offensive and defensive, with a great political party-which insists that it shall. This omnipresent, and almost omnipotent, interest has contrived to get the whole business of the country, its producing industry and its commerce, domestic and foreign, within the control of its grasp. It has possessed itself of upwards of threefourths of the newspaper press-a swarm of book-makers-public orators absolutely innumerable-and in private life, wherever two or three are gathered together, a vast majority of all the smaller Sir-Oracles who from the prominence whether of their proper position or of their pretensions, are accustomed to lay down the law to the little local spheres, or rather globules, of society that cluster naturally about them. An universal credit system of business having gradually established itself, ramified out into the pettiest details of the humblest traffic, and the institutions through whose agency the whole is administered having combined, with that function of lending money, the coordinate one of manufacturing a paper currency, the influence over the actions and opinions of men derived from the former function is made naturally to extend itself to the maintainance of the latter. There exists indeed no necessary or even natural connexion between these two functions, that of lending money and that of issuing paper currency; and their combination in the same hands is one of the most fatal evils with which a country can be afflicted-each perpetually stimulating the other to excess and abuse. But here is the actual state of things in full operation over the whole length and breadth of the country; and it is in this union, and in the power which the one function gives to maintain the other, that we can find the only explanation of the singular hold upon the public mind which this strange infatuation of paper-money has acquired, and despite the severest lessons of experience, seems still to retain.

This vast interest is by far the most powerful of all the elements of opposition against which the Democratic party is now engaged in so desperate a struggle. But for this, the numerical forces of the two parties, under the great principles which form the political creed of the present Administration, would be in the ratio of ten to one, instead of being so much nearer to an equality as we now witness them. Its partisans insist, and for the most part no doubt honestly believe, that a "convertible" paper-money is a better currency than specie. They therefore set their faces in utter hostility against the precious metals. They are in favor of the removal of all restrictions upon the circulation of paper. They denounce any attempt on the part of any great dealer in money to conduct his transactions in the precious metals, and will not permit any exception to be made to the universal use of paper, even in the smaller channels of circulation, and for all the minor purposes of

daily life, as the only medium which is to constitute practically the money and the currency of the country.

By paper-money, in the sense in which here used, we wish our readers to bear clearly in mind that we mean credit-money, such as the bank-note currency now in use amongst us-such paper as rests wholly or in part on the basis of confidence on the part of the community, being stamped with a promise to pay, which, by universal understanding, is meant to signify a promise to pay on condition of not being required to do so. A paper currency in the form of certificates of deposite, actually and bona-fide representing so much specie, dollar for dollar, would be a very different thing, combining as it would every convenience of form possessed by paper, with every advantage of substance and solidity inherent in the precious metals themselves. But, according to its common acceptation, we here use the term paper-money in the sense of credit-money, or confidence-money.

The theory of money is a very simple matter after all, and easily intelligible to every comprehension, notwithstanding the mystification with which the advocates of paper-money have sought to envelope it. The use of money is to serve as a medium of exchange, for which purpose it must also be a measure of value. This is its primary, essential attribute, indispensable to the performance of the function which it is created to discharge, that of a medium of exchange. Whatever is designed to serve as a measure of value must possess an intrinsic and certain value in itself, as measures of dimension or of weight must possess themselves the dimension or the weight for the measurement of which they are to serve as the units or standards. Value is derived primarily from labor, which is itself induced by the capacity of the object upon which it exerts itself to subserve the gratification of human wants or desires. Now the precious metals do possess the value derived from labor, the process of their extraction from the mines being a difficult, slow, and very expensive one; and in addition to the demand for them created by the fact of their universal use as the money of the world. they are used in a thousand modes to minister to human comfort and luxury through the arts. They unite moreover in a remarkable manner all the properties requisite to adapt them to the purpose of a measure of value and medium of exchange. The supply of them existing in the world approximates so nearly to perfect stability, that for practical purposes it may be assumed as absolutely fixed and uniform,—the annual production being entirely insignificaut in comparison with the stock permanently on hand, while the large proportion of the whole amount used in the arts serves as a perpetual corrective to fluctuation in that portion which is used for the purposes of money; ; since the slightest depreciation of their value from excess of supply would remedy itself by the conversion VOL. V. NO. XIV.-FEBRUARY, 1839.

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of a larger amount into articles of luxury and display; while on the other hand, an appreciation of value arising from deficiency could not fail speedily to transfer a portion of the latter back into the shape of coin. When in addition to this property of stability of supply, manifestly the first requisite for a measure of value, we consider their uniformity of quality-their hardness and durabilityand their capability of division into forms of the most convenient dimension, for the purposes of use from hand to hand, and of receiving a stamp to attest at a glance their purity and genuineness, with the immediate facility of detecting any spurious alloy or counterfeit-we shall not be surprised that the universal experience and intelligence of the world have selected them as the most suitable materials for this all-important purpose. A brief consideration of this train of reflection will also suffice, we imagine, to awaken some slight distrust of the soundness of the notion recently promulgated by high authorities, that the world has heretofore, until within comparatively a few years past, been under a total delusion on this subject, that the precious metals are entirely unsuited to the purposes of money, the supply of them being entirely inadequate to the demand-and that the cheaper material of paper is much better, when invested with an imaginary value by the consent of the community to use it as a medium of exchange, and by their confidence that the promise to pay on demand with which it is stamped will be realized, provided that no more than one-fifth or one-fiftieth, as the case may be, of the amount of these promises shall ever be required to be performed.

Nothing can in fact be more absurd than this notion, to which the profound ignorance that seems to prevail among most of our mercantile classes upon the first principles of political economy, has given vogue amongst them,-namely that there is not enough of gold and silver in the world to serve the function which these metals have heretofore been accustomed to perform, that of the common measure of value and medium of exchange. It might with as much reason be objected to the yard-stick that there are not enough of them, for the purposes of measurement, or that it does not stretch with the increase of the amount of commodities to which it is to be applied. It is plain that half of the existing quantity would answer very nearly, if not quite, as well, the nominal scale of prices of all commodities simply graduating itself accordingly, and other metals being more extensively used for the smaller subdivisions of silver which might then become inconveniently minute in size. And at any rate so long as such enormous quantities of these metals continue locked up uselessly in the form of massive articles of luxury and display, from which the urgency of demand created by defi ciency of supply would soon call them forth into activity in the shape of money, it is indeed amazing that any person pretending to

a decent average of information or common sense, can suffer himself to be so preposterously deluded.

It is a great mistake to suppose that the number and amount of actual transfers of money as the medium of exchange in the vast and immeasurable business transactions of an industrious commer. cial community, bears any considerable proportion to the number and amount of those transactions. At the period of greatest expansion of our paper currency prior to the late convulsion-when the amount of transactions was so enormous, and the activity of business so morbidly rapid-its amount was not more than about a hundred and forty millions of dollars, and the actual circulation of specie was very limited, by reason of the almost universal use of paper medium, notwithstanding the quantity existing in the country. The great bulk of all such transactions are in truth conducted on credit between man and man. The same process takes place between individuals, and sections of country, as between distant nations, in the management of their commercial transactions. They consist mainly of the interchange of commodities, which must always in the long run nearly equal each other in aggregate value,—conducted through the various forms of personal credit, such as running leger accounts. sound promissory notes and bills of exchange representing real transactions; and it is only the comparatively small balances that are periodically settled by the actual payment of money. These credits are of a perfectly sound, healthy and natural character. They are founded upon real transactions, and depend on personal confidence, being entered into voluntarily, and with intelligent circumspection. They all refer themselves indeed to the existing standard of value-which in the commerce of nations is gold and silver, and nothing else, and which in the commerce of individuals, and of different sections of a country, though it may be made to fluctuate more or less from time to time by the use of elastic artificial substitutes, must always, after all, sooner or later be brought down again to that standard, by the regulating check of foreign commerce. But they refer themselves to it in the same manner in which in the measurement of the millions of yards of cloth fabrics of all kinds-and, in short, of all the manifold computations of the dimensions of length and breadth which are constantly taking place the yard-stick or foot-rule is referred to, though comparatively rarely applied to the actual process of measurement.

But it may still be supposed by some, that the amount of the precious metals which any one country can possess, as its proportion of the whole common stock of the world, relatively to its population, industry and wealth, would still be insufficient for the purposes of actual circulation which may be required by its peculiar circumstances, of extent of territory, sparseness of population, and extraordinary business activity and enterprise of its inhabitants:

and that the advantage of convenience of form possessed by paper for distant transmission and rapid circulation in large amounts, over the metals, whose movements must be clogged by their weight and bulk, by the risk of transportation, and by the smallness of their subdivisions, is calculated to adapt it better than specie to such a country and such a population, as a "currency" or "circulating medium." Frequently as we hear this notion advanced, the sophism of its evasion of the true point of controversy is ridiculously shallow. For apart from the obvious considerations, that in the first place, for all purposes of personal expenditure, such as travelling, &c., gold and bilis of exchange are at least as convenient as bank notes-and, in the second place, that in all commercial communities where the metallic medium alone is used, the larger amounts frequently required circulate constantly in commercial transactions without the actual process of counting, in kegs or sacks of "which the seals are often unbroken for years--apart, we say, from these considerations, it is plain that nothing is easier than to combine the advantages of solidity of substance and convenience of form, to any extent that may prove desirable, by converting specie into the form of paper, through certificates of actual specie deposite, which would indeed afford a paper currency, as before suggested, entirely exempt from all the evils inseparable from every paper 'medium founded on any basis less broad and solid than the actual dollar for dollar. And the quantity of money actually required for circulation--apart from those private forms of credit which would still constitute the medium of the great mass of private transactions -would be but little beyond the actual amount of specie now in the country. The facility with which specie is to be obtained by the simple creation of a natural demand for it, is sufficiently shown by the increase of about seventy-five millions which has taken place in our stock within the course of the last eight or ten years. This fact should be borne in mind by the friends of paper-money, that the only advantage which the candid and intelligent writers on that side of the question (witness Mr. Gallatin) claim for paper, is this, that by the substitution of paper, sustained by public confidence, for an equal quantity of specie, the use of the latter is left free as so much additional capital. In other words, the annual saving or gain is worth the interest on the quantity of specie superseded by paper. The answer to this argument is easy. In the first place, apart from the main evil of fluctuation, the cost of the paper-money machinery is much greater than this annual saving of a few millions; in the second place, a circulating medium is a great labor-saving machine, for the use of which we ought not to object to pay, performing as it does functions so useful and indispensable, as we do not grudge the interest on the capital invested in a steamengine; and in the third place, this annual saving, made at the