United States, the pound sterling was reckoned as equal to $4.44 of our money; since then the weight and fineness of our gold coins have been reduced, and the real par of exchange is one pound for $4.87; the old nominal par however remains as the standard, so that the exchange is really at par when it stands in the quotations as 109, or 9 per cent. above par. Our gold dollar contains 23.2 grains of fine gold, and the English sovereign 113 grains and a fraction, and the true par therefore is 4.87 for 1. The par of exchange between France and the United States is 5 francs 17 centimes for $1; and between France and England, is 25 francs 20 centimes for £1.

(4.) Checks. Formerly, in England, and in other countries as well, every considerable dealer kept his strong box, and when he had occasion to make payments, told down the solid cash upon his own counter. Afterwards, the goldsmiths of London solicited the honor of keeping in their vaults the spare cash of the merchants, who in their payments among one another came to employ checks drawn on the goldsmiths, and at the shops of the latter the principal payments in coin were effected. The later introduction of banks brought along with it the custom, now continually widening in commercial countries among all classes of people, of keeping one's funds with a banker, and making payments by orders, or checks, upon him. When the person making the payment and the person receiving it keep their money with the same banker, there is no need of any money passing at all in the premises, the sum being merely transferred in the banker's

books from the credit of the payer to that of the receiver. The banker is quite willing to do this business for nothing, and even to allow the depositors a low rate of interest on all balances remaining in his hands, in consideration of the privilege he enjoys of loaning such proportion of the sums as he deems safe to other parties at a higher rate of interest. In the large cities, by an arrangement called "the clearing-house," substantially the same benefits are secured as if all the people of the city. kept their cash at the same bank; inasmuch as all the checks drawn on each of the different banks, and passing in the course of the business day into other banks, are assorted before evening at the clearing-house, and set off as far as possible against each other, leaving only balances to be adjusted in money. So long as the banks are strong and solvent, the safety of such checks is only surpassed by their convenience, which itself is enhanced by the facility with which they pass by endorsement from hand to hand, perhaps a dozen times in a morning, making payments equal to their face as often as they are transferred, and thus dispensing with the use of large masses of coin.

Some of the advantages of credit have been already anticipated in the discussion of its principal forms; but it is important to be observed that credit creates nothing except the paper embodying the evidence of it, but either, first, transfers the ownership of a return-service already in existence, and ready to be rendered at any time, into other hands; or, second, anticipates a return-service not yet ready to be rendered. Thus, when I deposit an $100

with a sound banker, and afterwards draw a check for the amount, which check passes by endorsement through a dozen hands before being presented for payment, there is a simple transfer by means of credit of the ownership of a service all ready to be rendered at any time, and the check does more conveniently, perhaps, exactly what the $100 in cash would have done, if, instead of depositing it at all, I had paid it out to the man to whom I paid the check, and he to the second, and so on through the dozen. The twelfth man in either case, and each in turn in the last case, receives an $100 in cash, the proprietorship of which, in the case of the check, passed from one to the other. But when I loan a poor artisan an $100 to buy stock with, and take his note, which is to be paid from the proceeds of his year's work, the return-service is wholly anticipated, and the element of time comes in, as well as the element of risk. Indeed, the element of time is the only basis of the distinction in hand. Credit in its nature is always the same thing, is always an exchange in which the return-service is contingent, and although the probability that it will be rendered is susceptible of all the degrees from a wellnigh certainty that it will to a wellnigh certainty that it will not, that is a matter which must be judged of from the character and condition of the party who is bound to render it, and nothing needs to be said about it in this connection; but time is a more calculable element in credit, and since credit is substantially delay and not power, since it only transfers capital from hand to hand and creates nothing, it follows that for the safety of both creditor and

debtor, the time of credits should be short. Some people, seeing men prosper on borrowed capital, seeing the undoubted benefits of some forms of credit, have jumped to the conclusion that credit is a positive productive agent, a thing to be put on a level with labor and capital. No. Labor united with capital will work wonders, and the nature of capital is not altered by the fact that it has been borrowed, and when skilfully used by the borrower will net him a profit besides paying back principal and interest; but it is a strange jumble to ascribe to the credit, which merely transfers the capital for a time, the efficiency which is due to the capital united with labor, Let the nature of credit be distinctly understood at the outset, and it is impossible that there should be any confusion in the premises. Both parties to a credit exchange undoubtedly expect to be benefited thereby, otherwise it would not be made; and the party who parts with money, or labor, or whatever is rendered, gives over to the other in consideration of a promised equivalent, a positive power, which would doubtless have been somewhat efficient in his own hands, but which is expected to become more efficient in the hands of the other. Its whole efficiency, therefore, obtained in the hands of the borrower, is not due to credit, but only that surplus efficiency over and beyond what the loan would have had in the hands of the original holder, or rather, over and beyond what must be rendered by the borrower to the original holder. It is only in this sense that credit can be said to have efficiency at all; and, short times being presupposed as essential, since the gain of the cred

itor is not in the promise but in the fulfilment, it is precisely here that we are to look for the first class of advantages which a general credit system can offer.

There are some men, and particularly young men, who have integrity and industry and skill, but no capital; and when such men are enabled to borrow money to start themselves in business, or to enlarge a business already in successful operation, the general interests of production, as well as their personal interests, are subserved by such credit, because in all probability capital thus passes from hands which are less to hands which are more able to use it productively. Those who are best able to make capital tell are generally those who are most desirous to obtain it, and frequently those who can offer the best security for its replacement. Nothing is to be said against, but everything in favor, of such a loaning of capital as shall bring it, under safe conditions, from the hands of the idle, the aged, those indisposed, or those incompetent to use it productively, into hands at once competent and honest. Such credit is a benefit, and only a benefit, to all the parties concerned, and to society at large. The operators retain something of profit after replacing the capital with interest; the lenders receive more than if their capital remained idle, or they employed it themselves; and society is benefited by a more complete development and rapid circulation of services. Despite all the instances of broken faith, it is still an honor to human nature that men do so gain by good character the confidence of their fellows that they are, and ought to be, trusted with capital on their simple word or note; and it is