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CHAPTER XII.

SUMMARY: CONCLUSION.

FROM the foregoing Chapters may be deduced the following principles for the Organisation Of Credit In England:

That money, the great instrument of commerce, makes a part, and a very valuable part, of the capital, but makes no part of the revenue; the money distributes the revenue, but makes no part of that revenue.

That, whatsoever part of the national property goes to provide the medium of, or substitution for, exchange, is wholly inoperative with regard to production. Nothing produces but human labor or efforts, brought into action by the immediate instruments of production; the tools or machinery with which the workman labors, and the raw material with which he fabricates. If, therefore, the whole of that portion of the national property, so employed, could be taken from that employment and converted into food, tools, and the

materials of production, the productive powers of the country would receive a corresponding increase.

That, it is the total quantity of the money in any country, which determines what portion of that quantity shall exchange for a certain portion of the goods or commodities of that country.

That, the portion of the annual produce, which is not exchanged at all, as what is consumed by the producer; or, which is not exchanged for money; is, with respect to the money, as if such portion of the annual produce had never existed.

That, a vast accession is, therefore, made to the means of production, by providing a substitute for the precious metals, as a medium of, or substitute for, exchange.

That, paper is far more convenient, as a medium of, or substitute for, exchange, than the precious metals. A large sum in gold or silver is a cumbrous commodity. In transferring property of considerable value the very counting of gold and silver is a tedious operation. By means of a bank-note, the largest sum is as quickly paid as the smallest.

That, the inconveniences to which paper money is liable are consequent only on defective arrange

ments.

That, these inconveniences may be compre

hended under three heads:

1.-The failure of the parties, by whom the notes are issued, to fulfil their engagements.

2.-Forgery.

3. The alteration of the value of the currency.

That, the effects of an increase of the quantity, and consequent diminution of the value of currency, are two :

the

1. A rise of prices, or an increase in the quantity of money given in exchange.

2. A loss to all those persons who had a right to receive a certain sum of money of the old and undiminished value.

That, an alteration in the value of money, it is obvious, alters the relative value of nothing else. All things rise in value as compared with money; but not one of them rises in value as compared with another.

That, difference in price is, in itself, of no consequence to anybody. The man who has goods to sell gets more money for them; but this money will purchase just the same quantity of commodities as he was enabled to purchase with the price he obtained before. The man who has goods to purchase has more money to give for them, but he is enabled to do so, by getting just as much more for the commodities he has to sell.

That, the effect of a degradation in the value of money is obviously a loss to creditors and a gain to debtors. It is equally obvious that this effect is reversed, when the alteration which has taken place is an increase in the value of money.

That, these losses are evils of great magnitude to the individuals concerned, and imply a gross violation of the rules of justice; but here is no destruction, and consequently no loss, of property. But every act of injustice is injurious, and all the consequences of altering the value of money, whether by raising or depressing it, are injurious.

That, fluctuations in the value of money are temporary alterations of the value, and are, therefore, extremely injurious, producing effects of the grossest injustice.

That, paper money, properly regulated, would be less liable to fluctuations in value than a currency wholly metallic.

That, when the whole responsibility of paying the notes in gold is borne by the people, any interference on the part of the Government, to prevent the issue of notes to meet the requirements of the people, is an act of the grossest impolicy and injustice.

125.

"Elements of Political Economy," by James Mill, page

That, the Government, which persists in such interference in the light of the present day, after twenty years' experience of the injurious consequences to the country, declares its own incompetency or dishonesty, and, in either case, forfeits the confidence of the country by an act of gross injustice to the whole people.

That, the progress of mankind coincides with the rapid creation of capital. Therefore, the paramount interest of all is to favor the rapid creation of capital, and capital increases of its own accord under the triple influence of activity, frugality, and security.

That, capital, when formed, necessarily leaves disposable both labor and the remuneration of that labor. It carries in itself a power of progression. The vires acquirit eundo may be applied with rigorous exactitude to capital and its beneficial influence. In proportion as its action is extended, it sets free and renders disposable a certain amount of human efforts, only by setting free and rendering disposable a corresponding fund of remuneration, so that these two elements meet and compensate one another.

That, every increase of capital is followed by a necessary increase of general prosperity. Therefore, in proportion to the increase of capital, the absolute share of the total product falling to the

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