108 USURPED POWER CHECKED BY REMONSTRANCE.

village strangers so charitable as to save them from going to prison. If they went to prison at all, they were by the imprisonment punished without open trial. Nothing but manifest danger of unusual breach of peace could justify imprisonment without open trial; if it was not worth while to get the Habeas Corpus Act suspended for the coercion of pamphlet-mongers, neither was it worth while to play at the revival of Tudor and Stuart prerogative.

Although Parliament did not resent the usurpation, and the question was not raised in a superior court by suing a magistrate for illegal imprisonment, yet the authoritative remonstrances of the Whigs imposed limits on the Government and taught the village magnates to beware lest they should become persecutors. In later years the justices of the peace have been so carefully instructed by statutes, and by those law books which digest and interpret decisions, that they have not been dazzled by any phantom of censorship.

In a land of less moderation such ministers as Lord Sidmouth would have let loose an excessive flood of zeal, and would have been swept down by the back stream of impeachment. In Britain their mistakes fell short of crime, and as in their display of strength they stood in awe of their chief adversaries, they could without loss of dignity glide into a safer course and be at peace with their successors.

IN the reign of Charles II., Mr. Evelyn, one of the most enlightened gentlemen of the age, was shocked at the sight of houses rising in London which were built partly of foreign timber, since the nation was, he thought, impoverishing itself by losing the gold spent on the timber. The belief thus entertained by a patriot who was intimate with statesmen and tinged with science was one of the false theories which beset not so much the common people as their advisers. To keep gold in the country has seemed to many shrewd practical men the proper object of commercial policy. They are under at least two delusions. They think that gold is wealth, in such a sense that wealth which is not gold is valuable only in so far as it procures gold. They think also that commerce is a game in which nations are the players, and that one nation loses as another wins, just as one gambler empties and another fills his purse.

The plain truth about gold is accepted at first sight by boys and girls born into an age of science and inheriting some conceptions which were not within the birthright of Mr. Evelyn.

But they hardly grasp the plain truth unless they examine the error which it cancels. Unless they have explored

the various mistakes made in the four centuries of modern history, made again and again down to their own schooldays, they cannot be assured, by the mere

repetition of a formula, against a hasty assent to a plausible doctrine set forth by a 'practical man.'

The old mistake is likely to be in vogue still, for the writers in newspapers who record the ups and downs of stocks and shares announce such an event as the shipment of a ton of gold with earnestness and even anxiety, whilst they take no notice of the export of a million tons of coal; and yet the coal goes away and passes elsewhere into smoke and ashes, the gold, unless the ship sinks in deep water, is sure to come back when persons resident in Britain find it worth their while to buy it. The ebb and flow of gold are undoubtedly of great importance to certain sets of men of business, men who are not producing commodities but playing at the game of speculation with various kinds of money; and the fortunes of these money-mongers affect, by the complexities of debt and credit, the fortunes of others who are increasing the commodities of the world by putting tangible and useful things in new places. The trade in gold, and the trade in silver too, are of importance to the offices of the State which have to remit money; in war time to generals serving in lands where trade is in abeyance, or to allies who require subsidies and loans in the form of cash; in time of peace to public servants residing in lands which have no complete bank system. During the great French

1 When the British Embassy was first established at Pekin it was guarded by British policemen, whose pay taken in silver was fetched by some of themselves from an European money office in a free port. Bankers enrich the world in so far as they set men free from carrying money bags, for the able-bodied and trustworthy carriers can be employed more advantageously.

PROFITS MADE BY LENDING TO THE STATE. III

war, the English Government was an excellent customer for the money sellers. Some few honourable and keen adventurers knew how to buy gold just before the Treasury wanted it; their gains were the Treasury's losses. But these losses, while sufficient to found the great financial houses, were not enough to made a serious breach in the State's solvency. Hasty bargainings for bullion were trifles compared with the mistakes made in borrowing. The loans were negotiated with a few citizens who were almost a privileged class. To lend to the King was a favour granted at the expense of the nation. The lender bought for sixty pounds or less an everlasting transferable annuity of three pounds. If a victory was won, he could sell this annuity for seventy pounds or less. If he could contrive to hold it till Napoleon fell, he could sell it at eighty pounds or more. When peace was made quite sure by Bonaparte's imprisonment, the State should have bought some of its own annuities, but they had at once become too dear. If the State had borrowed at par paying five per cent. or six per cent., instead of borrowing at fifty or sixty, paying three per cent., it could have taken advantage of its higher solvency or better credit at the peace by lowering the rate of interest.2

Under Mr. Pitt's plan of borrowing at three per

1 In 1807 Mr. Newland on retiring from the office of cashier to the Bank of England declined a pension because in his fifty years of service he had always been allowed a share of a Government loan and had made thereby 230,00ol.

2 This was done by the Treasury of the United States sixty years later.

cent., the higher the State's credit is the less profitable is it to pay off its debt by redeeming the annuities, and the nation whose productive industry is mortgaged to meet the claims of unproductive annuitants does not like to make a loss by investing on bad terms to get rid of its old bad bargains. As during the war there were great privations endured by weak creditors of the nation who would not afford to sell their three per cent. annuities when they were desperately cheap, so on the establishment of peace were considerable gains made by the stronger creditors of the nation who had been able to wait for the necessary rise in the prices of such annuities.1

there

The improvidence of the Government was mischievous, but it might have been more mischievous. It might have defrayed, partially, the expenses of the war, by issuing promissory notes without limit: a measure to which other great Powers have resorted. This would have tempted the ministers to still greater profusion, and the fulfilment of the promise contained in the notes would have been effected, if at all, only

This term is used because the term 'funds' is less intelligible. 'The funds' means debts which the State enables the creditors to transfer in greater or smaller sums to other private persons, but does not itself pay it pays a fixed interest, but it does not undertake to prevent the principal from falling in price; if it wants a new loan it wishes, but does not directly try, to raise the price of the funds. Besides the funds it owes an unfunded debt which it keeps from depreciation; it issues papers called Exchequer Bills, each for a certain sum; these are a sort of currency convenient for traders because the bills, if held for a very short time, nevertheless bear interest unlike most deposits in banks. The old Crown debts, before the reign of William III., were temporary, secret, and not transferable either wholly or in part from the original to a derivative

creditor.