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 to be wholly borne by the one transaction—a very slight expense becomes a great impediment. If the cost is only ½ per cent. there must be a profit of 2 per cent. in the rate of interest, or ½ per cent. on three months, before any advantage commences; and thus, supposing the Paris capitalists calculate that they may send their gold over to England for ½ per cent. expense, and chance their being so favoured by the Exchanges as to be able to draw it back without any cost at all, there must nevertheless be an excess of more than 2 per cent. in the London rate of interest over that in Paris, before the operation of sending gold over from France, merely for the sake of the higher interest, will pay."

Accordingly, Mr. Goschen recommended that the Bank of England should, as a rule, raise their rate by steps of 1 per cent, at a time when the object of the rise was to affect the "foreign Exchanges." And the Bank of England, from 1860 onward, have acted upon that principle. Before that time they used to raise their rate almost always by steps of ½ per cent., and there was nothing in the general state of mercantile opinion to compel them to change their policy. The change