or bait could allure it from its hiding-places.

Need we go any farther, then, than these simple truths, to lay our finger on the primal fact which underlies all financial embarrassments and panics? The mass of the transactions in commerce rests upon credit; the solvent of that credit is gold; and gold has not only a sliding scale of value, but is apt to disappear when most wanted. While business is moving on in the ordinary way, it is more than ample for every purpose; but the moment any event arises, such as a rapidly falling market, inducing hurried sales, or a drain of specie, disturbing the general confidence, everybody gets apprehensive, everybody calls upon everybody for payment, and everybody puts everybody off,—till a feeling of sauve qui peut becomes universal.

If there were no currency anywhere but a metallic currency, this liability to sudden revulsions would still hang over trade, provided credit and paper tokens of credit continued to be the media of exchanges; and the instinctive or experimental perception of this truth, combined with other motives, is what has led men to their various attempts to provide a money substitute for gold and silver. Lycurgus, in Sparta, found it, as he supposed, in stamped leather; but modern wisdom has preferred paper. The degree of success attained by Lycurgus we do not know; but of the success of the moderns we do know, by some one hundred and fifty years of recurring disaster. There are some steeds that cannot be ridden; they are so fractious and intractable, that, put whom you will upon their back, he is thrown, and invent what snaffle or breaking-bit you may, they will not be held to an equable or moderate pace. And of this sort, judging by the past attempts, is Paper Money. All the ingenuity and efforts of the most skillful trainers of the Old World, and of the most cunning jockeys of the New, have been tasked in vain to devise an effective discipline and curb for this impatient colt. Paper Money either refuses to be ridden, and runs rampant away, or, if any one succeed in mounting him for a time, he performs a journey like that which Don Quixote took on the back of the famous Cavalino, or Winged Horse. In imagination he ascended to the enchanted regions,—but in reality he was only dragged through alternate gusts of fire and of cold winds, to find the horse himself, in the end, a mere depository of squibs and crackers.

Paper money has been issued, for the most part, on the one or the other of two conditions, namely: as irredeemable, when it has been made to rest on the vague obligation of some government to pay it some time or other in property; or as convertible into gold and silver on demand. But under both conditions it seems to have been impossible to preserve it from excess and consequent depreciation. Nothing would appear to be safer and sounder, on the face of it, than a money-obligation backed by all the responsibility and property of a government; and yet we do not recall a single instance in which an irredeemable government-money has been issued, where it did not sooner or later swamp the government beyond all hope of its redemption. No virtue of statesmanship is proof against the temptation of creating money at will. Even where there has been a nominal convertibility on demand of the bills of government banks, they have worked badly in practice. In 1637, for instance, the monarch of Sweden established the Bank of Stockholm; yet in a little while its issues amounted to forty-eight millions of roubles, and their depreciation to ninety-six per cent. In 1736, Denmark created the Bank of Copenhagen; but within nine years from its foundation it suspended redemptions altogether, and its notes were depreciated forty-six per cent. We need not refer to the extraordinary issues of French assignats, or of American continental money,—nor to the deluges of paper which have fallen upon Russia and Austria. During all these experiments, the sufferings of the people, according to the different historians, were absolutely appalling. One of these experiments of paper money, however, begun under the most promising auspices, and on a professed basis of convertibility, was yet so stupendous and awful in its effects, that it has taken its place as a Pharos in History, and is never to be forgotten. We refer, of course, to the banking prodigalities of the Regency of France, undertaken in connection with the scheme known as Law's Mississippi Bubble,—although the Bank and the Bubble were not essentially connected. We presume that our readers are acquainted with the incidents, because all the modern historians have described them, and because the more philosophical impute to them an active agency in the origination of that moral corruption and lack of political principle which hastened the advent of the great Revolution. Louis XIV. having left behind him, as the price of his glory, a debt of about a thousand millions of dollars, the French ministry, with a view to reduce it, ordered a re-coinage of the louis-d'or. An edict was promulgated, calling in the coin at sixteen livres, to be issued again at twenty; but Law, an acute and enterprising Scotchman, suggested that the end might be more happily accomplished by a project for a bank, which he carried in his pocket. He proposed to buy up the old coin at a higher rate than the mint allowed, and to pay for it in bank-notes. This project was so successful that the Regent took it into his own hands, and then began an issue of bills which literally intoxicated the whole of France. No scenes of stock-jobbing, of gambling, of frenzied speculation, of reckless excitement and licentiousness ever surpassed the scenes daily enacted in the Rue Quincampoix; and when the bubble burst, the distress was universal, heartrending, and frightful. With millions in their pockets, says a contemporary memoir, many did not know where to get a dinner; complaints and imprecations resounded on every side; some, utterly ruined, killed themselves in despair; and mysterious rumors of popular risings spread throughout Paris the terror of another expected St. Bartholomew.

In this case the phenomena were the more striking because they were gathered within a short compass of time, and took place among a people proverbial for the versatility and extravagance of their impressions. The French are an excitable race, who carry whatever they do or suffer to the last extreme of theatrical effect; and for that reason it might be supposed that the tremendous revulsions we have alluded to were owing in part to national temperament. But similar effects have been wrought, by similar causes, among the slower and cooler English, with whom commercial disturbances have been as numerous and as disastrous as among the French, only that they have been distributed over wider spaces of time, and controlled by the more sluggish and conservative habits of the nation. Some twenty years before Law made his approaches to the French Regent, another Scotchman, William Patterson, had got the ear of Macaulay's hero, William, and of his ministers, and laid the foundations of the great Bank of England. It was chartered in 1694, on advances made to the government; and gradually, under its auspices, the vast system of English banking, which gives tone to that of the world, grew up. Let us see with what results; they may be expressed in a few words: every ten or fifteen years, a terrific commercial overturn, with intermediate epochs of speculation, panic, and bankruptcy.

We cannot here go into a history of this bank, nor of the various causes of its reverses; but we select from a brief chronological table, in its own words, some of the principal events, which are also the events of British trade and finance.

1694. The Bank went into operation.

1696. Bank suspended specie payments. Panic and failures.

1707. Threatened invasion of the Pretender. Run upon the Bank,—panic. Government helped it through, by guarantying its bills at six per