"Of course, any three of these quantities being given, the fourth can be deduced from them.

Thus,

m=;

which is the principle just enunciated. It is also evident, that the value of money will be inversely as its quantity; for, if we suppose the quantity of money to be doubled, we still have

whence,

gs=2mr;

2 m ==;

that is, 2 m is worth only the same value which was formerly represented by m." 1

The value of money, says Mr. Bowen, is in ratio to its momentum; that is, "to its quantity multiplied by what is called the rapidity of circulation." The degree of one measures that of the other. "If the value of the merchandise which changes hands in a country in the course of a year amounts to $1,000,000,000, and the circulation of money is ten times as quick as that of the merchandise, $100,000,000 will effect all the exchanges. Let the quickness of money be doubled, and $50,000,000 will suffice." So, also, he says, "the momentum of wealth is its value multiplied by the rapidity of its circulation." Momentum and effective value are identical terms. All kinds of merchandise, wealth being a generic term, obey the same law. Whatever value can be predicated of one kind, due to the rapidity of its circulation, can be of all other kinds. Assuming the correctness of his proposition, the great problem for society is to determine the degree of momentum that can be secured for its merchandise, as its wealth will be increased in like ratio. As Mr. Bowen has applied his illustration to only one kind of merchandise, money, we will extend it to others: thus,

gs=mr.

The algebraical formula is the same in its characters; but for the present purpose g stands for goose instead of goods. Now," the value of the goose is inversely as its quantity multiplied by the rapidity of its circulation." Assuming the formula given to express the ordinary rapidity of circulation, or, what is equivalent, the momentum, and consequently, value of

1 American Political Economy, pp. 306-808.

the goose; then, if its momentum, or value, be doubled, the formula has only to be altered; thus:

gs=2mr,

or

mr=21/22

The goose has now a value twice greater than it had before. Of course, any three of these quantities being given, the fourth can be deduced from them; thus:

m=

which is the principle just enunciated. As the value of the goose will be inversely as its quantity, if this quantity be reduced one-half (the demand the same), we still have

=mr,

whence,

2 m =

that is, 2 m will have only the value that was formerly possessed by m. If the crop of geese should be short, and it should be desirable to increase their momentum, or effective value, say tenfold, all that would have to be done would be to increase their rapidity of circulation to be expressed by the following change in Mr. Bowen's formula; thus:--

When the last degree of momentum was secured, a wing or a leg of the goose would have a value equal to that of the whole bird. Society will be the gainer in an equal degree, by being able to devote to other purposes the land formerly dedicated to goose-culture. Admitting the conclusiveness of his demonstration, it must be applicable to all kinds of merchandise; for, as has already been shown, money, after it has been spent, is as functus officio to its late owner as is the goose to its owner after it is eaten. If it be objected that the money is still in existence, and the goose is not, it may be replied: that the goose has indeed been eaten, but productively, to appear in new geese, or in other kinds of merchandise; so that whoever uses

the money the second time is still confronted by a new goose or its equivalent. If the goose or its equivalent do not reappear, then the money does not. Each responds, and with equal alacrity, to the call of the other.

"It is possible," he continues, "to displace a portion, or even the larger part, of the specie currency, and make paper currency, or some other substitute, take its place; and the specie thus displaced will either go abroad or be melted up. But the total amount of the currency will remain just as before: the value of the paper and the precious metals, taken together, will be just what the specie alone would be if paper were not used.1

"We thus gain a more correct idea of the comparatively limited functions of money; which common persons are led grossly to exaggerate, merely because, at any one time and place, it is a common measure of value, a universal denomination of account.

"All wealth, all commodities, are estimated in dollars, francs, pounds sterling, and the like; and it is by the aid of such estimates that all exchanges are made. Thus, the idea of money aids us, when the reality is seldom employed. As pounds sterling were a universal denomination of account for a long period during which there was no such thing as a pound sterling in existence, so the idea or abstract conception of numerical values expressed in coin would be a convenient, even an essential, implement or contrivance in mercantile transactions, though all exchanges should be made by direct barter of one commodity for another. such a contrivance, the merchant could not keep his books of record intelligibly, or preserve his accounts with individuals in his large and complicated business. Money is even now only a hypothetical or abstract medium of exchange in all the larger transactions of commerce. I almost anticipate the time, in the progress of invention and the discovery of new expedients and facilities in commerce, when it will become so universally; when, at any rate, so costly and useless a realization of the idea as gold and silver coin will be entirely done away. Only practical difficulties, or what may be called difficulties of detail, even now obstruct this desirable consummation.2"

Mr. Bowen is certainly mistaken. Society has not as yet advanced so far in the substitution of ideas for things as he supposes. Money is still, as many find to their cost, far more than a mere scale of valuation. The holders of property, when they sell it, still persist in demanding something more than "hypothetical or abstract media of exchange." They may be very uncivilized and selfish to demand a quid pro quo

1 American Political Economy, p. 311.

* Ibid., p. 334.

in all transactions, and the laws which uphold them very barbarous; but these laws, nevertheless, have maintained their force since laws existed. The longing of the Economists for a world in which ideas stand for things carries them too far. Mr. Bowen, before he vacated the chair of Political Economy, should have reconciled this conflict between the ideal and actual. He would then have ranked among the great benefactors of his race. But if wishing were having, if the good things of life could be had without desert, no one would do any thing deserving of them; so that, after all, it may be well to let money remain the expensive thing it is.

"We are now prepared to explain the great difference between convertible bank currency and inconvertible bills, or paper money, properly so called, that the latter is liable to issue in excess, and consequent depreciation, while the former is not. . . . Those who fear an excessive issue of convertible bank-bills might as well apprehend that Lake Erie would overflow its banks, and flood all the surrounding country, because it is constantly receiving the surplus waters of the three upper lakes and of innumerable tributary streams. They forget that the average level of the lake depends, not upon the quantity of water flowing into the lake, but upon the quantity that flows out of it over Niagara Falls; and that no cause could affect the level, except by raising or lowering the bar at the opening of Niagara River, which regulates the rate of the efflux.1

"It follows from this whole review of the subject of paper money, which I have intentionally based, as far as possible, upon historical facts rather than abstract reasoning, that the depreciation of it is attributable solely to excess in its issue. If this excess could be prevented, that is, if the amount of paper currency could be kept precisely equal to what the amount of metallic currency would be in case there were no paper in circulation, then there would be no depreciation of the paper; nay, the paper might even command a premium over the coin, if the aggregate value of it were made less than what the coin would amount to, and if it were also possible to prevent the importation of specie. Money acquires the power of exercising its functions, not from any intrinsic quality that it pos sesses, but solely from convention. To adopt Mr. Stuart Mill's language, 'Convention is quite sufficient to confer the power; since nothing more is needful to make a person accept any thing as money, and even at any arbitrary value, than the persuasion that it will be taken from him on the same terms by others.' The value of paper money, not depending at all upon its cost of production, is regulated solely by its quantity. A certain determinable sum of money is needed in every nation to effect its current exchanges, and to maintain prices at an equilibrium with the aver

1 American Political Economy, pp. 382–384.

age prices of commodities throughout the commercial world. Coin being banished, if the issue of paper money is less than this sum, the paper will be at a premium; if greater, it will be at a discount.” i

In the preceding paragraph, Mr. Bowen only repeats what the English Economists have labored a century to prove. If they have been answered, he has been; if not, he cannot be.

Were Mr. Bowen the only one to be affected by his opinions, they would be of very little consequence; but they become of the greatest importance when taught to young men about to enter the world of affairs, especially when they relate to a subject which concerns, more deeply almost than any other, the welfare of society. What would be thought of a professorship in a university that should still seek to establish the wonderful properties of the philosopher's stone? The attempt would not be a whit more absurd than his teachings upon the subject of money. The thing chiefly to be regretted is, that there does not seem to be any way in which to rid the universities and the world of such nonsense. So far as money is concerned, all are Alchemists, all are believers in the philosopher's stone, all are intent upon its realization. The first step in the way of reform should be to abolish the "professorship of Political Economy," not only in this, but in all institutions in which it is now pretended to be taught; and either abandon instruction in it altogether, or put its duties in commission. In the latter case, whatever was taught would at least have the merit of being as broad as the course of instruction would allow.2

1 American Political Economy, pp. 388, 389.

The following propositions, taken from the last catalogue of Harvard University, make up a part of the course upon which its students are called to exercise their wits:

"Compare the generally received principle, that paper money tends to expel coin from circulation, with the following:

"All commodities tend to move toward those places at which they are the most utilized. Notes and checks increase the utility of the precious metals; and therefore it is that money tends to flow toward those places at which notes and checks are most in use, passing in America from the Southern and Western States toward the Northern and Eastern, and from America toward England."

Some kinds of paper money tend to expel coin from circulation, and some to increase the amount in circulation. If any question were to be asked, it should have been the manner in which the two differ. How do notes and checks increase the utility of the precious metals? In the same way that they increase the utility of a barrel of pork. Whether they do increase its utility, and, if so,