cial means. It only keeps the real capital in activity: it adds nothing to it; this can only be done by paper credits, which do not represent specie.

On the first consideration, it would appear impossible to create a bank, unless all the capital was composed of the precious metals, supposing no aid from the public debt to be afforded; but it is very practicable, and has ever been practical by the makers of banks-it would not prove otherwise than beneficial to a country before destitute of such institutions, to create a bank, ten per cent. only of whose capital should consist of specie, merely for the common purposes of exchange. The remainder of the capital to be paid in notes at sixty or ninety days; which notes when due to be renewed by discounts. This may seem a visionary scheme; but alter the 10 per cent. to 15 per cent. of specie, and you have the identical plan on which the state banks were incorporated. It was not required, that money should be paid for the second instalment in those banks, they only required your note, with a pledge of the stock, and the business was finally settled. The only difference is, that some part of the stock was paid in promissory notes.

Now, on the supposition, that no other bank existed in the country, that of the United States would not prove a public benefit. In the actual situation in which the country now stands, groaning under the weight of millions of paper credits, it is a public benefit which stimulates to industry and trade.

If banks are such monstrous evils, why are they permitted to be daily extended through all sections of the country? The answer to this question, is to be found in the deceitfulness of their effects. One cause that may be assigned, is the fallacious appearances of wealth that

always attend them. The farmer receives a greater nominal sum for his products in common with the labourer, the mechanic, the manufacturer, and the merchant; and they all obtain a readier sale for their commodities: this flushness of money flatters them into an opinion of growing riches-they never consider, that the prices of all articles are augmented in the same proportion, by the same abundance of artificial money; they consequently spend as much more as they gain, in all articles of home manufacture. Thus far there is no `apparent loss; but extend the enquiry further-when we purchase foreign commodities, do we gain or lose by this excess of money, and increase of price? I think it is evident that we must lose by the operation. How this is effected I shall take another occasion to explain.

Another and a powerful motive, that impels people to uphold this ruinous system of credit, is the gain to be derived from speculating in bank stock. This source of profit is open to all the monied community, as well as to desperate and unprincipled adventurers; thus brokers, shavers, stockholders, merchants, and gentlemen combine to multiply, and increase the sum of paper credits; while they cajole the weak, allure the avaricious, impose on the credulous, and entice the timid, to enter into a destructive speculation in the stock, which is only kept from sinking to its intrinsic value, by means of the most false devices, and disreputable arts.

CHAPTER VIII.

Of Mixed Currency.

A SIMPLE, pure, and sound currency exists in few countries of the modern commercial world :-But among the ancients, it was so peculiar, that it may be doubted, if they had any idea whatever of paper credits, or even public debts. Gold and silver were the only medium of exchange known to the nations of antiquity, who provided for the exigencies of war, not by borrowing, and pledging the labour of unborn generations for the debt; but by accumulating a treasure during times of peace, when prosperity was at its flood, and the ease of the country enabled it to hoard without resorting to oppression.

An age of commerce and credit, however, is fruitful in begetting schemes of wealth and stratagems of profit. The institution of banks, or credits of paper, was calculated with certainty to drive away the natural and real currency of countries-gold and silver. As in physicks two different substances cannot possibly occupy the same space at the same time; so it is equally impossible for two different species of currency to operate as a circulating medium at the same time. If bank bills, or treasury notes, or stock certificates, perform the action of money, gold and silver will not, and cannot perform it. At the very moment that banks start paper credits, gold and silver will be hoarded. The issue of bank bills is predicated--a priori, on this fact.

The banks gather all the gold and silver they can, at first-lock it up in their vaults, and then send forth their paper as a substitute. The consequence is natural and unavoidable--the currency is composed entirely of paper, for all the operations of trade, and commerce, and the metals only circulate in the form of change, or fractions of a dollar.

To talk, therefore, of a mixed currency, is to talk of a fiction. It cannot exist in fact. A man may accumulate the silver fractions of a dollar, until they amount to thousands, but they will never constitute currency. The first person to whom he pays them, will deposite, or hoard them in like manner. Not so, however, if there existed no bank bills in that case, silver and gold being the natural currency, would be preferred-besides, that they would be indispensable.

The theory of a mixed currency, has been invented by the stipendiaries of banks, in order to reconcile the producers of labour to the frauds and taxes imposed upon them by paper money, and banking corporations. It has been defended by saying, that specie being the foundation of a paper currency, renders the latter as sound, as if it was composed of specie altogether; a sophism so palpably absurd, as to surprise us at its announcement. For how can that be a foundation, which entirely disappears? How can paper be sustained by specie, when the amount of the latter can never be made to cover the former? How can one be equivalent to 100? How can two different substances occupy the same space at the same time, as I before observed ?

The sophism here put forth of a mixed currency is founded on an erroneous idea of the virtue of paper, being dependent on its capacity, or power to command

specie, upon any emergency. This capacity, or power, is wholly problematical; it may, or it may not exist, but it has not, and never can have a certain existence; and this feature of currency never has, and never can be reduced to scientific precision, so as to admit of logical argument.

The great vice, and to the stock interest, the great virtue of paper, is its elasticity, its susceptibility of expansion, its power to absorb all the labour of the people, and to return it to them in such portions and dribbles, as their mercy may prompt, or their interest suggest. Gold and silver are not pliable metals in this sense. They have no power of passing for more than they are; they cannot be augmented to the maximum of numbers, or as suddenly reduced to 0! This is the peculiar property of paper credit. How then, can they ever mix? How can they amalgamate? How can they ever keep pace, or preserve at the same time a reciprocal circulation? With as much reason might a lunatic advance the idea, that a mountain of rock would float on the waves of the Atlantic ocean!

The too prevalent ignorance on the science of currency, has tempted empirics, and pseudo-economists of all grades, to misrepresent, and falsify its character to a credulous people, to dupe whom was so amply to profit themselves. In this manner, the most celebrated financiers have attempted to persuade the community, that currency is wealth, because bank bills are predicated on the existence of gold and silver. Gross as this paradox is, it no doubt has its believers; for what is too monstrous for ignorance to swallow, or credulity to assent to? A public that would believe in a mixed currency would believe any thing.

Bankers and financiers have endeavoured to mystify