CHAPTER II. 



THE CUKRENCY. 



Gold and silver are peculiarly adapted to act as a circulating 

 medium. They are: 1. Admitted hy common consent to serve for 

 •that purpose. 2. They contain within themselves actual intrinsic 

 value, equivalent to the sum for which they circulate, as security 

 against the withdrawal of this consent, or of the public estimation. 

 3. They lose less by the wear and tear and by theeffect of time, than 

 almost any other commodities; and, 4. They are divisible into all 

 and any of the fractional parts into which value may be, or neces- 

 sarily is, divided. There is no occasion to notice particularly in this 

 place the many other advantages possessed by the precious metals. 

 But we must romomber that when we exchange anything for specie 

 we barter one commodity for another. By the adoption of a circu- 

 lating medium we have facilitated barter, but we have not done 

 away with it— we have not destroyed it. Specie is a valuable com- 

 modity and its adoption by society as a medium of e.xchange does 

 not destroy its character as a purchasable and salable article. 

 Let Peter own a horse; let James own a cow and a pig; let James's 

 cow and pig, taken together, be worth precisely as much as Peter's 

 horse; let Peter and James desire to make an exchange; now, what 

 shall prevent them from making the exchange by direct barter? 

 AgainI let Peter own the horse; let James own the cow; and let 

 John own the pig. Peter cannot exchange his horse for the cow, 

 because he would lose by the transaction; neither— and for the 

 samereason— can he exchange it for the pig. The division of the 

 horse would result in the destruction of its value. The hide, it is 

 true, poscsses an intrinsic value; and a dead horse makes excellent 

 manun; for a graj)evine; nevertheless, the division of a horse re- 

 sults in the destruction of its value as a living animal. But if 

 Peter barters his horse with Paul for an equivalent in wheat, what 

 shall prevent liini from so dividing his wheat as to qualify himself 

 to offer to James an equivalent for his cow and to John an equiv- 

 alent for his pig? If Peter trades thus with James and John the 

 transaction is still barter, though tin; vvhi^at .serves as currency and 

 obviates the dilTiculty in making change. Now, if Paul has gold 

 and silver to dispose of instead of wheat, the gold and silver are 

 still commodities posessing intrinsic value, and every exchange 

 which Paul makes of these for other commodities is always a 

 trati'iaction in barter. There is a great deal of mystification con- 

 nected with the ■subject of the currency; but if we remember that, 

 whi'U vvf <i'\\ a in thing for specie, we buy the specie, and that when 



