9. We have now to treat of a cause of the movement of bullion which, has acquired an importance in modern times far exceeding what it ever did before: in fact it is more important than any other, except a depreciated Paper Currency, viz. a Difference in the Rate of Interest or Discount between two countries. Formerly when the communication was slow and expensive between different places, before the days of railroads and steamers, a considerable difference might exist in the Rates of Discount in two places, without causing a movement of bullion from one place to another. But that is not possible now. The communication between places is so rapid now, that directly the difference between the Rates of Discount in any two places is more than sufficient to pay for the expense of sending the bullion, an immediate flow of bullion commences from one place to another. And this is in exact accordance with the usual mercantile principle which operates in every other case, that if the difference of price of the same article in any two markets is more than sufficient to repay the cost of sending it from one to the other, it will be sent; and this movement will continue as long as the difference in price continues. Now if the Rate of Discount in London is 3 per cent., and that in Paris is 6 per cent, the simple meaning of that is that gold may be bought for 3 per cent, in London and sold at 6 per cent, in Paris. But the expense of sending it from one to the other does not exceed 1/2 per cent.; consequently, it leaves 2 1/2 per cent, profit on the operation. The natural consequence immediately follows, gold flies from London to Paris, and the drain will not cease until the Kates of Discount are brought within a certain degree of equality. It used to be the common delusion of mercantile men that gold was only sent to pay a balance arising from the sale of goods, and that it must cease of itself whenever these payments were made. But this is a profound delusion. When the Rates of Discount differ so much as is supposed above, between London and Paris, persons in London fabricate bills upon their correspondents in Paris for the express purpose of selling them for bullion, which they then remit to Paris, and which they can sell again for 6 per cent. And it is quite evident that this drain will not cease so long as the difference in the Rates of Discount is maintained. Moreover merchants in Paris immediately send over their bills to be discounted in London, and have the cash remitted to them. Now the only way of arresting such a drain is to equalise the Rate of Discount in the two places. These simple facts are a perfectly conclusive answer to those writers who complain of the variations of the Rate of Discount by the Bank of England, and suppose that it is possible to maintain a uniform Rate. Consequently at the present day, it is the imperative duty of the Bank of England to keep a steady watch upon the Rates of Discount in neighbouring countries, and to follow those variations so as to prevent its being profitable to export bullion from this country.