MONEY. 57 



mass of our existing circulating medium v;ere increased a hundred- 

 fold, the multiplication would have no effect other than that of 

 reducing the value of the individual dollar to that of the existing 

 individual cent. If gold were as plenty as Iron, it would command 

 no higher price than iron. If our money were composed of iron, we 

 should be obliged to hire an ox-cart for the transportation of SlOO; 

 and it would be asdifficult, under such conditions, to obtain a cart- 

 load of iron, as it is now to obtain its value in our present currency. 



A fall or rise in the price of money, and a rise or fall in the 

 price of all other commodities besides money, are precisely the same 

 economical phenomenon. 



The effect of a change in the volume of the currency is there- 

 fore not a change in the value of the whole volume, but a change in 

 the value of the individual silver dollar, this change being indi- 

 cated by a variation in the price of commodities; a fall in the price 

 of the silver dollar being indicated by a rise in the price of commo- 

 dities, and a rise in the price of the dollar being indicated by 

 a fall in the price of commodities. "The value of money," says J. 

 Stuart Mill, other things being the same, "varies inversely as its 

 quantity; every increase of quantity lowering its value, and every 

 diminution raising it in a ratio exactly equivalent. That an increase 

 of the quantity of money raises prices, and a diminution lowers 

 them, is the most elementary proposition in the theory of the cur- 

 rency; and, without it, we should have no key to any of the others." 



Let us use this key for the purpose of unlocking the practical 

 mysteries attached to variations in the volume of the existing cur- 

 rency. The banks, since they exercise control over the volume of 

 the currency by means of the power they possess of increasing or 

 diminishing, at pleasure, the amount of paper money in circula- 

 tion, exercise control also over the value of every individual dollar 

 in every private man's pocket. They make great issues, and money 

 becomes plenty; that is to say, every other commodity becomes 

 dear. The capitalist sells what he has to sell while prices are high. 

 The banks draw in their issues, and money becomes scarce; that is, 

 all other commodities become cheap. The community is distressed 

 for money. Individuals are forced to sell property to raise money 

 to pay their debts, and to sell at a loss on account of the state of 

 the market. Then the capitalist buys what he desires to buy while 

 prices are low. These operations are the upper and the nether mill- 

 stones, between which the hopes of the people are ground to pow- 

 der. THE EVILS OP CONVERTIBLE PAPER MONEY. 



Paper professing to be convertible into silver and gold, by over- 

 stocking the home-market with money, makes specie to be in less 

 demand in this country than it is abroad, and renders prolitable an 

 undue exportation of gold and silver; thus occasioning a chronic 

 drain of the precious metals.* 



"Persons of little foresight rejoice in the IukIi price of conimodi- 



