zens, some solid reason ought to be rendered why they are not good for the government. The truth is, they are not good for either, since natural laws are perfectly competent to regulate the rate of interest, and do regulate it substantially in spite of a factitious, impertinent, and mischief-making interference. The rate of interest has little to do with the value of money, properly so called. It depends on the proportion between the sums of money ready to be loaned in any market, and the amount wanted at that time by good borrowers in that market. There is no value more constantly variable from day to day, and from month to month, than the loanable value of money. The natural law that holds the rate of interest in its grasp is most efficient. Every rise in the rate tends to lessen the demand of borrowers, and every fall to enhance that demand, and thus every rise and fall of interest tends to check itself, and while the daily and monthly variations of the rate for first-class borrowers are very considerable, the general average of the rate by years, especially in England, where every vestige of usury laws has been swept away, is remarkably uniform. The experience of England completely confirms our reasoning, and makes us sure that we are right. Indeed the law might just as reasonably say that every lender shall receive six per cent., as that no borrower shall pay over seven. To say either is to defy common sense, and expose law to contempt. Adam Smith left the "Wealth of Nations" disfigured by the concession that governments might properly enough pass usury laws; but it is gratifying to be able to add, that he was convinced of his error in

that by Bentham's book on usury, and fully acknowledged his conviction in the spirit of a genuine lover of truth. We conclude, then, that usury laws are needless, since interest, like all other prices, will perfectly adjust itself. They are disregarded, since lenders will loan or withhold their money according to their own keen sense of interest. They are pernicious, since they infringe the rights of property, and tend to prevent weak borrowers from having a fair chance in the market.

CHAPTER XI.

ON CURRENCY IN THE UNITED STATES.

It is not so much a revolution through which we have been passing for the past few years, as it is a series of revolutions. There has been a political revolution, a military revolution, a social revolution at the South, and a monetary revolution the country over. It is difficult for us, who have all been in the current, to realize the rapidity with which as a people we have been borne onwards by all the movements, and the actual distance from our point of departure which we have already reached. The best place to watch the river is on the shore. If, for the sake of the view, we throw ourselves out in fancy from the rush of the stream, and take a fixed position to see how fast we have been moving and how far we have come in the matter of national money, we shall be struck with a marvelous transformation which has been silently and now almost completely effected. Unless every providential and political sign shall fail, we are to be hereafter one homogeneous people, distinct indeed in our States as the billows, but one in our Union as the sea; having one set of national rights for all the inhabitants within our borders, and having also, and this is the point of present consideration, one national money, current

and good everywhere, a sign and seal of national unity and of consolidated strength.

I venture to offer to guide my readers in an attempt to trace the steps, State and national, as well the earlier as the more recent, which have been made in this country to find the way to a healthy, safe, and uniform currency. Paper money of almost every conceivable variety has been tried at one time and another; and the national government for itself, between 1836 and 1862, discarded in its own transactions every kind of paper, both paying out and demanding to receive gold and silver money only, minting indeed at a small seignorage for all parties and in all quantities gold and silver that was brought to it, but otherwise leaving the States and the people to fabricate and circulate whatever kinds of money they might choose.

From the first establishment of the English colonies in America, the matter of a suitable exchangemedium attracted public attention, and was found to be attended with difficulties. The colonists drew all their supplies from the mother country, and for a long time had but few native products to export in return, and consequently there was a constant tendency in the coin which reached them to flow off again to England in payment of these debts. But something must be used for the purposes of domestic exchange. Tobacco in the southern colonies, and corn and cattle in the northern, were employed for a long time as a local and legalized currency.

In 1690 Massachusetts set the first example, which was soon imitated all over the country, of issuing bills of credit, a government paper made receivable in

taxes, and afterwards made legal tender in payment of ordinary debts. At first these bills, or treasury-notes, were issued, not to furnish a currency, but merely as a convenient way of anticipating the taxes, that is, to realize them at the beginning of the year, while they would be gradually paid in in the course of the year. They were, in short, an imitation in all respects of the English exchequer-bills. Afterwards, a scheme originating in South Carolina came into general favor, namely, to open loan-offices for the issue of colony-bills, which should furnish at once capital for borrowers, and a currency for the people, and the interest was to be a source of revenue to the colony.

But in whatever way issued, whether in the way of loan to borrowers, or in anticipation of the taxes, the essential and inherent vice of such irredeemable paper was soon everywhere apparent. There was a constant tendency to over-issue, and consequently a necessary depreciation. There never was a government yet, of all those which have attempted the issue of inconvertible paper, which had prudence and firmness enough to resist for any great length of time the temptation to issue such paper in excess. It always has depreciated from that cause, and it probably always will. So it was, at any rate, in these colonies thus early in our history. The bills of credit were issued profusely, and depreciated indefinitely. 1748 Massachusetts had found paper money so utterly wanting as a measure of value, that she deter. mined to abandon it altogether. She 'redeemed all her outstanding bills in cash at the current rate of twelve for one.

In