they may in time be paid off, as has been the general practice in the colonies. At this very time, even the filver money in England is obliged to the legal tender for part of its value-that part which is the difference between its real weight and its denomination. Great part of the fhillings and fixpences now current, are, by wearing, become 5, 10, 20, and fome of the fixpences even 50 per cent. too light. For this difference between the real and the nominal, you have no intrinsic value; you have not fo much as paper; you have nothing. It is the legal tender, with the knowledge that it can eafily be repaffed for the fame value, that makes three-penny-worth of filver pafs for fixpence. Gold and filver have undoubtedly fome properties that give them a fitnefs above paper as a medium of exchange, particularly their univerfal eftimation, efpecially in cafes where a country has occafion to carry its money abroad, either as a flock to trade with, or to purchase allies and foreign fuccours; otherwife that very univerfal eftimation is an inconvenience which papermoney is free from, fince it tends to deprive a country of even the quantity of currency that fhould be retained as a necessary inftrument of its internal commerce, and obliges it to be continually on its guard in making and executing at a great expenfe, the laws that are to prevent the trade which exports it. Paper-money well funded, has another great advantage over gold and filver-its lightness of carriage, and the little room that is occupied by a great fum; whereby it is capable of being more eafily, and more fafely, becaufe more privately conveyed from place to place. Gold and filver are not intrinfically of equal value with iron, a metal in itfelf capable of many more beneficial ufes to mankind. Their value refts chiefly in the estimation they happen to be in among the generality of na

The fifth reafon is, "That debtors in the affemblies, make paper-money with fraudulent views." This is often faid by the adverfaries of paper-money, and if it has been the cafe in any particular colony, that colony fhould, on proof of the fact, be duly punished. This, however, would be no reafon for punishing other colonies, who have not fo abused their legislative powers. To deprive all the colonies of the convenience of paper-money, because it has been charged on fome of them, that they have made it an inftrument of fraud, is as if all the India, bank, and other flocks and trading companies were to be abolished, because there have been, once in an age, Miffiffipi and South fea fchemes and bubbles.

The fixth and laft reafon is, "That in the middle colonies, where the paper-money has been beft fupported, the bills have never kept to their nominal value, in circulation; but have conftantly depreciated to a certain degree, whenever the quantity has been increafed." If the rifing of the value of any particular commodity wanted for exportation, is to be confidered as a depreciation of the va lues of whatever remains in the country, then the rifing of filver above

paper to that height of additional value, which its capability of exportation only gave it, may be called a depreciation of the paper. Even here, as bullion has been wanted or not wanted for exportation, its price has varied from 5s. 2d. to 55. 8d. per ounce. This is near ten per cent. But was it ever faid or thought on fach an occafion, that all the bank bills, and all the coined filver, and all the gold in the kingdom, were depreciated 10 per cent.? Coined filver is now wanted here for change, and one per cent.is given for it by fome bankers; are gold and bank notes therefore depreciated one per cent. ? The fact in the middle colonies is really this On the emiffion of the firft paper-money, a difference foon arofe between that and filver; the latter having a property the former had not, a property always in demand in the colonies, to wit, its being fit for a remittance. This property having foon found its value, by the merchants bidding on one another for it, and a dollar thereby coming to be rated at 8s. in papermoney of New-York, and 7s. 6d. in paper of Pennsylvania, it has continued uniformly at thofe rates, in both provinces, now near forty years, without any variation upon new emiflions; though in Pennfylvania the paper-currency bas at times increafed from 15,000l. the first fum, to 600,000l. or near it; nor has any alteration been occafioned by the paper-money, in the price of the neceffaries of life, when compared with filver: they have been for the greatest part of the time, no higher than before it was emitted, varying only by plenty and fcarcity, according to the feafons, or by a lefs or greater foreign demand. It has indeed been ufual with the adverfaries of a paper-currency, to call every rife of exchange with London, a depreciation of the paper: but this notion appears to be by no means

juft; for if the paper purchases every thing but bills of exchange, at the former rate, and thefe bills are not above one-tenth of what is employed [in] purchases, then it may be more properly and truly faid, that the exchange has rifen, than that the paper has depreciated. And as a proof of this, it is a certain fact, that whenever in thofe colonies bills of exchange have been dearer, the purchafer has been conftantly obliged to give more in filver, as well as in paper, for them; the filver having gone hand in hand with the paper at the rate above-mentioned, and therefore it might as well have been faid that the filver was depreciated. There have been feveral different fchemes for furnishing the colonies with paper-money, that should not be a legal tender, viz.

1. To form a bank, in imitation of the bank of England, with a fufficient ftock of cash to pay the bills at fight.

This has been often propofed, but appears impracticable, under the prefent circumftances of the colonytrade, which, as is faid above, draws all the cash to Britain, and would foon ftrip the bank.

2. To raise a fund by fome yearly tax, fecurely lodged in the bank of England, as it arifes, which fhould (during the term of years for which the paper-bills are to be current) accumulate to a fum fufficient to difcharge them all at their originul value.

This has been tried in Maryland, and the bills fo funded were iffued without being made a general legal tender. The event was, that as notes payable in time, are naturally fubject to a discount proportioned to the time-fo these bills fell at the beginning of the term, fo low, as that twenty pounds of them became worth no more than twelve pounds in Pennsylvania, the next neighbouring province, though both had been

firuck near the fame time, at the fame nominal value, but the latter was fupported by the general legal tender. The Maryland bills, how ever, began to rife as the term fhortened, and towards the end recovered their full value. But as a depreciating currency injures creditors, this injured debtors, and by its continually changing value, appears unfit for the purpose of money, which fhould be as fixed as poffible in its own value, because it is to be the measure of the value of other things. 3. To make the bills carry an intereft fufficient to fupport their va

lue.

This too has been tried in fome of the New England colonies; but great inconveniencies were found to attend it. The bills, to fit them for a currency, are made of various denominations, and fome very low, for the fake of change; there were of them from 10%. down to 3d. When they first come abroad, they pafs eafily, and answer the purpose well enough for a few months; but as foon as the intereft becomes worth computing, the calculation of it on every little bill in a fum between the dealer and his customers, in fhops, warehouses, and markets, takes up much time, to the great hindrance of bufinefs. This evil, however, foon gave place to a worfe; for the bills were in a fhort time gathered up and hoarded, it being a very tempting advantage to have money bearing intereft, and the principal all the while in a man's power, ready for bargains that may offer, which money out on mortgages is not. By this means, numbers of people became ufurers with fmall fums, who could not have found perfons to take fuch fums of them upon intereft, giving good fecurity; and would therefore not have thought of it, but would rather have employed the money in fome bufinefs, if it had been money of the common kind. Thas trade, instead of being in

creased by fuch bills, is diminished: and by their being fhut up in chests, the very end of making them (viz. to furnish a medium of commerce) is in a great measure, if not totally defeated.

On the whole, no method has hitherto been formed to establish a medium of trade, in lieu of money, equal in all its advantages, to bills of credit, founded on fufficient taxes for difcharging it, or on land fecurity for double the value, for repaying it at the end of the term, and in the mean time, made a general legal tender. The experience of now near half a century, in the middle colonies, has convinced them of it among themselves, by the great increafe of their fettlements, numbers, buildings, improvements, agriculture, fhipping, and commerce. And the fame experience has fatisfied the British merchants who trade thither, that it has been greatly useful to them, and not in a fingle inftance prejudicial.

It is therefore hoped, that, fecùring the full difcharge of British debts, which are payable here, and in all juftice and reafon ought to be fully difcharged here in fterling money, the restraint on the legal tender within the colonies will be taken off, at least for thofe colonies that defire it, and where the merchants trading to them make no objection to it.

has fcarcely exifted in reality. The wants, the fears, the weakness, nay the very nature of man, neceffarily conftitute him a focial animal: and, in the very origin of fociety, their mutual neceffities, with the various talents, means, and opportunities of individuals for fupplying them, muft have produced a reciprocity of fervices, and an occafional interchange with one another of that property, which each had acquired by his own

exertions.

Commerce may then be confidered as coeval with man himself, and barter as its first stage.

It is obvious, however, that the exchange of one kind of commodity for another, mult have proved too imperfect a species of traffic to anfwer the pupofes of fociety, after civilization had multiplied their wants. and extended the objects of them beyond their mere neceffities.

In order, then, to remedy the inconvenience of barter, certain fubftances have been adopted, amongst the various nations of the earth, as the scale or ftandard for measuring the value of every fpecies of property; thereby to afcertain the relative worth of every commodity, compared with others, and with this common standard.

The fubftances, moft univerfally employed for this purpose, are filver and gold, though the former is efteemed the ftandard. These metals poffefs an * intrinsic value, by reafon

NOTE.

*The value of the precious metals is, however, enhanced, by their peculiar aptitude to perform the office of an univerfal money, far beyond any real, inherent value they poffefs. This extrinfic value of gold and filver, which belongs to them when under the modification of coin or in bullion, is totally distinct from their inherent value, as a commodity. We are apt to confound the inherent

fcarcenefs; and certain other qualities render them fuitable materials for receiving fuch criteria, as that they may be readily diftinguished, in the tranfactions of men, for that standard, whereby the relative worth of all commodities is afcertained. The diftinguishing marks given, by the authority and fanction of a state, to certain portions of metal, denominate them coin. Thefe, which we call actual money, are graduated (if we may use the expreffion) according to the proportion and quality of metal they contain, by an arbitrary fcale, termed money of account; which, in every country respectively," reprefents an invariable scale "for measuring value."

But it is to be observed, that gold and filver coin derive not their intrinfic value from performing the office + of money; but poffefs it as a commodity. For, as mr. Anderfon expreffes it, " money, confidered in itself, is of no value. But among civilized nations, who have

NOTES.

value of the commodity with its extrinfic value as a money; and to unite the two, in eftimating the intrinfic value of the fubftance. Whereas bank-notes, or any other fpecies of fymbolical money, may, under certain regulations, acquire that" eftimation" among a people, neceffary to constitute money, and to answer all the ufes of a circulating medium of alienation in a state.

"By money," fays fir James Steuart, I understand any commodity, which, purely in itself, is of no material ufe to man, but which acquires fuch an estimation from his opinion of it, as to become the univerfal meafure of what is called value, and an adequate equivalent for any thing Political Economy, alienable."

Book I. chap. 6.

Vide his Obfervations on National Industry.

"found how convenient it is for fa"cilitating the barter or exchange "of one commodity for another, it "has received an artificial value. "So that, although useless in itself, "it has come to be accepted among * all civilized nations, as a token "proving that the perfon who is pof"feffed of it, had given fomething of real value in exchange for it; *and is, on that account, accepted "of by another, in exchange for "fomething that is of real utility " and intrinfic worth." In ftrictness, therefore, the employment of gold and filver-coin, in alienation, is no more than bartering one commodity for another of equal value, or rather price. The intrinfic value of fuch coin, does, in fact, render it, in fome degree, an imperfect medium of alienation; for, being itself a commodity, it is liable to rife and fall in value, like every other article of commerce and accordingly, we find that the price of filver is continually varying in the London market; and the English Eat-India company fend filver to China, in order to purchase gold.

Thus money, formed of the precious metals, may be confidered in a two-fold point of view-as a merchantable commodity, and as a medium of alienation. In the former capacity, it adds to the riches of a country, merely in poportion to its intrinfic value, but, as money, it can no otherwise produce this effect, than paper or leather-money, or any other fign of property.

If we recar to the original use of money as an inftrument by the intervention of which, alienation might be effected, and the neceffity of barter fuperfeded-it muft appear evident that we judge very erroneously, when we fuppofe intrinfic value to be infeparably connected with it. At the fame time it must be acknowledged, that that fpecies of money, which poffeffes intrinfic Vol. II. No. I.

value, has one advantage that does not appertain to fymbolical money; namely, that being itself a merchantable commodity, it may be bartered, at a foreign maket, for other commodities. This advantage, however, as fhall be fhewn in the fequel, is not more than equivalent to thofe that are deducible from a well-founded fymbolical money, which is capable of answering all the domeftic and internal purpofes of a circulating medium in a nation.

From what has been premifed, we may infer, that money, in its proper fignification, is not wealth, but the fign, token or reprefentative of it. The abfolute riches of a country, confift in the abundance of those productions of nature, that minister directly to the fupport, the conveniency, and the enjoyment of mankind. Where nature has bestowed these gifts, with a liberal hand, the nation, collectively, may juftly be termed rich, though deftitute of money. On the other hand, where thefe bleffings appear to have been dealt out to a people in a more sparing manner, they are comparatively poor, notwithstanding their country may abound with gold and filver-mines. For if we confider the former country as totally unconnected with any other, it is evident that the wants of all its inhabitants may be fupplied by the means of bartering; but if we place the other in the fame unconnected ftate, it is equally plain,

NOTE.

"Money is an univerfal medium or common ftandard, by a comparifon with which the value of all merchandise may be ascertained; or it is a fign which represents the real value of all commodities." Black. Comm. I. 279.

Lord Shelburne, fpeaking in the houfe of lords, called " money one type of proper :" paper (he adds) is another. Vide Anderfon, in Nota. B