of the mines in Spanish America. This event, in the course of a century and a half, caused a depression of their value to about a fourth part of what it had been; that is, an ounce of silver or gold in 1650 would purchase but one fourth as much food as could have been obtained for it a century and a half earlier. With this exception, and excepting also the change which the influx of Californian and Australian gold is now effecting, the precious metals have been very steady in value; their quantity cannot be suddenly diminished; and the demand for them is so great, that any unusual productiveness of the mines cannot speedily lower their value.

The other articles which have been used as money are subject to sudden and great variations in value. An unusually abundant harvest may depress the price of corn one half in a single season. No one would be willing to accept in payment a commodity which might lose a large portion of its value while in his possession. Cattle cannot be preserved, or transported from one place to another, without considerable trouble and expense; and owing to a difference in their qualities, one ox might be worth two or three oxen of a different species. Salt, shells, and fish are equally liable to objection; the values of equal quantities of them differ considerably; some cannot be divided, and others cannot be preserved or transported, without some expense.

For obvious reasons, two or three metals are generally used together, for different denominations of money, in the same country. Gold, which contains the most value in proportion to its bulk, is most convenient for large payments; it is not so well adapted for "making change," as it is called, or settling the fractional parts of an account, even the gold dollar which is coined in the United States being inconveniently small. For sums varying from five cents to a dollar, silver is the most convenient medium, copper being used when even a silver piece would be too minute in size. Copper coins, however, are employed only as tokens, being rated from 75 to 100 per cent above their real value. The privilege of issuing them at this nominal valuation is confined to the government, and they are made legal tender only to the amount of the smallest silver coin. In France and some other countries, a compound of silver and some baser metal is sometimes coined, which not

only represents, but is actually worth, the small sums for which copper is used elsewhere.

"Whatever may be the advantages attending the use of coined money," says McCulloch, "and they are great and obvious, it is necessary to observe that its introduction does not affect the nature of exchanges. Equivalents are still given for equivalents. The exchange of a quarter of corn for an ounce of pure, unfashioned gold bullion, is undeniably as much a real barter, as if it had been exchanged for an ox or a barrel of beer. But supposing the metal to have been formed into a coin, that is, marked with a stamp indicating its weight and fineness, it is plain that circumstance could have made no change in the terms of the barter. The coinage saves the trouble of weighing and assaying the bullion, but it does nothing more. A coin is merely a piece of metal of known weight and fineness; and the commodities exchanged for it are always held to be of equal value. And yet these obvious considerations have been very generally overlooked. Coined money, instead of being received in the same light as other commodities, has been looked upon as something quite mysterious. It was said to be both a sign, and a measure, of value. In truth, however, it is neither the one nor the other. A sovereign is not a sign; it is the thing signified. A promissory note, payable at some stated period, may not improperly be considered as the sign of the specie to be paid for it; but that specie is itself a commodity, possessed of real exchangeable worth. It is equally incorrect to call money a measure of value. Gold and silver do not measure the value of commodities, more than the latter measure the value of gold and silver. Everything possessed of value may either measure, or be measured by, everything else possessed of value. When one commodity is exchanged for another, each measures the value of the other. If the quartern loaf were sold for a shilling, it would be quite as correct to say, that a quartern loaf measured the value of a shilling, as that a shilling measured the value of a quartern loaf."

To ascertain the relative value of different commodities at any one time and place, I have already said that money is the best measure, simply because a silver dollar or a gold sovereign is a well-known and convenient unit of measurement;

when the coinage is in a perfect state, any one dollar or sovereign is precisely equal in weight and fineness to any other dollar or sovereign; and every article of value is more frequently exchanged for money than for any other one commodity. Tell a shoemaker that a certain house is worth so many dollars, and the information will be definite and intelligible to him; for he has been accustomed to barter shoes for dollars, so that, knowing what is the relative value of these two things, he can know by inference the relative value of the house and shoes, the article that he is best acquainted with. But tell him that the house is worth so many oxen, and the information will probably be of little use; for he has not been wont to exchange shoes for oxen, and he knows that oxen differ widely from each other in value.

To ascertain the relative value of commodities at different times, especially if a long lapse of years has intervened, a bushel of wheat is a better unit of measurement, though still an imperfect one, than a dollar. The discovery of new mines or deposits of the precious metals, or the exhaustion of old ones, may have so far affected the value of bullion, that an ounce of it at the later date may purchase only half as much, or twice as much, as at the former one. The quantity of silver contained in a dollar in 1650, for instance, would buy only one fourth as much grain or meat as in 1500. But it cost about the same amount of labor to raise a bushel of wheat at one of these periods as at the other; and the whole quantity of wheat raised in England bore about the same proportion to the whole number of persons to be fed. The value of wheat, then, for long periods, is more stable than that of gold and silver. Still it is but an approximation to the ideal standard of value, which should be absolutely invariable. The corn-rents of lands in England which are let on very long leases have depreciated in value much less than the money-rents. A still nearer approximation to a fixed standard of value might be obtained by taking the average prices of a dozen of the most necessary articles in common use, wheat being one of them, and sheep, oxen, hides of leather, wool, tallow-candles, soap, &c., being added. In the average of many, the effect of accidental circumstances in varying the price of any one of them for a few years would be less a source of error.

The relative value of commodities at different places, as well as at different times, cannot be determined with any accuracy. Owing to differences of soil and climate, and the variety of articles that are used for human sustenance, the cost of food varies widely in different parts of the globe. The value of the precious metals in different lands will depend upon the extent of the use which is made of them, and upon the distance of the mines that produce them, and the ease or difficulty of communication with the mining regions. Perhaps the nearest approach to a standard in such cases may be found in the value of an ordinary day's labor of a person of average strength and health. But it can be easily shown that this is only a rude approximation to the truth. According to Mr. Senior, "the average annual wages of labor in Hindostan are from one pound to two pounds troy of silver a year. In England, they are from nine pounds to fifteen pounds troy. In Upper Canada and the United States of America, they are from twelve pounds troy to twenty pounds. Within the same time, the American laborer obtains twelve times, and the English laborer nine times, as much silver as the Hindoo." This prodigious difference cannot be explained by the difference in the value of silver in the three countries; for owing to the facilities of commercial intercourse between them, and the small cost of transporting silver from New York or Liverpool to Calcutta, an inequality of this sort could not exist; dollars would be transported to Calcutta, if they would purchase commodities of much greater value there than in England or America. Neither can the whole difference be attributed to the only cause of it which is assigned by Mr. Senior; namely, the greater diligence, energy, and skill with which English and American labor is applied, the latter being assisted, moreover, by superior fertility of soil and greater extent of territory in proportion to the population. Unquestionably some effect is thus produced; but as only rude labor is in question, it would be extravagant to assume that twelve Hindoos can accomplish only as much as one American. The inequality must rather be attributed in great part to the undue depression of the laboring classes both in England and Hindostan, arising from the very unequal distribution of wealth in the two countries, the great bulk of the population thus consisting of laborers for hire, who are

solely dependent upon wages, and are constantly competing with each other for employment. In Hindostan, this effect is very much increased, of course, by the low standard of living, and the cheapness of rice and cotton cloth, which, in that climate, are almost the only necessaries of life. In America, the laborer must have thicker and better clothing, more fuel, a more perfect shelter from the weather; and he also expects a greater amount, variety, and delicacy of food. He is enabled to obtain these additional comforts, because the class to which he belongs is not so numerous in proportion to the rest of the community, because there is consequently not so much competition for employment, and because, if wages are not high enough to satisfy him, he will leave the class of laborers, and become a small landholder, or enter into trade or manufacture on his own account.

Adam Smith long ago distinguished the real price of commodities from their nominal price. Their real price, he says, is the labor which it costs to produce them. So it is; but when they are once produced, their real selling price is the amount of the necessaries, conveniences, or amusements of life that can be obtained in exchange for them. Every man is rich or poor, according to the degree in which he can afford to enjoy these things; and the real value or price of all the commodities which he possesses, therefore, is the amount of these things which his commodities will purchase. On the other hand, the nominal price of his goods is the money—the number of shillings or dollars — which they will bring. This price is called nominal, because for two reasons it is uncertain in amount; it varies with the fluctuations in value of the precious metals, arising from the larger or smaller supply of them obtained from the mines, and it varies with the higher or lower price of the commodities which we wish to purchase with the money. The price may be nominally the same, that is, it may be represented by the same number of shillings or dollars; but it may purchase a larger or smaller amount of commodities than before. Thus, wages and salaries have generally risen in the United States during the last five years, the amount of the increase being, on an average, at least fifteen per cent; but the rise is only nominal, as $115 will not now purchase any more necessaries and comforts than could be bought for $100