country, is favourable to a progressive increase of industry. And no doubt that is so. A stream therefore of the precious metals poured into a country, produces effects exactly the converse of the effects which its dereliction produces in the country which it is leaving. This fertilizing stream, in the country to which it goes, stimulates industry, multiplies transactions, creates its own demand, and counteracts its tendency to return. Our industry is crippled, our neighbour's is augmented, we permanently need the bullion less, he permanently needs it more.

But in the mean time what is already at this moment going on?

Money, even in the face of great discoveries of the precious metals, is rising in value. Property of all kinds, is declining in money value-in price. Shares in railways and other undertakings, corn, manufactured goods and colonial produce, have sunk, or are sinking in price.* Industry languishes.

Men in trade find their means of payment less. They are embarrassed.

The taxes remain the same nominally, but not really. The fund-holder and every public servant receives every year more and more. We have financial reformers anxious to curtail the public expenditure even at the risk of the public safety. Yet they have so managed matters, that the tax-eater, receiving the same nominal sum,

* What would they have sunk to, without California ?

really devours almost as much again of the national substance, as ever he did before.

The funds keep up, for there is little profitable employment for capital. And the interest which the funds pay partakes in the augmented value of money.

To confound a low rate of interest with a low value of money, is a very common mistake. The rate of interest might remain as low as it is now, if twice the quantity of gold were put into the sovereign, and the value of money thereby doubled. For the interest would in that case, be as much augmented in value as the principal.

A low rate of interest is consistent, and often coincident, with a high exchangeable value of money, and a high rate of interest with a low exchangeable value of money.

Thus of late the value of money, measured in other commodities, has been high. Its purchasing power has been, and is very great. But the rate of interest has nevertheless, at the same time been very low. Good bills are discounted at 2 per cent per annum. On the other hand, during the war, when the currency was notoriously depreciated, the value of money measured in other commodities was very low. Its purchasing power was then very small. small. But the rate of interest was then very high. The discount of the best bills was 5 per cent, and would have been more had the law allowed it.

When therefore in the inaccurate language of City Articles in Newspapers, we read of the plenty of money or the low value of money, or that money is cheap, that merely means that very little can be made

It is quite consistent with this intelligence, that by a high exchangeable value of money, the price of commodities is injuriously depressed, that the profits of trade are low, and the pressure of the taxes unfairly augmented. The announcement may betoken or

promise anything but prosperity.*

What are the circumstances on which the rate of interest depends is a point on which political economists are not entirely agreed. Most of them however, co-incide with Adam Smith that it is regulated by the

* Yet it may well be, that a sudden increase of the relative quantity of money beats down for a time the rate of interest. And that a sudden decrease of its relative quantity, raises for a time, the rate of interest. But these effects will be transient. Eventually the larger relative quantity of money in the first case, will in the aggregate be worth no more; and the smaller relative quantity in the second case, will in the aggregate be worth no less, than the original aggregate quantity of money was before either alteration. The ultimate and permanent effect will be felt in prices, not in the rate of interest.

All this assumes that the goodness of credit, public and private, remains the same. Of course where from any cause credit is affected, another element enters into the calculation of interest :-viz., the degree of risk. And not only the real risk, but the apprehended risk. Where the fears of the public exaggerate the apprehended risk, we say there is a panic. A panic may temporarily raise the rate of interest to any conceivable amount. A rise in the value of money often increases real risk. A trader's means of payment may be, and often are, destroyed by unexpected

low prices.

current rate of profit,-that most will be given for

Hence though value in New

money, where most can be made of it. the value of gold in London and its York, or Sidney, are at this moment nearly alike, the rate of interest is higher in New York, and higher still in Sidney, because the profits of trade are greater in America than in England, and greater still in Australia.

CHAPTER XVIII.

"It is preposterous to interfere with a man's management of his own property."

THAT land may be freely bought and sold, the legislature has from time to time passed many statutes of mortmain. With the same view, the Courts of Law have abolished all indestructible entails, and have destroyed perpetuities, by prohibiting settlements of property which would endure beyond a life or lives in being.

An

But such is the imperfection of human affairs, that one mischief is scarcely eradicated, when another springs up. A new sort of mortmain has of late presented itself, in the shape of incumbered estates. evil of portentous magnitude, not only impeding the sale of land, but preventing its cultivation: making the most important and productive of all labour impossible, and smiting large portions of England, and one half of Ireland, with an artificial, but invincible infecundity.

Owners of land have, from generation to generation, been left at liberty to manage, charge and settle their lands as they thought fit. The law has interfered no