if, instead of the Arabian method of notation, which requires few characters, he should make use of the Roman, which requires a great many. Nay, the greater quantity of money, like the Roman characters, is rather inconvenient, and requires greater trouble to keep and transport it. But, notwithstanding this conclusion, which must be allowed just, it is certain that since the discovery of the mines of America industry has increased in all the countries of Europe, except in the possessors of those mines, and this may justly be ascribed, among other things, to the increase of gold and silver. ... This is not easily accounted for if we consider only the influence which a greater abundance of coin has in the kingdom itself, by heightening the price of commodities, and obliging every one to pay a greater number of these little yellow or white pieces for every thing he has to purchase. And as to foreign trade it appears that a plenty of money is rather disadvantageous by raising the price of every kind of labor."1

Hume followed Law where the latter was wrong, and rejected him wherever he was right. The value of money, he tells us, is fictitious; its greater or less quantity, therefore, is of no consequence; nothing is to be gained by increasing the dimensions of a fiction; it is not valuable to a country in its commerce, for it is not the subject of commerce, only the oil which lubricates its wheels. Is not that a subject of commerce, the possession of which is the great object of commerce, and in which all the profits or balances arising in commerce are payable? According to Hume, its quantity becomes of importance only in negotiations and wars with other countries. But if it were a fiction in England when he wrote, why was it not a fiction in France, with which England was at war? Is it a law of human nature that that which is a pure fiction in one country should be solid reality in another? Is not that valuable which every people seek to obtain by exchanging therefor whatever they possess; and which will always, at its cost, command all other kinds of property?

In all respects, except in wars and negotiations, the abundance of money, says Hume, may be, and often is, a disadvantage, as prices are raised thereby in ratio to its abundance. In this way, poor countries having no money are enabled to undersell the rich having a great deal of money, and drive them out of their accustomed markets. The exact reverse of all this is the truth. Prices are either low in ratio to the abundance of money, or, what is the same thing, the amount which a people

1 Essay on Money, pp. 313, 314.

are able to consume is in ratio to such abundance.

Cocoanuts are very cheap in the interior of Africa, and dates in the interior of Arabia; but the people of those countries may consume nothing but cocoa-nuts and dates. They have no means of purchasing other articles, because they have no means of transporting that which they possess to markets where it would have a high value. Had they plenty of money, merchants could afford to supply them at very low rates from the certainty of being paid. With such people, therefore, the price of all imported articles would be in inverse ratio to the amount of their money. So with a symbolic currency, with paper money. This is the representative of capital. If one be abundant the other must be; and, if abundant, prices must be low, for prices are high or low in ratio to the abundance or want of the articles to which they relate. Whatever the form of money or currency, therefore, the greater the abundance, the lower are prices. If merchandise that is made the basis of production be low, the price of the product must be low. Cheapness of production is always in ratio to the abundance of means applicable thereto. Rich nations can, and always do, undersell the poorer, by force of natural laws. Does Spain undersell England, or Mexico the United States, in the markets of the world? Paper credits — that is currencies issued by Banks are one of the most important conditions of low prices, as they serve as the cheapest possible means of distribution.

There is some compensation, says Hume, for the inconvenience of too great an abundance of coin, that it can be used in foreign wars, but Bank paper can never be used out of the country in which it is issued. No reason, therefore, can be urged to palliate its issue. But does not the cost of articles used in foreign wars, other than coin, exceed tenfold that of the coin required? If they can be had by means of paper money, equally with coin, does not the former possess for the government the same value as coin? Hume would have all Banks like the Bank of Amsterdam, or an improvement upon that Bank. His Banks should collect every thing into their vaults, and let nothing out! But how, in such case, are exchanges to be effected? There must be either coin or symbols, or all commerce must speedily come to a dead stand. In such event, a people, in the course of a few months, would be reduced to the very brink of ruin.

With Hume, gold and silver derive their importance to a nation solely from their use in its wars and negotiations. Considered by itself, their abundance is of no consequence whatever. Suppose all people constituted one nation, would not gold and silver be held in the same esteem and possess the same value that they do with the vast number of nationalities and races which exist? Would they not appeal in the same way to the sense of beauty in man? Would they not have the same value in the arts? Would they not still be the most valuable of all kinds of property? and by virtue of such value serve as reserves in which all accumulations are to be held, whether in possession, or in loans at interest? When the first lump of gold was exchanged for some other article of property, did the person who received it consider that the profit of the exchange would depend upon the value of his gold in countries other than his own? Hume might just as well have affirmed that the only importance and value of iron was in dealing with other nations; that to a nation considered by itself it was of no consequence whatever.

Hume asserts the value of money to be imaginary, and at the same time that a great abundance of it is injurious by raising the price of commodities. But what constitutes the value of any article? The amount of demand that exists for it. There can be no other test or measure. We can form no idea of the value of any article but by comparing it with that of some other. If it have no exchangeable value, it has no value. It may have uses, without having values. The water that a person drinks from a river is useful in sustaining his life, but it has no value in the proper sense of the term. An imaginary value, therefore, is no value; so that the very foundation upon which Hume erected his argument has no existence whatever. Only that which possesses value can affect the value of other things. If money had no value, its greater or less abundance could exert no influence whatever on the value or price of other articles. A little thought and reflection would have shown all this, but this way was not Hume's way. Reflection and analysis are laborious and painful processes, to which he was by no means inclined. To truth he was wholly indifferent. His object was effect, provided that could be produced by very little labor and pains.

"Were all our money, for instance, recoined," says Hume, "and a penny's worth of silver taken from every shilling, the new shilling would probably purchase every thing that could have been bought with the old; the prices of every thing would be insensibly diminished; foreign trade enlivened; and domestic industry, by the circulation of a greater number of pounds and shillings, would receive some increase and encouragement. In executing such a project, it would be better to make the new shilling pass for twenty-four half-pence, in order to preserve the illusion, and to make it be taken for the same. And as the recoinage of our silver begins to be requisite by the continual wearing of our shillings and sixpences, it may be doubtful whether we ought to imitate the example in King William's reign, when the clipped money was raised to the old standard."1

Never did a person draw a more graphic picture of himself than did Hume in the preceding paragraph. He would debase money, and at the same time maintain its value. He would maintain its value, and at the same time derive an advantage from its debasement in diminishing prices. In the same sentence, the value of money was to be both maintained and reduced. From diminished prices at home, foreign trade was to be enlivened, and domestic trade receive some increase and encouragement from the greater number of pounds and shillings in circulation. But how could more pounds and shillings be in circulation, if the debased coins would purchase as much as those of full weight and value? In executing the project it would be better, he says, to make the "new shilling pass for twenty-four half-pence, in order to preserve the illusion and make it be taken for the same;" and he suggests that at the next coinage his project should be carried out, naïvely remarking, that it was doubtful whether King William's example in restoring the coinage should be followed. With Hume, from the perversity or credulity of human nature, a falsehood plausibly told, and well stuck to, would have all the potency of truth. Of this, his own works afford a memorable illustration. He contrived by artful fabrications to falsify the whole course of English history, and to make the world believe, almost for a century, that slavery, not freedom, was the birthright of Englishmen. Any one, by taking the pains, might easily have shown that his history must have been wholly untrustworthy, from the careless and flippant manner in which he wrote upon other subjects.

1 Essay on Money, p. 316.

"The necessary effect is," he continues, "that, provided the money increase not in a nation, every thing must become much cheaper in times of industry and refinement, than in rude and uncultivated ages. It is the proportion between the circulating money and the commodities in the market which determines the prices. . . . But after money enters into all contracts and sales, and is everywhere the measure of exchange, the same national cash has a much greater task to perform all commodities are in the market; the sphere of circulation is enlarged; it is the same case as if that individual sum were to serve a larger nation; and, therefore, the proportion being here lessened on the side of the money, every thing must become cheaper and the prices gradually fall. "i

The degree of wealth of a people depends upon their means of distribution. The one must always be in ratio to the other. Their money must increase as their industries increase, by a law as inexorable as that of gravity. Hume's assumption, therefore, that wealth and industry may increase, the amount of money remaining unchanged, is to assume a half to equal the whole. His plan for benefiting the public by reducing prices, by reducing the amount of money, is equivalent to taking off one-half of the cars from a railroad, where the whole had only sufficed for its operations. Such a process would reduce greatly the price or value of merchandise to the producer. It would, at the same time, add very largely to the price paid by the consumer. Both would be equally injured by the restricted capacity of the instrument of distribution. The former would receive much less; the latter would pay much more. So with money. So with money. With its decrease, production would decrease in far greater ratio. With such decrease, cost of production would increase. These are not assertions, but laws. By Hume's reasoning, money has only to be abolished altogether to have prices reach their minimum, or rather for merchandise to have no value at all.

"I scarcely know any method," he continues, "of sinking money below its level, but those institutions of Banks, Funds, and Paper Credit, which are so much practised in this kingdom. These render paper equivalent to money, circulate it throughout the whole State, make it supply the place of gold and silver, raise proportionably the price of labor and commodities, and by that means either banish a great part of those precious metals, or prevent their further increase. What can be more short-sighted than our reasonings on this head? We fancy, because an individual would be much richer were

1 Essay on Money, p. 320.