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HhtlOiS III WI '''i 4l'i". ''-
rural!v share OF il. proportional 70 rs commcrcia
business and u-e. fl Bills of Exchange were un
known then coin would exchange haads. from coun
try TO COUNTY, IN ord-r 10 pay debts, and settle ba
iances q, the course Of trade should have creaieC
such balance. the one eide or the other. Com /:
the universal solvent OF comn-rciai balances the
general pa,iuas,er whose Office ii l., 10 square
counts arising from the interchange uf commodities
IL produce exported becoues debtor 10 produce IN!
ported. coin aust pay the difference mud where ex
ports throw credit over imports coin returns 10 nd


Just the accounts. All this Is IL simple, IN the order
OF things rs is the proceeding OF farmer. who goes
TO the inarket towr, wiih the produce ot his Farm
and with none: in his pocket. ii he wishes 10 buy
more than he has 10 sell, bringing home more mo
ney, il hs sale exceed his purchases.


But in the intercourse o nations, there are things
which affect the simplicity Of This proceeding and
render il little more complicated, without chang
Jag It's nature. The one OF Bills Of Exchange i
universal. Bills Oi Exchange prevent, in yer,
great degree, in settled state ui trade the actual
transmission oil coin, from country TO country They
run ttc round o; the whole mercantile world, bring
ing nations IL settlement, each one worth all the
rest. one paving lis debts another. BY drawing
its funds The hands of thlrd. and leaving com 10
be called Tor only where balances OF debt are con
siderable, appear TO be accumulatlng al seine enc
point. London NAV be regarded aS The centre OF
Exchanges for Europe, ant the City of New-fo fork.
for this Country; Paris, Hamburg and Amsterdam
heing nuxiiiarics 10 London; and Boston. Phiadcl-
phia, Baltimore, Mobile and New-Orears auSilia-
res 10 New York The state of Exchange, then, ai
any time, between New-Iork and London, shows
substantially the state OF trade. IN The aggregate.
between this country and Europe. and the balances
actually existing 10 arse. on the one side 81
the other. Speculatlons, founded IN calculations
respecting future events, such aS the probable
amount of the staple articles, for the year. the
ltIn
or fall of prices, and other such things affect To
certain degree the actual rate. ut which Bills oi
Exchange are hough; and sold, ana thus qualif,
that which would otherwise be the mere result oi
fact with more or less OF the influence of opinion.
Still, the general ard the safe index OF the stale OF
trade, is the state OF the Exchanges.


To sn accurate understanding OF this subject.
however, it is necessary 10 bear in mind that the
nominal exchange between The nIted States and
Eng and does not correspond with the real com
mercal exchange; by reason OF the difference
which the laws ol the Two countries have cstab-
lishcd in regard 10 the value OF gold, and OF the IN
correct estimate, usually made here, in the business
of Exchange, OF the value of The pound sterling
In Exchange, the pound sterling Is received al
81 Al; lis real value may be put at 81 30; and so
the law OF Congress regards it. This difference
amounts 10 Q per cent. 50 that when bill o EX-
change is bought in Ne ! ork payable III London
in ST. Ring money, il the premium given FOR II DO not
exceed 8 per cent, IL is really purchased AT about
par and in tbs state OF Exchanges there Is no
danger Of the export Of specie.


This topic NAV be thought 10 be not altogether fl
for discussion here. But have made these remarks
upon it for reasons which have already stated, and
Tor the purpose OF preparing the way itle ior
opinions which entertain Oh the subject OF mixed
metallic and paper currency, and the Influences :"
this currency on foreign traie: and winch Opinions
| wish briefly to starc, And | wish do this al
,l,., ,I ti.tft fil
srrss OF great numher OF years, pF"bnbly soone,
than most men suppose. the currency question VIII
again come 10 be II qut tsion OF great interest.


Gold and silver, as have already said, consi
tuIe the standard oi value, and mcd'um o payinen
amnng natOns. The same is true in effect, in DO
nestle trade and among individuals. But here
comes in The modern use OF Bank paper as the rep
reseniatNc of gold and silver, which supplies the
place oi coin, and amcst supcrcedes II IN domestic
raisartiuus. Most conm.Tcu com RES nuthoriz'-
the circulation a. pa rr, and this ci cuntOnis great
rr or less according In circumstances and Ia the
habits OF the people in the United States aud Eng
la'd ii j. large, ia France ii Is less.


Inmnot now speaking OF Government securities, n
redeeuabI- Treasury nves, or any t!ung hat kEId
IN speaking OF Bank notes promising pasment IL
specie on demand, aod circulating Gs cash. In tie
United Slnlcs such Bank notes a,e issued by nan'
hundred differ, M Banks. Tn pass from hand IL
hand money, and little gold ana silver Is seen ~
the daily b.sinrss oi lite. TI- STATE of things l.
con,cnenl, so far local crCuauns are concerned.
and while the Of paper Is restrained within JaSl
limits But then comes the question: What orr the
lust limits and who is 10 preserve them What l.
the standard by which we are 10 decide the qucS-
Mons ui excess. or no excess and who Is 10 sup
port this standard


Is there, or is there not or may there be- or can
not there ever be, excess, so long u tie bnnhS are
able 10 redeem their paperl Nha, do we mean b,
nro ur IuIuuIclOus SuueraDluunnCG
OF paper


Toanswer these questions, we must remember,
that the tue operation OF bank paper Is repreSen'
tajve character. 1t represents com. But ihlS re-
preventative like other representatives, sometimes
t7rgets lis on>ttucnts and sets lisell up TO be son
BODY, or something; when, OF itself, Ii Is nobody
End nothing. The one dollar hill which you have
in your pocket is no beterihan blank paper, except
so far you have confidence that IT viii, Whenever
YOU wish, bring a dollar into YOUR hands hahk
nOie processing 10 represent CON- ana beng tru.
representative acts respectable part IN the dra!ln
of commercial affairs: but when IL SETS up ior iIseh'
or offers Itself in independent; character, IL oliy
"prese.ts the person oi moOnehine M securiiN
of paper first against the insolvency OF banks, and
secondly, against the general evil oi over issues
and inflated circulation, consists IN maintaining
inst an5 direct relation befreeR The amount ~ pa
per and the gold and siicer which II represents de
not, of course, say relation o equality, Dut jus!
relation, and Il direct relation. IN otheI "oi"E,
mean 10 say, that when the course OF trade with
draws specie from The country, then he amount o
circulating paper should be proporlionally dunn
ished. Bank notes will not pay orelsn debts
Strangers will not trust this representative OF com
They cannot Judge OF his credentials, and ller, lore
demand the presence of the constituent ITSELF Here
| think, hes one OF the great temptations 10 cAceS-
sive issues of paper. Then trade is such that bal
ances are rising against abroad, and the exPoHa'
ton of specie commences. There are those who al
ways desire an enlargement OF The paper circulation
10 supply the deficiency, and TO keep up prices. But
enlargement of paper issues, under such cncun,
Stances, is the irststep towards criSs, commercial
distress and revulSon. This country IL full OF -n
terprisc. No people have more. Almost every man
is active, while, al the same time, and for the sane
reason. capital is less abundant Than in older coun-
tries. These circumstances keep up demand io'
lonns and discounts, especially in times OF activity
and although it is doubtless true that well CON
Quoted system OF paper circulation may, TO some ex-
tent, act US expansion OF capital, and, IN that way be
useful in new country, yet men arc too apt 10 de-
Jude themselves with the dea that paperi> currency


But am row considering mainly paper cunen-
cv Mt home, in its consequences upon importatohs


,,J ,ticr hy.uc hes nt inrpiun frudts and IuSt I