leave the country, and are confined to the true purpose for which they are issued-the supply of small money. Were silver not only overvalued, but allowed to be a 'legal tender' to any amount, all the gold currency would rapidly disappear.

A second condition, which must belong to any measure of value, is, that it must be indestructible under the ordinary conditions of the atmosphere. If an article is depreciated by time or decay, it ceases to be a satisfactory measure of other values. Now of all natural objects certain metals are the least destructible, and among these especially gold and silver, which do not rust, corrode, or decay.

A third is, that the material of which this measure is made must be susceptible of such easy division or reunion, that a number of small pieces shall be worth no more, and no less, than an aggregate piece of equal weight. The quality being understood, the value of the measure will be determined by the weight only, and not by the size of the pieces which make up the weight. Precious stones are very valuable; they are highly indestructible. They are produced, certain conditions fulfilled, in nearly equal quantities by nearly equal labour. But they are valued, not by their weight only, but by their size, because though they may be divided, they cannot be united. Hence they are wholly unfit for the purposes of

a currency.

These conditions are fulfilled by no other object except gold and silver. Hence the selection of one or both of these metals as a measure of value is universal among civilised communities.

Still, in order to become available for currency, and as a measure of value, gold and silver must be subjected to

some further manipulation. These metals are rarely found in a state of purity, but have to be extracted from their ores by various refining processes. Furthermore, it is easy to adulterate them; and it is difficult, except great trouble is taken, and considerable skill employed, to detect adulteration. But it is plainly essential to a measure of value that it should be rapidly and easily estimated. If one had to test the value of lumps of metal whenever they were received, and to guard against adulteration. whenever it is practised, it is hardly possible to conceive that the mass of mankind would use these metals at all as a currency.

Gold is very heavy, and silver is very bright. But a mixture of gold, silver, and copper will deceive the eye, and be very likely undetected, unless the possessor of it be skilful enough to compare its bigness with its density. The story of Archimedes and the crown is well known. So silver will bear a great deal of alloy without losing its brightness, or at any rate will retain it sufficiently long for purposes of fraud.

It is therefore a very early and necessary act of police for a government to take on itself the duty of certifying the fineness or purity of the masses of metal which circulate in a community. It is proper that a government should always do its best to protect its subjects from any systematic adulteration or fraud. But governments are frequently incompetent for such ends, and in a great many cases the community is a competent judge of the goodness or badness of the various articles which it purchases in the market. But the adulteration of such gold and silver as is used for the general purposes of exchange is a much more serious matter. It needs imperatively the

superintendence of a public police; so that imperfectly civilised, despotic, and even barbarous governments recognise the necessity of securing the purity or standard of their currencies; generally by prohibiting any private person from issuing or certifying these metals, and by assuming the right or duty themselves.

The earliest form which this certificate takes is that of affixing a stamp to masses of metal. This is the practice in China, where many very familiar inventions have been made, as it seems, at an early date, but have been strangely undeveloped. Here, however, owing to the weakness of the government, the issue is not the act of the administration, but of well-known mercantile houses, who cast the silver, nearly pure, into rude masses, something like a shoe, and punch their symbol or trade-mark into the ingot. These ingots are called sycee.

When a government takes this duty in hand, it generally accommodates its subjects by issuing small pieces of stamped metal called coins. These coins generally possess a certain weight; but they must have, in order to be current, a certain and invariable fineness. It is an inconvenience, if the government diminishes or enlarges the weight of the pieces; but the inconvenience is comparatively trifling, since payments may be, as they were up to comparatively modern times, made by weight. Such a process, as is well known, was common in rude ages; and there is reason to believe that payments by weight were general in England up to the time when Elizabeth, shortly after her accession, reformed the currency.

But the case is very serious when the government, which has taken the coinage of money into its hands in

D

order to prevent fraudulent adulteration, commits the crime or fraud itself, and issues money below the standard of fineness. When such base money gets into circulation, all confidence and nearly all home trade are at an end. The effects are as disastrous on the credit of a country as the invasion and success of a hostile army are. Afraid of losing, men will not sell; for some person, in the long run, must sustain the loss of bad money, if indeed the value of money is ultimately determined by the cost of getting the metal it contains. Those who have good money, hoard or export it; for the facts which we see characterise a double currency, when one of the two metals is undervalued, affect the double currency of good and bad money in an exaggerated form. Prices rise, and all the appearance of a general dearth ensues. The country in which such a fraudulent policy is adopted, may permanently or for a long time retrograde in civilisation and opulence.

Only two English monarchs have issued base money. These were Henry VIII and Edward VI, though in the last case it was more properly the act of the Protector Somerset. If we can trust Edward's diary, it was an object of great anxiety to the young king. It took a century at least to do away with the ill effects of this financial expedient. In France the practice was carried to great lengths; and it seems probable that the backward state of that country during many centuries is, concurrently with other causes, to be assigned to the practice of tampering with the currency, and thereby inducing general distrust. It should be observed, that though all classes suffer when any such political crime is committed, the poorer classes suffer the most, and recover from the

effects of the crisis most slowly. The merchant who deals with foreign countries is more likely to make a gain than a loss, for he certainly reckons the debased coin at no more than its actual worth, and he has great opportunities for reckoning it at less. The landlord is not likely to suffer much, for his rent accommodates itself to prices. The farmer is not likely to suffer, for he sells his articles, objects of the highest and most urgent necessity, at the full price which he can exact from the wants of his customers. The manufacturer will not employ his capital at a loss, or, at any rate, he can recompense himself by enhanced prices. The retail trader may suffer by the fact that his customers are likely to be fewer. But the labourer is sure to suffer; for, first, he is obliged to offer his labour for what it will fetch at the moment, and he has generally no power to wait till the market improves; and, next, custom determines the price of labour more than it does that of any other article which is offered for sale. We shall have occasion hereafter to give abundant proofs of these positions.

CHAPTER IV.

On the Substitutes for Money.

WHEN a man sells his goods or his work, he really means to get other useful articles in exchange. If he takes, as he almost always does, money, he does so because, as we have seen, he can always get as much or nearly as much for money, at some future time, as he