of considerable authority, on certain projects of a deceased statesman for whom freedom wears no mourning, having reference to those countries. What a droll thing it would be thought, if there was a chance for the whole constitution, interests and political connections of the United States of America, being found some morning changed, by virtue of the loves or hates of Miss or Master Maddison if such there be, and if the business of the leader of the administration was to play his cards, as hearts or clubs were trumps in such a game!

.. The third is upon Portugal; a fertile subject, since ministers have undertaken to boast of the unanimity with which despotism is accepted in that country-knowing all the time, that 100,000 men were marched on the Peninsula to put down the friends of constitutional freedom, and that these friends would be great fools if they exposed themselves to danger, till the 100,000 men are ready to march the other way. If England had been occupied by the brother kings of James the Second, it would have been about as reasonable to harangue on the unanimity, with which arbitrary power had been accepted in the Isle of Wight. Wait till there is some fair play; and then it will be seen who are inclined for liberty, and who are

not.

The next article is on Mexico; which appears likely to undergo a second invasion from Cuba, because the interests of British slavery made it imperiously necessary for England to prevent the Mexicans from attacking Cuba when they might. If ever the chance returns, the Mexicans will probably be aware, that there is considerable difference between the ease and comfort of committing a breach of neutrality the first time, and the second. It is probable, that after what has been said in Parliament upon the first, the Mexicans would effect an insurance upon Change at a low rate, on the nonoccurrence of the other.

The last article is on France, and contains reflexions and documents on the various events immediately connected with

going to sit down on a throne which he will find fall to pieces under him in a few years, or else he will be forced to abandon, in spite of all his protectors can do to hinder it.

There was one very natural and simple way of providing the Greeks with the machinery for being a nation, and promoting the establishment of a government suitable to the habits, wants, and interests of the country. It required only a little less hatred for political freedom, a little more affection for mankind, and a moderate dose of common sense. I shall describe this method in my next letter, unless the execution of the project which we all set ourselves against to the utmost, condemns me to silence and waiting patiently for better days.'

1830. Postscript to Art. on Inst. of Exchange in No. I. 525

the present crisis. To those who love a jest in the midst of perils, may be recommended the mezzo termine proposed to the majesty of France, as an escape from the dilemma between mounting à cheval and en charrette, which appears to have pressed unpleasantly upon the royal imagination.

The most serious objection that can be urged against the article on France, is to the assumption that France is attached to monarchy. Opinions on this side the water lean to the conclusion, that in all the civilized portion of the European continent, the thing called monarchy is tolerated only upon a calculation of the probable cost of alteration. The experiment of what has been termed constitutional government, has been tried and failed. The legitimates refused this, while they might have had it; and the probability is, that they will have something they like less. Why the opinion and choice of one individual in a country, and that probably the worst educated within its bounds, should be set against the opinion and choice of millions;-why Europe should be filled with blood and discord, and the best men of half the continent be wandering in sheep-skins and in goat-skins as too good for their day and generation ;-are questions so utterly insoluble on any ground of common reason or general expediency-that it is impossible rational creatures should not bethink themselves of asking what all this is for, and of casting their eyes in search of models, upon the great fabric of public happiness which the descendants of Englishmen have raised on the other side of the Atlantic. Let it be settled, that there will be no more revolutions for constitutional monarchy upon the continent. The fight will be of another kind; and Englishmen have had too much experience of the past, to doubt to which side they ought to wish the victory.

POSTSCRIPT TO THE ARTICLE ON THE

INSTRUMENT OF EXCHANGE IN No. I.

THIS Article having been republished with a view to attracting attention to the subject at the present period, it may be useful to notice such alterations and additions as have presented themselves in the interval since the original publication.

The only material substitution, is in the part relating to the reasons for leaving bills of exchange out of the calculations altogether, as having no final effect on the results. The paragraph at the head of p. 191, beginning Because the portion VOL. XII.-Westminster Review.

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&c.,' has been replaced by the following; which, it is apprehended, presents the true reasons for the omission alluded to.

'No alteration needs be made in these calculations on account of the existence of bills of exchange. When a bill of exchange is first issued, it is received at a discount; and the holder either keeps it till due, or parts with it at a diminution of discount proportioned to the time he has kept it. The holder, therefore, virtually receives interest for every hour he keeps it in possession. Private bankers find it a good trade to become the holders of bills of exchange, for the sake of this very interest; and what is a good trade to one set of men, cannot be a bad one to another. But under these circumstances, there is no stimulus upon carrying the bill into the market as the means of purchase; the holder may let it lie in his desk till due, and receive interest on it all the time. The existence of depreciation, moreover, has no tendency to alter the substantial amount of the bills of exchange actually drawn in the whole country. A man draws a bill of exchange, in payment, for instance, of a certain quantity of goods; what he does, being in reality neither more nor less than begging the seller to lend him the price for a certain number of days, on condition of receiving interest. If in consequence of the depreciation of money the goods are worth forty of what are called pounds sterling instead of thirty, the bill will bear the words £. 40 instead of £.30; and this is all. Nobody will either draw any greater number of bills in consequence, or be affected in his bill-drawing practice in any other way. A certain part of the traffic of the country will be always carried on by means of bills of exchange, as a certain part will be carried on by barter, or by what is called setting-off. But as all these practices are devoid of any stimulus for increasing the quantity of purchases in the market, and moreover are under no tendency to be either increased or diminished in substantial amount by the progress of a depreciation-they may be left out of the cal culations altogether. It is true that if these practices, or any of them, had been non-existent, there would have been an altered demand for the instrument of exchange which consists of coins and bank-notes; and consequently the depreciation, and all the other results which depend upon it, would have been different. But it is also true, that if in any given case the quantity of coins and bank-notes in circulation, and the depreciation, can be actually ascertained, no alteration in the calculations built upon them needs be made on account of any of the practices designated.'

At the end of the paragraph which concludes in p. 197 with the words through the interference of the principle of popula'tion,' the following note has been added upon seignorage.

"The phenomenon of seignorage (which means recovering the expense of coining, by issuing the coins for a higher value than that of the metal contained in them), though it has been spoken of in somewhat mysterious terms by Adam Smith and others, appears to amount only to the fact, that an instrument of exchange may be composed of materials of intrinsic value equal to the exchangeable, or to any fraction of it,-or of no intrinsic value at all,-through the simple establishment of the requisite check upon the issues. Adam Smith says of seignorage, that though every body advances the tax, nobody finally pays it; because every body gets it back in the advanced value of the coin. The substantial explanation of which appears to be, that not only the portion which has been called seignorage, but the whole value of the materials used in coining, may be saved by the government or the community, and nobody be the worse for it. If a sovereign was made thinner and thinner till it was only a piece of goldleaf glued on a piece of stamped paper, or if the paper was used, without the goldleaf, it is proved by experiment that it will pass for the same value as ever, under

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a proper regulation on the issues. A Bank of England one-pound note, therefore, may be considered as a sovereign that is all seignorage. The wonder is not, that the government is able to save the seignorage; but that it does not find out, that it might as well save all the remainder too. There seems to be no more inherent reason why in a civilized country the instrument of exchange should be made of materials that convey the intrinsic value of what is to be transferred,-than why a bond or other security should be drawn on a plate of gold of intrinsic value equal to the amount to be secured. It would certainly be one way of conveying the security desired; but in a settled state of society, it would appear to be a very unnecessary and expensive way. It might be useful in a society so wretchedly constituted, that this should be the only way of a man's being safe from having two or three bonds brought against him where there ought only to be one; but it could be useful in no other.'

The note in p. 204 on the curve submitted as representing an approximation to a just scale of taxation, has been elucidated by a figure, and otherwise altered as follows.

x-a

*The equation to the curve is y = M x; where x is the abscissa measured from a point A outside the curve, a the distance from this point to the vertex, y the ordinate, and M a given straight line BC drawn from the vertex at right angles to the axis. If a represents the whole or actual income, a the income after which taxation is to commence, and M the per centage uniformly levied on the excess of r above a, y will represent the per centage on the whole income represented by x. If through C a straight line is drawn parallel to the axis, it will be an asymptote to the curve; for when a is indefinitely increased, y approaches to being equal to BC. 5 per cent C

D

If AE is divided into equal parts of which AB contains 150, and if BC is divided into five equal parts each of which represents one per cent, and straight lines parallel to AE are drawn through the points of division, the perpendicular FG drawn from any point F in the line BE will show the per centage levied on the whole income represented by AE. Thus on an income of 2501. the per centage is 2 per cent, as represented in the figure; on one of 500% it would be 34 per cent; and in like manner in other cases. As the income becomes large, the per centage on it approaches to 5 per cent.

A similar mode of representation may be applied to any other proposed scale or system of variation; the narrowing or falling away of the space included between the curved line and BE, representing the relief given to the smaller incomes.'

A number of other corrections and additions have been made; but not of sufficient magnitude to demand insertion in the present place.

Finally, The following Observations, with a list of Objections and the Answers, have appeared to be appropriate to the period of the present publication. The sources from which the Objections have been copied, will readily present themselves to those who are familiar with the current of the daily press.

OBSERVATIONS.

1. That to return to a depreciated currency, would be to license all who at this moment are debtors, to pay their debts with three-fourths (or whatever else the fraction may be) of the amount they owe. And though it is true that the recovery from a depreciated currency operated in like manner in favour of the creditors, it is further true, that there must have been a depreciation still earlier than the recovery; which must have been against them. The creditors may not in all cases have been the same individuals; but they were the same classes in the main,-which is coming as near to justice as the case will admit. Give and Take makes fair play; but because the creditors have lost once and gained once, there is neither fairness nor common sense in saying that therefore they must lose again now.

2. That it would bring upon all the labouring classes, in addition to their present sufferings, the intolerable mischief of being engaged in a continual struggle to raise their nominal wages in proportion to the depreciation. The result of which would be, that they would be screwed into a state still worse than they are in at present; by the double process of increasing their labour and diminishing their reward. The labouring classes are not weak enough to believe, that they will be any better for being paid with ten shillings than with five, if the ten shillings will only buy as much as the five. Still less, if the result of the whole should be (as it would be), that instead of ten shillings they only got nine.

3. That another object of the plan, is to rob the fund-holders, by paying them in a depreciated currency; or in other words, to get at those portions of the savings of industry which have been deposited in the stocks*.

4. That the argument for robbing the fund-holders is founded on reckoning up what the fund-holders have gained on one part of their account since the progress of the Pitt fraud was put an end to, (which happened in 1814), and taking no notice of all they were cheated of on other parts from 1797 to 1821, (or from the time the fraud was begun by the Bank of England refusing to pay its paper, till it was put an end to by the restoration of the currency to its original value). The real fact being, that if sums equal to the losses of the fund-holders in the cases where they were cheated, had from time to time been put into a bag, and the interest made principal half-yearly as an honest man would do with the property of a ward, -and if the value of their gains on the other part of their account from 1814 for ever, were put into another bag and treated in the same manner, the first would be the greatest. [See Mushet's Tables for every Year. Baldwin and Co.]. From which it follows that the pretence for robbing the fund-holders is a trick of the same nature as it would be to charge a man with all the Debtor side of his account, and refuse to take any notice of what there might be upon the other.

5. That the proposal for reducing the pressure of taxation, and then taking

A writer in Blackwood's Edinburgh Magazine (for Feb. 1830, p. 385), protests against the robbery of the State creditor,' but still calls for the Small Notes' as the means of paying taxes,' or in other words for increased issues and a depreciated currency. Does the writer not know, that a depreciated currency is the most practical and artist-like way of robbing the State creditor; or does he think it makes much difference to the State creditor, whether 30 per cent is struck off from his claims at once,-or he is paid in a currency of 30 per cent less value, with the comfort of knowing that all other creditors and the labouring classes are injured at the same time?

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