should bear the whole loss. In other words, wornout coin should always be received at the mint, at par, and exchanged for new. This remark, however, should apply only to worn-out coin; and not to coin which has been fraudulently diminished in value. Pierced or clipped coin, should not be exchanged. This will tend to prevent every one from receiving it; and will thus tend to keep it in the hands of those who have robbed it of a part of its value.

If such be the agency which a government is called upon to exert, in respect to a circulating medium, it will be seen that it has no right to interfere in any other respects. Hence, for instance:

1. It has no right to prevent the exportation or importation of specie. This, like any other commodity, if let alone, will regulate itself. Specie will never be sent abroad, unless it be for the advantage of the country that it should be so sent abroad. The actual monetary condition of a country cannot be affected by arbitrary acts. Besides, a man has the same right over whatever silver or gold he may possess, as he has over cotton, or wool, or any thing else; and he has just the same right to exchange it with any one, and for any thing, as he may think for his advantage.

2. A government has no right, arbitrarily, to alter the value of money; that is, to say that a dollar shall contain either more or less silver than it now contains. To do so, is, of necessity, to interfere with private contracts; and thus to expose one half of the community, a prey to the dishonesty of the other half. If A have promised to pay B, one thousand dollars; meaning by this, one thousand ounces of silver; and the government enact that the dollar shall hereafter contain only half an ounce of silver, and oblige B to receive half ounces, instead of ounces; they defraud him of precisely half his due. "This will be the case, not only with B, but with all the creditors in the whole community. It is just the

same interference, as though they should enact, that a debt of one thousand bushels of wheat should be paid with five hundred bushels; or, that a debt of a yard of broadcloth should be paid with half a yard.

If, however, the coin, by common consent, is found to need a change of any kind, and the public convenience actually require it, it is to be done by common consent, after sufficient notice of the change has been given, and be so done, that all contracts existing at the time, be left inviolate. If the amount of silver in a dollar, in this country, should ever be changed, it should be effected by exchanging, at the mint, the present dollar, at its value in silver, for a new dollar, at its value in silver; so that all contracts now in existence, should be fulfilled according to the terms of the agreement. A still better method would probably be, to issue a new coin, with another name. This, I believe, has lately been done in Great Britain. Instead of the guinea, of twenty-one shillings, a gold coin, of twenty shillings, has been introduced, called a sovereign.

3. A government, I think, has no right to fix the relative value between the precious metals. This cannot be done, in fact, because the relative value is 4 liable to continual fluctuation. If both are a legal tender, the debtor has the right of paying in that which he prefers; and, as he may be always expected to choose to pay in the cheaper, he may thus frequently defraud his creditor, to the amount of the fluctuation. It is better to have but one a legal tender, and leave the other, as any other matter of merchandise, to be exchanged by special contract between the parties. In this respect, I think the system of Great Britain preferable to our own. Gold, as has been remarked, is there the only legal tender, for all sums above twenty shillings; and silver, for all sums below that amount. Hence, whenever contracts are made, their amount determines the metal, in which the payment is to be made.

Mr. Condy Raguet, in his last treatise on currency and banking, has, we think, conclusively shown, that the present law fixing the relative values of silver and gold in this country, is in every respect injurious. Its tendency, clearly, is, to drive the one or the other metal out of the country, and thus to diminish instead of increasing the amount of specie in circulation. And, besides, inasmuch as the legal tender in Great Britain is gold, it would be much better that ours should be silver. A scarcity of specie in one country would thus be less felt in the other. This is a consideration of great moment where two nations are so closely connected as this and Great Britain. As we are at present situated, the least variation in one country is immediately felt in the other.

CHAPTER THIRD.

OF A CIRCULATION BY MEANS OF A PAPER CURRENCY.

SECTION I.

OF THE NATURE OF BANKS IN GENERAL.

BANKS OF DEPOSIT AND EXCHANGE.

We have already treated somewhat at large upon the subject of division of labor; the circumstances in our constitution by which it is introduced; and the benefits which result to every class of the community from its introduction. We have also seen, that division of labor is always carried on most successfully, when it is united with the use of some natural agent. Thus, in the manufacture of cotton, by the union of steam or water power and machinery, with division of labor, production is greatly increased; and every class of society is enriched. And we have also seen, that the one could not be carried to great perfection, without the employment of the other; and also that, in the nature of things, the one actually suggests and renders necessary the employment of the other.

Now all these remarks apply, with the same force, to the labor of exchange, as to any other labor. From the necessities of society, it is evident that a very large portion of its labor must be the labor of exchange. The increase of this labor would na

turally lead to the discovery of some natural agent, by which it might be executed at less expense of time and industry. At first, the rudest instruments, such as cattle, and the baser metals, were employed. These gradually gave place to the more perfect instruments, gold and silver. As the use of this more productive instrument increased very greatly the number of exchanges, and thus required more laborers, instead of fewer, in this department of industry, it was natural, in the next place, that divisions of labor should be introduced, in order to use the instrument, or natural agent, with the greatest degree of success; and also to accomplish, with a given amount of industry, the greatest amount of exchanges.

Division of labor, in this department of industry, as in every other, has proceeded from rude beginnings, to greater and greater perfection. At first, its benefits were but imperfectly appreciated. By experiment, they were more and more unfolded; and now, although its principles may not be generally understood, yet, it is coming into very general use throughout the civilized world. Instead of banks in none but the great marts of trade, as was the case a century or two ago, we find them, in free states, employed in towns and villages, over the whole community; and, when judiciously administered, their effects are the same upon the small, as upon the great sections of the community.

The word bank, is said to be of Italian origin. “In the infancy of European commerce, the Jews in Italy were wont to assemble in the market places of the principal towns, seated on benches, ready to lend money; and the term bank, is derived from the Italian word banco, a bench." When any of these money-lenders failed, his bench was broken. Hence, the origin of the word bankrupt.

1. We have shown how very great, in a civilized country, must be the amount of exchanges. We have also shown, that these exchanges are greatly