in store, to provide against daily calls or sudden emergencies, is the only unproductive portion of his capital; he is subject to a loss of interest on the whole amount thus retained. It has been already proved, that it is only through the constant transformations of capital, through its repeated consumption and reproduction, that it is made to yield a profit. And even as an article of unproductive wealth, it may be said of money that it gratifies no taste, and, in its capacity as money, apart from its character as a portion of wealth, it yields no enjoyment. The coin which a man keeps in his pocket does not, like his shoes or his hat, contribute to his comfort; it is a convenience to him only as it supplies immediate means for making small purchases or satisfying small demands.

Thus it answers a useful purpose; for, as I have said, it facilitates exchanges. In this respect, it corresponds perfectly, if I may adopt Adam Smith's illustration, to the land which is used for roads and other avenues of passage and transportation. The land thus appropriated affords no rent; it cannot be used for the purposes either of agriculture or building. We cannot do without the roads, any more than we can do without money; but the necessity of devoting much land to this use is a tax upon the community, and a tax to a serious amount; for it yields no profit, and it costs a considerable sum for keeping it in repair. So the cost to a community of the money which it needs is a serious drain upon its resources. For money also needs to be kept in repair; the loss by abrasion, by actual rubbing down through much handling, is considerable. The deficiency in weight of the old, worn coins, when they are called in to be recoined, has to be made up by the public. An operation of this kind in William and Mary's time, recoining all the specie currency of Great Britain, and issuing it again of the proper weight, cost the government about two and a half millions sterling, or twelve millions of dollars. McCulloch estimates the whole loss from abrasion, and from such accidents as shipwrecks, fires, and forgetting the places where hoards of it have been buried or otherwise concealed, at one per cent a year; estimating, as Mr. Senior does, the whole metallic currency of England at thirty millions sterling, or 150 millions of dollars, the annual cost of maintaining this currency in repair is about a million and a half of dollars.

This, however, is not the heaviest charge which the possession of a large amount of coined money entails upon the nation. The loss of profit or interest may be estimated by regarding the specie currency as so much unproductive wealth, which, if it were turned into active capital, would increase the national income by a large annual profit. The whole gold and silver currency of France, for instance, is estimated at 400 millions of dollars; considering the rate of profit in that kingdom to be only six per cent, the annual expense of keeping so much money within the limits of the country is twenty-four millions; add one per cent as the cost of keeping the coin in repair, and the total expense is twenty-eight millions of dollars, or more than half the sum which would defray the whole expense of our national government in a time of peace. We cannot estimate with much precision the amount of currency here in the United States; but the returns of all the banks in the Union, made to the Secretary of the Treasury in May, 1854, indicate that the average circulation of banknotes is now about 200 millions of dollars, founded on specie reserves held by the banks, of sixty millions. The gold and silver in the treasury depositories of the United States at the same period amounted to twenty-five millions. If we suppose that forty millions of gold and silver coins are in the hands of individuals and other corporations than banks, an estimate certainly not too large, we have 265 millions of dollars as the total of our circulation. The average rate of profit throughout the United States is at least as high as ten per cent; add one per cent for the loss by abrasion, and by shipwrecks, fires, &c., and we have over twenty-nine millions for what would be the annual cost of our currency, did it consist exclusively of specie. In fact, a large portion of it consists of bank-notes, a cheap substitute for coin; so the actual cost is but eleven per cent on 125 millions of specie, or a little less than fourteen. millions a year.

I should be unwilling to introduce these statistical computations, if they did not contribute more powerfully than other arguments to overthrow the old popular errors, that coined silver and gold alone constitute national wealth, or that they possess material advantages over every other commodity which is admitted to be wealth. There is no occasion to

undervalue the real service that is rendered by money; it is just as essential in every civilized, nay, in every barbarous community, as a system of roads or other means of transportation. Our only point is, that it is a very expensive servant, and that the true policy of nations is to get along with the use of as little of it as possible. We need a certain amount of money, proportioned to our population, the extent of our territory, and the magnitude of our commercial operations; to attempt to amass a larger amount than this, would be as great a folly as to lay out a greater number of roads than is necessary, and to build more carriages than are needed to carry the freight and passengers. Because specie is costly, there have been invented of late years a great variety of cheap substitutes for it, chiefly various forms or sorts of bank-notes, some of which are very useful, and others very mischievous expedients. The great advantage that gold and silver money possesses over them all is the perfect security that it affords; the great disadvantage is its expensiveness.

The utility of such a universal medium of exchange as money is very clearly and briefly explained by Adam Smith. "When the division of labor has been once thoroughly established, it is but a very small part of a man's wants which the produce of his own labor can supply. He supplies far the greater part of them by exchanging that surplus part of the produce, which is over and above his own consumption, for such parts of the produce of other men's labor as he has occasion for. But when the division of labor first began to take place, this power of exchanging must frequently have been very much clogged and embarrassed in its operations." One man may have hats that he wishes to sell, and another person. may wish to buy one. But the latter may have only bread to offer in payment, an article with which the former may be already provided. "No exchange can in this case be made between them. In order to avoid the inconveniency of such situations, every prudent man must naturally have endeavored to manage his affairs in such a way, as to have at all times by him, besides the peculiar produce of his own industry, a certain quantity of some one commodity or another, such as he imagined few people would be likely to refuse in exchange for the produce of their industry." If the whole community should

select and agree upon some one article for this purpose, every person in it would gladly accept this commodity in exchange for anything that he had to sell; he would receive it, not because he wished to use or consume it, but because he intended to buy something else with it; and he knows that the person who has this other thing to sell, will readily part with it in exchange for that commodity which all had agreed to accept. This is just the case with money; every one is willing to receive it, not because he intends to use it as a thing to be consumed, but simply because he knows that every one else is. willing to take it in exchange. He receives it because he intends to part with it as soon as possible in exchange for something that he does desire to consume. The first requisite, then, for an article that is intended to be used as money, is. the willingness of everybody to receive it in exchange for anything that he wishes to sell; and the characteristic quality of money is that it is not intended, and in fact is not fit, to be used for any purpose but that of being passed from hand to hand. It is simply a ticket of transfer, a medium of exchange.

It would seem, then, that almost any commodity might, by common consent, be used as money; and, in fact, different nations have employed a great variety of articles for this purpose. The North American Indians used wampum, or small shell beads strung together as ornaments; and our Puritan fathers, having very little silver and gold, gravely adopted this Indian money, and conducted their own traffic with each other, as well as with the savages, in wampum. Afterwards they used Indian corn, their staple product, as currency. Some African and East Indian tribes use cowries, another kind of small ornamental shells strung together; the inhabitants of Newfoundland adopted dried cod for this purpose, and the Abyssinians. rock-salt.

Some considerations of convenience, however, have generally inclined civilized nations to adopt one or more of the metals for use as money. "Metals can not only be kept with as little loss as any other commodity, scarce anything being less perishable than they, but they can likewise, without any loss, be divided into any number of parts, and by fusion these parts: can be easily reunited, a quality which no other equally du

rable commodities possess, and which renders them peculiarly fit to be the instruments of commerce and circulation." The quantity of metal can be proportioned to the precise quantity of any other commodity which we have occasion to purchase. The weight and purity of a lump or bar of metal can also be determined, once for all, with great exactness; and when determined, they can be made known by a stamp, proper precautions being taken against this mark being counterfeited, and the stamp being made to cover the whole surface of the piece, so that no portion of it can be abstracted without the loss being readily perceived. The trader is thus relieved from two very considerable inconveniences, the trouble of weighing and of assaying every piece of metal which he receives. The qualities which recommend the metals for use as currency indicate with sufficient clearness the second requisite of money, namely, that it shall be a good common measure of value, so that an exact equivalent can be offered in it for any amount or quantity of value which we wish to exchange.

The importance of this requisite appears from the experience of the ancient Greeks, who seem to have used cattle as money; Homer tells us that the armor of Diomede cost only nine oxen, whilst that of Glaucus cost one hundred. "But cattle," says Colonel Torrens, "must have been a most inconvenient instrument of exchange. The person who wished to purchase a supply of cloth, and who had nothing to give in exchange for it but a sheep or an ox, would be obliged to buy cloth to the value of a whole sheep or a whole ox at a time. He could not buy less, because his medium of exchange, his money, could not be divided without loss; and if he wished to purchase more, he would for the same reason be obliged to take double or treble the quantity, the value of two or three sheep, or two or three oxen. Now, it is evident that a medium so bulky, so unportable and indivisible as cattle, would frequently obstruct the interchange of commodities. Finding it often difficult, and sometimes impossible, to exchange by means of cattle the surplus products of their respective industry for the precise quantity of other articles which they might require, the inhabitants of the country in which cattle formed the only acknowledged measure of value would, on many occasions, be