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conditions, it may well be that the same force only takes upon itself the form of conscious energy, when it exists in connection with what we call a nervous organization. But, if our position is well taken, this characteristic is only one phase of its multiform power. It is no more a distinguishing feature than the peculiar characteristics of heat, light, electricity, or chemical affinity. What is there in common between the manifestations of heat and light (the two forms of energy which seem most closely related), or between either and electricity or chemical affinity? So far as appearances go-so far as their mode of manifestation is concerned-they are as widely separated from each other as consciousness is from either. The peculiarity of consciousness proves nothing at all, as to the nature of the force concerned. No two physical forces in their manifestations have anything in common; yet we know, from the best possible evidence, that all are essentially the same-that, under certain conditions, each may take upon itself the form of the other, or rather, that each may become the other. Now, we have evidence of the same sort, though not perhaps of the same strength, that one of these forces (chemical affinity) may produce, under certain conditions, consciousness. There is no more reason for rejecting this evidence, or the conclusion to, which it points, because of the peculiarity of the new phase, than there would be to disbelieve in the essential unity of the physical forces because they differ in their manifestations.

We should represent the universe, then, as a Being, infinite in variety, in extent, in duration; ever changing, yet ever essentially the same; ever involving itself in greater and greater complexity, and, anon, returning to its simplest form. Sporting in boundless space, it passes from everlasting to everlasting in a cycle of changes; now producing a world with its variegated life and activity, again absorbing it for new forms and new combinations. It is an infinite ocean of resources, in whose depths is included all life, actual or possible, past, present, or to come-an ocean whose waves are individual existences, which, pushed up for a moment to a greater or less elevation, shine with beneficent light, then break into spray, and sink back into the bosom whence they arose.

J. MCLAIN SMITH.

ART. III. THE VALUE AND REGULATION OF CURRENCY.

The first quarter of the nineteenth century was a period in which the principles of currency underwent, probably, a more profound discussion than in any period before or since.

The great work of Adam Smith had made its appearance long enough before to become known to students of political economy, and to exert the powerful influence that it did on the thought of the age. Adam Smith was followed by such thinkers and writers as Storch, Say, Garnier, Ricardo, James Mill, J. R. McCulloch, all of whom, with others scarcely less eminent, belong to this period.

There was much, too, in the period itself to call for the special discussion of this subject. The Napoleonic wars had unsettled all Europe. Extraordinary exertions and extraordinary expenditures were called for. England displaced a circulation consisting largely of coin, with a circulation consisting entirely of bank-notes. Austria, Prussia, Russia and other States issued more or less paper. The coin displaced by paper increased in other channels. It gathered in greater abundance in France, and enabled Napoleon to maintain coin payments throughout his struggle. His enemies, unwittingly, by forcing coin out of circulation at home through excessive issues of paper, sent it to France. For Storch shows that the coin displaced in England and other countries, did not leave Europe, but gathered in increased quantities in the countries adhering to a metallic currency. Large accessions, therefore, were made to the effective circulation of Europe, during the early part of the century. Prices rose, production was stimulated, and vast national debts were created.

With the return of peace, a return to the metallic standard, and, to a large extent, to a coin circulation, was undertaken.

Consequences wholly unforeseen ensued. The most far-seeing, apparently, were deceived. The difference between an increasing and a decreasing volume of money-between the depreciation and appreciation in value-was not understood by the most closely thinking economists. It was not till after the attempt had been made, that the baleful effects of a redistribution of the precious metals were discovered. Why should France, it might be asked, which maintained a metallic currency, suffer with those States which had departed from the metallic standard, and were endeavoring to return to it? When paper in England was but two or three per cent. below par of gold, Ricardo even saw only a fall in prices of two or three per cent. He did not then see, as he afterwards saw, that a vast addition had been made to the effective currency of Europe, under the influence of which the entire volume of coin and paper together had become depreciated, and that to withdraw the paper necessarily operated, by reducing the whole volume, to increase the value of the part left:

No wonder it seemed strange that a return to peace should produce such consequences as were felt, not only in England, but throughout all Europe. Many, like Mr. Twells in his examination by the Commission appointed by Parliament to inquire into the state of affairs, "would not believe the natural effect of peace was distress." Discussion went on, both in and out of Parliament. The Bullion Report of 1810 grew out of it. Hundreds of pamphlets followed, some good, many of little worth. But, taken together, the rich literature of this period has been the source from which have sprung the later science of political economy, and the better philosophy of the functions of money. It was not, however, until subsequent writers had worked over the material of this fruitful period, and events had shed the light of experience on it, that errors became eradicated and the way prepared for a truer science of money.

The influence of the discussions and the literature of the earlier part of the century on economic questions, extended to this side of the Atlantic, which accounts for the fact that Americans, sixty years ago, had a better understanding of

financial and economic questions than twenty years ago, or than they have even now.

One needs only to refer to the Reports of the earlier Secretaries of the Treasury,-as Hamilton's, Gallatin's, Woolcott's, or the writings of Jefferson or the treatise of Conde Raguet, for proof of this. Nor is an apology needed for saying that had there been at the head of the Treasury, during the late war, a man of the ability of Mr. Chase and at the same time one thoroughly versed in the literature, and completely acquainted with the experience of England from 1797 to 1821, at least a third part of the entire debt incurred for the war might have been avoided, without putting a man less in the field, or prolonging the war a day, or increasing in the least the difficulties of carrying it on; but, on the contrary, time and money would have been saved. And who can doubt, with the experience of both England and the United States before him, that it was possible to have avoided, in a large measure at least, the deplorable consequences of first needlessly inflating the currency volume and then the return to a gold standard, which we have experienced!

Among the questions profoundly discussed in the period. referred to, were those relating to the regulation and value of

money.

All sciences rest upon a few well-ascertained principles. And of no science is this more true than the science of political economy.

What the law of gravity is to physical science, the value element in money, or the principle upon which value depends, is to economic science.

Take first metallic money. The common idea, and one upon which whole treatises on money are built, is, that the precious metals possess a certain "intrinsic" value, and because of that value they are taken as the measure of other values,that is, for money. The word "intrinsic," like the word "abnormal," may mean something or nothing. Usually "intrinsic," when applied to value in money, only misleads.

How do gold and silver get their "intrinsic" value? Or from what does their value arise? This question, when asked

of gold and silver, has the same significance, and no more, as when asked of copper or lead, or anything else. Whence arises value in copper? Nine out of ten, probably, will say it comes from cost of production.

But before discussing the cost-of-production theory, let us follow a step further the value element in money.

And for that purpose we may suppose all mines to be closed, and that we have only the stock now in the hands of man to deal with. The problem is then simplified to this: so much gold and so much silver in the world; such and such uses. These are the elements of the problem. The uses make the demand, and the relation of quantity to use determines value, as compared with other things. Gold and silver, then, have no other or "intrinsic" value, except that derived from the uses they are put to, and the measure of the value is the intensity of demand growing out of the relation of quantity to use. Instead, then, of having a metal, or two metals, possessing value independently of their employment as money, we have two metals, the chief use of which is for monetary purposes. And the chief value of these metals, instead of existing independently of their money character, is derived from their employment as money. Statistics show that about two-thirds of the value of silver is due to its use as

money, and about one-third to other uses. That is, nearly two-thirds of the silver in the world is directed to monetary uses, and about one-third to use in the arts, as ornaments, etc.

Applying the same reasoning to gold, and accepting the most reliable estimates, we must conclude that from two-thirds to three-fourths of all the gold in the world, and of the production of the mines, is devoted to use as money, and not much more than a fourth part to other uses. Consequently, from two-thirds to three-fourths of the value of gold comes from its monetary application. Indeed, a closer analysis shows us how impossible, in the nature of things, it would be for gold to have the same value independently of its employment as money, that it has with that additional use. To say that it has, or that it can have, is to say that a foot can be expanded into a yard without lengthening the foot.

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