it had been, all that such an expression would imply is, that it costs more trouble to produce or procure everything, and though labour would be more heavily taxed to get what it needs or what it exchanges, as everybody would have to work harder, no one could be better or worse off in comparison. Thus five hundred years ago, every commodity which could be procured cost vastly more labour and trouble to get than it does now. The labour of the agriculturist produces, it is probable, six, perhaps eight times as much as it did in those days. So the rapidity with which clothing is manufactured, the ease with which metals are smelted and refined, the economy with which merchandise is transported, are at the present day, when compared with the past, incomparably greater. But unless the process by which any one of these conveniences or necessaries can be obtained, has been rendered easier or more rapid, the relative values of food, clothing, metals, and sea-carriage remain the same; and if there can be no general rise in values, there can be no general fall in values. General prices may rise and fall; for price is the measure of an article by one standard, value is the measure of any one object by all other objects. It will be remembered too, that the value of an object is not determined by the use it can be put to, or the importance which its possessor assigns to it, or even to the desire which another has for it, but that it resides in the power of exchange which the owner has by virtue of possessing it. If a merchant wishes to trade with savages, it would be of no use for him to export such merchandise as is fitted for civilized societies only. There is great use, it may be in such merchandise, but under the circumstances there is no market for it. If, again, a merchant were to

import food into a country suffering grievously from famine, no trade can ensue, unless the starving people had something to offer in exchange, though the desire which such persons would entertain would be urgent and vehement. In short, it is necessary, in order to give value to any object, that it should be, as is technically said, in demand; and this demand must be effectual, that is, must be accompanied with the power of proffering some other object in exchange.

Having seen, then, what it is which constitutes value, we may now be able to determine what constitutes price. The price of an article, as has been said, is its estimate in some one uniform measure. If this measure did not itself vary in value, i. e. if the cost of producing it was always one and the same, and any increase in its quantity was absolutely relative to an extension of the area over which it was used, a general rise and fall in prices would be as impossible as a general rise and fall in values. But as the value of one thing may rise or fall in relation to other things, so the value of the measure itself may rise and fall in relation to all other things. This variation we know to have occurred in the case of those objects, gold, silver, and copper, which have formed the measure of value among all civilized nations.

A little reflection will shew that some common measure of value must needs be adopted in all societies whose condition is superior to mere barbarism. Society, as we have seen, exists by the interchange of services; and that community makes but little progress in which each man is able, or rather is constrained, to supply all his own wants by his own skill or labour. But the fact, that such an interdependence characterizes civilized society, makes

it necessary also that some of those who work at special objects of utility should be far less numerous than others. Thus for example, the number of bakers in any community is far larger than that of shoemakers; that of shoemakers again than that of wheelwrights; that of wheelwrights than that of engineers, and so on; while there are some occupations which are fully served by two or three persons in a vast community. Now where dealings are transacted on a large scale, it is not difficult for commodities to be exchanged against commodities; as indeed is the case in the trade between two countries. Here as a rule, the actual transfer of gold and silver is rare, goods being exchanged against goods. But the case is quite different when the transactions are small. Here the exchange of commodities is impossible, or at least inconvenient; and the persons who deal together are obliged to adopt some common object of value, which each is willing to take, because he knows that he can easily get rid of it in exchange for whatever he wants or may want. This object is money. Money, then, is a means by which two persons who do not deal together mutually as producers and consumers, are able to enter into transactions. The baker does not want shoes, and so takes money from the shoemaker; he does want wine, but the wine-merchant does not want bread. He therefore gives the winemerchant the money which he takes from the shoemaker; and so the same money is made to represent an endless series of exchanges, each seller receiving the money in order to buy what he needs of those who sell what he wants. Money, then, is essential to the subdivision of labour and services, and the organization of society.

Even, however, if money were not a physical object,

it would still be necessary as a symbol or calculus. We need some common measure of value, as we need measures of length and capacity, even though we never transfer that which is designated by the name money. The merchants who trade between different countries, even though they exchange goods against goods, must needs estimate what they sell and what they buy by some common measure. A British merchant trading to France does not reckon so many hogsheads of wine against so many pounds of cotton yarn, or so many tons of iron, but he measures what he buys and what he sells by money. So necessary is this process to trade, that we are told of nations who have no money, properly so called, but who have been constrained to invent a fictitious measure in order to express values.

In short, the functions of money in the act of exchange present a close analogy to the functions of language in relation to thought. As there may be a rude barter, so there may be a rude language of signs. But there is no true communication of thought except by articulate speech; and similarly there can be no real and effectual trade except by the use of a common measure.

Money, however, is only a means to an end-the machinery, namely, of trade. For reasons which we shall see shortly, it is a very costly machinery, which society is always striving to economize. And for the same or similar reasons everybody who takes money wishes to get rid of it as soon as he can, because as long as he holds it it is to him wholly unproductive. Knowing that it is, by its very nature, that which is most easily got rid of, and is always in demand, he will always retain a small portion against emergencies; and if he thinks these emergencies

are very imminent, he keeps a larger quantity by him. Sometimes, too, though this practice is giving way, he hoards it; but in general, he tries to get rid of its actual possession as soon as he can. If he does not purchase goods with it with a view to a profit on the purchase, he lends it to others.

It is because everybody wishes to get money, and everybody is willing to receive money in preference to that which money will buy, that many persons, and even nations, have believed that money is the only wealth. It is undoubtedly that part of wealth which is most easily accepted in exchange, because when the seller of a commodity gets money in exchange for goods, the money is worth to him more than the goods, the difference between the two being his profit on the transaction. But though he takes the money, it is far from his thoughts to contemplate retaining it, he takes it to get rid of it, for he loses profit as long as he retains it.

The forgetfulness or ignorance of the true use of money, that, namely, of its being an instrument of exchange, has been the cause of an infinite variety of economical and political errors. For many centuries the policy of our laws and of our trade was professedly the retention of as much money as possible. It is an instance of the difficulty there is in generalizing correctly, that the act of hoarding, which no reasonable trader would practise for himself, was held to be the greatest wisdom in the commerce of the state. Had the legislature confined itself simply to putting stringent regulations on the exportation of money, no great harm would have been done, because these regulations were always and necessarily inoperative. The most efficient police is unable to prevent smuggling,