one remote point to another, as between New York and New Orleans, or between Europe and America, till the rates of exchange are so high at one point as to pay the agencies of remittance, including insurance, to the other. Until the rates of exchange will defray this expense, accounts between debtors and creditors in such remote points, are adjusted by bills of exchange. Whether this adjustment or settlement is effected by bills or by the transfer of bullion or specie, the transaction between the debtor and creditor is precisely of the same nature, as when a citizen of New York, with basket in hand, pays cash for the materials of his dinner which he buys in the market. The cash, in both cases, equally and alike discharges the functions of money. If the keeper of an hotel employs a caterer to go to market, instead of going himself, the wages of this agent occupy precisely the same position as the premiums on exchange, or as the pay for the transfer of specie, between New York and New Orleans, or between New York and London. None will deny, that the cash used in the former case, discharges the functions of money; but it is not without expense, whether the keeper of the hotel goes himself to market, or employs an agent. All these intermediate commercial agents are parts of the economy of the commercial world; and the reason why they are employed, is because it is economy. If the debts from New York to New Orleans are so much greater than those from the latter to the former city, as to pay for the transfer of specie, then specie travels instead of bills of exchange; and in this transfer, it discharges the functions of money, notwithstanding that the transaction is productive to the agents. The same is the case in the transfer of specie from one nation to another. Who can find or fairly make a difference? Will Mr. Twiss say, that the twenty or twenty-five millions of dollars, remitted from Europe to the United States, in 1846 and 1847, for breadstuffs, did not perform the functions of money, because it was productive to the agents of the transfer; or that it was no disadvantage to Great Britain to have parted with so much specie, because she received a quid pro quo in return? And will he say this, in the face of one of the most overwhelming instances of the poverty of the precious metals, with which the British empire was ever visited? Yet, according to his doctrine, and that of the Adam Smith school, this twenty-five millions of dollars did not come from Europe to the United States as money; but only as a commodity, in exchange for other commodities. Nay, more: according to this doctrine, both parties were benefited by the

trade. The famine in Ireland, and the general short crops of Europe, were not a calamity to those parts, since they had all the profit of trading away the commodities of gold and silver for the commodities of breadstuffs. Such, legitimately, are the conclusions of the Adam Smith school. But, while we are writing this page, October, 1847, the great commercial houses of Great Britain, one after another, in rapid succession, are tumbling to ruin in heaps, like as a circle of bricks set on end, near enough for contact, when one falls, the whole line goes down in succession; and with this ruin comes universal distress. And yet Mr. Twiss says, Great Britain has parted with no money; she has only parted with a commodity!

We agree with Mr. Twiss, that "it must never be forgotten, that the capital of a country, which is employed as money, is not employed as an instrument of production; but simply as an instrument to facilitate the exchange of other capital." But when he says: "let it not be overlooked, that the gold or silver, which is given in exchange for foreign commodities, is exchanged away as a commodity, and not as money," he is in direct contradiction with the above-cited proposition from his own hand, and evinces, that a professor of Oxford university must not only sympathize with the policy of the British government, but that he is forced to execute its behests, in violation of his reasoning powers, peradventure, of his conscience; unless, forsooth, charity should allow, that a man's social connexions may exercise dominion over his judgment, as is, no doubt, sometimes the case. But Mr. Twiss himself, against himself, as almost every other member of his school has done, in one form or another, has confessed the true doctrine, in the following words: "When gold or silver is employed as an instrument of exchange, it is employed in a different way from that in which it is generally employed as a commodity." Is not this surprising?

We have endeavored to show, in another chapter, that, from the time of Adam Smith, including him, there has been an understanding between the British government and British writers on public economy, as to the doctrine of freedom of commerce, which is not very consistent with freedom of opinion; and it was not to be expected, that a British university would go against British policy. Granting, however, for the sake of argument, that gold and silver, remitted to settle commercial balances against a nation, does not go as money, but only as a commodity; still, it can not be denied,

1

that the money is gone. What, then, would this assumption of Professor Twiss, or our concession of the point, avail him? "A rose, by any other name, would smell as sweet;" and the money of a nation, remitted to foreign parts, to pay debts, would still be a calamity, if enough should not be left for the trade of the country; and we do not understand these gentlemen as making any provision for such a contingency, or for any contingency whatever. Their doctrine is absolute.

There is an habitual mode of reasoning with Adam Smith, Ricardo, and others of their faith, in ascribing to gold and silver, when discharging the appropriate functions of money, the attribute of price, which, we conceive, leads to obscurity, even to error.

The world has agreed upon gold and silver, not only as the common medium of trade, but as the common instrument to express the values of all other things that are worth money, and to purchase them; but it has not agreed on anything to express the value of gold and silver, when discharging the functions of money; and there is no such thing. How, then, can gold and silver, in this office, be valued? How can they be worth more or less, than themselves, weighed in the scales? We know, indeed, that gold and silver vessels, or any works of art composed of these substances, are prized by gold and silver coin. And why? Because there are two principles in their value: one their weight, and the other their workmanship. Leave out their workmanship, and gold is gold, and silver is silver, of equal value, if equally pure, according to their weight, whether in coin, or bullion, or works of art. It would be absurd to suppose, that gold and silver, the instruments of expressing values, should express their own value, each for each. There they are, no matter how much in the world; no matter how little; the world has agreed that they shall express all other exchangeable values; but never, that anything else shall express their value. How, then, can they be cheap or dear, cheaper or dearer, while acting in the capacity of money?

Mr. Huskisson, one of the greatest of British statesmen, said, in 1816, "Gold, in this country, as silver in Hamburg, is really and exclusively the fixed measure of the rising and falling value of all other things, in reference to each other. The article itself, which forms this standing measure, never can rise and fall in value, with reference to this measure; that is, with reference to itself. A pound weight of gold can never be worth 14 pounds of gold. The

truth of this, which can not, I conceive, be called in question, would not be affected by any imaginable increase or diminution in the quantity of gold in the country. . . Gold [in England] is the fixed measure of the rising and falling value of all other commodities, in reference to each other." Again he says: “A banknote is not a commodity; it is only an engagement for the payment of a certain specific quantity of money." Lord King said: “It may be assumed, on probable grounds, that the bullion has not become dear, but that the paper for which it is exchanged has been rendered cheap, because every commodity is cheap or dear, in proportion to the abundance or scarcity of the supply.”—“We are in error," said Sir Robert Peel, 1847, "when we talk about the price of gold. The promissory note is a promise to pay a definite weight of gold, and nothing else." Even M. Say comes to our aid here as follows: "In treating of the elevation and depression of the price of commodities, although value has been expressed in money, no notice has been taken of the value of money itself; which, to say the truth, plays no part in real, or even in relative, variations of the price of other commodities." He also says: "The price of an article is the quantity of money it may be worth; current price, the quantity it may be sure of obtaining at the particular place.”

"What is worth in anything,

But so much money as t'will bring ?"-HUDIBRAS.

The British mind seems never to have disembarrassed itself from the effects of the controversy on this point, during the legalized suspension of cash payments in the bank of England, from 1797 to 1822, when it was so vital to the empire to support the credit of the paper of that bank. Will it be believed, that the British house of commons, in 1812, on motion of Mr. Vansittart, resolved, by a large majority, that "bank-notes were not depreciated, but gold enhanced in value?"-" Mr. Chambers," says Professor Twiss, "one of the witnesses examined before the bullion committee, whose reputation for intelligence and information stood very high in the commercial world, declared, that he did not conceive gold to be a fairer standard for bank of England notes, than indigo or broadcloth." It is true, that the bullion committee, of which Mr. Huskisson, cited above, was one, came to a different and the true conclusion. But the majority of the house, either believed in their doctrine, or thought it an expedient measure

of state policy to keep up this popular delusion, till the contest with Napoleon should be over. The notes of the bank were then at a discount of £13 9s. 6d. per £100, for gold. It was then sixteen years after the bank suspended, and no one could see the end of it. The empire, with this dubious and expensive war upon its hands, was compelled to subsist, so far as its currency was concerned a vital matter-on the credit of this irredeemable paper. It was, perhaps, a patriotic virtue in the house of commons to decree and announce a stupendous untruth. It was an atrocious fraud in legislation, to make the bank-notes a legal tender; the cheat was immense, and extended to a quarter of a century.

No one, of course, will imagine, that we mean to call in question the propriety of speaking of money as dear or cheap, as of high or low price, as a subject of trade. It is only when employed as the instrument of trade, that we maintain it can have no price in relation to the commodities for which it is exchanged. In this transaction, price can not belong to both the agent and the subject; but only to the latter. It is the very function of the agent to prize the subject.

M. Say is, in our opinion, right in his advice, that money should pass by its weight. But he does not seem to have seen, that, in advocating this principle, he has admitted, that money, as the instrument of trade, occupies a position outside of valuation, or which is inconsistent with it. Neither does he seem to have recognised the fact that his advice has been complied with, in all coins, not as coming from him, but before his time, from necessity. All denominations of coin, are rated at the mint, according to their weight; and it is known, to all those who trade in them, precisely what their legal weight is, and what fractions of them are composed of pure metal and alloy. Every coin, therefore, whatever be its denomination, always passes, in a common currency, for a specific weight of pure metal, though not named to the parties on the face of the coin, which is the principle that M. Say contends for. But he seems to think that it would have been better, if there had never been any other denomination than those of weight, which have gone into disuetude, except when the precious metals are subjects of trade, as in the practice of bankers and brokers, who use the scales for considerable and often for small amounts. M. Say moreover says: "If a house be valued at 20,000 francs, it is reckoned to be equivalent to so many pieces of silver coin, of the weight of 5 grammes, with a mixture of th alloy." Again: "The de