t of 1819, therefore, he
established that a pound sterling, or the standard, by reference to
which the value of every other commodity is ascertained, and every
contract fulfilled, should be itself fixed to be a piece of gold of a
certain weight and fineness, and that whatever paper-notes were
issued, the holder should be entitled to demand standard coined gold
in exchange for them at the Bank, at the rate of L.3, 17s. 10-1/2d. of
notes per ounce. Undertaking always to pay in coin when demanded, the
Bank was allowed to use its own discretion in the amount of notes it
might issue. Such discretion, however, was found to work badly, for
the trading community in particular; and therefore, by the act of
1844, the issue of bank-notes was limited to the certain amount of
L.14,000,000 against securities; and it was enacted that any further
issue must vary with and be equal to the amount of bullion deposited
in the coffers of the Bank. The reason why L.14,000,000 in notes
against securities was the sum fixed on, was partly that this was the
smallest sum that had been known to be in the hands of the public for
a very long period; and it is probable that numbers of these notes
will never appear again, so many being perpetually lost by fires,
shipwrecks, or carelessness. However, it is said, that only the other
day a bank-note was presented for payment, bearing the date of 1750.

'To what end,' it is sometimes argued--'since even the advocates of
gold-currency resort to paper-money as more convenient for practical
purposes--is the accumulation of treasure in the vaults of the Bank of
England? Why, after all the labour of digging it out of the earth in
the antipodes, is it buried again here? Why not coin it, and lend it
out at interest?' The remark is, of course, not unnatural, but has a
ready reply. The gold in the vaults of the Bank of England belongs,
not to the Bank, but to the holders of the bank-notes. They prefer
notes to gold to carry in their pockets, but these rags of notes have
no value in themselves; their sole value is as representatives of a
certain portion of gold. People cannot have notes and the gold
represented by the notes at the same time: they may have either that
they like. If they prefer to have gold spoons, or gold candlesticks,
or gold watches, or gold anything else; or if, as traders, they
require to make purchases in any parts of the world where their notes
would not pass current, or where those from whom t