But things change rapidly in this world, and, among the rest, the phenomena of political economy. Three years had not elapsed after the crisis of 1854 before things appeared in an entirely different aspect. The specie reserve of the banks, instead of decreasing at intervals as formerly, continued to increase, that of France in particular. In the middle of 1865, the 6th of July, it had reached five hundred and twenty-one millions; in 1866, seven hundred and eighty-one millions; in 1867 it attained to the famous one thousand millions; and finally, the present year, it oscillates between twelve and thirteen hundred millions, which nothing seems to diminish materially; neither the stock of cereals which we have been obliged to purchase to meet the deficiency in the harvest, nor the acquisition of raw material for our manufactures, nor even the expense occasioned by our preparations for war. In view of this fact, which has exercised, and still does exercise all minds, the attention is recalled to the question of the currency; it is again asked if we have not reached the time when the production of the mines, after having filled all the channels, and satisfied all demands, is about to overflow and cause a serious depreciation of specie. One recalls what took place after the discovery of America. From 1492 to 1530, in spite of the relative abundance of the precious metals, which was experienced from the first discovery of the New World, there was no appriciable change in the price of things-money preserved its full value -but, commencing with 1530, depreciation made rapid progress, and in the course of a century, according to some, three-quarters of a century, according to others, the revolution was accomplished; the value of the precious metals was thre or four times less, that is, merchandise which was exchanged in 1492 and again, in 1530, for a certain weight of gold brought triple and quadruple the amount in 1620 or 1630. Can we now be, as in 1530, on the eve of a new monetary revolution, and have we just traversed the intermediary stage when the precious metals, abundant as they are, still find a demand? Does the production commence to be largely in excess, and is it to this that we must attribute all the specie reserve of the principal financial institucions? These are the questions which are proposed to-day, and which we wish to examine without pretending to give them a practical solution, for it is very evident that if the depreciation of the precious metals were found to be real, it would be impossible to prevent it. In any event it would be well to know it, in order to know how to regard certain facts in political economy, which we observe without inquiry into their causes.

We shall astonish many persons perhaps in saying that the money question is still an obscure subject in political economy. Yet its use has been known for a very long time; it would be necessary to go back to

the infancy of society, to the barbarous epochs even, in order to find exchanges made otherwise than with a metallic medium. The Greeks, the Romans, and before them the Assyrians employed it: it was of bronze, silver or gold, according to the resources of the country and the state of civilization, but it existed everywhere, and it was in that form that riches were particularly sought. It is a long time that men have been called to meditate upon the use of a metallic currency and upon the influence which it can exert in the political economy of a people; but as nothing is simple in the phenomena of political economy, depending as they do upon a thousand things which cause them to vary with times and circumstances, it often happens that in studying these phenomena at different epochs, we arrive at very different conclusions. That which is certain, and we think it can be demonstrated, is that there are great errors disseminated upon the subject of the use of a metallic currency, and, I repeat, it is one of the points of political economy upon which science is the least employed. In speaking thus we have no reference to the opinions of those who imagine that a metallic currency is a useless expense which society imposes upon itself, that we should gain by ridding ourselves of it, and that it would be easy to carry on all transactions with some other instrument of exchange. some conventional thing of no intrinsic value, such as paper for example, We have several times seen this system in operation; we see it yet unfortunately every day; we know what it produces, and no reflecting mind. can view it with favor; but there is another much more serious school which has combatted successfully the extravagance of the mercantile system, but has found riches in nothing but metallic currency, and has sought to acquire the greatest possible amount of it; this school has committed another extravagance in refusing to give to specie that peculiar import. ance which it deserves. Hence the erroneous conclusions derived from what has taken place.

Upon the utility of money there is a figure in an American author strikingly appropriate. "The precious metals," says Mr. Carey, "are to the social body what the atmosphere is to the physical world; both furnish the means of circulation, and the dissolution of the physical body into its elements, when deprived of the one, is not more certain than the dissolution of society when deprived of the other." This is substantially the character of a metallic currency: it is an instrument of circulation, par excellence, that which extends the use and gives value to the more substantial things. In order that an article of merchandise may have great stability in value, there is need of two things: first, that it have an extensive market, and secondly, that it can be kept a long time. If it has only a limited market and is perishable, however useful it may be, it cannot escape the immediate effects of the law of supply and demand which

operates upon it in the market where it is sent. Take wheat for example. That article of food is undoubtedly very useful, it can have a very extensive market; but it is not convenient and easy of transport, and cannot be sent far; besides, it is subject to rapid deterioration. If, then, wheat is produced in a much greater quantity than is needed for immediate consumption within the limits of its market, it must fall in price and it will decline so much the more, for the reason that it can hardly be kept in store to wait for the equilibrium to be better established in supply and demand. It will be the same with any other article of merchandise which is less perishable and more convenient of transport, provided it is not so useful. If it exists in a greater quantity than is needed for the almost immediate use for which it is destined, it will necessarily depreciate, for the fashion may change and with it the use of the article may cease. The precious metals, on the other hand, unite a universal utility with a durability which exceeds that of any other product; they are, besides, convenient and easy of transport, are not subject to the caprices of fashion, and consequently everything is in their favor. Suppose the consumption of cereals in France to be 120 millions hectolitres*; if a good harvest furnishes 140 millions, and the markets surrounding have nearly what they need, this seventh part which is in excess of the ordinary consumption can cause a decrease in price of one quarter and perhaps a third—we have seen it many times. On the other hand, in years of scarcity, oftentimes a deficit of 10 or 12 millions of hectolitres is sufficient to send the price up in the same proportion. Not only has metallic currency a very extensive market and one always open, which renders a surplus more difficult, but its market has no appreciable limit, it can expand indefinitely. To day the commercial relations are maintained with 30,000 millions of money, to-morrow it will take perhaps 40,000 millions, and subsequently more in proportion as the commercial relations are extended. There is another fact, and it is one which has escaped certain writers upon political economy. The precious metals have of themselves developed business which eventually absorbed them, and thus have acted at the same time both as cause and effect. It is often said that man's ability to produce is unlimited like his ability to consume; it depends only upon the supply of necessary instruments, and the first in importance of these instruments is certainly that which extends his relations with his fellow-man. This is the service which a metallic currency performs. Like railroads, it brings the products to the consumers, and this ready supply increases the number of consumers and consequently the quantity consumed. You have

A hectolitre is about 2.75 bushels.

wine, woolen fabrics, manufactured products of any kind, with which you wish to purchase wheat, cotton, sugar and colonial commodities; but it may be that the people who have these commodities may not need at this time your wine and your fabrics. They will not take them in exchange, or if they take them it will only be on conditions unfavorable to you; you will abstain then from buying, and the holders of these commodities will not sell them till they have found a person who has the products which they wish in exchange. In the meantime see how the industrial pursuits are checked in their development, because the people are not furnished with a medium of exchange adapted to their wants. The precious metal presents itself and a medium is furnished.

Every one purchases the products he needs without taking the trouble to inquire whether the merchandise which he has is suited or not to those who sell to him; he is certain of a means of payment which wil not be refused. In this manner products are distributed, production is increased, and with it the public wealth. A very conscientious and very competent author, who has written the best things upon the influence exercised by the abundance of the gold mines, M. Newmarch, has endeavored to explain this. "The discovery of the gold mines,” he says, "has had the effect to increase wages and riches in the countries where they are found, and to attract there (a large population, which, being enriched by the mines, has consumed a much larger quantity of the manufactured products of other countries with which they have been connected. These countries, in their turn realizing profits from their exportations, have also become consumers to a much greater extent, of the products of other countries; and thus, in consequence of the remunerative employment derived from the opening of the gold mines at one point on the globe, the industrial pursuits and commerce have become active everywhere." This explanation has unquestionably its value, but touches only the smallest side of the question. It is as if it were held that railroads have only been useful for the employment they have furcished in their construction and what they still furnish in their operation. On this supposition, if instead of gold mines, iron and copper mines had been worked, which had yielded the same profits, the result would have been the same, since it would equally have furnished markets for the manufactured articles of other countries. One can understand perfectly that such would not have been the case, and that gold mines have had an effect beyond furnishing a field for remunerative labor; they have, like railroads, put in mens' hands the most effective lever for developing public wealth.

Many things have been invented since the beginning of the world which have aided the progress of civilization, but, aside from printing,

there is nothing which has had the influence of railroads and the precious metals, and, we may also add, the electric telegraph. Railroads not only furnish means of distributing the products along their lines, but they also have the merit of making more products; we have proof of this every day before our eyes. A railroad is constructed in a country which was destitute of them and had not the means of easy communication; the first year the transportation is very limited, the second year it increases, and, after a short time, the rolling stock is insufficient, its capacity is overtaxed. What has happened to bring about such a result? It has been simply the fact that new branches of industry have been created along the line, that those which existed have been developed, and this has happened because the people have had at their command convenient, rapid and cheap means of communication. It is the same with the precious metals. A discovery like that of the placers of California and Australia, by furnishing to the world a great quantity of the instrument of exchange, acted necessarily upon business, and gave it a greater development, a result inconsistent with the reasoning of those who hold that the working of mines is an improductive labor, because it only helps increase the weight of money; it also shows the insufficiency of M. Newmarch's explanation that there is no source of riches in the new mines except in so far as they have furnished employment for the laborer, M. Hume has said, in speaking of specie, that it was not one of the wheels of commerce, that it was only the oil which makes the movement easier and more agreeable. We think he is mistaken, and that money is precisely one of the wheels of commerce, and one of the most essential; but following out his illustration, we still find that the more abundant the oil, the more means we have to give activity to the wheels, and, therefore. the more is accomplished. The gold mines have of themselves aided the commercial movement which has resulted in absorbing them.

I.

According to this school, in time of a crisis, when the metallic currency becomes scarce and leaves the country, there is no occasion to feel concerned. Products are exchanged for products and it matters very little whether we export specie or anything else. We do not export for nothing; it is a traffic analagous to that of exchanging wine for iron or silk. It is only necessary to let things take their course and the equilibrium will establish itself naturally. It is thus they reason who see in the precious metals only an article of merchandise like anything else. Nevertheless experience teaches us that in a time of crisis when silver goes out of circulation and becomes scarce, society is otherwise effected than by the extraordinary exportation of wine or any other product. If