saw no other remedy for it, than to attribute the function of money exclusively to silver.

His opinion has been followed by most commercial nations, and, some slight differences excepted, gold is every-where considered as a merchandize, and silver alone performs the functions of money.

This example has been neglected by nations less familiar with the operations of commerce. In spite of the doctrine of all good writers, and notwithstanding the efforts of all enlightened minds, some nations have not ceased to admit both gold and silver as money; which occasions considerable inequalities in their dealings with other nations, and subjects them to infallible and unexpected losses.

Let it however not be inferred from this theory, that all nations ought suddenly to apply it to their monetary system; local and temporary considerations may oppose the actual depriving gold of the functions

of

money, or at least require important modifications in the operation. The care of repairing the evils occasioned by time must sometimes be left to time, and, as I have frequently observed in the course of this work, it is not always in the power even of the most enlightened governments to attain the end pointed out by the philosophical inquirer. Between practical truth and speculative doctrines, the interval is immense, and it is to their approximation in proper times, that the philosopher confines his wishes, and that governments ought to direct their efforts.

* Such as Hamburgh, Lubeck, Bremen, Dantzick, and Holland. It is only since 1728, that England has given currency to gold.

Another question, more interesting, more extensive and more difficult to resolve, is, whether there be a known and fixed proportion between money and the produce which it is to circulate, and, in case the existence of such a proportion should be doubted, whether the abundance of metallic money be beneficial, injurious, or indifferent to the progress of wealth.

Many celebrated writers on subjects connected with political economy have examined this question: but their opinions are mere conjectures, on which no positive doctrine can be grounded.

Sir William Petty thought that England required a quantity of money equal to half of the annual rent of her lands, to a fourth of the rent of dwellinghouses, to the weekly expences of the people, and to the value of a fourth of all commodities exported.

D'Avenant, who quotes the opinion of Sir William Petty, regards it as extremely well founded.*

Cantillon thinks, that the money which circulates in the different countries of Europe is generally equal to at least half of the produce of the soil, and at the utmost to two thirds of that produce.†

Montesquieu thinks, that the quantity of money is pretty nearly indifferent, because the rising or sinking of its value proportionates it to all wants.

"If we compare," say this illustrious author, "the mass of gold and silver which is in the world with the amount of existing merchandize, it is certain that every commodity or merchandize in particular may

* On the Protection and Cares due to Trade, vol. i. page 440. + Essai sur la Nature de Commerce, liv. ii. chap. 3.

be compared to a certain portion of the whole mass of gold and silver. As the total amount of one is to the total amount of the other, so will be a portion of one to the portion of the other. Suppose there be but one commodity or merchandize in the world, or only one that is purchased, and that it be divided like metallic currency, that portion of merchandize will correspond to a portion of the metallic currency, half of the amount of one to half of the amount of the other, the tenth, the hundredth, the thousandth part of one to the tenth, the hundredth, the thousandth of the other but as that which constitutes the property of men is not all at once in trade, and as the metals or coins which are the representatives of that property are neither in trade all at the same time, prices will be fixed in the compound ratio of the totality of commodities to the totality of representative coins, and of the totality of commodities actually in trade to the totality of the representative coins actually current; and as commodities which are not in trade to-day may be so to-morrow, and as the coin which is not in circulation to-day may return to it to-morrow, the fixing of the price of things is always chiefly dependent on the proportion of the total amount of commodities to the total amount of representative coin."*

Adam Smith has neither adopted nor combated any opinion on this point. He contents himself with observing, that "what is the proportion which the circulating money of any country bears to the whole

* Esprit des Lois, liv. xxii. chap. 7.

value of the annual produce circulated by means of it, it is, perhaps, impossible to determine. It has been computed by different authors at a fifth, at a tenth, at a twentieth, and at a thirtieth part of that value. But how small soever the proportion which the circulating money may bear to the whole value of the annual produce, as but a part, and frequently but a small part, of that produce, is ever destined for the maintenance of industry, it must always bear a very considerable proportion to that part."*

From these various opinions it may be inferred with certainty, that the problem is not yet solved; and it ought perhaps to be considered as incapable of being solved, when we reflect that the circulation of commodities in an agricultural country is essentially different from that which takes place in a manufac turing country; that the circulation of a country which enjoys a great credit cannot be the same as that of a country whose credit is limited or circumscribed by the nature of its government or the imperfection of its legislation; and that a circulation mostly carried on with the assistance of well accredited banks has no resemblance to a circulation that derives no assistance from banks. So many circumstances and combinations, and relations so various, render the task of searching for a conjectural, probable, or barely possible proportion unnecessary, and we ought to imitate in this respect the prudent circumspection of Adam Smith.

But what are we to think of the " very consider

*Wealth of Nations; London, 1805; vol. i. pages 454, 455.

able proportion" which Adam Smith supposes the amount of money must always bear to that part of the produce which is destined for the maintenance of industry? Is it true, that industry is benefited by the abundance of money and injured by its scarcity? and ought any particular attention to be paid to the complaints of people about the scarcity of money?.

The extract which I have given from the work of Adam Smith, appears to authorize this opinion. But how is it to be reconciled with what he states in other parts of his work concerning the scarcity or plenty . of money? On this important subject he expresses

himself thus:

"No complaint is more common than that of a scarcity of money. Money, like wine, must always be scarce with those who have neither wherewithal to buy it, nor credit to borrow it.-This complaint, however, of the scarcity of money is not always confined to improvident spendthrifts: it is sometimes general through a whole mercantile town, and the country in its neighbourhood. Over-trading is the common cause of it. Sober men, whose projects have been disproportioned to their capitals, are as likely to have neither wherewithal to buy money, nor credit to borrow it, as prodigals whose expence has been disproportioned to their revenue. Before their projects can be brought to bear, their stock is gone, and their credit with it. They run about every-where to borrow money, and every-body tells them that they have none to lend. Even such general complaints of the scarcity of money do not always prove that the usual number of gold and silver pieces are not circulating in