PREREQUISITES TO THE RESUMPTION OF CASH PAYMENT. 503 erable to an open boat at the mercy of inconvertible paper currency, and as both the Atlantic surges. The tide has so far ought to aim as soon as possible to resume risen that you can land nearer to the payments in specie, it is important to conpaved causeway than before; but even sider what are the prerequisites of such now you have to wait for the flow of the a change, and what a country ought to wave, then make a spring on to the black do which wishes to make it. and slimy rocks, which would be creditable to even trained gymnastic powers. So you go home, under the first streaks of dawn, wet through and scaly, and smelling abominably of fish, dashed with streak of tar for a compound. The whole place, however, will smell of fish to-morrow, and for many to-morrows. When the tucking-boats are brought in, then the women take their turn, and pack the pilchards in the fish-cellars or saltinghouses. Here they are said to be in "bulk," all laid on their sides with their noses pointing outwards; layers of salt alternating with layers of fish. Their great market is Italy, where they serve as favourite Lenten fare. The Italians believe them to be smoked, and hence call them fumados. This word the dear thick-headed British sailor has caught up, according to his wont, and translated into "fair maids"; and "fair maids"-pronounced firmads-is the popular name of salted pilchards all through Cornwall. The pilchard fishery begins as early as June or July, but then further out to sea, sometimes twenty miles out. According to the old saying, When the corn is in the shock harvest-time, which means from August From The Economist. PREREQUISITES TO THE RESUMPTION OF CASH PAYMENT. AMERICA AND FRANCE. As two of the great monetary countries of the world are suffering much from an' The conditions of success in the attempt are three First. The difference of value between paper and gold ought to be so far reduced that no enormous amount of paper will require to be exchanged for gold when specie payments are resumed. If gold is at a high premium-say 25 or 35 per cent.. -as compared with paper, it is plain that, as soon as the law says that gold must be given for the paper on demand, a very large number of persons will wish to obtain so considerable an advantage, and to exchange the less valuable article for the more valuable. And it would be difficult to accumulate sufficient specie to meet so formidable a demand. But if the premium on gold is reduced to a small amount, the amount of paper coming in for exchange will be small too; and the payment in gold of that small quantity of paper will be enough to accomplish the desired effect, and to equalize the value of the two. Secondly, and this does not need remark,- the Bank or Government which is about to pay in specie must have immediately ready in store as much of that specie as will be at once needed to pay the comparatively small amount of paper which will so come in. Thirdly, what does very much need remark, for it is by no means distinctly seen, the Bank or Government must have in stock such a quantity of gold and silver as will be necessary to secure the permanent convertibility of paper into gold. It must provide not only for the momentary demand which is sure at first to happen, in order to efface the slight premium on gold, but also for further demands which in the course of time may be expected to happen. The reason of this is plain. The undertaking to pay a large quantity of bank notes in specie is the creation of a very serious liability; at any moment a large amount of that paper may be demanded for payment. And it is as likely to be demanded immediately, or soon after the resumption of specie payment, as at any other time. Indeed, the period just after resumption is likely to be especially critical, because that resumption is in itself a great change in trade, and in that, as in all other such changes, no one can say what other 504 PREREQUISITES TO THE RESUMPTION OF CASH PAYMENt. movements or what new demands they happy belief of the public that no such may occasion. The resuming Bank or store was needed. But the calamities of Government must be prepared, at the 1825 were mainly owing to mismanagetime of resumption, with a sufficient ment after specie payments were restore of specie to secure its credit and to sumed; if the reserve with which the pay any demand which in reasonable Bank began specie payments in 1821 had probability will be made upon it. And been maintained in 1825, the panic of in such a vital matter it should err rather that year would never have occurred. on the side of excess than on that of The mistake was not in commencing deficit; for if it keep too much it only specie payments with inadequate reserve, loses some interest, whereas if it keep but in afterwards neglecting the reserve too little it must stop payment and its and letting it dwindle. The resumption credit will be broken. of cash payments by the Bank was an operation in itself fairly successful. When the Bank of England resumed specie payments under the Act of 1819 In the case of America the first conthe first of these conditions was com-dition is scarcely, we think, sufficiently pletely satisfied. The following table satisfied. The premium on gold, though will show that the premium on gold as compared with paper had become (from causes which we cannot now discuss) very small: AN ACCOUNT of the Average Market Price of Bullion in each Year, from 1800 to 1821 Average per Cent. far less permanently than it ever was, is still so high that an immediate offer on the part of Government to pay gold for paper might be dangerous. The price of gold now varies between 108 and 110; and if, with a premium of 8 to 10 in fayour of specie, specie payments were resumed, a large amount of gold might be required. Anything like a run is at such a moment particularly dangerous. It may begin in a desire to get a premium, but when once begun it may easily beget a distrust of paper altogether; far less events have caused in their time an "ugly rush." New York is a market where even 6 minor risks are serious everything is "worked" to the utmost. Unscrupulous and combined operators are ready to seize all advantages; and if the aggravation of general discredit would advantage them, they would without hesitation aggravate it. The premium on gold must, in our judgment, be still farther reduced before specie payments can be safely recommended. 7 16 10 20 14 9 22 18 O 25 2 16 14 3 I o 5 4 4 13 4 13 4 2 13 16 14 3 213 2 2 12 ; In America it is thought that this panic by the "shrinkage of values," that is, the reduction of prices which it has caused, has greatly increased the facility for a return to specie payments. But the diminution in the paper prices of articles other than gold is no aid in effecting this object; it is by the amount of the premium on gold in comparison with paper that its safety is to be measured. And by destroying money "corners" and much vicious speculation in gold that panic has no doubt been a sensible help; the premium on gold, which had been unduly raised 2 or 3 per cent., has now been reduced to its natural amount. so long as that premium still remains so high as it now is the risk of a return to specie payments will be considerable. But We know by experience how that pre PREREQUISITES TO THE RESUMPTION OF CASH PAYMENT. 505 mium may be effaced. If no more greenbacks are issued the augmenting trade of the country will of itself raise the value of the paper. But this is a severe and painful process. Conducting a larger trade with an identical currency is the same as conducting an equal trade with a diminished currency. In both cases there is dear money, that is, a high rate of interest and a lowered scale of prices; people have to pay more for what they borrow and receive less for what they sell, and the consequent suffering to trade is always considerable. It can be borne by America, we know, for she has already borne it; she has already reduced the premium on gold by a much larger amount than that which remains to be reduced. But the effort has been great, and this panic is, in great part, the consequence of it. Nor are our second or third conditions satisfied. The store of gold now held by the American Government is altogether inadequate to the resumption of cash payments. The amount of coin in the Treasury is 16,965,000/., and the actual legal amount of greenbacks is 65,265,000!, and this amount has just been exceeded by the re-issue, with contested legality, of greenbacks withdrawn from circulation. The specie is therefore just a fourth part of the liability on the currency, an amount plainly inadequate to the burden of so large a liability. whole amount of the premium on gold even now, though the circulation of notes has augmented so rapidly. There would be no difficulty in getting rid of such a premium as this; nor would it cause any risk in proceeding to specie payments. The small premium has driven the exchange business from Paris. Even that minute amount, and the incessant though still minuter fluctuations of it, have been sufficient to disturb such fine calculations. But the premium has had no other effect, and, except in the improbable event of its becoming much larger, it never will have. But, on the other hand, the Bank of France has no such facility as the American Government in obtaining gold. It is not a Government; it receives no taxes; it has no power of saying that such and such duties shall be paid to it in specie. It cannot fill its till by compulsion. And that till is now far from full. The figures are LIABILITIES OF BANK OF FRANCE Notes Total. £ 119,921,000 6,174,000 9,056,000 135,151,000 Against a reserve of 28,946,000!, which is little more than one fifth of the liabilities. To have in reserve the same proportion of its liabilities which the bank of England had in 1821, it must accumulate 54,000,000/, or 26,000,000/, more. Happily, however, the American Government has no difficulty in obtaining any amount of gold which it may require. In the present state of France this It receives its customs duties in gold, would be most difficult. The effect of the and these amount to more than the inter- indemnity is still felt. As M. Buffet well est which it has to pay in gold. It has said, France has not paid her debt, she for years sold gold regularly, and has in- has only changed her creditor. The invested the proceeds in the purchase of terest on the rentes, which are finally its own bonds. It has only to stop sell-placed, is very heavy, and is weighing ing, and it will receive of necessity as fearfully on the national finance; and bemuch gold as it may desire. In this way it may accumulate gradually a sufficient reserve in gold to meet the first demand consequent on resumption, while there is any kind of premium on gold as compared with the paper, and to meet also the permanent liability involved in the promise to pay on demand many millions. The American Government has no difficulty in accumulating the gold; its only difficulty is the necessary diminution of the premium on gold. The difficulty of the Bank of France is the precise opposite. It is not troubled with the premium on gold or on silver, since, for ordinary purposes, there has never been any, -7 or 8 per mille is the sides this there are said to be many bills representing portions of the new debt which are still in transitu, and have not finally sunk down to the consumer. Trade is bad, and must be bad, for France is a great consumer of its own productions, and France has economized since her defeat, perhaps more than any country before ever did. And in this way she will pay the interest to the national creditor. But in this way also she disturbs and renders unprofitable her ordinary trade. Goods which were produced in order to meet the demand which existed before the war cannot now be sold so soon as they could then have been sold, perhaps they cannot be sold at all. The applications for discount to the Bank of, earnest devotion to human good, and the France are becoming larger and larger, widest intellectual sympathies, no one and though it discounts in its own inconvertible paper, it charges 6 per cent., so as, if possible, to drive away bills and to lessen the amount of its advances. France cannot therefore easily accumulate a large amount of new gold. In order to do so she must raise her rate of interest above that of other countries, so as to attract gold to Paris and to keep it there. But in her necessary present condition, and without any ambitious effort, the rate of interest is 6 per cent., and may be higher. A most heavy burden is already imposed on an impoverished country, and she could not bear a heavier. who reads it with any discernment can doubt. But it is both a very melancholy book to read, and one full of moral paradoxes. It is very sad, in the first instance, to read the story of the overtutored boy, constantly incurring his father's displeasure for not being able to do what by no possibility could he have done, and apparently without any one to love. Mr. James Mill, vivacious talker, and in a narrow way powerful thinker as he was, was evidently as an educator, on his son's own showing, a hard master, anxious to reap what he had not sown, and to gather what he had not strewed, Such are the curiously-contrasted diffi- or as his son himself puts it, expecting culties which beset France and America "effects without causes." Not that the in an attempt to return to cash payments, father did not teach the child with all his and the effect on the English money mar- might, and teach in many respects well; ket of the two resumptions would be un- but then he taught the boy far too much, like also. The resumption of specie pay- and expected him to learn besides a great ments in France would perhaps be an aid deal that he neither taught him nor to the English money market. There showed him where to find. The child would then be, as there used to be, a began Greek at three years old, read a second great and accessible store of the good deal of Plato at seven, and was precious metals in Europe; the Bank of writing what he flattered himself was England would not be the only one. But "something serious," a history of the the American resumption would augment Roman Government,— not a popular hisour difficulties. America would com-tory, but a constitutional history of Rome, pete with us for the store of specie in the by the time he was nine years old. world; the present panic would have He began logic at twelve, went through a caused infinitely greater demands on us "complete course of political enonomy" if the currency had been metallic, all oth- at thirteen, including the most intricate er things being as they now are. The points of the theory of currency. He gold would not then have been an article was a constant writer for the Westminster of merchandise, but a means of payment. Review at eighteen, was editing BenWhen the American standard again con- tham's Theory of Evidence and writing sists of gold, we shall be always liable to habitual criticisms of the Parliamentary have our supply of gold interrupted by debates at nineteen. At twenty he fell her wants, and even to have gold taken into a profound melancholy, on discoverfrom London to supply them. We may ing that the only objects of life for which expect France to help us in keeping the he lived,- the objects of social and politgold store of the world; it is suitable to cal reformers,- would, if suddenly and her character as a quiet accumulating completely granted, give him no happination; but we cannot expect America ness.whatever. Such a childhood and to do so. She is the country which sur-youth, lived apparently without a single passes all others in the means of employing money and in the hardihood, not to say the recklessness, with which she uses them. From The Spectator. MR. JOHN STUART MILL'S AUTOBIOGRAPHY.* THAT this curious volume delineates, on the whole, a man marked by the most * Autobiography by John Stuart Mill. London: Longmans. strong affection,- for his relation to his father was one of deep respect and fear, rather than love, and he tells us frankly, in describing the melancholy to which we have alluded, that if he had loved any one well enough to confide in him, the melancholy would not have been,--and resulting at the age of eighteen in the production of what Mr. Mill himself says might, with as little extravagance as would ever be involved in the application of such a phrase to a human being, be called "a mere reasoning machine," are not pleasant subjects of contempla happy one. It is "sicklied o'er with the pale cast of thought," and of thought that has to do duty for much, both of feeling and action, which usually goes to constitute the full life of a large mind. the tion, even though it be true, as Mr. Mill asserts, that the over-supply of study and under-supply of love, did not prevent his childhood from being a happy one. Nor are the other personal incidents of the autobiography of a different cast. Noth- And besides the sense of sadness ing is more remarkable than the fewness, which the human incident of the autobilimited character, and apparently, so farography produces, the intellectual and as close intercourse was concerned, tem- moral story itself is full of paradox which porary duration, of most of Mr. Mill's weighs upon the heart as well as friendships. The one close and intimate mind. Mr. Mill was brought up by his friendship of his life, which made up to him father to believe that Christianity was for the insufficiency of all others, that with false, and that even as regards natural the married lady who, after the death of religion there was no ground for faith. her husband, became his wife, was one How far he retained the latter opinion,which for a long time subjected him to he evidently did retain the former, it is slanders, the pain of which his sensitive understood that some future work will nature evidently felt very keenly. And tell us. But in the meantime, he is most yet he must have been aware that though anxious to point out that religion, in what in his own conduct he had kept free from he thinks the best sense, is possible even all stain, his example was an exceedingly to one who does not believe in God. dangerous and mischievous one for That best sense is the sense in which others, who might be tempted by his religion stands for an ideal conception of moral authority to follow in a track in a Perfect Being to which those who have which they would not have had the such a conception "habitually refer as strength to tread. Add to this that his the guide of their conscience," an ideal, married life was very brief, only seven he says, "far nearer to perfection than the years and a half, being unexpectedly cut objective Deity of those who think themshort, and that his passionate reverence for selves obliged to find absolute goodness his wife's memory and genius-in his own in the author of a world so crowded with words, "a religion" was one which, as suffering and so deformed by injustice as he must have been perfectly sensible, he ours." Unfortunately, however, this could not possibly make to appear other- “ideal conception of a perfect Being "is wise than extravagant, not to say an hal- not a power on which human nature can lucination, in the eyes of the rest of man- lean. It is merely its own best thought kind, and yet that he was possessed by of itself; so that it dwindles when the an irresistible yearning to attempt to mind and heart contract, and vanishes embody it in all the tender and enthusi- just when there is most need of help. astic hyperbole of which it is so pathetic This Mr. Mill himself felt at one period to find a man who gained his fame by his of his life. At the age of 20 he under'dry-light" a master, and it is impossible went a crisis which apparently correnot to feel that the human incidents in sponded in his own opinion to the state of Mr. Mill's career are very sad. True, his mind that leads to "a Wesleyan's conshort service in Parliament, when he was version." We wish we could extract in already advanced in years, was one to full his eloquent and impressive descripbring him much intellectual consideration tion of this rather thin moral crisis. and a certain amount of popularity. But Here is his description of the first even that terminated in a defeat, and was stage: hardly successful enough to repay him for the loss of literary productiveness which those three years of practical drudgery imposed. In spite of the evident satisfaction and pride with which Mr. Mill saw that his school of philosophy had gained rapid ground since the publiliberal view of the science of political cation of his Logic, and that his large and economy had made still more rapid way amongst all classes, the record of his life which he leaves behind him is not even in its own tone, and still less in the effect produced on the reader, a bright and From the winter of 1821, when first I read Bentham, and especially from the commencement of the Westminster Review, I had what might truly be called an object in life; to be a reformer of the world. My conception of my own happiness was entirely identified with this object. The personal sympathies I wished Howers as I could by the way; but as a serious for were those of fellow-laborers in this enterprise. I endeavoured to pick up as many and permanent personal satisfaction to rest upon, my whole reliance was placed on this; and I was accustomed to felicitate myself on the certainty of a happy life which I enjoyed, through placing my happiness in something |