that the intellectual nature of man. With adequate moral, the highest material conditions follow as a necessary result. Smith failed in his attempt, as all must fail who ignore the moral or the sentimental side of man's nature. This is but another name for the ideal which far transcends all human effort.

Hence the insupportable weariness of his works. It is in the unattainable that lies the great charm of life, the great incentive to exertion. The goal reached, the wished-for one is still in the distance, and is still for ever to remain so. Smith and his school placed all good within the reach of human effort. They gave nothing, in assuming to give all.

The first writer following Smith upon the subject of money, deserving attention, was Dugald Stewart, Professor of Moral Philosophy in the University of Edinburgh, who delivered, in the early part of the present century, an elaborate course of lectures upon the subject of Political Economy. Stewart was an ardent admirer of Smith, and assumed to reduce to precise and logical terms what his great master only more generally outlined. With Smith, he held "that division of labor, whereever it existed to any considerable extent, presupposed the establishment of some common medium of exchange. Without this previous arrangement, it would be impossible for an individual to devote himself exclusively to a particular species of employment. . . . In process of time, among all civilized nations, gold, silver, and copper have supplanted all other commodities, as the great instruments of commerce." Smith, however, held that the value of these metals depended largely upon their beauty, utility in the arts, and scarcity; that such qualities, among others still more important, fitted them to serve as money. To this, however, Stewart strongly demurred.

"I certainly agree with Mr. Smith," he says, "excepting where he states that the intrinsic value of gold and silver was the quality which fitted them for their employment as coin. It appears to me that this intrinsic value, which I shall allow to gold and silver to its fullest extent, ought to be regarded in the theory of money as merely accidental circumstances, from which it is proper to abstract with all possible care, as tending only to embarrass our conceptions; for the same reason that, in studying the theory of mechanics, we abstract from the effect of friction, the rigidity of the ropes, and the weight of materials of which the machines are composed.... When gold is converted into coin, its possessor never thinks of any thing but its exchangeable value, or supposes

a coffer of guineas to be more valuable because they are capable of being transferred into a service of plate for his own use. Why, then, should we suppose that, if the intrinsic value of gold and silver were completely annihilated, they might not still perform, as well as now, all the functions of money, supposing them to retain all those recommendations (durability, divisibility, &c.) formerly stated, which give them so decided a superiority over every thing else which could be employed for the same purpose. Supposing the supply of the precious metals at present afforded by the mines to fail entirely the world over, there can be little doubt that all the plate now in existence would be gradually converted into money, and gold and silver would soon cease to be employed in the ornamental arts. In this case, a few years would obliterate entirely all trace of the intrinsic value of these metals, while their value would be understood to arise from those characteristical qualities (divisibility, durability, &c.) which recommend them as media of exchange. I see no reason why gold and silver should not have maintained their value as money, if they had been applicable to no other purposes than to serve as money. I am, therefore, disposed to think, with Bishop Berkeley, whether the true idea of money, as such, be not altogether that of a ticket or counter.... It is general consent alone which distinguishes them, when employed as money, from any thing else which circulates in a country; from the paper money, for instance, which circulates in Scotland and England. Were this island insulated from the rest of the world, the former, as a medium of exchange, would possess no advantage over the latter, excepting in so far as it diminished the opportunities of fraud; nor would it make the slightest difference on the national wealth whether the circulating medium consisted of gold or paper, or whether the materials were abundant or scanty." And he continues, "this observation is to me a self-evident proposition. "In a country which had no communication with others, it is obvious and indisputable that the precious metals, when formed into money, would be useful only as a medium of exchange and scale of valuation. On this supposition, the observation of Anacharsis the Scythian, quoted by Mr. Hume in one of his political discourses, seems to be perfectly just, that gold and silver appeared to be of no use to the Greeks but to assist them in enumeration and arithmetic. . . . The only utility which is essential to gold and silver as media of exchange is their peculiar adaptation (divisibility, durability, &c.) to this purpose. And, though I would not take it upon me to say that their uses in the arts detract from their value in this respect, yet these are so far from being essential to their quality as money that they are, in some respects, disadvantageous, by rendering the theory of money more complicated than it otherwise would have been.” i

The groundlessness of Stewart's assumption, in common with Smith, that money was an invention, an arrangement entered into from a sense of its necessity, has already been

1 Lectures on Political Economy, Part i. Book ii.

sufficiently shown. The conclusion, however, to which Stewart came, that value is not a necessary attribute of money; and, if not necessary, it is no attribute of it, was the logical sequence of the premises laid down by the former. Smith

would by no means have admitted that money might be wholly without value,- only that value was not its most essential attribute; that the qualities which chiefly fitted gold and silver to serve as money were their divisibility, fusibility, durability, and the like. As they must be taken from commerce at their value as merchandise, the substitution of a less expensive article therefor was so much clear gain. An inexpensive wheel of commerce took the place of an expensive

Assuming, for the moment, Smith's premises to be correct, his next step should have been to show how far the value of money was intrinsic, and how far it was factitious; how inexpensive might be the medium employed, in other words, how far its nominal might exceed its real value: for it is evident that, if media of exchange pass at their real value, one must be as expensive as another. When reduced to such terms, the untenableness and absurdity of Smith's propositions will at once be seen. There is no middle ground: the real value of money must equal its nominal value, or, in case of symbols, the values of what they represent must equal their nominal value in coin, or value is no attribute of money whatever. The latter conclusion is an irresistible one, from the premises which Smith laid down, and Stewart has the merit of first giving a logical and precise form to that which came from his great master as a very indistinct and ill-defined proposition.

"We never think," says Stewart, "when we receive the precious metals as money, of their value in the arts." But were they not first taken, and chiefly, for their value in the arts? and if we do not now consciously go through the same mental process that was gone through when they were first taken, is it not that such consciousness is concealed from us by habit, not that it does not exist? We are constantly practising, without apparent reflection or thought, processes which, in the outset, cost us infinite attention, labor, and painstaking to acquire. That we at last come to practise these unconsciously, is no proof that the mind is not engaged in one case as in the other. Stewart, however, wholly misstated the fact that gold and silver are taken without any consciousness of

their value in the arts. As a rule, we do not raise the inquiry; we assume from experience that coins are what they purport to be: but let it be noised abroad that debased coins of a particular denomination are in circulation, then every one of the kind, good or bad, will be subjected to the closest scrutiny, and, if taken at all, will only be taken at its value in the arts, measured by the amount of pure metal it contains.

"If all the mines," says Stewart," should become exhausted, then all the gold and silver in the arts would be converted into coin; and all remembrance of their value in the arts would inevitably fade away. As there would be no idea of their value, they would have no value." Suppose a physician, in erecting a system of hygiene, should make provision for the total disappearance of oxygen from the air. The only proper answer would be, that oxygen will not disappear. It is in the air by Divine ordination. If the physician persist, the only proper course for him is to attack and upset the Divine order. It is just as absurd to deduce a law in reference to money by assuming that gold and silver may cease to be produced. There is no more probability that they will not be produced than that oxygen will cease to be an element of the air. When gold and silver disappear, civilization will disappear with them. The one is reared upon the other. That Stewart could use such illustrations shows how incompetent he was for all such investigations. He was the Schoolman over again, in assuming to solve by dialectics what will yield only to scientific analysis. But, even if the mines should fail, all the gold and silver in existence would by no means go into money. It is not probable that for a long time the relative proportions of that held as money and that going into the arts would be materially changed. As it gradually disappeared from loss and attrition, commerce and trade, and with these, civilization and wealth, would gradually die out. As these disappeared, gold and silver would gradually flow back into the arts, and almost wholly in time; for, as there would be no trade, money would not be wanted. It is a fact of universal observation, that gold and silver possessed by the savage races are not used as money; but almost wholly in the arts. They cover themselves, if they can, with them, and have little other sense of their value

or use.

"If England were insulated from the rest of the world,"

says Stewart, "then, for that country, gold and silver, as a medium of exchange, would possess no value over the most worthless of substances." This absurdity is repeated by every subsequent writer upon the subject of money. Suppose England to be the world, what then? Would all sense of beauty, of utility or value be lost to its people? Suppose, as Stewart assumes, England isolated, a Yorkshire grazier should take with him to London a lot of beeves; and upon their sale should be offered a leather medal, with curious hieroglyphics stamped upon it, in payment. The seller at first might consider the offer as a good joke; but, on finding the purchaser in earnest, he would believe himself to be dealing with a madman, and would take good care to get his beeves into his possession again, and to rid himself of such a dangerous customer. To be logical, Stewart must assume that, were England isolated from all the world, its people would have a sense of neither use nor beauty; in other words, that they would be lower in the scale than any race or tribe ever yet discovered. If the precious metals have no intrinsic value, then the Scythian was correct in assuming money to be useful only for the purpose of assisting in numeration and arithmetic. It is for this reason that Stewart held their value to be disadvantageous, in complicating thereby the theory of money. If value be not an attribute of money, he was quite right in eliminating from it all idea of such quality. Figures convey to us only ideas of numbers. If they conveyed other ideas, they might, from the distraction that would be caused, render it impossible to use them for the purpose of making any calculation whatever.

"It must not therefore be imagined," says Stewart, "when I lay so great a stress on the properties of the precious metals (divisibility, durability, and the like), abstracting from their intrinsical value, in studying the theory of money, that I would mean to insinuate any apology for these arbitrary operations in coinage which have been so often practised by different princes. If gold and silver possessed no intrinsic value, such operations might be no less iniquitous than they always have been; for their iniquity arises not from the useful purposes to which the precious metals are subservient in the arts, but from the universality of their employment as media of exchange; and, indeed, one of my chief reasons