hundred thousand dollars in bills, on the plea that he had no money or property at all with which to redeem them, he would be rightly thought insane; and if he persisted in such an absurdity, he would be sent by his friends to the lunatic asylum. If he should demand, besides, that these bills which he desires to issue should be declared a legal tender, no doubt he would be put into a strait-jacket, or sent to the incurable ward, and the lowest attendant in the asylum would laugh at him as an absurd creature.

231. But this is precisely what the government does in issuing greenbacks. It issues promises to pay, on the plea that it has no money; and it makes them a legal tender because they are not good. For if they were good, it would not need to force us to accept them, which is the only object of the legal-tender clause; and if the government had money, it could have no excuse or occasion for issuing notes.

232. For you must not forget, what was shown you under the head of Taxes, that a government can earn or create nothing; it is not a producer. Again, you saw, under the head of Money, that when the government coins money it does not create gold or silver; nor does it add to their value by coining them; it does not even own the metal it coins; but only, for the general convenience, stamps your or my or John Smith's gold with its certificate that each piece contains a specified quantity of the metal.

233. This service plainly gives it no right to declare any thing else money; but if it did, it would be you or I or John Smith, and not the government itself, who would have the right to carry iron or paper to the mint to be stamped.

234. Nor does its authority to declare the gold it stamps a legal tender give it power to make any thing—even gold—a legal tender for more than its actual and real value. For in all this it creates nothing: it only exercises a power delegated to it for the general convenience, to make public declaration of a value already existing.

235. Let me repeat to you once more that a government has no power to create value in any way or sense; for it does

none of the things out of which, we have seen before, value grows it neither produces, nor exchanges, nor saves; it only expends or destroys whatever is given to it by society. It is, in fact, like a pauper; for, like a pauper, it exists by the contributions of others; and as it can have no surplus, but necessarily lives from hand to mouth, and by the labor of others, a pauper might as well put out demand notes as a government; for the bills of each would represent, not existing values, but values destroyed and extinct, and therefore not values at all, but nothing. If you will reflect that in order to call in and redeem the greenbacks the government would have to first raise money by taxes or by what is in the long run the same thing, by sales of bonds-you will see that the greenback is simply a certificate that the government has actually spent and destroyed that much property; and that, as before said, it represents, not value existing, but value extinct, which is nothing.

236. You will see by this the extraordinary hallucination of those people who cry out for "more greenbacks." In a time of war, when the expenditures of the government enormously exceeded the largest sum it could raise from taxes, it was authorized to borrow money. It borrowed many hundreds of millions, upon bonds, or obligations promising to repay the lenders at a certain time, with interest at a stipulated rate. This was perfectly legitimate and honest. But, by a singular blunder, the government also chose to borrow money by a forced loan from its citizens, for which it gave, not interest-bearing bonds, but notes promising to pay, but neither stipulating time of repayment nor granting interest for the use of the money. Such a note made by an individual would be void; made by the government, it was tolerated, on the express ground that the government needed vast sums for its current expenditures, and must get money where and in whatever way it could.

237. But circumstances have changed. The taxes now equal the expenditures, and there is an annual surplus even. How then can we have "More greenbacks?" On what excuse, in what way, for what purpose, can the government borrow money? What shall it do with the money for which

it is to issue "more greenbacks?" The “ more greenback people seem to have perceived this dilemma, and to meet it they have begun to urge a great system of "public works" —canals, railroads, and other costly improvements. But if we are to run in debt for these, surely it is better to do so honestly, by selling our bonds, than dishonestly, by increasing the amount of a forced loan which ought long ago to have been paid out of the surplus revenue, instead of redeeming bonds not yet due.

XXVI.

OF COMMERCE.

238. You have seen, under the head of Property, that the surplus, or that part of his product not needed by the producer for his own consumption, has no real value, and can not become wealth or capital unless he can exchange it for something else.

239. It is not less true that the value of the surplus grows in the precise measure in which the facility of exchanging it is increased.

240. The Nebraska farmer, unable to get his corn to market, is forced to burn it as fuel; and no matter how rich his land, or how great his crop, the surplus on his hands is after all worth only so much wood. If he could send it to Chicago, it would be worth a good deal more than so much fuel. If he could as cheaply send it to New York as to Chicago, it would bring him a still greater price; and its value to him. would be increased with every market he could touch. When I was a boy, Ohio had no railroads, and the farmers near Cincinnati used to sell eggs in that market for three cents a dozen, because that was their only market. Railroads have so greatly increased for them the facility of exchanging eggs, that they now get even in Cincinnati probably at least five times as much as formerly. You can see that they gain this

great advantage simply by increased facility of exchange. Railroads have extended their market for selling eggs.

241. Nor is this increased facility of exchanging eggs for other products a benefit to the farmer alone; for if formerly, for lack of cheap transportation, eggs were very cheap in Cincinnati, they were very dear in many other places. To facilitate the exchange only equalized the prices, and thus increased the comfort of the mass of consumers, and also the wealth of the mass of producers. For if eggs were any where very dear, that is a proof that they were scarce there; and facility of exchange created abundance where before was scarcity.

242. Pray fix in your mind therefore this fundamental truth, that every impediment to the exchange of products is an injury; and that every removal of such an impediment is a benefit, because it increases the rewards of the mass of producers, and the abundance, and hence the comfort and happiness of the mass of consumers.

243. Hence the satisfaction with which people welcome railroads; the benefit of steamboats, steamships, bridges, and all other means by which we decrease the cost of transportation. For you can see that if a farmer can send his eggs to only one place, Cincinnati, where men want to buy eggs, he can not hope to get as much for them as if he could-with cheap transportation-send them to any one of a dozen cities. And as he would send his eggs only to places where they would bring a higher price-where therefore eggs were scarce -cheap transportation, by creating abundance in those places, would benefit consumers there.

244. Commerce means the exchange of products. If I have more hides than I need, and you have more clothing than you need, and if I want clothing and you hides, it is plain that we shall make an exchange of our surpluses if we can get together and agree upon a price. It is clear, too, that we shall both benefit by such an exchange, because when it is made, each of us will have less of the articles which he could not use, and more of those which he wanted.

245. Moreover, you can see that it would be an advantage to you, having clothing to exchange for hides, if you could find, not me alone, but a hundred others, with surplus hides to exchange for clothing, because you would hope thus to get more hides for your clothing. It would be an equal advantage for me if I were the only possessor of hides within the reach of a hundred men having clothing to exchange. But, evidently, all the owners of surplus hides would be benefited if they could come in contact with all the possessors of surplus clothing-because thus the market of all would be broad-, ened, and the price would be equalized for the mass.

246. Thus you see that unimpeded commerce is a benefit to the mass of producers; and that every impediment preventing a part of the owners of surplus clothing from reaching a market of hides, while it may be an advantage to the few who do reach it, and who would thus have a monopoly, would be an injury, first, to those who were prevented from reaching it; but, second, and more important, to the whole of those who were anxious to exchange hides for clothing.

247. Every impediment to free exchange, therefore, whether natural or artificial, is an injury to the mass of consumers— who are the whole people.

248. Nevertheless, every act of exchange which takes place, even where a close monopoly exists on one side, or in regard to one product, is still an unmixed benefit, for it increases abundance and comfort, though in a less measure than if the monopoly did not impede free exchange; and thus it would be wrong to say that men, under any circumstances, become poorer by voluntary exchange. It is, however, quite certain that capital increases far more slowly where impediments exist to a free exchange of surplus products.

249. Impediments to the exchange of products are either natural or artificial. The natural obstacles are very numerous, but may be comprised under the general head of distance. A river is a serious impediment to commerce, until it is bridged or a ferry-boat crosses it; an ocean is a greater impediment, and can be overcome only with the help of ships.