The union of the different qualities of comparative steadiness of value, divisibility, durability, facility of transportation, and perfect sameness, in the precious metals, has, doubtless, formed the irresistible reason that has induced mankind, in every civilized community, to employ them as money. The value of gold and silver is certainly not invariable, but, generally speaking, it changes only by slow degrees; they are divisible into any number of parts, and have the singular property of being easily reunited, by means of fusion, without loss; they do not deteriorate by being kept; and, from their firm and compact texture, they are very difficult to wear. Their cost of production, especially of gold, is so considerable, that they possess great value in small bulk, and can, of course, be transported with comparative facility; and an ounce of pure gold and silver, taken from the mines in any quarter of the world, is precisely equal, in point of quality, to an ounce of pure gold or silver dug from the mines in any other quar ter. No wonder, therefore, when all the qualities necessary to constitute money are possessed in so eminent a degree by the precious metals, that they have been used as such, in civilized societies, from a very remote era. "They became universal money," as M. Turgot has observed, "not in consequence of any arbitrary agreement among men, or of the intervention of any law, but by the nature and force of things."

The greatest drawback attendant on the use of

gold and silver as money consists in the high value of these metals, and in the consequent expence they occasion; and there can be no doubt that a desire to lessen this expence has been one of the chief causes that has induced all highly civilized and commercial nations to fabricate a portion of their money of some less valuable material. Of the various substitutes that have been resorted to for this purpose, paper is, in every respect, the most eligible. By using paper instead of gold, we substitute the cheapest in room of the most expensive currency; and enable the society, without loss to any individual, to exchange all the coins which the use of paper money has rendered superfluous, for raw materials or manufactured goods, by the use of which both its wealth and its enjoyments are increased. Ever since the introduction of bills of exchange, almost all great commercial transactions have been carried on by means of paper only. It has also been used to a very great extent in the ordinary business of society. And as paper notes of given denominations may be rendered exchangeable at the pleasure of the holder, for given and unvarying quantities of gold or silver, their value may be maintained on a par with the value of these metals; and all injurious fluctuations in the value of money may be as effectually avoided, as if it consisted wholly of the precious metals.

We shall afterwards endeavour to unfold the principles that determine the value of commodities, and, consequently, of money, which is nothing whatever

but a commodity. And as the observations now made seem to be sufficient to give such a general idea of the nature and functions of money, as is necessary to facilitate the acquisition of a knowledge of the principles of Political Economy, the reader is referred to the authors who have treated expressly of Money for a further elucidation of the various ques tions connected with it.

SECTION III.

Different Employments of Capital and Labour-Agriculture, Manufactures, and Commerce, equally advantageous-The investment of Capital in different Businesses determined by the Rate of Profit which they respectively yield.

In the previous section, it has been shown, that the increase and diminution of capital is the grand point on which national prosperity hinges,—that if you increase capital, you instantly increase the means of supporting and employing additional labourers-and that if you diminish capital, you instantly take away a portion of the comforts and enjoyments, and perhaps also of the necessaries, of the productive classes, and spread poverty and misery throughout the land; and it has also been shown, that the increase or diminution of the rate of profit is the great cause of the increase or diminution of capital. Now, if such be the case, it seems impossible to resist coming to the conclusion, that the employments which yield the greatest profit, or in which industry is most

productive, are the most advantageous. But Dr Smith, Mr Malthus, and most other political economists, have objected to this standard. They allow that if two capitals yield equal profits, the employments in which they are engaged are equally beneficial to their possessors; but they contend, that, if one of these capitals be employed in agriculture, it will be productive of greater public advantage. It is not difficult, however, to discover that this opinion rests on no good foundation; and to show that the average rate of profit is, under all circumstances, the single and infallible test by which we are to judge which employment is most and which is least advantageous.

A capital may be employed in four different ways; either, first, in the production of the raw produce required for the use and consumption of the society; or, secondly, in manufacturing and preparing that raw produce for immediate use and consumption; or, thirdly, in transporting the raw and manufactured products from one place to another according to the demand; or, fourthly, in dividing particular portions of either into such small parcels as suit the convenience of those who want them. The capitals of all those who undertake the improvement or cultivation of lands, mines, or fisheries, are employed in the first of these ways; the capital of all master-manufacturers is employed in the second; that of all wholesale merchants in the third; and that of all retailers in the fourth. It is difficult to conceive that a capital can be employed in any way which may not be classed under some one or other of these heads.

On the importance of the employment of capital in the acquisition of raw produce, and especially in the cultivation of the soil, it is unnecessary to enlarge. It is from the soil, including under that term mines and fisheries, that the matter of all commodities that either minister to our necessities, our comforts, or our enjoyments, must have been originally derived. The industry which appropriates the raw productions of the earth, as they are offered to us by nature, preceded every other. But these spontaneous productions are always extremely limited. And it is by agriculture only, that is, by the united application of immediate labour and of capital, to the cultivation of the ground, that large supplies of those species of raw produce, which form the principal part of the food of man, can be obtained. It is not quite certain that any of the species of grain, as wheat, barley, rye, oats, &c. have ever been discovered growing spontaneously. But, although this must originally have been the case, still the extreme scarcity of such spontaneous productions in every country with which we are acquainted, and the labour which it requires to raise them in considerable quantities, prove beyond all question that it is to agriculture that we are almost exclusively indebted for them. The transition from the pastoral to the agricultural mode of life is decidedly the most important step in the progress of society. Whenever, indeed, we compare the quantity of food, and of other raw products, obtained from a given surface of a well cultivated country, with those obtained from an equal surface of an

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