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preliminary to the settlement of a controversy respecting the laws of international exchange, between Mr. Mill and Colonel Torrens on one side, and Mr. Senior, representing the great body of free-traders, on the other. But now it is no longer a question of merely curious science, but a question of very practical and even urgent importance. What if that event, which seems with so much reason to be expected, should involve great changes in the distribution of wealth in England, enriching some, impoverishing others, prostrating often the best, exalting others not the best, breaking up innumerable old relations, and scattering disorder and obstruction over many of those ancient ways in which the life of England has so long loved to tread? This would indeed be much; but what if, beyond merely material changes, there should concur with them still deeper and more important changes of a moral kind, changes in the feelings, habits, and tastes of men, which would constitute that most awful of all events, a decay in the fibre of national character? This is, indeed, a question, the very thought of which is enough to strike us pale, and to make this hand tremble as it writes. But such things are not impossible. The descendants of those who fought at Marathon and Leuctra were the pliant sycophants and quacks upon whom, even in the corrupter days of Rome, a Juvenal could look down. Greater still, those same Romans, who practised, by a noble instinct, the stoicism which the Greeks only taught-who also, true prototypes of the English, knew both how to conquer and how to govern―that great nation had for its representatives none but liars, swindlers, and cowards, in the days of Luitprand the Lombard. I cannot pursue this strain; it is enough to show that there is or may be here a question of far higher moment than any which divides our parties. I invite all honest men to its consideration; I think I can promise them that whether any clear solution of our problem be gained or not, their time will not be wasted.

To you especially, youth of England, who, with clear intellect and firm will, at Oxford, Cambridge, London, or else

where, are striving, by the highest culture, to become fit for the tasks of a future, yet lying bright before you in all the colours of hope;-to you, heirs to an illustrious ancestry and a priceless inheritance ;-to you, to whom belong as your own both the Saxon and the Norman-the mailed crusaders and the peasant archers the great churchmen and the great thinkers of the times which Mr. Digby has depicted as the "ages of faith,” — the riper and nobler glories of the Reformation-that Ridley and that Latimer, whose fire has been lit up in England, and shall never be extinguished-the wondrous galaxy of poets, statesmen, discoverers, and commanders of Elizabeth-the Falklands and the Hydes, and, nobler still, the Eliots, Vanes, and Hampdens;-to you, who are sensitive to all that was beautiful in the martyr Charles, who

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and all that was grand in the character and career of his great destroyer; or to you, whose sympathies may be by choice with the men of later time, whether with either of the great rivals whose jar in the Senate "shook realms and nations;" or with the heroes of charity and faith, the Clarksons, the Wilberforces, the Buxtons, the Wesleys, the Whitefields; or those purehearted outspoken men, brave in the midst of obloquy, the Prices and the Priestleys ;—to you comes this appeal from one whom a singular destiny has led to dwell in turn upon each and all of these glories with loving admiration, and who can interpret much of your conflicting aims in this perplexing time, out of the conflicts and perplexities of his own experience.

To you, English by birth, comes this appeal, from one who, though not born on the soil, is bound to it by the strongest ties of domestic affection-of friendships dearer than life—of a love which the meditations of years have continually augmented. It comes from one prepared, by long habits of lonely thought, to speak to you at this solemn time. Believe me, it is no common call. Here is no demagogue, seeking to kindle and

then fawn upon the baser appetites-no leader, desiring to use you for his ambition-no turbid excitement for the hustings no stimulant to party passions. All shall be clear and calm. The pulses of the national life already begin to beat with the fire of an old and well-known disorder. The flush is on the cheek, the unhealthy lustre in the eye. Each paroxysm of that malady, if not more painful, is always morally more destructive, than the preceding. There is too much reason to dread another. You are called, therefore, to a consultation, not, I trust, to one which is without hope-for the issue will rest mainly with yourselves—but to a consultation which concerns even the existence of whatever you hold most dear.

The Problem stated.

The immediate problem, then, is to determine by what steps the new gold can find its way, to any great extent, into the English currency. Such gold, when it arrives in England, must come into the hands of persons who will either seek to employ it as capital or to spend it as income. The course, then, must be, to determine what is capital and what is income; to see how the two are related, how far increase of one is connected with increase of the other; and, those relations being once made clear, to trace in what way the incoming flood of new gold may affect them. A man who is about to commence any industrial undertaking must first have his capital in the form of money. His income is also estimated by him, and spent in the form of money. The first step is to mark out, as accurately as possible, what is the actual and general acceptation of the word, and therefore its true meaning. I mean, then, by Money, not simply gold or bank-notes, but THAT, whatever it may be, which is money in the money market and on the Stock Exchange-money with the draper, the grocer, and the butcher.

CHAPTER II.

MONEY.

"The awful shadow of some unseen power

Floats, though unseen, amongst us."-SHELLEY.

Money is Gold, Notes, and Bank Credits.

THERE is in England, existing separately from and in addition to the sum total of its material wealth, excepting bullion, a certain purchasing and paying power established by convention, a small part of it depending on the possession of bullion, but the much larger part on certain legal rights, the whole being placed as it were face to face with the gross stock of commodities, fixed property, and marketable personal qualities belonging to the people. This purchase power is in the aggregate, at any one time, of a definite ascertainable amount, though capable of being enlarged or diminished. It may be possessed by persons without land or goods, and who render no useful service to society, but who, nevertheless, can take the full amount of their claim out of the general stock. It may be divided into the minutest parts, transferred from hand to hand indefinitely, used immediately as income, or accumulated for future use as capital. The same portion which, when held by one man, is capital, may be income when transferred to a second; and after a third transfer, again capital; its character being determined by the manner in which its possessor intends to apply it. It includes the whole of the currency; that is, coin and bank-notes, and bullion in private hoards, together with a large additional sum, in the form of transferable bank credits.

Money is not synonymous with the gold and bank-note currency, because he who has a credit with a London banker

is universally felt to have money in the same effectual sense as if he had the sum under lock and key. His transfer of that credit by cheque operates as an absolute payment, simply by two lines in the books of the banker. In the words of Colonel Torrens, it "closes transactions."

Bills of Exchange not Money.

A bill of exchange never closes a transaction. It is itself only the evidence of one or more transactions, all of which are closed then only when the bill is paid by means of coin, notes, or bank transfer, that is to say, in money. Bills of exchange play a most important part' in effecting transfers of mercantile and banking capital, but they do not enter into income the amount of which determines prices. A bill of exchange is not used for wages or salaries, nor paid away to a butcher or a landlord. For the same reason Government securities, however nearly equivalent to money in many cases, and even acting as money amongst the Scotch bankers, who settle balances in exchequer bills, are yet not money in the popular and correct sense of the term. They will neither pay a bill of exchange nor a railway call, and they do not pass into incomes.

Further, with respect to bills of exchange, on those occasions when the light of monetary science is most needed, they not only cannot be considered in the same line with money as means of payment, but must be placed in direct opposition to it. In a crisis, bills of exchange constitute the precise difficulty that has to be met. Gold, notes, and transferable bank credit, so far as it then exists, are the only means of meeting that difficulty.

Money Capital distinct from Commodities.

Of this aggregate stock of money, a portion is always in

1 See Mr. Newmarch's Paper in the "Journal of the Statistical Society," May, 1851.

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