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] currency, gold remained out of circulation, though with the growth of business the premium on it declined to an average rate of 12 per cent.; but no inconvenience was felt from tne existence of a pure paper circulation, and the opinion, in fact, arose that the currency thus established was a sure preventive of recurrent panics and exaggerated rates of discount. But in September 1873 the financial house of Jay, Cooke, &amp;lt;fe Co., having locked up a large amount of capital in railway enterprises not immediately if ever likely to be productive, suspended payments ; other financial houses were forced to take the same step, several banks closed their doors, and a severe panic set in. The holders of the notes in circulation of the banks that failed were protected by the deposit of bonds at the Treasury, and the notes were never discredited ; but the financial distress throughout the Union was excessive, and continued for many months It was practically demonstrated that the national bank law protected the holders of national bank notes from loss, but afforded no immunity against the occurrence of financial crises.

Banking in Germany.

Banking in Germany, up to the close of the Franco-German War, presented no peculiar features requiring attention. The Bank of Hamburgh was established in 1619, on the model of that of Amsterdam, as a purely deposit bank for the transfer of sums from the account of one individual to that of another ; and its management appears to have been uniformly good. In the several German States banks were authorized under laws peculiar to each ; and most of them were allowed to issue notes according to regulations varying from State to State. It followed that the notes of each bank were confined to its own neighbourhood ; but the establishment of German unity was followed by a demand for a general banking law, and the establishment of a note currency that might circulate throughout the empire. After some discussion the Act of the 30th January 1875 was passed to satisfy these demands. Under this law an Imperial Bank was established, with an uncovered issue of 250 millions of marks (&#61; 12,500,000); and thirty-two banks were re cognized as possessing rights of uncovered issue to the ex tent of 135 millions of marks (6,750,000). The Imperial Bank is, however, allowed to increase its issue, subject to the condition that at least one-third is represented by cash in hand, and the remaining two-thirds by bills not having more than three months to run ; while the other banks may also exceed their authorized issues subject to the payment of 5 per cent, interest on the excess above the authorized limit, plus the cash in hand, and weekly returns are required of the amount in circulation. No note is to be less than 100 marks (5), and no new right of issue can be conceded except by a law of the empire. The State itself, however, under a law of April 1874, has the right to issue 120 millions of marks in State notes of small denominations. The working of this law has not yet been tested ; but, if we may judge from our own experience, it will not produce any rapid withdrawal of local issues, and ! the unification of the note currency of the empire will not 1 be accomplished.  

 BANKRUPTCY. When a person is unable to pay his debts in full, the law of civilized countries adopts some means of satisfying the creditors, as far as they can be satisfied, out of the debtor s estate, and relieving the debtor himself from pressure which, by his own efforts, he would not be likely to overcome. The debtor having been declared a bankrupt, his property vests in his creditors for the purpose of being rateably divided among them, and he thereupon starts a new man, entirely relieved from the obligations thus partially satisfied. Such, in general terms, is the process of bankruptcy as observed in modern societies. The law of bankruptcy is, in fact, a modern creation, slowly evolved out of the criminal code in answer to the neces sities of a widely-spread industrial life. Early society is unanimous in treating inability to fulfil legal obligations as a most serious offence ; and the harshness of ancient law towards debtors has been explained as a consequence of the fact that a contract was at first regarded as a sort of incomplete conveyance, and creditor and debtor as persons who respectively had and had not fulfilled their legal obligations. The early law of Rome, while prohibiting contracts of usury, still gives the legal creditors the savage remedy of dividing the carcase of their debtor or selling him and his family into slavery. Severe commercial distress endangering the stability of the state is of frequent occurrence in the history of Rome ; but the law against debtors long retained its primitive severity. The Lex Pcetelia (about 326 B.C.) enabled a debtor, who could swear to being worth as much as he owed, to save his freedom by resigning his property ; and many years after the legislation of Julius Caesar established the cessio bono- rum as an available remedy for all honest insolvents. The slow development of the law, and the practical difficulties with which each new adjustment was met, are copiously illustrated by the history of bankruptcy legislation in England. The first English statute on bankruptcy (34 and 35 Hen. VIII. c, 4) was directed against fraudulent debtors, and gave power to the lord chancellor and other high officers to seize their estates and divide them among the creditors. The 13 Eliz. c. 7 restricted bankruptcy to traders, and prescribed certain acts by committing which a trader became a bankrupt. Commissioners appointed by the lord chancellor are to seize the person of the bankrupt and divide his property among the creditors. The 4 Anne c. 17 and 10 Anne c. 15 took away the criminal character hitherto borne by the proceedings, and allowed a debtor, with the consent of a majority of his creditors, to obtain a certificate of having conformed to the requisitions of the bankrupt law, which, when confirmed by the chancellor, discharged his person and his after-acquired property from debts due by him at the time of his bankruptcy. The 6 Geo. IV. c. 16 allows a debtor to procure his own bank ruptcy (an arrangement previously regarded as fraudu lent), and introduces the principle of deeds of arrangement between debtor and creditors without a public bankruptcy. The 1 and 2 Will. IV. c. 56 established the Court of Bankruptcy, consisting of six commissioners, along with, four judges as a Court of Review, and appointed official assignees to get in the bankrupt s estate on behalf of the creditors. Various other statutes in the next twenty years made unimportant changes in the constitution of the court. In 1847 jurisdiction in bankruptcy was again restored to the Court of Chancery by the appeal being transferred to that court. The Bankrupt Law Consolidation Act, 1849, effected several important alterations in the system. Pro ceedings were to begin by a petition to the Court of Bankruptcy instead of a fiat out of Chancery. The com missioners were authorized to award certificates, classified according to the merit of the bankruptcy. In the first class the insolvency was declared to be due to misfortune ; in the second, not entirely to misfortune ; and in the third, not at all to misfortune. Certain specified offences deprived the bankrupt of all right to a certificate, and made him 