lity of borrowing it cheaply upon good securities. But when the farmer, the manufacturer, and the labourer, speak of the plenty of money, they mean thereby the facility with which their customers pay them their debts, and with which they obtain good prices for the sale of their agricultural and manufactured produce and their labour. This kind of plenty of money, this facility of acquiring the ownership of money, may exist, and sometimes does exist, at the same time when a great scarcity money is found to exist in the markets where the use of money is borrowed and lent; and vice versa, the plenty of money in the markets of interest may exist, and does now exist, at the same time that a great scarcity of money exists in the markets of property and labour, where the ownership of money is bought and sold.

Having thus obtained clear ideas, let us now inquire into the nature of the process which is now in operation. The contraction of the general currency of the country by the pressure of the unsuitable metallic standard, having reduced the prices of property within the gripe of the vested interests, which during the paper system have acquired such a prodigious growth, the consequence is, that the necessary profit cannot be made by the employment of money in the production of agricultural or manufactured produce; therefore the productive classes of the community are not willing to borrow money, the use of which is attended with little profit, and probably with loss. They rather prefer, as far as

they can, to contract their own establishments, and to draw in their capital from the employment of industry, in order to lend it to others upon good securities. They choose, if possible, to throw upon others a responsibility which they dare not undertake themselves. They prefer the smallest certain profit that can be obtained for the use of their money, in preference to employing it in their respective occupations to a precarious and inadequate profit, or rather to a probable loss.

But whilst masses of lenders are thus forced into the markets of interest, the usual number of borrowers in those markets is decreased by the very same con traction of the currency which increases the number of lenders. For when the prices of property are so reduced that they cease to be what is called "remunerating;" when they cease to be sufficient to cover the reward of industry, after paying the taxes and fixed charges which the law, and the habits of society, and a paper system of twenty-five years' duration have imposed, then all prudent and safe borrowers are alarmed at such a state of things, and none are found in the markets of interest, but some few who borrow with one hand, in order to pay debts with the other; or some imprudent and needy adventurers, who have no good security to give. It is thus that the interest of money is beaten down by the very state of things which raises the value of its principal. It is thus that the contraction of the currency determines it in masses into the markets of interest, at the same time that it draws it from

up

the uses of industry, and debilitates and exhausts the vital functions upon which the existence of the community depends.

The very scarcity of money is thus brought to exhibit an apparent redundancy, in a state of society like ours. If the prices of property and labour were now at a remunerating level, and if the whole population of the country were actively and wholesomely employed in producing and consuming each other's productions, double the present quantity of money might exist in the country, at the same time that the interest of money would rise.

The command of money being thus placed in active and useful hands, instead of idle and effete hands, and the use of money in the employment of industry being thus again rendered securely beneficial, the interest of money would necessarily rise with the fall in the value of its principal; because few men would be willing to lend money at a small profit, when they could safely employ it themselves at a large profit. The borrowers would be increased, whilst the lenders would be diminished, and thus the rate of interest would rise with the increase and depreciation of money, and with the consequent restoration of the national prosperity.

But although the interest of money is now beaten down by the general contraction of the currency, it does not therefore follow that every contraction of the currency instantaneously produces a fall in the interest of money. On the contrary, it tends to produce a temporary rise in the rate of interest, until

time has been afforded to get rid of existing obligations. A sudden contraction of the currency creates a sudden rise of the rate of interest, by the increased difficulty which it occasions in the discharge of

floating engagements. But when those engage

ments are once discharged, and when the fall of prices has taken place so far as to render the employment of money dangerous and unprofitable, then the parties who have discharged their obligations are careful how they contract others; and then it is that the contraction of the currency is brought to act in producing a general fall in the rate of interest. This was exemplified during the "late panic." The sudden contraction of the circulating medium left masses of debts without the means of payment, and the persons involved in such debts were ready to borrow at great sacrifices. But when masses of money were thrown into temporary circulation to meet and discharge the masses of debt, this temporary increase of money was shortly after withdrawn, without at all increasing the rate of interest, which has in fact continued to fall ever since that period. The sudden contraction of the currency acts first, for a short period, in raising the rate of interest, and then it acts permanently in depressing it. The pressure of floating engagements occasions the rate of interest to rise for a short time; but when this pressure is relieved, the money becomes stagnant and inactive, until the reward of industry shall have been restored, either by the breaking down of the vested interests, or by an adequate increase of the currency producing a similar effect.

This is now the state of the country. The great question is at this moment at issue, whether the vested interests shall be broken down; or whether the productive classes shall be crushed under their enormous pressure; or whether the interests and the rights of both shall be conciliated and preserved by an adequate increase and a renewed depreciation of the currency. The Government have been hitherto shrinking from either of these great alternatives. They have been wilfully closing their eyes and their ears, and laying "the flattering unction to their souls," that it is possible for them to steer a middle course. A crisis is now approaching, which will compel them to make their choice. The time for wavering and temporizing is rapidly passing away.

In such a state of things as this, it is not to be wondered at that the revenue falls off.

The contraction and stagnation of money, the diminution of prices, the deficiency of employment for labour, and the decrease of rents and profits-all contribute to a reduction in the produce of the existing taxation.

The revenue is, however, for a time, supported out of the capital of the farmers and productive classes; when this capital is exhausted, the deficiency is certain to become very great.

In the meanwhile we have a debt of eight hundred and thirty millions sterling, all payable by law in heavy gold; that is to say, convertible by law into eight thousand tons of standard gold! Unless we reduce this debt publicly and openly, it is vain to think of bringing the national expenditure within