is either for consumption, or for a fixture in the disposition of permanent capital, so called, but yet often perishable. Money is employed as the instrument to carry them on to their respective destinations, where they must soon arrive, perhaps by the first transaction; but whether by one or more, money is the agent, and they are the passive subjects. But the functions of money in this field, never cease; it will never have done its work; its destination is perpetual employment in the same offices; and while the things on which it operates, are constantly passing away by consumption, or arriving at their final destination as fixtures, by the agency of money, money itself is constantly returning to its duty. in moving on other commodities, in endless succession, to their destinations. Money, in this field, is the moving power, without which nothing else would move, so far as trade is concerned, except in the way of barter, which, properly does not belong to civilization. And yet Adam Smith, Say, Ricardo, M'Culloch, and others of that ilk, tell us, that money and a piece of calico are, commercially considered, the same thing, and occupy the same position, in a commercial transaction, when one is exchanged for the other; and they tell us, that it is no matter, whether a nation parts with one or the other, so that trade goes on. Unfortunately for a nation, and fortunately for the truth, the absurdity comes to light, when the money is all gone and trade will no longer go.

We submit, then, whether the distinction between money as a subject and as the instrument of trade, is not clearly made out, as definite, substantial, and necessarily influential as to the matters in question.

When and wherever there is a want of money, trade comes to a halt. The interest of every party, therefore, a man or a nation, concerned in trade, is to take care not to be out of money, for it is his "tools of trade." And how does such a party get out of money, if it had any? It can only be by buying more than is sold of other commodities, which are prized and moved by money, and by being obliged to settle balances with cash. When the trade of a party comes to this, and the store of cash is exhausted, trade must stop, barter only excepted, which is the same as stopping, because it is a mode of trade which can not be revived, and which, if it could, can not now be employed to any profitable

extent.

It is by entirely overlooking this distinction, that the advocates of Free Trade commit their fatal error. They hold that money is

a commodity, and that it is exchanged in trade as such; and that consequently, the more of trade, the better, whether money goes or comes; or whether all goes, and none comes.

But, as above shown, it is not true, when gold and silver are parted with, in discharge of the functions of money, that they occupy the same position, as the commodities for which they are given; much less do they discharge the same functions. Strictly speaking, the commodities thus operated upon by money, discharge no functions at all, in the transaction that is going on, but are merely passive. Neither the world, or any part of it, has ever consented to take these other, or any other commodities, as a currency, as money, as a legal tender. The consequence is, that, when a foolish and unwise nation has parted with all its cash, on the theory of Free Trade, though it be ever so rich in other commodities, it can trade no more; or if it has only parted with enough to cripple its commercial position, it is a bad business. It is, therefore, hazardous for a nation to part with its money, in foreign trade, on the principle, that it can be bought back again with other commodities, as certainly and as easily as money itself can buy that which is in market. In the meantime, when there has been an inconvenient drain of money to foreign parts, how is the nation to carry on its home trade? Doubtless, by waiting long enough, and with great sacrifices, the money will come back, by reversing the mode of business, in selling more of other commodities than is bought; which again demonstrates the fallacy of the doctrine, the practical operation of which brought the nation into this trouble.

The following is one form of Adam Smith's argument on this point: "A country that has wherewithal to buy wine, will always get the wine which it has occasion for; and a country which has wherewithal to buy gold and silver, will never be in want of these metals. They are to be bought for a certain price, like all other commodities; and as they are the price of all other commodities, so are all other commodities the price of these metals. We trust with perfect security that the freedom of trade, without any attention of government, will always supply us with the wine which we want; and we may trust with equal security, that it will always supply us with all the gold and silver which we can afford to purchase or to employ, either in circulating our commodities, or in other uses."

It can not but be seen, that the great error of Adam Smith and his school, on this point, is, that they not only call money a com

modity in trade, which is true when it is bought and sold, and is not employed as money; but that they fail to consider its peculiar and appropriate functions in trade, when discharging the offices of money. They do not, so far as this point of their argument is concerned, allow it to have any functions at all; but represent it as passive, like the commodity for which it is exchanged, in any particular transaction. But gold and silver, when employed as money, are taken out of their position as commodities in trade, and used as an agent or instrument to carry on trade. They are technically, "tools of trade." In this capacity or function, they are the motive power of the commercial world. They do not, as before shown, in the discharge of this office, occupy the same position as the commodities which they move, in the act of being exchanged for them. The commodities are passive, in relation to this act; and money is the agent. When money has moved one, it moves another, and so on, without any definite limit; and the same act may be performed an indefinite number of times every day, by precisely the same sum of money, in application to as many different commodities.

Adam Smith himself was aware of all this, as he could not but be, and as the following citations from him will show: "The great wheel of circulation is altogether different from the goods which are circulated by means of it."-"Money, the great wheel of circulation, the great instrument of commerce, like all other instruments of trade, though it makes a part, and a very valuable part of the capital, makes no part of the revenue of the society to which it belongs; and though the metal pieces of which it is composed, in the course of their annual circulation, distribute to every man the revenue which properly belongs to him, they make themselves no part of that revenue;" that is, no part of the commodities purchased by them, to be consumed or used.—"When we compute the quantity of industry which the circulating capital of any society can employ, we must always have regard to those parts of it only, which consist in materials, provisions, and finished work. The other, which consists in money, and which serves only to circulate these three, must always be deducted. In order to put industry into motion, three things are requisite: materials to work upon, tools to work with, and the wages or recompense for the sake of which the work is done. Money is neither a material to work upon, nor a tool to work with; and though the wages of the workmen are commonly paid to him in money, his real revenue, like that of all

other men, consists, not in the money, but in the money's worth; not in the metal pieces, but in what he can get for them," to wit, the commodities wanted.

It will be observed, that Adam Smith, here, not only ascribes a peculiar function to money, but places it in a peculiar position, as is right. He does not rank it among the things, or commodities, exchanged, but endows it with the faculty of making those exchanges, as "the instrument, as the great wheel of circulation;" and although he says truly, that it is a part, and a very important part, of the capital of society; nevertheless, the function he ascribes to it is so peculiar, that it is not to be computed with, but "to be always deducted" from, those parts of "the circulating capital of society," which put and keep industry in motion, because "money serves only to circulate" those other parts. This is its function. Surely, then, Adam Smith himself has put it quite far asunder, in its position and functions, from the things which it "circulates," or acts upon quite far enough for our present purpose.

Let us, then, return, and try Adam Smith by Adam Smith. He says: "A country which has wherewithal to buy wine, will always get the wine which it has occasion for." Very good. He adds: "And the country which has wherewithal to buy gold and silver, will never be in want of these metals." No one can fail to see, that he has here begged the question, as a step-stone to his conclusion; in other words, has asserted an identical proposition-a mere truism. The "wherewithal" is the thing required, and having, by hypothesis, put the country in possession of that, to start with, of course it ought to do well enough. If the country has money, or anything else which the wine-makers want, or which a third party will take for the wine, it can get it; but if the wine can only be had with money, then money is the only "wherewithal" to buy it. Parties in trade are not to be forced. Commercial transactions have always to do with two wills and two interests, at least. Money is the only thing that will buy everything else. A man may have plenty of substantial capital, and yet not find it easy to buy money with it, if he has been so unwise as to get out of money. He is in absolute peril of bankruptcy, if his position requires money; at best, he is embarrassed.

But this is not the end. He says: "They," gold and silver, "are to be bought for a certain price, like all other commodities." This seems very plausible, and in one sense, is true. But it will be observed, that he does not use the term money here, but gold

and silver; and that, instead of investing them with the peculiar attributes he has ascribed to money, in the passages above cited, he puts them in the same class and position with all other commodities, not as agents, but as subjects of trade; not to buy and sell with, but as things to be bought and sold; and it is true, that gold and silver, when not used as money, occupy that position. Rich men and rich nations, in a prudent way of living, can easily buy gold and silver, as subjects of trade, and are accustomed to do it; but those men and those nations, who, by mismanagement, have got embarrassed, though they may have other capital in abundance, can not do it so easily. Here is the distressing point of Adam Smith's hypothesis. If his reasoning avails anything in the case, it is intended to represent, that a man or a nation that has traded so freely as to get out of money, is just as well off as the man or the nation that has taken care to keep enough money in bank to do business with! Is it not so?

But he is involved in a still greater absurdity. He adds: "And as they," gold and silver, "are the price of all other commodities, so all other commodities are the price of these metals." Let us put this proposition in another form, and see how it will look : "And as they," gold and silver, "will purchase all other commodities, so will all other commodities purchase gold and silver." No one will deny, that this is a fair statement of the case; for it is the very case; nor will any deny, that it is untrue; absolutely untrue, as a reliable condition, in the experience of life. It is because money is the only common currency of the world. What, then, is a nation to do, that has traded so freely as to get rid of all its money? Why, simply, take a new start, trade more prudently in future, and under great inconveniences and with immense sacrifices, get up again, as every man is obliged to do, who, by trading in the same loose way, has got into the same trouble.

This is only one of a multitude of instances, in which Adam Smith and his school reason precisely in the same way, whenever they approach the doctrine of Free Trade. Adam Smith could not but be right, as seen above, when he was talking about the position and functions of money, in negotiating exchanges; and he could not but be wrong, when he turned his back on that reasoning, and undertook to show, that it was just as well for a nation, or a man of business, to be without money, as to have it at command. But let Adam Smith answer Adam Smith yet farther on this point: "The merchant generally finds it more easy to buy goods with