if the banker fail in giving immediate notice, his remedy against his customer is gone.

But the Law of Continuity shews the fallacy of the doctrine that Bank Notes payable to bearer on demand alone are Currency. Lord Overstone rigorously restricts the term to such notes. But would not notes payable one minute after demand be Currency? or one hour? or two, or three, or four hours? Would not notes payable one day after demand be Currency? or two or three days? Lord Overstone denied that Bank post bills, which are issued payable seven days after sight, are Currency. According to this doctrine, if a man deposits money in the Bank and receives in exchange for it a bank note payable on demandthat is Currency; but if he ask, for his own convenience, for a note payable seven days after sight-that is not Currency! But the note becomes payable on demand on the seventh day after sight, and then, by their own definition, it is Currency. What was it before? It used formerly to be the custom for banks in the country to issue notes payable 20 days after demand. These notes circulated and produced all the effects of money. What were they, if they were not Currency? Cheques are payable on demand. How are they not Currency as much as notes? How are Bills of Exchange not Currency on the day they become payable? And, if they are so then, what were they before? It is quite plain that there can be but one answer. They are all species of Currency, though differing in degree, and the distinction between them is untenable.

Nay, according to this doctrine a Bank Note itself is only Currency during about six hours out of the twenty-four: because it is only payable on demand during banking hours, say from 9 a.m. to 3 p.m. As soon as the clock strikes three the Note is not payable till next day; and, consequently, it is not Currency, and has ceased to affect the foreign exchanges. Therefore, at 5 minutes before three it is Currency, and 5 minutes after three it is not Currency. So at 5 minutes before nine a.m. it is not Currency, at 5 minutes after nine it is Currency. We must leave our readers to judge whether such doctrines are sound philosophy.

Not only are Colonel Torrens's statements of law perfectly inaccurate, but also his statements of fact and the routine of business. He asserts that Bills of Exchange are not Currency

because they are intended to be, and are, ultimately liquidated in coin or bank notes. Such a statement as this shews the most profound ignorance of the ordinary routine business of banking; for comparatively very few bills are ever paid by means of coin or bank notes; in modern times they are almost universally paid by means of Bank Credits: and, consequently, by Colonel Torrens's own definition, these Bank Credits must be money.

19. But we must point out the further conclusions which the doctrines set forth by these witnesses lead to, which may somewhat surprise their advocates.

They say that the fundamental essence of Currency or Money is that it "closes a debt."

Now to this we shall reply as was the fashion in the glorious old days of special pleading-(1) there is no debt to close; and (2) it does not close the debt.

1. When money is exchanged for goods no debt arises and if it be said that the money closes the debt which would have arisen on the sale of the goods, it is perfectly obvious that it may equally be said that the goods close the debt which would have arisen on the sale of the money. It is simply an exchange; and the goods and the money close the debt equally on each side. Therefore, if it be the essence of Currency to "close debt," the goods are Currency for precisely the same reason that the money is. It is quite common in the City to discharge a debt by stock: now by this the debt is closed, and, consequently, according to this doctrine, the Stock is Currency or Money.

So in innumerable cases it is the custom to discharge a debt by a payment of goods. A baker or a tea merchant becomes indebted to a wine merchant, and for the sake of convenience he may take payment in bread or tea. If he does so, then the debt if closed; and by this doctrine the bread or the tea are Currency or Money.

So in all cases of Barter or Exchange of goods, the goods on each side discharge or close the debt which would have arisen without the exchange; consequently, the goods exchanged on either side are equally Currency or Money.

Furthermore, let us test the doctrine by cases regarding other paper documents.

A merchant, suppose, puts his acceptance into circulation:

another person happens to be indebted to him in an equal amount, and chances to come possessed of his acceptance. The merchant asks for payment of his debt, and the debtor hands over to the merchant his own acceptance. By this means the debt is closed; and according to this doctrine the merchant's acceptance is Currency or Money.

So a banker, say, issues notes, and discounts a merchant's acceptance. When the acceptance falls due, the merchant collects an equal amount of the banker's notes. Each is then equally indebted to the other; and in payment of their reciprocal claims, the merchant hands the notes to the banker, and the banker hands the acceptance to the merchant. By this means the debts are mutually closed, and if the Notes are Currency because they have closed the debt, is it not manifest that the acceptance is equally Currency, because it has performed exactly the same function?

So if two merchants issue their acceptances for the same amount, and they get into each other's hands, each will offer to the other his own acceptance in payment of the debt by him. By these means the debts are mutually closed. And consequently each acceptance is Currency or Money.

Thus we see that the dogmas of these writers are transfixed by darts drawn from their own quiver !

The same doctrine may be extended to other cases. Suppose a man buys a ticket from a Railway Company, the Company is then indebted to him. But when they have carried him to his journey's end, the debt is closed. Therefore, according to this doctrine, the carriage of the passenger is Currency or Money.

So if a person buys an opera ticket, the manager of the theatre is indebted to him. But when he has witnessed the play, the debt is closed; consequently the performance of the play is Currency or Money.

So if a person buys Postage Stamps, the Post Office is indebted to him: but when he has sent his letters by post, the debt is closed. Therefore the carriage of the letters is Currency or Money. And so on, the same principle may be applied to many other cases.

2. In the next place, we affirm that a payment in Money does not close the debt, because all Economists have shewn that

the transaction is not closed until some product or satisfaction has been obtained in exchange for the one originally given. The earliest Economists pointed out that in a sale for money the exchange is not consummated.

A baker, we will say, wants shoes: he sells his bread for money; but can he wear his money as shoes? Certainly not; he must exchange away his money for shoes. Consequently, the Physiocrates held that the exchange was not consummated, or completed, until the baker had got his shoes. And J. B. Say called a sale, a demi-exchange.

And it is precisely for this reason that all Economists from Aristotle downwards, have perceived and declared that money itself is only a species of Credit, or general Bill of Exchange, as we have shewn by a whole catena of writers. Hence, money and bills of exchange are fundamentally analogous; they are each of them merely the evidence of a debt due to their possessor; and the payment of a bill of exchange in money is only the exchange of a particular and precarious instrument of Credit, for a general and permanent one. But, as Economists, we have nothing to do with satisfaction and enjoyment; we have only to do with exchanges; and the exchange of goods for a bill or note is one exchange; the exchange of a bill or note for money is another exchange; and the exchange of money for goods is another exchange; they are all equally exchanges, and therefore Economic phenomena.

20. We are happy to say that on this subject M. Michel Chevalier is entirely of the same opinion as ourselves. After shewing1 the untenable nature of the distinction set up between Bank Notes and Bills of Exchange, he says "The English language has a generic word which comprehends money, bank notes, paper money, or assignats not convertible into specie, and every other kind of security which can be put into circulation, and is accepted more or less generally among men: and that is the word CURRENCY. Our language has no precise equivalent: nevertheless, the word Numéraire may be taken in the same sense, and I shall so employ it for the future in this work." And the same distinguished writer has given his formal adhesion to the fundamental nature of a Currency set forth in this work.2 2 Journal des Economistes, August, 1862.

1 La Monnaie, § 3, ch. 5.

But, while we contend that Lord Overstone's criterion of a Currency is fatal to his own view, we are quite willing to accept it. For what is it that exists in all places, in all times, and among almost all persons? DEBT, or SERVICES DUE. And what is it that is universally required to measure, record, and transfer them? Some material. But we see that all Currencies are more or less local, none are universal. The idea, or the want alone, is universal. The notes of a country banker, only circulating in his own neighbourhood, are like a country patois, each district has its own. A national Currency rises to the dignity of a language. But even that is only local, on a larger scale. The ideas only expressed in the language are universal. We are, therefore, strengthened in our conviction, that the only true idea of a Currency is, that it is the Representative of Transferable Debt, and that whatever represents Transferable Debt is Currency.