other explanation can be given than the uniformity in religion and dogma which so long prevailed in their country. The reasoning faculty of her people was, as it were, lost, for want of proper objects for its exercise, or from its improper exercise. When emancipation, or whatever it may be termed, came, the habit of assuming, instead of proving, had become too strong even for such men as Hume and Smith, who were certainly no churchmen. When they began to inquire in reference to matters other than those which related to religious dogma, they used precisely the same methods as were used by those remaining within the pale. It was far easier to assume than to investigate; but very unsafe when the subjects for investigation were the phenomena of the physical world, the operations of society, or the laws of matter. When Smith asserted that "the amount of paper money which can circulate in any country can never exceed the amount of coin which would have circulated in its place;" that "money has two distinct and separate functions, — one as an instrument of commerce, the other as a measure of value;" that "the great wheel of circulation" (metallic money) "is altogether different from the goods which are circulated by it;" that "it forms no part of the revenue of an individual or nation;" and that, "of all kinds of capital, money is the least valuable," it never occurred to him that these statements were not proofs. He assumed them as axioms with which to construct his more complex propositions. He might just as well have entered upon solutions in geometry by assuming an acute angle to always equal a right angle. As his premises were wholly false, his conclusions could not be less so. His followers, bowing abjectly in so great a presence, accepted without the least reservation or qualification the assumptions upon money of their master. Unfortunately, he was as lacking in intuition as in method. He had not a touch of that inspiration by means of which great truths first find their expression, to become, in time, the property of the race. He could never forget himself, or get away from himself. He could not even stop to analyze the system of his own country, which, when he wrote, had been in operation nearly a hundred years; an examination of which would have completely disproved every proposition made by him in reference to money. What he did not propose or attempt, it would

own.

have been in the highest degree irreverent for his followers to do. It was natural that an ignorant or excited people in a great extremity, and conscious of their impotence, should take refuge in theories and conclusions laid down by authority, as it were, in the books, without the least comprehension of their validity or effect. It is in this way that speculation, grounded on no principle or law, gets its power to harm. The Act of 1844, with all its consequent disasters, was the natural and direct result of Smith's propositions upon money, incessantly reiterated by the Economists from his time to our The Scotch people, however, have been far wiser than Scotch thinkers or metaphysicians. With the absurdest theories in their books, they have the best system of banking now existing, and one of the best that has ever existed. With them theory and practice have been as wide apart as the poles. In this respect, they closely resemble the Puritan emigrants to this country. Were one to examine the literature and legislation of the latter, he would suppose religious metaphysics to be their only occupation in life. Their theme, from morning till night, appeared to be the truth of their peculiar views; and their chief labor, to sustain them from Bible texts. Yet there was another side to this picture, if possible far more striking. Their discussions in theology took very little time or thought necessary for the discharge of the graver duties of life. In all their affairs they displayed an energy, persistency, and soundness of judgment which made them one of the greatest marvels of material prosperity and success the world has yet seen. The wrongs and mistakes they did commit. came, like those of the Scotch, from the speculative side of their nature. A traveller who visited them in the earlier part of the eighteenth century, after describing their formal manners, their uncouth scriptural language, their constant and rigid observance of religious forms, by no means agreeable to him, winds up the strange picture with the statement of a fact which still more excited his wonder, and defied explanation,"but great numbers among them are damnably rich!" Indeed, a strong religious sentiment seems to exert a powerful influence favorable to the accumulation of wealth, for the reason that a people subject to it are the more persistent in their industries, and the more economical in their expenditures.

If we must go to McCulloch to learn the opinions and theories held by the Economists, particularly those which relate to the subject of money, we must go to Mr. Stuart Mill to learn what is now taught in reference to it. His work on Political Economy is the great text-book on both sides of the water. It is made a part of the course in nearly all the institutions in which this science is, or is assumed to be taught. If his own works are not directly used, it is only for the reason that it has become a habit with almost all teachers or professors of Political Economy in this country, to get up works of their own; based, however, almost wholly upon the teachings of this, the great light in modern Economy.

"Money," says Mill, "when its use has grown habitual, is the medium through which the incomes of the different members of the community are distributed to them, and the measure by which they estimate their possessions. As it is always by means of money that people provide for their different necessities, there grows up in their minds a powerful association, leading them to regard money as wealth in a more peculiar sense than any other article ; and even those who pass their lives in the production of the most useful objects acquire the habit of regarding those objects as chiefly important by their capacity of being exchanged for money. A person who parts with money to obtain commodities, unless he intends to sell them, appears to the imagination to be making a worse bargain than a person who parts with commodities to get money; the one seems to be spending his means, the other adding to them: illusions which, though now in some measure dispelled, were long powerful enough to overmaster the mind of every politician, both speculative and practical, in Europe.

"It must be evident, however, that the mere introduction of a particular mode of exchanging things for one another, by first exchanging a thing for money, and then exchanging the money for something else, makes no difference in the essential character of transactions. It is not with money that things are really purchased. Nobody's income (except that of the gold or silver miner) is derived from the precious metals. The pounds or shillings which a person receives weekly or yearly are not what constitute his income: they are a sort of tickets or orders which he can present for payment at any shop he pleases, and which entitle him to receive a certain value of any commodity that he makes choice of. The farmer pays his laborers and his landlord in these tickets, as the most convenient plan for himself and them: but their real income is their share of his corn, cattle, and hay, and it makes no essential difference whether he distributes it to them direct, or sells it for them and gives them the price; but as they would have to sell it for money if he did not, and as he is a seller at any rate, it best suits the purposes of all that he should sell their share along

with his own, and leave the laborers more leisure for work, and the landlord for being idle. The capitalists, except those who are producers of the precious metals, derive no part of their income from those metals, since they only get them by buying them with their own produce; while all other persons have their incomes paid to them by the capitalists, or by those who have received payment from the capitalists; and, as the capitalists have nothing from the first except their produce, it is that and nothing else which supplies all incomes furnished by them. There cannot, in short, be intrinsically a more insignificant thing in the economy of society than money, except in the character of a contrivance for sparing time and labor. It is a machine for doing, quickly and commodiously, what would be done, though less quickly and commodiously, without it; and, like many other kinds of machinery, it only exerts a distinct and independent influence of its own when it gets out of order.2

Mankind, from habit, says Mill, came to regard money as being peculiarly wealth; and that objects are useful and valuable in ratio to their capacity of being exchanged for it. But is not such capacity a proper test of value? Have articles that will not exchange for money any value? Is not the uniform experience of mankind, from the time that exchanges first began to be made, of more force than Mill's assertion to the contrary? Are not gold and silver something beyond mere tickets or orders invented "for doing quickly and commodiously what would be done, but less quickly and commodiously, without them?" Are they not the most, instead of being the least, significant things in the economy of society? As capital, they can always be loaned at interest. They are the universal equivalent, that into which every one seeks to convert whatever he acquires not necessary to his immediate wants. They are the only articles fitted to constitute the reserves of society, as they are imperishable, and preserve their value, uniform, from age to age. They are the only articles which can be sent to every part of the world with the certainty of always being accepted at their cost. If the precious metals alone, of all articles of merchandise or property, possess such attributes, then Mill's description of their nature and function is inadequate and puerile to the last degree.

1 Nothing more strikingly illustrates Mill's incapacity for scientific inquiry, the puerility of his mind, and the infirmity of his temper, than his assertion that one reason for the conversion by the farmer of his products into money was to give his landlord "more leisure for being idle." He could not discuss a purely scientific subject without intruding spiteful and irrelevant personalities and flings. 2 Political Economy, vol. ii. pp. 7-9.

"When," says Mill, "one person lends to another, as well as when he pays wages or rent to another, what he transfers is not the mere money, but a right to a certain value of the produce of the country, to be selected at pleasure; the lender having first bought this right by giving for it a portion of his capital. What he really lends is so much capital; the money is the mere instrument of transfer. But the capital usually passes from the lender to the receiver, through the means either of money or of an order to receive money; and, at any rate, it is in money that the capital is computed and estimated. Hence, borrowing capital is universally called borrowing money; the loan market is called the money market; those who have their capital disposable for investment on loan are called the moneyed class; and the equivalent given for the use of capital, or in other words, interest, is not only the interest of money, but, by a grosser perversion of terms, the value of money. This misapplication of language, assisted by some fallacious appearances which we shall notice and clear up hereafter, has created a general notion among persons in business, that the value of money, meaning the rate of interest, has an intimate connection with the value of money in its proper sense, - the value or purchasing power of the circulating medium. We shall come to this subject before long; at present, it is enough to show that by value I shall always mean exchange value; and by money, the medium of exchange, not the capital which is passed from hand to hand through that medium.

"As the whole of the goods in the market compose the demand for money, so the whole of the money constitutes the demand for goods. The money and the goods are seeking each other, for the purpose of being exchanged. They are reciprocally supply and demand to one another. It is indifferent whether, in characteriz ing the phenomena, we speak of the demand and the supply of goods, or the supply and demand of money: they are equivalent expressions. . .

"Supposing the money in the hands of individuals to be increased, their wants and inclinations collectively, in respect to consumption, remaining exactly the same, the increase of demand would reach all things equally, and there would be a universal rise of prices. We might suppose, with Hume, that some morning every person in the nation should wake and find a gold coin in his pocket; this example, however, would involve an alteration of the proportion in the demand for different commodities; the luxuries of the poor would, in the first instance, be raised in price, in a much greater degree than other things. Let us rather suppose, therefore, that to every pound or shilling or penny in the possession of any one, another pound, shilling, or penny were suddenly added. There would be an increased money demand; and, consequently, an increased money value, or price, for things of all sorts. This increased value would do no good to any one; would make no difference, except that of having to reckon pounds, shillings, and pence in higher numbers. It would be an increase of values only as estimated in money, a thing only wanted to buy other things with; and would not enable any one to buy more of them than