is hardly able to check it, even when goods are bulky and cheap; how much more difficult would it be, then, for a rude police to prevent the efflux of that which is of great value, and which lies in small compass.

But the acts of the legislature took a different turn. They strove to encourage exports, and discourage imports, because exportation increased the money of the country, importation diminished it. Hence, protective regulations were adopted, and a host of laws, instituted originally from mistaken notions of the public good, became, in course of time, the strongholds of ignorance, indolence, and selfishness. We have got rid of these arrangements only in our own day; and no other nation has made nearly so much progress in the true theory of public wealth as we have. At present, however, we have reversed the policy of our forefathers. Their rule was, as has been said, to discourage imports, and encourage exports; ours is to encourage imports, and to let exports find their own market for themselves. In other words, we are always willing to buy, because we know that when nations wish, as all nations do wish, to sell, they must also buy, and that if they are resolved to put hindrances on their own power of buying, they must sell their own goods at cheaper rates, if, indeed, they want to sell them at all.

Money, then, is an essential part of the machinery of trade. It forms a measure of value even when commodities are exchanged; it is the most convenient, intelligible, and available pledge which a seller of goods can obtain, for it is that which he can make use of at his discretion when he needs, in his turn, to effect a purchase of any goods which he may desire. To receive money in

exchange for goods, is to receive that commodity which, more than any other, will give its possessor command over the general market,

This money is generally, but not invariably, one or both of those metals which are called precious, for a reason which we shall presently see. Sometimes the standard is

copper, as it was in ancient Rome and in mediæval Sweden. Sometimes it is gold, as in Great Britain and the United States. Most frequently it is silver. Occasionally, as in France, it is either gold or silver, at the discretion of the purchaser. It is said that other articles besides the metals are employed as a measure of value, Thus we are told that rock-salt is used in Abyssinia, hides in South America. The travels of Mr. Speke seem to imply that pieces of cotton cloth answer the purpose of a currency in Eastern Africa. For many ages a small univalve shell, the cowrie, has been a form of currency in Bengal.

But civilized communities invariably employ one or both of the two precious metals, gold and silver. Here, however, we must distinguish gold and silver as used in the arts, and as used for the purpose of trade or exchange. In the former case they are strictly merchandise, in the latter, as we have seen, they are a kind of machinery by which exchanges are adjusted. It has been said by an eminent economist, that the value of gold and silver is determined by their use in the arts. This statement, however, is not quite correct. Their use in the arts is an index of their value, but not the sole cause of that value. If the employment of gold and silver as a measure of value should cease, the liberation of existing stocks would be followed by a great fall in their value,

and they would forthwith become of less value in the arts. Their value is as much due to the demand which exists for their use as currency, as it is to the demands of the arts. It has been observed above, that the rise in the value of gold, a fact fully ascertained from the rate of exchange after the beginning of the fourteenth century, was due to the general use of gold as a currency.

The causes which have determined civilized communities to use gold and silver as the material of money are as follows. First, in the natural course of things, they are produced in nearly equal quantities by nearly equal labour, or at nearly equal cost. Over a long period of time, the labour necessary to produce equal quantities may vary, and has varied considerably. But over short periods of time, no great variation ensues, and for several reasons. In the first place, the stocks of gold and silver possessed by civilized communities are so large, that very considerable additions are, comparatively speaking, small by the side of the quantity existent or in circulation, and the quantity annually required for consumption. In the next place, the precious metals are generally found in districts which are otherwise unfitted for the supply of the necessaries of life; among barren rocks and mountains, to which food must be transported, and in which, therefore, living is dear, and the cost of production great. In the next, after the few prizes in the shape of metallic masses of gold and superficial ores of silver are secured, gold must be obtained from very hard rocks by very expensive machinery; and silver is ordinarily found in slender and deep veins, in alloys from which it is extracted with difficulty, and in small percentages to the weight of the ore. Now if large quantities of gold and silver could be found

within easy reach of abundant labour and food, and could be collected without any great amount of labour, the first finders and miners would be enriched, and by degrees the possessors of the old stocks of gold and silver would be impoverished. But no such thing has ever happened. It is said that at the close of the Roman republic, the vast mass of gold which Julius Cæsar brought into the Roman treasury, reduced its value by twenty-five per cent. It is certain that the occupation of the new world by the Spanish conquerors of Mexico and Peru reduced the value of silver so considerably, that it was not worth half as much at the close of the sixteenth century as it was up to the first half of the same period. But in both these cases, the fact did not ensue from those ordinary economical conditions which affect and determine production. Both these phænomena were the results of violence. Julius Cæsar was bringing with him the plunder of the Gauls, the masses of native gold which this people had roughly fashioned into articles of personal adornment, and which, it seems, was procured in abundance. The Spanish colonists of the new world exhausted the population by compulsory labour in the mines. If, then, by some similar action, or by some exceptional circumstance, it were possible to add largely and suddenly to the stocks of the precious metals, serious results would ensue to many persons, and the fitness of gold and silver as measures of value would be impaired.

Again, if both gold and silver are used simultaneously as a currency, the proportionate amount of labour required to produce each cannot, without great public inconvenience, be disturbed. In the rough, it may be said that the cost of producing a pound Troy of gold is fifteen times

as great as that of producing a pound Troy of silver, and that therefore, a pound of gold is worth about fifteen pounds of silver. Now it is of course impossible that the production of any two commodities should always represent the same proportionate cost, or that variations in the annual quantity of silver or gold brought to market should not occur. But here again, though there are always oscillations in price, the oscillations are very slight, partly because the excess in production for one year or one period is compensated by a defect in another year or period; and so the average cost of producing these objects rectifies occasional irregularities; partly because, as was observed before, the existing stocks are so vast, that even a considerable addition in any one year or period produces very little effect on the aggregate in existence.✓

Still this change in the relative values of gold and silver has been witnessed. The proportion between the two at the latter end of the thirteenth century was about nine to one by the middle of the fourteenth it was as twelveand-a-half to one: at present, as we have seen, it is about fifteen to one. But this variation and its economical effects have been manifested on a large scale, and in a very significant manner in France, during the last fifteen years. In that country there is a double currency, i. e. any debtor may proffer the amount of his debt in gold or silver at his discretion. On March 28th, 1803 (7 Germinal, year 11), the French republic fixed the proportion of gold to silver at fifteen-and-a-half to one. High as this proportion is, the gold was undervalued; silver was the cheapest currency in which a debtor could pay his obligations, and consequently gold almost disappeared from eirculation. Since the discoveries of gold in Australia and