value of money is not determined by its quantity alone, but by this in connexion with the rapidity of its circulation. When trade is dull, or in other words, when exchanges are very few, money is cheap; but when exchanges are quick and numerous, money becomes in demand, and rises in value. If in a given period a thousand dollars will effect a certain number of exchanges, and if at another time five hundred dollars, by a more rapid circulation, will effect double the number of exchanges in the same time, and in the same amount of property, it is obvious that the five hundred dollars in one case will have performed the same service as the thousand in the other. It is obvious, also, that the value of the money will be higher, when it is performing this rate of service, than when it is doing only half as much. Hence money has not a fixed intrinsic value, but one that fluctuates in proportion to the demand for it as a medium of circulation. Suppose there is just money enough in a community to carry on with convenience all the operations of mercantile exchange, and in this state of things, suppose the amount to be increased one half, the quantity of goods and the demand for consumption remaining the same. What will be the consequence? The yard of cloth, that was before sold for a dollar, will now be sold for two, and money will have fallen one half in value; or, if you choose to view it in another light, the value of the cloth will be doubled, so as to produce an equilibrium with the money. But take it which way you will, the community gains nothing by the process. It adds nothing to the wealth of a nation, to have the mass of circulating coin increased twofold, if all the commodities purchased with it are enhanced to a double price; in fact, it is a waste, because money is forced into the useless office of circulation, which might be sold for its full value as a product.

Carry this principle a little farther, and we shall find not only a useless, but a positively injurious effect. By a restrictive duty a larger amount of coin is kept in the country, than is needed for circulation; its abundance diminishes its value, or, in other words, causes the relative price of articles for which it is given in exchange to rise; more money will be given for a commodity than it would command, if coin were suffered to flow into its natural courses, and find its natural level. This state of things will only happen, however, VOL. XXI.-No. 49.

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in the country where the restrictive duty on exportation exists. And when goods are introduced, which have been manufactured in another country, where money is dearer because scarce, and where the goods are cheaper because the cost of production is less, they can be sold to a great advantage over the same kind of goods, manufactured in the country where the restrictive duty operates, because the cost of production is there in proportion to the forced relative value of the coin. Hence such a law would act as a check to manufactures, and make a nation dependent on foreigners for some of the commonest articles of consumption, which its best interests require to be produced by its own resources, capital, and labor.

It is, moreover, greatly for the interest of a country like Mexico, whose mineral treasures are so abundant, to afford all possible facilities for the exportation of coin. Where the production is so great, the natural tendency is to overstock the market, and to give a forced value to the circulating medium, which can only be truly profitable, when it sustains nearly the same relative value to other commodities, that it holds in commercial countries generally. It is important to Mexico, that money should be dear there, and then there will be a quick demand; the imported commodities will be at a low price, and manufactures and numerous branches of industry will flourish, which could not otherwise be sustained, and the wealth and prosperity of the nation will be increased. Such results can only be brought about by opening every channel to a free departure of the surplus coin.

In the last place, if gold and silver be regarded merely as a product of the soil, one of the great staples of the country, the false policy of a duty on exportation will be equally apparent. In this point of view, the working of the mines, or the producing of this staple, becomes a most important branch of industry, which it is the part of a wise government to foster and protect. It has been mentioned above, that although the mines in Mexico are inexhaustible, the ore is not rich, and in most cases yields but a moderate profit to the miner. It follows, that any unnecessary burden upon this species of industry will prevent its being prosecuted, and thus paralyse a large amount of capital, and throw out of employment a numerous class of citizens, who can engage in no other occupation só advantageous to the state; we say none so advan

tageous, because this staple is more valuable to the state than any other. If the price of gold and silver be reduced by an unnatural increase of quantity, the cost of labor and all the materials requisite for working the mines, such as provisions, quicksilver, iron, and machinery, will be increased in the same ratio. Hence all those mines, which under favorable circumstances would do little more than meet the expense of working, must stop, when the price of silver and gold is reduced, and that of the articles necessary for subsistence and use is raised. If, for example, a thousand pounds of ore yield ten ounces of silver, and these ten ounces of silver be just enough to pay all the charges of production, the mine may be worked without a loss; but if the value of silver fall, by an increased quantity in the market, since the same amount of labor and other materials are requisite to produce the silver as before, and these at a higher price, it is manifest that he mine can no longer be worked; and that a duty, which should end in this result, would be most impolitic and ruinous. The only effectual laws for increasing production, and consequently a profit to the nation, will be those which afford the strongest encouragement to exportation. The great political economist, Ricardo, in his chapter respecting taxes on gold, has some remarks touching this subject, which do not seem to us altogether sound.

To make their views the more easily apprehended, by those members of the Congress not well versed in studies of this nature, the committee illustrate them by referring to the old regulation under the Spanish system. They affirm, that it is the same thing in effect, whether a tax be laid on the precious metals in the hands of the miner, as formerly, or a duty on exportation, which is supposed to be paid by foreigners. If the miner were now obliged to pay a tax of twenty per cent, or give one fifth of all he produces to the government, he would immediately find that he could not pursue his business without ruining himself. But the result would not be varied, although it would come less direct, if the same amount of duty were laid on exportation. The foreigner would pay it, in the first instance, it is true, but he would pay it in goods at a price advanced in proportion to the duty, and these goods the miner must purchase at this advanced price, by giving one fifth more gold for them, than he

would have done, had no duty been laid; which is just the same to him, as if he had paid one fifth of his gold in a tax, and bought the goods at a proportional price. The same will hold true of all the goods he purchases, whether of domestic or foreign production, because the prices of all will be raised alike. The effect of these principles has already been seen in Mexico. The freedom of commerce now enjoyed, has reduced the price of foreign goods one half below that, which they maintained under the old restrictive system of Spain. The consequence has been a corresponding reduction in the price of home manufactures, notwithstanding the prejudices of the people in favor of their old habits, the impulse of interest, and the exertions of native enterprise to give the goods of home production an ascendency in the market.

The committee close their report with two observations, in the nature of precautions, in one of which it is hinted, that a constitutional question is involved in the subject.

They state that such a measure, as the one contemplated in the proposed duty on the exportation of the precious metals, would derange the negotiations, which have been instituted in forming companies abroad for working the mines, and by which the fidelity of the government was virtually pledged to ensure as favorable prospects, at least, as those which existed when the engagements were made. The mining companies of Europe, employing in Mexico the capital of Europe, are conferring a great benefit on the nation, and actually providing the means for paying the interest on the loans, which the government has contracted abroad. Thus a mutual interest is growing up between Mexico and the European governments, by reason of the facilities afforded in Mexico for a profitable employment of capital, the consequent stimulus given to industry and enterprise, and the new and intimate commercial relations, that must necessarily be established. But impose this duty, and a check will be given to the companies already formed; it will prevent others from forming, and create jealousy, and a suspicion of the good faith of the Mexican government, and a distrust of its future wisdom and firmness.

The objection to the duty, on constitutional grounds, arises out of the local situation of the mines. The constitution of

the Mexican Republic provides, as in the United States, that all taxes shall fall as equally as possible on each part of the union. Now the principal mines are situate in a few only of the provinces or states. A tax on silver, therefore, would not be equally borne, but settle most heavily on the states where it is produced. This is deemed unconstitutional. How far this argument deserves consideration we forbear to decide, but presume it should be allowed as much weight at least, as similar arguments in our own congress, where it has never been complained, that the watch towers of the constitution were guarded by drowsy sentinels.

We have thus presented, in as perspicuous a manner as we could, the principles contained in the report of the committee on finance and mines, together with such illustrations and remarks of our own, as have occurred to us in pursuing the subject. The sound policy and just views of the committee must be obvious, and a clearer proof of the wisdom of the Mexican congress could hardly be adduced, than the fact, that this report was unanimously adopted, and no additional duty was laid on the exportation of gold and silver. The committee state explicitly, that in their opinion the nation would be benefited by taking off the existing duty of three and a half per cent, but as this subject was not referred to them, no specific measure to that effect is recommended. This duty will doubtless soon be removed by the same enlightened policy, which has prevented its being increased.

Mr Alaman's last report to the congress shows the Mexican government to be sedulously devoted to the best interests of the nation. Vigilant attention is bestowed in affording all the encouragement, which the present state of the country will possibly admit, to every branch of industry, to the means of education, to agriculture, manufactures, and internal improvements. During the disasters of the revolution, many of the old colleges have been neglected, and have gone to decay, by reason of their revenues being withheld or diverted to other channels. Some of these will be immediately restored, and others established anew. A spirit begins already to prevail, in a few places, which promises good results. In San Luis Potosi there has been a voluntary subscription of fortytwo thousand dollars, for establishing a college; measures are adopting to restore another in Guanaxuato; and in Celaya