When Adam Smith remarked that gold in a Bank is so much dead stock, he could have had no idea of the extent to which modern invention has pushed the policy of economising its use. The theory and practice now-a-days upon the subject go far beyond Dr. Smith's views, and produce an effect which he strongly deprecates; namely, a scarcity of specie. The governing idea with most men now is, that gold is a lock-up when you have it, and ruin comes if you are called upon for it, and have it not to give. Let us all, then, agree, they say, to put on the appearance of having it, but endeavour by all means to do without it. Every recent improvement in Banking has gone upon the principle that we should retain gold as a standard, but bring it forward as seldom as possible, and scarcely ever touch it. The perfection of the theory would be a refinement of the thing into nothing, a spiritualizing away of the reality, until gold and no gold became one and the same. Such improvers would make it "small by degrees, and beautifully less," until it had vanished altogether, and ceased to exist otherwise than argu-mentatively. They would exceed the art of the modern cabinet-maker, who makes twenty tables out of the log of mahogany which formerly only made one, and goes on veneering and veneering, until it has become a matter of doubt whether there is an inch of solid mahogany in any well-furnished house in London.

Examining the question in this way, I can discover no strong reason to show that a Banker ought to be protected and relieved from the first fundamental principle by which we bind every other man of business. Trading is begun and carried on by converting property into, and always retaining a proper supply of, the stock or commodity to be dealt in. The shopkeeper has his stock of goods, the manufacturer his machinery and the material manufactured, the wine-merchant his wine: to call upon the Banker to provide himself with specie, is only to subject him to an obligation no other trader can escape. As to the formidable assertion that gold is dead stock, I have to observe, that every man must sink something in his business, and further, that all stock is dead when not acted upon. The Cadiz merchant, with one hundred butts of sherry in the docks, which he cannot sell in consequence of a glut or depression in the market, holds so much dead stock while this state of things lasts. His sherry is his gold, and a portion of it is necessarily unproductive from time to time. It is so with all merchants, and the Banker cannot reasonably claim an exemption from the general law of trade.

Gold has been over and over again laid down, by the common consent of all the authorities upon the subject, to be a commodity itself; and to differ not in its nature or application from any other exchangeable commodity the world uses or knows of. Gold, being a legal tender, must also be a commodity in which the Banker trades; it is his stock and capital, just as corn, wine, tea, indigo, and tobacco are the stock of the merchants dealing in those articles of consumption; and the former cannot fairly claim to be allowed to do more than realize his profit or per centage upon invested capital, as every other trader does. He would be ridiculed who would contend that a corn-merchant could do business without corn, or a tea-merchant without tea. Why not treat the Banker in the same way with regard to gold and silver, when we know that corn and tea, gold and silver, are exchangeable commodities, and a bill of exchange given for corresponding portions of one or the other will differ in no respect. Is it not, therefore, obvious that they should have no privileges one above another? If a bullion dealer must have bullion, the Banker should not be exempt from holding gold coin as value for the paper he puts in lieu of it. The Banker will probably turn upon me here, and tell me, that if he does not keep gold, he keeps a legitimate substitute in the form of Bank of England notes. I answer, that I blame not the Banker but the system. The sub-stitute I know is lawful, and that is what I object to; because experience tells me that the substitute really does not represent the amount of specie in lieu of which it has been issued, and that if half the men holding notes were to demand specie for them the Bank must break.

Our policy has been to narrow the market for gold, and so to lessen the number and size of the channels in which it shall flow, as to pass through them the smallest possible quantity. The reverse of this, in my opinion, ought to have been done. Gold is never found in abundance, nor is it indigenous in countries the inhabitants of which are numerous, rich, advanced in civilization, and standing in need of numerous and expensive commodities. Unlike other minerals, coal and iron for instance, it does not abound where there are good general commercial markets, to facilitate its purchase from the resident inhabitants. Geology has gauged the coal stratification of England, has measured its depth and extent, and computed the supply in the bowels of the earth. We are certain that we shall have an abundance of coal to burn in England for centuries to come. But the countries in which gold is found have not been penetrated and examined in the same way. We cannot tell what they contain, nor can we predict with accuracy the quantity they will furnish for any given period. Meantime society is increasing rapidly in numbers and in wealth; every succeeding day gives birth to some new invention for multiplying the products of human labour by simplifying and expediting its details; manufactures are thus extended, trade and commerce quickened, the sphere of all business is enlarged, more money is made, and the want of more specie to represent that money is created. The property of the United Kingdom has been enormously increased during the last fifty years, and the trials and losses we have recently undergone have proceeded as much from this as from any other cause, that there has been no supply of gold equal to our increased property, while the supply of silver which might have answered the purpose has been senselessly thrown out of use.