the quantity of the precious metals possessed by any single nation, nothing will permanently alter their value, so far as that value depends on intrinsic causes, unless it affect the cost at which they are obtained.

The causes which actually decide what shall be, at a given period, the cost of obtaining the precious metals in the countries in which the mines, streams, and sands which afford them are situated; or, in other words, which decide what, at a given period, shall be the poorest mine that shall be worked, or the least productive soil or sand that shall be washed or sifted, form the subject of an interesting enquiry, on which our limits will not allow us at present to enter. We hope to recur to it hereafter; but we shall now confine ourselves to the causes which regulate. the supply of gold and silver in the countries which, having no natural deposits, obtain them by commerce. Such countries bear a still stronger resemblance to our supposed insulated community of 10,000 families. The rest of the commercial world is the silver mine, or the auriferous sand, to which each of them resorts in order to supply her annual consumption; and her gatherers of the precious metals are those who export her commodities.

During thirteen years, from 1829 to 1841, both inclusive, France imported 385,885,880 francs, or L.15,435,435 sterling of gold; and 1,969,600,513 francs, or L.78,784,020 sterling of silver; and exported 356,132,082 francs, or L.14,245,283 sterling of gold, and 619,656,625 francs, or L.24,786,265 sterling of silver; showing that she requires for her own consumption, in plate and money, an average annual supply of both metals to the amount of 106,130,591 francs, or L.4,245,223 sterling.*

We have no official data showing the annual supply required by the British islands. Mr Jacob, in 1831, estimated the annual consumption of the precious metals in Great Britain, for all purposes except money, at L.2,457,221 sterling.† This estimate is treated by Mr M'Culloch as excessive. But when we consider that Ireland is excluded, and that, during the twelve years that have since elapsed, the population of the British Islands has augmented by more than three millions, and our exports have risen from thirty-seven millions to fifty-one millions, it probably rather falls below than exceeds the present consumption in Great Britain and Ireland. If we add to this about L.200,000

See, for the statistics of French commerce, the yearly official pub lication entitled, Tableau général du Commerce de la France. † Jacob on the Precious Metals, Vol. ii. p. 299. + Dictionary of Commerce, Art. Precious Metals.

as the annual waste by loss and wear of money, the annual consumption of the British islands may be taken at L.2,700,000. From whence do France and the British islands obtain their supplies? From the whole commercial world. The annual export of British and Irish produce and manufactures, exceeds in value fifty millions sterling. The annual export from France of French produce and manufactures, exceeds in value thirty millions sterling. There is no portion of this great export of which the exporter, if he thought fit, might not receive the price in gold or silver. In fact, he almost always does receive it in gold or silver. There is much inaccuracy in the common statement, that the commerce between two countries, when the values which they reciprocally give and receive are equal, resolves itself into barter. It has a tendency to do so, because such a result is beneficial to all parties; but this arrangement is often defeated by local difficulties, or by the ignorance of one person as to what has been done or is doing by another— an ignorance which occasions almost all the errors by which commerce is deranged. The goods which are exported from Hull to Stettin are sold for Prussian thalers-those exported from Stettin to Hull are sold for English sovereigns. The English exporter wishes to convert his thalers into sovereigns; the Prussian exporter to convert his sovereigns into thalers. The ultimate resource is, that the Englishman has his thalers sent to him, and sells them for sovereigns to a London bullion merchant; and the Prussian receives his sovereigns, and sells them for thalers to a Prussian bullion merchant. But this is a very expensive process. The voyage may take a month or more; the freight and insurance on bullion are considerable; and coined money is almost always worth something more than the mere metal which it contains. The best expedient of course is, that the Prussian and English debt, so far as they are equal, should be exchanged; and, if the Englishman and Prussian are correspondents, this is done of course. But one debt may be much larger than another; or the two exporters may have different agents, who may not be acquainted with each others' transactions. In this case, the Prussian who has to send money to England will naturally endeavour to effect it by sending commodities. Supposing the expense of sending corn or bullion to amount to 10s. per L.100, and the voyage to take a month, a profit of 10s. per month, or at the rate of six per cent per annum, would be obtained by sending goods, which would sell in Hull for merely what they cost in Stettin. If he could not send commodities, he would endeavour to find some one to whom money was due in England, who would take his Prussian money, and transfer to him his English debt.

It would be worth his while even to pay, as a premium, any thing less than ten shillings per cent the supposed expense of remitting coin or bullion; and this premium might induce some one else to send commodities to England. If he could not make the proposed arrangement at Stettin, he might be able to make it at Dantzic, or Berlin, or Leipzic. Or if money were due to him in Vienna, or in Paris, or even in New York, by sons to whom money was due in England, it might be worth his while to direct his debtors in Vienna, or Paris, or New York, to discharge their debts to him by discharging his debts to his English creditor, and thus prevent the transit of money.

per

It is in this manner, by the exchange of debts and credits, that the commerce of the world is carried on, and with a comparatively small transmission of the precious metals. But, though the international circulation of the precious metals is comparatively small, it is positively great. We have seen that during thirteen years ending in 1841, France, while she imported gold and silver of the value of L.94,219,455 sterling, exported gold and silver of the value of L.39,031,548; all of which was exported merely to come back to her-the greater part being constantly passing and repassing between London and Paris. The expense, indeed, of sending money from Paris to London is so slight, that it may be supposed that no great effort is made to avoid it. But even between England and China, where it costs an expensive and dangerous voyage, and a loss of six months' interest, vast sums go and return.

It is notorious that, during the last five years, we have received eight or nine millions of ounces of silver from China. In that period we have exported to China 122,840 ounces in 1837 ; 125,197 in 1838; 947,256 in 1839; 322,446 in 1840; 127,797 in 1841; 1,040,194 in 1842; and 164,000 ounces in the first ten weeks of 1843. During that time, there can have been seldom less than half a million of ounces on the sea, going backwards and forwards merely between England and China. And yet, what we send to China does not amount to one twentieth part of our annual exportation of the precious metals. From the beginning of 1837 to the 10th March 1843, we exported 2,062,247 ounces of gold, and 87,555,117 ounces of silver, of the aggregate value of L.29,918,653, besides the amount recorded in the custom-house ;-an amount which may be very large, as there is no penalty on non-entry. What we imported during that time is not recorded; but according to Mr Jacob's estimate

Parliamentary Return, 17th March 1843. No. 56.

which appears to us, as we have already stated, to be rather below than above the truth-that we annually consume L.2,700,000 by the wear and loss of plate and money, our importations cannot have amounted to less than L.43,318,653, or more than eight millions sterling a-year. A sum equal, according to Mr Jacob's estimate, to the whole metallic currency of Europe, (L.313,388,560,) enters France in less than fifty years; and the British islands in less than forty years. When the precious metals are in this state of constant motion-when every commercial country is every day receiving and parting with them at a thousand inlets and a thousand outlets-to suppose that one nation can drain another, is as rational as to suppose that the level of the British Channel could be altered by enlarging or contracting the Straits of Dover.

Without doubt it is in the power of a nation, not by commercial, but by monetary regulations, to increase or diminish the amount of its metallic money. If we were to make silver instead of gold the British standard, we might reverse the existing proportions of the British currency. From thirty millions of gold and ten of silver, we might constitute it of thirty millions of silver and ten of gold. By issuing unconvertible government notes to effect all the larger payments, and copper coins for all the smaller ones, and rendering the use of gold and silver money penal, we might banish both metals from our circulation. Or, by prohibiting the issue of notes and copper coinage, or by internal commotions restrictive of credit, and consequently of the banking operations which depend on credit, we might render our currency exclusively metallic; and require 80 millions of metallic money instead of 40. But those measures would affect the value of the precious metals only so far as they affected the cost of obtaining them. Whether our currency consisted of 30 millions, or 10 millions, or 60 millions of sovereigns, the value in Great Britain of each sovereign would always depend on the amount of British labour necessary to obtain one.

France, with a population of 34 millions, is supposed to possess a currency of more than 120 millions sterling.* The British islands, with a population of 28 millions, possess a currency of only 40 millions. There is much less division of labour in France than in England; and consequently there are

Chevalier. L'Amerique du Nord. Vol. 1. Note 20. M. Leon Faucher estimates the specie of France at 3,500,000,000 of francs, or about L.140,000,000 sterling. See his able Pamphlet, entitled Recherches sur l'Or et sur l'Argent.-P. 59.

much fewer exchanges in proportion to the population. The general scale of prices is much lower, and consequently each exchange, in which money is employed, can be effected with less money. But the effects of the causes which tend to diminish the quantity of the precious metals in France, are more than counterbalanced by those which tend to increase it. In the first place, the general want of credit occasions the use of money in exchanges, in a proportion, perhaps, ten times as great as in England; and secondly, money is exclusively employed in France as a safe, though unproductive investment. The French peasant accumulates specie until he can buy a patch of land-the only investment which, from the tradition of centuries, he believes to be secure. The English labourer either expends all that he earns, or lends his savings to the Government, through a Savings' bank, or to a neighbour, or employs them in some retail trade. Perhaps half the money of France does not change hands once in ten years. In England there is scarcely a hoard, except the specie in the vaults of the bank. But though France has nearly three times as much money in proportion to her population as England, gold and silver are more than one third dearer in France than in England. It costs a Frenchman more labour to obtain two ounces of silver, than it costs an Englishman to obtain three. If France could rely on internal and external tranquillity-if mutual confidence and commercial habits could be established among her people-if every town had its bank of deposits and circulation, and every village its Savings' bank-60 millions might perform all the operations for which 120 are required. The remaining 60 millions might be exported, and send back the materials, and implements of agriculture, and manufactures, in which France is now so lamentably deficient. The distribution of the precious metals, to use Colonel Torrens's expression, would be altered; but would France be a sufferer by the change? Would rents or wages fall? Would it cost more labour to obtain an ounce of silver than it does now?

Colonel Torrens states with perfect truth, that the main cause which renders the value of money, in relation to labour, different in different countries, will be found to be the different degrees of 'efficacy with which, in different countries, labour is applied.'(Budget, p. 24.)-Yet, in the next page, he assumes that the value of money depends on its quantity, and may be lowered by increasing that quantity, and raised by diminishing it: 'Let us assume,' says he, that labour is applied with equal effect in England and in France; that, in consequence, the 'metals are distributed in equal proportions throughout the two