confidence, the hoards are brought out; the amounts held in reserve by bankers in England and Ireland can be reduced; the stagnant funds, the locked-up capital, are again put into circulation; money is vitalized, and soon overflows the country.

The following list of the Bank rate for six years will prove that money is not paid too highly for :

FLUCTUATIONS IN THE BANK RATE OF DISCOUNT DURING 1877-1882.

Ask any tradesman why business is so dull, you have the stereotyped reply," Scarcity of money;" yet money is waiting to be asked for, if they had the debts represented by bills to give in exchange for it. This is caused mainly by a want of confidence, stopping production, distribution. Yet why this feeling of mistrust it would be hard to tell; except that men do not think for themselves, do not act for themselves, but have trusted to bankers and others to invest for them; and one gigantic failure shakes confidence in all, and so the public, the money-investing public, keep to first-class securities only; and on the 8th of April, 1879, Consols exceeded the price of 98 for the first time since November, 1858. November 20th, 1882, Consols were 102 for money. There could be no safer indication that capitalists are at their wits' end to know what to do with their money. The quantity of money required in any country must depend upon the extent of its trade; and as both the foreign and domestic trade of this country has very considerably decreased the last few years, and still

keeps in a very depressed state, less money is required to carry it on. Manufacturers and merchants have not the same quantity of bills to offer for discount; hence there is a great falling off in the demand for money. The quantity of money required to carry on any given amount of trade depends also upon the general scale of prices; and as the prices of nearly all commodities have been much reduced, the amount of money required for the exchange of the same quantities of commodities is proportionately diminished. So lenders cannot find legitimate borrowers, capital is in search of employment, and has to be satisfied with very poor remuneration. How is this? There are various causes, and our working classes have yet to learn that it is a very easy task to bleed a man to death, but even with a profuse supply of money to put fresh blood into his veins, we cannot at our pleasure restore him to life again.

What an outcry there is when money gets over 5 per cent., or even before it reaches that rate; yet manufacturers and merchants might well afford the capitalist his temporary gleam of sunshine without so much murmuring. The rule with manufacturers is to draw on their customers at four months if they are not able to take the discount; this is charging their customers 7 per anuum. The City merchant houses make a large profit by the necessities of their customers; or, putting it another way, they lend to their customer; that is, they extend the length of credit four months by his sacrificing 2 per cent. discount. There are some houses who will only draw at three months. A business man, of course, always discounts such accounts if possible, and arranges that the house that draws at four months shall do so; but the profit monthly in discounting a batch of bills at the Bank rate, in comparison with the discount their customers have to forego, must be a large sum. A tradesman should always try and arrange his purchases so as to secure the discount; to do with good men or to do a cash trade, taking the discount is essential. As a rule, it is not advisable to draw on houses that sell all for cash; if a debtor's assets consist only of his stock-intrade, that alone will never pay his creditors 20s. in the £, if he takes the full time allowed in the trade. For instance, the terms at least are one clear month and four months' bill; then there is dating on-say six months' credit or half a year's trade. To pay, the stock must be turned over four times a-year, or at least three times. You will perceive that there is only three or four months' stock to pay six months' purchases with. Yet merchants will not keep their eyes open, will not read the signs of the times, will not see that book debts will year by year be less of an asset as cash trade becomes more and more the rule. Despite, I say, of this, our

leading City houses tempt their customers to buy by offering job lots, dated on. So infectious has become this fatal disease, that another house, whose system was unique, whose counting-house policy was the most profitable as the most judicious in the City, whose rule used to be that if a parcel was bought on the last day of the month, it was charged for in that month's account if it left the premises, yet on March 29th, 1879, this house, to my great sorrow, so far departed from the principle of its great founder as to send out a circular offering goods under price, and to be dated as May. I know the excuse; trade is bad, others do this and that. Buyers grumble that the dating on will tempt men, aye, even more than price. All too true. Still the principles that have made a house, that have triumphed successfully over periods as adverse as the present, ought not to be departed from except as a last resource. Look at the damage it does the house! A besieged castle has little chance against the enemy when it is known how nearly exhausted the supplies are; and once begun, and you join in this dangerous system of dating on, there is no knowing where you may go.

"Within the infant rind of this small flower
Poison hath residence, and medicine power.
Two such opposéd kings encamp there still
In man as well as herbs-grace and rude will;
And when the worser is predominant,

Full soon the canker-death-eateth up that plant."

SHAKSPERE.

Beginning life with a very small amount of borrowed capital, I am well aware of the value of dating on; but at that time we sold our own goods on credit-credit was the rule, ready money the exception-and the dating on was only the two seasons' parcels bought some months in advance of the time they would be required. The "canker" in the present system is dating on by circular indiscriminately to every one, and after having sold the season's parcel dated as February to your regular customers, offering "job lines" to those who have not already bought in March, dated as June. The judicious use of the system is the "medicine;" the reckless use of the system is the "poison," in tempting a man in March again to buy "jobs" dated as June, before you know if he intends to pay in April for the season's parcel bought in February; tempting men to incur liabilities; making of business a reckless, haphazard kind of thing; the counting-house, instead of, as formerly, being the safetyvalve, the poison luring men on to their destruction. Why is this? Because men do not think, and are led away by specious expedients, and do not take the trouble to get at the bottom of things.

A business man, of course, takes advantage of the liberal terms. Time is money, and if a house volunteers an extra month or two, he is willing to take it. As a rule, they allow you half per cent. extra per month for prepayment; so buy upon their terms if you want to buy, and if the price is right, and prepay them. But the tendency of the times is for the consumer to pay "cash," and get the best value possible for ready money; and to help their customers, it would be wiser to" shorten credit," and charge a lower price for the quicker turn-over and lessened risk. The secret of success in 1883 is " value for money." Goods cannot be sold cheaply, as they should be, to "cash" buyers whilst our system is one of reckless, foolish, indiscriminate" long credit."

"Dating on" is excused by saying trade is in a very depressed state. No doubt it is, and unless great caution is observed, the excessive glut of idle capital will lead to a deal of unsound speculative business. It may be difficult to do so, it is very unpleasant to have to do so, but it would be wiser to keep goods, as it is wiser to keep money till it can be legitimately used, than lend it rashly rather than not lend it at all. It is a calamity for the moneyed interest when the nation groans under the pressure of an abundance of moneylenders not able to find borrowers; capital in search of employment, and not able to find it. Trade being generally depressed, the cause cannot be for want of money; and the capitalist must have patience, and wait till the cause of the depression be removed. It should be a proof that the quantity of money does not of itself give the stimulus to domestic industry. Trade may be paralyzed when in full operation because money cannot be had, but money alone cannot set the wheels in motion. There was nothing to justify the difficulty in getting money during the last pressure. I have witnessed those of 1847, 1857, 1866, but the 1877, 1878 collapse seemed to make our bankers lose their nerve. What manufacturer or merchant feels disposed to launch out upon such an insecure sea as our currency, with their bankers acting in a certain manner up to the last moment, and in the hour of need, without the least warning, to object on some puerile objection, and return your paper? Why, inevitably, every prudent, sensible man resolves to curtail his operations, and not risk his position upon such an insecure basis. As before stated, I see no reason, if the Bank Act was altered to meet the requirements of 1883, why the Bank rate should be at any time over 6 per cent. The higher rate, the panic rates, are nothing to any solvent man doing a legitimate business. It is a little off my year's profit, and a little more in the banker's or money-lender's. We must all have our innings; but what we

object to is that there should be any difficulty in getting money when wanted, and, after being refused, is lent. Then you open up a new aspect of the case, that crushes by its uncertainty the actions of the man, and all operations are necessarily for a time curtailed. This is the real evil of all panics-the depriving of solvent houses of the means of meeting their legitimate engagements. Banking ought to be done upon a certain system; bills of regular customers that are taken for certain sums or at certain dates ought not to be objected to at a time of pressure, when the market is not open to the customer. Six months' bills are right or wrong; if right, they should be taken at one time as at another; if wrong, they should not be taken at any time, no matter how plentiful money may be. If there be any deviation, it should be in being more liberal at the difficult time to the regular customer, unless his credit is unsatisfactory, or the amount of bills under discount much larger than usual. Bankers, of all men, should be superior to nerveless fear, as by such actions wealthy men may be ruined. Manufacturers deprived of the means of executing their orders, thousands thrown out of employment, the national industry paralyzed, the progress of useful works stopped, through want of confidence, and the usual facilities of getting money stopped,-such are the effects of pressure in the money market. The high rate is a mere bagatelle; the stoppage of a man's credit, the limiting and restricting his loan account, or refusing to discount this or that paper, being the real evil that causes an immediate paralysis of trade. Bankers, as a rule, are too liberal; their great fault is that, like an indulgent father, they suddenly, without cause or reason, refuse the helping hand they have heretofore so liberally given. Times of pressure, of course, are very trying to bankers, and fluctuations in the value of money generally injurious. When money is abundant they get the minimum of profit, and are tempted to make imprudent investments, in order to employ their funds; and when money is scarce the rate of interest on deposits is advanced, and although they get the advantages on the balances of the current accounts and their own capital of the higher rate of interest, on the other hand they have to keep a larger sum unemployed in the till, ready in case of a rush, and there is more danger from losses by the failing of customers, or from the necessity of realizing the securities they hold. As a rule, the extremes of abundance and scarcity of money are unfavourable to banking profits. A state in which money is easy without being abundant, and valuable without being scarce, is the most conducive to the prosperity of both the banking and the commercial interests of the country.

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