dently, and without the necessity of aid from another. If he is in want of food, some animal which he may take, supplies it. If he wants clothing, the skin of the same animal answers the purpose. If he wants a house, the same skins, or the nearest twigs or turf, or all, are the material, and he himself is the artificer. He exists alone; or, perhaps, it should be said, he may exist alone. His wants he can supply without aid from his fellows. He requires only articles of first necessity, such as will supply the cravings of nature: other commodities are, in a measure, useless, because they answer no useful purpose to him. Gold and silver are of little value; he can manufacture them into rings and plates, for ornament, but will readily part with them for a small scrap of iron,* which is of greater use, in enabling him to prepare better and more serviceable arms for war or the chase. Of course, among such a people there is no trade-there is nothing to exchange-there is no necessity for exchanges. But as society becomes civilized, and the division of labor takes place, exchanges commence, and become more and more frequent, according to the degree of civilization attained. As society reaches the highest stage of civilization, and the division of labor has become thoroughly established, men supply but a very small part of their own wants with the produce of their own labor: from existing independently, as in a savage state, men depend upon the labor of each other. The superior comfort in which men can live, in consequence of the division of labor, whereby man is enabled, by the excellence he can attain by practice in any one employment, to procure much more for his comfort than he could in an independent existence, binds society together, and men become, as it were, interlocked with each other. As society comes into this state, money comes into use, for the purpose of enabling the members of society to effect their exchanges.

For example: a hatter can use for himself but a very small part of what he produces; after supplying himself with one or two hats in the course of a year, his productions must be exchanged with some other person who needs his hats, and can supply him with other articles of which he is in need. The baker, we will suppose is one-but the hatter wants a great deal of bread in the course of the year, while the baker wants but a very small amount in hats. The baker can give his bread until he has received all the hats he wants, and then trade between them must stop, unless some new way of exchanging can be devised. The baker employs workmen, whom he pays for their labor; they want the commodities of the hatter, but the hatter wants nothing of them: they could therefore receive of the baker in payment of their wages, the commodities of the hatter, to such an extent as would supply their wants, but no further. Here the trade would stop again; but these workmen might want beer of the brewer, who in his turn would want hats of the hatter-while the hatter might think he could do without the beer, and would not have it: here would be an opening for further exchanges; but they would by this time become very cumbrous and inconvenient, and moreover very difficult; and there would be no remedy to the inconvenience but for the parties to the exchange to make use of some commodity which would be desirable by every body, and be received by every body, and which could be given from one to another, in greater cr less quantities, according as circumstances might require.

An illustration of this will occur to every one who has read the history of the discovery of America. The natives readily parted with masses of gold for small quantities of iron, and seemed to wonder that the gold seemed so valuable to the Spaniards.

There can be no doubt that such was the origin of money, for different nations in different times have made use of different articles to effect their exchanges, but all were intended to answer the same purpose. In the early ages of the world cattle were principally made use of. "The armor of Diomede," says Homer, "cost only nine oxen; but that of Glaucus cost a hundred oxen. Cattle, however, must have been a very inconvenient medium of exchange, to say the least of it. It must have been very difficult to effect small exchanges, to buy any thing of less value than a whole horse, or sheep, or ox; and the cattle could not be kept on hand without care and expense. Among some people, grain was made use of. There could not be the same objection to grain as to cattle, as it could be divided into such quantities as might be convenient; but it would be difficult to transport any quantity of it from one place to another, and by keeping it on hand too long, the holder would be liable to loss from its deterioration in quality. Among other people, other articles have been made use of, as tobacco in Virginia, or even milkpails in Massachusetts ;* but the use of any of these articles was always attended with inconvenience: the various metals were found to possess the various qualities requisite to make them suitable agents in effecting exchanges. From their hardness they are not likely to perish. They can be kept without expense. They are easily transported, they are divisible into minute parts, so as to be serviceable in large or small exchanges, and they possess that quality of universal usefulness requisite to any thing to make it serviceable as a medium of effecting exchange, which makes every body desirous of possessing it. Among the Spartans, iron was used; among the Romans, copper. The abundance of these metals, however, makes them of less comparative value than others, and requires too great a bulk of them to represent any considerable value. For this reason, na. tions farther advanced in wealth and civilization have made use of those rarer, and consequently more valuable metals, silver and gold.

If this explanation of the origin of money is a correct one, it follows that money is merely a commodity selected to represent the value of other commodities, and is in no wise distinguished from them. It is, like them, subject to fluctuations of supply and demand. It is used as a medium, for no other reason than that it possesses certain qualities which make it the most convenient for the purpose. In fact, in their uncoined state, they are so considered by every body, whether friends or opponents of usury laws. As bullion, gold and silver stand in the market precisely as do lead, copper, and iron. Whoever takes the trouble to read the London price currents, will observe them to be quoted in the same way, with the same ob. servations relative to supply, demand, &c. &c.

The question would then seem to be narrowed down to this-does the coinage of these metals by the government clothe them with any peculiar attribute, and so divest them of their character as commodities as to require specific and arbitrary regulation of their value?

This question cannot be more satisfactorily and clearly answered than by quoting from Adam Smith. He gives us the reason why the metals are coined into pieces of specific weight and fineness. Let us hear what he

says:

"The use of metals in the rude state was attended with two very considerable inconveniences; first, with the trouble of weighing them; and,

The town of Hingham, in Massachusetts colony, once paid its taxes in this article.

secondly, with the trouble of assaying them. In the precious metals, where a small difference in the quantity makes a great difference in value, even the business of weighing with proper exactness requires at least very accurate weights and scales. The weighing of gold, in particular, is an ope ration of some nicety. In the coarser metals, indeed, where a small error would be of little consequence, less accuracy would, no doubt, be neces sary. Yet we should find it excessively troublesome if, every time a poor man had occasion to sell a farthing's worth of goods, he was obliged to weigh the farthing. The operation of assaying is still more difficult, still more tedious; and unless a part of the metal is fairly melted in the crucible with proper dissolvents, any conclusion that may be properly drawn from it is extremely uncertain. Before the institution of coined money, however, unless they went through this tedious and difficult operation, people were liable to the grossest frauds and imposition, and instead of a pound weight of pure silver or pure copper, might receive, in exchange for their goods, an adulterated composition of the coarsest and cheapest materials, which had, however, in their outward appearance, been made to resemble those metals. To prevent such abuses, to facilitate exchanges, and thereby encourage all sorts of industry and commerce, it has been found necessary, in all countries that have made any considerable advance towards improve. ment, to affix a public stamp upon certain quantities of such particular metals as were, in those countries, made use of to purchase goods. Hence the origin of coined money, and those public offices called mints, institutions EXACTLY OF THE SAME NATURE as those of the analyzers and stampmasters of woollen and linen cloth. All of them are equally meant to ascertain, by means of a public stamp, the quantity and uniform goodness of THOSE differENT COMMODITIES, when brought to market."-Wealth of Nations, book iv. Now it seems difficult to suppose that money had different origin any than that which is here supposed. If this was its origin, by what process of reasoning can it be made to appear to possess a character differing from that of every other commodity? The metals, in their rude state, are confessedly articles of merchandise. With what new attribute are they clothed by the coining? The stamp of government is merely a certificate, of an authority which all are bound to acknowledge, that the pieces are of a certain weight and degree of fineness, so that a quantity can be ascertained by counting a number of pieces, without the trouble of weighing or assay. ing. The coining itself was originally a rude device to certify the quality of the metal by means of a mark upon the piece, like the marks we now see upon cast-steel and some kinds of iron; but this would not remedy the evil of weighing. If the mark certifying the weight were put upon one end of the ingot, it could be made lighter by cutting off at the other; consequently, the mode of cutting the metal into pieces of uniform weight, and covering the whole surface, on both sides and the edges, with the stamp, came gradually into use, and coining came to its present state of perfection. Does it appear more reasonable to prescribe what shall be given for the use of one or more of these pieces, than to prescribe what shall be given for the use of a barrel of beef, after it has undergone government inspection and received the stamp of the proper authority, certifying it to be of a certain kind and a certain weight, which certificate "encourages trade," by enabling the buyer to purchase without examining any thing but the mark.

The great object of coining, therefore, appears to have been to save two

sorts of trouble; one, the trouble of weighing, the other, the greater one of assaying. It was intended to promote the public convenience, especially in the smaller exchanges; the acknowledged stamp upon the metal, being respected by both parties, entirely did away with the machinery of scales, weights, and crucibles, in ordinary transactions. It is not probable, that, at the time coining was introduced, such a thing as credit was thought of, except in some peculiar cases. Men exchanged commodities, and completed the exchange at the time. The loan of metals, especially for use in commercial transactions, was then a thing which rarely, if ever, occurred. In this state of society, we cannot understand the reasons which induced lawgivers to prohibit the taking of interest* altogether, as they did. But whatever the reasons were, when commercial credit came into existence, the laws were altered. The authorities were forced to do it from the very necessity of the case. But when the alteration was made, having ancient customs firmly fixed in their minds, they only yielded so far as they were absolutely compelled to yield, and allowed interest to be taken, but restricted the rate to a certain per centage, probably in order that the unforeseen evils that might arise from the innovation should not be very monstrous. These rates were subject of alteration from time to time, but the principle of restriction was adopted by almost all commercial nations, as will be explained as we further examine the subject.

ART. IV. CAUSES OF UNSTEADINESS OF THE CURRENCY, AND THE REMEDY THEREFOR.

NUMBER THREE.

OF THE MEDIUM OF EXCHANGE.-FRANCE, GREAT BRITAIN, AND THE UNITED

STATES.

We propose now to inquire into the condition of several nations as regards those portions of the currency which consist of coin and circulating notes, with a view to ascertain what is the proportion which they severally bear to the amount of production, and to the exchanges that are performed and will afterwards proceed to a similar examination of the whole currency, including coin, circulating notes, and deposits.

In some countries, money is received on deposit by banks or bankers, subject to transfer by the depositor, provided he enters his order therefor upon the books of the bank. Such is the case at that of Hamburgh. Others perform transfers on receiving orders in the form of checks, or drafts, a much more simple operation. Such is the case with the bankers of Lon don. Others not only permit their depositors to make transfers by means of checks, but grant also their own promises to deliver certain quantities of money, by the use of which great facilities are afforded for the performance of all transactions in which money is used. Some of these banks charge commission, and the charge is usually in the inverse ratio of the convenience afforded. That of Hamburgh charges five cents for each entry of transfer,

The law of Moses absolutely forbids the taking of interest. Aristotle says, as moncy cannot produce money, nothing ought to be taken for its use.

and about one half of one per cent. for the re-delivery of the money. Those of Great Britain charge about per cent., while none of those of the United States make any charge whatever.

It is usual with writers on currency to devote considerable space to a description of the various banks that exist throughout the world, with a view to determine the advantages of those of deposit over those of issue, or vice versa; but we shall not trouble our readers in this way, believing that they would deem it equally useful to go into an examination of the advantages of the horse-path, the first wagon-road, the turnpike, and the railroad, with a view to determine which would afford the greatest facilities for the transport of merchandise. To men accustomed to the conveniences resulting from the use of bank notes and checks, the proposition to dispense therewith, and to substitute in the place of the existing system the clumsy machinery of Hamburgh, must appear as extraordinary as would be a proposition to take up the rails of the various roads, and to substitute therefor clay or pounded stone.

It is not unfrequently assumed that the tendency to variation in the Amount of the currency, and consequent unsteadiness of prices, is the result of the substitution of drafts, checks, and circulating notes, for gold and silver, and that if communities would agree to deprive themselves of those facilities to trade, a steady currency might be established. Experience, however, teaches that with every increase in the facility of intercourse and exchange, there is a tendency to equality and steadiness of value, which is much more uniform throughout the world, and from year to year, now, than they were fifty, one hundred, or five hundred years since. The price of grain in the fifteenth century fluctuated in a single year from four shillings to four pounds, and the produce of China, or India, a century since, would sell in England at three or four times the cost, whereas at the present time an advance of 10, 15, or 20 per cent. is deemed sufficient. If unsteadiness in the currency be the consequence of the increased facilities for trading, it will be found that where the restrictions upon the use of those facilities are most numerous, the currency will be smallest, and there will be the least tendency to expansion and contraction; whereas if steadiness be the natural effect of improved modes of transacting business, it will be found that where the people are most free to select for themselves their own medium of exchange, the currency will most nearly approach the amount actually needed for the daily business of life, and will consequently be least liable to expansion or contraction, at the will of either individuals or associations, and thus that the cheapest currency must be the safest and most steady.

The annual product of FRANCE is about fourteen hundred millions of dollars, or forty dollars per head of the population. The quantity of capital remaining in the form of gold and silver coin or bullion, is stated at six hundred millions of dollars, equal to the product of the nation for one hundred and twenty-nine working days. No paper was allowed to circulate of less amount than five hundred francs, equal to ninety-three dollars and thirty-three cents-until, at the recent establishment of the Bank of Havre, permission was granted to issue notes of two hundred and fifty francs. The circulation maintained by the single Bank of France averages in amount forty-five millions of dollars, being equal to the product of ten days.

The annual produce of ENGLAND and WALES is estimated at two hundred and Eixty millions of pounds, or eighty-one dollars per head, viz., twenty-seven cents per day for three hundred working days. The quantity of capital in the