nomic question, on which parties must inevitably divide, and reconstruct themselves in the near future.

CLEARING HOUSE TRANSACTIONS.

In our last review we showed in a general way the financial expansion as it appears in the transactions of this great central exchange. How their volume rose from twenty-nine thousand millions in 1879 to forty-nine thou sand millions in 1881, and later, gradually but steadily receded until the sum of twenty-eight thousand millions was again reached in 1885, and we concluded with a confident assurance that the lowest point of depression had been reached, and we were again on an upward scale. The result has fully borne out our anticipations. The official report announces the total exchanges for the calendar year 1886 at thirty-four thousand millions. The average balances had increased from one hundred and thirteen millions to one hundred and forty-six millions.

The report for the first quarter of the present year 1887 shows an arrest of this forward movement. The exchanges from January 1 to April 1 amounted to eight thousand two hundred and sixty-two millions, against eight thousand five hundred and twenty-six millions for the same period in 1886, a slight decline, and the average balances fell from one hundred and thirty-three millions to one hundred and twenty-five millions.

This arrest is owing chiefly to the diminution in transactions in stocks; dealings in railroad shares being limited by the uncertainty felt as to the operation of the InterState Commerce bill upon the trunk lines.

OUR CIRCULATING MEDIUM.

In our review of 1885 we presented a precise statement of the condition of our circulating medium; the amount of gold and silver estimated to be in the country by the highest authorities, the actual amount of paper currency, and the manner in which it was held at the close of 1884. The changes in 1885 were so slight, that we last year confined ourselves to stating, in a general way, that at the

close of the year it was, all kinds included, "somewhat more than sixteen hundred million dollars, one-half of which was coin and bullion, one-half bills and certificates of deposit." As this subject, in all its phases, will no doubt come before the next Congress at an early stage, we again present a statement in detail.

The Director of the Mint, in his recent report, gives two valuable tables, which must be accepted as authoritative statements. The one shows the form and distribution of the total circulation of the United States, July 1, 1886, at

Gold being twice counted; as specie and as certificates.

$1,815,571,226

Distribution.

This circulation he states to be thus distributed. Precious

The specie in the Treasury is stated at

Gold Coin and Bullion,

$231,984,033

213,626,867

$445,610,900

Turning to the table showing the stock and ownership of gold and silver coin, July 1, 1886, we find

Recapitulating the above tabular showing, we find in round numbers an apparent circulating medium of eighteen hundred millions of dollars, and deducting the sum held by the Treasury for coin certificates, an actual circulation. of sixteen hundred million dollars. Thus composed:

1. United States issues, legal tender, (except

fractional currency,) resting on the gen-
eral faith of the Government, and the
special reserve secured by law,

$350,000,000

2. National Bank issues, secured by Government bonds pledged for redemption of

same,

3. Gold and silver certificates of the United States Treasury, secured by actual deposits of coin,

Total paper,

$310,000,000

165,000,000

$825,000,000

Resting on a metallic basis of nine hundred millions of dollars.

A marvellous exhibit, compared with the condition of the circulating medium in 1873, when seven hundred and forty millions of paper issues rested for redemption on one hundred and thirty-five millions of coin.

The redemption of the National debt, and the inevitable reduction of the rate of interest, will, no doubt, cause an entire withdrawal of National Bank issues, and put an end to this system, while coin certificates of deposits in the Treasury will take the place of the bank bills. We shall then have the best circulating medium yet devised, better even than a pure metallic circulation, because less cumbrous, free from the temptations to hoarding, and also from the loss by abrasion of the metal. If the legal tender notes of the United States be retained, a simple stamping on their face of an engagement by the United States to redeem in coin on presentation at any Sub-Treasury, will take from them the chief objectionable feature. But in the end these, no doubt, will also disappear. Let us hold on to every ounce of gold that we produce, and only part with our surplus silver at a full equivalent. With the rapid development of our industries, we shall need all that our mines produce.

THE COMMERCIAL OUTLOOK.

The year 1886 was one of the most speculative years in our history. Over one hundred million shares of stock, thirteen millions of Government bonds and six

hundred millions of other securities, representing nearly eleven thousand millions of dollars at their par value, changed hands on the New-York Stock Exchange. The wheat crop was sold two or three times over on the Produce Exchange; the cotton crop was sold five times over on the Cotton Exchange; the sales of coffee were twice the importations of the year. But for the solid strength of our financial system, the December panic would have been a national disaster. Our metallic basis saved us. We were no longer, as in 1873, with an extended paper currency, resting on a basis of one hundred and thirty-five millions of coin, but with a paper currency, not extended from what it was in that fatal year, resting on nearly a thousand millions of gold and silver.

The lesson of December, however, came none too soon, and it is with infinite satisfaction that we notice a more restful feeling in nearly every branch of trade. Other reasons may be given, no doubt, for this comparative repose the abeyance of manufacture in the interval between the close of the Forty-ninth Congress and the sessions of the Fiftieth, which may bring great changes in legislation, and consequent displacements of industry; the hesitation. of speculators in grain staples, as to how the Inter-State Commerce bill will affect the surplus product of the West; the timidity of operators in stocks as to how the rulings of the Commissioners will disturb the earnings of the railroads; the prudent waiting of conservative capitalists as to what cloud the Treasury surplus may cast over the general finances of the country. All of these are sure signs that this is to be what may be called an "off year." Meanwhile, every industry appears to be thriving—a slow, healthy thrift.

Moreover, the anarchy problem has been solved for this Continent. The social problem is in process of quiet solution. And the universal verdict of the American people as to the right of the individual to work as he will, when he will, and for whom he will, undisturbed of any man, and under the protection of law, has been given a verdict irreversible in this century, if ever in this land.