cloth; neither more nor less. The account is closed. England owes nothing for the difference, because values are exchanged, not prices, and this difference of $2,000 is mere price, the result of an artificial depreciation of the value of money in this country. The two nations gain equally by the exchange, since surplus products are supplied to each other of equal value. Money being the thing tampered with by adulteration, remains untouched in this transaction, as between the two parties to the exchange, and has no more to do with the balance of trade than an equal value of beef, or corn, or wine, which remains untouched in either country. But suppose, what is very sure to happen, that England takes $6,000 of gold instead of 1,000 barrels of flour for her broadcloth; then she takes our artificially depreciated commodity, and gets $6,000 of money for a real money value in broadcloth of $4,000, which we raise in price to $6,000 by adulterating our currency. She thus gains $2,000 of value that we lose by our own folly. This is a balance of trade that is better missed than found. Its advocates, however, call it national gain. I know what I say when I call it a dead loss; we might as well plunge two thousand dollars of gold into the sea.

Unpracticed thinkers find some difficulty in comprehending that the dollar is not a fixed value. Make it of gold, or make it a promise to pay gold, interchangeable with gold, and men, of whose intelligence, better things should be expected fail to discover that an increase of supply depreciates its exchange value, precisely as every other instrument or object of commerce is depreciated in value. The dollar being the currency, unit, the depreciation of its value exhibits itself only in the rise of general prices, and more dollars must be given in exchange for other values than before. When we add dollars of debt to our currency, interchangeable with dollars of gold, until six have no more purchasing power than four possessed before, it is inevitable that foreigners will take our dollars and leave our flour, until it gluts the home market insupportably, or its production is reduced to correspond with the demand. Thus we throw away capital and stop an equal amount of production by the same suicidal act,―a double loss, like the difference to a merchant between making $2,000 and losing $2,000 which is $4,000 in his stock account.

Here an objector may say, that with an open commercǝ gold cannot remain one third cheaper in one country than in another, which is the same thing as saying that general prices cannot remain one-half or 50 per cent higher. On this point, what is supposed to be scientific teaching differs from the fact of experience, and, as science is simply experience classified, the theory must give way where it is contradicted by the well observed fact. The fact is, that under the operation of a currency of debt, which can be made to suit the interest of its producers, general prices can remain 50 per cent higher in one country than in another, or in all others, for an indefinite period, sometimes for several years, mainly because most of the values of every country are not objects of international exchange, but in a great degree becanse the makers of such a currency protect themselves by bond and security against its effects. They lend no value, no capital, but promises which create price without value, and throw upon their debtor the obligation to furnish the value and capital to pay the false price and meet such promises. Generally the currency maker is protected and paid, but the value which is put in his hands to

enable him to redeem his obligation he never loaned; it is robbing Peter to pay Paul, and Peter fails. A price that is not a value may be kited in the exchanges of domestic commerce for years, but when its ultimate payment in value is demanded somebody must fail, for a value cannot be paid that never existed. It is, as I have on another occasion remarked, like circulating promises to deliver several Kohinoor diamonds, there being but one in existence; the promises may crculate so long as the issues are protected from an absolute demand for payment; but the one diamond belng demanded and sent out of the country because its value is greater abroad than where the spurious promises circulate and cheapen it, the several promises for which there is no diamond to respond must be discharged by insolvency. Whether one diamond or millions of them, one dollar or millions of them, or anything else, form the basis of fictitious promises, a currency so constructed must plunder those who become bound with endorsers to save the issuers harmless. But while the issuers are saved the currency can be maintained so as to inflate prices not merely 50 per cent but even 400 per cent beyond the natural money value, and yet under specie payment, as the experience of France with Law's banking and Mississippi scheme clearly shows.

Charles Mackay, in his historical sketch of the Mississippi scheme says: "The looms of the country worked with unusual activity to supply rich laces, silks, broad cloths, and velvets, which being paid for in abundant paper increased in price four-fold. Provisions shared the general advance; bread, meat, and vegetables were sold at prices greater than had ever before been known, while the wages of labor rose in exactly the same proportion. The artisan who formerly gained fifteen sous per diem now gained sixty."

This four-fold rise of general prices was nothing but a fall of threefourths in the value of money, and the cheapened commodity; money rushed out as fast as foreigners could pour other capital into France to exchange for it. Edicts of the Government, the most despotic, and persecution the most odious, were powerless to prevent this. Plate and expensive jewelry were secretly sent away to England and Holland, and ludicrous devices were adopted to escape the vigilance of the Government. "Vermalet, a jobber who sniffed the coming storm, procured gold and silver coin to the amount of nearly a million of livres, which he packed in a farmer's cart, and covered over with cow dung; he then disguised himself in a dirty smock frock, or blouse, and drove his precious load into Belgium. From thence he soon found means to transport it to

Amsterdam."

"Notwithstanding every effort to the contrary the precious metals continued to be conveyed to England and Holland. The little coin that was left in the country was carefully treasured or hidden, until the operations of trade could no longer be carried on.

Law then obtained an edict forbidding the use of specie altogether, which destroyed the credit of the bank paper irrevocably, and drove the country to the very brink of revolution. The illusion created by his system of banking, of which the Mississippi scheme was but an off shoot, lasted four years-1716 to 1720-when the iniquitous contrivance concrumbled into ruin, destroying not traders only, but the fortunes of many of the wealthiest and best families of France.

No one having a knowledge of commerce, to say nothing of political economy, will deny that cost of production is an essential element of market value in every commodity, and also that the currency aud demand of the consumer finally determines its selling price over and above the cost of production, and the effect of the high price he pays, if convertible into value, is to enhance the price and value of imports in the market of production. In every way and without exceptioe the result of employing a paper or debt currency is to benefit the foreign to the damage of the home market. Thus France, under Law's currency scheme, became the dearest market to sell in in the world.

The surplus products of every commercial nation must be sold at such rates as foreigners will pay, so that the producers of such products get no advantage from the paper inflation at home. Generally nations without mines of the precious metals, and without a paper currency, pay for their imports directly in their own products without difficulty, and without exporting gold and silver which they receive in their returns; and if we possessed statistics of the foreign commerce of France during the eventful four years of Law's experiment, I have no doubt we should find that her home products would have paid for all her imports, and did so in fact, if the imports had been reckoned at the natural money value, so that the money which made up the "balance of trade" in the excess of exports was completely thrown away. The kingdom would have been stripped of the precious metals at that time, virtually for nothing, but for the habit of hoarding among the people induced by a long continued distrust of the government.

If what has been said is correct, then a protective tariff which is with many the panacea for all the ills of commerce, and especially for what is thought to be an adverse balance of trade is an evil. Of course the object and the operation of the tariff is to raise the price of both foreign and domestic products to consumers, so that certain individuals may be enabled to direct the industry of the country into unnatural channels and supply the home market with commodities directly, that can be supplied cheaper indirectly through foreign commerce. And this it is contended, by checking imports, will save our gold and silver coin and bring about the desired "balance of trade" in an excess of exports. That, with a debt currency, it tends to a nominal excess of exports there would seem to be no doubt, for the same reason that cheap money induces high prices which cripple foreign commerce and change the export demand from merchandise to money. I repeat that while a debt currency circulates in the country the money included in the excess of exports, is thrown into the lap of other nations in payment of a false price for their products to our utter loss. The tariff promotes this loss by indirection, by raising our home prices and preventing profit in foreign trade which would exhibit itself as it does in England in an excess of imports.

Has the tariff policy which has been pursued with rigor, but with vexatious irregularity, ever since the close of the war of 1812 saved to the nation the precious metals imported and mined here since that date? The answer to this question in to be found in the fact that not more than $200,000,000 probably remain in the country outside of the arts and hoards,

TREASURE MOVEMENTS DURING THE REBELLION.

In this number we give a comprehensive exhibit of the movements of treasure, at New York, for each month of the last seven years; the fluctuations of which deserve careful analysis, as illustrating the monetary derangements connected with the war and the supply of the precious metals at its close.

The first result of the outbreak of hostilities was to draw a large amount of specie from abroad. The prospect of a limitation of the business of the country induced a contraction of importations; and, having a large surplus of produce for exportation, our exports so for exceeded our imports that, in 1861, we imported $37,088,413 of specie, seven times the average amount of the two preceding years. This large accession of coin would have materially strengthened the banks in aiding the government and might have enabled us to surmount easily the first financial demands of the war, had it not been that the failure of confidence throughout the country caused a rapid and extensive withdrawal of money from this centre. Credit was suddenly curtailed; and the result was that the circulating medium was needed everywhere to supply the place of the usual forms of individual promises-to-pay; while the banks of the interior partly from mistrust of the ultimate ability of the New York banks to meet their obligations and partly because they were pressed by depositors for coin, withdrew their balances from the banks of this city. Not a few cautious individuals and most of the foreign bankers took the same course, so as to be prepared for any possible adverse contingency. The result of these movements was that, in 1861, $68,408,112 of specie was returned from this market into the interior and into hoards, nearly $27,000,000 of the amount going in the month of December. The receipts from California during that year were at about an average rate, amounting to $34,485,949. The whole movement for the first year of the war, 1861, may be thus summarised:

The large withdrawals of gold at the close of 1861 precipitated the suspension of the banks; which was followed by a gathering in of their balances from the interior, producing a return current of specie to this centre. This movement continued throughout 1862, and for the year the amount gathered in from hoards and drawn from the interior amounted to $43,907,957. The return current was stimulated by the issue of United States notes, Demand notes, and 7-30 Treasury notes, of which, combined, there was outstanding, on the 30th June, 1862, $272,496,550.

The issuing of this large amount of paper currency lessened the requirements for coin as a circulating medium, and treasure was, consequently, free to follow its tendency to gravitate toward this centre. The passing of the legal tender act was followed by a general withholding of coin from circulation; which still further aided the return current. The effect of these issues of currency was to steadily force up the premium on gold, which, at the beginning of July reached 10, and at the close of December 33. Gold and silver coin being then no longer a currency, but practically an article of merchandize, and being non-productive to its holders, it naturally returned to this point, where, for the purposes of customs duties, exportation, and speculation, it was in active demand. Under these circumstances it was not remarkable that of the sixty-eight millions withdrawn into hoards and inland during 1861 forty-four millions should have been recovered from those sources in 1862; nor was it singular that, during the whole of the latter year, not one dollar was withdrawn to those sources. The disturbance of confidence exhibited its natural results in the extraordinary export, during 1862 of $59,437,021 of specie; foreign capitalists calling home their balances held here, foreign bankers sending abroad their gold for safe keeping, while even domestic capitalists sent out large amounts of coin from the same motive; a movement which, owing to a decrease of produce exports, there was no favorable balance of foreign exchanges to obviate. The following statement will indicate the movement of treasure during 1862 :

The year 1863 was chiefly remarkable for the reduction in the receipts from California, resulting from the dangers of capture by rebel privateers. The receipts from that source for the year amounted to only $12,207,320, about one-third the average Pacific supply. The receipts. from abroad were merely nominal, aggregating for the year $1,528,279. The supply from the interior and from hoards continued to flow in steadily, from the causes above indicated, commencing with $1,509,382 for January, and closing with $5,427,748 for December, and aggregating for the year $33,040,001. The exports to foreign countries amounted to $49,754,056, and would have reached a much larger sum but for the fact that large amounts were shipped from San Francisco to Europe on New York account. During this year, also, there was no movement whatever into hoards or to the interior, the general disposition apparently being to realise upon gold rather than to hold it idle. This fact is worthy of special note, as it wholly disproves the oft reiterated assertion that the unsetled condition of the finances, and the advancing premium on gold induced an extensive hoarding of coin. The truth is, that during the second and third years of the war-1862 and 1863-$8,536,946 more was drawn from hoards and inland than was withdrawn into those