Because, as I have shown above, plenty of money will for several reasons make land rise in value exceedingly. And I appeal to those immediately concerned for the proprietor in the sale of his lands, whether land has not risen very much since the first emission of what paper currency we now have, and even by its means. Now we all know the proprietary has great quantities to sell.

And since a plentiful currency will be so great a cause of advancing this province in trade and riches, and increasing the number of its people; which, though it will not sensibly lessen the inhabitants of Great Britain, will occasion a much greater vent and demand for their commodities here; and allowing that the crown is the more powerful for its subjects increasing in wealth and number, I cannot think it the interest of England to oppose us in making as great a sum of paper money here, as we, who are the best judges of our own necessities, find convenient. And if I were not sensible that the gentlemen of trade in England, to whom we have already parted with our silver and gold, are misinformed of our circumstances, and therefore endeavour to have our currency stinted to what it now is, I should think the government at home had some reasons for discouraging and impoverishing this province, which we are not acquainted with.

It remains now that we inquire, whether a large addition to our paper currency will not make it sink in value very much. And here it will be requisite that we first form just notions of the nature and value of money in general.

As Providence has so ordered it, that not only different countries, but even different parts of the same country, have their peculiar most suitable productions; and likewise that different men have geniuses adapted to a variety of different arts and manufactures; therefore

commerce, or the exchange of one commodity or manufacture for another, is highly convenient and beneficial to mankind. As for instance, A may be skilful in the 'art of making cloth, and B understand the raising of corn. A wants corn, and B cloth; upon which they make an exchange with each other for as much as each has occasion for, to the mutual advantage and satisfaction of both.

But as it would be very tedious, if there were no other way of general dealing, but by an immediate exchange of commodities; because a man that had corn to dispose of, and wanted cloth for it, might perhaps, in his search for a chapman to deal with, meet with twenty people that had cloth to dispose of, but wanted no corn; and with twenty others that wanted his corn, but had no cloth to suit him with; to remedy such inconveniences, and facilitate exchange, men have invented MONEY, properly called a medium of exchange, because through or by its means labor is exchanged for labor, or one commodity for another. And whatever particular thing men have agreed to make this medium of, whether gold, silver, copper, or tobacco, it is, to those who possess it (if they want any thing), that very thing which they want, because it will immediately procure it for them. It is cloth to him that wants cloth, and corn to those that want corn; and so of all other necessaries, it is whatsoever it will procure. Thus he who had corn to dispose of, and wanted to purchase cloth with it, might sell his corn, for its value in this general medium, to one who wanted corn but had no cloth; and with this medium he might purchase cloth of him that wanted no corn, but perhaps some other thing, as iron it may be, which this medium will immediately procure, and so he may be said to have exchanged his cloth for iron; and thus the general

change is soon performed, to the satisfaction of all parties, with abundance of facility.

For many ages, those parts of the world which are engaged in commerce, have fixed upon gold and silver as the chief and most proper materials for this medium ; they being in themselves valuable metals for their fineness, beauty, and scarcity. By these, particularly by silver, it has been usual to value all things else. But as silver itself is of no certain permanent value, being worth more or less according to its scarcity or plenty, therefore it seems requisite to fix upon something else, more proper to be made a measure of values, and this I take to be labor.*

By labor may the value of silver be measured as well as other things. As, suppose one man employed to raise corn, while another is digging and refining silver; at the year's end, or at any other period of time, the complete produce of corn, and that of silver, are the natural price of each other; and if one be twenty bushels, and the other twenty ounces, then an ounce of that silver is worth the labor of raising a bushel of that Now if by the discovery of some nearer, more easy or plentiful mines, a man may get forty ounces of silver as easily as formerly he did twenty, and the same labor is still required to raise twenty bushels of corn, then two ounces of silver will be worth no more than the same labor of raising one bushel of corn, and that bushel of corn will be as cheap at two ounces, as it was before at one, cæteris paribus.

corn.

Thus the riches of a country are to be valued by the quantity of labor its inhabitants are able to purchase, and not by the quantity of silver and gold they possess; which will purchase more or less labor, and therefore is

* Franklin states this doctrine in 1729, precisely as Adam Smith does forty-six years afterwards in The Wealth of Nations. W. PHILLIPS.

more or less valuable, as is said before, according to its scarcity or plenty. As those metals have grown much more plentiful in Europe since the discovery of America,* so they have sunk in value exceedingly; for, to instance in England, formerly one penny of silver was worth a day's labor, but now it is hardly worth the sixth part of a day's labor; because not less than sixpence will purchase the labor of a man for a day in any part of that kingdom; which is wholly to be attributed to the much greater plenty of money now in England than formerly. And yet perhaps England is in effect no richer now than at that time; because as much labor might be purchased, or work got done of almost any kind, for one hundred pounds then, as will now require or is now worth six hundred pounds.

In the next place let us consider the nature of banks emitting bills of credit, as they are at this time used in Hamburgh, Amsterdam, London, and Venice.

Those places being seats of vast trade, and the payment of great sums being for that reason frequent, bills of credit are found very convenient in business; because a great sum is more easily counted in them, lighter in carriage, concealed in less room, and therefore safer in travelling or laying up, and on many other accounts they are very much valued. The banks are the general cashiers of all gentlemen, merchants, and great traders in and about those cities; there they deposit their money, and may take out bills to the value, for which they can be certain to have money again at

* This passage shows, that the theory, as to the effect of the South American mines upon the rate of money prices and the reduction of the value of the precious metals, so elaborately set forth and reasoned out by Adam Smith, was quite a familiar notion when he was but six years old; the correctness of which, however, to the extent laid down by Franklin in this place, and afterwards by Smith, has of late years been gravely questioned by very respectable writers. W. PHILLIPS.

the bank at any time. This gives the bills a credit; so that in England they are never less valuable than money, and in Venice and Amsterdam they are generally worth more. And the bankers, always reserving money in hand to answer more than the common run of demands (and some people constantly putting in while others are taking out), are able besides to lend large sums, on good security, to the government or others, for a reasonable interest, by which they are paid for their care and trouble; and the money, which otherwise would have lain dead in their hands, is made to circulate again thereby among the people. And thus the running cash of the nation is, as it were, doubled; for all great payments being made in bills, money in lower trade becomes much more plentiful. And this is an exceeding great advantage to a trading country, that is not overstocked with gold and silver.*

As those, who take bills out of the banks in Europe, put in money for security; so here, and in some of the neighbouring provinces, we engage our land. Which of these methods will most effectually secure the bills from actually sinking in value, comes next to be considered.

Trade in general being nothing else but the exchange of labor for labor, the value of all things is, as I have said before, most justly measured by labor. Now sup

* This is a clear and just view of the effects and utility of banks of deposit. But the application, which Franklin is about to make of it to land banks, will not be acquiesced in at this day. Every body knows, that certainty as to time of payment of bills, that pass as a circulating medium, is no less important than the certainty that they will be eventually paid. The convertibility of the fund pledged for the redemption of the bills is as material a circumstance as its sufficiency and permanency of value. Land, and immovable property generally, is less convertible than movable property, for it cannot be removed from its place to seek a market; this renders this kind of property peculiarly unfit to constitute a fund or pledge for the redemption of bills, that circulate as money. W PHILLIPS.