capital, property, merchandise owned, loans, payments, etc. as so much Money, as so many dollars or pounds sterling; though, in fact, gold or silver coins form little or no portion of them, but they are only so many dollars' worth.

Moreover, since Money is the common medium of exchange, and since wealth itself subsists, or is continued in existence, only through an interminable series of exchanges, all wealth must more or less frequently, though only for a short time, appear as Money, and be reckoned or estimated as such. Money is thus the univer sal form or garb which all the items or commodities that constitute wealth occasionally assume. If a man is compelled to borrow, he borrows, not the particular articles that he actually needs, but as much Money as will enable him to purchase them. And when he pays the debt, he does not return the very articles that he borrowed, or an equivalent amount of a similar kind, but he pays a proportionate sum of Money. As we are thus obliged constantly to substitute one name for the other, it is not strange that people should almost universally believe that Money alone is wealth, and that the ease or difficulty of effecting loans and payments should be called "the abundance or scarcity of Money." This error can be avoided only by keeping constantly in view the fact that Money has two distinct functions, and only two: First, as a measure of value,—that is, of wealth, capital, debt, or payment, — it is akin to the yardstick or peck basket; secondly, as a medium of exchange, it is a mere "ticket of transfer," or means of effecting a change of ownership, that is, of bartering one kind of merchandise for another.

2. Currency, as its name imports, is the current substitute for money, and has no intrinsic value. It consists of engraved pieces of paper, issued either by the government or by a bank, each bearing on its face a promise to pay the bearer, either on demand or at some future day, a certain sum of Money. Strictly speaking, then, it is the acknowledgment of a debt, and it differs from other acknowledgments of indebtedness, such as promissory notes, bills of exchange, and the like, only because it is payable "to bearer," whoever this may be, and not, like the promissory note, or bill, "to order of some one person. Because it is thus left indeterminate, so that any holder of it may demand its payment, it is fitted for general circulation as a substitute for Money. A note

of hand is not fitted for such use, because payment of it can be enforced only by the particular person designated on its face, or by his legally accredited representative.

Currency is of two sorts, 1. That which is immediately convertible, or payable on demand; 2. That of which the payment is postponed, either indefinitely, or to some fixed future day. The former usually appears as convertible bank-currency, or bankbills; the latter is properly called Paper Money.

If the arrangements made by the issuing banks are such that every holder of their bills is sure that he can have them cashed with ease and quickness whenever he desires, then the bank-bills are an admirable substitute for Money. That which is immediately convertible into a dollar or a pound sterling will evidently measure value just as well as that dollar or pound; a piece of tape or paper, if it is just a yard long, is as good a measure as the yardstick. As a medium of exchange, such bank-bills are not merely as good as Money; they are better, for they are more convenient. They are less expensive, more portable, more easily counted, and, if lost by accident, wreck, or fire, there is no absolute destruction of value, no real loss to the community. Only make sure of their immediate convertibility, and there is a great gain in substituting, as far as possible, bank-bills for actual Money.

But Paper Money, because it is not immediately convertible, has no fixity of value, and is therefore adopted only on compulsion, through the act of the government or the necessity of the case, which, by making it legal tender, compels creditors to receive it as a satisfaction of their dues. Foreigners are under no obligation to receive it, and therefore invariably refuse it, so that its circulation is confined to the country in which it originates. Its value there, at any one time, depends not merely upon the actual quantity of it in circulation, but on the apprehended speedy increase or diminution of that quantity, according as the necessities or the caprice of the government, or other authority by which it is issued, may dictate. Hence its value cannot be rendered stable or uniform; it is always liable to sudden, and even great, fluctuations in value, according as the apprehensions of the people are more or less excited. The value of the Money in use is, as we have seen, only another name for the prices of commodi

ties. Accordingly, when Paper Money is in use, there is no standardno uniformity of prices, and therefore no possibility of foreseeing how much value must be given and received in payment of a debt or in the execution of a còntract. The very life of trade consists in anticipating what will be the prices of merchandise at some future day; if this cannot be done, legitimate trade cannot go on; it is reduced to mere gambling. Any one who buys or sells for any other purpose than that of immediate consumption must, in popular phrase, "run for luck"; he cannot tell whether he will gain or lose by the transaction. Commerce is thus incapacitated for performing its proper functions of equalizing the supplies and the prices of commodities at different times and at different places.

What is worse, the use of Paper Money destroys confidence between man and man; it sanctions injustice, and compels the injustice to be constantly repeated. Any one who trusts another, either by selling him goods on credit or by making him a loan, does so at his peril. He must "run for luck"; for he cannot tell how much less or more value there may be in the nominal payment than there was originally trusted out. If, in the interval between contracting and paying a debt, the value of the Paper dollar is depreciated 20 per cent, the creditor is defrauded of one fifth of his just due; if that value rises 20 per cent, the debtor is compelled to pay one fifth more than he ought. On account of the uncertainty and injustice thus created, legitimate trade in this country, during the last eight years, has been several times reduced almost entirely to what is called "a cash basis"; that is, credit has been generally refused, and the only proper traffic has been the direct interchange of values vested in commodities.

The value of Paper Money does not at all depend upon the probability that the "promise to pay," which is engraved upon its' face, will be kept.' Its issue is an act of enforced bankruptcy; it acquires a conventional but fluctuating value from the legal necessity imposed upon all creditors to accept it as a full discharge of any pecuniary obligation. The act of government has made the notes legal tender; and the power which they thus possess to wipe off debts gives them a fictitious value, or makes them capable of effecting purchases. Everybody is willing to take these poor substitutes for money, because everybody else is willing, or is

compelled, to take them. If any one has a barrel of flour to sell, it may seem that he makes a foolish bargain by consenting to exchange it for half a dozen ragged bits of paper, each bearing a promise which, as he well knows, will never be redeemed. But observe that the real equivalent for the flour is not these worthless notes themselves, but the commodity which they will purchase, or the act which they will enable him to perform. He sells the flour because he wishes to buy a piece of cloth, or some groceries, or to pay off a debt; and if these bits of paper will enable him to accomplish these ends, to buy the desired commodities or a receipt in full, they are just as valuable as if they were Money strictly so called, as if they had intrinsic value.

Recent facts confirm this theory. During the last year of the Great Rebellion, probably not the most sanguine Confederates had any expectation that the Paper Money with which their government had deluged the Southern States would ever be redeemed or paid off, either in full or in part. It was already so depreciated that forty or fifty dollars of it were needed to buy one dollar in gold. But at this depreciated rate it circulated just as freely as ever, probably more freely, as the depreciation went on; since every one who had received it was eager to get rid of it, or to pay it away as fast as possible. It was quite as easy in Richmond, up to the date of its evacuation, to buy a barrel of flour with three hundred dollars in Confederate Currency, as with six dollars in gold; — not that any sane person regarded these two sums as equivalent in intrinsic value, but because the state of the market, and the necessity of having some common medium of exchange, some Currency or other, had established this relation between them.

The paradox seems still more extravagant when we state, that the want of faith in the "promise to pay," or the opinion which may be entertained respecting the probability of the notes being redeemed at some future day more or less remote, is not the cause even of the depreciation in the value of the Paper Money. The extent of the depreciation depends not at all on the presence or the want of faith in the ability and disposition of the government to pay off the notes in full with specie, or on the nearness or remoteness of the time when it is likely to do so; but solely on the

relative amount of the Currency as compared with the needs of business.

How great are these needs? Commerce needs Money or Currency enough to enable it to perform its peculiar function; that is, to make the prices of commodities in the home market equal, or as nearly equal as possible, to the prices of the same commodities in foreign markets. If the amount of Paper Money is just sufficient for this purpose, there is no need of its being redeemed at all, but it may continue in use for an indefinite period. A paper dollar is just as good as a gold dollar, so long as it will buy as much; that is, so long as prices are maintained at the point of equilibrium. If there is more than enough Paper Money for this end, it will inevitably be depreciated; that is, prices will be unduly enhanced. And the depreciation, or the undue enhancement of prices, these two phrases meaning precisely the same thing, — will be strictly proportioned to the excess of the Currency, or to what men think will very soon be the measure of that excess.

For instance: if there are only one hundred dollars to buy flour with, and only ten barrels of flour are offered for sale, the competition of buyers and sellers must fix the price at ten dollars a barrel. If there were twice as much flour, the number of dollars being the same, the price must be reduced to five dollars. On the other hand, double the quantity of money, let there be two hundred dollars available for this purpose, and, as at first, only ten barrels to be sold, and the price would rise to twenty dollars a barrel; that is, each dollar would be worth only half as much, -would be depreciated fifty per cent. Such an adjustment of prices is evidently independent of any opinion that may be entertained respecting the intrinsic value of the dollar, or the probability of its speedy redemption in coin. Money as such is valuable for no other purpose than buying commodities or paying debts; and therefore its value must be measured by what it will accomplish in these two respects.

3. Floating Capital is the only stock of values which are really available for actual loans or actual payments. Its amount, at any one time, is the aggregate of merchandise of all sorts which is directly offered for sale in open market and at current prices. It includes even lands, buildings, machinery, railroads, and all other