which interest in 1905, without negative reckoning, will foot up to £88,128,800 and still leave the debt of £11,016,100 standing to the eternal disgrace of every Chancellor of the Exchequer since the illstarred Sir Robert Peel. But that is not all; add to the annual interest which at 3 per cent. £11,016,100 carries, as a negative, and a sum will be arrived at which, as thrown away, would of itself have provided decent housing for the poor and also a proper weekly allowance to the aged, whether well or ill-deserving. Leaving Cassell & Co. to make good their implied aspersion on the honour of Sir Robert Peel and on the honour of the Bank of England, pass on to non-contentious facts.

When the Chancellor of the Exchequer imposed the Export Coal Tax (1) he may have thought that the war would soon be over, and (2) that then he might see his way to repeal the tax. Did this occur to him that the effect of the tax, as also the effect of all taxes on exports, is a reduction of our balances against abroad at a time when our excessive import trade is steadily and seriously creating foreign balances against us? The facts are these: our imports are accompanied by bills which come chiefly into the hands of the London bankers, who straightway sell them, chiefly to French, German, Russian, Belgian, and other foreign bankers, each bill sold bearing the endorsement of the selling bank. Further, as our import trade has increased, so has increased the foreign London banks' agencies to buy those bills. And so grave had the situation become so far back as 1876 that attention was directed to it by a London banker, Mr. Ernest Seyd, in a paper read by him at the Society of Arts. He then held that the sum of those foreign-held bills payable on demand, although their due dates had not been reached, was not less than £60,000,000 in gold, although the average holding of gold and silver then, as now, by the Bank of England, was £35,000,000, a fourth of the sum in silver. Nothing beyond carping criticism followed from those presumably holding briefs for the banks, and those in the know could only shake their heads. Later, in 1893, in a paper entitled "Dangers of Modern Finance," which appeared in the March number of the Fortnightly Review, Sir Samuel Montague, M.P., took up the position held by Seyd in 1876. Everybody knows how our imports have increased since 1876 and 1892, and impliedly with the increase the number of bills held against us by abroad; and so grave is the situation now as the result of our gigantic import trade and its obligations, that were we to become involved on the Continent the first shot that would be fired against us would be the presentation for payment in gold of not less than £100,000,000 on endorsed London bankers' bills, against which there is the average holding in gold and silver of £35,000,000 by the Bank of England. Yet Mr. H. D. Macleod, in the preface to his recent "Indian Currency," has the hardihood to write that:

"The present monetary system of England is founded on the experience of centuries and the unanimous arguments of the greatest economists for 500 years. It is the most perfect monetary system ever devised by the ingenuity of man. It is now being adopted with some slight modifications of detail by the most powerful and civilised governments in the world."

Well done, Mr. MacLeod; you have done the best for the banks, and if what you say is so, the "most powerful and civilsed Governments are drifting towards liquidation accentuated by the external pressurə of the struggling masses for whom there is neither housing nor cldage pensions-indeed, under present conditions, no hope.

Whatever the line to be now taken by the Chancellor of the Exchequer in his next budget he is sure to be severely handled by the interests he bleeds; and in the interest of the rate and tax payer the following suggestions are made: The London and County Bank by its report of August 1, 1901, appears to be in a prosperous condition of figures; and there is no unfairness in generalising its gains. Its gross earnings last year were 40 per cent., a gain which literally wrings the neck of industry and commerce. Contrast that gain with what has been said to be the occasional gain in the textile industries, which done call upon the Bank and all banks to justify the difference. At times in the textile industries there are no profits for distribution, and at other times the profits are reckoned in four to five places in decimals, namely, in profits from one penny per £100 to one shilling per £100. In the paper of Mr. Seyd previously referred to he outlined the various money clearings without money leaving two or three blanks. That was in 1876, and he then gave the clearings (filling in the blanks for him), as the London banks £6,000,000,000, the country and general bankings £8,000,000,000, the general accounts and settlements £5,000,000,000, and the inland and foreign bills £1,200,000,000, with a total of £20,000,000,000, but now £40,000,000,000. So let the Chancellor of the Exchequer put 1 per cent. on the annual clearings at £20,000,000,000, or 2 per cent. on the £40,000,000,000, the former returning net £200,000,000, and the latter £400,000,000. As before stated the gross earnings of the London and County Bank last year were 40 per cent., and who will say that a deduction of 1 per cent. or 2 per cent. could not be spared. Of course there will be the old hue and cry that the industry and commerce of the kingdom would have to pay the charge but that need not follow. For since, as Mr. Macleod puts it, the bankers are no longer bankers in the popular sense, but "manufacturers of credit" the good they do to trade is more than offset by their harm to it by the assistance they extend to gambling on the Stock Exchange and the produce exchanges by trusts, rings, and other combines to the prejudice of trade and industry, and particularly to the facility that they extend to imports

for the creation of foreign balances against us, which on pressure for payment would overwhelm us; the banks opposing the national wellbeing and development however helpful they may prove to individuals and corporate interests. The first suggestion to the Chancellor is that forthwith all clearings in substitution for the lawful coin of the Realm shall for the past year and for each month of the present year and during all subsequent months pay into the Exchequer without deduction 1 or 2 per cent. of the sum of the clearings.

A second suggestion is that the public account with the Bank of England be forthwith closed by paying off the £11,016,100 now owing, the payment to be made in Consols, coupon bonds carrying 3 per cent. interest for twenty-four years and 1 per cent. interest for a further period of twenty-four years, when the National Debt would cease and the trade and commerce of the kingdom be released from the present annual burden of say £25,000,000 interest. The reason for the restriction to 1 per cent. for the second period is as before stated that the accumulative power of human effort in seventy years is only 1 per cent., and that interest for money should not possess a greater accumulative power than human effort. What will double the million of the millionaire in seventy years? What will double the earnings of the professional man or the working man or any man in seventy years? The answer is 1 per cent.

Vitalising the National Debt by converting it into Consols coupon bonds, while ultimately relieving the taxpayer from the annual burden of £25,000,000, might be made the means of placing our banking system on the secure basis of Canadian and United States banking, by requiring all notes to be secured by deposits at the Exchequer of Consols coupon bonds, and further, by requiring all persons and corporations dealing in money to lodge at the Exchequer not less than 40 per cent. of their capital in Consols coupon bonds. Why should not the public be made secure in their money, and why should not the national credit be preferred to personal or corporate credit? Surely the Bank of England should be a borrower from the Exchequer, rather than the Exchequer a borrower from the Bank of England. The present system cannot justify itself. In many ways which need not now be particularised, Consols coupon bonds would be of service to the public and to the banks. For example, when the Bank of England has stood in need of assistance from the Bank of France, the clumsy expedient of a third party drawing short bills on a Paris banker for discount by the Bank of France for coin need not be resorted to and its cost paid. For with the Consols coupon bonds of Great Britain in a carpet-bag, a banker taken short might set out for New York or Montreal to satisfy his wants, should he not care to go to Paris, Berlin, or Amsterdam. Such are the businesslike courses before the Chancellor of the Exchequer.

Turn, finally, to the Corporations which have laid upon posterity

impossible payments. How are they to be delivered (1) from current interest payments and current charges, and (2) from the principal sums they have laid upon posterity to pay? There is one and only one way out of both difficulties. There is no other way, no alternative. The plan is extremely shocking and calls upon us all to put pride in our pockets. A year ago Glasgow had it in the mind's eye to issue £500,000 in £1 corporation notes, receivable in payment of rates, if in payment of nothing else, and the proposal will hold water and ultimately prevail. Why not? Canada has gone in for it in millions, and why not Glasgow, as a beginning, go in for half a million? Guernsey did it for its meat-market, and why not every corporation in the kingdom for the relief of its ratepayers and the helping forward of its industries against competition at home and abroad? Surely it is incumbent on us to re-arrange our ideas on money matters, as well as on other things, as altered circumstances require. We really cannot allow ourselves to be bowled out by America and Germany when we may help ourselves and hold our own by easing off the local burdens. Excepting in their abuse there has been nothing done in our money matters since 1844, when Peel meddled with them only to spoil them. His idea of banking was a sovereign downstairs for each pound note upstairs, whereas nowadays, with not enough gold at the Bank of England to go round, three London banks-namely, Lloyds, the National Provincial, and the London and County frequently owe the public, on their own confession, £150,000,000 among them. Whereas Lloyds, Limited, did not exist in 1844. In 1866 the National Provincial opened in London from Gloucester, Brecon, and other parts, and the London and County, in 1836, was a small affair with a different name in Southwark High Street; those three banks, typical of many others, have prospered in figures as "manufacturers of credit," their managers, men of character, energy, and resource; but a manufacturer of credit, handling things already made and "securities already made, can hardly nowadays be regarded as an important factor in industrial development or in social ameliorations, otherwise there would be less misery in evidence. Thus the banking present is essentially unlike the banking past, and the new municipal idea of an issue of local notes to pay expenses we owe to Glasgow, after Guernsey.

To illustrate the working of local notes from the Glasgow point of view, the use of £500,000 is desired for something in relief of rates, or for some needful purpose. "The impudence of the thing," exclaims the fellow who does not pay rates and who does not know what he is talking about. The workman takes the notes or goes, and, on inquiry, he finds that the shopkeeper, who has rates to pay, receives them and also his landlord. In short, in time the whole £500,000 is absorbed and is in local circulation, and, the

sum being obtained for the cost of ink and paper and productively employed, the Corporation is in a like position to that of the promoters of the Guernsey meat-market, who destroyed the notes as the rents were paid. In time, Glasgow would issue a second £500,000, the new profits, added to the old, probably relieving the community from rates, with an indirect increase of wages and cheaper productions all round. Of course, the long-term engagements could only be dealt with in one way. A sinking fund would have to be created by lending at compound interest to public bodies, who would take, from time to time, the surplus profits available and hold them for a term of years. Obviously by such means posterity would become possessed of a goodly heritage, instead of an aggregation of obligations which it could not pay and which necessarily it would subject to repudiation.

Finally, before the Chancellor of the Exchequer thinks of new borrowings and new taxes, does not the insurance system present a fruitful field for him to operate upon without incidental cost of collection? A fair charge on all insurance in the United Kingdom would be 10 per cent. on gross income. In illustration of what life insurance is (subject to differences in offices): with the expectation of life at 20 for 50 more years, a man at 20 insures for £1000 at an annual premium of £20, and 30 years later he desires to surrender How is he met ? He is liable to the office

his policy to the office.

for 20 years more of £20 annually at 3 per cent.

At his death £1000 is to be paid, for which he has paid already, at 3 per cent., direct and negative, £1427 5s., and he is still liable for 20 times £26 17s. 43d., or £537 17s. 43d. is not highway robbery. It is life insurance.

This is lively. It

P. BARRY.