deed, a critical one, when a courier from General Jackson galloped up at full speed bringing the order for Stuart to retreat as quickly as he could to his original position. Our commander-in-chief, adhering to his earliest idea, still objected to a forward movement, for which, in my judgment, the golden moment had now passed, had he inclined to favour it. Under cover of the darkness of the night, we conducted our retrogade movement in safety, and reached our old position on the Port Royal road with but slight loss. The division of D. H. Hill had now arrived at Hamilton's Crossing, and had been placed at once in the open field upon Jackson's right, where might be seen the glare of their hundreds of camp-fires, and where they were busily engaged in throwing up intrenchments. On our left wing the assault of the enemy had been renewed at dark, and had been attended with the same fatal result to them with their efforts elsewhere, and the ground in front of Marye's Heights was heaped with dead bodies, chiefly those of the brave Irishmen of Meagher's brigade, which went to the attack 1200 strong, and left 900 of their number upon this dreadful spot. About seven o'clock the battle ceased for the day; only random cannon - shots were still interchanged, the flight of the shells distinctly marked in flaming curves across the dark firmament, and the shadows of evening fell upon a battle-field, the nameless horrors of which none of us had even measurably conjectured a battle-field where thousands of mutilated and dying men lay in hopeless anguish, writhing in their wounds, and pitilessly exposed to the sharp frosty air of the winter's night. Not one of our generals was aware of the magnitude of the victory we had gained, of the injury we had inflicted upon the enemy, and of the degree of demoralisation in the hostile army, everybody regarding the work as but half done, and expecting a renewal of the attack the following morning. Of our own army only one-third had been engaged, and our loss did not exceed 1800 in killed and wounded. Most of these belonged to A. P. Hill's division, and had fallen during the first attack in the morning on the spot where our lines had for some time been broken. We had to mourn the loss of two general officers, Maxey Gregg of South Carolina, and Thomas R. R. Cobb of Georgia, who fell on Marye's Heights. At his side General Cooke, a brother of Mrs Stuart, was dangerously wounded in the forehead. The Federal loss was not less than 14,000 in killed and wounded (we took only 800 prisoners), and in this frightful aggregate of casualties was to be reckoned the loss of many officers of rank. Among these there was the much-lamented General Bayard, a cavalry officer of great promise, who, far in the rear of his lines, was torn to pieces by one of our exploding shells while in the act of taking luncheon under a tree. General Lee has been much criticised, and chiefly by English writers, for not having assumed the offensive in this battle; but every one who knows how exceedingly difficult it had become, already at that time, to fill the ranks of the Confederate army, and how valuable each indibeen considered, and, on the other vidual life in that army must have hand, what reckless prodigality of life characterised the Federal Government and the Federal commanders, caring little that 20,000 or 30,000 men should be killed in a mans and Irishmen could be readily campaign, when as many more Gerput in their places,-I say that every one who bears in mind these ing that our commander-in-chief facts will agree with me in thinkacted with great consideration and wisdom. There was scarcely an officer in the whole army who did not confidently believe that the attack would be renewed the next day; and where an opportunity was likely to be afforded of again inflict ing serious damage upon the enemy with trifling injury to ourselves, it surely cannot be censured as a fault to have speculated upon the incapacity of the adversary. General Lee, who had been careful to strengthen the weaker portions of his line during the night, said in my presence on the following morning, "My army is as much stronger for their new intrenchments as if I had received reinforcements of 20,000 men." I regard it as almost certain that had the Federal commander been able to carry out his intention of renewing the struggle, the second day would have turned out even more disastrously to him than the first. It was a late hour of the night when we returned to headquarters for a short rest. There we found Captain Phillips, who congratulated us heartily upon having safely passed through the perils of the day, and who spoke with enthusiasm of the magnificent view of the battle which he had obtained from Lee's Hill. With a modest smile, Pelham returned to the Captain the bit of regimental ribbon he had worn as a talisman during the fight, its gay colours just a little blackened by powder-smoke, for it had flaunted from the cap of the young hero in the very atmosphere of Death. Poor Pelham! he has been lying these three years in his early grave there in Alabama, whose Indian name, "Here we rest," has a pathetic significance as applied to the "narrow home" of one so young and so full of promise; and the record of his services to his country fills a few pages in the melancholy story of an unsuccessful struggle for national existence; but his memory is green in the hearts of friends that survived him, and a brave English soldier cherishes the ribbon he wore at Fredericksburg as one of the dearest souvenirs of the past in his possession. We were greatly delighted at finding also at headquarters two of the younger members of the staff, Lieutenants Hullyhan and Turner, who had just returned from a dangerous expedition into the enemy's lines on the other side of the Rappahannock. Several days before they had gone off with the hope of rescuing from the hands of the Yankees Miss Mary Lee, the daughter of our commander-in-chief and a dear friend of General Stuart's, who, while on a visit to some friends in the county of Stafford, had been cut off from her home and family. This was an expedition after my own heart, but I was prevented from undertaking it by General Stuart's energetic opposition. The young lieutenants had reached in safety the house where Miss Lee was staying; but as her friends were afraid to allow her to accompany them on their return, they were compelled to come back without their expected precious charge-fortunately enough, indeed, for the lady, as they were very soon taken prisoners by a patrol of Federal cavalry. During the night following their capture they found the opportunity of overpowering and killing two of their sentinels with their own carbines; and mounting, just in the nick of time, the horses of the Yankee guard, they made good their escape before the rest of their captors had recovered from their amazement at the boldness of the venture. REFORM OF THE BANK OF ENGLAND. "What I want is Facts."-Boz. ONCE upon a time a great Chief of his nation, whom we would call a Prime Minister, arose in an assembly of the chiefs and elders of the people, which we would call a House of Commons, and he laid before them a long roll covered with strange characters, which no man then could rightly understand. And the great Chief said, "This is of great moment to the welfare of the nation : it tells us how to get rid of the plague which has so long vexed our country; and I shall tell you what it means." And he said, "The interpretation of the scroll is so-andso, and thus must we act." And one or two chiefs, with whom the great Chief had previously taken counsel, said as he said. And halfa-dozen of the elders of the people said, "Nay; that is not the meaning of the scroll; and if you do as the great Chief proposes, it will bring evil days upon our country." But the great body of the chiefs and elders said nothing: they could not read the scroll, neither did they profess to be able to do so. And as it was not what we call a party question," the assembly took little interest in the matter. So, although the proposal of the great Chief had to be repeated several times, according to the custom of the country, there was very little debate-only half-a-dozen of the elders said "Nay" to it, as before, while the great Chief, and two or three of his friends, said that his proposal was very good. The remaining 650 or so of the chiefs and elders said nothing; but they thought that the great Chief must be right, and voted on his side: so that the great Chief's proposal, which we would call a Bill, was adopted almost without discussion or opposition-only half-a-dozen speaking and voting against it, and 66 all the rest taking the great Chief's words as gospel. If we transmute this parable into facts, it will aptly describe what happened twenty-two years ago, when the present Bank Acts were adopted by Parliament. All parties then, as now, were agreed that the matter was one of great importance to the wellbeing of the community, but not one man in twenty in either House even professed to know the facts or understand the principles of the question. It was a case decided without being judged-without the evidence being gone into, or counsel heard on the other side. The Minister who brought forward the measure was thought to understand the question, and the House, without questioning, adopted his proposal. There never was a case, in our times at least, when the value of "Party," as a means of insuring criticism and ample discussion, and thereby eliciting the true facts of a case, was so plainly demonstrated. Jurare in verba magistri may be a good maxim in schools, but it is a very bad one in Parliament, as the present case, in its practical results, has lamentably shown. No question has hitherto been regarded as so great a mystery as that of Monetary Science. It is allowed on all hands to be of vital importance to national wellbeingalike to the interests of the State and the fortunes of the community. Nevertheless few men, either in Parliament or out of it, have given much study to it, or profess to have mastered it as a whole. The immense field of Facts-and Facts are everything in this question-is still like a strange scroll, the actual import of which few men even profess to understand. The study of the whole facts is too much for any Minister, absorbed in parliamentary business, and who knows little or nothing of the practical ongoings of commercial and monetary affairs. But a change is coming. We are glad to find, from converse with City men, that the events of the last few years-even of the last two years have forced them to give heed to the matter. The unreasoning and unquestioning faith so long accorded to the Bank Acts is wholly shaken, and City men begin to investigate the matter for themselves.* The Act of 1844 has in practice proved a failure, and has already been suspended twice. It is also acknowledged, even by many of its supporters, that the theory upon which the Act was based is wholly false. But the time of men of business is too valuable, their pursuits are too engrossing, to allow of their investigating the question fully and thoroughly, so that as yet they have arrived only at a negative result. They feel, all of them, that something is wrong-that the Bank Act works great mischief; but they are still at a loss to devise a remedy. Having given many years of patient thought and study to the question; having watched closely from year to year every phase of monetary affairs-not merely looking out from our study, or viewing the facts as reflected in the newspapers, but mingling with men of all classes with bankers, merchants, manufacturers, agriculturists, shopkeepers, in all parts of the country-having noted the nature of their business, the varying wants and opinions of each class, and not least the interests of the community at large; having viewed the question alike in regard to individuals and to the general wellbeing of the State and the country,-we can speak with no ordinary confidence as to the facts of the case, and to the consideration of these facts we have given many weary hours-hours at least which would be weary but for the great object which we have in view-an object of immense benefit to the welfare of the country, and which, we believe, will triumph in the end as surely as (pace Dr Cumming) the sun will rise on the earth a dozen years hence. In previous articles, constantly appealing to Facts, we have described minutely the nature of the ever-recurrent malady to which the trade of this country is subjected; and we have laid down carefully and fully the general principles of monetary science which ought to be applied, and the neglect or violation of which principles is the chief cause of our recurrent commercial crises. We have set forth the remedy, our plan of Reform, as regards the general currency and banking system of the country. But there is one grand point which remains to be discussed, and which we have reserved for separate treatment in the present article. The Bank of England, the head and centre of our system of currency and banking, is an establishment per se. It is an anomaly. Legislation has done its worst upon ithas conferred upon it so many privileges, and imposed upon it so many burdens, that both the position and the constitution of the establishment are wholly unnatural. Since this article was in type, the banking and commercial classes in Liverpool have memorialised the Government for the abolition of the Bank Act, and for the establishment of a monetary system substantially the same as that which we proposed and explained last summer in a series of articles on the "Rate of Interest." "The Act of 1844 was passed amid a cloud of theoretical discussion. What has turned out to be the essence of the Act was hardly alluded to. As to the refined and abstruse arguments upon which the Act was originally defended, we have often shown their unsoundness. The original doctrine of the founders of the Act of 1844, was one of which they do not like now to be reminded."-Economist, September 24 and November 5, 1864. VOL. XCIX.-NO. DCV. Z The Bank acquired a virtual monopoly 160 years ago, in return for a loan which it then made to the Government. In consideration of that loan the Bank was constituted the sole joint-stock bank of issue in England. And at successive intervals it purchased a renewal of this monopoly by making to the Government new loans. These loans form part of the capital or assets of the establishment, and in consequence its capital has swollen into disproportionate magnitude to the requirements of the Bank. The result of this especially since 1844, when the Bank's monopoly of issue was made stringent has been most injurious. As every one knows, the larger the amount of a bank's capital compared to the amount of its business, the higher must be the rate of interest at which the bank carries on its business if it is to pay an ordinary dividend. In brief, the capital of the Bank of England has been swollen to its present magnitude not by the natural requirements of its business, but as a means of purchasing renewals of its monopoly and this disproportionate magnitude of its capital is a direct and special cause why the Bank should seek to reimburse itself by enhancing its charges upon the community. It acquired its present dominating position at the cost of adding inordinately to its capital, and naturally it now makes use of its position to recoup this cost by keeping the rate of interest in this country at the highest possible level. If the Bank's capital were less, or the extent of its operations greater, it is obvious that the Bank could conduct its business at a lower rate of interest without any diminution of its profits. A rate of 4 per cent, for example, might then yield it as much profit as a 6 per cent rate does at present. Let us then, in our review of the present condition of the Bank of England, begin with its Capital or Assets, and see what relation these bear to its liabilities, or, in other words, to the amount of business which it carries on. The Bank keeps permanently on hand Government securities of various kinds to the amount of £25,000,000; also, on the average, nearly £15,000,000 of specie: making a total of £40,000,000. It also holds on the average upwards of £20,000,000 of private securities, consisting chiefly of commercial bills. Thus the capital and assets of the Bank amount to upwards of £60,000,000. Its Liabilities consist of its note-circulation, averaging £21,000,000, and its public and private deposits, amounting to about £20,000,000: in all, about £41,000,000. So that, while holding upwards of 60 millions of assets, the Bank has only 41 millions of liabilities. It has one-half more capital than the total amount of business which it carries on. Next, let us see the nature of its business and of its Liabilities. Rather more than one-half of its liabilities, as we have seen, consists of its Note-circulation, and the remainder of its deposits. With the exception of an infinitesimal fraction, its note-circulation never becomes a charge upon the Bank at all. The notes are all needed to carry on the business of the country. The country-that is to say, the public and the other banks must have some twenty millions of these notes, otherwise all business would be stopped. The notes are never brought to the Bank to be cashed save for the purpose of getting "change.' "As no notes are issued by the Bank for a smaller amount than £5, it ever and anon happens that some note-holder wants to exchange a £5 or £10 note for "small change," sovereigns: but this, and this only, is the extent of the demand for gold in payment of notes. And the whole amount of specie needed for this purpose in the Hall" of the Issue Department averages only about £100,000, the public demand amounting ordinarily only to a few thousands. |