fore, which he took without credit from Law, is a pure fiction, a fiction, unfortunately, which has done a vast amount of mischief; for it is one which has been accepted as a fundamental principle in monetary science from his day to our own, and is the great cause of the confusion and error which still prevail. As a person is rich in proportion to the amount of coin - the highest form of property—which he holds, so a person is rich in proportion to the number of oxen and horses he owns. Money is not every thing, no more than oxen and horses. The Spaniards were right, as their only object was wealth, in making gold and silver in South America and Mexico their chief object, in place of the other products of these countries. They grew rich much faster by wringing these articles out of the natives, than they could by any other mode. The amount of gold and silver they collected was something the like of which was never seen. They enriched themselves beyond measure. There is, however, another side to this picture. The adventurers were a set of robbers and cut-throats, and in the end shared. the fate of robbers and cut-throats. Like all of their class, they were speedily rid of their ill-gotten gains; and both Spain and her colonies have ever since been paying the penalties of their follies and crimes in impoverishment, a prey to intestine feuds, without ambition, without capacity or hope, a by-word and reproach among the nations. The Tartars inquired, and very properly, of an ambassador sent by the King of France, whether there were many sheep or oxen in that country, as a means of informing themselves of the degree of its wealth, their wealth consisting chiefly in their herds. This does not prove them to be a higher form of capital; only that, from their want of exchangeable commodities, it was the only kind of capital they could acquire in any considerable amount. These could not be sent to Peru and Mexico in exchange for gold. In the same sense, an Esquimaux would ask a West Indian whether there were many seals and walruses in his country. By such inquiries by a people ignorant of, or possessing little gold and silver, Smith would infer that these articles did not constitute wealth. Indeed, he seems to think such inquiries to be conclusive; as he intimates that the Tartars' test of wealth - sheep and oxen - was a better one than that of the Spaniards - gold and silver. "It is not," says Smith, "because wealth consists more exclusively in money than in goods that the merchant finds it generally more easy to buy goods with money than to buy money with goods, but because money is the known and established instrument of commerce, for which every thing is readily given in exchange, but which is not always with equal readiness to be got in exchange for every thing." Why did money become an established instrument of commerce for which every thing is readily given in exchange? Does not such universal experience establish a law, and could not Smith have been much better employed in investigating the phenomena, for the purpose of deducing the law, than in wearying the reader with page after page of loose and vague assumptions, not one of which will bear the test even of ordinary scrutiny? In the discussion of money, he failed to solve a single proposition. He is like a traveller who, lost in a wood or fog, always speedily comes round to the point at which he started. No progress is made, — only constant iteration of the same circle; so that any account he might give of his wanderings would be but the repetition of the same experiences and the description of the same scenes. So Smith's argument upon the nature and origin of money; upon the real and nominal price of commodities; upon metallic and paper money, and upon the mercantile system, is but a repetition that money is an invention from the sense of its necessity; that in its use it is wholly unproductive; that only such an amount of it can remain in circulation as is necessary to effect the exchanges of society; that an issue of paper money always displaces from circulation an equal amount of coin; and that the only mode by which the latter can be made productive is to send it to other countries. He uses, throughout, arguments precisely similar to sustain propositions wholly different in kind. Another fiction is his assertion that a profit more frequently arises from selling than from buying; and that the merchant, consequently, is much more anxious to sell his goods for money than his money for goods. The old adage, that goods well bought are half sold, is exactly opposed to this assumption. It is utter folly, however, to assume any thing of the kind. The profit or loss of a transaction cannot be told till after the goods that have been purchased are sold. It hinges as much upon one act as upon the other. To attempt to decide in which act is the greater profit is on a par with an attempt to determine which of two equal quantities is the larger. Not content with asserting that goods can be more readily obtained for money than money for goods, Smith proceeds immediately to prove the converse of this proposition. "Though goods," he says, "do not always draw money so readily as money draws goods, in the long run they draw it more readily than it draws them. Goods can serve many other purposes beside purchasing money; but money can serve no other purpose beside the purchase of goods. Money, therefore, necessarily runs after goods; but goods do not always, or necessarily, run after money. The man who buys does not always mean to sell again; whereas he who sells always means to buy again. It is not for its own sake that men desire money; but for the sake of what they can purchase with it." As in all transactions for the sale of merchandise equivalents are exchanged, or are assumed to be exchanged, and as each party equally assents thereto, it is difficult to see that the running which he describes is more on one side than the other. The illustration is simply To assert an attempt to prove that of two equally strong motives, or inclinations, one is stronger than the other; or that the tide flows inland with more strength than it flows outward. His assertion, that goods can serve many other purposes than the purpose of money, while money can serve no other purpose than the purchase of goods, shows that he had not the least. comprehension of the matter upon which he wrote. The exchange of money for goods, or goods for money, is simply an exchange of one kind of merchandise for another. that one of the subjects of exchange can have no use but to serve as the instrument of exchange, is equivalent to asserting that it has no value in itself, or that it is, like a yardstick, the mere instrument of exchange. It is the old story which Smith is always repeating under all possible forms, that money is not merchandise, and that value is no necessary attribute of it. The exact opposite to his assertion is the truth. Money gold and silver-serves vastly wider uses than any other kind of merchandise. Food can have no other purpose than to be eaten; cloth, no other than for making garments. The precious metals, on the other hand, enter into almost every department of social economy. It is the variety of their uses which renders their value more uniform than that of any other serves. articles. They are the only articles which can serve as reIt is these, with other qualities which they possess, that fit them to serve as money. No other articles of property have such a wide range of use. Smith and the Economists have adopted exactly the opposite theory, - that the precious metals, of all articles, had the narrowest range of use; that their possession was to be avoided, was to be discouraged rather than encouraged, and that the only way to turn them to account was to send them abroad in exchange for what was useful. In reply to his assertion, that it is not for its own sake that men desire money, it may be replied that it is for its own sake that they do desire it; as by means of its intrinsic value they can always obtain that of which they stand in need. It frequently happens when money is acquired its possessor has no notion of the objects for which he may expend it; or he may intend never to expend it, but to invest it for the income it will yield. A man labors for money just as diligently when he has a hundred times more than he knows how to spend, as he does when he is pinched with hunger. Money, Smith tells us, is the least valuable part of the capital of a community. In the same breath, almost, he tells us that the great thing is to get money. That got, every thing else follows. If money be the master of every thing else, and if it secure by direct exchange whatever its possessor may wish to purchase, how is it that it is the least valuable and least productive part of a person's capital? What constitutes value but demand and uses? "Although," says Smith, "gold and silver could not be had" [to serve as money] "in exchange for goods destined to purchase them, the nation would not be ruined. It might, indeed, suffer some loss and inconveniency, and be forced upon some of those expedients which are necessary for supplying the place of money. The annual produce of its land and labor, however, would be the same, or very nearly the same, as usual; because the same, or very nearly the same, consumable capital would be employed in maintaining it." What expedients would he use? Not legal tender surely? That he never contemplated. He could not have a symbolic currency without reserves of coin. The nation, consequently, would be without any currency whatever. Its industries, notwithstanding, were to go on as before. Some inconvenience, but no considerable loss, would result. It has been shown that life without money is the life of the savage. To give it up is, at the same moment, to give up our cvilization. Smith would have all our present conditions maintained, throwing away the very foundation upon which they rest. Such were his ignorance and incapacity that he could hardly venture upon an assertion that did not involve him in the grossest contradictions and absurdities. The reason why the dogmas of Aristotle and Smith have had such universal acceptance is the absence of all attempt at proof in their support. They are pure assumptions. Had it been attempted to establish them by any process of reasoning, the utter inadequacy of the evidence would have been fatal to the attempt. To offer a reason is always a dangerous expedient. If one would command assent, his words must be those of an oracle. He must transcend the vulgar processes of reason and induction, of proof. The public do not want to be told how a thing is true, but that it is true. A mere charlatan, consequently, will often for a time find wider acceptance than a man of the most solid qualities. An affirmation without a reason may be above the reach of reason. How is it to be demonstrated that Aristotle's fifth element or essence does not exist? how that all diseases do not operate through the fluids rather than through the solids? All that is wanting, often, to the perpetuation of a theory or error, no matter how gross, is its mere statement. The moment assent is secured, it may defy for ages all assault; for the reason that the methods likely to be brought to its attack have no adaptation to their object. - The doctrines of the Economists in reference to "Balance of Trade" are the necessary sequence of those held by them in reference to money. What could be more absurd than to make that the object of commerce which was the least valuable subject of commerce, or which was not even a subject of commerce? The premises admitted, the conclusions were inevitable. With them, the suggestion of the importance of a favorable balance of trade was the red rag to the bull: it was enough to throw them into paroxysms of rage and fury. The welfare of a nation was to be measured by the amount of the precious metals it could get rid of. In parting with them, |