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under its shadow; and in a popular political pamphlet, which has been widely strewn about in Austria, Charles the Fifth has been mythically brought forth from his cavern to make a third with them. It is there explained that the event which will bring him forth in the body is the creation of a compact and united Germany. Every hundred years the Emperor lifts his head and asks if that event has yet arrived. Next time when he varies the monotony of his existence by putting this question, it will be answered in the affirmative. The result of the Salzburg meeting will be a grand European war, in which France and Prussia will each exhaust itself. Then will Austria step forward to the rescue, declaring that not a single German village shall be ruled by a stranger, and the house of Lorraine will again be the head of a German Empire more compact and national than that of the past.

Berchtesgaden is surely one of the most delightful spots upon the crust of the earth-so secluded is it, and so affluent in noble scenery. It may be counted as entirely exempt from English tourism, and it is less sought by Austrian and Bavarian pleasure-seekers than the Saltz Kammer-Gut and Innsbruck. I pitched my camp here at the inn of the Lauthaus, in pursuance of a policy which I have generally found to be successful. The 'Murray' I possessed-an edition a year or two old-had passed on this house the ominous sentence, "dirty and dear." The result was that I found it to be clean and reasonable. All things about it and its management were well-favoured and pleasant, down to its two imp kellners-boys some ten or twelve years old, inspired by an attentiveness that amounts to pertinacity, and with such a superfluity of energy, that, while serving you effectively and readily, they extract from you the history of your past life and future prospects, with an exact and particular account of what you are about day by

day-if you are going to sail on the Koenigs See or to climb the Watzman. "Hollo!" says one of them, who finds you deficient in punctuality, "here waits your breakfast. Ah, I see you have been tempted to spend your money at the hornware shop yonder. So you were not so busy, then; you were only promenading to get an appetite, which your breakfast awaits." To a person with an imperfect colloquial supply of German, such active curiosity gives a good deal of hard work; but it is a sort of training, and may in this view be thankfully endured.

Berchtesgaden has its special sights; but the glory of the place is that you can go nowhere in the group of mountains wherein it nestles without beholding an infinity of what is noblest and most beautiful in scenery. It is to be found among the various folds of the mountains, with their spiked tops, their snowy aprons, and their deep green forest girdles. But to those who have a special craving for penetrating the dark recesses of nature there are opportunities also. Wherever the word "klamm" occurs in a map, one is sure to find a deep dark cleft with a white roaring torrent hurrying through it. One of these, the Wimbachklamm, is within two or three hours' walk of the village. You take the road. to Ramsau, and turn off where a stream descends from a valley leading to the Yagdschloss or huntinglodge of Wimbach. After mounting a little way up, you find the rocks rising black and perpendicular above you, while the stream whirls down below, a succession of cataracts. A very attractive feature of this klamm is a row of tiny waterfalls dropping over the face of the rock into the principal stream. They are lined by wild flowers and brilliant mosses, a gentle and beautiful fringing to the tossing cataracts below. They reminded me of the Linn of Corriemulzie, near Braemar.

(To be continued.)

MONETARY

ANY one who watches the signs of the times, the material wants and intellectual movements of the age, must feel assured that a revision of our Monetary System will be one of the first questions forced upon the attention of, if not spontaneously taken up by, the reformed Parliament. There is certainly no lack of remedies proposed. The difficulty of the case lies rather in the number and diversity of the new systems which are already advocated. In truth their name is legion; and this very multiplicity and diversity is probably the greatest obstacle to the success of the movement. A Minister who has but little time to examine the remedies proposed, and to think out for himself the practical effects of each, is apt to turn away from the problem in despair; and to infer, with easy rapidity, that all of the proposals alike must be wrong or seriously imperfect, seeing that they differ so widely from one another. Any statesman, however, who argues in this superficial way will certainly find himself in the wrong. He will find that though for the sake of ease he himself has shrunk from mastering the problem, there will be many members in the new House who have carefully investigated the subject, and who will press their views with an earnestness of spirit and cogency of reasoning that will compel the Government to deal with the question.

It is true that the study of the currency question, to one who does not think out the problem for himself-who does not laboriously set himself to master the mazy multitude of facts, and to ascertain their precise significance, but who seeks to understand the question by accepting the statements and opinions of the many writers on the subject -is at present but a listening to a

REFORM.

chorus of discordant cries. The "Eureka!" is raised now in cry one part of the wide field, now in another, till the hunt after the truth terminates in disappointment. It is like the hunt after the fairy fox, whose various parts appeared to the hunters each in a different part of the field,-his brush in one direction, his head in another, his fore-legs in one place, and his hind-quarters in another; and each hunter, as he descried a part of the animal, raised the "view-halloo," and started off in pursuit as if the whole fox were actually before him, "the field" being immediately broken up, and starting off in different directions; and even if successful, the pursuers found at the last that they had captured but a fragment of the animal, while the real object of their pursuit was still beyond their reach. So it is with the vast body of "currency doctors." Even if they successfully run down the object of their pursuit, it proves to be a mere fragment,-of no use of itself as long as the other parts are not equally mastered and combined with it as a living whole.

At the present time, the uppermost thought in the minds of practical men is to devise a plan which will give to our monetary system a suitable power of expansion, to meet the severe strains which ever and anon are made upon it. How to obtain an elastic monetary system: this is the main problem with practical men. They do not care much as to the terms upon which this elasticity or expansibility is to be procured. They have got so accustomed to high rates of discount-eight, ten, or even twelve per cent-that they would be thankful if currency in adequate amount to the wants of the community could in times of difficulty be obtained even upon those exorbitant terms. The most

pressing defect of the present system is, that even upon those terms an adequate supply of currency is sometimes not to be obtained, so that substantially good securities cannot be converted into currency; and mercantile houses, financial companies, and even banks, have to come to the ground, owing to a temporary impossibility of converting their assets into currency.

This, we say, is at present the starting-point in all plans put forward by practical men for a reform of our monetary system. Beyond this, few of the "practical men" venture to go. Engrossed in business, they have little time, and few of them have the capacity, to enter upon the science of the question, and to ascertain how much further a reform of our monetary system may be carried. They are confident that their rudimentary proposal is desirable; and they also see how beneficial it would be to get rid of the perplexing fluctuations and excessive elevations of the rate of discount,-in other words, to keep steady the value of the currency, which is the measure of value.

Under a perfect monetary system, the value of the currency should always be the same. As Leon Fauchet remarks in his 'Political Economy,' a fixity in the value of the currency is a mark of civilisation, and a currency which fluctuates in value is a barbarism. Under the erroneous and altogether absurd system established in 1844, we have become so accustomed to variations in the value of the currency, and of the charge for banking accommodation, disastrous as those variations have been, that we have almost lost sight of the true object of currency. The currency is the Measure of Valuethe circulating medium by which the value of all other kinds of property is represented in a negotiable form. If the currency fluctuates in value, all monetary contracts are thereby vitiated. Under the present system in this country, it is no exaggeration to say that a merchant

who gives his bill or promise to pay £1000 three months after date, may find that, owing to a change in the value of money, he has to pay £1250; and it is quite a common case if he has to pay £1100 instead of £1000. Say that a merchant, when the Bankrate is 4 or 5 per cent, purchases a thousand pounds' worth of goods, and gives a bill for £1000 payable at three months after date. In the interval, the Bank-rate is doubledis raised to 9 or 10 per cent; in consequence, the markets are depressed to the extent of 20 or 25 per cent below their former ordinary price: and thus, in order to get money to meet his bill, the merchant must sell not only the thousand pounds' worth of goods which he received, but a fifth or a fourth part more, before he can obtain the £1000 which he promised to pay. This is a great evil. It indicates a glaring defect in our present monetary system. It is a barbarism. And the only wonder is, that habit should have accustomed the present generation to regard such a system as tolerable in any degree. By our ancestors such a system would have been scouted as a barbarism: and the thinking men of the new generation now rising up regard it in exactly the same light.

The grand object of all plans of Monetary Reform is to prevent or minimise fluctuations in the Measure of Value,-in other words, to insure steadiness in the value of the currency, in which all contracts are made; so that those contracts may not be vitiated owing to a change in the value of the circulating medium by which they are payable and must be discharged. This is a most important object. It is of momentous importance to the community that the sum (the amount of currency) which a man promises to pay at a certain date-whether it be a yearly rent for house or land, or a three months' bill-should represent the same value or purchasing power, should be convertible into the same quantity of merchan

dise or other property, at the time of payment as at the time when the contract was made.

It is impossible, of course, to prevent fluctuations in the value of the ordinary kinds of property, for all kinds of property vary more or less from time to time, and in some cases suddenly, owing to a change either in the amount of supply or in the extent of the demand. Such changes are inevitable, and no one imagines that they can be prevented. But what is desired is, that changes of price should not be occasioned merely by a temporary excess or deficiency of the currency. The amount of the supply, and the extent of the demand, for any kind of property remaining the same, the price of that property should be unaltered. Yet at present, in such circumstances, the price of goods is vastly enhanced or lowered owing to a wholly extraneous cause-viz., the fluctuations in the Measure of Value, a change in the purchasing power of the currency, owing to the supply of currency becoming greater or less than usual in proportion to the demand for it.

We cannot prevent fluctuations in the price of goods-corn, cotton, houses, or land-because it is impossible to increase the supply of them at all times when the demand increases, or to diminish the demand for them at all times when the supply of them falls below the ordinary amount. If the harvest is bad, the price of corn must rise; so must the price of cotton, or any other kind of goods, if the supply from any cause falls short of the demand. In like manner the price of corn or cotton, or any other commodity, must fall if, from any cause, the supply is greater than the usual demand. Such changes, we say, are acknowledged to be inevitable. But the value of the currency is another matter. Papermoney, especially in the form of banking-currency, is the offspring of civilisation, devised for the very

purpose of keeping steady the Measure of Value: it is a means by which the supply of currency may be kept always commensurate with the demand for it,-increasing if the demand for it increase, and diminishing when the demand diminishes. When the community require more currency, they obtain it from the banks in the form of additional loans and discounts: if less currency is needed, the fewer notes are taken from the banks. Hence it follows that if the currency be issued by the banks always on the same terms-that is to say, if the Bank-rate, the charge for banking - accommodation, remains always the same-the Measure of Value will be perfect; the relative proportion between the amount of the currency and the requirements of the public will be always preserved; and consequently the purchasing power of the currency (not indeed as regards any particular kind of goods, but as regards property in general) will at all times be alike, -so that all monetary contracts will be equitably maintained, and no man will have to pay more value or receive less than he bargained for when his contracts were made. The attainment of this end is indispensable to a perfect monetary system. And it is the grand object which all currency - reformers have, or ought to have, specially in view.

There are two broad, and in some respects rough-and-ready, ways in which it has been sought or proposed to impart steadiness to the currency, -i.e., the Measure of Value. One of these is, by fixing the rate of discount; the other is, by fixing the amount of the currency. The former of those means was in use in this country for nearly a century and a half after the establishment of banks and bankingcurrency; and it was adopted, sua sponte, by the great Napoleon in founding the Bank of France. The latter system was advocated by Cobbett, one of the shrewdest prac

tical men which our country has produced; it also finds favour with some writers of the present day. But neither of those systems is perfect of itself, and the latter is wholly untenable.

1. The proposal of Cobbett which is now advocated afresh-to preserve fixity in the Measure of Value by always keeping the currency fixed at a certain amount, although specious in appearance, will not stand examination. The value of the currency (like that of every other thing) depends not merely upon the amount of the supply, but upon the extent of the demand. There are two factors in the calculation, and Cobbett looked only at one. If the requirement for currency remained at all times the same, and if the amount of the supply remained likewise the same, the value of the currency would consequently be perfectly steady. But, as every one knows, this is not the case. The requirement for currency varies greatly from time to time. Hence to fix the amount of the currency, instead of being a means of insuring its uniform value, would ever and anon cause the latter to fluctuate to a serious extent. In truth, if the amount of the currency were fixed (though it is not easy to see how it could be fixed), our country would be subjected to even greater monetary embarrassments than at present. The defect of our present currency-system is a want of elasticity-it cannot expand freely in accordance with the wants of the community: but if the currency were absolutely fixed in amount, we should be even worse off than we now are. Hence, whatever arguments may be advanced in support of a steady Bankrate, as a means of insuring steadiness in the value of the currency, no such argument is tenable in support of fixing the amount of the currency. With a fixed amount of currency we could not possibly have a fixed or steady Bank-rate. The two things are incompatible.

2. Napoleon I., when founding, or at least reconstituting, the Bank of France, said to the Governor and Directors: "Write up in letters of gold these wordsWhat is the object of the Bank of France? To discount commercial securities at four per cent." Quoting this maxim, and appealing also to the established practice in our own country previous to 1844, during which long period the Bankrate never varied more than one per cent, some writers now propose that a fixed Bank-rate should be substituted for the ceaseless fluctuations in the charge for bankingaccommodation which have prevailed under the new system, established by the Bank Act of 1844-45. That such fluctuations are exceedingly detrimental to the interests of trade and industry of all kinds is indisputable. But the question is, How far is it practicable to abolish them, by establishing a fixed Bankrate?

If the Bank-rate were fixed-if the charge for making loans and discounts to the public were always the same-the steadiness in value of the currency would be fully insured. For, in such a case, the cost to the public of obtaining currency would be at all times the same; so that the value of the currency would always be the same. Now, the desirableness of securing a uniform value for the currency is indisputable; and certainly, those who maintain that it is practicable to have a fixed Bank-rate, have a strong basis of facts to argue upon. They can point to the historical fact, that for 150 years after the establishment of Banking in this country, the Bank-rate never varied more than one per cent-ranging from 4 per cent to 5. Or they can point to the case of France, where, for half a century after the founding of the Bank of France by Napoleon I., a similar practice was steadily adhered to. In truth, it is a remarkable fact that, with a fixed Bank

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