Imagens das páginas

that money has a value, which, after all, is factitious; and that it should be satisfied with this persuasion, on the principle that it is a convenient delusion, is not more absurd than contrary to M. Say's own doctrine, when he says, "a system of swindling can never be long lived, and must infallibly in the end produce much more loss than profit." It is not easy to believe, that the world has been thus cheated, and that the credit of its circulating medium does not rest on a basis entirely independent of itself. It is the very nature of credit to have a basis. To say that intrinsic value is the basis, is precisely what we maintain. Intrinsic value for what? It is not the idea or function of money, that constitutes intrinsic value; but it is that which qualifies for the function; and the qualifying power lies back of money itself, is underneath it, is its foundation. But why adopt an absurdity without cause? Why hold debate here, when the numerous and important values of gold and silver, for other uses, are so palpable, quite enough to recommend them for the offices of money, and quite sufficient to sustain them in the discharge of these functions? In this light, society is safe, and the good sense of mankind is vindicated, in adopting the "precious metals" as a common currency. It would be most unpleasant to be obliged to believe that is a fraud money or even that the use of it is a self-imposed deception.

But it is not, perhaps, very strange that an economist, who, like M. Say, holds that the value of paper money does not depend upon its being convertible into specie on demand, should also maintain that the esteem in which gold and silver are held, as money, is arbitrary-the effect of custom.

[ocr errors]

Without doubt, gold and silver employed as money, constitute one of the values of these metals, and that not unimportant; but the foundation on which they started as money, the causes which summoned them to this position, to these important functions of society, and of the commercial world, will be found only in values of an older date; and the causes which still sustain their credit as money, will also be found in the same old values, and in a multitude of others since added, and continually augmenting, as the uses to which these metals are applied, other than that of money, are multiplied in the progress of time, and in the advances of civilization. It was never an accident, nor a sum or concatenation of accidents; it was never an arbitrary fit, nor an arbitrary law of society, that lifted gold and silver into the position, and installed them in the functions of money; it was not custom; it was not

even the necessity of a common medium of trade that selected them for this duty, though that necessity was urgent; but it was a substantial value imparted to them by time and events, destined never to be diminished, but always to increase; it was "the nature and force," not "of things" in general, as Turgot taught, but of these very things in particular; it was their own position, their own force and nature, their own value, independent of and prior to that of money, that made them money. As a law of society, which grew up with society, it could no more be resisted than a law of nature. It was not a choice which men made; but a necessity into which they were forced; and not a necessity to have this or an alternative at their own will; but to have this, and nothing else. There was no more uncertainty hanging over the predestined use of gold and silver as money, than over the course of the heavenly bodies. The law in one case is as forcible as that in the other; and both are ascertainable and definite. One is the attraction of gravitation; the other the intrinsic value of gold and silver for other uses.

If we wish to ascertain the additional value which gold and silver have acquired in their use as money, we know of but one rule, which, though it may not be accurate, is worth something. In China, Japan, and some other portions of the Eastern world, gold is not used as a currency, but silver only. Take, then, the relative value of these metals in Europe and America, where both are used as money, and in those quarters where silver only is thus employed, and the difference may perhaps, be assumed as the proportion of value which they have acquired by their use as money. In Europe and America, the value of gold is to that of silver as 15 to 1, with a small additional fraction in favor of the former. In China, the value of gold is quoted, by some authorities, as 12 to 1 of silver; by others as low as 10 of the former to 1 of the latter. In Japan, the value of gold is cited by some as 9 to 1, by others as 8 to 1 of silver. If the medium difference in these quarters be assumed as 10 to 1, then the value added to these metals by their use as money, is equal to one half of their value for all other uses. It ought to be by much the greatest value, as compared with that imparted to gold and silver by any other single use, because it is by far the most important.

Money may be defined as the common medium of trade, or of commercial exchanges. Or it may be called the standard medium of trade.

We have purposely and scrupulously excluded from this definition all other ideas, which, by various authorities, have been put into the definition of money, particularly such as its being a measure of value, which, at first sight, would be received by almost all persons as a correct and necessary part of the definition.

A man on 'change buys stock of one person, at 95 per cent., and turning on his heel, sells it to another at 954. Which is the measure of value, since both can not be? The buyer who buys to sell, for the sake of profit, always buys at one price, and sells at another and higher if he can. In all exchanges, prices are continually fluctuating. Which is the measure of value? These examples are perhaps enough to show, that the definition of money as being the measure of value, or when this is made a part of the definition, leads to an absurdity.

We think M. Say has clearly proved that money is not the measure of value, by the simple suggestion, that measure supposes an invariable rule, as for example, in measures of capacity, of superficies, of length, and of weight. Invariability is so important, that the law makes it a fraud and criminal offence to use false

measures in trade. But prices are constantly fluctuating. Money expresses prices, and effectuates exchanges; but it does not measure prices. Its functions cease, when it has expressed them, and effectuated the trade. It can go no farther. The measure of value is the agreement of parties as to price, in any particular transaction; and for public purposes of the market, the prices current are the nearest measures that can be found. If persons would learn to distinguish between the expression and the measure of values, they would find themselves at the end of this question. The agreement of parties determines, and money expresses values. The agreement is the measure of value, as between them, and it is expressed in the established denominations of money. So in all cases of actual exchanges. So in prices current of the market. The sole functions of money, as such, are to express values, and to effectuate exchanges as a quid pro quo.

We define money, therefore, as the common medium of trade, and find in it two simple, but important functions, one to express values, and the other to consummate commercial exchanges, by being given on one side, and accepted on the other, as the consideration thus agreed upon. It is a medium as the instrument; it is common, because the world has so ordained.



The Distinction between Money as a Subject and as the Instrument of Trade.-Review of the Doctrine of Adam Smith and others on the Relative Position of Money and of the Commodities given for it.-Adam Smith versus Adam Smith.-Price the Attribute of Commodities, not of the Money given for them.-Smith and Others on this Point-Error and Confusion of their Doctrine.-Weight the Measure of Money.-Effect of the Discovery of America on Prices.-Professor Twiss' "View of the Progress of Political Economy, since the 16th Century."-Mr. Twiss meets the Point, and puts all at Stake.Examination of his Position.

HAVING defined money, determined what is the foundation of its value, and ascertained its functions, it is now proposed to mark the distinction between money as a subject and money as the instrument of trade, then to follow out its results. This distinction is one of great importance, not simply because it is a fact, connected with a very important subject, but more especially because the fact itself is entitled to more influence on the question between Free Trade and Protection than any other, perhaps, that could be named. It is, indeed, in our opinion, of itself alone fully adequate to decide that question. Whether this be a reason that has induced the Free-Trade economists to keep this distinction out of view, or whether they have fallen into their great error because they did not discern it, we do not undertake to decide. It is true that it has been recognised, incidentally, by Adam Smith, and by others of his school, as it was impossible, certainly not easy, to avoid it; but, whenever the proper place for its influence turns up, it is carefully kept out of sight, all is silence, except, in one recent and notable instance, Mr. Twiss, who faces the principle, and denies its application, by forcing upon it a misnomer, as we shall presently see.

We proceed to the distinction. The Free-Trade economists, Adam Smith and his school, say, that money is a commodity, and that it occupies the same position in trade as other commodities. We grant, that it is a commodity, and that as a subject of trade, it occupies, as they say, the same position as other commodities. But we deny, that it discharges the functions of money, and hold that it is merely passive, when it is the subject of trade. Gold and silver, in passing from the mines to market, bullion in the

market, and all manufactured articles which are composed in whole or in part of the precious metals, are subjects of trade. The same may be said of coin, bank-notes, and negotiable paper of every kind, when bought and sold. Bankers and money-brokers trade exclusively in money, and money in their hands, and in whatever form, coming or going, is always a subject of trade. The precious metals, in bullion or in coin, passing through the hands of brokers, from one country to another, are subjects of trade, while in the hands of those dealers, though they may be at the same time discharging the functions of money between debtor and creditor, who employ bankers and brokers as agents of remittance. All notes discounted at bank, are subjects of trade, in the transaction, both to the lender and to the borrower. Bills of exchange, bonds and mortgages transferred, and many other descriptions of credit, for which a consideration is paid, are subjects of trade. All who borrow credit for a consideration, buy it. It is a subject of trade in the transaction. Gold and silver, in all other forms than that of money, are subjects of trade. So far as these and many other forms and conditions of money and of credit go, and so far as the precious metals are devoted to other objects than money, as subjects of trade, we agree with the Free-Trade economists, that they occupy the same position as other and all other commodities exchanged in trade.

But, it must be observed, that money, in its own proper functions, as such, has had nothing to do with all this, except so far as the considerations rendered in these transactions are concerned, as for example, the discount and interest of a note. They are merely the preparatory stages, through which money passes, the platform on which it is tossed about, in a merely passive state, as a subject of trade, till it reaches the great field of the commercial world, where it is destined and designed actively to discharge the appropriate functions of money. This is a field, before which the Free-Trade economists have held up a screen. Let us go behind it, and see how money operates there, in distinction from the manner in which it is operated upon as a subject of trade, before it gets there.

A consideration of the difference of destination of money, and of the things for which it is exchanged, as the medium of trade in this field, will cast light on this point. The destination of money here, is for an endless round of duty, in the discharge of the same functions; whereas the destination of the subjects of its agency in trade,

[ocr errors]
[ocr errors]
« AnteriorContinuar »