PREFACE

In the present edition of these Lectures I have corrected some inaccuracies which occurred in the first. I have in many places, where my meaning seemed to be obscure, endeavoured to make it plain ; and I have, in some instances, altered the arrangement of the subjects. I believe that they are thus better worthy of acceptance than they originally were, and that they are now probably as complete as I shall be able to make them until experience shall have thrown some more light upon the subject.

The recent debate in the House of Commons, on the motion of the Chancellor of the Exchequer, for a Select Committee to inquire into the operation of the Bank Act of 1844, shows that the policy of that measure is by no means universally acquiesced in. I confess, however, that the interval of more than three years which has elapsed since the first edition of these Lectures was published, has but confirmed me in the opinion, which I then expressed, as to the wisdom — indeed, I may say, the indispensable necessity — of having our monetary system based upon the principle which that Act affirms. Sonic confusion seems to me to have arisen from not distinguishing between the principle of that measure and its details. The latter may be varied from time to time, while the former is maintained in its integrity. The great principle of the Act I take to be this : that there shall always be some limited sum, beyond which no issue of notes shall be made on securities ; that this sum shall be so low that there shall be no possibility of the circulation falling below it by any drain for gold; that all issue beyond this sum shall be made in exchange for the precious metals ; and that to this latter issue there shall be no limit. Every other provision of the Act is of importance only as it contributes to sustain this leading principle. Thus the amount which the bank may issue on securities, whether the present sum of fourteen millions or a larger amount — the proportion of silver to gold bullion which it may hold — the relation which it should bear to the department of public issue — all these, and other instances which might be given, are but subordinate provisions, which may be varied or modified from time to time, as it may be deemed expedient, provided only that the great principle of the Act be not encroached upon.

I have endeavoured in these Lectures to discuss every matter which could legitimately be included in a treatise on the principles of Currency and Banking. Many valuable works have been published at various times upon detached portions of this subject, but it appeared to me that there was still room for a treatise, complete in itself, and embracing the entire subject, and this want I have here attempted to supply.

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