deed, can more happily illustrate, either the process of comparing values, or the necessity in general of having recourse to individual objects in applying abstract terms. No term is more clearly general than weight; nothing, too, is more general than our language, when we talk of a pound weight; yet, whenever we come to form an estimate, to make a comparison, can we make use of the general idea? Or, is there any general material pound, which can be put at the one end of the balance? Is it not an individual body, weighing a pound, which we are obliged to employ ? It only remains, therefore, to be confidered, whether the term 'measure of value,' can have any meaning; and what that meaning is. In the refult of this inquiry, we hope to find a fatisfactory answer to the queftion What is money?" It is now, we truft, abundantly manifeft, that nothing can measure value, but value itself. Some afcertained value is affum ed as a given quantity, and with this all other values are compared; and they are denominated either multiples or fractions of the affumed value, according as the refult of the comparison determines. Thus, a bar of iron is affumed by the blacks of the coaft of Africa as an ascertained value; and with this they compare the value of all other commodities. A gallon of fpirits, they fay, is of the fame value; but a slave is a hundred and fifty times that value. In the fame manner, an afcertained portion of gold or filver is affumed in Europe as a known value, and by a comparison with this the value of all other things is estimated. There is a material difference, however, between the practical proceedings of the Africans and the Europeans. When the Africans eftimate the value of a purchase in bars of iron, they have not, in general, the bars to give for it; they have only fome other kind of goods, and their purchases and fales are mere barter,-though they estimate the value of the commodities given and received, by comparing it with a bar of iron. When the Europeans, however, make their estimates by comparison with afcertained quantities of gold and filver, they have the gold and filver ready to give for the commodity which is the object of purchase. The convenience of this is very great. When traffic is carried on by barter alone, it is, in the first place, very difficult to proportion payments to the commodity purchased. If a man wants to purchase a hatchet, but has only a fheep to dispose of, which is worth fix hatchets, he knows not how to accomplish his purpose. But the principal difficulty probably confifts in adapting to one another the objects of purchase and fale. The man who has the hatchet to fell, wants not to purchase a sheep, but a cloak; while the man who has the cloak to difpofe of has no occafion for a hatchet, but for fome other other commodity. In thefe circumftances, it becomes a matter of expediency for every man to provide himself, if poffible, with more or lefs of that commodity which most people will be willing to purchase, and with which he can therefore most readily procure the various articles for which he may have occafion. After the trial of various commodities, the courfe of affairs has every where, fooner or later, recommended the precious metals as the commodity for which moft people would be willing to exchange the articles of which they had to difpofe. At first, they are merely used in the unfashioned ftate, and are bought and fold, in the different exchanges, by weight, like any other commodity; and, in this cafe, felling a fheep for a piece of gold, or a piece of filver, of a certain weight, is vifibly the fame fpecies of tranfaction as felling it for a certain weight of falt, or of corn. The gold is the commodity purchased with the fheep in the one cafe; the falt or the corn is the commodity purchafed with it in the other. Thus far the nature of purchafe and fale, by means of the precious metals, is diftinctly understood, and no mysterious notions are attached to it. All the world fees, that it is a fimple exchange of one commodity for another. It is, in reality, a barter of two commodities, the value of which is equal. The one party has bought a fheep; the other party has bought a quantity of gold. It would have been trifling to have brought this familiar procefs fo formally into view, were it not for the light it affords, to fhow the extreme fimplicity of the next step, which yet has been thrown fo much into darknefs and myftery, by the vague and indefinite terms employed about it. No fooner have the precious metals affumed the shape, which is diftinguifhed by the appellation of money, than we have the phrafes, fign of value,-measure of value,standard of value,-medium of exchange,-inftrument of barter,and many others, afcribed to them; and the process is now conceived to have entirely changed its nature. But, in reality, what is it that the coining of the precious metals performs? Nothing more than to fet a ftamp upon certain convenient portions of them, declaring authoritatively the weight and fineness of the piece upon which the ftamp is impreffed; thereby faving thofe, by whom it is purchafed and fold, the trouble of weighing it, or proving its quality. Still it is nothing more than a piece of metal, of a certain weight and quality, which is bought with the article we have exchanged for it, and which we regard as of equal value; and money is neither more nor less than that commodity which every man is willing to purchase with any other commodity of which he may have to difpofe; because he knows that all those persons will be ready to buy it of him again, who may have any thing to fell which he shall de fire to purchase. This fimple account, founded upon upon fuch decifive confiderations, and which explains fo completely all the phenomena of money, writers feem in general to have miffed, (as men often mifs other advantages), by looking too high; by conceiving that the theory of money muft certainly involve in it fomething extremely magnificent and mysterious. With this imagination, and the aid of loofe and indefinite language, they have written books of very indifferent quality. Yet there were always fome obvious and remarkable appearances which might have taught them that money was nothing but a commodity bought and fold for its value, like other commodities; and that it rofe and fell, in its power of purchasing, exactly as its value was enhanced or impaired. Whenever princes have debafed the coins of their realms, thefe coins have uniformly become depreciated in exact proportion to the debasement; and have never, for any length of time, continued to purchase more than the metal, and the workmanship of the coin, were really worth. What other account can be rendered of this ftriking phenomenon, than that coins are mere commodities, fubject to the laws which regulate the purchase and sale of all other commodities ? Having thus afcertained the nature of money and coins, we are in a condition to fee clearly through the mystery of the meafure of value;' and as the vague ideas entertained respecting that measure have produced fo much confufion on the subject of mo ney, it may be useful to fubjoin a few reflections. Men have occafion to compare values in two refpects; either in times very distant, or in times contiguous. Among the other properties of the precious metals, this is one, that though they are fubject to very great alterations of value in times very remote, they change more slowly than perhaps any other commodity, and, during any small number of years, may be regarded as invariable. Within that number of years, therefore, they form a standard of comparison very exact. They vary too confiderably in their value in places very far distant from one another; but, in places not exceedingly remote, they are always of the fame, or very nearly the fame value; and thus, within a certain range of time and place, their value is fufficiently fixed to afford an inftrument of comparifon exact enough for the practical purposes of life. But, in all this, there is neither mystery, nor measuring; the value of one commodity is only compared with the value of other commodities; and as coin is the moft convenient fubject of comparison, the value of all other commodities is ufually expreffed by naming a correfpondent quantity of that convenient fubftance. When we mean to exprefs the value of an acre of land, we do not fay that it is worth fo many pounds weight of corn, or fo many pounds weight of flax. What we fay, however, is literally that it is VOL. XIII. NO. 25. D worth worth fo many pounds weight of gold or filver. Thus the matter ftands in regard to contiguous places and times. With respect to very diftant times, the difficulty is much greater; and there is no ftandard of comparison which enables us to do more than approximate to accuracy. It is evident that money, or gold and filver, changing its value remarkably in diftant times, is altogether unfit for this purpose. Corn, though it varies greatly in value from year to year, Dr Smith thinks, continues more nearly on a level, through long tracts of years, in its power of commanding the objects ufeful and agreeable to man, than any other commodity; and he is probably right; but ftill, the varieties to which it is fubject render it a very inaccurate medium of comparison. It thus appears, that in the fenfe in which writers ufually conceive it, there is no standard or measure of value; that gold and filver afford a ftandard of comparison, which may be metaphorically denominated a measure, accurate enough for the common business of life within a moderate distance of time and place; but that, for times very remote, we have no measure or ftandard of comparifon which affords us more than the means of approximation. 2. As, from the difcuffion which precedes, the nature of coins fufficiently appears, and as the notion of Mr Smith, that they are only fymbols of an ideal standard, falls to the ground when this ideal ftandard is removed, we may, without ceremony, pafs over his remarks on this part of the fubject, and proceed directly to another very important inquiry,-the nature and properties of paper money. There are two kinds of paper money, which are fo remarkably different, that it is furprising any occafion fhould remain to point out the diftinction between them; yet fuch confufion has prevailed on this fubject, that fome great errors owe their origin to the misapprehenfion of one for the other. Of thefe, one fpecies is the paper money iffued by government, and which it is rendered obligatory upon the people to receive. Of this nature were the affignats, and the mandats, iffued by the revolutionary. government of France; of this nature, too, was a paper money iffued by the government of the United States in the crisis of revolution, and by the Dutch in their celebrated war for the independence of the republic. The fecond species of paper money confifts in the notes of bankers, payable to bearer on demand, and which pass current for the fums there fpecified. Bills of exchange and other obligations, payable only at a ftated time, and bearing intereft, are sometimes denominated paper currency; but it will contribute to distinctness, if we exclude them from the appellation of paper money. We are difpofed to give Mr Smith very confiderable praise, whether • that whether he discovered the diftinction, or learned it elfewhere, for having very clearly perceived the difference between the paper money which a government may force upon the people, and the paper money circulated from banks, which nobody receives but at his pleasure. He has feen, too, that many errors may be traced to the strange inaccuracy of confounding together these two fpecies of paper money. It is very extraordinary,' he says, many erroneous doctrines are still kept up,-the writers on this fubject continuing to perfevere in fupport of many maxims, which, in practice, have been long ago abolished. One great caufe of this appears to be, that there have exifted two fpecies of paper money, perfectly feparate and diftinct in their nature, properties and effects, but which have been hitherto confounded together by all these writers.' It is unfortunate, after making this falutary diftinction, that he fhould have been mifled, by his own notion of an imaginary ftandard, into an unprofitable train of speculation; otherwife it is probable that fome ufeful truths would have been the confequence of fo hopeful a commencement. Fortunately, it is the free and voluntary species of paper money, almost exclusively, with which we have been experimentally acquainted in this country; and as the other is abundantly simple in its nature, and moreover very circumscribed in its use (for it necessarily very soon destroys itself), it is only the paper money consisting in the notes of bankers, which calls on us for consideration on the present occasion. The notion which we have endeavoured to establish of the nature of coined money, will speedily enable us to discover the principle and laws of paper currency. As coins are neither more nor less than commodities which are bought and sold for their value, like other commodities, so bank notes are obviously obligations upon the issuers to pay a certain quantity of those commodities; and these obligations also are bought and sold for their value, or for that quantity of the valuable commodity, coin, which they can command. They are usually denominated the representatives or symbols of coin. It is very evident, however, that this is not only a vague but an inaccurate expression. They are no more representatives or symbols of coin than bills of exchange, or any other transferable bonds for the payment of money. They are actual obligations for the receipt of a certain quantity of specie; and they are received in payment as readily as the specie itself,-only when it is well. known that specie can be received for them, without delay, and without inconvenience,—or when it is known, that they will be as readily received in the market as the coin which they specify. If bills of exchange, therefore, and other transferable bonds, are regarded in the market as mere commodities,-as goods or chat |