usual decorum of continental etiquette, he offered three millions sterling to the king of Poland for his crown; and the monarch is said to have been so deaf to the voice of self-respect, as to have actually treated for the sale. It would have seemed as if the wealth of the whole nation had been thrown into the governmental foundry, and recast into colossal shapes, which astonished not only from their grandeur, but their solidity. The face of the country was reduced to a wilderness-its fields were dry-its laborers starving-its trade confused-while here and there, on the shore, or in the forest, might be seen a splendid palace, or a grotesque pagoda, which had been built by the collected energies of the state. But who can estimate the misery that was then suffered? The eye of the traveller was caught by the monuments of wealth which stood out in the distance before him, and he forgot to notice the miserable hovel by their side. The chronicles of the court of Louis XV., are too much wrapped up in the momentous weight of the intrigues which they relate, to bestow a thought upon the silent sufferings that were endured by those who were not involved in the masquerade. Madame du Barri says carelessly, that the poor were found starved and frozen in troops, in the dreadful winter that ensued; but she relates it as a matter of speculative curiosity, in the same way that almanac writers in our own day relate the extraordinary movements among wild beasts, who were driven by the extremity of the weather to the road-side to die. The princess Elizabeth wondered that people should starve; she asked whether they were too proud to eat bread. In another reign the cup was full, and the princess Elizabeth was led to the altar, to expiate the crimes of those from whom her honors were descended. She might have looked to the other end of the street in which she was sacrificed, and seen there, led on a similar errand to that in which she was employed, a victim far more frail, but not less obnoxious to the executioners. The daughter of king Louis XV., and the mistress who countenanced him in his last atrocities, might have called to remembrance in that solemn hour, the miseries which the one had endeavored to alleviate, and which the other had aggravated till the moment of their revenge had arrived.

The founder of the Mississippi Scheme found himself brought down in the course of a few short months, from a pitch of honor second to that alone which belonged to the king, to a point so low that there were none in that great realm who would have done him reverence. In the desolate retreat at Venice, in which he hastened to draw around him that obscurity which could form his only shield, he might have looked back to a time, only a year distant, when he stood in the highest pinnacle of the state. The Earl of Ilay, in a letter written at the crisis of the speculation, says that he found Mr. Law's antechamber guarded by Swiss troopers, who were placed there to keep out the crowds of suitors who pressed about its door. Peers of France, and princes of the royal blood, were seen daily waiting at his door, hoping by their hollow compliments, and their humble attentions, to win the notice of the great financier. Mr. Law retained his Scotch associations, if he had thrown off his British allegiance, and made his house the home of his original countrymen, no matter what might be the nature of their relations to their native land. The last Pretender was then hovering around the skirts of Paris, and in the want to which he was reduced, he found that the munificence of the Scotch banker afforded him assistance more warm than that which was given to him by

the promptest of his adherents. The prince is said to have drawn up at one time a paper ministry, in which Mr. Law was elevated to the post of chancellor of the exchequer, and was invested at the same time with so complete a supervision over the home department, as would place the Bank of England under his control as fully in his new office, as the Bank of the Mississippi in his old one. It became the prevailing belief in France, till the fatal edict of 21st of May had suddenly prostrated the company, that the power of its founder was unlimited, and the sycophancy of the speculators towards him increased in proportion with the rage for speculation. Schemes were laid by the reigning beauties of the day for the purpose of drawing him within their power, which, if they were not successful, at least deserved to be so from the ingenuity which was displayed in their conception. We have heard of instances in which the cavaliers of a past generation performed the most daring and laborious feats, in order to bring them under the notice of the lady to whom they had devoted themselves by a vow of consecration; but there are examples which are displayed by Mr. Law's biographer, of chivalry under a contrary manifestation, which can rarely be surpassed in the history of the Roc minstrels. The wife of a debtor of the comptroller-general, having sought in vain all other methods of rescuing him from his embarrassments, and despairing in any other way to attract the notice of the sovereign in whose hand her fate depended, caused herself to be overthrown in his court-yard, at a time when his carriage was passing by, and when, from the prominency of her disaster, she might lay claim to his favorable attention. The device was successful, and became popular; and the consequence was, that Mr. Law for some weeks was unable to move out, without being impeded by the flounderings of a wrecked carriage, or the way. wardness of a dismantled horse.*

There was but one step remaining to place the comptroller-general at the head of both church and state, and by a summary process that was taken. In December, 1719, he appeared with his son and daughter before the altar of the church of the Récollets, at Melun, and there did penance for the heresy in whose shadows he so long had tarried. As a sign of his sincerity, he officiated as patron in his parish church of St. Roch; and having endowed it with a magnificent donation, was constituted its honorary warden, in place of a duke of the royal family, who gave way. A convoy of fish was ordered through his bounty to be brought to Paris, and distributed to the poor during lent; though, unfortunately for the appropriateness of the charity, the vessels were detained by contrary winds, and did not arrive till after Easter. Lord Stair, who at that time was British minister, was superseded by his court, because he had neglected at first to ingratiate himself with the ruling power; and the English ministry hastened to redeem the error, by supplanting him by a representative who could be more pliant in his demeanor. The whole of Europe lay at his feet, while he, like the son of the Jewish patriarch, was waited upon by those in whose lap he had been nursed, and under whose protection he had been fostered, as the statesman who controlled the destiny of his adopted country.

As on the day of his highest exaltation, when every circumstance had combined to raise him to a pitch of power unexampled in a subject, Mr.

Law proceeded, after the immediate business of his department was closed, to hold the levee which the lateness of his employment required him to delay till almost midnight, he might have seen, as the last visiter was departed, or the last suppliant was dismissed, the first rays of a morning which was to usher in his complete degradation. There was scarcely a breathing time between his highest elevation, and his final ruin. He seemed to have reached the pinnacle of a high mountain, and then, slipping from his foothold, to have fallen with a violence which carried him below the level from which his exertions had first been directed. A guard was necessary on the day of the bank's stoppage, to preserve his person from violence, and even under its escort he was insulted by placards brandished before his face, in which he was styled "papillot," and "fils ainé de Satan." He had expatriated himself from his native land; he now was banished from that which had been the land of his prosperity. We can follow him in his wayward course from court to court, from capital to capital, until at last, with a fortune which had experienced every vicissitude, till its substance was worn away by its changes, and with a name which was soiled with every blemish which in those dissolute times could be won, he died in Venice, on the 21st of March, 1729, and in the fifty-eighth year of his age. The traveller who sees the name of John Law, of Lauriston, on a stone in the church of St. Marks, forgets that under him lay the remains of the speculator who prepared for France the bankruptcy under Louis XV., and the revolution under his successor.

It is our intention, at a future period, to examine the condition of the commerce and the finances of France, in the various relations into which they were thrown, by the changes of the French revolution. We have made use at the present of the Mississippi Scheme, as an illustration of the spirit of financial ignorance, and of governmental despotism, which existed at the commencement of the reign of Louis XV. We have seen a scheme which bore on its face little beyond plausibility, snatched up by the gov ernment as a medium by which its debt could be paid, and palmed off on the people by all the measures which fraud or violence could suggest. When persuasions were of no more use, constraint was used; and the capitalist who was unwilling to listen to the seductions of a messenger of the court, was palsied into obediency by the bayonet of a Swiss grenadier. One half of the national debt was thus avoided; but it was avoided by throwing it from the king to the people, without a consequent diminution of the taxes which had been previously drawn to support it. A period of distress was produced which is unequalled in history, and which laid the seeds of that deep and wide-spread rebellion, which overthrew in the next reign the dynasty under whose auspices it had been fomented. It was from the ruin of the Mississippi Scheme, that we can trace the rise of those commercial institutions, which, after a century of uproar and oppression, have assumed a power which bids fair to lift France to a pitch of prosperity higher than has been imagined by the most sanguine of her chiefs.

ART. II.-THE THEORY OF BANKING.

QUESTIONS of currency and banking have, during the few past years, undergone much discussion in this country; and are, at the present time, little less interesting to the people of England than to ourselves.

Our attention has of late been drawn to sundry publications that have appeared in England, which express various views of the system of banking at present existing in that country; and the remarks we propose to make have been suggested by the perusal of them.

1. Report of the Directors to a Special Meeting of the Chamber of Conimerce and Manufactures at Manchester, on the Effects of the Administration of the Bank of England upon the Commercial and Manufacturing In terests of the Country: December 12, 1839.

2. Analysis of the Report of the Manchester Chamber of Commerce, with an Exposure of its Fallacies: no date.

3. A Letter to J. B. Smith, Esq., President of the Manchester Chamber of Commerce; by Samuel Jones Lloyd: January 9, 1840.

4. Remarks on the Management of the Circulation, and on the Condition and Conduct of the Bank of England, and of the Country Issuers, during the year 1839; by Samuel Jones Lloyd: 1840.

5. Report of the Select Committee on Banks of Issue, with Minutes of Evidence, &c.; ordered by the house of commons to be printed: August 7, 1840.

In these different publications, various views are presented of the interesting subject to which they refer. The report of the directors of the chamber of commerce attributes the fluctuation of prices that is continually occurring, and particularly the heavy fall of prices in 1837, together with much physical and moral evil, to the mismanagement of the circulation by the Bank of England. A different view is taken by the anonymous writer, whose pamphlet is mentioned above as No. 2. Mr. Lloyd, an intelligent banker, author of Nos. 3 and 4, is of opinion that the system is wrong, but thinks the bank has done its duty, as far as it was able to do under the circumstances in which it was placed.

The discussion to which these publications gave rise appears to have caused the appointment of the committee of the house of commons, on the 19th March, 1840, to inquire into the effects produced on the circulation of the country by the various banking establishments issuing notes payable on demand. The committee held many sittings, called before them for examination gentlemen engaged in various departments of business, of great experience and extensive observation, and obtained much statistical information, but came to no result. They reported the evidence they obtained to the house, without expressing any opinion of their own.

And, it must be acknowledged by every one who reads the "minutes of evidence," that for a large committee to agree upon a report founded on the testimony of individuals who, in their views of the same subject, differ so entirely from each other, would be a work of no small difficulty. In fact, the witnesses can be said to agree in no one particular, except that the present system is, in their opinion, defective, and requires amendment. In respect, however, to the particular alterations in the mode of managing the circulation necessary to remedy existing evils, each witness entertained opinions peculiar to himself.

This state of the case in England does not differ materially from the state in which the same questions now stand in this country. Questions relating to the currency, and our banking system, have been long under discussion, and without leading to any satisfactory result. All agree in one thing, however, which is, that the currency of the country, and, as connected with it, the banking system, are in a most unsatisfactory state, and require thorough reformation.

The inquiry, therefore, that naturally suggests itself is this: what is the true principle on which the banking system of the nation should be founded? Who of all the multitude of reasoners, that have treated the subject, have given us correct views of it? Or, does the true principle still lie hidden? To ask these questions is easy. To answer them is difficult. To answer them satisfactorily to everybody is, perhaps, impossible. Yet, to look for the answer may not be altogether in vain.

It is with reference to that branch of modern banking which consists in the issuing of circulating medium, that all discussion is now carried on. The great point to be settled is, to discover some system on which the issues of paper money may be based, which shall combine the requisite qualities of security and convenience, and at the same time guard against the fluctuations that inevitably attend excessive issues.

We consider it altogether too late in the day to discuss the question of tolerating banks at all. That question has been conclusively settled by the opinion of every enlightened commercial nation. Modern commerce could not be carried on without them. The experience of centuries has proved them to be indispensable to the prosperity of an active business people.

Even allowing the existence of banks of discount and deposit, we do not admit it to be possible to devise a plan for issuing paper money so free from objection as can be devised and executed through the agency of these institutions. However numerous the objections to the existing system, all plans for its improvement, under whatever name proposed, when traced out in detail, end finally in a bank of some sort. The great object, therefore, seems to be to devise a system of issues which shall combine the economy and convenience of paper with the security of specie.

The system of banking at present existing in this country, is not founded on any well-defined principle. The system works in accordance with laws emanating from twenty-six different legislatures; and embodying, not only the wisdom, but the theoretical notions and whims of some six thousand legislators. In all the states, excepting New York, banks are established under charters specially granted by the legislature, and the corporations are subject to such restrictions as may be by those bodies imposed upon them. They are subject to no limit in the issue of notes, unless some limit happens arbitrarily to be fixed by the power that creates them. It is directly for the interest of these institutions to push their issues upon the public to the utmost amount possible, and therefore an irresistible tendency in the circulating medium to become redundant; and when it has become so, and their notes begin to return upon them for specie for export, that being the only portion of the currency that can be used for discharging an unfavorable balance of trade, the banks in most of the states meet the demand by a refusal to pay.

In England the system is more sound, yet in some respects exceedingly defective. The currency is managed and supported by the Bank of England. Notes are issued by the bank, redeemable in coin, and by all coun