be retained, we can scarcely question that such a power should be given; and yet there are many and great difficulties in settling the way in which it should be conferred, and the persons to whom it should be intrusted. We may dispose, at least so it seems to us,-almost at once of the suggestion for an exact pre-appointment of the occasions on which this exceptional discretion is to be exercised. The circumstances of commercial crises differ so very much, that even for the few of which we know the details it would not be easy to fix a machinery which would be uniformly applicable; and it would be immeasurably more difficult to prescribe beforehand, and in an enactment, for all which the future may have in store for us. We may have a domestic panic when the bullion in the issue department is above any point which we can exactly specify, when the rate of interest is eight per cent or ten per cent,-during a foreign drain of bullion, or after it. No practical statesman will, it is probable, frame an elaborate proposal of this kind; persons conversant with complicated affairs are habitually averse to minute predescription, and to any profession of foreseeing more than it is possible to foresee. The most plausible of these contrivances is that which would fix the minimum rate of interest to be charged during the time that the Bank may avail itself of such exceptional issues; but even this is liable to the two objections -that it may happen that the minimum is fixed too high; and that the necessity of changing it, in order to obtain the needful notes, may impose a needless burden on the public during a time of difficulty: and secondly, that it only in appearance limits the occasions on which the exceptional power may be exerted, since the fixing the rate of interest must necessarily be in the same hands as the exercise of that power, whether of the Chancellor of the Exchequer or of the Bank, or of both; and if those authorities at any time wish to avail themselves of the power, they can adjust the rate of interest accordingly. On the whole, therefore, if such a clause should be hereafter added to our legislation, it will probably be found necessary to leave the occasions on which it may be exercised, as well as the extent and manner of that exercise, to the unfettered discretion of some persons, and it will only be necessary to consider who those persons should be. At first sight, it seems absurd to place this expansive power in the sole discretion of the Bank directors. These are the persons, it should seem, whose discretion we cannot trust, and on whom we wish to impose a binding fetter; yet great difficulties arise when we attempt to vest any such power in any department of the executive government. As Mr. Gladstone has observed, nothing can be more foreign to our habits, and to the entire genius of our legislation and

society, than that ministers of the crown should have to decide which commercial house or firm is to stand and which to fail. Yet in actual practice the discretionary employment of such an expansive power as is proposed does of necessity involve their having to decide such points. The power is only to be exercised in times of extreme pressure or of panic. What is to be the test of the extremity of the pressure? The only test is the stoppage or critical position of great commercial houses. The panic apprehension which brings such eminent firms into a crisis of difficulty can only be tested by communication with such firms, and an examination of their difficulties. No more delicate or unpleasant power can be placed in the hands of any minister, especially of a minister under a parliamentary government, who may be politically and closely connected with some. commercial city, and have to decide on the ruin or prosperity of his warmest and most important supporters. Vesting the expansive power in the Government has also some of the inconveniences, just now so familiar to us, of a double government. In 1847, the Bank directors maintained that the state of the Bank was a perfectly safe one, that they desired no help from the administration, and that the issue of Sir C. Wood's letter was only desirable-if desirable at all-for the general welfare of the commercial community. We do not know if there was any such "coquetting" on the late occasion; but in her Majesty's Speech, and in the debate, ministers appeared to take on themselves the full responsibility of the extra-legal act. In this there is certainly some anomaly. The Bank directors ought to regulate, and ought to be responsible for, all the acts of the Bank, whether legal or extra-legal-whether they were done in the common course of business, or under the authority of an "elastic clause." The legislative creation of such an expansive power, assumes that its existence is necessary and its employment at times desirable. The authorities of the Bank can hardly be permitted to abdicate all responsibility at these times-to manage in ordinary periods as they did in the year 1847, so as to aggravate the intensity of a great crisis; and then, in the moment of the most harassing difficulty, to devolve the entire care of the banking community upon the executive government. The warmest admirers of a duplicate administration will scarcely recommend that we should have one set of authorities to get us into trouble, and another set to get us out. We can hardly question, that if there is to be such an elastic element within the limits of the law, the Bank should have a share in the responsibility of withholding it or of setting it free. Possibly the best solution of these conflicting practical difficulties would be, to vest the responsible discretion of making or not making such exceptional issues in the Bank and the Govern

ment together. We would recommend that there should be a distinct application from the Bank to the financial executive for the permission to make such unusual issues, and an official reply from the Government authorising such issues to be made. We should then clearly know who was responsible for what has been done the Bank directors, having expressly asked for permission to overstep the ordinary limit, could not in any degree evade an important share in the responsibility so incurred; the Government, having acted at the request and under the counsel of the Bank directors, would be relieved from some part of the odium which attaches to the intervention of parliamentary statesmen amid the distressing personalities, and what must be to them the unaccustomed scene, of a commercial crisis. As we have formerly remarked, we believe that if such a discretion is to be given at all, it had better be an unrestricted discretion. Only a doctrinaire pedantry can, we think, presume to enumerate circumstances, or define the precise minute, at which it will be required.

The difficulty of framing such an "elastic clause" throws great doubt, in our judgment, on the advisability of framing it at all. This arbitrary limit, and authorised manner of overpassing it, have rather an appearance of artificiality and technical theory. All such schemes are likewise liable to the objection that the relief they provide us with, is, if the expression may be allowed, relief with a jerk. The panic is allowed to become imminent, and then is on a sudden calmed by an extraordinary and peculiar act. Under an unfettered system the relief might be given gradually, insensibly, and as a matter of

course.

We are aware of the great feeling which exists in England against vesting an unfettered power of issuing notes payable on demand in any body whatever. We believe that this feeling, in so far as it is a just one, is founded on historical circumstances, especially on the insolvency of the old race of country bankers in times when banks were not allowed to be composed of more than six partners, and on remarkable misuses of its metropolitan monopoly during the same period by the Bank of England. Much might be said as to these historical circumstances in mitigation of these apprehensive feelings; but it is simpler to observe that the whole subject is a choice of difficulties. It may be an evil to have discretion; but the events of the last few months prove-and all that we have written is but an attempt to explain-the evils of a rigid rule which ad- . mits of no discretion.

Much of the apprehension which prevails in England as to "baseless paper" might perhaps be calmed if we adopted the plan of requiring from all issuers of it a specific security.

If all notes were known to be secured by a deposit of consols, with a margin of consols taken at a low value, the fear of our being flooded with paper issued by insolvents, and representing nothing, might be mitigated. This might be extended to the country districts, and to Scotland and Ireland; and the currency of the three kingdoms would then be uniform, would be protected from panic feeling, and would be reasonably and justly relied on by the public.

some.

The whole of our banking system is to be explored, it is said, before the impending committee, with an acuter attention, if possible, than ever before; and though we cannot expect a great deal of new light, we may perhaps hope to have We should especially hope that we shall not have on any future occasion the class of theorists who have beset us lately, and who maintain that the Government relaxation of the Act of 1844 is a debasement of the currency, and yet do not dare distinctly to impugn its propriety; with such speculators there ought to be no argumentative quarter. A debasement of the currency is a measure which can never be right under any imaginable conjuncture of events; it is a violation of a fundamental maxim of morality. We can imagine many reasonings under many circumstances for a suspension of cash payments; unfortunate events may prevent our paying our debts for a time, and it may be necessary to postpone all creditors, to avoid an unequal preference of some few. But we can imagine no circumstances in which it would be right to compel people to accept little shillings instead of large shillings. No words can be too mean for the subterfuge of professing to pay our debts, when we are really giving less than we contracted to repay. Those whose theory logically compels them to take this view of the Government relaxation, ought to have opposed it with a far greater decision and explicitness. As a matter of fact, we apprehend, however, that the practical good sense of the most accomplished of such persons really makes them feel that if they had been in the position of responsibility, they would have acted as her Majesty's Government have done; and accordingly, whatever a rigid logic may advance, their essential judgment is in its favour.

Notwithstanding the arguments of some eminent orators, the whole subject is not yet exhausted. There is no exhausting subjects on which experience daily accumulates, and of which the details daily change. We have only been able to touch on a few points in comparison of the many which are important, and yet we must have wearied our readers. We can only hope that other writers will be both more exhaustive and more agreeable.

BOOKS OF THE QUARTER SUITABLE FOR READING

SOCIETIES.

The Epistles of St. John. A Series of Lectures on Christian Ethics. By F. D. Maurice, M.A. Macmillan and Co.

[This is, we think, Mr. Maurice's most effective and instructive work. He is peculiarly fitted by the constitution of his mind to throw light upon St. John's writings.]

The Indian Crisis. Five Sermons by F. D. Maurice, M.A. Macmillan. [A fine series of sermons, on the spirit in which all Englishmen should interpret the Indian calamity.]

The Philosophy of Evangelicism. Bell and Daldy.

[A very able and thoughtful essay on something far wider than what is technically called Evangelicism. The style is, perhaps, a little too studied for the subject. To the writer's criticism on our last Number we may perhaps take some other opportunity to reply.]

The Philosophy of Theism. Ward and Co.

[This is a really able but hard essay, which shows much affinity with the Calvinistic metaphysics of the understanding.]

Sermons preached on various Occasions. By John Henry Newman, D.D., of the Oratory. Burns and Lambert.

[A volume of sermons, preached chiefly to the students of the Roman Catholic University of Dublin. It has Dr. Newman's general characteristics,-wide intellectual grasp, and every grace that style can give to very unsatisfactory moral premises; but there is less substance in the volume than in most others of the same author.]

The Orthodox Doctrine of the Apostolic Eastern Church; or, a Compendium of Christian Theology. Whittaker and Co.

The World of Mind by Isaac Taylor.

[Reviewed in Article VII.]

Jackson and Walford.

Essays, Scientific, Political, and Speculative. By Herbert Spencer. Longman, Brown, and Co.

[This is a republication of Mr. Spencer's thoughtful and able essays in the various quarterlies.]

Thorndale; or, the Conflict of Opinions. By William Smith. 1 vol. W. M. Blackwood and Sons.