solely dependent upon wages, and are constantly competing with each other for employment. In Hindostan, this effect is very much increased, of course, by the low standard of living, and the cheapness of rice and cotton cloth, which, in that climate, are almost the only necessaries of life. In America, the laborer must have thicker and better clothing, more fuel, a more perfect shelter from the weather; and he also expects a greater amount, variety, and delicacy of food. He is enabled to obtain these additional comforts, because the class to which he belongs is not so numerous in proportion to the rest of the community, because there is consequently not so much competition for employment, and because, if wages are not high enough to satisfy him, he will leave the class of laborers, and become a small landholder, or enter into trade or manufacture on his own account.

Adam Smith long ago distinguished the real price of commodities from their nominal price. Their real price, he says, is the labor which it costs to produce them. So it is; but when they are once produced, their real selling price is the amount of the necessaries, conveniences, or amusements of life that can be obtained in exchange for them. Every man is rich. or poor, according to the degree in which he can afford to enjoy these things; and the real value or price of all the commodities which he possesses, therefore, is the amount of these things which his commodities will purchase. On the other hand, the nominal price of his goods is the money—the number of shillings or dollars which they will bring. This price is called nominal, because for two reasons it is uncertain in amount; it varies with the fluctuations in value of the precious metals, arising from the larger or smaller supply of them obtained from the mines, and it varies with the higher or lower price of the commodities which we wish to purchase with the money. The price may be nominally the same, that is, it may be represented by the same number of shillings or dollars; but it may purchase a larger or smaller amount of commodities than before. Thus, wages and salaries have generally risen in the United States during the last five years, the amount of the increase being, on an average, at least fifteen per cent; but the rise is only nominal, as $115 will not now purchase any more necessaries and comforts than could be bought for $100

in 1850.

A portion of the rise is directly proved to be nominal by the fact, that the dollar does not now contain so much pure silver as it did before 1853 by about seven per cent. Only 345.6, instead of 371.25, grains of pure silver are now coined into a dollar.

It has already been said, that money is not a sign of value, because it possesses value in itself; it is the thing signified. It is custom and the general consent of the community, not the authority of government, nor the stamp upon the face of the coin, which causes money to pass current, like other commodities, and to be received in exchange for them. The stamp is a convenience, as we have seen; for it saves the trouble of weighing and assaying every piece which the seller receives. But if government should affix the stamp which now belongs to a silver dollar to a piece of copper of similar shape and size, and should call this base coin a dollar, it could not oblige the people to receive it as such, or to give their goods in exchange for it at its nominal valuation. It is not the stamp, nor the authority which affixes the stamp, but the known value and weight of the metal which receives the impression, that renders money universally acceptable, or gives it currency. In this matter, as in many others, the government even of a despotic state cannot govern, except by respecting the wishes and preferences of its subjects. If there was good reason to believe that any other commodity-wheat, for instance-would pass more currently in exchange for the various articles which are needed, people would not give their goods for dollars, but would demand wheat, which would then be invested with all the properties of money. And this, as M. Say remarks, has sometimes occurred in practice, when the authorized or government money has consisted of paper which has lost public confidence. The business of coining money, or of dividing the precious metals into pieces of a convenient shape and size, and affixing a convenient stamp, is usually retained exclusively in the hands of the government, to secure the advantages of uniformity, undivided responsibility, and public confidence. If individuals were allowed to assume this office, we should be perplexed by a multitude of coins of different denominations, and we could never be sure that the stamp correctly indicated the weight and fineness of the metal.

Seigniorage is a charge made by government to defray the expenses of the mint, or the cost of converting bullion into coined money. The machinery for coining money is now brought to such perfection, that the actual expense of this process is but trifling; it is computed to amount to one half of one per cent (.005) for gold coins, and one and a half per cent (.015) for silver coins. Some governments, among which, till recently, were those of Great Britain and the United States, performed this work gratuitously, or took upon themselves the expense of the coinage. Any person might carry any amount of gold and silver bullion of the requisite fineness to the mint, and, after the time required for coining so much metal had elapsed, or as soon as the demands of previous applicants were satisfied, he was entitled to receive an exactly equivalent weight of gold or silver coins. But the time required for the process, or to satisfy previous comers, involved the loss of a small amount of interest; and it was therefore provided in the United States law, that the owner of the bullion might receive an equivalent weight of gold and silver coins for it immediately, with a deduction of one half of one per cent, as an indemnification to the mint for the delay caused by the coin

age.

I

At present, however, the law of 1853 provides that the depositor of gold bullion shall always pay this charge of one half of one per cent, and the government reserves to itself the privilege of issuing as much silver coin as the public seem to require, at a profit of about five per cent. The French government levies a seigniorage of only per cent on gold and 11 per cent on silver, hardly enough to defray the actual expense of the process. Governments in former times attempted to convert their mints into sources of revenue, by charging a seigniorage of 10 or 15 per cent. This form of taxation, for it is nothing else, would not be practicable in our day, as private coiners would enter into competition with government, being stimulated by the large profits that would accrue from the manufacture of good coin. Their operations would flood the country with a depreciated currency; the prices of other commodities would rise in the same ratio with the over-valuation of money.

Some writers have contended that the state should not make any charge for coining money, but that the expenses of

the

the mint should be defrayed by the public. They have an indefinite impression that the quantity of precious metals in the country might thus be increased, persons being encouraged to bring them hither by the opportunity of having them manufactured, or coined, gratuitously. Of course, this liberal offer of the government would tempt them to bring more bullion here to be coined; the only question is, whether it would stay here after it was coined. It is difficult to see that the country would gain anything by having fifty millions of dollars annually brought hither in bullion for the sole purpose of receiving government stamp, and then immediately exported to Europe, without paying our mint anything for the process, which costs over half a million of dollars. During the five years beginning in January, 1850, the United States mint and its branches coined over 260 millions of dollars in gold. Hardly one third of this great amount of coin was needed for our own use; in fact, the custom-house returns during this period show that about 170 millions in specie were shipped from this country to Europe. What possible advantage can there be in bringing hither more gold than we want, transporting it first from San Francisco to New York, thence to Philadelphia, coining it there gratuitously at a heavy expense, carrying it back to New York, and then shipping it off immediately to London or Paris, where it will be melted up as soon as possible, and converted into English or French coins? Why should it not be shipped immediately to the place where it is needed, thus saving the entire expense of coinage, the cost of much unnecessary transportation, and the interest on the whole amount for at least two months' needless delay? It must not be supposed that England will obtain the gold, either as bullion directly from San Francisco, or as coin by way of New York, without rendering a full equivalent for it in other commodities; or that the United States suffer any loss by allowing the miner to exchange his gold for other goods. Gold is only an article of merchandise, like copper, tin, and iron; and, like them, it must be sent to the market where it is most wanted, and where, consequently, it can be sold to the greatest advantage. Would it be good policy, in order to increase the stock of copper in this country, to enact that the pig metal should be manufactured into sheets, plates, and rods at the ex

pense of government, without charge to the owner, who should also receive a free gift of the interest on the whole value of the copper during the time required for its manufacture? Such a law would doubtless bring all the Chilian copper hither, to be put into a form fit for use, and England and France would then obtain their share of it without any charge for the transformation it had undergone. As McCulloch remarks, "those who contend that the state ought to defray the expense of the coinage, might, with equal cogency of reasoning, contend that it ought to defray the expense of manufacturing gold and silver teapots, vases, &c. In both cases, the value of the raw material, or bullion, is increased by the cost of workmanship. And it is only fair and reasonable that those who carry bullion to the mints, as well as those who carry it to the jewellers, should have to defray the expenses necessarily attending its conversion into coin."

"But there are other reasons," continues McCulloch, "why a seigniorage, to this extent at least, ought to be exacted. Wherever the expenses of coinage are defrayed by the state, an ounce of coined gold or silver, and an ounce of gold or silver bullion, must be very nearly of the same value. And hence, whenever it becomes profitable to export the precious metals, coins, in the manufacture of which a considerable expense has been incurred, are sent abroad indifferently with bullion," and even in preference to it, as the latter must be weighed and assayed when it reaches its place of destination, while the coins bear the evidence of their weight and fineness on their face. "Admitting, however, that it were possible, which it most certainly is not, to prevent, or at least materially limit, the clandestine exportation of coins, it is conceded on all hands to be quite nugatory to attempt to prevent their conversion into bullion. In this there is almost no risk. And the security with which their fusion can be effected, and the trifling expense attending it, will always enable them to be melted down and sent abroad whenever there is any unusual foreign demand for the precious metals. This exportation, however, would either be prevented or materially diminished by the imposition of a seigniorage or duty, equal to the expense of the coinage. The coins, being by this means rendered more valuable than bullion, would be kept at home in prefer