would compel them to lower their price without increasing their sale.

"Price," Mr. Buchanan observes, with great happiness of expression, "is the nicely poised "balance with which nature weighs and distributes "to her children their respective shares of her gifts, to prevent waste, and make them last out "till re-produced."

66

You will now be able to understand, that when you consider labour as a measure of value, you must estimate, not the quantity of labour bestowed on the production of any commodity, but the quantity of labour it can command; that is, that can be obtained in exchange for it. The former represents its natural value; the latter its market price, which is certainly the more accurate measure of value.

We have dwelt a long time upon the subject of value; and we may now conclude, that though a fluctuation in the exchangeable value of commodities may be occasioned by various circumstances, it will seldom deviate much from the natural value, or cost of production, which is a variable quantity, to which (when the employment of capital is left open) the exchangeable value will always tend to approximate.

CAROLINE.

Value and wealth, I perceive, are far from being synonymous terms; for the increased value of food,

in times of scarcity, indicates a diminution of wealth?

MRS. B.

Certainly. Wealth depends upon the abundance of commodities possessed, no matter what their production cost, whether the result of manual labour or machinery, whether obtained by fair or fraudulent means. The Romans were wealthy by conquest; the Carthaginians, by industry. Machinery augments the wealth of a country by facilitating the production of commodities, whilst, by reducing the cost of production, it reduces the value of those commodities.

CONVERSATION XVI.

ON MONEY.

OF THE USE OF MONEY AS A MEDIUM OF EX

REAL CHEAPNESS.

-

IT AFFECTS THE

OF NOMINAL AND

WHAT CLASSES OF PEOPLE

ARE AFFECTED BY THE VARIATION IN THE VALUE OF GOLD AND SILVER. HOW FAR MONEY CONSTITUTES A PART OF THE WEALTH OF A COUNTRY. OF THE EXPORTATION OF MONEY. OF THE MEANS BY WHICH THE VALUE OF THE PRECIOUS METALS EQUALISES ITSELF IN ALL PARTS OF THE CIVILISED WORLD.

MRS. B.

HAVING obtained some knowledge of the nature of value, we may now proceed to examine the use of money.

Without this general medium of exchange, trade could never have made any considerable progress; for as the subdivisions of labour increased, insuperable difficulties would be experienced in the adjustment of accounts. The butcher perhaps would want bread, at a time that the baker did not want meat; or they might each be desirous of exchanging their respective commodities, but these might not be of equal value.

CAROLINE.

It would be very difficult, I believe, at any time to make such reckonings exactly balance each other.

MRS. B.

In order to avoid this inconvenience, it became necessary for every man to be provided with a commodity which would be willingly taken at all times in exchange for goods. Hence arose that useful representative of commodities, money, which, being exclusively appropriated to exchanges, every one was ready either to receive or to part with for that

purpose.

CAROLINE.

When the baker did not want meat he would take the butcher's money in exchange for his bread, because that money would enable him to obtain

MRS. B.

Various commodities have been employed to answer the purpose of money. Mr. Salt, in his Travels in Abyssinia, informs us, that wedges of salt are used in that country for small currency, coined money being extremely scarce. A wedge of rocksalt, weighing between two and three pounds, was estimated at 1-30th of a dollar.

CAROLINE.

How extremely inconvenient such a bulky article must be as a substitute for money coined; the carriage of it to any distance would cost almost as much as the salt was worth.

MRS. B.

A commodity of this nature could be used for the purpose of money in those countries only where very few mercantile transactions take place, and where labour is very cheap. Tobacco, shells, and a great variety of other articles, have been used at different times, and in different countries, as mediums of exchange; but nothing has ever been found to answer this end so well as the metals. They are the least perishable of all commodities; they are susceptible, by the process of fusion, of being divided into any number of parts without loss, and being the heaviest, they are the least bulky of all bodies. These properties render them peculiarly