It has often been maintained that bills of exchange are currency, as truly as bank-notes. Let us inqiure.

1st, The popular definition of currency is, that which passes current from hand to hand in all transactions between buyer and seller, in large or small amounts; and, also, in payment of all obligations. It is evident that this is not true of bills of exchange, which may be taken as the example of all negotiable paper. It is, indeed, said, that in some countries, as in Great Britain, they are so used, in a limited degree; but even such use does not bring them within the definition.

2d, The wider definition which we gave of currency, viz. that instrumentality by which a general exchange of values is effected and payments are made, does not embrace bills of exchange, which have themselves to be discharged with currency. The fact, that, when found in equal amount on opposite sides, they may be used to cancel each other, makes them no more currency than is the credit side of a book-account, which balances the debit. Bills of exchange dispense with the necessity of transporting currency in a certain number of commercial transactions: they are not, therefore, themselves currency. They allow debts between different States or nations to be discharged in the local currencies; but each bill is itself discharged in full by the use of currency, no less.

3d, Currency, if it be equal to money, can be at once exchanged for specie, at the place where issued; but cash cannot be obtained on demand for bills of exchange, as they are generally on time. Here, then, is another wide difference between currency and individual promises. They are, in fact, bought and sold for money, like the merchandise on which they are drawn.

4th, Currency is that in which all persons promise to pay their cash obligations. Is that true of bills of exchange? Quite the reverse. 5th, If a bill of exchange be dishonored, that is, not paid according to promise, the currency of the country is not thereby diminished. Is it so with currency? On the contrary, if a bank fails, so much currency as it has in circulation is at once abstracted from the community.