The improved facilities for transporting specie, and the greater security of shipments have latterly brought the 'specie points' nearer together, and at present they may be taken as follows:

We give the exchanges for the above five places only, because they are the capitals of the countries to which our gold mostly goes or whence it generally comes. Portugal, which might have been included in the list, charges an export duty on gold (5 milr. p. 1 kilogr.) which interferes with its free movement. For countries having a silver standard (India, &c), the specie points will vary according to the relative value of gold and silver, and for those using an inconvertible paper currency, based upon the silver standard (Austria, Russia), the specie points will vary according to the relative value of gold and silver as well as according to the depreciation of the paper currency. The countries of the double standard come only into consideration for the exchanges based upon the gold par.

The above list shows a difference between the two specie points of | to 2 per cent.

Though this difference is comparatively small, it frequently happens that the specie points are touched, which brings about an increase in the number of shipments. These shipments sometimes counterbalance each other. It thus happens that the American exchange is favorable to England, while the German or French exchanges are against England. Money will then arrive from New York to go to Berlin or Paris, a fact which would only exemplify that this city is the heart of the bullion market, whereto the specie flows from the producing countries to be distributed over the world. But if these shipments do not counterbalance each other, they bring about alterations in the Bank rate, which is either raised to attract bullion from abroad or reduced through foreign arrivals of bullion. And here we should remark that, although the difference between the specie points is not considerable, when it becomes evidently necessary to attract bullion from abroad, the rise in the Bank rate must be rapid and effectual. For the bills on which bullion movements are based have generally three months to run, so that the Bank rate here would have to be 4 per cent. above the rate abroad in order to cover a charge in the shipment of 1 per cent.

These frequent changes in the Bank rate which have increased especially during the last five years, partly through the greater extension of the area of the gold standard, and partly through temporary and exceptional causes, have often been complained of, and various plans for remedying the inconveniences experienced from this state of things have been suggested. But from what we have said above it is clear that the cause of the evil, if evil it be, is the greater facility of sending specie and the consequent increase in the number of shipments, and that all proposals which do not touch this cause cannot be considered a thorough remedy.

We shall now inquire whether some method could not be adopted by which the trouble and expense of the shipments of gold might be avoided, which would at the same time tend to steady the rate of interest.

Our previous explanations have shown that every country requires in a given state of trade a certain amount of money to carry on its commerce, a fact confirmed by experience. The specie which leaves a country and which is taken from this required amount will always come back after a certain time. Indeed, with some countries the movements of specie consist simply in taking a certain amount of gold from the vaults of the principal bank of the one state and transferring it to the vaults of the principal bank of the other state; whence, after a time, it is taken away to be retransferred to its former place.

It is now to be considered how far it would be practicable to effect these transfers by simply placing in the books of one bank a certain amount of gold to the credit of another, leaving meanwhile the bullion itself where it is.

Such a proposal cannot, we admit, be carried out in practice with all countries-at least not for the present. The gold, for instance, which is taken to Alexandria is not placed in the vaults of any bank, but finds its way direct into active circulation, and, when returned to England, comes to us directly from circulation. In this case it cannot be denied that nothing short of the metal itself would satisfy the demand, for a credit on the Bank of England would be of no avail.

The same objection applies to New York. There is no bank in the States which is the recognised bullion reservoir of the country, and what specie goes across the Atlantic finds its way into the Gold Exchange, whence it is distributed through the various arteries of trade.

But even if we limit the application of our scheme only to Paris, Berlin, and Amsterdam, we believe it could be made to work and would result in a great advance in political economy. The movements of specie between these three places and our city are very large, and if they can be avoided commerce at large would gain.

The proposition is that the Bank of England should buy of or sell to the 'Banque de France, 'Banque Neerlandaise/ and 'Reichsbank' bullion in bars or coins at the price of £3 17s. 9d. and £3 17s. l1d. respectively per ounce standard, and agree to keep the bullion sold free of charge on account of the buyer, and to let bullion bought of these institutions remain with them.

Such a scheme may appear impracticable at the outset, but we think a closer examination will show that the objections against it are less weighty than may appear. We may state at once that what we propose is only for ordinary quiet times; during periods of international complications it might not be possible to apply it. Moreover, we do not propose it for any large or even proportionately large amount of the reserves of those banks, but only for that part which has been called the international ' speculative fund, which represents the available supply of capital which is always ready to flow from place to place according to the conditions of supply and demand. The system, therefore, could not have been applied to Germany whilst she required the actual gold to complete her currency reform, but it may be applied to her when that reform is established.