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the plain relations of debtor and creditor, into a profound science, impenetrable to uninitiated minds; as if the business of bankers and financiers was any thing but the plain relations of debtor and creditor! True, they are so extensively licensed to operate at their discretion upon the labour and property of others, that we may well mitigate surprise at their presumption, and restrain resentment for their duplicity and fraud! Where the power of the debtor is unlimited, he may well put on an air of mystery, to disguise a part of his injustice, as the priests who officiated at the ancient oracles, were always invisible, lest the sight of their humanity should discredit their divine presumption. Every bank, by the issue of every bill, contracts a debt to the producer of labour. How such a debt can be designated as wealth, could only be shown by a superannuated statesman, in the babbling incoherencies of senility, on the credit of a prescriptive reputation, never tested by intellectual achievements, or confirmed by displays of substantial science. Bank bills being fabricated by men, may be increased to any amount, so that prices may fall one half in a month Gold and silver are a physical measure of property, which man cannot create, or produce, and is therefore, invariable. To issue gold and silver is not to contract a debt, but to pay away that which represents property. It is utterly impossible, therefore, that a paper currency could ever be benefitted by the precious metals, so far as to form what has been termed a mixed currency. - A paper currency would be less pernicious, if the precious metals were wholly removed ; because, in that case they would experience less fluctuation. The constant collision between paper and the metals, is the
cause why the former suffers such ruinous variation, depreciation, and contraction. Any currency that is simple and uniform, would be preferable to all these attempts at a mixed and compound circulation, which cannot be realized, and that only ends in producing more antagonist consequences, than they were devised to cure. Knowing from experience, that there exists an invincible principle of enmity between credits and money, that one will always clash with the other, and that harmony never can exist between them—they being the real debtor and creditor—how futile to persist in urging the absurd theory of a mixed currency, between substances, endowed with inherent properties of repulsion, and which never can unite into one.
Paper then, being utterly worthless in itself, as a measure of property; (for how can that be a measure which is perpetually shrinking up, and swelling out again?) it becomes a question for society, whether they will consent to endure its evils for the sake of its partial benefits, if any benefits there be; a question to decide which I must refer the reader to other chapters of this treatise. *
THESE may be termed the instruments, or tools, with which labour and commerce effect their exchange of commodities. They constitute the only real and bona fide currency; because they possess the quality, more than any thing else, of a standard, as well as a measure of value: not being liable to depreciation, destruction, or loss; not to be produced by manufacture, nor susceptible of sudden increase, or augmentation.
Like all the metals in their crude state of raw material, gold and silver exist independent of human labour. It is only when they take the form of coin, or manufacture, that their value is increased by industry. But they are distinguished from all other metals by this property—that their preciousness and value, does not depend, like iron, lead, &c. upon their application to useful purposes by human labour. Gold cannot be wrought into any shape of great utility, like iron; yet it is the most valuable of all the metals—from intrinsic qualities, among which are durability, beauty, &c.
“Gold and silver,” says a popular, but deluded writer of the Adam Smith school, “are commodities produced by human labour.” The strangeness of this paradox is nothing in comparison with the violence with which it shocks all our perceptions and experience. According to this doctrine, if a North Carolina planter discovers a lump of gold on his estate, it is produced by human labour ! If a mine of South America is worked by slaves, do they produce the gold and silver ? If the writer meant that labour is necessary to discover gold and silver, he is in error; for much of it is attained without labour, and where labour is required, it does not produce the gold and silver—which are among the primitive sources of wealth—the natural elements of riches. If he meant, as his expression implies, that labour will always produce the metals gold and silver, the assertion is as self-evidently contrary to reason, as it is to fact. The production of any substance, by means of human labour, is always expressed in contradistinction to those which are produced by nature: thus gold and silver are produced by nature; but coin or money is produced by human labour. If toil could beget gold and silver, their utility and value would soon be destroyed by their abundance, and like bank credits, they would possess little or no intrinsic value. “Between the two, (continues the same writer,) there is no proportionate value fixed by nature, any more than there is between lead and iron.” A second fallacy equal to the first, here excites our surprise. Nature has happily proportioned the value of everything; but that of metals in a most especial manner, and those of the precious metals in a manner not to be overlooked. The properties of gold are, in every respect, superior to those of silver, and at the same time its quantity is infinitely inferior. This proportionate value is easily ascertained with exactness by experience and observation; it may have varied in the time of the Greeks, from the age of Solon to the invasion of the Persians, and in the time of the Romans, from the era of L. Junius Brutus, to that of Vespasian; and in the time of Alfred it was no less different from what it was in the reign of P
George IV. ; but the proportion will at all times exist—has existed at all times, and is inherent in nature, owing to quantity and quality, not according to human labour, but according to the eternal laws of physics. There is no analogy between other metals, and gold and silver, in reference to currency or even their utility. “The erroneous notions,” says the same writer, “of unfavourable exchange, unfavourable balance of trade, draining of specie from the country, and other such mistaken views, which have led men in power to endeavour to correct these supposed evils by restrictions upon commerce.” According to this writer, when all the specie of a country leaves it, it is “a supposed evil /* When exchange on Europe continues for six or ten years in succession, at ten or twelve per cent. premium, it is a favourable symptom and a “supposed evill”—When we export ten millions, and import fifty millions, it is a favourable balance of trade, and a supposed evil! Let us examine a little into these whimsical paradoxes. The school of philosophers to which this writer belongs, takes it for granted, that the ten millions we export nets us a profit of forty millions; and that the fifty millions we import, is a gain of forty millions to the country | Could any thing be more absurd 7 And this idea is entertained, with the fact staring them in the face, that our exportations do not net a gain of five per cent. in foreign countries 1 Even supposing our profit to be 100 per cent. on our exportations, still thirty millions of specie must be drained from the country to pay for our importations; and this the writer declares to be a favourable balance of trade, and “a supposed evil / / /?”