the quantity of money beyond that point would have, and could have, the only effect of increasing the nominal prices of services, without making the services themselves any greater in number or better in quality. It is with money exactly as it is with any other form of capital, allowance being made for the fact that money is a kind of generalized capital. How many ships docs a commercial nation need to employ? As many as will fairly take off its exports and bring in its imports. Ships are wanted for one definite purpose; and when enough are secured to answer that purpose, all additions to the number will lessen the value, that is, the purchasing-power of ships generally. So of all instruments whatever. Enough is as good as a feast. Enough is better than more. In regard to every form of capital, the point of sufficiency is determined by the quantity of work to be done. Now, money is a form of capital, an instrument, having this peculiarity only, that it is capable of aiding to a certain extent all branches of production; and the point of sufficiency in the quantity of money for a country, or for the world, is determined by the amount of products of all kinds, otherwise ready to be exchanged, and only waiting the facilitating agency of an exchange medium. The quantity of money being given, an increased aggregate of exchanges can be facilitated by it, by means of a greater rapidity of circulation of that given quantity. $400,000,000, changing hands forty times, will effect exchanges to an aggregate of $16,000,000,000 in a year; the same sum, by a circulation doubly rapid, will effect twice that aggregate of exchanges; so that, it follows, that an

increased amount of business to be done, does not necessarily require an increased volume of money, but sometimes only a brisker use of that already in circulation. As in mechanics, so in money, the whole power is the product of the two factors, mass and velocity. Money is like any other tool, the more constant its use the more profitable its agency. If $16,000,000,000 of value are to be exchanged, it is very much cheaper that $400,000,000 of money should do the work, changing hands forty times, than that $800,000,000 should be employed, changing hands only twenty times. The quick movement of a small mass is better than the torpid movement of a big mass, both in what it saves of expense, and in what it presupposes of the general conditions of exchange. It only remains under this proposition to add, what will be more clearly perceived when we come to treat of foreign trade, that no enterprising commercial nation, so long as the natural right of exchange is left unimpeded, and so long as the money of the nations consists of gold and silver, or paper, the genuine representative of these, can ever lack, for any great length of time, a sufficient quantity of money to serve as its medium of exchange.

2. Money is a measure of value.

I hope it was made very plain, under the preceding proposition, what is meant when it is said that money is a medium of exchange. Closely commingled with its function as a medium, money has another very delicate function, as a measure of value. How important this second function is may be seen by supposing for a moment that there were no in

strument in existence capable of performing it. Without a common measure of values of different sorts, it would be inconvenient, not to say impossible, to carry on traffic at all. For instance: A baker has only loaves of bread, and wishes to buy a hat, a horse, a house. How many loaves shall he give for each? Without some common denomination in which these differing values can be expressed, and by means of which they can be brought into numerical relations with each other, it would be an awkward piece of business to effect even the three exchanges; and every time he wished to purchase another article, there must be an independent calculation from different data, to decide the terms of the exchange. Introduce now some common denominations in which each of these values can express itself, and the difficulty disappears in an instant. My loaves are worth ten cents each," says the baker. "My hat is worth ten dollars," says the hatter. The terms of exchange, then, are 100 for 1, and no parleying. So of the rest; so of everything that is ever bought or sold. Dollars and cents are the denominations in which values are reckoned, and by which they can be compared with each other numerically, just as feet and inches are the denominations by which different lengths are compared, and pints and quarts the denominations by which capacity is measured; and the builder and the surveyor would not be more at a loss in their work without the units of length, or the vintner without the units of capacity, than everybody would be at a loss without the units of value. Dollars and cents are, as it were, the language in which values express themselves; and,

without some such language, the busiest marts of exchange would soon become not only a silent but a deserted scene.

The difference between money as a medium and money as a measure is one that should be clearly delineated and perfectly apprehended, because there is no such thing as adequately understanding the subject of money unless the two functions be kept distinct in the mind, as well in their single as in their commingled action. There is the same difference between money as a medium and money as a measure that there is between a bushel of wheat and that round vessel by which we determine that there is a bushel: dollars and cents perform their duties as a medium by virtue of their being commodities; they perform their duties as a measure by virtue of their being denominations. For example: A Berkshire woollen-manufacturer goes to market to buy wool, and calls on five dealers, each of whom demands a certain price, and in conversation with each of whom, consequently, our manufacturer uses money as a measure; that is to say, uses the denominations as a means of comparison; but with that one only with whom a bargain is consummated does he use money as a medium; that is to say, pay it out in exchange. The distinction between denominations and those things themselves which are reckoned by denominations seems a very obvious distinction, and one would suppose the two not likely to be confounded; but, the truth is, the two are perpetually, confounded, even in some of the most recent and approved works on money. Indeed, the grand difficulty and source of error in discussions on money

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heretofore has been that this distinction has rarely, if ever, been consistently attended to; and I flatter myself that I am doing the science a service at this point by calling attention to this confusion, by explaining how it arises, and by clearing up, so far forth, a vexed portion of the subject.

How does it happen that money is constantly confounded with the denominations in which it is reckoned, while feet and inches are never confounded with lumber or lath, pints and quarts with milk or beer, acres and rods with meadows or pastures? The reason is this: all other tables of denominations have a basis independent of the things which they measure, and are not variable by the quality or quantity of those measurable things. A French metre, for example, is an invariable unit of length the world over; so is one of Troughton's inches; but this is not true of the denominations of money at all. Pounds, dollars, guilders, francs, and their subdivisions, are denominations of value, which is a variable relation, and as denominations they follow the fortunes of the coins whose names they are. When the current dollar, for instance, sinks to one half, or rises to twice, its previous purchasing-power, we call it a dollar all the while, the denomination perpetually shifting with every variation of the thing, and the illusions and mistakes are numberless which result from calling a thing which is no longer the same as before by the same name as before. Mr. Charles Moran, in his late interesting book on "Money," quotes approvingly from the "Edinburgh Review" the following "Were an ounce of gold to fall to one tenth of its present cost of production, or to cost ten

sentence:

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