(Commercial Dicty. p. 871.) So that to repair the wear and tear of a metallic currency of one hundred millions would cost annually a million a year, exclusive of the expense of an annual recoinage to supply the place of the coins that had become unfit, or disappeared from circulation.

The fabrication of so cheap a substitute for coin as bank-notes, might be considered to carry the art of manufacturing money to perfection; but such has been the ingenuity, stimulated by the wants of commerce, that these constitute only one among many kindred contrivances of mercantile men. Paper currency is not restricted to the promissory notes of bankers, nor bills of exchange; but may be defined, after the Abbé Morellet, to consist of every negotiable security, every acknowledgment of debt or pecuniary obligation, every stipulation by writing between a debtor and creditor, which obliges the former to pay, and authorizes the latter to exact a value; and which security, acknowledgment, and writing, being transferable, are the means of transferring values without the actual transport of the commodities they represent or attest the ownership.

The quantity of money of all kinds necessary to a country depends on the amount of its wealth, and extent of its commerce. A poor country, with little trade, does not require much money, either to represent its riches, or to facilitate the exchange of its commodities. England, it is well known, is the most rich and commercial nation in the world, and to represent its wealth, and carry on its vast and

varied exchanges, coin, aided even by bank paper, would form a totally inadequate medium. How, fo instance, could the value be represented, or the payments be made, involved in the transfer of the hundreds of millions of property that change hands every year, by the intervention of notes and coins? The mere counting of one, or the weighing of the other, would be an incredible labour. Then mark the ingenuity-the delicate and curious machinery that has been introduced to supersede the necessity of either. By the use of bills of exchange, bills of lading, checks, scrip-notes, clearing houses, and a variety of other contrivances, aided by a vast fabric of credit taken and given in open account, money, in its common acceptation hardly ever enters into mercantile affairs; it is indeed the substance really meant and shadowed forth; but it never, as one may say, bodily passes from merchant to merchant; and is only used as petty cash for paying wages and settling balances of insignificant amount: all the great transactions of commerce, all the great masses of property-the roads and canals-the mines of gold, and silver, and iron-the cargoes of sugar, cotton and indigo, that are constantly being transferred from one possessor to another, on the Royal Exchange, or from London to Liverpool, Manchester, and Glasgow-all this is done by the intervention of the credit and commercial paper mentioned; the business of the mercantile classes being reduced, by a wonderful system of balancing payments, to little

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more than a game at chess, or the working in their counting-houses an algebraic equation, consisting of the debit and credit side of each account, and communicating the result to their agents, customers and correspondents in every part of the globe.

It would be unsuited to the limits of this publication to describe, in detail, the commercial machinery I have indicated: but in speaking of paper money, it is impossible to help glancing at such an extraordinary fabric as our monetary system; nor think without astonishment of the successive steps of its progress from the state of barter to the use of the raw metal-then to coin-then to bills, bankers' notes and checks-and finally to the winding up and balancing of all commercial dealings in England Europe, Asia, and America, in that great focus and centre of circulation, the British metropolis!

Paper money has been as powerful a commercial instrument in facilitating the exchange of commodities, as the steam-engine in the production of them. Yet, in one respect, it is inferior to coin. It possesses only conventional, not intrinsic value. Coin not only measures the value of commodities in exchange, it is a real equivalent for them; it is the veritable substance, of which paper currency is only the representative. Whether paper money is worth any thing or nothing, depends on the guarantee under which it is issued; but coined money depends on no such contingency-it is its own guaranteethe universal medium of commerce, and in every

market of the world will be accepted as an equivalent for merchandise, in proportion to its weight and purity.

This property of coin arises from the material of which it is made being a regular article of commerce a coinage of the precious metals could not be easily maintained in circulation if its equivalent were not nearly on a par with its representative value. To make this appear, it is only necessary to consider the effect of an issue of gold or silver tokens, the representative value of which, as money, greatly exceeded, or fell short of their real value as bullion. In one case, a profit might be realized by converting the tokens into bullion; and in the other, by converting bullion into tokens: and either alternative, if the temptation were considerable, would be sufficient to destroy a circulation so unwisely constituted.

Coin possessing intrinsic value is an advantage, inasmuch as it renders it a safe instrument of exchange; it is a disadvantage, inasmuch as it renders it a dear one.

Such conditions do not attach to a currency of paper. A parcel of bank-notes, if they are not valuable as money, are valuable as nothing. No one can make a profit by converting them into any thing else. If the bank become worthless that has issued them, they become worthless too, and they cannot be transmuted into any thing of value. It is different with a sovereign: if it cannot be returned to the mint, it can be taken to the goldsmith or dealer

in bullion, where it can be exchanged for coin of another sort, or for some article of use or ornament.

The absence of intrinsic value in paper money has formed a principal cause of those disastrous vicissitudes in our monetary system, which have distinguished the last thirty years of our commercial history. Fabricated almost without expense, it executed all the functions of money, and the same advantages were derived from its employment. More of it advanced in loans, and greater the interest realized; more of it employed in trades, and greater the profit. The temptations to issue it to excess were too great to be resisted. Advances were made to individuals without adequate security; a spirit of over-speculation was encouraged in every branch of national industry; prices, rents, tithes, mortgages, every thing, in short, the value of which is measured by money, was forced up to an unnatural height; and then, when the artificial impulse could no longer be supported, came a mercantile reaction-a subsidence of the pecuniary deluge, leaving the land, not enriched, like Egypt, by the overflowings of the Nile, but covered with the debris of aërial castlebuilding!

It is the readiness with which paper-currency ministers to the avidity of mercantile speculation, that forms the strongest objection to its being issued under the same principle of competition and absence from legislative interference, which ought to govern the supply of commodities. Like the atmosphere we breathe, it forms a medium susceptible of