hundred years, the more important Laws of Money have been assumed to be settled beyond cavil or dispute. These laws are still accepted, in their original integrity, with the same confidence as are accepted the demonstrations of Newton of the laws which control the motion of the heavenly bodies. To declare the old ideas to be not only inadequate, but wholly opposed to the fact, would have been to be open to the charge of unwarrantable presumption, unless followed by demonstrations which should conclusively establish the correctness of such an assumption. That no such charge might be made, the whole question of money has been carefully reconsidered, and subjected to a process of rigid analysis. This has shown that its laws as laid down in the books have from the outset been wholly without warrant, and that the confusion which has prevailed in reference to them has been the necessary result. The science in its present form is the work of Aristotle, accepted by the Schoolmen, and transmitted by them to modern times, without having, in any single instance, challenged or received any thing like a critical examination. It still remains a striking example of the method which assumes to solve by dialectics every question coming within the range of human inquiry. In this science, its founder still reigns supreme,

a most signal illustration of the permanence of opinions after their correctness has been once accepted, and the easy immunity secured to them after hoary antiquity shall have rendered impious all attempt to inquire as to their right to rule.

The whole subject turns upon the question, whether or not value be an essential attribute of money. That it was a convenient attribute, few, perhaps, would deny. But such attribute was held to be useful chiefly in providing a way for the retirement of whatever might exist, or be issued, in excess of the amount required in the exchanges; and if such excess could be used, or converted into that which could be used, for other purposes, then the currency was self-regulating, and so far value would be a useful attribute. But it was of no use so long as the money did not exceed the public want: so long would its real equal its nominal value, from the necessity of its use; and so long it was indifferent of what material it was composed, or whether or not it had a constituent, or carried any obligation. Such assumptions are laid down as

fundamental principles by every writer upon the subject. They have been shown, it is believed, to be wholly opposed to natural laws, as well as to the common experience of mankind. The appeal to the empirical has fully sustained the conclusions of induction. Such a result being established, there should be an end to this branch of the discussion, — not only from its superfluousness, but to spare the reader a repetition which might exhaust his patience, but which could add nothing to the force of his convictions.

1

CURRENCY AND BANKING IN THE UNITED STATES.

THAT which has preceded will have prepared the way to an intelligible discussion of the financial and monetary systems of the United States. It was useless to undertake any thing of the kind till the whole subject of money had been reconsidered, its laws determined, and applied to every proposition which the ingenuity of the Economists could suggest. Till then, any isolated essay, or statement of principles, without detailing the process by which they were reached, would have only added to the confusion which prevailed. Every proposition to be found in the books in reference to money, especially paper money, is exactly opposed to the fact. Although all writers upon it agree in the main, it is always with some qualification, in order to show some degree of independence and originality; so that error itself takes a thousand different shapes. The debates in Congress are simply the roar of chaos. The laws of paper money have, it is believed, been placed, in what has preceded, upon impregnable foundations; and their application made palpable to the most ordinary understanding. We can now see exactly where we stand, and correctly estimate the nature and effect of our circulation, and the methods or steps to be taken to relieve ourselves of it, and to provide one which, by being capital, or the representative of capital, will promote in the highest possible degree, the welfare of the nation. As our present legal-tender currency is the second one of the kind, — for the existing government is to be considered only as a continuation and part of that instituted at the outbreak of the War of Independence, it becomes important to give a brief sketch of the first, in illustration of the reasons for the issue of the second, and of the influence exerted by it upon the operations of government, as well as upon those of production and trade.

Our government as first organized was vested in a Congress, or body of delegates, representing the thirteen original States. As it did not spring directly from the people, it lacked that representative character considered under our own system as well as that of England as indispensable to the exercise of the right or power of taxation. It could make requisitions upon the States, but was utterly powerless to enforce them. The latter still remained independent communities, united in a voluntary confederation for the prosecution of the war. As the central Government, as the chief Executive, was compelled to act at once in reference to the necessities imposed upon it, it must itself provide the means as best it could. Without the power of taxation, the mode obviously suggesting itself was an issue of notes to serve as money. All the colonies, in similar necessities, had issued greater or less amounts of such notes; although, for some time preceding the outbreak of the war, they had been greatly reduced, not only from a general sense of their mischievous effect, but from an Act of Parliament forbidding their continued issue. Though the results of their issue had, without exception, been most disastrous, yet there is nothing in which a community so soon forgets the lessons of the past. The first effect of paper money always seems beneficent; for it always creates activity in all the departments of industry and trade, in ratio to its amount. If this be small, it will for a considerable time circulate at only a very slight discount, from the use that can be made of it by indebted parties, for whom it will have the value of gold. Its issue, therefore, in the outset is always welcome to the great mass; as in the present enjoyment and satisfaction, both past and future are alike forgotten; or, if some uneasiness and apprehension be felt, they are quieted by the assumption that the amount will be small, and that whatever may be issued will speedily be taken in.

The first Continental Congress assembled on the 10th of May, 1775. On the 30th of that month, the colony of New York, through its delegates, submitted that as from the inability of the National and State Governments to raise money, either by loans or taxation, notes of one or the other, to serve as money, would have to be resorted to, they should be issued by the General Government, from the greater credit that would be

attached to them, representing, as they would, the whole country; the greater ease and certainty with which their amount could be regulated; and the wider circulation which could be secured. It was also urged that as the State of New York would, from its central position, be that in which a large proportion of expenditures would be made, unless the notes were issued by the central Government, that State would soon be flooded with those of other States, upon whose issues there would be no check, and for which there would be no sufficient vent, greatly to the public detriment. If notes were to be issued, the reasons urged by the New York delegates appeared to have more force than they really deserved, as the provisional Government might cease at any moment to exist, while those of the States would, in any event, be continued. Their representations, however, prevailed; and on the 22d of June, 1775, an issue of $3,000,000 was authorized to be made as occasion required. Such was the beginning of the Continental money, -as humble and insignificant, in the outset, as the Genie of the Arabian Tales, whom a small bottle at first sufficed to hold, but who, freed from his imprisonment, swelled into proportions so vast as to enfold both sea and land. But the Genie could contract as well as expand. In a freak of vanity, to show his power, he crept back again into his bottle, which the fisherman who had unwittingly set him free instantly closed, and so escaped with his life. Here the parallel ends: for the Genie of the printing press, from an equally insignificant beginning, swelled into proportions still vaster than those of his prototype, which no power, not even his own, could reduce; and could be got rid of only by his death, but not till a whole nation was very nearly brought to the same desperate pass.

The following is a copy of the notes first issued:

"This bill entitles the bearer to receive" (from one to twenty) "Spanish milled dollars, or the value thereof in gold or silver, according to the resolution of the Congress held at Philadelphia on the 10th day of May, A. D. 1775."

The first issue of notes was apportioned among the several States in ratio to their population, as their proper quota to the expenses of government, which were, in theory at least, to be borne by them by virtue of their power of taxation, - a power