considerable rise in prices, which will be followed by two or three years of seeming quiescence, and then another rise will ensue. Such has been our experience thus far. The principal effect upon the market was produced in 1853, the receipts from California and Australia having reached their highest point the previous year. Since 1853, there has been no general advance; prices have only been maintained, those of some commodities have even fallen off* In a year or two, we may expect another start, if the annual supply from the mining countries should not be suddenly and largely diminished.

One reason why money does not sink in value slowly and uniformly, but by starts, is to be found in the time which is required for equalizing prices throughout the world. After they have risen in the chief commercial countries, such as England, France, and the United States, the effect must be transmitted to the East, to British India and China. The price of opium, tea, silks, and other Eastern products, must also rise, and large amounts of gold and silver will be transmitted to pay for these commodities at their enhanced valuation. The East has always required more metallic currency in proportion to the extent of her commerce than the West, as it has fewer banks and other expedients for economizing the use of money.

It may be readily inferred, from what precedes, that, far from regarding a considerable decline in the value of money, when produced by natural causes, as a calamity, we consider it as a blessing. It will greatly alleviate the burden of taxation in many states that are now oppressed by a heavy national debt. Private debts, as well as public, will become easier to bear; they will be subject to a steady process of abatement, too slow, and compensated in too great a variety of ways, to occasion any serious loss to the creditor, and still affording a sensible relief to all who have payments to make. The greater proportion by far of fixed payments are made by those who are engaged in business or industrious undertakings, to those who are enjoying leisure and wealth. Thus, the

* Breadstuffs may be thought to be an exception; but these ought not to be taken into account, except on an average of a considerable number of years. A very short or very abundant harvest will affect the price of flour much more than any advance or decline in the value of money.

relief and the encouragement come to the more active and industrious classes, while the loss, small in proportion, falls upon those who are most able to bear it. The increasing abundance of money, and the steady rise of prices, stimulate all forms of industry and enterprise. As the operations of trade and manufacture are quickened, wages tend to rise even in a higher ratio than the prices of commodities. Thus the condition of laborers is ameliorated, and the inequality in the distribution of wealth, which is the great misfortune of the most prosperous nations, is slowly diminished. Hume, long ago, remarked that, "in every kingdom into which money begins to flow in greater abundance than formerly, everything takes a new face; labor and industry gain life, the merchant becomes more enterprising, the manufacturer more diligent and skilful, and even the farmer follows his plough with greater alacrity and attention. But when gold and silver are diminishing, the workman has not the same employment from the manufacturer and merchant, though he pays the same price for everything in the market. The farmer cannot dispose of his corn and cattle, though he must pay the same rent to his landlord. The poverty, beggary, and sloth that must ensue, are easily foreseen." Even so cautious and conservative a writer as McCulloch fully admits the truth of this view, though he adds the obvious and just qualification, that the fall in the value of money, which is to be advantageous to a country, must proceed from natural causes, and not be an intentional reduction by the authority of the state. Apart from the obligation to act with good faith and equal justice to all classes, which is incumbent upon every government, it is obvious that any measure, having this end in view, would occasion a great shock to public and private credit, and cause a large amount of capital to be transported to other lands as to places of security.

Those who were apprehensive that a decline in the value of money, produced by the increased supply of the precious metals, would derange the operations of business, and destroy large amounts of wealth, may console themselves by remembering that England, France, and the United States have, at no remote period of their history, passed, without any very serious consequences, through crises similar in character, but more violent and sudden than that which is now in prospect.

In May, 1837, when all the banks in the United States suspended specie payments, specie rose to a premium amounting, on an average, to at least 12 per cent, and therefore disappeared from the circulation, all obligations being discharged in paper,—that is, by the payment of 88 cents on the dollar. This alteration in the value of the currency was far more violent, and more sweeping in its effects, than that which we are now experiencing. It was a depreciation of 12 per cent, and as it took place at once, it literally affected all debts which came due while it continued. But a gradual depreciation of two or three per cent a year has scarcely a perceptible influence on the great bulk of business transactions, which involve obligations to pay that have only a few months to run. It is more important to observe, that the suspension itself, or the acknowledgment of the depreciation of the currency, which, in truth, had already taken place, was felt as a relief. It had been preceded by a period of advancing prices, great activity in commerce and manufactures, and universal prosperity. These high prices could not be maintained, because the inflation of the currency had been unnatural, and was, therefore, temporary. The suspension came, not because the currency had expanded, but because it could not expand any further,because there were not gold and silver enough to maintain it at the point which it had reached. The distress was caused, not by the decline in the value of money, but by its advance, - by the contraction of prices, and the restoration of things to the old standard. It was felt, not when a debt of 100 dollars could be paid off by 88 dollars, but when a debt contracted by receiving virtually only 88 dollars had to be discharged by paying 100. As no such reaction or collapse can follow, when the rise of prices has been occasioned by a natural cause, that is, by the augmented supply of the precious metals, we shall have, in the case before us, the period of prosperity, and a long one too, without being obliged to pay bitterly for it afterwards.

It was just so during the suspension of specie payments by the Bank of England, that began in February, 1797, and continued till 1819. The depreciation, which was very slight for a few years, rose suddenly, in 1810, to 13 per cent, and attained its maximum in 1814, when it was 25 per cent. The ministry, who at first regarded the suspension with great anxi

ety, came afterwards, it is said, to be as much delighted with it as if they had found a mountain of gold. And well they might be delighted. It was this depreciation of the currency which carried England triumphantly through the war, which enhanced rents and profits, gave unprecedented activity to manufactures and commerce, kept the laboring population employed, and therefore quiet, enabled the government to raise enormous loans without difficulty, and made the people bear, with ease and cheerfulness, an amount of taxation which they can now hardly contemplate without shuddering. "It is undeniable," says a very well-informed writer, "that during the greater part of that period (from 1793 to 1814) the trade of the country was in a state of unexampled prosperity. In no twenty-two years of our history, of which we have authentic accounts, has there ever been so rapid an increase of production and consumption, as in the twenty-two years ending with 1814." It is not going too far to say, that, without the high prices of those years, Wellington could not have driven the French out of Spain, or triumphed at Waterloo. The dark hour came, when, after the close of the war, it was thought necessary to take measures to contract the currency, restore the former value of money, and submit to the consequent fall of prices. "In whatever degree minor circumstances may have coöperated, the great and mighty source of the distresses felt by all classes of producers has been the transition that took place at the termination of the war, the transition from an immense, unremitting, protracted, effectual demand for almost every article of consumption to a comparative cessation of that demand." "There was," adds Mr. Tooke, "from 1814 to 1816 (a period of rapid contraction of the currency) a very general depression in the prices of nearly all productions, and in the value of all fixed property, entailing a convergence of losses and failures among the agricultural, and commercial, and manufacturing, and mining, and shipping, and building interests, which marked that period as one of most extensive suffering and distress."

By a very natural association of ideas, the years marked first by a great decline, and then by a rapid restoration, of the value of money, come to be remembered only as one period, or complete cycle, of great prosperity followed by still greater

depression and distress; and men naturally shrink from so cruel an alternation. They forget that the prosperity alone is consequent on the depreciation of the currency, and if this depreciation could continue, or become permanent, no reaction, no distress, would succeed. It was such a permanent decline in the value of money which caused the marvellous development of the wealth and material prosperity of England, that took place during the reign of Elizabeth; and it is to a decline equally permanent, and perhaps equally great, that we have now to look forward. Surely, there is nothing in such a prospect to create agitation and alarm. We know not what political troubles may grow out of this grand monetary revolution, or that it will have any political effect whatever; but industry, commerce, and the arts have nothing to fear from it, but everything to hope.

Coming down again to particulars, it was generally expected that the decline in the value of money would be indicated by a variation in the relative values of gold and silver, as the increase in the annual supply was thought to be almost exclusively of the former metal. Such a variation would enable the legislature, from time to time, to determine the amount of the depreciation which has taken place, and, by such enactments as the Gold Bill passed in 1834, and the law enacted by Congress in 1853, to adjust the state of the currency to the new values of the precious metals. But we have already shown that, owing to the unexpected increase of the annual product of silver, and the sudden diminution of that of gold, the change in the relative value of the two metals will probably be much less than was anticipated. The variation will indicate in part the decline in the value of money, but it will not be a measure of the whole depreciation. Silver, for instance, is now only two per cent dearer in comparison with gold than it was in 1848, while the depreciation in the value of both metals, or of money generally, is from 15 to 20 per cent. One reason, perhaps, why the change in the proportional value of the two has not become more manifest, may be found in the change which has taken place in the currency of France. The circulation in that country was almost exclusively metallic, as the only bankbills were of a very high denomination; and, till recently, it consisted for the most part of silver, gold bearing an agio of