394 



THE POPULAR EDUCATOR. 



Quite through the young maids and the men, 

 To the ninth number, if nqt ten; 

 Until the tired chestnuts leap 

 For joy to see the fruits ye reap, 

 From the plump chalice and the cup, 

 That tempts till it be tossed up." 



Old records serve to show us, not only that 'the chestnut was 

 valuable for the table, but that it is extremely difficult to 

 discover an entirely novel fashion or custom. The following 

 extract plainly proves that the fashionable tint, which the belles 

 of our own day are so desirous of imparting to the hair by the 

 aid of cunningly compounded chemicals, was in Evelyn's day pro- 

 duced by levying contributions on the chestnut tree ; thus he 

 writes : " A decoction of the rind of the chestnut tree tinctures 

 liair of a golden colour, esteemed a beauty in some countries." 



A reference to the illustration in the preceding page will serve 

 to show the form of leaf and husk or outer covering of the 

 edible chestnut. Nature has wisely defended its nuts, or seeds, 

 by a covering of sharp, needle-like spines or prickles, whilst the 

 walnut is protected from the attacks of feathered and furred 

 marauders by the acrid and astringent juices given forth by the 

 rind in which it is enclosed. 



Marvellously beautiful are the provisions thus made by an 

 all-seeing Creator for the reproduction of the trees best calcu- 

 lated to afford sustenance to man. 



POLITICAL ECONOMY. YI. 



BY J. E. THOEOLD ROGERS, M.A. 



MONEY AND BANKING. 



IN these days I suppose nobody believes that wealth consists in 

 bits of gold and silver, or that these metals alone make a nation 

 rich. The singular delusion, however, that money is wealth, 

 occupied men's minds for many a century, and has been the 

 motive for an amazing amount of wickedness and wrong, and 

 of a great deal of mischievous though well-intended legislation. 

 The notion arose ' entirely from one fact, that of all articles on 

 which men set store, the two metals, gold and silver, are the 

 most saleable, and therefore are most competent to supply, 

 under ordinary circumstances, the wants of an individual. I 

 propose in the present lesson to show why it is that these two 

 metals have been chosen by civilised communities, what are the 

 uses of money, and what is the part which money and its sub- 

 stitutes play in the machinery of trade. 



Adam Smith pointed out that it is a peculiarity of man to 

 effect exchanges with his fellow-man, and observed that this pro- 

 pensity to truck or exchange is the motive to those acts of 

 which the economist takes cognisance. Perhaps the analysis 

 ought to go a little deeper. It is more correct to say that as 

 society becomes more settled and civilised, as men have more 

 wants, and there is a greater power to gratify these wants, they 

 find that they can each do one or a few thing's infinitely better 

 and more easily than they can a plurality of things. The most 

 moderate idea of comfort requires the supply, say, of fifty dif- 

 ferent objects. Now it is possible, perhaps, for the individual 

 to furnish himself with all these objects by his own labour, as 

 Eobinson Crusoe does in Defoe's romance. But he will not 

 be able to do any one of these necessary operations except in 

 a very rude and imperfect manner, if ho attempts the whole ; 

 whereas, if he devotes his energies to the production of one 

 article only, or even to the part of one article, he contrives to 

 do that with great dexterity and quickness. Now his special 

 dexterity is a saving to the aggregate of human labour, a means 

 for cheapening the supply of human wants. That community 

 is ablo to provide itself the most fully with all it requires, whoso 

 members are as quick and clever as possible, each on his own 

 industry or craft. And as each man finds it to his advantage to 

 shorten his own labour, or, in other words, to make his own 

 labour as effective as possible, the energies of a civilised com- 

 munity, in which labour is free, and industry is honourable, are 

 directed towards continually increasing the skill or effective- 

 ness of those processes of labour by which conveniences are 

 supplied. For however much we may press material forces into 

 our service, we must remember that all these agencies are 

 subordinate to labour, and are set in motion by it. It is plain, 

 therefore, that labour, to be effectual, must be accompanied by 

 the machinery of exchange. 



Now if an exchange is -to be effected on a very large scale 

 that is to say, if two countries are trading together, and each 

 has some special object which it changes reciprocally, and the 

 value of each object were equal the mutual transfer of tho 

 goods would be a settlement. But the trade oetween any two 

 civilised countries is never exactly equal, and, therefore, though 

 to a very great extent international trade is mere barter, it is 

 not entirely so, and, moreover, could not be. Besides, the 

 development of an international trade is in the history of 

 civilisation long subsequent to that of domestic trade. And 

 the mere exchange of commodities could never satisfy a 

 thousandth part of the exchanges which civilisation renders 

 necessary. 



What is to be done then ? It is requisite that something 

 should be found which everybody will be willing to buy, and 

 everybody will be able to sell, in order that it may form a sort 

 of measure by which everything else may be valued. This 

 article must itself vary very little in value, else persons will 

 hesitate to take it, in the fear that it may very much fall in 

 value, or hesitate to give it, in tho fear that it may very much 

 rise. For example, wheat varies very much in value from year 

 to year, and therefore is an unsatisfactory measure for the value 

 of other things. Nor must it be perishable, for if it be, it will 

 vary in value. Nor must it be itself very cheap or very easily 

 procured, else it will be too cumbrous for use, and will also be 

 liable to vary exceedingly in value as it is more or less easily ob- 

 tained. For tho same reason it must be capable of such easy 

 division and such easy reunion, that there shall be no appro- ': 

 ciable difference in value, however small or largo the pieces may 

 be, provided that the weight of a certain number of small pieces 

 is equal to that of a number of larger pieces. Precious stones 

 contain all the above-named characteristics except tho last, and 

 the want of this last entirely prevents them from answering the 

 purpose of a measure of value. 



The discovery of some such measure is a matter of absolute 

 necessity. It has been said, and perhaps with much truth, that 

 it is not possible to reason without speech. It is even more 

 true that it is impossible for exchange to take place between 

 the inhabitants of any country, unless some such measure bo 

 discovered. Hence, in tho absence of the best medium of ex- ; 

 change, communities have adopted some expedient so univer- 

 sally, that we may fairly declare that community to be inca- 

 pable of civilisation which cannot understand or employ some 

 such medium. Thus we are told that rock-salt has been used in. 

 Abyssinia for this end ; salted hides in South America, cod in 

 Newfoundland, tobacco in the infancy of Virginia. Nay, some 

 African tribes have actually invented an imaginary measure, by 

 which they estimate values. For many ages, India, which had 

 for small transactions no convenient medium, employed little 

 shells, called cowries, for this purpose. So again, Spoke and 

 Grant found that in that portion of Central Africa which they 

 explored, pieces of American or British cotton cloth were used 

 for purposes of exchange, or, at least, as a unit of value. But 

 tho best, the most convenient, the most general, and, as civilisa- ' 

 tion extends, the universal medium of exchange is and wid be 

 what are called the precious metals i.e., gold and silver. 



My reader will see why it is that these articles have been 

 recognised and employed for the purpose of trade. They are 

 each obtained at different times by nearly equal quantities of 

 labour, the labour of obtaining gold being on an average about 

 fifteen times greater than that of obtaining an equal weight of 

 silver. They are nearly indestructible. And here, I may 

 observe, that since they are so lasting, a great addition made to 

 the existing stocks of the precious metals makes very little dif- 

 ference to the value of the whole, because the new supply is lost 

 in the vastness of the old. It is different with other things 

 which are rapidly consumed. A storm in the hills will swell 

 a mountain stream from a rill to a torrent, but will produce 

 very little effect on the lake into which the stream falls, because 

 the existing volume of the lake is so groat. Again, the pre- 

 cious metals thence called represent great value in small 

 compass, and therefore are convenient instead of being cumber- 

 some. And lastly, they can easily be divided and re-united so 

 easily, that a heap of gold and silver dust is worth as much, 

 weight tor weight, and fineness for fineness, as a single solid 

 lump. These, then, are the principal reasons which have in- 

 duced civilised communities to adopt one or both of these 

 metals as a means of exchange, a measure of value, or, as they 



