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It may be proper to obferve here, that feveral antiquaries have mentioned that fome barbarous nations made ufe of bafer metals, fuch as lead, tin, iron, and even leather, fhells, and bark of trees, for money. This is no way contrary to the above theory, for fome nations might indeed ule lead, iron, and tin, as things of value, upon the fame principles as others uied gold, filver, and brafs. 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 iflands, paffed, from hand to hand, as inftruments of com merce. As to leather, fhells, &c. I fufpect fome part of this is fabulous; but if it did take place, in any meafure, it has been a rude effay, ufing the fign feparately from the ftandard, and could not be of any great extent or long duration. We know, indeed, of one nation, after fociety 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 or ignorance; it was one of the extraordinary in ftitutions of Lycurgus, who intended by it (and did not conceal his intention) to banish riches, or real and proper money, from the ftate. He indeed banished industry, at the fame time; for none of his citizens were allowed even to be hufbandmen, or to

NOTE.

33. chap. 3. "Servius rex primus fignavit æs. Antea rudi ufos Roma Timous tradit. Signatum eft nota pecudum; unde et pecunia appellata. Servius first coined brafs. Timaeus fays, they ufed it formerly, rough or uncoined at Rome. It was marked with the figure of cattle, whence alfo 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 flaves. I do not find, therefore, that there is any thing in hiftory deferving credit, that militates against the theory above laid down.

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Having thus laid down the theory of money, and fupported it by hiftory and experience, I proceed to draw a few inferences from it, and apply them to fome opinions, which have taken place, and fome measures, which have been adopted or propofed with refpect to currency and commerce, in this country. In the first place, the above theory will enable every intelligent perfon to fix in his mind, precifely, what is or ought to be the meaning of a circulating medium. This phrafe is in every body's mouth, and we meet with it continoally in the effays published in the news-papers, and the fpeeches of fenators in public affemblies. We may fay of this, as controverfal divines ufed to fay, long ago, that a mifconception of this is the proton pfeudos, the radical error. Not long fince, a writer in one of the papers, faid, it was agreed, on all hands, that there is at prefent, a scarcity of a circulating medium. To this I answer, that it is not agreed upon on any hand, but among thofe 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 ufe of among the nations, connected in commerce. Whether any particular perfon, city, or nation, is rich or poor, has more or lefs, comparatively,ofit, is nothing to the purpofe. Every one will receive of the circulating medium, that quantity which he is intitled to, by his property or induftry. It has been fhewn, that rarity is one of the qualities of a circulating medium. If it were more rare, than it is, a lefs quantity would be fufficient to represent a stated measure of pro

perty. If it were more plentiful than it is, a greater quantity would be neceflary; but the comparative riches or poverty of nations, or perPons, would be altogether the fame. Is any body ignorant, that half a century ago, in this country, a man might have bought a bufhel 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 juft as rich, who had it in his pocket? Undoubtedly. Nay, I muft further fay, it was a better circulating medium, because it was of lefs fize and weight. Has not the quantity of the precious metals in> creafed greatly, fince the difcovery of the mines of South-America? Is not the quantity, now neceffary, for any confiderable purchase, fo great, as to be burdenfome, in the tranfportation? The price of a good horfe, in filver, would, at prefent, be a great encumbrance, on a long journey. How eafy were it to point out places and countries, in which there is a greater quantity of the circulating medium, than any where else, and yet, at the fame time, greater national and perfonal poverty, and, probably, for this very reafon. What would it fignify, to a labourer, in the mines of Peru, if he should get a half johannes, or even two, for a day's work, if, at the fame time, he could hardly purchase with both, as much provifion as to keep body and foul together? Are not thefe things true? Are they not known to be fo? What then must we fay, of the extreme ignorance and inattention, to fay no worse, of thofe perfons, who are continually telling us, that there is a want of a circulating medium? Are not gold and filver a circulating medium, whofe currency is univerfal? Are thefe, then, too fcarce for that purpose, when there is hardly a negro flave, male or fe'Vol. II. No. I.

male, without filver buckles in their fhoes, 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 infifted longer on this, than was neceffary; but I have been induced to it, by the frequent complaints, upon this fubject, and the abfurd application of the phrase, a circulating medium. More reflexions will occur, connected with this fubject, in the fubfequent part of my difcourfe.

In the mean time, I

will clofe by faying to my reader, you and I may be poor men, the state in which we live, may be a poor ftate, we may want property, rents, refources, and credit, but, a circulat ing medium, we want not.

2. From the principles above laid down, it will appear, that money, having, as one of its effential qualities, an intrinfic, that is to fay, a commercial value, it must be not only a fign and ftandard, or a medium of commerce, but also, itself, a commodity, or a fubject of commerce. There are many transactions respecting money, in a trading nation, in which it is confidered fingly in this view. These it is unneceffary for me to enumerate; but even where it is applied directly or principally, as a medium of alienation, its value, as a standard, doth and muft always follow and accommodate itself toits value, as a commodity. Hence it fellows, neceffarily, that money must be fubject to every rule, that other commodities are fubject to, in buying and felling. One of the chief of thefe is, that it muft rife and fall in price, according to the quantity that is brought to market, compared with the demand there is for it. This is an unavoidable confequence, and as neceffary, in the cafe of money, as in that of any commodity whatever. If a greater quantity of money, than before, is brought into any country, even though brought by the G

fairest and most honourable means,
viz. increafing induftry and profit-
able trade, it will have the effect of
raifing the price of other commodi-
ties in general, and of induftry,
which is the fource of all commodi-
ties. But, we must obferve, that
men are apt to view this in a wrong
light. One commodity may rife or
fall by its own plenty or fcarcenefs;
but when there is a great and general
rife of prices, of all commodities, it
would be, at leaft, as proper, or ra-
ther much more fo, to fay, that money,
had fallen, than that goods had rifen.
We had fo large experience of
this, during the war, by the extef-
five emiffions of paper-money, that
it needs hardly any illuftration. It
is true, fome perfons did then, and
do now, fuppofe, that the deprecia-
tion of the money, was owing as
much to the difaffection of fome in-
habitants, and the counterfeiting,
and other artful endeavours of our

enemies, to deftroy it, as to the in-
creafed quantity. But, in this, they
were quite miftaken. Jealoufy or
fufpicion of the money, would have
had different effects, from a gradual
and continual rife of prices. If I
meet with a fufpicious piece of mo-
ney, 1 do
not raife the price
of my goods, but refufe to fell
them. This was, indeed, the cafe
with all those who doubted the mo-
ney of congrefs, in time of the
war. Befides, it is plain, that the
American caufe was most doubtful,
and its enemies moft numerous,
in the years 1776 and 1777, and
yet the currency of the money was
then very general, and its depreci-
ation flow; whereas, in the three
following years, when, in confe-
quence of the French treaty, and
other European alliances, the confi-
dence of the public, in the caufe,
was encreafed, the depreciation was
accelerated in an amazing degree.
I must also here make a remark upon
another opinion, often expreffed,

during the war, that the depreciation muft have been owing to other caufes, than the quantity, because it was greater than what they called the natural depreciation, in confequence of the quantity. By this, they meant, that it was not regular; but, when the quantity had risen, fuppofe to five for one, the depreciation was at fifteen or twenty for one. Thefe perfons did not underftand the depreciation of a commodity, in confequence of its quantity; for it is not regular and equable, as in arithmetical progreffion, but 1a. pid and increafing, fo as foon to get beyond all computation. If there is, in any country, but one tenth part more, of any commodity, than there is any demand for, the price will probably fall more than one half, and if there is double or treble the quantity needed, it will be, what merchants call a drug, that cannot be fold at all; but if it be a perishable commodity, mnt fink in the hands of the poffeffor.

I have faid above, that the increafe of money, even though in confequence of national profperity, that is to fay, internal induftry and profitable trade, will yet neceffarily, have the effect of raising the price of induftry and its fruits. This, however, muft evidently be in a far higher degree, and attended with much more pernicious effects, when it is thrown into circulation without induftry; as, when filver is found in capacious mines, or paper is iffued by the authority of a ftate, without meafure, 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 iffued by the united ftates, the diforder would have been as great, or greater, than it was. At least, it would have been fo at first. The difference would have been, that filver, being current over all, it would have foon gone

abroad, and found its level, fo that the alteration would have been ultimately, not in the united states, but in the general circulating medium, over the whole earth. Thofe, however, among whom it was firft found, and who received it without induftry, would have fuffered moft by it. A mong them, it would have produced lazinefs and luxury. Other nations would have drained it from them only by fuperior induftry. The ftate of the Spanish monarchy at prefent, ought to be, and indeed in a great measure has been, a leffon to the whole world. At the time when they got poffeffion of South America, they were the most powerful and wealthy flate in Europe. Would any man, at that time, have been reckoned found in his judgment, who fhould have affirmed that they would grow poor by means of the gold and filver mines? Yet, it has happened fo, and now there is hardly any politician fo fhallow but he can affign the reafon 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 mul pay fo much the more to thofe who were willing to work for them.

3. The above principles will clearly fhew, that what is commonly called paper-money, that is, bilis, bearing that the perfon holding them, is entitled to receive a certain fum fpecified in them, is not, properly fpeaking, money at all. It is barely a fign, without being a pledge or ftand. ard of value, and therefore is effentially defective as a medium of univerfal commerce. I will afterwards fpeak of the different kinds of it, and point out their real and proper ufes; but in the mean time, I obferve, that to arm fuch bills with the authority of the ftate, and make them a legal tender in all payments, is an abfurdity fo great, that it is not eafy to speak with propriety upon it, Perhaps it would give offence, if I should

fay, it is an abfurdity 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 ftandard of value, and if any prince or state debafe the metal below the ftandard, it is utterly impoffible to make it fucceed. How then, can it be poffible, to make that fucceed, which has no value at all? In all fuch inftances, there may be great injuries done to particular perfons, by wiping off debts; but to give fuch money general currency, is wholly impoffible. The meafure carries abfurdity 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 refufe it, when it is good? If it is neceffary to force them, does not this demonftrate, that it is not good? We have feen, indeed, this fyftem produce a moft ludicrous inverfion of the nature of things. For two or three years, we conftantly faw 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 tranfactions. Money is, itfelf, a commodity. Therefore, every tranfaction, in which money is concerned, by being given or promifed, is, ftrictly 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, precifely, the fame thing with laws regulating the prices of commodities, of which, in their full extent, we had fufficient experience, during the war. Now, nothing can be more radically unjust, or more eminently abfurd, than laws of that nature. Among all civilians, the tranfactions of commerce are

ranged under the head of contracts. Without entering into the nicer diftinctions of writers, upon this fubject, it is fufficient for me to fay, that commerce, or buying and felling, is founded upon that fpecies of contracts, that is moft formal and complete. They are called, in the technical language, onerous contracts, where the proper and jutt value is fuppofed given, or promised on both fides. That is to fay, the perfon who offers any thing to fale, does it, becaufe he has it to fpare, 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 tranfactions; but thefe do not affect the argument in the leaft. A fair and juft value is always fuppofed, or profeffed to be given on both fides.

Well! is it agreed, that all commerce is founded on a complete contract Let then, any perfon, who will, open as many books as he pleafes, written upon the fubject, and tell me, whether he does not always find there, that one of the effential conditions of a lawful contract, and, indeed, the firft of them, is, that it be free and mutual. Without this, it may be fomething elfe, and have fome 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 tranfactions of a different kind, might let this matter in a clear light. Suppofe, a man were to fay to one of our law givers, upon this fubject, as follows: When you make a law, laying on à tax, and telling me, I inuft pay fo much to the

public and common expenfes, of the ftate, 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, till this is within your line; and if 1 have any complaint, I can only with, that, at the next election, we may get wifer men. Again, a juftice of peace, in time of war, may give a prefs-warrant, and take my horfes and waggons, to tranfport provifions or baggage, for an army. I understand this, alfo ; 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 conftitution can be fo perfect, but that fome cafes will occur, in which the property of individuals muft give way to the urgent call of common utility, or general danger. Thus we know, that in cities, in cafe of a fire, fometimes a houfe, without the confent of its owner, will be deftroyed, to prevent the whole from being confumed. But, if you make a law, that I fhall be obliged to fell my grain, my cattle, or any commodity, at a certain price, you not only do what is unjuft and impolitic, but, with all refpect be it faid, you fpeak nonsense; for I do not fell them at all; you take them from me. You are both buyer and feller, and I am the fufferer only.

I cannot help obferving, that laws of this kind have an inherent weaknefs in them; they are not only unjuft and unwife, 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 induftry, inclination, hope, and intereft. The first of thefe is very imperfectly reached by authority and

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