of paying Hall out of the proceeds, in pursuance of a promise of Bradford to remit to him; and his liability is the same as if Bradford had inclosed a bank-note to him, requesting him to deliver it to Hall, which would be considered as a payment by Bradford at the time when he sent the note, if Hall chose so to consider it. It would in that case be Hall's money, and he could maintain an action for it if it were not paid over."

"If upon his receipt of the letter and bill of exchange, the defendant had informed Hall, and at the same time declared his intention to keep all the money to himself, the case would look better for him; for then Hall might have taken other measures to obtain his debt. But the silence of the defendant and his receiving the contents of the bill, must be construed to be an assent to pursue his instructions to receive the money for Hall as well as for himself; so that when it was paid him, two hundred dollars was legally Hall's money, and was afterwards improperly converted by the defendant to his own use."

These cases show to what an extent the debtor is protected in the exercise of his right to apply his payment as he pleases.

But although the right of the debtor to make application of his payment is thus absolute, it must be taken with some qualifications-the most important of which relate to the time and mode in which he must exercise it.

It must be borne in mind that this right of the debtor exists only in respect to the payments which he makes voluntarily. Where money is collected from a man by legal compulsion, the law in general directs the application of the fund collected, and so far as it does not, it is the creditor, and not the debtor, who is entitled to do so.

A more important qualification of the debtor's right of appropriation is this-that he must direct the application of his payment at the time when that payment is made. If he fails to do this, he loses all right to control the appropriation. He may accompany his payment by whatever directions he chooses respecting its application, and they will be binding upon the creditor; but if he gives none at the time of paying, and his intention to make a particular application is not apparent from the circumstances of the case, his right is gone forever. It then becomes the creditor's privilege to apply the payment, as will be more fully shown when we come to consider the extent of the creditor's right.

It is plain that the debtor's wisest and best course, in all cases where he desires to pay off one debt in preference to another, is to give distinct specific and unequivocal directions to that effect, accompanying the money; and he should secure evidence that he gave such directions just as carefully as he secures evidence of his payment. If he pays the money himself, he should have the intended application specified in his receipt. If he sends it by a messenger he should send a message stating the application which he intends. If he incloses it in a letter, he should write his directions as to the application in the same letter. In such ways as these it is prudent to state distinctly his wishes.

But it does not always follow that because the debtor has not in so many words directed his creditor to make a particular application, therefore his right to have it made is lost. Sometimes a direction on the part of the debtor to make a particular application of his payment may be implied from circumstances. This will be the case whenever the circumstances attending the payment are such as may reasonably be considered to show to the creditor what the intention of the debtor was.

For example, suppose a merchant should send in to his customer bills for two separate parcels of goods sold; and the customer should say to the messenger: This bill is right, and I will pay it in a week or two; but that one I shall not pay, for I never ordered the goods;" or, "They were never delivered to me;" or "I have paid for them once before ;" and soon afterwards should send to the merchant a sum of money just equal to the amount of the bill which he promised to pay, and larger or smaller than that of the other, without sending any message. These circumstances would show clearly enough that the debtor intended to pay one of the bills and not the other. The creditor would be bound to obey the implied direction. He could not credit the payment upon the repudiated bill and then proceed to collect the one admitted.

Thus also, if the debtor owed two admitted debts, to his creditor, and should send to him a sum of money exactly sufficient to meet the larger of the two; this would show an intention to pay the larger debt and not the smaller. And the creditor would be bound accordingly.

But no such direction can be implied from circumstances unless they amount to a notice to the creditor of his debtor's intended application. The creditor is entitled to this notice. Once or twice a debtor who paid money without directing its appropriation, and contented himself with entering it in his own account book as paid upon one particular debt, has relied upon this entry as a circumstance showing what his intended application was. But this is not sufficient. The creditor must be notified of the debtor's wishes, or he will not be bound by them.

Thus we see that the party who makes a voluntary payment has always an absolute power to appropriate it as he pleases, by notifying his creditor at the time of payment, either in words or by implication, of the appropriation which he intends. This principle is more concisely summed up by an ancient Latin proverb often quoted in law books in connection with this subject: "Quicquid solvitur, solviter propter modum solventis.”

The creditor's right to apply the payment, and the rules of law regulating the application where none has otherwise been made, will be considered in a future number.

Art. VIII. THE BANK OF ENGLAND IN 1854.

THE London Bankers' Circular of June 23, 1855, contains its annual analysis of the Bank of England, in continuation of the one published last year, the substance of which was reproduced at the time in the pages of the Merchants' Magazine. We now give the Circular's statement for the year 1854, more as matter for future than present reference:

The information contained in the movements of this establishment affords but little that is interesting to the casual observer, or to those whose views are confined to the surface of things which are daily occurring around him; but to the man who can for a time withdraw himself from these pursuits, and carefully survey the mighty interests which are involved in the operations of the Bank of England, the subject is full of the most important philosophy; nor are we aware that this importance has ever assumed a graver weight than during the year which we are about to investigate.

• Whatever is paid is paid according to the design of the payor.

Two years since, the civilized world, and more especially the commercial part of it, was raised to the highest pitch of expectation by the enormous influx of gold to these shores. The Bank of England, which had for many years previous only received some three or four millions per annum, suddenly became ab solutely gorged with the golden treasure, and possessed at one time upwards of £22,000,000 sterling of the precious metals. Under this remarkable change the bank had power to issue its notes to the extent of £35,878,000, which left a margin of unissued paper under the head of reserves of £14,244,000, the active circulation at that time being £23,379,000, and the minimum rate of discount for mercantile bills only 2 per cent.

It is unnecessary for us to point out to our commercial and manufacturing readers the impetus which this gave to the industry of the country, for they have only to have recourse to their ledgers for 1851 and 1852 to be fully sensible of the great changes which took place; and it certainly cannot be a matter which is unworthy of their consideration to inquire how far the returns which we lay before them to day may be regarded as the consequence of our monetary system. We are aware that we have to deal with some who treat an examination of these facts with as much indifference as if they had not the slightest influence upon the interests of the public, while others receive them with as much submission as if they were some sacred ordinance of heaven; but all this is wholly unworthy of a great and intelligent people; it is bowing down to a Dagon, which monopoly, power, and ambition have set up. Touch it by the magic wands of truth, justice, and reason, and it crumbles to pieces before you. We trust, therefore, that our readers will not throw aside the array of figures that are here presented to them as unmeaning and useless, nor treat with neglect or indifference the philosophy which they unfold.

We shall now proceed to notice the principal changes which occurred in the bank operations in 1854.

ISSUE DEPARTMENT.

In comparing the highest amount of issues in 1854 with that of the previous year, in the second column of the table at page 831, it will be found that the power of issuing notes diminished considerably, the highest and lowest amounts for the three years being as follows:-

These figures show that the fluctuation in the power of the bank to issue notes between July, 1852, and May, 1854, diminished to the extent of £10,099,060, or nearly 30 per cent. These fluctuations are governed principally by the fluc tuations in the gold held in the issue department, and do not afford any measure of the notes actually in circulation.

The amount of notes in active circulation, given in column 3, for 1854, when compared with the two previous years, fluctuated as under:

Here we see that in 1852 the active circulation was reduced to £4,095,000 in about six months; in 1853 it was reduced about £3,880,000; and at the close of 1854 it had decreased £4,840,995 below what it was in July, 1853.

The metallic assets in the issue department of the bank during the year 1854 were considerably below what they were in the two previous years, and indeed lower than they had been the four previous years in their extreme fluctuations; for on the 4th of February the highest amount was only £15,523,620, and on the 20th of May it had fallen to £11,779,095, the extreme diminution of gold being £3,744,525. The following statement shows the comparative fluctuations in gold coin and bullion for the five years ending 1854:

These figures show that the metallic assets of the bank have not fallen to so low an amount for several years; and this reduction in the bullion has also had the effect of reducing materially the proportion between the amount of bullion held and the paper in active circulation. In 1852, this proportion advanced to 101 per cent against the notes in circulation; in 1853 it fell to 90.7 per cent; and in 1854 it fell to 70.9 per cent, as the highest proportion of bullion to paper; showing, beyond dispute, that the bank has no control whatever over the degree of convertibility which it is able to maintain. The following figures show the fluctuating power of the bank to maintain this convertibility during the three years ending 1854:

PROPORTION OF BULLION TO NOTES IN CIRCULATION IN THE ISSUE DEPARTMENT.

If we omit the small amount of gold and silver coin held in the banking department, we find that the notes in circulation, which were more than covered by bullion in 1852, had their metallic basis lessened by about 29 per cent when at the highest point in 1854, and at the lowest point of the metallic assets there was only 54 per cent of gold as the basis, therefore 46 per cent were issued upon credit. To the unobserving this change in the proportion of the metallic basis, which is made the foundation stone of the issues of the bank, may carry with it very little significance; but it is the mainspring which guides all the secret operations of the bank machinery, because its directors regard every advance in the metallic proportion of its assets, compared with its liabilities, with hope and encouragement; while, on the other hand, it watches every decline, when it reaches a certain point, with apprehension and fear. Therefore the fluctuations in the metallic resources of the bank, as given in column 8 of the table, are favorable as they advance or recede.

It may be seen that we have retained the column in the issue department of the bank returns for silver bullion, but the bank has reserved no part of its metallic assets in silver since the 20th of September, 1853, though the act of 1844 allows it to retain a proportion not exceeding one-fourth.

THE BANKING DEPARTMENT.

The changes which take place in the issue department are presumed by the framers of the act by which it is governed, to operate without, in any degree, interfering with the movement in the banking department, but this is too palpable an error to obtain credence amongst those who are practically acquainted with the working of the system. The bank is compelled to watch the proportions which are continually occurring between its metallic assets and its active circulation with the greatest vigilance, and as it has no power to maintain a strict proportion between its issues and its specie, it is forced, therefore, to compensate for any difficulty here by restrictions in the banking department, either in the shape of discounts or in loans and advances.

The highest amount of the "rest" was, on the 1st of April, when it stood at £3,757,576, against £3,681,119 on the 8th of October in the previous year. These figures denote an increase in the prosperity of the bank as a public company.

Under the head of "public deposits" the highest amount was £8,291,993, on the 7th of January, against £11,400,933 on the 31st of December of the previ ous year, showing a reduction of upwards of three millions in one week; the change, however, at this period may be accounted for by the preparations made

for the dividends; but the low amount to which the public deposits fell in 1854, may be accounted for by the operation of two circumstances. The first of these was the scheme of Mr. Gladstone for paying off the principal stock of the South Sea Company, and the second the demands upon the treasury for the support of the war. The following is a statement of the highest and lowest amount for the three years ending 1854:

Highest amount. Lowest amount.

The private deposits during the early part of the year exhibit the same steadiness which characterized them through nearly the whole of 1852 and 1853. The following were the highest and lowest amounts in the three years:

Seven-day and other bills stood at their highest point on the 14th of January, being £1,232,329; and at the lowest on the 30th of December, being £892,118. The total amount of the liabilities of the bank in the banking department stood at £40,052,580 on the 7th of January; but on the 3d of June it was reduced to £31,560,653, being a decrease of nearly nine millions in six months. This decline appears to have occurred to the extent of nearly six millions under the head of public, and the remainder under the private deposits.

The highest amount of the Government Securities held in the banking department was £14,833,299 on the 7th of January, against £15,044,330 in the last week of the previous year; and the lowest amount, £9,720,499 on the 17th of June, against £11,319,072 on the 22d of October in the previous year.

Under the head of other securities, which comprised commercial bills discounted, advances on bills, bonds, and other descriptions of securities, the highest amount was £16,912,843 on the 30th of September, against £19,124,799 on the 1st October, 1853. These figures show a very great reduction in the commercial transactions of the bank in the latter year, and up to the present time a decrease under this head of about 7 millions sterling-a fact of great significance in the commercial world.

The reserve of notes during the year 1854 fell far below the point at which it declined in 1853, having been at £3,900,430 on the 6th of May, against £5,012,490 on the 15th of October in the previous year, from which date the rate of discount was raised to 5 per cent, and continued until May, when it was raised to 5 per cent.

With regard to the minimum rate of discount, we have not to record so many changes as occurred in the previous year, but we have to notice a longer duration of a very high rate than can be found in the previous history of the transactions of the bank during the last century. Higher rates may be found, as in 1847, but between September, 1853, and April, 1855, the bank minimum rate was kept at 5 per cent for 67 weeks, and for 12 weeks at 5 per cent, which produced to the bank under the head of discounts alone, according to official returns, about half a million sterling, during the first five months of 1854. The minimum rate of discount was continued at 5 per cent in 1854 to May the 11th, when it was raised to 5 per cent, and again reduced to 5 per cent on the 2d of August.

The last column shows the total amount of bullion and coin in both departments to have fallen off considerably in 1854, compared with the two previous years, as may be seen by the following statement of the highest and lowest amounts: