and it is a wonderful confirmation of the truth of our fundamental conception of the nature of money. It is there shewn that John Law's theory of money is a direct violation of that conception, that it involves a contradiction in terms. Several examples of its adoption and failure are then given. And as we are writing these sheets a terrible confirmation of its truth has just taken place. For American banking is based upon John Law's theory of money. And it is to the erroneous nature of American banking, that the present crisis is owing. The theory of the Bank of England in 1810, of basing a paper currency upon the discount of mercantile bills, is then investigated, and its necessary consequences demonstrated, corresponding with the actual phenomena. Thus, we see that all parts of the system mutually sustain one another. We then shew the beautiful action of the true regulating power of the currency, namely the rate of discount; how, by its own natural operation, it maintains the equilibrium between production and consumption, always adapting one to the other, and curbing and promoting them in strict accordance with the requirement of nature, so as to prevent violent convulsions. An historical sketch of the Currency of England is indispensably necessary, and is given in the SIXTH chapter, in which several questions respecting the exchanges are incidentally illustrated. The SEVENTH chapter treats of the Regulation of a Paper Currency, which is, in fact, the summing up of Political Economy. It exhibits the action of the Bank of England in all the great monetary crises since 1783 up to the present month of November, 1857, and a statement is given of the different opinions that have prevailed. And an account is given of Sir Robert Peel's THREE states of opinion on the currency question. It is clearly shewn that his opinions in 1844 were entirely different from those he held, and repeatedly expressed from 1819 to 1833. The Bank Act of 1844 is then explained in detail. Such an extraordinary exposure scarcely ever took place. It is proved to be founded upon contradictory principles, and seeks to attain an object which has been repeatedly condemned by all the great authorities of former times, and by all experience. What its fate will be remains to be seen. Thus, it appears that all the great questions in Political Economy flow directly from the doctrine of Exchange. This work restores the great line of orthodox opinion, so rudely broken of recent years. It is the lineal representative of the ideas of BURKE, of KING, of THORNTON, of HORNER, of HUSKISSON, of the BULLION REPORT, of the FRAMERS OF THE ACT OF 1819. The Currency Question is the most important subject of the day. But it is now in the Arian phase of its existence. Like the throes of Enceladus, it will periodically convulse the world, until it is settled on true scientific principles. That this work is subversive of the dominant opinions of the day is true; but γνῶμαι πλέον κρατοῦσιν ἢ σθένος χερῶν Ideas are no respecters of persons. They will sap the power of rank, of wealth, of number, and of authority. Firmly relying on the invincible power of truth, from however humble an origin it may spring, to win its way to universal empire, I submit these pages to the candour and the intelligence of the world. KENSINGTON, November 25, 1857. H. D. MACLEOD. b CONTENTS. 1. Difference of opinion as to the nature and limits of Political 2. Origin of the true science to be dated from the period of the 5. Extent of it, as conceived by him. Three of his maxims were the overthrow of the previously existing system of Political Economy. 7. Quesnay is the Copernicus of Political Economy. 8. Adam Smith's conception of the nature of Political Economy. 9. J. B. Say's conception of the nature of Political Economy. 10. This conception has been extensively received. 11. Ricardo's Principles of Political Economy and Taxation. 12. Mr. Senior's conception of the nature of Political Economy. 14. Many continental treatises have gone back to the original 15. Necessary to explain the conception of the science as adopted 9 9 10 10 20. The second method of free exchange and unlimited compe- tition is exclusively adopted in this Work. 21. The true object of Political Economy is to discover the laws which regulate the values of quantities, and all quantities which have value, or exchangeable relations, are included in it. 22. Political Economy includes the Present Value of deferred 24. Archbishop Whately has proposed the name of CATALLACTICS. 12 25. We adhere to the name of Political Economy. 26. If there were no exchanges there could be no science of Political Economy. Inadequacy of J. B. Say's definition. 27. Wealth may be produced, distributed, and consumed, without any exchanges, and then there could be no idea of value 28. This, however, requires a peculiar state of Society. 29. It has always failed where the members of Society were on an 30. The Socialists have endeavoured to abolish Political Economy 31. Having adopted this fundamental conception of the nature of Political Economy, what things are excluded from it 32. Such discussions are excluded from this Treatise 33. Advantages of this mode of treating the subject 11. Though it receives its name from passing from hand to hand, it is only current because it circulates something else |