the money the second time is still confronted by a new goose or its equivalent. If the goose or its equivalent do not reappear, then the money does not. Each responds, and with equal alacrity, to the call of the other. "It is possible," he continues, "to displace a portion, or even the larger part, of the specie currency, and make paper currency, or some other substitute, take its place; and the specie thus displaced will either go abroad or be melted up. But the total amount of the currency will remain just as before: the value of the paper and the precious metals, taken together, will be just what the specie alone would be if paper were not used.1 "We thus gain a more correct idea of the comparatively limited functions of money; which common persons are led grossly to exaggerate, merely because, at any one time and place, it is a common measure of value, a universal denomination of account. "All wealth, all commodities, are estimated in dollars, francs, pounds sterling, and the like; and it is by the aid of such estimates that all exchanges are made. Thus, the idea of money aids us, when the reality is seldom employed. As pounds sterling were a universal denomination of account for a long period during which there was no such thing as a pound sterling in existence, so the idea or abstract conception of numerical values expressed in coin would be a convenient, even an essential, implement or contrivance in mercantile transactions, though all exchanges should be made by direct barter of one commodity for another. Without such a contrivance, the merchant could not keep his books of record intelligibly, or preserve his accounts with individuals in his large and complicated business. Money is even now only a hypothetical or abstract medium of exchange in all the larger transactions of commerce. I almost anticipate the time, in the progress of invention and the discovery of new expedients and facilities in commerce, when it will become so universally; when, at any rate, so costly and useless a realization of the idea as gold and silver coin will be entirely done away. Only practical difficulties, or what may be called difficulties of detail, even now obstruct this desirable consummation."" Mr. Bowen is certainly mistaken. Society has not as yet advanced so far in the substitution of ideas for things as he supposes. Money is still, as many find to their cost, far more than a mere scale of valuation. The holders of property, when they sell it, still persist in demanding something more than "hypothetical or abstract media of exchange." They may be very uncivilized and selfish to demand a quid pro quo 1 American Political Economy, p. 311. 2 Ibid., p. 334. in all transactions, and the laws which uphold them very barbarous; but these laws, nevertheless, have maintained their force since laws existed. The longing of the Economists for a world in which ideas stand for things carries them too far. Mr. Bowen, before he vacated the chair of Political Economy, should have reconciled this conflict between the ideal and actual. He would then have ranked among the great benefactors of his race. But if wishing were having, if the good things of life could be had without desert, no one would do any thing deserving of them; so that, after all, it may be well to let money remain the expensive thing it is. "We are now prepared to explain the great difference between convertible bank currency and inconvertible bills, or paper money, properly so called, - that the latter is liable to issue in excess, and consequent depreciation, while the former is not. . . . Those who fear an excessive issue of convertible bank-bills might as well apprehend that Lake Erie would overflow its banks, and flood all the surrounding country, because it is constantly receiving the surplus waters of the three upper lakes and of innumerable tributary streams. They forget that the average level of the lake depends, not upon the quantity of water flowing into the lake, but upon the quantity that flows out of it over Niagara Falls; and that no cause could affect the level, except by raising or lowering the bar at the opening of Niagara River, which regulates the rate of the efflux.1 "It follows from this whole review of the subject of paper money, which I have intentionally based, as far as possible, upon historical facts rather than abstract reasoning, that the depreciation of it is attributable solely to excess in its issue. If this excess could be prevented, that is, if the amount of paper currency could be kept precisely equal to what the amount of metallic currency would be in case there were no paper in circulation, then there would be no depreciation of the paper; nay, the paper might even command a premium over the coin, if the aggregate value of it were made less than what the coin would amount to, and if it were also possible to prevent the importation of specie. Money acquires the power of exercising its functions, not from any intrinsic quality that it pos sesses, but solely from convention. To adopt Mr. Stuart Mill's language, Convention is quite sufficient to confer the power; since nothing more is needful to make a person accept any thing as money, and even at any arbitrary value, than the persuasion that it will be taken from him on the same terms by others.' The value of paper money, not depending at all upon its cost of production, is regulated solely by its quantity. A certain determinable sum of money is needed in every nation to effect its current exchanges, and to maintain prices at an equilibrium with the aver 1 American Political Economy, pp. 382-384. age prices of commodities throughout the commercial world. Coin being banished, if the issue of paper money is less than this sum, the paper will be at a premium; if greater, it will be at a discount." i In the preceding paragraph, Mr. Bowen only repeats what the English Economists have labored a century to prove. If they have been answered, he has been; if not, he cannot be. Were Mr. Bowen the only one to be affected by his opinions, they would be of very little consequence; but they become of the greatest importance when taught to young men about to enter the world of affairs, especially when they relate to a subject which concerns, more deeply almost than any other, the welfare of society. What would be thought of a professorship in a university that should still seek to establish the wonderful properties of the philosopher's stone? The attempt would not be a whit more absurd than his teachings upon the subject of money. The thing chiefly to be regretted is, that there does not seem to be any way in which to rid the universities and the world of such nonsense. So far as money is concerned, all are Alchemists, all are believers in the philosopher's stone, all are intent upon its realization. The first step in the way of reform should be to abolish the "professorship of Political Economy," not only in this, but in all institutions in which it is now pretended to be taught; and either abandon instruction in it altogether, or put its duties in commission. In the latter case, whatever was taught would at least have the merit of being as broad as the course of instruction would allow.' 1 American Political Economy, pp. 388, 389. 2 The following propositions, taken from the last catalogue of Harvard University, make up a part of the course upon which its students are called to exercise their wits: "Compare the generally received principle, that paper money tends to expel coin from circulation, with the following: "All commodities tend to move toward those places at which they are the most utilized. Notes and checks increase the utility of the precious metals; and therefore it is that money tends to flow toward those places at which notes and checks are most in use, passing in America from the Southern and Western States toward the Northern and Eastern, and from America toward England." Some kinds of paper money tend to expel coin from circulation, and some to increase the amount in circulation. If any question were to be asked, it should have been the manner in which the two differ. crease the utility of the precious metals? In the the utility of a barrel of pork. Whether they do How do notes and checks insame way that they increase increase its utility, and, if so, |