^{page 61 note 1} Assurance Mag., vols. vi., vii., and viii.

^{page 62 note 1} Page 1.

^{page 62 note 2} Page 9.

^{page 62 note 3} Page 16.

^{page 62 note 4} Assurance Mag. viii. 75.

^{page 62 note 5} London; 12mo.

^{page 62 note 6} See Preface.

^{page 63 note 1} Page 10.

^{page 63 note 2} ii. 242.

^{page 63 note 3} See Preface.

^{page 63 note 4} Page 13.

^{page 63 note 5} Ency. Brit.; 7th edit.; art., “Pol. Eco.”

^{page 64 note 1} Hist, of Com. ii. 843.

^{page 64 note 2} See Preface.

^{page 64 note 3} Page 97.

^{page 64 note 4} Page 95.

^{page 64 note 5} Page 10.

^{page 64 note 6} Page 135.

^{page 64 note 7} Page 28.

^{page 65 note 1} See Preface.

^{page 65 note 2} Ibid.

^{page 65 note 3} Ibid.

^{page 65 note 4} Page 17.

^{page 65 note 5} A Select Collection of Early English Tractson Commerce, reprinted by the Political Economy Club; London, 1856; p. 211. I take this opportunity of expressing my high sense of the usefulness of this reprint, as well as of that, even more valuable, of the Select Tracts on Money; London, 1856 Google Scholar . Both volumes are ably edited by Mr. McCulloch.

^{page 65 note 6} Ibid., p.246.

^{page 65 note 7} Child's Reprint, p.227.

^{page 66 note 1} Trade, &c., Considered, p. 7.

^{page 66 note 2} Ibid., p. 9.

^{page 66 note 3} Wealth of Nations, book i, ch. 9.

^{page 66 note 4} Interest at Six per Cent. Examined.

^{page 67 note 1} Locke's, Works; Lond., 1812; vol. v Google Scholar.

^{page 67 note 2} Page 11.

^{page 67 note 3} Macaulay's, Hist. Enq. iv. 631 Google Scholar.

^{page 68 note 1} Page 63.

^{page 68 note 2} Boswell; Lond., 1847; p. 502.

^{page 68 note 3} Early Tractson Commerce; Loud., 1856 Google ScholarPubMed.

^{page 68 note 4} Ibid., Preface xii.

^{page 69 note 1} Page 518.

^{page 69 note 2} Page 518.

^{page 69 note 3} Page 522.

^{page 69 note 4} Page 520.

^{page 69 note 5} Page 521.

^{page 69 note 6} Page 540.

^{page 70 note 1} Hist. Eng. iv. 630.

^{page 70 note 2} Select Tracts on Money, pp. 156,157.

^{page 70 note 3} See Petty's, Tracts; Dublin, 1769: pp. 1 to 88 Google Scholar.

^{page 70 note 4} Chap. v. 3.

^{page 70 note 5} Chap. v. 37.

^{page 70 note 6} Chap. iv. 19, 20, 22.

^{page 71 note 1} Select Tracts, p. 166.

^{page 71 note 2} Lond, 1658; p. 233.

^{page 71 note 3} Select Tracts on Money, p. 165.

^{page 71 note 4} Early Tracts on Commerce, p. 525.

^{page 71 note 5} Hist Com. i. 463, 464, 474, 511, 529, 530; ii. 43.

^{page 72 note 1} The annual supply necessary to meet the demand for an increasing currency of gold and silver can hardly ever be large. If the quantity required of any article of consumption, such as sugar, were to be gradually doubled in seventy years, the importation of sugar in each year would go on increasing until it became twice as great as at first; but a constant annual importation, or balance of imports over exports, of less than 1 per cent, upon the amount of precious metals in circulation, would double that amount in seventy years, supposing no losses to accrue from waste or accidents. A celebrated writer, Mr. McCulloch, has estimated (Ency.Brit.; 7th edit.; art, “Money”) the annual cost to Great Britain of a purely metallic currency of fifty millions sterling at three millions and a half, or 7 per cent,—allowing 6 per cent, per annum for loss of profit upon the capital sunk, and 1 per cent, for losses “from wear and tear, from fire, shipwreck, and other accidents.” This estimate for a currency purely metallic is, I think, much beyond the truth; but, at any rate, it is entirely inapplicable to a mixed currency of gold and paper, such as that of Great Britain, of the cost of which it may be possible to give some idea. We know, from experience, that the loss from the wear of our gold coinage is very small. The sovereigns struck in 1819 were, in the course of twenty-five years, depreciated in value, by diminution of weight, to the extent of about two-pence each. This was at the rate of less than 4 per cent, in a century, ox of 004 per cent, annually. The risk of the destruction of money by fire must evidently be much less than that of the destruction of immovable property, which, if not specially hazardous, may be insured against for an annual premium of 1s. 6d. (=0·075) per cent, a rate that, besides the fund necessary to meet losses, covers a considerable expenditure, with, sometimes, large profits to Assurance Companies. Destruction of coin by fire, therefore, can hardly exceed 6d. (0·025) per cent, per annum upon the circulation; and its destruction by other modes, exclusive of shipwreck of foreign importations, is, probably, not greater. Thefts of money, although productive of losses to individuals, do not cause any diminution of the coinage, the object of those who steal money being to put it into circulation as soon as possible. Losses from shipwreck are, undoubtedly, the most important, but a small fraction only of these is chargeable to the home circulation. The enormous foreign commerce of this country gives birth to a very large transit trade in bullion, which is certainly liable to considerable losses from shipwreck; but this trade would still be carried on whatever might be the nature of the national currency, which is only fairly chargeable with the losses upon the importations of the precious metals necessary to keep it up. There is, indeed, the loss from shipwreck of coin carried coastways, but this must evidently be trivial, and may be included in the destruction from various accidents, estimated at about equal to the destruction from fire. It would be a high estimate to take the losses from shipwreck upon foreign importations at 2 per cent, for each voyage.

There appears to me to be an important fallacy in charging a metallic currency at so high a rate of interest as 6 per cent. Investments in the precious metals, so far as the safety of the principal is involved, are, undoubtedly, the most secure, and for that reason ought only to be charged at the most favourable rate which the best investments command. This rate in England has been, on the average of the last 130 years, lower than 4 per cent., and for securities immediately convertible, like money, very much less. Four per cent., then, seems to me to be the highest rate of interest that can be charged against the capital sunk in a metallic currency, the total annual cost of which as at present used in Great Britain would, I think, be estimated, with tolerable correctness, as follows:

Which is, upon a circulation of 60 millions (4·099=) £4. 2s. per cent.; leaving the cost, exclusive ofinterest upon the capital employed, at 2s. per cent, per annum only.

^{page 74 note 1} Let E represent the value of the exports in the transaction referred to in the text, I, the value of the imports, x the expenses of the speculation, i the interest of the capital employed, and p the profit obtained beyond the interest. Then if, as has been assumed, the transaction be a profitable one, I = E_x+x+i+p, or I, —E,=x + i+p; that is to say, the surplus value of the imports is the fund out of which expenses, interest, and profits are to be paid. Now, x+i being a fixed quantity, it is evident that p, the profit, increases as the excess of I. over E, increases. If I.= E+x+i only, there will he no profit; and if I. be less than E+x+i, there will be a loss, which will be greatly increased if I, be less than E, the state of things considered so desirable by the believers in the old doctrine about the balance of trade. In the foregoing equations, x + i is supposed to be due to the English exporter; but if the expenses were paid, and the capital furnished by the foreign merchant, x + i would be deducted from the return cargo, the value of which (z being taken as the total cost of it in the foreign market) would then be and the excess in value of the imports, as well as the amount of profits (p₁), would be thereby diminished. It generally happens, however, from the large capitals possessed in England and the facilities they afford, that the greater portion of the expenses and interest upon our foreign trade is payable in this country. The freights, both outwards and homewards, are, in the majority of cases, paid in England; the assurances are principally effected here, and the capital employed being for the most part English, the bulk of the interest thereon has to be included with the profit of the English merchants. All these elements of commercial superiority tend, as has been shown, to swell the excess in value of imports over exports, or the balance of trade against England, as it is often erroneously called.

^{page 75 note 1} Early Tracts, p. 234.

^{page 75 note 2} Assurance Mag. viii. 68, Note.

^{page 75 note 3} Hist. Com. iv. 414.

^{page 75 note 4} Vol. vi., chap. xxxv. 6.

^{page 77 note 1} Commons' Journals x. 433.

^{page 77 note 2} Ibid. x. 440.

^{page 77 note 3} Ibid. x. 484.

^{page 78 note 1} Commons' Journals x. 550, 552, 616, 629.

^{page 78 note 2} Lords' Journals xv. 49, 53, 56, 80.

^{page 78 note 3} Commons Journals xv. 23,129, 145.

^{page 78 note 4} Diary; Lond., 1858; i. 374 Google Scholar.

^{page 78 note 5} Ibid. ii. 250.

^{page 78 note 6} Child's, Work, p. 35 Google Scholar.

^{page 78 note 7} Hist. Commerce ii. 597.

^{page 78 note 8} Statutes of the Realm v. 750.

^{page 79 note 1} Hist. of Eng. iv. 320. Those who wish for farther information may also consult Macpherson (Hist. Commerce ii. 670).

^{page 79 note 2} London, 1720.

^{page 79 note 3} Hist. Eng. iv. 323. The etymology of the word “stock-jobber” is sufficient to show that it was not derived from the national debt. Stock originally meant a capital employed in trade or in productive industry, and to purchase shares in the stock of the East India Company, of the Bank of England, and so forth, was therefore a perfectly correct expression; but it was not usual to call taking the assignment of a mortgage or of a debt “purchasing stock.” The debts of the Government, however, becoming transferable in the same manner as shares, and being dealt in by the same persons, were included in the general denomination of “stocks,” and that term is now, in the money market, confined entirely to public debts, while shares in the stocks of public Companies are called merely “shares.”

^{page 79 note 4} Many years ago, I met, in a public library, with a bulky volume, consisting of the prospectuses of various projects bound up together, and labelled “Some of the bubbles of 1825.” Among the projects thus described, was one that has since been productive of the greatest and most rapid advance in the social condition of mankind effected since the first dawn of civilisation; it was the plan of a Company for constructing a railway between Liverpool and Manchester.

^{page 80 note 1} Hist. Com. ii. 153.

^{page 80 note 2} Select Tracts, p. 165.

^{page 80 note 3} Hist. Com. ii. 612.

^{page 80 note 4} Statutes of the Realm v. 693.

^{page 81 note 1} Select Tracts, pp. 164 to 167.

^{page 81 note 2} Ibid. p. 167.

^{page 81 note 3} Macaulay iv. 501.

^{page 81 note 4} Lords' Journals xv. 423.

^{page 81 note 5} Ibid. xv. 426.

^{page 81 note 6} Statutes of the Realm vi. 433.

^{page 81 note 7} Macaulay iv. 499.

^{page 81 note 8} Ibid. iv. 498.

^{page 82 note 1} Macaulay iv. 502.

^{page 82 note 2} Parliamentary Paper, No. 443 (1858), p. 85. I had recently in my possession one of these tallies, dated in 1811, which resembled more the rude contrivance of the denizens of a wilderness, than a voucher issued from the exchequer of one of the most powerful monarchs reigning over one of the most polished nations of the globe.

^{page 82 note 3} Hist. Amer., book vii.

^{page 83 note 1} Erskine's Speeches ii. 263.

^{page 83 note 2} Epistle to Lord Bolingbroke.

^{page 83 note 3} Heary VI., act. iv., scene 7.

^{page 83 note 4} The curiosity about tallies excited by this circumstance led to the publication in the Times of the 1st November, 1834, of a very full and accurate account of them, written by that sturdy politician and studious antiquary, William Hone.

^{page 83 note 5} The Venetian Government having, in 1171, raised a forced loan, to which all the citizens were compelled to contribute, it was ordained that the subscribers, who were subsequently incorporated as a company and became the celebrated Bank of Venice, should receive interest a raggione del quattroper cento di “pro.” This is said to be the earliest known instance of the use, now so general, of the expression “per cent.,” to denote the ratio between two numbers.

^{page 83 note 6} “Notices of the various Forms of the Public Debt; its Origin and Progress:” Parliamentary Papers, No. 443 (1858), Appendix.

^{page 84 note 1} Chisholme's, Notices, &c., p. 90 Google Scholar.

^{page 84 note 2} Statutes of the Realm v. 165.

^{page 81 note 3} The fees upon payments by tallies appear to have been higher than 10s. per cent. Pepys, in his Diary (12th May, 1665), mentions tallies for £17,5G0 struck for the use of the navy, and adds, “But to see how every little fellow looks after his fees, to get what he can for everything, is a strange consideration—the king's fees, that he must pay himself for this £17,500, coming to more than £100.” This virtuous indignation is in amusing contrast with the entry on the following day:—“Received my watch from the watchmaker—and a very fine one it is—given me by Briggs, the scrivener.” Briggs having made the present to secure the Secretary's official influence (ii. 229).

^{page 84 note 4} Statutes of the Realm V. 858, 870, 928.

^{page 84 note 5} Commons' Journals ix. 702.

^{page 85 note 1} Diary ii. 412.

^{page 85 note 2} Ibid. iii. 240.

^{page 85 note 3} 3rd edit.; Longman, London; no date.

^{page 85 note 4} Page 243.

^{page 85 note 5} Parliamentary Paper, No. 443 (1858), p. 93.

^{page 85 note 6} Ibid. p. 2.