and labor bestowed on those portions of the precious metals which are appropriated to other uses than that of money, as is quite probable he did, judging from his Free-Trade views, he has certainly circumscribed himself to a very narrow field-not narrow in itself, for it is a broad one-but narrow as compared with that which he did not survey, and which is by far the richest and most important, yiz., the sway which gold and silver wield over human affairs, and over the destiny of man, as the instrument or "tools of trade." If he had seen and appreciated this, it is not conceivable, that he could have made so derogatory a remark, "The only benefit," &c.

Like all the Free-Trade economists, Mr. Jacobs says: "Gold and silver"—we cite his own words" are merely commodities;" and like them, we understand him as holding to the doctrine of equivalents in exchanges. And yet he says: "During the whole of this reign, [of Henry VII.,] trade had increased both in imports and exports; and as the latter regularly exceeded the former, a great increase in the deposite of the precious metals, either in the form of coin or of bullion, must have taken place in this kingdom." Here, in the first place, he has granted all we ask, on the question of the balance of trade, in recording an historical fact; but how, as a Free-Trade economist, asserting that money occupies the same position as other commodities in trade, is "merely a commodity," and that in all trade the exchanges are equivalents, he could make the exports exceed the imports, is more than we can see.

It has already been seen, in the current of our argument, that, in consideration of the undeveloped resources of this country, of the enterprise of its population, and of the high value which money has always sustained here, as compared with its value in Europe and other foreign parts, it is scarcely possible for us to have too much of it. It is generally supposed, that eighty millions of cash, or specie, is necessary for our domestic exchanges and common business purposes. This is used many times over, and some portions of it may pass through hundreds of hands, in the course of a year.* It has been estimated that more than four hundred millions of dollars are annually required for the movements of the domestic trade of the country alone. Eighty millions of specie, therefore,

Since writing this chapter, we have been told of a case of fact, well certified, in which a man, with $1,000 capital, traded to the amount of $100,000 in twelve months. Is not money the "tools" of trade? Without this cash, none of this business could have been done. How emphatically does this fact illustrate the importance of cash to a nation, and the misfortune, the incalculable disadvantage, of having too little― of having it drawn away by Free Trade to foreign parts.

as the basis of a currency required by all the business and trade of the country-more especially as a large fraction of this, perhaps nearly a moiety, is itself a part of the currency-may be considered a small enough supply for all demands. Prooably one hundred millions, for present population and business, in an ordinary state of things, would be more convenient. There is no use in having more cash in the country than its business or trade requires, as more would be idle. But that amount is important-is indispensable for the convenience and prosperity of the people. Its chief function is to constitute the basis of the currency, the bulk of which is always paper in a civilized, active, commercial community. But the cash, or specie, must be in the country, in abeyance to demand; else the currency is unsound, being irredeemable.

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Nothing but the protective policy can keep the necessary amount of specie in the country. This is evident from what is elsewhere proved. History is prophecy." The past proves what the future will be. There never was a time of no duties, as under the confederation; or of low duties, as for the few years previous to the tariff of 1824, and previous to that of 1842; when the specie did not leave the country, and the currency break down. The reason is, that low or anti-protective duties always run the country in debt to foreign parts, by buying more than is sold; and no foreign balances against the country can be settled, except by cash, weighed in the scales. Consequently, the specie is required, and must go; and unless the banks suspend, to stop it, it must continue to go, till these balances are settled. One hundred millions of balances of this kind against us, would at any time drain the country of a sufficient amount of specie, to distress and embarrass it; and without an extension of credit, it would probably take all the specie. But the commercial history of the country demonstrates, that a short period of low, anti-protective duties, will run up more than a hundred millions of balances against us. That is the reason, and the sole reason, of all the currency troubles of the country, in times past.*

Such was the distressing effect of the absence of specie from the country, or of the want of "tools" of trade, in consequence of low duties, just before the tariff of 1842 came to the rescue, that in some parts of the interior of Pennsylvania, the people were obliged to divide bank-notes into halves, quarters, eighths, and so on, and agree, from necessity, to use them as money. In Ohio, with all her abundance, it was hard to get money to pay taxes. The sheriff of Muskingum county, as stated by the Guernsey Times, sold at auction one four-horse wagon, at $5.50; 10 hogs, at 64 cents each; 2 horses (said to be worth from $50 to $75 each), at $2 each; two cows, at $1 each; a barrel of sugar, for $1.50; and a "store of goods" at that rate. In Pike county, Missouri, as stated by the Hannibal Journal,

A man of business, in a sound state, as to his own private finances, can not fail, if he should try, so long as he does not buy more than he sells. It is the same with a nation. Having once in its bosom cash enough for its business, or trade, domestic and foreign, it will always have enough, till it begins to buy of foreign parts more than it sells to them, take the foreign trade as a whole. Then the cash must go, to settle balances, whatever be the amount. If they be equal to half of the specie in the country, then half of it must go; if equal to the whole, the whole must go; or the debts must be protested, or be arranged; in any case, if the whole does not go, the debts must remain unpaid.

The foreign debts of the United States are probably at this moment more than three times as much as the amount of specie in the whole country; and they were all created in times of low duties, and by reason of them. But those which were not settled by private bankruptcy and state repudiation, thus returning home from inability or bad faith, have been arranged, and the nation pays, through the debtors, from twelve to fifteen millions annually, in the shape of interest, with the principal hanging over its head. It is so much foreign debt against the country; and if justice be done, the interest must always be paid.*

the sheriff sold 3 horses, at $1.50 each; 1 large ox, at 12 cents; 5 cows, 2 steers, and 1 calf, the lot, at $3.25; 20 sheep, at 13 cents each; 24 hogs, the lot, at 25 cents; 1 eight-day clock, at $2.50; a lot of tobacco, 7 or 8 hogsheads, at $5; 3 stacks of hay, at 25 cents each; and 1 stack of fodder, at 25 cents. This is but an epitome of the general state of the country at that time, arising from this cause, though some parts suffered more than others, as those above named.

• After the bank of the United States was wound up, as a national institution, by the refusal of a new charter, the states were stimulated, by the action of the federal executive, to the creation of a host of banks without a specie basis, and to extravagant expenditures for internal improvements. From 1820 to 1830, during the existence and action of the national bank, only 22 state banks were erected, with an aggregate capital of only $8,000,000; whereas, between 1830 and 1840, 392 banks, or 571, including branches, sprang into existence, with a nominal capital of $213,000,000. (See House Document 111, 2d Sess. 26th Congress.) A large portion of these banks, being unnaturally forced into being, without any solid foundation, failed of course, in the commercial revulsion that followed.

The history of the state debts shows, that from 1820 to 1825, the increase of state bonds was $12,000,000; from 1825 to 1830, the increase was $13,000,000; from 1830 to 1835, when this unnatural stimulant began to operate, the increase suddenly rose to $40,000,000; and from 1835 to 1840, it was $109,000,000, nearly the whole of which was issued in 1835 and 1836, before the destruction of general credit. The imports of 1836, tempted by the same seductive influences, under a system of low and falling duties, were $61,000,000 in excess of the exports; and the home speculations and adventures, prompted by this cause, were on the same scale of extravagance. All these state debts, or nearly all, went abroad to satisfy the commercial balances, which were heaping up against the country.

But the nation has never run in debt to foreign parts, under the existence and action of a protective policy; and it has never paid any foreign debts except by that policy. Such are the facts. It is not intended to say, that no foreign engagements have ever been met, under a system of low, anti-protective duties; but only, that foreign engagements, in the aggregate, have never been liquidated, but always increased, under that system; and that the aggregate has only been lessened, and credit revived only, under the action of a system of protective duties.

Moreover, the currency can never fail, will always be sufficient, and can never be unsound, under an adequate system of protective duties. Nothing more is meant here by the term, adequate, than that the system shall be strong enough to prevent foreign commercial balances accumulating against the country; and it is supposed, that a tariff based on the principles of that of 1842, and as a whole equally protective, will be sufficient. It is also supposed, that the legislation for the regulation of the currency, shall be ordinarily prudent and effective. A bank, here and there, might fail, from mismanagement, or other cause; but such an event, rarely occurring, could no more disturb or impair the general system, than the failure of a merchant, in the city of New York, could shake the commercial fabric of this great emporium. So long as no foreign commercial balances are accumulating against the country, the specie in it would remain as the basis of the circulating medium, and a part of it. And the small balances in favor of the country, annually accruing, as under the tariff of 1842, showing that the country is selling more than it buys, would gradually enlarge and fortify the basis and body of the currency. It could neither fail, nor be insufficient, nor unsound, any more than a private individual could fail, who has once started strong, and never buys more than he sells, but always sells more than he buys. All the money, and more too, would be in the country-would always be here; and therefore the currency would always be sound, and must remain so. All the talk about overtrading, and about the alternate inflations and contractions of the currency, has arisen entirely from, and only applies to, a state of things, which the want of a protective system brings about.

As to inflations and contractions of the currency, they are all produced by changes in the policy of government. Banking is trading in money, and the same principle of self-preservation controls this branch of trade, as all others. It will not commit suicide,

as would be the case, by a voluntary sacrifice of the confidence of the public. Nor will it voluntarily do an injury to that public, on whose prosperity it depends for all its profits of business. It would be absurd to suppose it, because it is a moral impossibility. It is only the irresistible pressure of a superior power, that of government, which leads to such results as sudden and violent contractions and expansions of bank issues.

It is true, indeed, that this view of this subject, presents quite a different aspect to that portion of our history, from 1830 to 1840, when compared with that which was forced upon the public at the time, by men in power, who charged all the fault of those expansions and sudden contractions of the currency to the banks. It was the fault of the government exclusively, consisting in the fitful fluctuations of its policy, and in having adopted a plan of Free Trade. The banks accommodated the people when and as far as they could. That was called an inflation or expansion of the currency; but when the government, by its policy, forced them to diminish their discounts and issues, which crippled business and trade, that was called contraction.

All the currency troubles of the country, all bank suspensions, all bank troubles of a serious nature to the wide community, all insufficiency and unsoundness of the circulating medium, and such like, have occurred ONLY in the absence of a protective policy of the government over the commercial interests of the people. Such is history. It is, therefore, fair to say, that these troubles come in consequence of such defect. If it had been only once, or twice, or three times, the evidence would be less strong. But it has been many times, without a single exception to the rule.