The Sun.
London, England, 1855-07-05 00:00:00

LITERATURE.

The Theory and Practice of Banking. By _Henri
Dunning Macleod, Esq. Longman, Browilf
Green, and Longmans.
In a country like ours, which has risen to an uly
paralleled height in the scale of nations, and whiebt
if it fell to-morrow, would leave behind it mono'
ments of its existence and beneficent sway greater
and more enduring than any history has recorded,
it might reasonably enouglk be expected that the
principles of that agency ro whose operations.
,its,
position and influence are mainly to be ascribed
would long ago have been established beyond the
reach of cavil. So far, however, from this beieg
the case, it is only comparatively of late years that
the true principles, generally speaking, of political
economy have been eliminated from the haze °A
prejudice which had so long obscured them, se"
been marshalled into the order of a science whose
lessons even then it required much individual ae,',
collective effort, and a lapse of years, systematically
to establish and have received with effect. To thi,t
result the Anti-Corn Law League largely contrY
buted ; and though that organisation passed aWel.
little
the cause of its existence, there can be "
question that not the least important result of its
labours was the general reception of a safer and
more satisfactcry, because scientific, direction
of commercial enterprise than before. The
knowledge of one branch of political econorail
however, the monetary system in general and the
banking pert of it in particular, has not advanced
pa ri passic with others. Though the subject is ee°
of general interest, and involves every one's Nre.l:
fare, or, as we are told, because of these facts 1;
has been so obscured by passion and prejudice t 13,6,
its true principles are still far from being generall
understood. To this state of things the desire °
many writers to popularise the science has largelt
contributed. In their endeavour to facilitate vile
gar comprehension they have fallen into the errors
of being loose and inaccurate, not only omitting
strict definition of words they used in relation tl
the subject, but also employing them in differed
senses from the first and from one another. Uncle,
these circumstances Mr. Macleod, justly apprecie'
ing the importance of the subject, has not erred 1,1
thinking " there was room for a work which shout
endeavour to treat of it more as a science, and
a more methodical and systematic manner than I;
hitherto been done. Like every other scion!,
whatever," he remarks, " the monetary system 117
ideas and principles which are peculiar to its
eill
and if these could be as thoroughly and carefelli
investigated as is done in ever other science, ,10
would necessarily assist in removing some of the
differences of opinion and contradictory views uP°O,
the subject. It is because such care has he
e 0
taken in ascertaining and settling the elemental
principles of the physical sciences that they are
well understood, and so few differences of opiei°4
prevail about them ; and it is because such o'o
and attention has never yet been bestowed uP°„(
settling the definitive and elementary principles uci
monetary science that it is still in so conftis4;
controverted, and unsatisfactory a state."
truth and force of these remarks are self-eeideei;
and tend to impress the reader with a favourel?o
opinion of a writer whose general aim is so defilll
and practical—an opinion, we will here add, whin,
$
careful perusal of the work will increase in the inid e
of many to confidence and respect. Mr. Maele.,j
evidently possesses a prehensile and logical /01", t
—conscientiousness, and a knowledge of his subjeivie
and mode of dealing with it, which could only 134,
been acquired by laborious application ; and no
out committing ourselves to a strict concurrenet!„e
his views, we can have no hesitation in predicatil
of his work, judging by what has appeared, that'll,'
will prove a very valuable contribution to
supply of a most important desideratum. t
In pursuance of his object, and in perfeeiithor
nicely with the views previously quoted, the aLbich
first examines the general principles " tat
monetary science is based, and the fundanle%
ideas involved in it, considering it simply a'to
science ; and, these being established, proceed jo
trace their gradual adoption and developmerl,v,e,
practice. The first chapter is devoted to settil
the definitions of the different expressions ev_sa
technical words peculiar to monetary science ; sPoi,
in order to secure greater accuracy and Preb,
sion, the circumstances under which each total
nical expression —including the fundameerti
one, the Currency—originated, and the v/Pro
it supplied are briefly and lucidly narrated. :14
the following we have what the author conceis
to be the most perfect idea of a currency :
" The use of a currency being to record ail',
transfer debts, if we could imagine a great Public 1300.4
kept by the national authority, in which every one vied
entitled to record his services, which should be valtio
at a certain amount in figures, it would present the flit
perfect idea of a currency. For any one who bad ere p,
in that book might require the services of another pergier
and give an order to the national book-keeper to tra° uil
the figures denoting their amount from his own to Poi
creditor's column. The book itself would be the reco
of the evidence of' the debts, the total amount of tPO
figures at the credit of each person would be the tot
amount of the currency in the country, and the tran9bpo
rence of the figures from one column to another would
the transference of the debt, and would denote an opeoo
tion, just as the transference of money from one perelcl
to another, and the amount of these transferences Nvo"
he the circulation."
The idea being established, the author proceeds ttit
consider the different kinds of currency, and Nrlli.
is and is not currency, and to settle other den(
tions. The reader, however, may wish to ke°,,
what Mr. Macleod includes in the term currency' ,6
" The amount of the currency in any country
the aggregate amount of it belonging to every individul';
Now, whatever represents the amount of debt due to 11b,
individual, over and above his possessions in commoditiol
in whatever form that debt be recorded, whether 133800
or paper, or whether it exists simply as a debt, f° r
amount of currency belonging to him. Whatever tbeo
0,
fore confers the power of demanding services or corns
dities. or professes to confer the power of deruanno
them, is the currency or circulating medium of any lie
person : and includes not only the current coin of 04
realm, but all its substitutes of every description, i°l3io
whatever else presents or displaces it. Adopting ", if
definition, we any enumerate the different species (~.
as fellows :-1. Coined money : gold, silver, and cope
2. Bills of Exchange, including cheques ; 3. PromisB°o
Notes, including Bank Notes ; 4. The sum standingAo
his credit in his Banker's books ; 5. Private debts "
to him."
to
Subsequently the opinion that a private debt joie,
be considered as currency is maintained and b,
fended. The Theory of Prices, involving the inuelo
vexed question of the action of the issues of baeo,
upon prices, is next considered, and, to facilit°,o
comprehension, the causes which produced a chal,o
of prices is carefully investigated, a few extrewee
cases being taken—the causes which influeed,
prices in such particular instances being analysed'
with the following result :
setvice Price varies directly as the intensity of the set
vice rendered, and inversely as the power of the buir
over the seller, which may be thrown into an arith°
tical form, thus—
Price potwenersiotyf
boufyseerrvoicveerresneldleerned.
be
This expression properly interpreted will be found
of universal application, and to comprehend all tranf
tions of whatever nature they be,. whether by way
wages, rent, or price."
A number of examples and illustrations of -of
general formula are given, and some principito
preceding writers, including Ricardo and itu'et
Smith, on the subject controverted. An accei'if,
of the different substances used as currency 119.5 t
ferent nations, and the different changes in Wele,r
and fineness which the English currency has 1111", A be
gone, follows ; and the nature of Interest, i;ot
causes which govern its rate, and the peell'ilje
method of Discount which bankers practises 41
whole theory of Credit and of Exchanges, are 1:1;3%
treated—the above six chapters in all embrecito
the whole theory of the subject. In the seven
de
chapter the rise of Banking and the progress 133-4 je,
in it by the nations of antiquity, its revival le "j,
middle ages, and its rise and progress in Scotletilot
with an account of the existing system log
country, are narrated ; the eighth and conclu''pa
chapter of the first volume tracing the rise iloci
progress of Banking in England. In a sec-edg
volume the subject, we are told, will be continil"
The functions of a bank are thus described
"The functions of a Bank, then, in the conimer-ft
body resemble those of the heart in the human 0
attracts to itself capital, the life blood of commerce, j,""-cti'
every direction, in the minutest rills, and having 011 -
ululated it in a great reservoir, propels it throng od
the arteries and channels of commerce, vivifying 413
nourishing it, and spreading vigour and health tbrt)
the whole commercial body."
With this imperfect notice we must content 1131:
selves for the present, intending to return t°
book on a future occasion,

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