would cherish any kind feelings for the blacks, or that he would take the trouble to negative an unkind insinuation against one of their race.

The breakfast being demolished, Mr. M'Doodle ordered his guests' horses to be brought, and Howard was about to take his departure with them, but M'Doodle pressed him so kindly to remain, and looked as if he could say something to him if left alone, that he was prevailed on to stop: a promise to show him the process of sugar and rum manufacture, and the beauties of the estate, which abounded in scenery, cascades, and grottos, were too strong inducements to forego, and this, perhaps, fixed Thornton on stopping: the other guests took their leave, and with them departed the noisy bustle and rude rejoicing which their presence had introduced.

M'Doodle, being now left alone with Thornton, enumerated the number of estates he had been located on since his arrival from Scotland, related his early struggles with adversity and his subsequent prosperity, and enjoining perseverance in Thornton, at once recommended him to become his bookkeeper, and he would soon advance him to the road to fortune. Thornton, who was only travelling for amusement and with an ample fortune, did not require the aid of such a patron, and politely thanking him, respectfully declined his offer; and at M'Doodle's further entreaty promised to make his house his abode for some days more.

That hour of the day when the sun becomes vertical, and its heat is less felt, the colonists choose for riding or walking in the country. Thornton chose it for the latter, and walked out alone round the works of the estate. The labourers were at their daily toil, and the windmill was performing its rotatory motion, having its sails filled with a gentle seabreeze; the air was cool and refreshing, the sun shone brightly, and all nature looked cheerful and smiling; some dozens of children half clad, but sleek and fat, were gathering canes in the mill-yard to take to the mill for grinding; they were grouped into little bands headed by the eldest of their juvenile associates, all directed by a duenna who carried in her hand a birch. rod, rather as an emblem of authority and fear than of correction, to collect the little stragglers when they had fallen from their ranks, and the adults were singing a pleasant air, which perhaps reminded them of their harvestseason in Africa. It was a scene in which nature seemed reconciled with herself it was one that the indifference of a stoic could not enter in, and he would admire all before him. Thornton was enraptured at the sight, and while he viewed the smiling faces, and compared the seeming happiness of these children of Africa with the starving peasantry of England, he felt that man would surrender his liberty to avoid the sufferings of want, but on a sudden a gloom overshadowed his countenance, for he remembered

"That that day which makes man a slave
Robs him of half his worth."

Warmed with the enthusiasm of an Englishman he judged the nation by himself, and felt that his countrymen would sooner die of hunger than accept riches without liberty that with her "poverty looks cheerful;" and full of these noble thoughts he bent his way to the dwelling-house. On the steps he was preceded by an old woman with a large basket covered with a clean cloth. M'Doodle was waiting his return, and coming forward to meet him on the landing of the stairs, he saw the old woman. "What news to-day, Quasheba?" said M'Doodle. "Bad news, massa-bad news, sa. Jumby play trick wid de fowl. Me go dis morning fi feed fowl, massa; me see one no hab no foot, tarra one hab no yeye, some sick can't walk, and all a dem look like sa duppy put mout pon dem. Me bring tootry fi show you, On uplifting the cloth she brought out a helpless lot of fowls,

massa."

ducks, and turkeys, all suffering from the effects of gunshot wounds, which the poor creature ascribed to the machinations of some evil genius. Thornton could not restrain his laughter, and begged Mr. M'Doodle to dismiss the woman, and he would explain the mishap to the poultry. He did so, first desiring her to make soup of the wounded fowls for the children. Thornton introduced the subject of the night's transactions, and with little difficulty brought to M'Doodle's mind the occurrence. Stricken with shame, he would have sacrificed almost any thing had the circumstance been unknown to a stranger; but with all the assumed indifference of the other guests, there were others, as the sequel will show, who were quite as observant as Thornton. Making a virtue of necessity, M'Doodle attempted to extenuate his conduct by urging his situation as host, which obliged him to make his guests "comfortable," and carried him beyond his accustomed habits. Thornton saw too plainly that his host keenly felt his weakness, and he endeavoured at once to set him at ease: he assured him that he did not see that he could adopt any other course, and as for the freak of last night, "'t is trivial," said Howard, "'tis better 'tis no worse: hear what the poet says,

M'Doodle's confidence was now restored: he became very communicative; gave a second edition of his adventures, and rather interested Thornton: his behaviour to him for the few days he remained at his residence was of the kindest nature; he omitted to show him nothing, and explained all the minutiæ of a sugar estate, and, in short, treated him with that English hospitality which has long since disappeared with the good old days of Queen Bess.

The time for Howard's leaving the country was near at hand: he received a note from the captain of the ship, in which he had taken his passage, that he would be ready for sea in five days, and as he had to prepare his sea stores, he reluctantly bade adieu to Mr. M'Doodle, and started off to the port in which his ship lay at anchor.

For the few days he remained on shore he visited several places in the town, and was considerably mortified to hear M'Doodle's installation discussed with the poultry war. He little thought that there were others who could discriminate besides himself; and had imagined that as the subject would not be related by M'Doodle, it would never be heard, as with him it should remain sacred; but he was mistaken not only the parish, but the whole country knew it. The mention of the circumstance was a disclosure of the secrets of the prison-house; it was an abuse of the confidence of the host, who, in an over-anxious desire to make his friends welcome by indulging in conviviality, had been thus subjected to the criticisms and jeers of those who had shared his hospitality, and to the lampoons of every dirty scribbler in his neighbourhood. Human nature cannot stand the attacks of false friends; the abuse of friendship is too poignant to be endured; ridicule from friends is insupportable. M'Doodle, notwithstanding his homely character and want of education, was kind and benevolent, willing to do good in his own way, and from his want of observation thought that all men were of the same caliber as himself, and not of contrary dispositions: the ridicule of his friends gnawed him to his very vitals; he pined secretly; and after Howard's arrival in England he received a letter from Jamaica communicating the circumstances of M'Doodle's death-he died broken-hearted, without having once publicly enjoyed the object of his ambition for which he thirsted. Thus, reader, the appointment of a good but unqualified man as a justice of the peace ended in the death of his poultry shame, and subsequent death of himself.

87

BANKING AND EXCHANGES.

IN our number for September we endeavoured to show, that what is called "an unfavourable exchange" is favourable to the exporter from Britain to foreign countries; and that, as the value of our exports exceeds the value of our imports, what is called an "unfavourable exchange" is favourable to the nation at large; and we gave a case in illustration, which would enable all those who might object to our opinion to confute us, by simply producing a case in which the exporter is a loser by an unfavourable exchange, so miscalled. We did not think it necessary to add, that an exchange which is favourable to the exporter must be unfavourable to the importer; but we have reason to think that this fact, however obvious, should have been stated.

Such being, as we apprehend, the state of the case, we repeat that the adoption of any system in the currency ought not to be rejected merely because it will, or may, "turn the exchanges against this country favourite phrase, but in our opinion egregiously misapplied.

Since the publication of our September number various articles have appeared in the newspapers, lamenting the decrease of bullion in the Bank, and the unfavourable state of the exchanges enumerating the perplexing terms of the circulation, deposits, securities, assets, and liabilities of the Bank-deprecating the suspension of cash payments, admitting at the same time that the bullion in the Bank amounts not to one-fourth part of the circulation of bank-notes, adverting also to Mr. Loyd's opinion, that the Bank should not be a bank of deposit and discount, and also a bank of

issue.

As this opinion continues to attract much attention, and as it can be discussed independently of any other part of the subject, we shall incur the charge of repetition by again examining it. In the first place, all the banks of Scotland are banks of deposit, discount, and issue: they are all thriving; their stock bears generally a great, and some of them an immense, premium; and a failure of any of them, and still more loss by any of them, is an event of rare occurrence indeed. Of those very few which have stopped payment, most, if not all, have subsequently paid their notes in full. Now this is a fact which no writer on banking can safely or fairly overlook, however inconsiderable Scotland may be as a commercial country as compared to England. The banks in Scotland are almost the only establishments where spare capital can be deposited. There are in Scotland few or no such characters as a London banker or London bill-broker: if such characters were to be readily found, we should decidedly object to their banks being banks of deposit, as we object to the Bank of England being a bank of deposit, unless, perhaps, upon the plan of the Bank of France, as alluded to in our September number. In London spare capital should be deposited with the private banker or bill-broker, to whom it is profitable, and by whom it is most advantageously for the public distributed. In the Bank of England it is locked up, certainly without use to the Bank, and comparatively without benefit to the trading public. We therefore entirely agree with Mr. Loyd's objection to the Bank of England, which is a bank of issue, being at the same time a bank of deposit, which he appears to us to contend for; but entirely disagree with his opinion that, being a bank of issue, it should not at the same time be a bank of discount; and his opinion in this respect seems at variance with his description of a bank of issue (paragraph ix. of his searching pamphlet of February, 1837). "The sole duty of the former i. e. a bank of issue, is to take efficient means for issuing its paper upon good.

security, and regulating the amount of it by one fixed rule." Again he says (p. 46. of Mr. Loyd's "Further Reflections"), "As a mere regulator of the currency, she (viz. the Bank) would keep out the requisite amount of notes, either by purchase of government securities, or by loans of money upon stated terms made to the highest bidder." Are not bank-notes issued by discounting mercantile bills as legitimate and beneficial a mode to be followed by the Bank of England for keeping out its notes, as that proposed by Mr. Loyd? *

We think it a silly phrase (we do not speak it offensively), when it is said, as it is said by multitudes, that the power of creating money should be taken from the Bank. Do Reid, Irving, and Co., and Baring and Co., create money when they accept bills of exchange against value? Does the Bank of England create money when it gives to the holder of such acceptances bank-notes in such various sums as may be convenient to the holder, in exchange for these acceptances, and which the Bank holds as security? Without such or similar acceptances on the part of our merchants, and without such or similar discounts on the part of the Bank, or a bank, the commerce of this country would inevitably be annihilated.

The Bank of England, it is to be observed, is always a purchaser of bullion, substituting its own paper for the amount so purchased, and so prevented from going into circulation. What are the advantages of this system? Do not answer, that whilst the Bank is obliged to pay their notes in gold when gold is demanded, the Bank must therefore have gold in store, for the gold thus obtained is purchased with its own notes, which increase exactly as its hoards of gold increase.

Mr. Loyd has published another pamphlet, "Remarks on the Management of the Circulation, &c." January, 1840. As may be expected from the attainments of the author, this pamphlet contains a great deal of information, though nothing material on the subject of currency that is not contained in his first pamphlet of February, 1837. The Bank of England, Mr. Loyd continues to insist, should act as manager of the circulation merely, and consequently must neither be a bank of discount nor of deposit. As manager of the currency it should increase its circulation of notes with a reference to the bullion in the coffers of the bank, augmenting the circulation of the notes as the bullion augments, and contracting the circulation of the notes as the bullion decreases. These points we referred to in our number of September last, and we now add, that the contracting of the circulation of the notes as the bullion in the Bank decreases, seems infallibly to lead to an absurd conclusion, to wit, that if all the bullion should be withdrawn from the Bank (an event which Mr. Loyd will not assert to be impossible) we should have, as far as the Bank is concerned, no circulating medium whatever.

Mr. Loyd has shown beyond contradiction, that the Bank of England has deviated from the plan of holding in bullion or coin a third part of its available funds, retaining in securities, the aggregate of which was to be unaltered, two-thirds of these funds. But the deviation of the Bank from a plan proposed by the Bank itself, is a matter of inferior moment: not what the conduct of the directors of the Bank has been, but what the Bank of England should be, is the question. As to any bank declaring that it will keep its securities invariable in amount, or in other words, that in as far as depends upon its power it will limit the extent of our commercial transactions, the attempt seems as unjust as it would prove impracticable. Let

• Government securities, we repeat, they should not be permitted to purchase.

those who recommend it remember the legend of Canute, and how he exposed and reproved his flatterers by whom he had been assured that every thing was possible to him. He ordered, says the story, his chair to be set on the seashore when the tide was rising, and commanded the billows to obey the lord of the ocean and retire, but the advancing waves soon obliged the monarch thus dubbed omnipotent to shift his quarters. If we too might hazard a simile, we should designate Commerce as the rising tide, the demands of which will sweep away all such arbitrary regulations of the Bank of England.

Mr. Loyd in his last pamphlet pays a high compliment to the stability and management of the Scotch banks. Their stability is all that we insisted on, but the consequence of this stability is, that gold is not called for in Scotland in exchange for their notes, though it may be legally called for by the holders of every such note in circulation.

The capital of the Bank of England, including the debt due to it by the Government, is about eighteen millions. Will not this give sufficient stability in England, and prevent a run upon the Bank by the public for gold?

In the midst of Mr. Loyd's liberal praise of the banking concerns of Scotland, it is difficult to suppress a smile at what he supposes the vices of the system. "As banking establishments they are unexceptionable, but as managers of the circulation of that country, possessing the power of regulating and controlling the amount of the paper issues, we much doubt whether they will be found to be free from those vices which attach generally to all systems involving a multiplicity of issuers."

Again (p. 83.), it is in substance objected to the Scotch banks, that the same variation in prices, the same spirit of speculation, the same commercial storms which occasionally desolate the manufacturing plains of Yorkshire and Lancashire, are not arrested in their progress when they reach the borders. Glasgow and Paisley feel their force as much as Manchester and Leeds.

The banks of Scotland, we imagine, do not assume the prerogative of managing the circulation, and regulating and controlling the amount of paper issues; they seem contented with discounting what they conceive to be good bills, and giving every aid to commerce consistent with what they deem their own safety; and so far from objecting to their system, that under it fluctuations in prices, speculation, and bankruptcy, happen in the trading world of Scotland as of England, it is, we think, a proof of the soundness of that system that it exists and thrives, notwithstanding all these drawbacks of fluctuation, speculation, and bankruptcy.

As to Glasgow and Paisley feeling the force of those storms as much as Manchester and Leeds, it would be very extraordinary if a fall in the prices of the manufactures of these last-mentioned places was not followed or accompanied with a fall in the prices of the same description of manufactures of the first-mentioned places.

For the reasons assigned in our September number, we deem it unnecessary that the Bank of England should regulate its circulation with any reference to the exchanges. We continue to think that it should be a bank of discount as it is of issue, and that it should not be a bank of deposit nor a purchaser of bullion, as bullion must flow into it for that part of our exports which exceeds our imports. For the Bank to increase its stock of bullion by purchasing bullion with its own notes, cannot be a sound proceeding. For these notes, gold, the very gold so purchased, may be at any time demanded: there seems, indeed, to be something ludicrous in the transaction.