WORKS BY THE SAME AUTHOR. I. A DICTIONARY OF POLITICAL ECONOMY. Biographical, Bibliographical, Historical and Practical. VOL. I., Second Edition, preparing. VOL. II., Completing the Work, in progress. "A single person is executing by himself, with a remarkable superiority, a Work, which in France required the assistance of twenty (38) distinguished writers, directed by an able editor."-M. JULES DUVAL, Economiste Français. II. Adopted by M. MICHEL CHEVALIER at the College PRINCIPLES OF ECONOMICAL PHILOSOPHY. VOL. I., Price 15s. SECOND EDITION. VOL. II., PART I., Price 12s., Completing PURE ECONOMICS., VOL. II., PART II.; Mixed Economics, in preparation. "Of all the Works in Political Economy printed within the last fifty years, none surpasses this in importance. You have advanced the Science more than any one during the last half century, by the severe and judicious analysis to which you have subjected all the fundamental Ideas and Definitions. As a proof of the conviction I have on the subject of the extent of the services you have rendered to Political Economy, I add that it is this book, the Principles of Economical Philosophy, which henceforth shall serve me as a guide in my teaching at the College de France, for the Philosophy of the Science. No other book can be compared to yours for the correction of philosophic errors.-MICHEL CHEVALIER. III. THE ELEMENTS OF POLITICAL ECONOMY. 1 VOL., PRICE, 168. Being the first Edition of the Principles. A few Copies of this Work may still be had. THE THEORY AND PRACTICE OF BANKING. BY HENRY DUNNING MACLEOD, Esq., M.A., OF TRINITY COLLEGE, CAMBRIDGE, AND THE INNER TEMPLE; BARRISTER-AT-LAW; SELECTED BY THE ROYAL COMMISSIONERS FOR THE DIGEST OF THE LAW TO PREPARE Testimony is like the shot of a long bow, which owes its efficacy to the THIRD EDITION. VOLUME I. LONDON: LONGMANS, GREEN, READER, AND DYER. 1875. THE AUTHOR RESERVES THE RIGHT OF TRANSLATION. 232. e. 382. PREFACE TO THE THIRD EDITION. THE earlier part of this Work has been entirely remodelled and greatly simplified. When the first Edition was written, the Author found the fundamental principles of the current books on Political Economy so unsatisfactory, that he was obliged to examine them at considerable length. Since then he has published the Dictionary of Political Economy, and also the Principles of Economical Philosophy, in which the foundations of the Science are thoroughly examined; and, therefore, it is not necessary to do so in a Work specially devoted to Banking. In this edition those fundamental conceptions and general laws only are investigated which are exclusively necessary for the THEORY of CREDIT. Since the first Edition was published, the doctrines established in it have constantly obtained increasing influence. After pointing out the arithmetical errors, and the unphilosophical conceptions upon which the Bank Act of 1844 is founded, and also that the Theory it seeks to enforce was expressly condemned by all the great Banking authorities of former times, the Author demonstrated that the only true way of controlling the Paper Currency, or Credit, is by sedulously adjusting the RATE of DISCOUNT by the Bullion in the Bank, and the state of the Foreign Exchanges. This doctrine, but very imperfectly understood and extremely unpopular at the time it was first published in 1856, is now universally acknowledged to be the true one, and is adopted by all the Banks in the world. It is the principle upon which the Bank of England is now managed, and the Usury Laws in France were modified for the express purpose of enabling the Bank of France to adopt it; and it is to the thorough understanding and adoption of this principle that the Notes of the Bank of France, which was obliged to suspend cash payments in consequence of the misfortunes of the country, circulate at par with specie. In fact, this principle is now as well established among all competent persons as the Newtonian Law of Gravity. In the first Edition an attempt was made to investigate the Theory of ACCOMMODATION PAPER, which has produced so many calamities, but which has been so much misunderstood. The Author explained wherein the true danger of Accommodation Paper consists. In 1861, the failure of Lawrence, Mortimer, and Schrader, popularly known as the great leather fraud case, took place. In his very long and elaborate judgment in this case, Mr. Commissioner Holroyd quoted the explanation given in this Work at great length, thereby giving the sanction of his high authority to its correctness. In 1862, M. MICHEL CHEVALIER presented an elaborate Report on the Author's Works to the Academy of Moral and Political Sciences of the Institute of France, in which he declares his unreserved adhesion to their principles. This Report was published at length in the Journal des Economistes for August, 1862. In 1863, M. ROUHER, then Minister of Commerce and Agriculture, instructed M. HENRI RICHELOT, one of the Heads of Departments in his Office, to draw up an account of the Author's |