from a state of apathy and unproductiveness to one of activity and productiveness enabling every man to sell his laborreceiving in exchange the commodities required for the consumption of wives and families, who before were like to suffer for want of the common necessaries of life. What, however, was it, that gave value to these notes, and why was it, that they circulated so much more freely than those of the blacksmith and the farmer? Because there existed in the community a confidence that behind them stood a pile of money sufficient to redeem each and every one of them, whenever and however presented. Without the existence of that belief, they could not have circulated, as would soon be seen were there established a drain of gold — producing a steady diminution of the quantity in the possession of the bank, until at length even a single note failed to be paid on presentation. From that moment their circulation would be stopped; the suspension of movement would again take place; and the blacksmith, the machinist, and the wheelwright would again mourn over instruments that they would gladly exchange for food and cloth; while the farmer and the manufacturer would suffer from the difficulty of obtaining machinery for the better production of food and clothing. Money is to society what fuel is to the locomotive and food to the man the cause of motion, whence results power, Withdraw the fuel, and the elements of which water is composed cease to move, and the machine becomes stationary. Withdrawal of the food from man is followed by paralysis and death; and such, precisely, is the effect of failure of the necessary supply of money-the producer of motion among the elements of which society is composed.

When, therefore, the farmer complains that money is scarce, and the laborer, mechanic, and manufacturer repeat the complaint, they are right. It is money that is needed, and their common sense does not in any manner deceive them. In every country of the world, pleasant feelings are excited by hearing of the incoming of gold and silver, because there with are associated ideas of activity and energy; while, on the contrary, fear and sorrow are excited by their outgoing-there being therewith associated ideas of dulness, inactivity, suffering, and death. To this it is due that in almost every nation of Europe laws have been enacted having for their object the prohibition of the export of the coin of

the realm. The end sought to be accomplished was a right one the law-makers having failed only in discerning the proper mode of seeking its accomplishment. They needed to attract money by giving to their subjects the peace and security, and the exemption from taxation, required for enabling them to appropriate more of their labor to the accumulation of machinery for facilitating the production of the commodities with which it could be purchased. Money is capital, but capital is not necessarily money. When a man negotiates a loan, he obtains money for which he pays interest; when he borrows the use of a house, he pays rent; when he hires a ship, he pays freight; and there is strict propriety in maintaining the use of the term "money market," in preference to adopting that of "capital market," which it is now proposed to substitute for it.

§ 6. The motion described in the passage above given, proceeded, as the reader has seen, from the substitution of banknotes for those of individuals, the use of which, however, as we are assured, tends to the expulsion of the precious metals. The reverse of this being the fact money always tending towards those countries in which there exists that confidence which induces men to accept the transfer of property in coin by means of circulating notes-we have all the advantage suggested by M. Coquelin, unaccompanied by the disadvantage that has been suggested. All commodities will seek that place at which they are most utilized; and more than with any other is this the case with the precious metals. A hundred thousand pounds being, by the use of such notes, made to perform the work that without them would have required half a million, their effect has always been to lower the rate of interest for the use of money, to the great advantage of those who required to borrow it-while increasing the production, and diminishing the cost, of the commodities required to be used by the owner of the gold; to the great advantage of both. Such are the effects which are now observed in both France and Germany. In the former, bank-notes have only recently come into use, but the import of gold increases with the extension of credit, and the decline in the rate of interest. In the latter, the habit of association, and the extension of credit, are now rapidly growing by help of the Zoll-Verein, or Customs-Urion, esta

blished with a view to bring together the producer of food and wool and the consumers of food, cloth, and iron. It is through this increase in the utility of the metals that there has been a decline in their value the greater facility of purchasing them with cheaply-produced food and manufactures, giving increased power to apply them to various uses in the arts. So is it with all other commodities. As improved steam-engines enable us to obtain a larger amount of power from the same quantity of coal, the utility of coal increases, but its value declines, because of the increased facility of obtaining more coal, and more iron for the construction of other engines. As the old road becomes more useful from the increased use that is made of it by a growing population, its value declines, because of the growing facility of obtaining new and better roads. Utility, as the reader has already seen, is the measure of the power of man over nature, while value is the measure of the power of nature over man - of the obstacles to be overcome before a commodity can be acquired; and this declines as the former rises. With every augmentation of wealth resulting from association and combination, there is an augmented power to subject to cultivation the richer soils; and with every stage of progress in this direction, the value of labor rises, while that of the original poor soils as much declines. Such, too, is the case with the precious metals, whose value everywhere declines as their utility increases. Wherever, and whenever, they are hoarded, they are useless, and the rate of interest is high. To reduce that rate, it is only needed that they be applied to their proper use that of promoting those exchanges of service which constitute the commerce of man with his fellow-man.

§ 7. With increase in the supply of money, there is everywhere a steady tendency towards an equalization of the price paid by the poor and the rich for the services of this great instrument of association. A century since, the British three per cents. were higher than they are now, and of course the rate of interest on such securities was lower; but the rate of interest paid by men of small means was greatly higher. So in France, when the government could borrow at five per cent., the weekly charge in the retail operations of the markets of Paris was nearly a hundred and seventy-five per cent. So is it now throughout

the United States. The wealthy man can borrow at ten or twelve per cent., but the small manufacturer can scarcely do so at any price; while the poor laborer is happy to obtain credit at even cent. per cent. Whenever, and wherever, money is scarce and credit is impaired, there is great inequality. So soon, however, as it becomes again abundant, the prices charged for its use tend gradually towards a level-the small operator, of good character for punctuality, obtaining loans at nearly, if not quite, as low a rate as does his opulent neighbor. With the growth of wealth, in whatsoever form, there is a tendency towards equality, manifested by a constant increase in the proportion of the laborer or artisan, and corresponding diminution in that retained by the land-owner or other capitalist; but in none of the operations of life is that tendency so frequently or so clearly manifested, as in the transactions connected with the use of money of all the machinery of exchange in use by man, the one that renders the largest amount of service, and at the smallest cost.

With every increase in the supply of money, there is, too, a diminution of the burden imposed by pre-existing capital. It is within the knowledge of every man who reads this volume, that mortgages become more and more oppressive as money becomes more scarce; and that as the supply increases, there is a diminution of the weight of the mortgage, both as regards the payment of interest and the repayment of the principal. In the former case, if the movement be continued for a sufficient length of time, it results in the forced sale of the incumbered property, as was seen to so great an extent in this country in 1842, and has recently been seen in Ireland. The rich are thus made richer, while the poor are ruined. Every step towards increase in the facility of obtaining money is therefore equalizing in its character.

Again, with every increase in the abundance of money, taxes become less oppressive to those who pay them, and less beneficial to those who receive them, except, in so far as an increased production of the commodities required for their consumption, makes amends for decline in the value of the one in which their salaries are paid. The men of fixed incomes-whether soldiers, judges, generals, or sovereigns lose now by the substitution of the cheaper gold for the dearer silver; but the farmer, the laborer, and the other tax-payers of the country, profit; and here again

we have evidence of the highly equalizing tendency of an increase in the power of man, over those great deposits of the only commo dities capable of being used with advantage in the transfer of property from hand to hand.

That such is the tendency of the greatly increased facilities for obtaining the precious metals, is clearly seen by the men of Europe who derive their means of existence from the public treasury - from money-rents or from interest; as is shown by the ingenious efforts in France and Holland for excluding gold from circulation. The public debt of the latter being immense, and the men who look to the treasury for dividends being great in number and in power, they, of course, have desired to be paid in silver, as the metal of greatest value; while the tax-payers would have preferred to pay in gold, as being the one of smallest value. The former triumphed, and gold was formally excluded from the circulation. In India, too, gold was expelled the Company having preferred to collect its taxes in the dearest commodity. In France, as yet, the effort has proved a failure. Taxes, rents, and interest being there enormous in amount, their recipients are both numerous and powerful. The annual receipts and disbursements from the treasury being about 1,700,000,000 francs, while mortgage debts require nearly half as much, and rents of houses and lands perhaps as much more, we have thus an amount of more than $600,000,000 to be first collected in money, and then again divided among the most influential members of society-all desiring to receive the dearest of the precious metals; to the great injury of the tax-payers, and of those who need to pay for the use of money.

The abundance of gold being equalizing in its tendency, they would repudiate that metal; and yet the injury would ultimately recoil upon themselves. Such a measure could not fail largely to increase the tendency in that country towards the state of things so well described in the extract from M. Coquelin's excellent little book that of frequent suspensions of labor, resulting from the difficulty of finding purchasers for its products; everywhere a consequence of deficiency in the machinery of circulation. Elsewhere he reminds his readers of the French proverb, which says, that "the difficulty is not to produce, but to sell;" and without desiring to assert its absolute truth, he says that it is im