It may be proper to observe here, that several antiquaries have mentioned that fome barbarous nations made use of baser metals, such as lead, tin, iron, and even leather, shells, and bark of trees, for money. This is no way contrary to the above theory, for fome nations might indeed use lead, iron, and tin, as things of value, upon the fame principles as others used gold, filver, and brass. I think it is faid, and indeed is more than probable, that the nails given by our voyagers to the inhabitants of the South-Sea islands, pasled, from hand to hand, as instruments of com merce. As to leather, shells, &c. I suspect fome part of this is fabulous; but if it did take place, in any meafure, it has been a rude effay, using the sign separately from the standard, and could not be of any great extent or long duration. We know, indeed, of one nation, after society had been far advanced, that made use of iron, even when very plentiful, for money, viz. the Lacedemonians. But this was not at all from rudeness orignorance; it was one of the extraordinary in stitutions of Lycurgus, who intended by it (and did not conceal his intention) to banish riches, or real and proper money, from the state. He indeed banished industry, at the fame time; for none of his citizens were al lowed even to be husbandmen, or to NOTE. 33. chap. 3. "Servius rex primus fignavit æs. Antea rudi ufos Romæ Timæus tradit. Signatum eft nota pecudum; unde et pecunia appellata. Servius first coined brass. Timæus fays, they used it formerly, rough or uncoined at Rome. It was marked with the figure of cattle, whence also it was called pecunia." The fame author tells us, that filver began to be coined, at Rome, in the 485th year of the city, and gold 72 yeas after. cultivate their lands, This was left to the slaves. I do not find, therefore, that there is any thing in hiftory deserving credit, that militates against the theory above laid down. Having thus laid down the theory of money, and supported it by history and experience, I proceed to draw a few inferences from it, and apply them to some opinions, which have taken, place, and some measures, which have been adopted or propofed with respect to currency and commerce, in this country. In the first place, the above theory will enable every intelligent person to fix in his mind, precisely, what is or ought to be the meaning of a circulating medium. This phrase is in every body's mouth, and we meet with it continually in the essays published in the news-papers, and the speeches of fenators in public assemblies. We may say of this, as controverfal divines used to say, long ago, that a mifconception of this is the proton pfeudos, the radical error. Not long fince, a writer in one of the papers, said, it was agreed, on all hands, that there is at present, a scarcity of a circulating medium. To this I answer, that it is not agreed upon on any hand, but among those who are wholly ignorant of the meaning of the expreffion. The circulating medium is not yours nor mine; it is not the riches of Holland, nor the poverty of Sweden. It is that indefinite quantity of the precious metals, that is made use of among the nations, connected in commerce. Whether any particular person, city, or nation, is rich or poor, has more or less, comparatively, ofit, is nothing to the purpose. Every one will receive of the circulating medium, that quantity which he is intitled to, by his property or industry. It has been shewn, that rarity is one of the qualities of a circulating medium. If it were more rare, than it is, a less quantity would be sufficient to represent a stated measure of pro male, without silver buckles in their shoes, and many of them with rings, and other ornaments of gold, which, five hundred years ago, would have denoted a prince or princess? Perhaps, I have insisted longer on this, than was necessary; but I have been induced to it, by the frequent complaints, upon this subject, and the absurd application of the phrase, a circulating medium. More reflexions will occur, connected with this fubject, in the subsequent part of my discourse. In the mean time, I will close by saying to my reader, you and I may be poor men, the state in which we live, may be a poor state, we may want property, rents, resources, and credit, but, a circulating medium, we want not. perty. If it were more plentiful than it is, a greater quantity would be neceffary; but the comparative riches or poverty of nations, or perfons, would be altogether the fame. Is any body ignorant, that half a century ago, in this country, a man might have bought a bushel of wheat for one quarter of a dollar, for which now he must pay a whole dollar? Was not the quarter dollar, then, as good a circulating medium, as the whole dollar is now? And was not the man just as rich, who had it in his pocket? Undoubtedly. Nay, I muft further fay, it was a better circulating medium, because it was of less fize and weight. Has not the quantity of the precious metals in› creased greatly, fince the discovery of the mines of South-America? Is 2. From the principles above laid not the quantity, now necessary, for down, it will appear, that money, any confiderable purchase, so great, having, as one of its essential qualias to be burdensome, in the tranf- ties, an intrinfic, that is to say, a portation? The price of a good commercial value, it must be not onhorfe, in filver, would, at present, ly a sign and standard, or a medium of be a great encumbrance, on a long commerce, but also, itself, a commojourney. How easy were it to point dity, or a subject of commerce. There out places and countries, in which are many transactions respecting mothere is a greater quantity of the cir- ney, in a trading nation, in which culating medium, than any where else, it is confidered singly in this view. and yet, at the fame time, greater na- These it is unnecessary for me to enutional and personal poverty, and, pro- merate; but even where it is applied bably, for this very reason. What directly or principally, as a medium would it fignify, to a labourer, in of alienation, its value, as a standard, the mines of Peru, if he should get doth and must always follow and a half johannes, or even two, for a accommodate itself toits value, as a day's work, if, at the same time, he commodity. Hence it follows, necould hardly purchase with both, as cessarily, that money must be fubmuch provifion as to keep body and ject to every rule, that other comfoul together? Are not these things modities are subject to, in buying true? Are they not known to be and felling. One of the chief of fof What then must we say, of the these is, that it must rife and fall in extreme ignorance and inattention, price, according to the quantity that to say no worfe, of those persons, is brought to market, compared with who are continually telling us, that the demand there is for it. This is there is a want of a circulating me- an unavoidable consequence, and as dium? Are not gold and silver a necessary, in the case of money, as circulating medium, whose currency in that of any commodity whatever. is univerfal? Are these, then, too If a greater quantity of money, than fcarce for that purpose, when there before, is brought into any counis hardly a negro slave, male or fe- try, even though brought by the Vol. II. No. I. G fairest and most honourable means, during the war, that the depreciativiz. increasing industry and profit- on must have been owing to other able trade, it will have the effect of causes, than the quantity, because it If there I have faid above, that the increase of money, even though in confequence of national profperity, that is to say, internal industry and profitable trade, will yet neceffarily, have the effect of raising the price of industry and its fruits. This, however, must evidently be in a far higher degree, and attended with much more pernicious effects, when it is thrown into circulation without industry; as, when filver is found in capacious mines, or paper is issued by the authority of a state, without measure, and without end. I verily believe, that if as many millions of filver dollars had fallen from heaven, and been thrown into circulation, as there were paper ones issued by the united states, the disorder would have been as great, or greater, than it was. At least, it would have been so at first. The difference would have been, that filver, being current over all, it would have foon gone 1 abroad, and found its level, so that the alteration would have been ultimately, not in the united states, but in the general circulating medium, over the whole earth. Those, however, among whom it was first found, and who received it without industry, would have fuffered most by it. A mong them, it would have produced laziness and luxury. Other nations would have drained it from them only by fuperior industry. The state of the Spanish monarchy at present, ought to be, and indeed in a great measure has been, a lesson to the whole world. At the time when they got poffeflion of South America, they were the most powerful and wealthy Rate in Europe. Would any man, at that time, have been reckoned found in his judgment, who should have affirmed that they would grow poor by means of the gold and filver mines? Yet, it has happened so, and now there is hardly any politician so shallow but he can affign the reason of it. They thought that gold and filver would at once procure them every thing without working; but for. got that the more they had of it, they mud pay fo much the more to those who were willing to work for them. 3. The above principles will clearly shew, that what is commonly call ed paper-money, that is, bills, bearing that the perfon holding them, is entitled to receive a certain fum fpecified in them, is not, properly speaking, money at all. It is barely a fign, without being a pledge or ftand ard of value, and therefore is essentially defective as a medium of univerfal commerce. I will afterwards speak of the different kinds of it, and point out their real and proper ules; but in the mean time, I observe, that to arm such bills with the authority of the state, and make them a legal tender în all payments, is an abfurdity so great, that it is not easy to speak with propriety upon it, Perhaps it would give offence, if I should say, it is an absurdity reserved for American legislatures; no fuch thing having ever been attempted in the old countries. It has been found, by the experience of ages, that money must have a standard of value, and if any prince or state debase the metal below the standard, it is utterly impofsible to make it fucceed. How then, can it be possible, to make that fucceed, which has no value at all? In all fuch instances, there may be great injuries done to particular perfons, by wiping off debts; but to give such money general currency, is wholly impossible. The meafure carries absurdity in its very face. Why will you make a law to oblige men to take money, when it is offered them? Are there any who refuse it, when it is good? If it is neceffary to force them, does not this demonftrate, that it is not good? We have seen, indeed, this system produce a most ludicrous inverfion inverfion of of the nature of things. For two or three years, we constantly saw and were informed of creditors running away from their debtors, and debtors pursuing them, in triumph, and paying them without mercy, Let us examine this matter, a little more fully. Money is the medium of commercial transactions. Money is, itself, a commodity. Therefore, every transaction, in which money is concerned, by being given or promised, is, strictly and properly speaking, a bargain, or, as it is called in common language, an agreement. To give, therefore, authority or nominal value, by law, to any money, is interpofing, by law, in commerce, and is, precisely, the same thing with laws regulating the prices of commodities, of which, in their full extent, we had sufficient experience, during the war. Now. thing can be more radically unjust, or more eminently absurd, than laws of that nature. Among all civilians, the transactions of commerce are no ranged under the head of contracts. Without entering into the nicer diftinctions of writers, upon this fubject, it is sufficient for me to say, that commerce, or buying and felling, is founded upon that species of contracts, that is most formal and complete. They are called, in the technical language, onerous contracts, where the proper and just value is suppofed given, or promised on both sides. That is to say, the person who offers any thing to sale, does it, because he has it to spare, and he thinks it would be better for him to have the money, or fome other commodity, than what he parts with; and, he who buys, in like manner, thinks it would be better for him, to receive the commodity, than to retain the money. There may be mistakes, or fraud, in many transactions; but these do not affect the argument in the least. A fair and just value is always supposed, or professed to be given on both fides. Well! is it agreed, that all commerce is founded on a complete contract Let then, any person, who will, open as many books as he pleases, written upon the subject, and tell me, whether he does not always find there, that one of the essential conditions of a lawful contract, and, indeed, the first of them, is, that it be free and mutual. Without this, it may be something else, and have some other binding force, but it is not a contract. To make laws, therefore, regulating the prices of commodities, or giving nominal value to that which had no value before the law was made, is altering the nature of the tranfaction altogether. Perhaps, a comparison of this, with other transactions of a different kind, might let this matter in a clear light. Suppose, a man were to fay to one of our law givers, upon this fubject, as follows: When you make a law, laying on a tax, and telling me, I must pay so much to the public and common expenfes, of the state, I understand this very well. It falls under the head of authority. You may lay on an improper or injudicious tax, that will operate unequally, or not be productive of what you expect; but, still this is within your line; and if I have any complaint, I can only with, that, at the next election, we may get wifer men. Again, a justice of peace, in time of war, may give a press-warrant, and take my horfes and waggons, to transport provisions or baggage, for an army. I understand this, also; writers and reafoners tell me, that it falls under the head of what they call, the rights of neceffity. The meaning of this, is, that no civil constitution can be so perfect, but that some cases will occur, in which the property of individuals must give way to the urgent call of common utility, or general danger. Thus we know, that in cities, in cafe of a fire, sometimes a house, without the consent of its owner, will be destroyed, to prevent the whole from being consumed. But, if you make a law, that I shall be obliged to fell my grain, my cattle, or any commodity, at a certain price, you not only do what is unjust and impolitic, but, with all respect be it said, you speak nonsense; for I do not fell them at all; you take them from me. You are both buyer and feller, and I am the sufferer only. I cannot help observing, that laws of this kind have an inherent weakness in them; they are not only unjust and unwise, but, for the most part, impracticable. They are an attempt, to apply authority to that which is not its proper object, and to extend it beyond its natural bounds; in both which, we shall be fure to fail. The production of commodities must be the effect of industry, inclination, hope, and interest. The first of these is very imperfectly reached by authority; and |