placed under the control of gigantic institutions, that lock up in their vaults hundreds of millions of coin, by way of preparation for crises that they themselves invariably produce. In both, the power of association and combination is thus diminished, with corresponding diminution of production, and of the power of purchase the two countries whose teachers most desire to enlighten the world in reference to the advantage of perfect freedom of trade, thus setting the example of absolute monopoly in reference to the commodity that is, of all others, the most important agent in the extension of commerce. Frequent and destructive revulsions, affecting the value of the land and labor of the world at large, being the necessary result, other communities find themselves compelled to the adoption of measures of protection against their consequences.

The doctrines of M. Bastiat being totally adverse to the idea of any harmony of interests between the countries that do, and those that do not, produce gold and silver, we might, for that reason alone, safely venture to repudiate them. there being in the true interests of both men and nations, a perfect harmony.

§ 18. In his recent work, M. Chevalier says, that "money is indispensable to man from the moment of his living in society;" and that "gold and silver have, from the earliest period, been chosen for the performance of its functions," as satisfying, more perfectly than any other commodity, the conditions required for a medium of exchange. He therefore lays it down as a principle, that, as in the case of all other commodities and things useful to man, "the diminution in the cost of producing the precious metals tends to the advancement of civilization." The only form, however, in which its benefits would be exhibited would, as he thinks, be "in an increased facility for obtaining ornaments or utensils of gold or silver, or plated with those metals."

In all the transactions of life, a larger quantity of money would have to be given for the same commodity prices of all things having increased in a corresponding ratio; and this, so far from being an advantage, would prove-as regarded foreign commerce - a disadvantage. The foreigner would, as he thinks, "deliver his merchandise at the price of the country, while continuing to take that of the country at its price in the general market of the

sold

world; and, under these circumstances, a nation would transact its business in the style of the great lord who, for a wager, on the Pont Neuf a piece of six francs for twenty-four sous."* We have here again the doctrine of Hume, Smith, and of almost all other writers on this subject; yet the world presents no single country in which such results have been produced, nor is it possible that there should be such an one. The people who produce money sell it, and they desire to sell as dearly as possible those who get it doing so, only by supplying cheaply the commodities required by those who have it to sell; and more cheaply than any other country is able or willing to do.

The whole question, and all the philosophy of money is, however, settled by the simple proposition, of universal truth, that in the natural course of human affairs, the prices of raw and finished commodities tend to approximate—the former rising as the latter fall, and the rapidity of the change increasing with every increase in the supply of the metals which constitute the standard with which prices are required to be compared.

This being true and that it is so cannot be questioned — it follows, necessarily, that the precious metals tend towards those countries in which the cultivator obtains the largest prices for his products, and purchases cloth and iron, ploughs and harrows, at the lowest ones those in which the proportion of the trader and transporter is least, and that of the ploughman is largest-those, consequently, in which commerce grows most rapidly, and men tend most certainly towards an entire emancipation from the dominion of trade.

§ 19. The power of man over matter results from combination of effort the more perfect the power of association, the more rapid being everywhere the increase in the value of labor, and the more rapid the decrease in the value of those things for the production of which labor is required. Therefore it is, that wherever there exists diversity of employments, men are most enabled to command the services of that great instrument of association money; and that where diversity is least, they are least able to obtain it, or to retain it even when it has been obtained.

The less the power of association - the less the artisan and the *De la Monnaie, p. 375.

man who follows the plough are enabled to work in combination with each other the greater is always the difficulty of obtaining roads, mills, or money; and the greater the tendency towards recession from each other of the prices of raw materials and finished commodities the former falling and the latter rising, as has been so long the case in the United States. Therefore it has been, that whenever the protective policy has been abandoned, the country has witnessed the abandonment of roads and canals half finished the closing of mills-the exportation of coin-and the destruction of credit; all of which is now going on in face of the fact, that California still yields from $40,000,000 to $50,000,000 a year. Its gold, however, has ceased to render service to the community that owns the State by which it is produced.

Money is to society what food is to the body-the producer of motion. In order that food may give motion and produce power, it must be digested, and pass gradually through the very many miles of vessels by whose help it is slowly assimilated, and made to yield support to the whole system having done which, it passes gradually off, and chiefly in perspiration. So is it with gold and silver. That they may be the cause of motion and of power, it is required that they, too, be digested and passed gradually through the system some portions being absorbed and retained, and others passing slowly and almost insensibly off, to be applied to the purchase of other commodities. In default of this, the supplies of California are, and can be, of no more service to the United States, than would be supplies of food to a man suffering under dysentery, or cholera. The more the latter ate, the more certain would be the approach of death; and the more gold supplied by California, the poorer do those States become, under a system that closes the mills and furnaces of the country that destroys the power of association and that causes an export demand for all the gold that they receive — every step in that direction being accompanied by an increase in the rapidity with which consumption follows production, in other countries, and a diminution therein among themselves.

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END OF VOL. II.