exhaustion of the auriferous veins in the second Punic war ; and that Spain and Greece near the surface, dreadful contest was less brought to from long-continued working, and the a successful issue by the firmness of extreme hardness of the rock in which the senate or the arms of Scipio, than they were imbedded farther down, by the wisdom of a decree which which seems to be a general law of virtually, at the crisis of its fate, nature all over the world,* and which doubled the currency of the Roman rendered working them, to any con- republic.f The Transatlantic revolusiderable depth, no longer a source of tion was brought to a successful issue profit. On the other hand, the pro- in the same way; and the independdigious start which Europe took ence of the United States is less during the sixteenth and seventeenth to be ascribed to the imbecility of centuries, and which has implanted British counsels, or the wisdom of the European race for ever in the American generalship, than to the new hemisphere, is well known to establishment of a paper currency, have been mainly owing to the disco- which sustained the efforts of the very of the mines of Mexico and insurgent states when they had no Peru, and the continual rise of prices other resources wherewith to mainduring nearly two centuries, which tain the contest. It was the assignats, took place all over the world, from as all the world knows, that set on the constant and increasing influx of foot those prodigious armies which, the precious metals drawn out of their amidst the destruction of all private rich strata.

fortunes, enabled France, during the The greatest and most momentous Reign of Terror, to repel the assault contests which have taken place of all the European powers; and the among nations, have been in a great coalition which at last overturned degree determined by the discovery or the empire of Napoleon was sustained use, by one of the belligerents, of an by a vast system of paper currency, expansive currency, to which the issued in 1813 in Germany, which, other was for a time a stranger. The guaranteed by the four Allied powers, most memorable strife in antiquity, passed as gold from the Atlantic that between Rome and Carthage, on Ocean to the wall of China, and which depended whether Europe or arrayed all the armies of Europe in Africa was to become the mistress of dense and disciplined battalions on the civilised world, was in reality the banks of the Rhine. Of what determined by a great extension of incalculable importance it was may the Italian circulating medium during be judged of by the dreadful straits to

* See a very able article on California, Quarterly Reciev, Oct. 1850.

+ “Quum Censores ob inopiam ærarii, se jam locationibus abstinerent ædium sacrarum tuendarum, curuliumque equorum præbendorum, ac similium his rerum : convenere ad eos frequentes, qui hastæ hujus generis assueverant; hortatique censores, ut omnia perinde agerent, locarent, ac si pecunia in ærario esset. NEMINEM, NISI BELLO CONFECTO, PECUNIAM AB ÆRARIO PETITURUM ESSE.”—Livy, lib. xxiv. c. 19. “The censors,” says Arnold," found the treasury unable to supply the public services. Upon this, trust monies belonging to widows and minors, or to widows and unmarried women, were deposited in the treasury ; and whatever sums the trustees had to draw for, were paid by the quarter in bills on the banking commissioners, or triumvirs mensarii. It is probable that these bills were actually a paper currency, and that they circulated as inoney on the security of the public faith. In the same way the government contracts were also paid in paper; for the contractors came forward in a body to the censors, and begged them to make their contracts as usual, promising not to demand payment till the end of the war. This must mean, I conceive, that they were to be paid in orders upon the treasury, which orders were to be converted into cash when the present difficulties of the government should be at an end.”-ARNOLD's History of Rome, ii. 207, 208. This was just an inconvertible paper currency ; and its issue immediately after the battle of Cannæ saved the Roman empire. We have heard, from a gentleman who was present, that, in a political Whig party many years ago, when the conversation turned on the service of a paper currency in bringing a state through a pecuniary crisis, and some one said it was that which enabled the Romans to surmount the Second Punic war, Lord Melbourne, who was present, immediately repeated from memory, the words above quoted from Livy in capitals.

which Wellington, for five previous the increased numbers or enhanced years, had been reduced by its want. efforts of mankind are amply sustainGreat Britain emerged victorious from ed by the newly opened treasures of the strife, chiefly from the powerful in the reserves of nature. Rome, imfluence of the same omnipotent agent. pregnable to the assaults of undisVain would have been the constancy ciplined barbarians, yielded, at the of Pitt, the genius of Nelson, or the appointed season, to the contraction wisdom of Wellington, if the paper of its domestic currency, which rencurrency, established in 1797, had dered the maintenance of armaments not given her people the sinews of adequate to the public defence a war, and the means of illimitable matter of impossibility in the later industry, when the Continent was shut days of the empire; and when the to her commerce, and the whole discovery of the compass, of the art precious metals were drained away of printing, and of the new heniiby the necessities of Continental war- sphere, had at once given a vast fare. Nor have the effects of the impulse to European activity, and opposite system, pursued since the provided new and boundless fields for peace, been less striking and mo- its exertion, the mines of Potosi and mentous ; for the contraction of Mexico were suddenly thrown open, British currency to one half of its and nature provided a suitable reformer dimensions, by the bills of 1819 ward for all this enhanced effort by and 1844, has brought about the the continually rising price of its prodreadful panics of 1825, 1837, and duce. 1847, induced by the decline of prices That a period of equal, perhaps and the sufferings it occasioned. The greater activity, than that which English revolution of 1832 trans- followed the discoveries of Columbus, ferred power in the British islands would succeed the outbreak of the exclusively to the inhabitants of social passions that occasioned the towns, and spread such misery through French Revolution, has long been the rural population, that three hun familiar to the thinking part of men, dred thousand emigrants now annually and unequivocal proofs of the reality leave the British islands for Trans- of the change may be seen in every atlantic or Australian shores.

direction around us. But sufficient As the expansion or contraction of attention has not hitherto been paid the circulating medium is thus an to the extraordinary encouragement agent of such prodigious power and which this increased mental energy irresistible weight, both upon the for- has received, from the facilities which tunes of particular states and the have been placed at its disposal by the general progress of the species, so it mechanical discoveries of the last half will be found upon examination that century. Yet are they such as to it is by a withholding or letting loose throw all past discoveries into the the fertilising flood, that Providence shade, and give an impulse to human appears often to act most directly and affairs which has scarcely been exdecisively upon human affairs. When ceeded since the first separation of a nation has performed its mission, the dwellers in cities and the soand is to make room for other actors journers in the fields. The steamon the great stage of the world, if its engine has wrought these prodigies. power has rendered conquest by a Applied to mechanical invention, and foreign enemy impossible, a contrac- the moving of machinery, it has mula tion of its domestic currency paralyses tiplied tenfold the powers of urban its internal strength, and renders dis- industry, elevated the districts possolution, at no distant period, a matter sessing the necessary fuel to the of certainty. If a great start is clouds, cast down places once the prepared for human indastry, if new seats of commercial greatness, but continents are laid open to its energies, destitute of that essential element and an unusual impulse communis in modern manufacturing energy, to cated to its activity by the develop the dust. Applied to the propelling ment of social and democratic pas- of vessels, it has more than halved sions, a vast addition is suddenly the breadth of the ocean, rendered made to its metallic resources, and navigable against the current the greatest rivers, sent the colonists of tions, and exceeding it tenfold in the Europe in countless multitudes up the magnitude of their extent. Proporstreams of the New World, and pro- tionate to the wants and necessities of vided an entrance for civilised man mankind, in an age of such intellectual into the greatest continents by the and physical activity, has been the very magnitude of the waters which hitherto untrodden fields which the flow down from their inaccessible beneficence of nature has laid open to mountains, or are fed in their marshy their industry. plains. Applied to travelling by land, These advantages, however, great it has diminished distance to a third- and unbounded as they are, have brought the capital of every civilised been, till very recently, counterstate into close proximity to its most balanced, and perhaps more than distant provinces; while the simul- counterbalanced, by the serious detaneous discovery of the electric crease which, for the greater part of telegraph has rendered the communis the period that has elapsed since cation of intelligence all but instan- the peace of 1815, has been going taneous, and made the circulation of on, from the effect of human violence ideas and, it is to be feared, also of or folly, in the circulating medium of passions, as rapid over a mighty em- the globe. The South American repire as heretofore it was in the streets volution at once almost destroyed the of a crowded capital.

working of the mines of Mexico and When nature communicated this Peru: the annual produce of those vast impulse to human activity, and mines sank from £10,000,000, to which, placed these mighty instruments in according to Humboldt, it had risen the hands of men, she was not un- prior to 1810, to less than £3,000,000. mindful of the extended field for The diminution in the supply of the industry which their enlarged numbers precious metals for the use of the and increased energies would require. globe, from the effects of this most The plain of the Mississippi, the calamitous revolution, which Great garden of the world, containing Britain did so much to promote, was, a million of square miles, or six times during the thirty years which elapsed the area of France, was thrown open from 1810 to 1840, certainly not less to their enterprise. Steam power pro- than £150,000,000 sterling. Contempelled a thousand vessels through the poraneous with this immense reducthick network of natural arteries which tion, took place the great contraction in every direction penetrate its vast of the paper currency of Great and fertile plains. In 1790, five thou. Britain, the commercial heart of the sand Anglo-Saxons were settled in this globe, which was reduced by the bill magnificent wilderness ; now their of 1819 from £60,000,000, which it numbers exceed eight millions. Aus- had reached in 1814, to little more tralia has opened its vast prairies, than £30,000,000, its average since New Zealand its fertile vales, to that time. These two great causes European enterprise. The boundless of decrease, operating simultaneously plains of Central Russia and Southern during a period of general peace, Siberia, afforded inexhaustible re- unbroken industry, great increase in sources to the rapidly increasing population both in Europe and AmeMuscovite population; and an empire rica, and a vast addition to the transwhich already possesses in Europe actions and mercantile dealings of and Asia sixty-six million inhabitants, men in every part of the world, procan without apprehension contem- duced that universal and unlooked-for plate a continuance of its present rate decline of prices which has been of increase for centuries to come. everywhere felt as so discouraging to The Andes even have been passed; industry, and nowhere so much so the Rocky Mountains surmounted; as in the highly taxed and deeply and on the reverse of their gigantic indebted realm of Great Britain. It pilcs new states, peopled by the was the exact converse of the geneAnglo-Saxon race, are arising, and ral and long.continued prosperity increasing with unheard-of rapidity, which the progressive rise of prices in regions rivalling Italy in the consequent on the discovery of the variety and riches of their produc- South American mines produced dur

ing the sixteenth and seventeenth cen- shortcoming in the

supply of food for turies. It was apparently the com- the use of man. The latter may be mencement of a long and disastrous removed by increased rural activity period of rise in the value of money, and a good harvest in a single year. and fall in the price of every species of But the former is susceptible of no produce, similar to that which, in the such remedy. On the contrary, the first four centuries of the Christian augmented activity which it brings era, crushed the industry and para- on, from the general and pinching lysed the strength of the Roman suffering with which it is attended, Émpire, and at length prostrated the only tends to aggravate the common dominion of the legions before the distress, because it multiplies the arms of an untatored and barbarous transactions in which money as a enemy.

medium of exchange is indispensable, It is now ascertained, therefore, by and consequently makes its scarcity the only sure guide in political science in proportion to the existing demand -experience—that if no addition to be more severely felt. the circulating medium of the globe To this must be added another and had been made at a time when so im- most important cause, which operated mense an increment was going forward since the peace of 1815 in withdrawin the numbers and transactions of ing the precious metals from the globe, the most active part of mankind, con- arising from the very scarcity of these sequences the most disastrous to hu- metals themselves. The addition man industry and happiness must have which their enhanced value made to taken place. If-when the United the riches of the affluent was so great, States, with their population of that it led to a rapid and most import25,000,000 doubling every twenty-five ant increase in the consumption of years, and Russia, with its population gold and silver in articles of luxury. of 66,000,000 doubling every forty Gold and silver plate, jewels, and other years, and Great Britain, with its po- ornaments set in gold, became general pulation of 29,000,000 doubling in among the richer classes, and to an about the same time, and its exports extent unprecedented since the fall of and imports tripling in thirty years, the Roman empire. Gilding was emwere in a state of full and undiminished ployed so much in furniture, the frames activity—there had been no addition of pictures, the roofs of rooms, carmade to the circulating medium of the riages, and other articles of state or globe, it is difficult to estimate the show, as to withdraw a considerable amount of embarrassment and distress part of that the most precions of the which must have become all but uni- precious metals from the monetary versal. If the circulating medium of circulation. The scarcer gold and the earth had remained stationary, or silver became, the more was this digone on receiving only its wonted rection of a large portion of it increased, annual increment, when so prodigious because the richer did the fortunate few an addition was going forward in the who possessed amassed capital become numbers and transactions of men, a from the daily decline in the price of universal and progressive fall of prices all other articles of merchandise. This must have ensued. The remuneration effect was most conspicuous in ancient of industry must have been halved— Rome in its latter days, where, while the weight of debts and taxes doubled. the legions dwindled into cohorts from The fatal increase in the value and the impossibility of finding funds to power of riches, so truly felt and pay them in large numbers, and the loudly complained of in the declining fields of Italy became desolate from days of the Roman empire, would have the impossibility of obtaining a remubeen everywhere experienced. A nerating price for their produce, the money famine would have been univer- gold and silver vases, statues, and orsally felt ; and, paradoxical as it may naments amassed in the hands of the appear, dear-bought experience has wealthy patricians in Rome, Constannow taught us that such a famine is tinoplo, Alexandria, and the other attended with more disastrous, be great cities of the empire, so prodigiouscanse more widely spread and irre. ly increased, that, with the currency, movable, consequences, than even a which formed but a small part of its


amount, their value is estimated by time in America, and checked at anGibbon at the almost incredible other with precipitate and imprudent amount of £350,000,000 sterling of severity, four-fifths of the wealth of our money.

the United States were in a few years Bills of exchange and paper money, swept away by the fearful oscillation which have become known and of prices consequent on these violent general only in modern Europe, changes. And although wisdom and might have gone far to mitigate these prudence could easily have devised a disastrous consequences in particular system of paper currency which, enstates, or even, if conducted with tirely based upon available property prudence and regulated by wisdom, of some kind, and therefore perfectly might in some places have alto: secure, was yet capable of expansion gether prevented them. But in proportion to the increase of the paper currency is a new element of numbers and transactions of men, and surpassing power and efficacy, but the temporary abstraction of the prerecently introduced into common use cious metals from a particular country among men, the principles on which by the mutations of commerce or the it should be regulated are far from necessities of war, yet it was evident being generally understood. Even if that no such wise and patriotic system understood, it requires for its due re- was to be anticipated, till a vast amount gulation a combination of wisdom and of general suffering had enlightened the self-denial that can rarely be looked majority of men on the subject. Least for among the rulers of mankind. The of all could it be hoped for in Great fundamental principles on which its Britain, where the increase and weight due regulation must be rested—that of the moneyed interests, and the conof being based on certain and available sequent determination to enbance the property of some kind, and of being value of money, without any regard capable of extension in proportion to to its effects on the remuneration of the increase in the numbers and trans- industry, had become such, that no actions of men, and the abstraction of other interest in the State, nor even the precious metals forming the me- all other interests allied, were able to dium of international circulation, and make head against it. yet duly restrained and over-issue The future destinies of mankind, and prevented—were successively over- of this country in particular, seemed, looked by the greatest and most en therefore, to be involved in clouds and lightened nations of the world. Issued darkness ; nor did any means appear in unbounded profusion in France to be within the bounds of possibility during the fervour of the Revolution by which the difficulties which beset or and the terrors of European invasion, awaited industry could be obviated. with no real basis of available pro- The greater the efforts made by indusperty on which to rest, the assignats try, it was plain the greater would be produced, simultaneously with the the distress in which it would be inprodigious armaments which saved volved; because an increase in the the country, an unheard-of confusion transactions of men required an augamong the transactions and obliga- mentation in the circulating medium tions of men, and destroyed in a few by which they were to be conducted ; years the whole capital of that great and an addition to the produce of lacountry, the accumulated savings of bour, while the currency was fixed or centuries of industry. Contracted declining, only rendered its remunewith equal rapidity from the influence ration less. The whole object of of the opposite set of interests in Great statesmen and legislators, both in Britain after the peace, the paper cir- Great Britain and America, bad come culation of the British Empire was to be to cheapen everything, and raise rendered the instrument of destruction the value of money by contracting its of property as great, and misery as amount--augmenting instead of rewide-spread and universal, among its lieving the general distress arising from inhabitants, as the assignats or con- the inadequacy of the existing circufiscations of the Convention. Adopted lating medium for the enlarged wants with heedless eagerness, and with- and numbers of men. The evil seemed out any adequate safeguards, at one to be beyond the reach of human

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