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ART. I.-ARTIFICIAL AGENTS OF EXCHANGE.
HAVING noticed in the preceding numbers of the WESTERN JOURNAL the nature of the agency performed by the merchant and the carrier, we now propose to consider the nature of a different class of agents, which, although artificial, are nevertheless essential to the advancement of civilization.
Among these artificial agents, money may be regarded as the first in point of importance; for, independently of its intrinsic utility as an agent in effecting the exchange of other commodities, it would seem to be endowed with some inherent property that exerts an influence at once potent and mysterious, over the moral nature of man. The power of money is derived from the universal assent of the civilized world, and its most important function is that exercised in facilitating the exchange of other commodities. This is the fundamental principle involved in its use, and should be constantly borne in mind by those who desire to understand its true nature.
The adoption of symbols as the representatives of useful commodities is among the most ancient of the social institutions, and the same idea seems to have occurred to every people in the earliest stages of their civilization; for, even barbarous tribes, ignorant of almost every civil art, and unacquainted with the precious metals, have, nevertheless, conceived the principle involved in the use of money, and for the want of better defined symbols, use shells and other things of no intrinsic value, as the representatives of useful commodities.
Indeed, it is difficult to conceive how the human family could have emerged from a state of barbarism without the adoption of some arbitrary and conventional representative of the value of those things which were necessary to their comfort and convenience; for, without such a representative, the time consumed and the inconvenience incurred in effecting the exchange of commodities, would be greater than the labor of producing them; and would tend to discourage the production of all such as were not essentially necessary to the subsistence and VOL. I, NO. VI-29
comfort of the producer. Without such an agent as money, if the producer of corn should need a coat, he must not only find an individual who had a coat to dispose of, but he must find one who desired to exchange it for corn: and if no such individual could be found, the farmer must go without a coat, or otherwise enter into a series of exchanges, for the purpose of procuring an article which the owner of the coat desired to obtain. It was to remedy the inconvenience of effecting the exchange of commodities by bartering, that the principle involved in the use of money was adopted. The proposition was simple, and easy of apprehension, and only required the selection of a proper symbol to put the principle in operation; and the precious metals would seem to have been designed for that purpose for owing to the peculiar manner in which they are distributed throughout the earth, they can never be produced in quantities so large as to cause a sudden depreciation in their value; while the desire to obtain them ensures the constant working of the mines, so as to prevent a decrease in quantity; and thus the labor employed in mining, is made to regulate the money price of all other labor. This is the principle involved in the use of the precious metals as symbols; and, although they appear to have been wisely selected, it does not follow that the exchange of commodities could not have been effected by other arbitrary symbols, as well as by the precious metals. It is remarkable, that notwithstanding the principle of exchanging commodities by the use of an arbitrary representative of their value has been so long understood and acted upon, yet the laws governing the circulation of money should be so imperfectly understood at the present day. This is owing to the fact that its use and circulation are so intimately connected with the production, exchange, and consumption of useful commodities, that it is impossible to understand it as an independent and distinct subject; nor can it be fully comprehended without embracing the entire subject of political economy. Owing to the facility of exchanging money for whatever the possessor may desire, we very naturally forget that it is an agent, and invest it with all the powers of a principal. Acting upon this error, it becomes the primary object and end of all pursuits, while the substance is sacrificed to obtain the shadow. Such is the case with the farmer, who, aiming to grow rich by the acquisition of money, wears out his land, and permits his houses and enclosures to fall into decay; and such is the case with him who, possessing means sufficient to ensure every reasonable comfort, yet continues to exert every faculty of both body and mind, in the pursuit of wealth. For the former will discover in the end that his labors have simply resulted in exchanging the permanent and substantial wealth which he possessed in his soil, for its equivalent in money; and that his gains consist in the privilege of purchasing, and in like manner wearing out another farm; or, haply, if he perceives his folly, he may appropriate his money, and an equal amount of labor to the purpose of restoring his exhausted farm to its original state of fertility: while the flatter, will in time, perceive that he has exhausted his muscular strength, denied
himself the comforts of physical repose, neglected to improve his opportunities of mental and moral improvement, and sacrificed all the pleasures which these were designed to afford for that, which to him, is worse than useless.
Although the amount of money in circulation in a given country may be regarded as the representative of all the labor and property within its limits, yet it is not, nor can be, made a permanent standard of value; for every individual being left free to exchange his labor or property for money, or not, as he may choose, the measure of its value is subject to the agreement of the parties concerned in every transaction of exchange; and hence, it frequently occurs, that at the same time and place, money cannot be exchanged, with different individuals, for the same quantity of a given commodity. One is willing to exchange coin for money at the rate of twenty five cents per bushel, while another demands thirty cents for the same quantity; and thus, in every case of exchange, the parties agree upon the value of money according to the opinion which they respectively form in regard to their own interest or convenience; or, it may be that one or the other is compelled by necessity, to yield to an exorbitant demand; and thus, it will be perceived that "the intrinsic value of money," a phrase which is often used by the politician, is the most vague of all unmeaning terms, especially in the sense in which it is generally used-for, if it possesses an intrinsic value besides its use as a mere metalic substance, this consists in its functions as a general agent of exchange; while its specific value is the subject of agreement between the parties to each transaction.
As an agent in effecting the exchange of other commodities, it is in strict accordance with the nature of money to accumulate and abound most where the greatest amount of commodities are exchanged; and therefore, it as naturally tends to the great commercial marts, as matter to the centre of gravity. As we proceed from these great marts towards the extremes of the commercial circle of which they constitute the centre, the representative value of money gradually increases, or, in other words, it becomes dearer, while lands and provisions become cheaper. This difference in the value, and quantity of money between distant points, however, would not be important was there no commercial intercourse between them; but it is clear that in the exchange of commodities between the centre and the distant points within the circle, the advantages are greatly in favor of the former-for, if the money value of lands and provisions materially differ in different countries, the commerce between them cannot be placed on grounds of equality.
The high price of lands and provisions necessarily enter into and influence the price of every other commodity, and if the people of a country where the price of lands and provisions rules high, as in Great Britain, should exchange their manufactures for the raw material of a country where the price of lands and provisions was low, as in Missouri, the former would enjoy the singular advantage of selling their agricultural products at prices which would pay them a fair profit on
lands valued perhaps at two hundred dollars an acre; while the latter would pay for them in raw material, at a price which only pays a moderate profit on land valued at from five to ten dollars per acre; and thus by purchasing the manufactures of England, we are sustaining the high prices of lands and provisions in that country, and depressing them in our own.
The immense commerce of England draws to that country a larger amount of money than is found in any other; and hence money is cheaper and lands and provisions dearer there than in any other part of the world; and labor is also dearer than in any other country, except the United States. Now, it is evident that these high prices could not be sustained, unless she could sell her manufactures to the people of other countries, at prices corresponding with the prices of her lands and provisions, and purchase their raw material at prices corresponding with the price of lands and provisions where it is produced. This is the course that England has hitherto pursued; and hence she has enriched herself from all the nations of the earth. But no people have ever become rich by British commerce-nor can such an event happen so long as the products of her soil continue at former and present high prices, and she to find a market for her manufactures.
After long experience the people of this country have begun to perceive that we have gained but little by British commerce; but they appear greatly puzzled to find out the cause. Among the many causes assigned, the low price of labor in Great Britain is considered by many as the most prominent. But the average difference between the price of labor there and here, constitutes but a small item in the list of disadvantages against which we have to contend in our commerce with that country. Labor there is dependent upon capital, and wages are reduced to the lowest point that will sustain the operative in a working condition; this is necessary to enable the manufacturer to meet competition from other countries, and also for the purpose of sustaining the high prices of land and provisions; but pauper labor," as it is sometimes called, is but as the dust in the balance, when compared to the immense amount of machinery, the large profits of real estate, and the fixed capital of the Bank of England. These constitute the elements of the great power against which we have to contend in our commercial intercourse with that country. With such advantages against us, it is our true policy to limit our commerce with her to the exchange of such commodities only as are essentially necessary to our comfort and convenience. For as long as money remains cheaper in Great Britain than in the United States, the advantages grow. ing out of an exchange of commodities, must remain in her favor.
It may be asked, if money is dearer in the United States than in Great Britain, why it does not come here for investment? This would be in conformity with one of the laws of its circulation were not this law modified and controlled by the causes just mentioned. Owing to these causes, the people of Great Britain avail themselves of all the benefits of the high price of money here, while they still keep their own precious metals at home.
If we have made our views intelligible to our readers, they will perceive the importance of lessening, as far as practicable, their reliance upon foreign countries for the sale of their raw material, and also for the purchase of foreign fabrics; for we are fully persuaded that it is only by encouraging the manufacture of our own raw material, and consequently enlarging our internal commerce, that we can avoid the disastrous effects of foreign revulsions. Nor can we by any other means secure to the agriculturists of the United States the just reward of their labor. We have furthermore endeavored to show the tendency of money to accumulate in the great commercial marts, and that this accumulation operates to the disadvantage of those who reside at a distance from the place where their exchanges are effected. From this we discover the importance of encouraging and building up markets as near home as practicable. This is a subject in which the people of the west are vitally interested, for until the farmer of this Valley can find a market for his produce, nearer than the coast of the Atlantic, he must be content to receive a far less reward for his labors than do those in that region.
[TO BE CONTINUED.]
ART. II.-THE MORALS OF COMMERCE.
NOTES OF A LECTURE DELIVERED BEFORE THE YOUNG MEN'S MERCANTILE LIBRARY ASSOCIATION OF CINCINNATI, NOVEMBER 30TH, 1847, BY T. WALKER.
My subject is "the Morals of Commerce." I have given it this name for want of any one more definite, under which I could bring together a variety of random thoughts, all more or less connected with the mercantile profession, but not susceptible of a convenient arrangement under a less comprehensive title. What I shall say will have reference principally, to two things; first, the preparation for a mercantile life, and, secondly, the line of conduct to be pursued therein.
First, then, as to the preparation. And here the result to which I would conduct your minds is, that to the merchant knowledge is capital. If it be a general truth in human affairs, that knowledge is power, I hold it to be pre-eminently so in regard to mercantile pursuits. Without it, all the capital of a Girard or an Astor, would not make a merchant; and with it, as the principal thing, capital soon follows as an incident. Accordingly, the first duty of every person destined for a merchant, is to prepare himself, by a suitable education, for an intelligent discharge of his diversified functions—just as much so, as of a lawyer, a physician, or a clergyman; and to this end, there is just as much need of commercial schools and colleges, as of any other-and these, I rejoice to say, we are beginning to have in all our commercial cities. We have, too, commercial dictionaries and magazines a distinct commercial department for newspapers-chambers of commerce-boards of trade-reading rooms-and, best of all, library associations.