1 64 Present State of Society, [FEB. 



changes. The most immediate in effect, and the most unjust because 

 impartial in its operation, is the alteration of the value of the circulating 

 medium by the la-le economists. It would be beyond the scope of this 

 article to enter into all the various branches of so wide a question as 

 that of the Currency ; but we may be justified in examining a few of its 

 leading features. The principal argument adduced by the economists 

 in favour of a circulating medium based on real value, was its safety as 

 compared with one which only represented such value, and the com- 

 parative stability with which it invested all commercial transactions. 

 This argument was dwelt upon by the advocates for cash payments as one 

 of incontrovertible truth ; and the disastrous panic of the years 1825 and 

 1826, with its accompanying ruin, was triumphantly pointed out as illus- 

 trative of the danger of the existing system. Its effects were stated to be 

 overtrading to a ruinous extent, production beyond any possible demand, 

 wild speculations entered into by persons incapable of sustaining the 

 reverses which might ensue, and consequent losses to the community at 

 large. Now amidst these apparently overwhelming evils it is astonish- 

 ing how few really deserve any serious consideration. The only ones 

 in fact which do so deserve, are not inherent parts of the system, but 

 excrecencies which a little restriction or regulation on the part of the 

 legislature might correct. It was urged that there was no security 

 against the issue of notes by bankers not possessed of capital sufficient to 

 guarantee their safety, if, by speculation or otherwise, they suffered any 

 sudden loss. This certainly is an evil not difficult to remedy ; but in 

 fact the evil never existed to half the extent supposed by those who 

 offered it in support of their measure. It has been ascertained that, out 

 of about seventy banking houses, who failed during the two years we 

 have mentioned, the whole, with the exception of less than half a dozen, 

 have since paid their engagements in full, after all the enormous sacrifices 

 they must have made! Many of these too were houses who never issued 

 a one-pound-note in the course of their practice. The system, it was^added, 

 induced bankers, by the advantages it offered, to extend accommodation 

 to persons possessed of no capital, who were thus enabled to carry on 

 business to the detriment of men of property, and the risk of loss to the 

 community. In this case we should assuredly say, that the risk, if any, 

 was the banker's own ; and as to the other part of the argument, we 

 cannot see its pertinence. Here was at least a system which enabled 

 men of industry (for their own sake, the bankers would give the pre- 

 ference to such men) to support themselves and their families in comfort, 

 and to support, besides, the labourers, who would otherwise have bur- 

 thened the poor-rates. But it was added, that by encouraging such 

 men we encouraged over-trading. What is overtrading ? We cannot 

 for the life of us tell. We became overproductive. In what ? Not in 

 corn, for abundance of the necessaries of life is a blessing, not a curse. 

 In manufactures then? Not at all, for in the great manufacturing counties, 

 small notes were but little used ; in Manchester and London, the great 

 mercantile cities of the empire, they were entirely unknown I But fur~ 

 ther, if we were overtrading, would that not tend to cheapen, arid is not 

 cheapness our great strength in foreign markets ? Can we be overpro- 

 ductive so long as our goods sell readily, both at home and abroad ? and 

 they did sell, both readily and profitably. Why, then, for the dread of 

 this bugbear, "overtrading/' have we sacrificed our prosperity? We shall 

 see anon. 



