the debt is or is not beneficial, we must know the terms on which it is incurred, and what it is incurred for. What do we receive for the bonds which we are exporting? Ploughs, steam-engines, mines, and factories? No. We receive mainly cloths, silks, wines, and other articles of luxury, which add little or nothing to our permanent wealth. And see how hard the terms on which the debt is contracted. Even now, for every hundred dollars' worth of goods, we have to export more than one hundred and thirty dollars in six per cent bonds, so that we pay eight per cent interest on the value received, and a bonus of thirty per cent on the principal besides. That public opinion should look with favor on such a transaction as this, is almost inexplicable. Were the transaction of a very complex nature, it might be supposed that the public generally did not see into its results. But when a nation's imports exceed its exports by hundreds of millions, and the balance is made up by exporting national indebtedness on such terms as a Jew offers an heir who has not yet entered into possession of his estate, surely the nature and effect of the bargain cannot require much elucidation. The regulation of our currency is a problem of far greater complexity than the payment of our debt. In almost all countries the relations and mutual reactions of the currency, prices, trade, and credit are so complex, that the profoundest political economists have scarcely been able to unravel them. But compared with our present bank and government currency, the currency of every other commercial people is simple in the extreme. Some idea of its complexity may be formed by glancing at its origin and rise. In 1861 our currency consisted of coin, and bank and government notes convertible into coin at the pleasure of the holder. This, being the sort of currency on which, after several centuries of trial and experiment, the civilized world has finally settled as the best, did not involve any new financial principle, and was neither more nor less complex than the monetary systems of other nations. In the winter of 1862 the first additional element of complexity was introduced by the issue of the legal-tender notes. Underestimating its own credit and the determination of the people, Congress, in a moment of great general depression, cut loose entirely from the specie anchorage, and substituted government six per cent bonds as the basis of the entire monetary system. One hundred and fifty millions of notes, convertible into these bonds, were declared a legal tender for all debts, public and private, except duties on imports and interest on the public debt. They were therefore a legal tender for the entire principal, whenever it should become due. This first change in the character of government obligations to pay money was little more than a change of principle. A very great change of principle, indeed, when a nation which had agreed to pay gold coin would really pay nothing but its own promissory notes; but if these promissory notes would serve the receiver as well as an equivalent amount of coin, the change was productive of little injury. Now, this was the case so long as the volume of the notes was limited to one hundred and fifty millions. Unfortunately, however, when a nation or an individual changes its principles, it is pretty sure to change its practice accordingly. To grant any earthly power the legal right, under any circumstances, to issue notes which it is not obliged to pay in coin, and to expect that this right will not be abused, is like putting an open cask of wine before a thirsty laborer, with the expectation that he will confine himself to a single glass. Such a power never was granted without being abused. Before Congress adjourned, the total amount of notes was increased to three hundred millions, of which, however, fifty millions were reserved to pay depositors. The next Congress increased the sum total to about four hundred and fifty millions. During the year 1863 the five-twenty bond basis was cut loose from, and the entire volume of currency and of public and private indebtedness was left without any basis whatever, except such as Congress might from time to time fix. The provision permitting the notes to be converted into five-twenty bonds was repealed, and the notes were simply declared receivable in payment of all loans made to the government. Here was a second addition to the complexity of the system. A third source of complexity was devised in the shape of compound-interest legal-tender notes. They are legal-tender notes, payable at a definite time in other legal-tender notes, wirich are themselves payable no one knows how or when. The rights and the functions of the national banks and their currency introduce another complex element into our calculations. These institutions, in consideration of converting three hundred and fifty millions of legal-tender notes into interestbearing bonds, are to be permitted to issue three hundred millions of their own notes. However wise, patriotic, or necessary these measures might have been, they were each designed solely with reference to the exigencies of the hour, and adopted without any inquiry into their ultimate effects on the financial condition of the country. The government required money, and each measure supplied a limited amount of that commodity; but what government should do when the supply was exhausted was left to be discovered when the emergency should arise. In no official document do we find any attempt to discover the effect upon government indebtedness of the depreciation of the successive currencies authorized. In fact, many thinkers are disposed to deny that there has been any depreciation. The first step of an inquiry into the working of our currency system must be this: During the time that gold has been fluctuating between par and one hundred and sixty per cent premium, which was the standard of value, gold or legal-tender notes, or something between the two? This is a disputed question; and before entering the arena, let us disclaim all intention of answering it with logical precision. Political economists have searched in vain for a standard of value which would apply to different ages and countries, or even to the same country for two successive years. Exchangeable value not only depends upon every circumstance which influences the desires of man, but is itself something so impalpable as almost to elude exact defi nition. But a standard of value, though unattainable, can be approached. The result of an average day's work of the entire community is, mathematically, the best approximate standard. Unfortunately it is not a standard which we can directly measure by. It is like the French metre before an arc of the meridian was measured, very well defined, being exactly the forty millionth part of the earth's circumference, but not very easily handled. It is found by experience that gold is the best attainable standard, its value, as measured by labor, varying less from month to month than that of any other commodity. In other words, the amount of exertion with which men in general can obtain possession of a definite weight (say one ounce) of gold is more nearly constant from year to year than an amount of exertion defined in any other way. If you contract to deliver your neighbor an ounce of gold in two, four, or ten years, you can count with more certainty on the amount of labor it will cost you to fulfil your contract, than if you agreed to deliver him a specified quantity of flour, cloth, or "lawful money." If you agree simply to pay twenty dollars in lawful money, that lawful money may, for aught you know, be as difficult to obtain as gold, as it certainly will be if gold is at par. On the other hand, currency may be issued in such quantities by Congress and banks, that you may be able to possess yourself of the required twenty dollars with very little exertion. For example, if you are a farmer, you may be able to obtain them by raising and selling a single bushel of wheat. Thus the contract loses that definiteness which would characterize it if you agreed to pay gold, pure and simple, and partakes of the character of a game of chance. Still, gold itself is subject to changes of value of three different kinds. The largely increased supply is undoubtedly diminishing its value from generation to generation, though it is difficult to say to what extent. Like all other commodities, it is subject to slight fluctuations from month to month, but these are rendered very minute by the international supply and demand. Finally, in case of a great war or other social convulsion, circumstances may arise to change the value of gold, independently of other causes. Thus, during the Napoleonic wars, the great demand of the British government for gold to export to the Peninsula and other seats of war created a real rise, amounting perhaps to twenty per cent, in the value of that article, as measured by the relative price of other products of labor. Has there been a similar enhancement of its value during our civil war? This question can be answered only by an appeal to fact. Reason ing can no more settle it than it can decide how much rain fell in July, 1863. Appealing to tables of prices, we find that the average price of the products of labor has, throughout the war, kept pace with that of gold. It is, then, a settled statistical fact, that during the war men in general have been able to possess themselves of a gold dollar with as much ease as at any time before the war. Should any one be disposed to argue that there has been a universal rise in the intrinsic value of commodities, it will be vain to discuss the question with him. If the maker of a new yardstick should find that everything he measured with it seemed twice as long as before, his neighbors would probably conclude that his measure was only half long enough. But he might claim that the human race, the world, and the entire solar system had doubled their dimensions while he was hewing his yardstick, and it would be impossible to drive him from his position. Equally impossible is it to disprove the proposition that United States notes are invariable in value while everything else fluctuates. Having settled upon the fact that gold is the only practical standard of value for every-day purposes, and the nearest approximation to an invariable standard at our command, we have a firm basis to build our conclusions upon. All prices and values must be reduced to a gold standard before we can • It is quite common to argue this point from entirely insufficient data, taking the price of a few articles on a certain day, instead of the average price of a great number during a considerable length of time. Even then, what we strictly want is, not an indiscriminate average, but one making due allowance for the quantity of each product produced or sold. To express the rule in algebraic language, if the prices of the different products are represented by P1, P2, P3, etc., and the quantities sold by 91, 92, 93, the average price of the products of labor and capital will be represented by P191+P292+P3 3 + P1 % + etc. 91 +92 +93 + + etc. The tables of prices which have appeared on several occasions in Hunt's Merchants' Magazine furnish us with the nearest approach to our desideratum. From a table in Vol. XLVIII. p. 121, it seems that, during the year 1862, the average price of a large number of staples in the New York market had increased more than fifty per cent; the premium on gold having risen to but thirty-five. Cotton, tobacco, rosin, and turpentine were excepted in taking the average. It also appears that the rise in prices did not follow, but preceded, the rise of the premium on gold, and generally kept in advance of it. Again, from a table in Vol. L. p. 132, it seems that the average rise per cent in the price of fifty-five products increased as follows from |