A NEW THEORY 
 
 FOR AN 
 
 INDEPENDENT TREASURY, 
 FOR THE PEOPI.E5 
 
 OR^AN EXPLANATION OF THE CAUSES 
 OF THE 
 
 LATE FLUCTUATIONS IN OUR CURRENCY, 
 
 WITH A 
 
 PBOPOSITION FOR AN EFFICIENT REMEDY. 
 
 By ROBERT GRANT. 
 
 BANGOR: 
 SAMUEL S. SMITH, PRINTER. 
 1840. 
 
ADVERTISEMEN'T. 
 
 While investigating the important facts, in relation 
 to a National Currency, which are condensed in the 
 following pages, the reader is entreated to restrain all 
 partialities for men or measures, which may influence 
 his judgment, and base upon the great truths of Nature, 
 as here attempted, those conclusions he may form, 
 either for, or against, the theory, which is now for the 
 first time laid before the American people. 
 
 In establishing the foundation for this plan, the ar- 
 guments which are advanced may at first seem irrele- 
 vant and obscure. All nature is so closely linked to- 
 gether by a chain of dependencies, that it is impossi- 
 ble to explain why a result, or effect, has occurred, 
 ■without tracing it to the cause which has produced it. 
 All causes are dependant in their nature upon the great 
 First Cause. The human mind does not however, pos- 
 sess capacities to analyze the Divine energy, our intel- 
 lectual faculties extending ox^^y to that point, at which 
 we must cease to answer the question, ^hy does such 
 an effect occur. A subject becomes intricate, in pro- 
 portion to the approximation of the questions, which aa 
 explanation of its details require, to those causes which 
 are beyond our capacities to investigate. For this 
 reason, the science of political economy has assumed a 
 complicated character; emanating directly from those 
 first principles, which are combined in the formation of 
 secondary causes, it cannot be explained without a 
 full elucidation of its original design, and capaci- 
 ties The reader is therefore requested, to consider 
 thoroughly each argument which is advanced m the 
 following pages, however remote it may at first appear 
 to the subject under consideration. 
 
PREFACE. 
 
 When a crisis arrives in the affairs of a nation, which requires 
 B change in the accepted policy of government, or an improve- 
 ment in those laws which directly affect tlie welfare gf the people, 
 it becomes the duty of each individual member of society, to in- 
 vestigate the cause, which may have produced such disarrangement, 
 and endeavor to discover an appropriate remedy. Such an 
 event has occurred in the financial regulations of the United 
 States of America, perplexing to the government, and unless spee- 
 dily modified and improved, ruinous to the productive interests of 
 the people at large. The representative currency of our country, 
 has hitherto been distributed, in a manner hignly disadvantageous 
 to the welfare of the community. It oppresses the opperating and 
 producing classes, by controling, and taxing, the channels of pro- 
 duction, "and fosters a spirit of wild, unproductive speculation, in 
 the distributing departments of society, directly adverse to a pro- 
 gressive national advancement in wealth and intelligence. It is 
 generally admitted, that a serious evil exists in the operation of 
 those laws, which govern public, as well as private exchanges, 
 but individuals possessing that information, and influence, which 
 should enable them to direct a needful reform, have hitherto 
 studied the effects, produced by our present financial system, rather 
 than the causes, which give rise to its injurious tendency, and con- 
 sequently have discovered no efficient remedy. The subject has 
 thereby become so disconnected, and confused, that some of our 
 most popular statesmen, now advocate projects of government, 
 relating to the currency of our country, which they have previous- 
 ly proved to be incorrect, and unsound, in clear and powerful ar- 
 guments before the national councils. 
 
 With due respect to the opinions of my fellow citizens, and ac- 
 tuated solely by a desire to elucidate truth, and disseminate its 
 benefits, I have arranged a theory of the mechanical and mate- 
 rial phenomena, of the production and distribution of wealth, which 
 I shall present for public consideration, together with anew system 
 of a national currency, based upon those truths, which this analysis 
 of wealth, will prove to be most subservient, to the greatest degree 
 of happiness among all classes of mankind. 
 
 No Agrarian view, or disorganizing movement, are countenanc- 
 ed by this plan. It can be incorporated with the operation of pro- 
 duction and trade, as is water with the parched earth, strengthening 
 their vivirying powers, without decomposing the mass of mingled 
 energies, of vv^hich society is formed. 
 
 Also a full analysis will be given, of the first principles, which 
 impart to primitive matter, and inert substance, those properties, 
 which are necessary in the exhibition of all values. 
 
 It may be asserted, in continuation, that this subject, embraces 
 all that is sublime and beautiful, in the study of material Nature. 
 |t has hitherto been distorted, and rendered obscure, by the efforts 
 
of philosophers, who have presented a learned detail of specula- 
 tions, rather than a simple concentration of facts. From this 
 cause, the study of Natural, Moral and Political Economy has 
 been neglected, and incorrect deductions, based upon the imperfect 
 mechanical philosophy of the last century, have been suffered to 
 exercise an injurious svv'ay over the minds of individuals, and the 
 policy of onr National Councils. 
 
 The first presentation of this system of a representative curren- 
 cy, will be commenced in the foilowing arguments, and there is 
 no mechanical adaptation of the results of scientific research, which 
 can be of so much consequence in a political point of view, at the 
 present time. If it is proved to be unworthy of public considera- 
 tion, by this exposure to general criticism, let it be refuted, and 
 the theory crushed in the bud! But if there are important facts 
 substantiated, abuses exposed, and a feasible method for establish- 
 ing a perfect republican currency, made clear, and lucid to the 
 public mind, permit it to be said of this system, should it embrace 
 so many features of public utility, that it was first approved by 
 the citizens of the United. States ! ! 
 
 CHAPTER I. 
 On the Jlrst Principles. 
 
 When we are required to explain the operation of any subject 
 which comes within the reach of human intellect, it becomes 
 necessary to classify and arrange it under some head, or leading- 
 principle, to prevent the mind from straying, and confine it the 
 more closely, to the matter under consideration. The imperfect 
 foundation which has previously existed in the philosophical world, 
 upon which to base deductions, has hitherto been of serious disad- 
 vantage, to the furtherance of scientific research. The accumula- 
 tions of knowledge, have however, so far occupied the labyrinth of 
 material causes, that we may now safely assume, that we have 
 arrived at that combination of fundamental truths from whence 
 all the developments of matter spring. In this arrangement, I shall 
 differ somewhat from the premises established by common consent, 
 among the philosophers of the present day. How far I am right, 
 1 shall leave the public to decide. 
 
 The first enquiry which presents itself to the mind in the study 
 of the operation of Material Nature, is, what exists We are 
 answered that the planets, earth, man, animals, vegetables, air, 
 water, and every other phenomenon of which the mind receives 
 an impression, exists ! Then, we inquire, in what order ^ is ivhat 
 exists, arranged or classed 7 To this it is answered, that what ex- 
 ists, is classed under three heads, which may be called the first 
 principles, of fundamental truths of Nature ! ! These are, the first 
 principle of matter ; ihe first principle of motion, and the first prin- 
 ciple of mind ! / The first principle of matter, embraces all the 
 substance of Material Nature ; this is again divided into about sixty 
 distinct classes, or simple elements, such as the primitive earths, 
 
5 
 
 4. 
 
 carbon, the various metals, &c. By a combination of these 
 particles of bodies, all the productions of Nature are formed ; they 
 constitute the tangible and perceptible medium, through which 
 every exemplification of the power, and wisdom of Deity, is made 
 known to us. Their primitive qualities are, solidity, divisibility, 
 indistructibility, space and form. They are all capable of being 
 converted into gasses or subtle vapor, by violent heat, or congealed 
 into tangible masses, by the abstraction of heat, or extreme cold. 
 They are also susceptible of being incorporated in the formation 
 of organized bodies, and mingle together in a dormant state, ac- 
 cording to their different affinities. 
 
 Thelirst principle of motion, or power, has, equally with the 
 first principle of matter, an important position in the constitution 
 of visible Nature. It differs however from matter, in the fact, that 
 while matter in itself, is tangible and perceptible to our senses, 
 motion or power, is inappreciable to us, except through the medi- 
 um of its operation upon material substance. It has long been a 
 question of much perplexity to philosophers, who have endeavored 
 to explain the phenomena of visible Nature, whether motion was 
 an inherent attribute of mind ; or matter ; or whether it sprung 
 from any other source ; some supposed that the action of nature, 
 was a direct exhibition of power, from the hand of Providence, 
 and that organized beings, possessed a delegated individual portion 
 of that essence, which existed independently within themselves. 
 Others believed that power was a natural consequence of organiza- 
 tion ; that the world itself was an atom among a complication of 
 organized systems, and that man was the ultimatum of organized 
 perfection. Theory is always acceptable, where experiment is im- 
 practicable, for this reason, the principle of power, has for so long 
 a time, been a subject of unsatisfactory speculation. Truth, has 
 however an inherent property of progression, and in compliance 
 with this law, the fundamental principle of action or force, has at 
 length been discovered, and elucidated by actual experirnent. The 
 extended researches in the science of Electro Magnetism, for a 
 few years past, in New York and Baltimore, undertaken for the 
 purpose of bringing into active operation, a new motive power, 
 has done more towards explaining the principle of action, than all 
 the theories that have been exhibited, since the days of Socrates. 
 By these experiments it has been proved, without leaving a shadow 
 of doubt, in the minds of those who have witnessed them, that 
 the first principle of motion, springs from the action of the Electric 
 fluid. The different exhibitions of this first motive power, through 
 the medium of material substance, produces all the different stages 
 of action, both as seen in the attraction and gravitation of the 
 earth, light, heat, the production of animal life, and the vital sys- 
 tem, the growth of plants, the flow of water and the rush of winds. 
 We can neither taste, touch, see, smell, nor hear electricity. The 
 noise of the thunder, and the vivid flash of the lightning, are 
 caused by the combustion of the gasses of which the air is formed, 
 when an accumulation of electricity passes through it. In fact, 
 there is nothing, in the composition of this principle, which can 
 make it appreciable to our senses, except through its action upon 
 matter. Our bodies without the aid of electricity, would be, to 
 all human perception, perfectly dead, but our limited faculties do 
 1* 
 
6 
 
 not permit us to detect the vital principle, on its leaving the sys- 
 tem. The human frame is composed of a combination of various 
 material substances, which are formed, and sustained, by a con- 
 densation of the electric fluid, received by the brain, from the de- 
 composed air in the lungs, from whence it is distributed to the 
 different muscles, and vessels in the system, by the medium of the 
 nerves, where it produces galvanic contraction, and decomposition, 
 as the functions of our natures require. I would not here be un- 
 derstood to assert, that the electric fluid is the soul, and hope to 
 make it obvious in the following explanation that a wide distinc- 
 tion exists between the cause of action, and the direction oi^ thought. 
 
 When we contemplate the sublime principle of mind, either in 
 connection with its organized material body, or extended immortal 
 destiny, we find that it possesses such varied, and numerous attri- 
 butes, that volumes might be filled with profitable suggestions, ex- 
 emplifying its constitution. My object is, however, to explain at 
 the present time such qualities only, as will clearly point out its 
 distinction, Vv^hen viewed in relation with the first principles of 
 matter, and motion. In the first instance, I have shown that mat- 
 ter, contained all the substance and form, of material Nature ; that 
 motion, was the cause of all combination and power, in simple 
 substances, and promoted every exhibition of organized life. I shall 
 now attempt to prove, that mind, is the directing and governing 
 principle, without which, the combinations of matter, and motion, 
 would form a perfect chaos, either as vievv-ed in the sublime and 
 incomprehensible operations of Deity^ or considered in the subor- 
 dinate combinations, delegated to the control of man. 
 
 In the human system, we find the three first principles of matter ^ 
 motion, and mind, concentrated in their greatest perfection. In the 
 first instance, the germ of the body, is endowed witii a property, 
 which ennables it to concentrate a certain portion of electricity in 
 its economy, which produces growth or vegetation, by combining 
 other particles of matter, in its proportions. This property may 
 be termed JNatural mechanics, or a branch of that system of manu- 
 factures, by which the Almighty Hand, creates worlds, and directs 
 the motion of spheres. This is among the first causes, which the 
 mind does not possess capacities to investigate. After the human 
 frame is fully developed, we find that two classes of nerves take 
 their rise from the brain, having entirely distmct properties. These 
 are called the nerves of sensation, and the nerves o/f volition, or the 
 nerves of feeling, and the nerves of motion. Divide the nerve of 
 sensation, and all feeling leaves the limb to which it is communi- 
 cated. Disconnect the nerve of volition, leading from any portion 
 of the body to the brain, and all action ceases in that part at once. 
 Divide the nerve of volition leading to the tongue, and although 
 that organ will cease to move, still the sense of taste remains. In 
 the same manner the eye can see, and the hand feel, although they 
 may be deprived of all power of motion. The organs of smelling 
 and hearing, have in the human subject, small sized nerves of voli- 
 tion, but they still,in common with the other senses, are subject as far 
 as their capacities extend, to the same laws. It is a well known 
 fact that through the medium of the five senses, the mind receives 
 every impression of external Nature. The soul without the me- 
 dium of the senses, would be in the body, like a man in a dungeon, 
 
7 
 
 excluded from all communication with the world. The senses 
 rnay indeed be termed, the portals of the soul. Jf then, the nerveig 
 of volition, which act directly on those organs of animal economy 
 requiring- a display of power to develope their capacities, — are en- 
 tirely distinct from the nerves of sensation, which require no power 
 to effect their purpose, we may safely assert, that three distinct 
 principles are manifest in the composition of the human system. 
 This fact may be further proved by the action of the galvanic bat- 
 tery upon the body of a sound healthy man, within a few hours 
 after death. On an application of the poles of a concentrated bat- 
 tery, to the base of the brain from which the different nerves spring;, 
 and the extremity of a limb or any portion of the members which 
 3'ou wish to experiment upon, that portion of the body is instantly 
 put in violent action. The teeth are set, the eyes roll, the lungs re- 
 spire, the voice is uttered, the heart beats, the stomach digests its 
 food, the limbs are thrown into contortions, and in fact every ap- 
 pearance is shown, which manifests the presence of life, but still 
 the eye cannot see, the ear hear, the tongue taste, the olfactoiy 
 smell, or the body feel ! And what is the cause of this strange 
 mystery ! It is simply because we can concentrate and direct elec- 
 tricity, which is the principle of motion, to act upon the nerves of 
 volition, while we cannot call the soul from Heaven, which mani- 
 fests itself through the nerves of sensation, to direct and continue 
 this action, and produce the phenomenon of human life. 
 
 The three first principles when viewed in tjieir primitive capac- 
 ities, are not supposed to be susceptible of either accumulation^ or 
 decrease. Not one particle of the simple elements of matter, is 
 ever supposed to be changed in its nature, or destroyed so effectu- 
 ally, that it shall cease to exist. Electricity also, when withdrawn 
 from one position must be accumulated in another. Its tendency 
 is however to flow together with matter, and where an undue 
 amount is gathered in any body, within the attraction of another 
 body, an explfrsion, of more or less violence, takes place, in the ef- 
 fort to equalize itself. We may from this fact, safely conclude, that 
 a perfect equilibrium exists in the distribution of electricity jthrough- 
 out the vdstness of space, and consequently, a diminution could 
 not occur, in the whole amount, without endangering the equilibri- 
 um of spheres, or a change take place in its composition, without 
 an attendant change in the economy of Nature The different 
 qualities of mind, arc likewise well defined, and have even been 
 marked by phrenologists with corresponding developments on the 
 surface of the head. There can be no doubt, but that the human 
 mind possesses as many faculties in its constitution, as there are 
 primitive substances in the formation of matter. We also find that 
 these faculties are similar in different individuals, of the same spe- 
 cies, and that it is only by an improved excellence in their cultiva- 
 tion, that they are enabled to excel each other. 
 
 When viewed as a whole, the three first principles are found to 
 be linked together by a chain of dependencies, which spring with 
 beautiful progression from matter to mind. Motion is only known 
 through the medium of matter; and mind through the medium of 
 motion For instance, if all the nerves of volition w^ere paralyzed 
 in the human body, without producing death, a person might feel 
 the most acute sensations of pain or fear, without being able to 
 
8 
 
 manifest them by any outward sign. Persons afflicted with catalep- 
 sy may see, hear, and feel what is passing around them, or comes 
 in contact with their bodies, and still be as far as human perception 
 can discover, perfectly dead. Many persons have been buried, 
 v;hih^ under the influence of catalepsy, and become capable of mo- 
 tion while in the tomb. Some have been rescued, and lived to de- 
 fscribe their feelings, and others, have perished, after returning vi- 
 tality enabled them to make desperate efforts for relief from their 
 awful silualion. Thus it will be seen, that the elements of the 
 first principles, are entirely distinct, refuting by their constitution, 
 the theory of materialism, and pointing directly, by their progres- 
 sive dependent connection ; to a Great First Cause, whose attri- 
 butes are beyond our capacities to investigate. 
 
 In my exhibition of the first principles, J made no distinction, in 
 the definition of mind, between the First Cause, and the dependant 
 creature man. This was unnecessary at the time, as 1 was merely 
 classifying the principle mind! Neither did I confine my descrip- 
 tion of matter, and motion, to the sphere of the earth, on which we 
 live. It may therefore be necessary to state* that the first principle 
 of matter, is indestructible, and extends throughout the systems of 
 the universe. That motion is also imperishable, and is evervwhere 
 operating with a greater or less degree of activity either connected, 
 or disconnected with matter. Therefore if we suppose matter, 
 and motion, to be imperishable, as distinct substances, we may also 
 safely say that mind is immortal; and if matter and motion, exist 
 in stupendous systems throughout the universe, why may not 
 mind, which prevents confusion, and promotes order on the surface 
 of the globe, rule, with a more perfect sway, the universe, which 
 is evidently created, under the directing hand, of some mighty, and 
 perfect Intellectual Energy. 
 
 CHAPTER 11. 
 On the Combination of the First Principles. 
 
 After establishing the three first principles, or fundamental truths 
 of Nature ; we then inquire, in what manner does the combination of 
 these principles, operate to produce the ultimate ends for which 
 they were created ? It is answered, that they operate in a mechan- 
 ical manner! ! The movements of the solar system is mechanical, 
 and the more extended plan of universal Nature, as far as human 
 perception extends, presents a series of complicated and beautiful 
 mechanical movements. The structure of the earth is mechanical, 
 and every change on its surface presented by the seasons is me- 
 chanical. Organized life is a mechanical combination of simple 
 substances, and man is the most perfect of mechanical conceptions. 
 Man himself, as a machine, is again capable of manufacturing the 
 rude materials of earth, into such forms as shall be most subservient 
 to his use. 
 
 In classifying mechanics, we may therefore style the operation of 
 
9 
 
 primitive substance, and organized matter, such as plants, animals 
 &c., Natural mechanics, because they are the immediate works ot 
 Deity. All increased excellence of form, given to any substance, by 
 the labor of man, may be called artificial mechanics, being the work 
 of art. We may now ask, what are the uses, to which the pro- 
 ductions of Natural and artificial mechanics, are subservient ? It 
 may be answered, that they are subservient to the use of man, for 
 the promotion of his comfort and intelligence, and that these pro- 
 ductions are called toealth. * u 
 
 We find in the classification of matter, about sixty distinct suD- 
 stances, or simple elements In the classification of mmd, there 
 is also, about sixty individual faculties, or primitive capacities. 
 A combination of the elements of matter, in various ways, may 
 produce several thousand changes, and each change be susceptible 
 of an indefinite variety of forms. In the same manner, the primi- 
 tive faculties of mind, combine in the formation of an idea, that 
 idea, manifests itself in a iva.nt, or in the production of a waiit. 
 This loant is only known to be satisfied, by the use of some combi- 
 nation of material substance, adapted by labor to supply that want 
 Labor is produced by the first principle of power, directed by mmd 
 and acting upon matter. Thus we see, that the principles of mznrf, 
 and matter, are made up of a variety of distinct elements, each 
 element affordino- a distinct result. The principle of power is dif- 
 ferent from Mind and Motion in its constitution, being composed 
 of but one element, capable of an infinite variety of action, and 
 fully efficient as the agent of 7nind to produce any desired combi- 
 nation of matter. . ^ , . 
 
 To give the greatest efficiency to labor, it is foimd necessary to 
 concentrate it upon the production of distinct forms or arrange- 
 ments of matter. Matter is perhaps, only capable of satisfying 
 a want, after it has aone through a number of changes ; each 
 change requiring a distinct concentration of labor. Adam Smith 
 calls this distribution of labor; but here he is evidently incorrect. 
 Labor must either be concentrated or distributed in its action ! ! We 
 could not certainly, call it a concentration of labor, where every 
 man produced a portion of all the values which exist 1 And we 
 could not, with equal certainty, call it a distribution of labor, where 
 each individual produced only a separate article. This is however 
 onlv a disagreement in terms, but an incorrect term, often leads the 
 mind to false deductions, and consequently, is in many cases, as 
 injurious as a false position. To exemplify the benefits of a con- 
 centration of labor, we take for example the article of clothing. 
 The wool is raised by the farmer, who sends it to the manufacturer 
 who makes it into cloth, from whence it is carried to the tailor 
 where its ultimate manufacture into clothing is perfected. Here 
 the farmer with the proceeds of his wool, could buy a better ar- 
 ticle, than he could manufacture himself at the same price, provid- 
 ed there was a fair value fixed upon the dififerent proportions of 
 labor. There are various concentrations of labor upon different 
 manufactures, which require from fifty to a hundred distinct opera- 
 tions before the article is fit for use. The great variety of these 
 operations however, only increases the importance of the fact, 
 that concentrated labor is more efficient than distributed labor ; for 
 if each article produced for the satisfying of each distinct want in 
 
10 
 
 community required but one operation to perfect it, still there 
 would be such a multilude of productions, that a concentration of 
 labor would be required in the production of wealth, or a failure in 
 the variety and quality of articles produced, mio-ht be expected. 
 
 It wili therefore be perceived, that each individual member of 
 society, IS susceplible, in his own person, of all ihe wants common 
 to mankind. It has also been shown that man individually, is ca- 
 pable of producing effectually, but a very small portion of that 
 torm m any substance, which satisfies one want. He is therefore 
 capable of producing effectually, only one form in substance, but 
 this form, he can produce effectually in any ffiven quantity. His 
 own want for this particular manufacture islimited, and the sur- 
 plus produce IS only beneficial to him, when it can be distributed 
 lor such other values produced by other individuals, as shall most 
 conduce to his comfort and convenience. This is called the dis- 
 tribution of wealth. 
 
 It has before been shown that man combined in his own person 
 the three first principles, but this fact is common to all animals, 
 iiis organization however, is superior to alUther animals, and he 
 IS distinguished from the inferior creatures more particularly, in 
 the fact that he possess a greater number of distinct faculties of 
 mind. Among these are causality, comparison, ideality, and other 
 important intellectual features, which place him at the head of or- 
 ganized creatures, and constitute him a reasoning beino- The 
 mere possession of these faculties however, does notennablS him to 
 excel even the brute creation, while he suffers his intellectual ca- 
 pacifies to remain dormant. The diamond onlv excels the coarse 
 trap rock, when it is polished and exhibited to"'the sio-ht. In the 
 earth they both occupy space ;— that capacity emb'odying alike 
 tneir whole utility. If it were asked, in what does man excel ani^ 
 mats/ It might be answered, that man excels animal in the exer- 
 cise of distributing wealth. The beaver, the bee and the ant have the 
 capacity of producing wealth, but man alone is known to buy and 
 sell, or exchange his productions in trade. The very exchauire of 
 Ideas by the medium of language promotes the distribution of 
 wealth. What would be the condition of man, if nlaced upon the 
 earth with all his faculties in full perfection, with the exception of 
 the power of communicatincr his ideas to his fellow men, and also 
 deprive him of the beneft of any discoveries that had been or were 
 being made m the arts and sciences ! If this event should occur 
 he would always remain in a sava^-e state ; while his animal f^cuU 
 ties would be increased to a superior deoree of perfection. There, 
 would consequently be no increase in the arts and sciences, for 
 every man would be compelled to invent and manufacture all the 
 convenienciesoflife, these, in consequenceof his limited intellectu- 
 al culture, would consist of such crude materials only as mio-ht be 
 required, support his animal existence, while his intellectuafbein^r 
 would be entirely blank, man in this condition, would be strictly 
 animal, and the conclusion drawn from this fact is, that man is ena- 
 bled to excel animals, only by the exercise of the power of distri- 
 but ma; wealth. 
 
 Political economists have generally classed wealth under three 
 distinct heads. First, that wealth which is being manufactued 
 they class under the head production. That^which is being 
 
11 
 
 bought and sold, is classed under the head of distrihution ; and that 
 which is being used, tliey place under the head of consumption. 
 The two former classifications are correct, but the latter is inad- 
 missable in the eye of political economy. There, any value is only 
 known from the capacity which its use, has for supplying a want, 
 therefore if any manufactured article is used without supplying a 
 want it is destroyed / If it supplies a want in its use, its value is 
 not consumed hixt exckan^ed into another form. It must be born m 
 mind in analyzing this question, that it is impossible to take into 
 consideration the bulk of the articles which constitute wealth ; for 
 wealth only exists, in an increased exellence of form, and combi- 
 nation of substance, which ennables it to produce a cei tain result. 
 If in producing this result, one particle of tangible value incorpo- 
 rates its usefulness into another substance and capacity, the wealth 
 would not be consumed, although the substance which formerly 
 embodied it, might have entirely disappeared ! , , , , 
 
 It will therefore be perceived, that wealth can only be classed 
 under two heads ; udimeXy— Production and distribution. 
 
 lliave been thus particular, in the previous classification of the 
 fundamental truths of Nature, that 1 might establish a firm founda- 
 tion for the followinffar^rumerits, against the present system of cur- 
 rency, adopted by the UrntedStates of America. As these arguments 
 embrace the whole system of Political economy, a new theory of 
 a representative currency, will be presented, based upon these 
 principles. I have adopted this plan from a firm conviction that 
 every argument, however slight may be its import, depends entire- 
 ly for support upon the foregoing 'primary truths. It would be 
 equally feasible, to attempt to build a house, by commencing at the 
 top, without foundation or support, as to lay out an argument 
 which was not based upon the fundamental truths of Nature ! ! 
 
 CHAPTER III. 
 
 On the Production of Wealth 
 
 When we inquire into the nature of the composition of wealth, 
 we find that it consists of various articles produced by man, to 
 satisfy his wants. Wealth has an intrinsic or real value and a price 
 which may bear either a corresponding or a fanciful value. The 
 intrinsic value of wealth, consists in the capacity of any substance, 
 to produce an eflfect, which would not otherv^ise take place. Thus 
 water, and food, are neccessary to continue and perfect animal 
 life.— Clothing is required to protect man from the inclemency of 
 the weather ; fire is indispensible for the production of heat, and 
 the soil is alone capable of supplying the more extended princi- 
 ples of vegetation. The fanciful value, is that which brings sub- 
 stances having no reproductive value, but exchanged and upheld 
 by the taste, and artificial wants of community, into a competition 
 with those values, which are indispensable for some operatiori in 
 the machinery of social life. A surplus of any necessary article, 
 assumes a fanciful value, when employed in an extravagant man- 
 
12 
 
 her, or when the price of its purchase is rated higher, than its pro* 
 ductive value justly entitles it to command. a1i values depend 
 on the labor required to produce them, and on their scarcity com- 
 pared with the demand for them in market. The intrinsic value 
 of water, is equal to that of all the solid articles of food combined, 
 but food requiring a greater amount of labor to produce it, conse- 
 quently demands a high marketable price, while Water, which en- 
 ters more largely into operations of domestic economy, and 
 equally indispensable for the support of human life, has scarcely 
 any comparative price. To analyze the question, we will suppose 
 the present large surplus of water to b& reduced to a quantity just 
 sufficient to supply all the wants of society, without a surplus. If" 
 then this amount of water should be economically used, it would 
 be destitute of a marketable price, for the supply requiring no la- 
 bor to produce it, would be still sufficient for the wants of commu- 
 nity ; but if a speculator should hoard up a portion of this water, 
 indispensable for some domestic purpose, and demand a great 
 price for it, the diffi?rent members of society, rather than suffer the 
 loss, would deduct some poition of other values, which we will 
 suppose required labor to produce, and exchange them for the wa- 
 ter, which would be more immediately indispensable for their com- 
 fort. Water hovv^ever, does not always exist in such abundance 
 in all parts of the world, as to be destitute of a marketable price. 
 In the deserts of Africa, it often happens that a large sum is paid 
 by travellers for water, when their supply has failed in exposed sit- 
 uations, and where it is collected with much labor by the Arabs. 
 Articles of value are often exchanged at sea for water, where an 
 exchangeable surplus occurs in diffi^rent vessels on a long voyage. 
 
 Those articles of food, which are most necessary for the support 
 of life, are also so plentiful in some of the tropical climates, as to 
 cause them to possess very little exchangeable price. The Friend- 
 ly Islands in the Pacific Ocean, on their first discovery, abounded 
 with fruits and vegetables of such nutritious character, that the 
 Inhabitants lived in comparative idleness; a very small amount of 
 labor being necessary to produce a sufficiency to supply their 
 wants. These people it is true, were in a savage state, and requir- 
 ed very little above their mere animal wants, to support their sys- 
 tem of domestic economy ; but then it must be remembered that 
 all values not required to support, and continue the existence of 
 the vital principle, have intrinsic qualities which are necessary 
 for intellectual rather than physical advancement. 
 
 There is a race of people in New Holland, who are very little 
 removed from the animal state in their tastes and habits ; they are 
 unacquainted with the use of fire, nianufacture neither clothing or 
 domestic utensils, and live in the open air like wild beasts, upon 
 game, or fruits and vegetables which grow spontaneously in that 
 mild climate. These people may be said to have in common with 
 the instinctive animals no conception of wealth, as known in the 
 civilized world, and still are possessed of the power of speech, whick 
 is the distingishing attribute of man. 
 
 The intrinsic value of those articles which support life, is great- 
 er than that of any other substances in a comparison of thefr real 
 utility. They would also be superior to all other values in their 
 nominal prices, were all valuei capable of reproduction, and 
 
13 
 
 procyred with the same certainty and with a relative amount of 
 labor according to their utility, as they enter more largely than any 
 other articles into the operations of domestic economy. The in- 
 trinsic value of the diamond is very limited; the most beneficial 
 Mse to Which it is applied, is for the cutting of glass, by the gla- 
 ziers and other operatives in that substance. For this purpose, a 
 small diamond is as serviceable as one of a larger capacity : in con- 
 iradistiiiction however, to its real utility, the price of the large dia- 
 mond increases in the same ratio, as does the square of its solid 
 contents. The real utility of iron, is greatly superior to that of 
 gold and silver, and if one of these substances were to be preserv- 
 ed, and the others destroyed, the public voice would at once de- 
 cide, that both the gold and silver might be forever completely an- 
 nihilated, if iron were permitted to remain. The single quality of 
 refined iron,which enables it to be converted into steel, and receive 
 I a cuttinfT edge, is worth more to society than all the benefits result- 
 I ino- frorn gold and silver together. What would one of our hardy 
 I pioneers at the North, or West, accomplish with a silver or gold 
 i axe, upon the gnarled surface of the primeval oaks of the forest? 
 The stone hatchet of the Indian, would be more serviceable for the 
 levelling of the forest, and paving the way for the march of civili- 
 zation. Or perhaps a golden plough, might rival the golden fleece 
 I of fabulous literature, were it used by our farmers for the cultiva- 
 tion of the earth. t ■» 
 
 The above analysis has shown, thai every substance has a deh- 
 nite intrinsic value, based upon its real usefulness, or capacity, to 
 perform a certain operation, which could be performed by no other 
 medium. It would be no objection to my first position, to prove 
 that the operation to be performed was in itself deliterious. Opium 
 and other narcotic drugs, have a certain intrinsic vah.ie of quieting 
 the nerves of sensation ; and in continuation it may also be said, 
 that the same powerful drugs, have the intrinsic value of pro- 
 ducing a speedy death if necessary, of a character which can be 
 caused by the use of no other substances. This argument may be 
 applied to the analyzation of any values, and will be found to pro- 
 duce a simular and equally correct result in all. 
 
 When we look around on the material woi Id, every thing by 
 which we are aided in acquiring ideas, is presented in some form 
 or capacity, combined in the first principle of matter. Even the 
 immaterial principle of mind, is established in tlie material body, 
 acting through the agency of organized substance. I]ere w'e can 
 ! recog'nize the machine alone, our senses giving no insight into the 
 great mystery which wraps up the soul. We can therefore have 
 no idea of wealth, unless it presents itself in some substantial shape. 
 Some of our most approved writers have advomicd the theory, that 
 wealth as it appears in the education of the human mind, or the 
 training of a horse, or any other animal, is of itself a separate pre- 
 sentation, and should be known, in political economy under the 
 i name of immaterial wealth. This reasoning will at once be per- 
 ceived to be false, from the following deductions. A fruit tree 
 might be said to possess the property of immaterial, as well as ma- 
 terial wealth, were this method of reasoning correct. The one 
 presenting itself in the capacity of bearing fi uit, and the other la 
 
14 
 
 the arrangement of form or class. The one is the result of ih^. 
 greater or less degree of cultivation, and the other the necessity of 
 Its existence, for without form or class, there would be no definite 
 substance. A schoolmaster undertakes to teach a child, andbv dint 
 of laborious perseverance, instructs him in the rudiments of the 
 different useful branches of knowledge. On the same plan a car- 
 penter may fashion a plank, by the application of his skill, into a 
 beautiful piece of furniture. There is no difference in the abstract 
 philosophical fact, the only distinction exists in the sublime superi- 
 ority of the immortal soul over a perishable substance. In politi- 
 cal economy they both have the same relative quality, being capa- 
 ble of receiving a high manufactured excellence without an addition 
 of substance. 
 
 The agency of the electric power, or the first principle of motion, 
 in promoting' the production of wealth, consists in its operation 
 upon the different substances of material Nature, in a distinct, or 
 complicated action, arranging them either into tools, or machines ; 
 a tool being a simple part of a machine, and a machine a compli- 
 cation of tools. This mechanical action, is again subdivided into 
 two distinct operations ; the one being the result of the labor or 
 art of man, the other as shown in the existence of the animal and 
 vegetable kingdom, continually renewed in kind, by the hand of 
 Nature. These may be termed the productive and reproductive 
 agencies ; the reproductive, being the first action of the mechani- 
 cal principle embodying animal, or vegetable life, and the produc- 
 tive a secondary operation, resulting from labor, which o-ives an 
 improved form and utility, to the raw material, without an Tncrease 
 of substance. 
 
 Raw material may be divided into two classes; the one being 
 the reproductive, or vegetable and animal exhibition, of matter, the 
 other the primitive and chemical combination of those simple sub- 
 stances, of w^hich visible Nature is composed. Thus cattle, wheat, 
 cotton and ^timber, form a part of the animal and vegetable raw 
 material, while water, minerals, salts, alkalies and earths, quarries 
 of stone, and the different ores, present some of the principle sub- 
 stances coniposing the primitive raw iPaterial. They are in the 
 eye of political economy, established upon the same basis, provi- 
 ding the supply is inexhaustable. The operation of harvesting, 
 and preparing for the market, the reproductive, is equivalent to 
 mining and quarrying the primitive raw material. All primitive 
 raw material, has already been produced to its greatest extent, and 
 were the quantity of any desirable substance exhausted, there 
 would be no process existing in the present operations of Nature 
 or within the control of man, by which it could be replaced. It is 
 not the nature of reproductive substances to become extinct, even 
 were the whole supply to be consumed, with the exception of a 
 single germ of each kind. This is not the case with these values 
 which are of a primitive origin, and to this fact, may be attributed 
 the decided superiority which the reproductive values, bear over 
 the primitive, in consolidating and improving those nations which 
 depend on agricultural, in contradistinction to mineral wealth ; wit- 
 ness for example the rapid decline, which has attended the influx 
 of gold and silver in Spain, of all the power and enterprise of that 
 
15 
 
 once prosperous nation. The causes which produce this dispara- 
 Ping result in the mining, when compared with the agricultural 
 secdons of the globe, are, the inability oi man to cause a '-eproduc- 
 tion of any primitive values, or aftbrd a yearly supply of the same 
 materia], without encroaching upon the original deposit, conse- 
 quentlv the supply must eventually fail, however large theamount 
 mav be in any one location. Agricultural productions on the con- 
 trasV are continually being renewed, with an improving utility ot 
 tlse producing principle, and consequently increasing the quantity 
 of -the article produced. . , • ^^ 
 
 The chemical combination, and mechanical labor required to pro- 
 duce an increased value in any primitive or reproductive substance 
 hv changing its form, constitutes the process of manulacturing, 
 vvhile agriculture consists in directing and assisting the generative 
 reproductive principle of creation. In the last case the machinery 
 of Nature is most efficient, in the other the machinery ot man. 
 Thus, it will be perceived, that those things which are of the great- 
 est original intrinsic value, are placed within our reach to an al- 
 most unlimited . extent, and are also perfectly inexhaustible, while 
 all primitive values are merely of a local nature, and liable to tail in 
 their suoplv. It is true no article of utility of a primitive charac- 
 ter has ks yet been wanting, but this only the more fully shows the 
 wisdom of the great Author of the universe, in adapting the pro- 
 ductions of the earth to the wants of man. If food, for instance, 
 had been a mineral, instead of an agricultural substance, the supply 
 must eventually have failed ; for if the whole surface of the earth 
 had been composed of mineral food, extending even to an unknown 
 depth in its original state, in the course of time, an accumulation 
 of rejected rubbish, would so choke up the avenues by which it 
 mi-ht be obtained in some more favored and eligible situations, that 
 it would be impossible for the inferior order of animals to exist ; 
 and man himself, in the event, would be compelled to forego every 
 other employment, and unite in the drudgery of mining, for a dai- 
 ly subsistence. „ , 
 ' All matter when reduced to its original elements, as far as the 
 improved philosophy of modern science is enabled to trace thein, 
 consist of about sixty distinct substances. The ancients acknowl- 
 edged but three. A chemical combination, and arrangment ot 
 these substances, is continually fitting the surface of the earth, tor 
 the reception of seed, and for the reproduction of the vegetable 
 material exhibition of life. This is again extended to the more per- 
 fect arrancrement of animal vitality, which returns again atter a 
 certain period of action, to its original elements, to be again col- 
 lected around another nucleus of existence, and again be decompo- 
 sed. it will thus be seen that there is a regular rotation in repro- 
 duction, which continues to extend and embody its kind indeh- 
 nitely, embracing more or less of the general bulk of ni atter or 
 primitive substance. The fruits of the earth as far as perfected by 
 the machinery of nature, are thus termed reproductive raw mate- 
 rial. When the substance produced receives an increased value 
 of form, by the addition of labor, it is styled the manufactured ar- 
 ticle. The reproductive raw material, always presents itself in a 
 certain form, which is indispensable to its nature. Thus animals 
 
16 
 
 appear according to their different species, each with a distinct or- 
 ganization; wheat is presented in an obJong grain, cotton in a fine 
 white fibre; while vegetables, fruits, and other material, in all 
 their classes, are produced from the hand of Nature, with certain 
 distinguishing proportions predominating in each. In the manu- 
 lactured article, no definite form of presentation is manifest. 
 Wheat, lor instance, can be manufactured, and compounded with 
 other substances, into articles of such taste and appearance, as to 
 perplex the most nice discernment of eye, or refinement of palate, 
 and even chemical decomposition to discover the ingredients. All 
 the various manufactures, and presentations of cotton and wool, 
 would fill a large catalogue. As a great increase in variety, occurs 
 Irom the manutacture of the raw material, so does also the price of 
 the article increase, in proportion to the labor bestowed on its pio- 
 duction or by the advantage which may be taken of a certain fa- 
 Cility ot manufacture, or monopoly of the market unattainable by 
 other competitors. For example a fleece of wool, may be worth 
 .wo dollars in a raw state, while the satne article, manufactured 
 into fine cloths, is often valued at fifty dollars. A bundle of flax 
 worth one dollar in its raw state, is capable of beina worked into 
 iace, which would bring five hundred dollars in market. The util- 
 ity of manufactures, consists in the greater facility and profit, with 
 which certain substances are made to enter into the process of re- 
 production, when improved in form, than they are capable of do- 
 ing, when they appear as a raw material only. A rough piece of 
 iron ore is incapable of entering into any of the mechanical oper- 
 ations, of human industry, previous to its manufacture into mate- 
 rial or tools, which will bring out its original intrinsic value, and 
 render it applicable to some useful purpose. 
 
 All wealth is embraced in the increased excellence of the form 
 and capacity of any substance, for supplying the wants of man. 
 Ihese wants are continually increasing with the increase of civili- 
 zation and demand, first, a supply for the nexessarks. then the Zwx- 
 ries of existence. The use of any sub&tance, increased in excel- 
 lence, by a process of manufactures, transfers this excellence to any 
 object, for the production of which, this usl may be applied 
 ^ or instance a farmer in using a plough, increases the capacities of 
 his land for bearing a crop, while his plough is being worn out. A 
 mason fashions a block of marble, while his hammer is decreasintr 
 m utility by use. A book is destroyed, while the knowledge ft 
 contained is incorporated in the intellectual wealth of those who 
 read it. A loaf of bread is decomposed, and its value appears again 
 in the renewed strength of the consumer. Thus it will be seen 
 that wealth is not identified with the continuance of a specified 
 form in any substance, but in the most rapid and beneficial transfer 
 of Its uses. Wealth is produced by labor, but the increase is al- 
 ways progressive, each transfer of value, adding a little more to 
 the bulk, or usefulness of the articles produced. Wealth however 
 may be incorporated into substances which can be preserved for 
 an indefinite period of time, when kept without being used. Ear- 
 then-ware for instance, when placed in a covered and secure situa- 
 tion, may continue its form and capacity thousands of years. Va- 
 rious earthen utensils have been found in the ruins of Fompei, and 
 
17 
 
 Herculaneum, and also in the Indian mounds ol Western America, 
 which were quite perfect. Cuttlery, clothing, and various articles 
 of food may also be preserved for a series of years, in an inactive 
 state, wheii a rapid transfer of their uses would soon decompose 
 
 ^^EaJh'aJticle of the general bulk of wealth, will continue to be 
 produced, as long as its use will supply a want, for the gratification 
 of which, it is found that an amount of labor can be advantage- 
 ously exchanged , equivalent to the production of that article As 
 the -amount of labor, required in the production of any article, in- 
 creases towards that point, at which it wou d be found advisable 
 to relinquish its production entirely, so does ihe va.ue ot that 
 article increase in intensity. From this fact, may be shown the 
 causes of the gradual declension of luxurious production in times 
 of scarcity, and also the real intrinsic worth of the various produc 
 lions are then presented in an active point of comparison 1^ or in- 
 stance, a man parched with thirst, or starving on an inhospitable 
 island.would exchange a ship load of gold were itm his possession, 
 for a draught of water, or a loaf of bread. 
 
 It will be observed, that in the production of wealth, such values 
 as conduce to the maintenance of the animal economy, are first 
 produced, then, those values which promote the intellectual ex- 
 cellence of the nature of man. The continuance of the animal 
 economy, is however more imperious than the enlightening ot our 
 mental capacities, for without the animal, the intellectual man is 
 not known to exist ! Hence the superior importance, which the 
 production of food and raiment at first appear to assume over those 
 values which cultivate and improve the reason. Reason is however, 
 the only principle which really progresses, for matter and motion, are 
 merely adapted by their form and action, to carry out the purposes of 
 mind,and return to their original position, after those ends are effect- 
 ed It will therefore be perceived, that wealth is ultimately in- 
 corporated with mind, all tangible values presenting merely a cycle 
 of forms, which are decomposed by use, while mind improves in 
 strength with every exertion of its energies. There is however, 
 a perfect analogy between the intensity of those values, which 
 conduce either to mental, or physical advancement. For example, 
 a child is not taught the higher branches of philosophy, before he 
 understands the simple elements of common education. By the 
 same rule, a laborer does not devote his earnings to purchase nne 
 furniture, when he cannot afford sufficient food and clothing, for 
 
 himself and family. , . t i 
 
 These facts are presumed to be sufBcient to show, that the law 
 of intensity of values in all cases control production. This law ap- 
 plies indiscriminately to all presentations of wealth, whether they 
 appear in the form of merchandise, gold and silver, or in the im- 
 proved cultivation of the human mind. All wealth has therefore, 
 intriiisic qvjiY\Uc3 which denote its real valm ; and an intensity 
 of value Vv'hich limits its production. 
 
 2* 
 
18 
 
 CHAPTER IV. 
 On the Distribution of Wealth. 
 
 By the distribution of wealth, ail the arrangements of trade 
 are effected, and also those exchanges of property, which pass 
 from the hands of the producer of the raw material, into the pos- 
 session of a second person. In the first formation of society, very 
 little, if any distribution of wealth was required, for the productions 
 being few and simple, every man could cultivate, and manufacture, 
 those values which were necessary for the maintenance of hig 
 family. We read in the history of ancient times, of communities, 
 who followed the occupation of shepherds and herdsmen, or obtain- 
 ed a precarious subsistence as hunters. Among these societies, all 
 exchanges were based upon the labor applied in obtaining the dif- 
 ferent productions, for a comparison, of value, thus we read of 
 tribute being paid in cattle by an inferior community, to procure 
 the protection of a more powerful neighbor, or by an individual for 
 the purchase of a piece of land, or a wife, or any of those values 
 w^hich were then bought and sold. Labor in those days, was con- 
 sidered an equivalent for the purchase of any article, which was 
 desired to be transferred. Jacob, is represented as having labored 
 fourteen years for Laban, to render an equivalent for Leah and 
 Rachel. As society increased in wealth, and numbers, the neces- 
 sity for a more extended system of exchanges took place, for, as 
 an accumulation of a greater variety of values occurred, so did 
 also the desire for bartering the productions, and effecting such a 
 distribution of the different values in society, as would o-ive each 
 individual an opportunity of deriving an advantage from the use 
 of all. The utility of this system of barter, will.be perceived, 
 from a comparison of the situation of the original Indian popula- 
 tion of Western America, with the Anglo Saxon race who now 
 inhabit that portion of the United States. When the valley of the 
 Mississippi was explored, by Lewis and Clark, the immense plains 
 of that fertile country, were covered with herds of Buffalo extend- 
 ing as far as the eye could perceive, in every direction. Elkj 
 Deer, and game of all kinds, were scattered over those luxuriant 
 fields, in an almost inexhaustible number. These natural presen- 
 tations of wealth, were all held and claimed by the bands of In- 
 dians, who occupied that section of country. Was all this bound- 
 less supply, a presentation of actual wealth to them? Most cer- 
 tainly not ; for a lavish supply of their wants, as far as animal 
 food was capable of affording that gratification, was abundantlr 
 accomplished, without abstracting a thousandth part, of the repro- 
 ductive energy of the capital which afforded the supply. There- 
 fore, all the surplus returned to its original elements, without in- 
 corporating one moiety of its results, in tPie extended operation of 
 promoting human life. How is it with the present occupiers of 
 those productive plains, as far as they have accomplished a settle- 
 ment. On each acre of land, which twenty years ago, was occu- 
 pied upon an average with one Buffalo to an acre, is now produc- 
 ed yearly, two bales of cotton, or a hundred bushels of corn. 
 
 Man is so constituted that his wants are capable of an almost 
 
19 
 
 unlimited increase ; and those productions, which supply these 
 wants, are susceptible of as many exchanges, as in their number 
 of transposition. The cotton which the Mississippi planter pro- 
 duces, is not worth more for actual use, in the region in \yhich it 
 is raised, than was the surplus herds of Buffalo to the Indian hun- 
 ter, but in England and the Atlantic States, which have entered 
 into the manufacturing business, it bears a high marketable pi ice. 
 All wealth was distributed in the earliest period of traffic, among 
 communities, by the process of bartering those commodities for 
 each other, which were of an actual utility to the buyer and seller. 
 Thus a horse, would be sold for an ox, a given number of sheep 
 for a cow, or so much labor as should be considered equivalent to 
 the production of any desired article, would be rendered for its 
 purchase. The accumulation of wealth, was less desired at an 
 early period of civilization than it is at the present time. When 
 the combined wealth of a community, consisted of a few distinct 
 values, extensively produced, the exchange of those values, wa» 
 less advantageous to those who bought and sold, than if a greater 
 variety was offered in the market. Thus, among a community of 
 herdsmen, the exchange would be comprised in bartering one kind 
 of animals with their productions, for another species with their 
 attendant values. A people who followed hunting as a general 
 occupation, would barter the spoils of the chace, and the fisherman 
 distribute among those who were allied with him, the results of his 
 employment with the net or the line. It is very rare, that we find 
 a primitive people engaged in more than one general productive 
 employment. The Tartars are herdsmen, the Indians of North 
 America, hunters, and the inhabitants of Greenland are dependent 
 for the principle part of their support on the fisheries of those in- 
 hospitable shores. The consequence of this state of limited pro- 
 duction is, that a great accumulation of any one value, become* 
 burdensome in those societies, where an exchange of commodities 
 can only be effected by a succession of two or three distinct trans- 
 fers, the productions not admitting by their limited variety of a 
 greater number of transpositions. 
 
 CHAPTER V. 
 
 On the Capacities of Gold and Silver, as a Medium of 
 
 Exchange. 
 
 Among the accumulations of a primitive people, ornaments are 
 found to occupy a conspicuous place, both in ancient and modern 
 times. When a historian of those days, in which the dawn of 
 civilization commenced, wished to describe a luxurious feast, or 
 a pompous parade, he generally laid much emphasis upon those pas- 
 sages, in which the jewels, and gold and silver ornaments were 
 en*umerated, thus exhibiting the taste of the times, for a writer gen- 
 erally the most vividly describes that, which he thinks will the 
 
20 
 
 mo^l readily please the taste of his readers. The Indians of North 
 America are found to lavish the principle part of their wealth, upon 
 the decorations of their persons, and their implements of war. In 
 Mexico, Pizarro, on liis first penetration to the capitoi of that em- 
 pire, found such an abundance of gold and silver, in the form of 
 personal ornaments, in the possession of the natives, or used for the 
 decoration of their temples and shrines, that he sent it home to 
 Spain, by the ship load, in bulk. The beautiful texture of gold and 
 S!iv<;r, and the quality of their composition, which ennable them 
 to resist all corroding damps and acids, render them peculiarly 
 applicable to the purpose of personal ornament, therefore we read 
 of this meial, as being iji high estimation at an early period among 
 the ancients. Diamonds, pearls, sapphires, rubies and emeralds, 
 also had their value in public estimation, based upon their qualities 
 of brilliancy and beauty. The exchange of articles of personal 
 ornameut, for other values of more immediate utility, did not be- 
 come general, until such an increase occurred in the , production 
 and variety of those substances, which formed the staple Wealth 
 of those times, that it vv^is found impossible to perfect a satisfactory 
 system of traffic, without some general medium. 
 
 The complication of the genera! exchanges in the course of trade, 
 increases with the accumulation of diflerent values, in a ratio, which 
 requires only to be calculated, to convince any one of the utter im- 
 possibility of bartering the material productions for each other ex- 
 tensively, without a general medium. To give a definite idea of 
 what is stated, a calculation of the variety of exchanges may ba 
 made, from two up to twenty thousand, about the average number 
 of different values supposed to be in the market at the present time, 
 and they wilJ be found to increase in this ratio. For two articles 
 of value, there is one exchange ; for eiglit values, twenty eight ex- 
 changes, and for twenty six values, three hundred and fifty one ex- 
 changes ! ! it will be perceived from this calculation, that however 
 valueless a general medium of exchange would be, when two arti- 
 cles only were required to be transferred, it would become indis- 
 pensable, when there was twenty six exchangeable values in com- 
 munity ! Still it must be observed, that all values produced for the 
 use of man, are not required to be transferred. AM values in actu- 
 al use, are generally consumed by the possessor; we may set down 
 however under the head of exchangeable vahies, all raw material 
 not employed in the process of reproduction. This comprises the 
 yearly agricultural crop, and the production of mines and of the 
 ocean. A fair calculation therefore, would give about one tliirtieth 
 part, as the proportion of those values distributed by trade in a 
 community. That community must be very destitute which is not 
 possessed of sonie two or three'^ thousand exchangeable commodities, 
 at the present time ; and we may infer from the historical accounts 
 of ancient times, that at an early period a general medium of gold 
 and silver began to be substituted, for the original system of direct- 
 ly trafficing the different commodities by barter trade in the 
 open market. 
 
 It is not supposed that a direct law was at any time enacted, 
 to give gold and silver the preference as a medium of exchange, 
 but, it is the more readily presumed, that it gradually arrived at 
 
21 
 
 that distinction by common consent, in the natura order of things. 
 \t first, trade was simple and easily accomplished by banering 
 "the few articles of raw material directly in the marlu^t. / ^« 
 variety of values increased, the sellers found difficult to meet 
 with purchasers who could exchange such commodities for their 
 produce as would be agreeable to both parties. The consequence 
 was, that they gradually agreed upon such articles of value horn 
 the common slock, as they could most easily dispense with and 
 converted them into a currency, for the purpose of promoting a 
 more efficacious distribution of the remaining wealth. 
 
 Gold and silver, in receiving the preference for a general curren- 
 ry, was indebted to ik> particular utility, which rendered i more 
 efficacious than other values as a portion of the general wealth; it 
 may even be said to be less efficient than many other substances, 
 for the promotion of human happiness; its peculiar qualities of di- 
 visibilil^y. incorruptibility, endurance scarcity and intensity of value 
 influenced the choice, and gave that direction to its use. When 
 any article of value is converted into a medium of exchange, or a 
 nalional currency, the original use, upon which its value as a cur- 
 rency is based, is suspended for the time, and a representative val- 
 ue, dependent upon its facility for an immediate transfer, into those 
 articles of use, for which it was originally created is instituted, 
 which continues while it passes in general trade as a coin 
 
 The increased production of gold and silver, resulting trom/^^ 
 discovery of America, and the proceeds of the rich mines of Mex- 
 ico and Peru, caused a reduction of the price of the precious 
 metals in a ratio corresponding to their actual increase, above the 
 demand for them in market. The cause of this decrease resulted 
 from a depreciation in the activity of their intrinsic value, ^or 
 instance, the increase of population and luxury in society , demands 
 a correspondino- increase of all available substances, required lor 
 the use of man. If the progression of all values snould be equal, 
 the distinction in the price of each substance would continue the 
 same ; but should any one valu^ be produced in an unusual abun- 
 dance, while the remainder of the general mass of wealth receiv- 
 ed but a fair averao-e proportion of increase, the price ot the in- 
 creased value would fall, in proportion to its comparative^ advanced 
 production. For instance, gold and silver was advanced just lour 
 fold in its actual quantity, and comparative increase, by the dis- 
 covery of the continent of North and South America. In conse- 
 quence, one dollar four hundred years since, was worth as mucti 
 of the general bulk of wealth, as four dollars is, at the present 
 
 At^the same time that the price of any given quantity of gold 
 and silver is decreasinir, in comparison with the price ot a given 
 portion of the general inass of wealth,the whole value of the precious 
 metals, is also decreasing in proportion to the increase of the coni- 
 bined values of all other substances over the whole amount ol gold 
 and silver. From this view of the subject it will be seen, that al- 
 though the actual value of any substance may increase with its 
 quantity, still the comparative price of the whole bulk will not be 
 advanced, over the price of other substances which were lavored 
 with no superior advantages of production, unless its actual uses 
 
22 
 
 advanced also Thus, if lead is six cents a pound and iron six, 
 tne discovery of a position where double the quantity of lead could 
 be obtained with one half the labor, without increasino- the demand, 
 would at once reduce the lead to three cents a pound ; the iron 
 still remaining at six cents, thus equalizing the price, althouo-h 
 the actual amount would be doubled. 
 
 The intrinsic value of any substance increases with the increase" 
 ot Its use. Therefore, it is impossible to fix an actual comparative 
 value on any article, for the price of all substances are continualiv 
 fluctuating with the wants of the community ; the general averacre 
 proportion can be ascertained however, and this wiil be found lo 
 apply indiscriminately to all those substances of which wealth is 
 composed. On this analysis therefore, we may found the follow- 
 ing position. When there are two values in community, gold and 
 Silver being due, the gold and silver will purchase the correspond- 
 ing value ; when four values are created, gold and silver still 
 lorming one, the precious metals will buy but the fourth part of 
 the public wealth, and when five thousand substances each worth 
 as mucn as the whole amount of gold and silver in the country 
 are created, the precious metals will then sufiice to purchase but the 
 onehve thousandth part; let its intrinsic value be either ex- 
 panded or condensed, as the production of bullion may meet the 
 pubhe demand or fall below it 
 
 Gold and silver like any other merchandise, depends upon its 
 quantity for the activity of its intrinsic values. For instance, we 
 will suppose food to be reduced to a quantity, just sufficient to 
 support animal life, the immediate value of that portion, would be 
 equal to the value of the existence which it was intended to pre- 
 serve but that portion necessary to continue health, and comfort 
 wou.d be sacrificed. If the supply of gold and silver, should be' 
 increased to an unlimited quantity, the actual value of that sub- 
 stance as a metal, would be increased to the full extent of its use 
 but the concentrated activity, of its intrinsic worth, would be di- 
 minished, and consequently its value as a medium of exchano-e^ 
 would be lost, for like water, it would then bear no exchano-eable 
 price or luxurious value. If on the contrary, the public necessi- 
 ties should demand the whole quantity of silver and gold, which 
 IS now in existence, in the world, for a currency, and the yearlv 
 increase, be only sufficient to supply the wear and tear of that ma. 
 tenal : is it not manifest that the original object, and value, of 
 those metals would be destroyed,and a dependent utility substituted 
 which vyould compensate for that value which was lost.? If a por- 
 tion onlv were taken, the public would consent to deprive them- 
 selves of the utility of one part, for another utility foreio-n to its 
 nature. Before the invention of saw mills driven by w^ater or 
 other natural forces, boards and planks were cut by hand, thus'oc^ 
 CLipying those intellectual agents, which are required in the more 
 advanced stages of civilization, for the purpose of directintr, rath- 
 er than assisting production. The same rule will apply to any prin- 
 ciples of production. Merchandise is the first presentation, and 
 currency the natural agents of all material wealth. 
 
 Production without a currency, performs two operations, distri- 
 butzott and use. Use is its legitimate end, and money is a mer^ 
 
mm 
 
 23 
 
 machine, which distributes the various productions to their differ- 
 ent combinations without loss. It has previously been shown, that 
 material in the process of use, is not generally required to be bought 
 and sold Those portions of raw material also, which are used by 
 the producer, do not enter into the general exchanges of trade. 
 The principle operations of commerce, are therefore confined to 
 the transfer of that quantity of raw material which is not used by 
 the producers, and the further exchange of the more perfectly 
 manufactured article, until it enters into actual use, and is conse- 
 ouently in the process of transferring its values into some other 
 substance Those articles which are produced to their full exteiit, 
 and are therefore in a stage of decay, are generally more consoli- 
 dated than when in the process of production. Ail values are 
 made of parts, and the more minute those parts, the greater the 
 rapidity of their combination and consequent distribution. Ihe 
 combination of substances and the increased exellence of their 
 form, is the department of the manufacturer, while the merchant 
 is wholly employed in transferring the various values from their 
 raw, to be converted into a more highly manufactured state, and 
 thence distributing them to their difierent uses, therefore the only 
 distinction between these two branches, is, that the one fashions, 
 while the other fits, what Nature and the agriculturalist pioduce. 
 By the fores:oing deductions, it has been shown that a national 
 irrencv is required, to transfer that portion of wealth, which, af- 
 
 wealth, and by common consent, applied by the public as a gener- 
 al representative of all other values, as far as its own comparative 
 value will extend. It is also evident that in the first stages of so- 
 ciety, a direct medium of exchange is not needed, and that at the 
 commencement of a regular system of barter, those values which 
 are the most convenient for that purpose, are abstracted from the 
 general mass of wealth and used as a public currency. And also 
 that in the more advanced stage of civilization, no one value can 
 be found which is fully equal to all other exchangeable values, and 
 therefore capable of representing them in the market. It will 
 also be perceived, that not only a depreciation takes place in the 
 general mass of productive wealth, by directing a portion of that 
 wealth, to a channel foreign to its real use, but that the superior 
 fitness of gold and silver alone, for general circulation, denies the 
 competition of a portion of other valmes, which would^ otherwise 
 be immediately adapted to that use, as being in the absence of 
 other agents, the most advantageous presentation of their value 
 to the community. Reasoning from the fact, that the legitimate use 
 of gold and silver is suspended, during that time in which it is pre- 
 sented as a coin, we may infer that an article set apart as a 
 currency does not require in its mechanical operations, any of the 
 peculiar qualities which render those metals so precious in a luxu- 
 rious point of view. 
 
 The prosperity of those commercial nations who adopted a nomi- 
 nal substitute, for those values which would otherwise have been 
 required as a direct public agent, or currency for the distribution 
 
24 
 
 of all other values, at the first commencement of the bank system, 
 proved that an extension of nominal values, above those abstract- 
 ed from the general mass of wealth, was necessary to meet the 
 growing wants of the commercial world ; but when the benefits 
 resulting from a paper substitute became obvious, the true cause 
 of that prosperity was not inquired into, while enterprising and 
 speculating members of society, rejected tlie actual, for the nomi- 
 nal wealth, and a disastrous reaction has taken place, which is the 
 cause of all the contractions and distress which now impedes the 
 general distribution of wealth. 
 
 CHAPTER VL. 
 On Banks, 
 
 The establishment of banks in the first instance, arose from no 
 concerted plan, but they were instituted rather as places of deposit 
 for articles of value, which were placed in their vaults for safe 
 keeping, by different members of society indiscriminately. For 
 these deposits the owners received a certificate ; and they were 
 transferred on the books of the bank, to different purchasers, when 
 an exchange w^as required, without removing the original values 
 from the vaults of the bank. No interest was in any case allowed 
 by the banks on these deposits. A certain percentage was also 
 paid the banks on each transfer. These institutions were called 
 banks of deposit, and were originally established in Venice, Ham- 
 burgh, and other cities of Europe. 
 
 The Bank of England, was tiie first bank of discount and circu- 
 lation, which v^nt into successful operation. Upon this plan, 
 all the banks in the United States are based, and it is now 
 generally adopted in Europe. By a bank of discount and circula- 
 tion, is understood, an institution privileged by law to issue notes 
 of hand, redeemable in specie at sight, which pass as a general 
 currency, when a deficiency of exchangeable mediums occur in 
 community. These banks are permitted to issue from three to five 
 dollars in bills, for one dollar in specie, deposited in the vaults of 
 the bank: thus increasing the facilities of distributing wealth from 
 two to four fold. For these issues, the banks are held responsible 
 in some States, by making the personal property of the stockhold- 
 ers liable, for the redemption of the bills. In other places, the 
 notes, bonds, and mortgages, received as security for the bills of 
 the banks, from those individuals who have the privilege of bor- 
 rowing money from these institutions, are considered as a suflicient 
 security for the ultimate redemption of their issues. The distinc- 
 tion between banks of deposit, and banks of discount and circula- 
 tion, is, that the one transfers the values in deposit, by a debt and 
 credit account on the books of the institution, while the banks of 
 circulation issue certificates of debt, which pass as a general medi- 
 um of exchange, and receive uncurrent certificates in deposit at 
 
m 
 
 f I... \.enB^cml effects, ^.bich have resulted from the adoption of 
 Wnks of circulation, in the United States, m preference to banks ot 
 d Sit, a'e shown 'in the .ncre.s.d facility, wh.ch note, of^h^^^^^^ 
 possess as mediums for tTansferrinp;a!ues, over a debt and c|^^^^^^ 
 Lcount on the books'of a bank. It is ^f^.'-'^^^^llJ^^^^^^^^^ 
 on political economy, that the facihties 'f "^"f ^ '^'^^r 
 
 Ihe amount of their deposited specie capital, in '^'J^ ^"^^^^^ 
 advantage which ba.ks of discount possess, ^^^^j, ^^^^^^f.^^^^^^^^^^^ 
 of the distribution of wealth in communitv ; and that he sub^titu 
 tion of certificates of d'.bt as security for bills dt^^^^^^^' ' \^ if^^ 
 cided improvement over the deposit of f ^^^'^^ ^^^'^^^^^^^^^^ 
 tiemandeci by the banks of deposit. It is true that a smaller 
 .mounf of capital is deducted from its legitimate uses, in a bai^k of 
 circulation than is required in a bank of deposit, but it must 
 ;.;so be understood that all circulating mediums not possessmg any 
 intrinsic value individua]iy,are now supposed to be based "P" ^ 
 value for which they can be exchanged, at any moment of P^esen ta- 
 tion. If then bank bills are issued upon a specie basis iheve stiould 
 be a dollar in silver or gold, in the vaults ol the bank, for every 
 dollar in bills issued as a currency to the people l it must be borne 
 in mind that every paper dollar not actually based upon a dollai n 
 specie deposited in the vaults of the Bank, is based on otner capital, 
 either exhibited in notes, and mortgages, or such other security as 
 the directors shall deem proper. At the present time the banks 
 cannot transact a lesritimaU hunlimg business, to any advantage, un- 
 less they issue f\-om^five to fifteen dollars in paper, upon one dollar 
 in silver in ti^eir vaults, as their circulation cannot be sustained m 
 public confidence during a panic in the money market 
 
 Unon what then are the surplus issues really based? 1 hey are 
 hased upon the vrcsumed capacity of individuals to return them back 
 to the bank wif.h interest, after usinsr them for their own purposes in 
 trade 'I What are the profits of the Bank under this regulation : 
 The bank profits under a legitimate system of banking, are derived 
 from the interest received on the surplus amount of bids issued, Jor 
 which there is no activa capital deposited ! ..1*1 
 
 Money is the nominal agent of actual wealth ; it is the tool, or 
 machine, by which ail exchanges are made. If money, like any 
 other tool could be distributed in the same channels in which 
 trade flows, and be dependent for its existence, upon the same basis 
 as is the raw material, for the circulation of which it is created, 
 there would be no possibility of a concentration, or monopoly ot 
 the whole currency of the nation by a few individuals. As the 
 law now permits in the different States, banks are chartered, with 
 privilege of issuing from three to five dollars of paper money, 
 ypon one dollar of silver deposited, in their vaults. 'iliey ...n 
 issue from five to fifty dollars in paper upon their nominal amount 
 of deposits, and in favorable times not only issue their paper but 
 also the specie upon which it is founded. What is the result of 
 this state of things They are airaply these. Our country is now 
 producing every year eight huiadred million, of agricultural or 
 reproductive raw material. We require an amount of the circulat- 
 ing medium equal to half the amount of raw material raised. 
 According to th(^ report of the Secretary of the Treasury, there is 
 
 3 
 
26 
 
 only eighty million of specie in the country. Fifty million would 
 «ome nearer the amount. Of this sum about twenty four million 
 is in posserision of the banks and brokers, who mostly act as their 
 agents. There are about eight hundred banks in the United 
 States, and if we allow an average of tliirty thousand dollars to be 
 contained in the vaults of each institution, which is more than a 
 fair average, we have just twenty four million of banking basis. 
 We will give them the usual limits allowed for their issues, and 
 we have one hundred million of paper money, afloat in communi- 
 ty, with no other basis, than the twenty four million of specie, 
 supposed to be lodged in the vaults of the Banks, in proportion to 
 their issues ! ! Here we have only one fourth of the amount of 
 a necessary representative currency afloat ; and let us consider 
 further, in w^hat channels is this money diverted.'' Does it flow 
 freely through a regular course of trade ? No ! Far from it. It is 
 mostly employed in ga^mbling speculations, some of which, after 
 a long course of vascillating success, have exploded, many are now 
 breaking around us, and all, must be eventually crushed by their 
 own unwieldy weight bearing heavily upon the sandy foundation 
 on which they are established. It is not here supposed, how- 
 ever, that the Banks do confine themselves to a safe, or even le- 
 gitimate amount of issues. At times thej^ have extended to near- 
 ly the whole amount of currency necessary in the country, and 
 again they have contracted to one quarter the amount required. 
 It is not however for a moment suggested tliat their bills have 
 been curtailed for any length of time, to the amount required by 
 law, on the contrary they issue as much as they can dispose of in 
 market. 
 
 The establishment of banks npon real estate security, as a part 
 of their nominal capital is a slight improvement in the general bank-* 
 ing laws of New York. Perhaps, next to dollar for dollar, in spe- 
 cie in the vaults of a bank, for each dollar of its issues, real estate 
 IS as safe as any other security can possibly be, if security alone is 
 required to perfect a correct national financial system. This is not 
 the only requirement ; and again if one portion of tangible proper- 
 ty is selected as a security for a paper emission, all property has 
 the same constitutional privilege. All produced tangible values 
 aie considered by the correct rules of political economy, to be in 
 a state of decay the moment they are applied to any distinct use ; 
 gome are of a rapid, and some of a slow decay, but still the use 
 may be termed the presage of destruction in all. It will then b© 
 perceived, that if one value has the privilege of administering a 
 currency to a community, all can demand the same advantage. 
 Even the very garments which a person wears, are as fully entitled 
 to the privilege of having a portion of the national currency 
 founded upon them as is a house, a lot of land, or any other arti- 
 cle in actual use ; always providing that a currency is founded up- 
 on the nominal price of the article pledged. It may be contended 
 that a suit of clothes would soon w-ear out ! ! This is true : but so 
 would a house, eventually , and the utility of a lot of la^d, depends 
 entirely upon the labor bestowed upon it, or the convenierice de- 
 rived from it for the time being, and if there is a possibility of 
 any substance being liable to an eventual decay, upon which 
 
S7 
 
 a currency is founded, it might come as well first, as last, the loss 
 would be the same in the result. ^ , . u^„h<. nrA based 
 
 If you inquire what security, the real -^^^^^^^^ 
 uponf vou will be informed that they are founded chiefly upon 
 mortgages for a capital, and have together with --tgage upon 
 real estlte, mortgages upon unreal estate, mortgages «P«^/°^^^^ 
 and mortgWs u!,o'n lan'ds, and mortgages ^fj^^^^ 
 top-elher From this you are bound to infer, if you lollow tne 
 on of the reputed' wise directors of finance ^^TlouldTe 
 kffislative bodies that you have the best security which could be 
 offered. In a bill which represents a mortgage upon real estate 
 although there may be a certainty of a definite value, which is not 
 the cas^e with the bills of other institutions, founded ^l^f 
 mon principles of banking, there may still be discovered the same 
 imperfections which attend the operation of f ^^'^ ^a^k representa- 
 lives of capital, which bear the same general credit These are, 
 the concentration of the representative wealth within he con 
 trol of the bank Directors, giving them the facility of diverting 
 the general funds, which are created for national use, into specu a- 
 tin/channels. The limited and partial representation of property, 
 and the adoption of the greatest deception, which modern banking 
 institutions hold out to the public, the pretence of basing their 
 bills upon snecie. The limited credit, which a currency sustains 
 in remote pkrts of the country, when it is in reality founded upon 
 a perishable material in any fixed location ; corisequently taxing 
 the producing classes with the depreciation-and the danger of a 
 total sacrifice of the deposits of mortgages, arid other securities 
 upon which the banks are based, by a run upon the banks for specie, 
 and a consequent suspension, implicating the property of deposi- 
 ters which must be sacrificed, to meet the deraa^os of bill holderi 
 for ffold and silver. ^ , . . ^.^ ^. 
 
 The operations of banks in the early stages of their institution, 
 were fixed upon a more sure foundation, and were more advanta- 
 ffeons to the general interests of trade, than they can possibly be 
 at this advanced period of national wealth, and complicated ex- 
 chancres and traffic, consequent upon the production and distribu- 
 tion of that wealth. At that period they might safely liave based 
 their issues upon a specie capital ; but let us examine by a com- 
 parison the different results of the influence of these institutiona 
 at different periods of society. Let us suppose that ten men with 
 their families emigrate into anew country, and we will suppose 
 they take with them an amount in specie, equal to all the other 
 values which they possess. This specie will buy and sell all the 
 property of the community at the first stages of their settlement ; 
 but after a few years, other values produced from the soil increase 
 to such an extent, that the specie is found insufiicient to perform 
 the office of a medium of exchange. It stands in relation to all the 
 values of the community, as one in a hundred, and one individual, 
 who perhaps was unable, at the first commencement of their settle- 
 ment, to absorb more than one fifth of the specie in the communi- 
 ty, by investing the whole amount of his property in that commo- 
 dity, can now easily purchase the whole; and although specie mar 
 gradually flow into the bulk of the original amount, yet it is found 
 
28 
 
 more advantageous to invest actual values in a productive employ^ 
 ment,than to buy gold and silver to be used as a currency alone to 
 the full amount of their domestic requirements. They preter to 
 cramp their exchanges rather than their productive operatiGns, 
 Exchanges are continually growing more complicated with tne 
 increase of wealth, and the relative value of gold and silver, are de- 
 creasinu-, in proportion, as the general mass of wealth increases 
 over thl whole amount of specie, and it is found necessary to sub- 
 stitute some medium of exchange, which shall meet tne wants ot 
 community. It is then propQsed by one of the ten mdividua s 
 who form the settlement, to convert his property into specie, ab- 
 sobinp- all that is afloat in trade, and form a bank. This is acceed- 
 ed to by his companions, together with a prompt exchange ot lue 
 money which had before partially supplied them with a ^^^'^^^^'Y' 
 Here "then we have the first germ of a monopoly, but it will De 
 perceived that the individual who has absorbed the whole amount 
 of currency, forms but a proportion to the whole community as one 
 in ten. ile'contmues his bank operations, issumg^his bills to ins 
 nei^rhbors. giving three dollars of paper, for one of silver or gold 
 capital. The community soon increase to such an extent, that tne 
 
 tpn thousand : ne is sun 
 
 banker forms a unit in society as one m ten thousand 
 enabled to absorb all the specie in circulation, for by 
 dollars in paper, for one in specie banking capital, he can buy 
 the o-old and silver, and hoard it up, and still have two values out 
 of three in circulation in community, based upon each dollar ab- 
 stracted from the specie cii culat-ion, actually given to him out ot 
 
 enabled to absorb all the specie in circulation, for by issuing thre^e 
 
 out 
 ab- 
 
 of 
 
 the pubUc purse. He might thus go on indefinitely and however 
 gre^the qUntHy of silver and gold nnght be, and to wha ^ 
 
 Ltent the popuiauon might increase ; he sUll co.ld accum«la e, 
 and coneentr.le, the whole amount of representative cap.tal nece - 
 sary to transact the fi.cal concerns of the coramonUy, wUhout 
 returning one dollar of actual wealth into the circulation, pioduced 
 by these%erations. The credit of this establishment would be 
 good as long as the people forbore to demand specie for the b il., 
 & would'be sound,. f the cap.tal is to be used as an .nstru^ 
 ment of loan only. A capital of one dollar, '^/"fe'-'^' .^"""jf 
 an establishment of this kind upon, which '"/i^*;, <^"fi.j;."'^ 
 sorb all ihe produce of the globe, without actually affo dmg one 
 cent of value in return, for the i.icrease of the general mass of 
 wealth, and which, if required to redeem all .ts .ssues, and pay a" 
 its dehL, would sink into the original nothingness, from vvlience 
 
 " U is b^; the agency of the pledge, or guarantee, which a charter 
 to a bank is supl.osed to give the public, by ensuring a J die ou. 
 supervision over its aifiurs, that the notes of these 
 pass current. This pubUc pledge might '"toneitv^ 
 to the notes of individuals, given upon good secur..y P'°Pf'^|. 
 until all the active wealth of the country, and ^^e" . ..Y^ol^ 
 capacity of the people for production, was '''P^^'^" f,'' ° 
 notes, such as form the paper c.rculat.ng med.um at the Present 
 time. This would merely extend the present system, to a just 
 diTtribut.on of the represc-ntative of wealth, to all Producers - 
 discriminately. If bank notes issued upon individual responsibih- 
 
29 
 
 lies, under the sanction of a State charter, pass current as a 
 medium of exchange, and connmand an interest of six per cent 
 annually, which interest is drawn from the public at large, without 
 rendering an equivalent, which requires a corresponding amount 
 of labor to produce, then why is not every individual in communi- 
 ty, holding responsible property, entitled to receive the State 
 sanction, and share in the profits of these issues? They certainly 
 are entitled to this privilege, and the opportunity offered by this 
 favorable investment of capital, either directly or indirectly to 
 reap unearned profits, has caused the energies of the country to 
 be centered chiefly upon banking speculations, and trade connect- 
 ed with thern, leaving very few producers, while the country 
 swarms with distributers and destroyers of wealth. Opulent 
 farmers who formerly brought their sons up to the honorable occu- 
 pation of tilling the earth, have for a few years past, not only 
 preferred the subservient employment of clerks for their youth, 
 but have also diverted a large portion of their capital, to the great 
 chaos of speculation and destruction, afforded by cities fostered by 
 banks. 
 
 There are about eight hundred banks in existence in the United 
 States at the present time, the issues of which are secured or sup- 
 posed to be secured, by pledged capital, the fanciful value of which 
 is equal to three or four times the amount of their bills in circular 
 tion. This circulation is based, or pretended to be based, upon 
 about eight per cent of these issues in specie capital lodged in the 
 vaults of the banks, by which the bills are to be redeemed, or 
 measured in value. In times of prosperity, the distribution of 
 wealth in the United States, requires in active circulation a cur- 
 rency of about four hundred million of dollars. At the present 
 time, there is not eighty million in operation, as a general medium 
 of exchange. If four hundred million of bank bills are in circu- 
 lation, about thirty million of specie is supposed to be deposited. 
 Now, the circulation is eighty million, for which about six or seven 
 million of specie is placed in the vaults of the specie paying banks. 
 
 It must be understood in this review, that what is termed capital 
 stock, is money belonging to stockholders, placed in the hands of 
 the bank directors as collateral security to bill holders, to be loaned 
 out again to the best advantage. After all expenses and losses of 
 the banks are paid, the stockholders are entitled to a share in the 
 surplus profits of the paper isues, if any remain. It is rare in the 
 local bank system that any accrue, so that the stockholders ar« 
 mere responsibilities in the hands of the bank officers, to shield 
 theni and their favorites in their operations upon the public. One 
 million of dollars of the stock or bills of one bank, can be made 
 subservient as the capital stock of five hundred banks. Jt may be 
 loaned and reloaned indefinitely, leaving notes of responsible indi- 
 viduals in the vaults of each bank, at every transfer. These notes 
 merely pay the interest of the deposits of the stockholders ; the 
 income of the bank must therefore in the event, result from about 
 eighty per cent of profit made upon the superfluous issues of notes, 
 based upon a small amount of silver deposited in vaults of the in- 
 stitution. 
 
 It has already been shown that the intensity of the value ol 
 3* 
 
30 
 
 limits its production. The value of specie, being dependent 
 specie, limits Its proau .^^^^^^^^ ^^^^^ ^ 
 
 rr^tre' rreu'he greatest use for it as plate, ornament, and 
 °*The'"nden"ation of wealth, exists to a much greater extent in 
 
 f M nle . a uL raw material which the producing energy of the 
 %-"'T.fnk; Wd'bf e"mtoHe'd t^SfthirTe-oi^or^: tlL 
 
 ritriiuttiip'^ 
 
 tn:n;:St:^v*r«e^^^ 
 
 ^''"-r^'Ahi wf.o%Tm~:2,fb tn -creased 
 K; o7oVaVa~Tates a large quantity of !li-;^^specie^^ and 
 
 =]x:^ntisraK^« 
 -';?:?!^MhV"se^r;;?'drfi-omthrfir:^^ 
 
 S^uIsTsuffictat 'sjecie to base a second bank upon, and so on inde- 
 
31 
 
 finitely Jeaving each succeeding bank to replenish their vaults with 
 coin as tliey can procure it. It will therefore be perceived that no 
 one bank can rnonopohze this enormous interest. And also it is 
 fh» ^V"""^ individuals may engage in this business, that 
 
 be expenses of supervising, buildings, and other charges, will in 
 the end, eat up the profits. " ' 
 
 n rn^fll^'"!- P'-^^";"'^ wi 1 1 be perceived, that a bank having 
 .inn'^f I dollars paid in, and a circula- 
 
 - tion of MS own t>i Is arriou.iiirig loone hundred ihousand, Wrf upon 
 d specie deposit of eight thou.^and, would have a clear eain of the 
 jnterest of ninely two thousand dollars, equal to five thousand five 
 huncli ed and i wen.y dollars. We have a 'circulation of bill s fi o™ 
 ti e eight hiindied banks in the Uniled Slates, of about eighty mi™ 
 lon Upon this circulation, producers pay an interest of four mil- 
 honfour hundred and sixtcnc thousand doUars, for which the baX 
 vmual^v render no equivalent whatever. Wei'e the whole capa ty 
 of toe producing energy of the country represented by these issues 
 
 ITnf "i^'i"Kq"anmy of gold and silver as a mea! 
 
 suie of value The interest obiained by those institutions which 
 are chartered by the ditrerent States, or^the nation, Tm-ike paper 
 ssues vvhich pass as a currency or transferring medium is akr 
 hmued ! We will suppose that^ll the propert? ti e ua on i 
 
 rency, be it issued by one or more banks. To accomni sh ?h U 
 pledge, et every individual in community alternately convert „ 
 specie, tne whole amount of his proportv. This may be pLced i 
 he bank one day and drawn out as loans the next, to be aoain di" 
 ributed into bank stock. If one bank only is chartered^ in tb, 
 Unued Sl^te, every individual in society ,.-an own stock in it b 
 
 'l7 f " t Y f'-'" '''"'^ r>^kole people can sti . 
 
 ho d stock to the whole amount of their property. If one ba k 
 only ,s chartered on this plan, the expense of siistai'ning and directing 
 that bank, must first be ],a,d from the twenty four niiUion of interest 
 money derived from the paper circulation,Vnd the re;idu{ div ded 
 among the e according to the whole amount of the rpro- 
 
 perty. If e.ght hundred banks are chartered, the expenses of Lht 
 hundred hanks -^re first to be paid from the twenty four mi^ i,3f 
 interest before a dividend can be made among tL stocSders - 
 t wil therefore be perceived that a limitation tf the .W- Irf™ 
 the rates of dwidend. As the amount of stock required as s.curitv 
 for the bills issued by banks, is decreased in proportion to t ^ 
 amount of their is.^ues, so is the value of that sloei iLreasrd to e 
 stoekholders, and the seeurity of the lills decreased toTHi^' if 
 one or more banks are chartered, and the stock limited Hie v'alue 
 
 es the H °f '''f »^ ^"'•P'"-^ in ere Tncrcas! 
 
 es the dividends, over the egal interest of the country. If the 
 Block of one or more hanks, is public and unlimited the hills 
 would be more secure, hut the business of the bank" would l ecome 
 more complicated, by the amount of loans wl. i'crwould p^ss 
 
32 
 
 throu"!. the lian<l. of the directors, while the los.es rvhich would 
 
 at tm°es result from these cnmbersonie iransact.ons wo. Id be de- 
 duced f om th^. general dividend, wHiiout an equna ent ! ! 
 
 If ei.- n hundred banks .re established, and no i^ecuhar advantage 
 Jntedwa V one particular in.utuiion,olher than that acquired 
 iy^" :atK,nan^.rade^tw,ll be perceived that a struggle must en^^^^^^ 
 Imon" these institutions for the greatest share oi those piotits 
 whicif " h from an extended paper crcula.ion Jhe premmm 
 noon exchanoes, is the result of the maneuvers of the local banks 
 to tax the pubhc, and crau.p the circulal.on of the issues of distant 
 Lai banks, in thei-' "^n v.cinity, in order to fill the vacancy wtth 
 local oanKs, in I accomplish bv refusing the bills, of 
 
 *di:!LtTnst": t:ns, in pavnt^nt of no^svvhich they have discount 
 ed vvi'hout a ruinous deduction from their norrnnal value. These 
 buis a 8 hen passed to their broker, who receives perhaps more 
 ^han Ureir nomiLl value by a second transfer tn the course of 
 
 "''lll'cf^'equence of the restriction of the stock of the banks a 
 lar ie nortfon of the wealth of the commvinity stands readv to enter 
 ntf banking speculations, and is only restrained by the dange of 
 a sacrifice of Hie stock by too great a competition among the baniiS, 
 and a consequent increase of The danger of injudicious loans. 
 
 rcomMor.mr. ™lom.l ta»k...nd it 1. .1.0 . r„l. ..th 
 
 Ji?;e to ji/ieert c complaint among our banks is, that 
 
 Ti 'luis'^ '^ret^r^o Utem I specie bffore they circulate 
 .ufficientlv to rive them any opportunity of being lost ! 
 
 s evidenr that a papeV circulating medium is necessary, and 
 also that It should be measured in price by gold and silver, or some 
 o her arVicle of wealth of slow use, and of an intense primitive 
 vtlne And it is also true, if we are compelled to depend on banks 
 of dfsco^ and cr,culation to provide this medium, that it is much 
 better to have one bank with branches, than eight or nine hundred 
 and eonf^cting «st.ut^^^^^^^ But w ii ^ X^^-toT. 
 
 Tarater' hove a^routd all inSions chartered with the privi- 
 tZ nowr^oZr>o\ized by banks, and that while a partial p os- 
 S at>^nds"heir operations during the first stages of commerce, 
 thTv stui contain seeds of evil which must eventuate in their de- 
 struc^on These evils present themselves in two distinct forms, 
 and deny their issues the character of a <:«" ««'^y- , , .,, ^5,6 
 First Bv permitting the banks to issue surplus bills on ine 
 „oWZ valVo^ propefty, which is still held and used by the 
 
33 
 
 stitutions, thereby enabling those connected with the banks to 
 obtau, tiie direction and untaxed use of all the circula no medfu u 
 of the country, wuhout buying or hireing it ; and deleo^trs: tl e 
 a few ind 'J'T^/"'',""!'''''^'"^^"' °f to the^charVof 
 
 turned in bm :/" f '^"''^"^^ of loaning it out to b^e re- 
 
 turned in bi Is of a similar character on a certain dav i This 
 general restriction upon the free circulation of a ZdiL of ex- 
 change to Its uses indefinitely .denies it the character of a cur." ney 
 - ind T ^''o.stantly liable to be withdrawn from its <renera uses' 
 and centered ,n any desired channel, or wholly deniedto the nublic' 
 
 hTst'iev' :/'rd tho^se who b'ofrow' 
 
 se vient to "hei'^ = t/'enrselyes to return it, are rendered sub- 
 '^4 ' Tl'^r'"?'''"' "'"^'■^l''"'^- Bank notes therefore are 
 
 T„T f PC' torm the duty of a cur- 
 
 rency for a currency must be bought Ld sold in com n^inity as is 
 
 illiTer"" ^^"'"-'--y or indirect restrictions Tpol 
 
 Secondly. A currency is only required to buy and sell that nnr 
 
 de^tr ft on n th ' ^'''^ '"^l^^'-^ ^^'^ ^^^^^i^m caused by use or 
 
 destrution, m the necessary transfer of values. Thfrehre a cur r el 
 
 proauccd, and u izch is reqmred to he transferred in trade ! ' 
 
 n there IS not a portion of raw material raised to fill the vacuum 
 
 cTrfe-n;^ i^nr'U" e^^S't r^^l 
 
 T^ZTcl':}':^^^^^^^^ 
 
 currency ,s founded upon the^ioi^na? '^ce'L- p S 
 
 restrictions are placed upon banks to nrevent 
 '^"''"f""' "^"'^ values, upon the 'credit of whiKir 
 nei rer a're Z.") " 7'^ V°™P'^ ^'-m to continne^^ZZ^, 
 
 cnJrtL^;:-d:r'i^^;^ 
 
 rrr"::l;dinft: t t^^^r' St 
 
 that they cannot be dentified Wh',f r.l..- S ^" "icinuraciuie, 
 afford pi^oductions that ca:,'be iTnllfi^^r if mT b^ u^he'sU? 
 t]n<T]y answered, THE FARMFRm ^u.. \y unnesita- 
 who Ln, ..A tke possesIJ:^^^^,^^'^^,:^ ^^l^^/^ 
 
 Classes oj society. Vhe soil alone, is the only machine lohirh en« 
 vary Us production, and is capable of impro.enLt i't consegentTy 
 
34 
 
 the Farmers are the ordy class of P™'^"'^'''-^,"'''" "^"^^t^ciftf 7« 
 
 of the distributer and noii-prodncer. 1 he reveise na» aivv , 
 '"Xhrefore in behalf of the rights of „,an and 'h;wf a- ^-^i 
 
 Tor^f^Vilf^Tlrfh^oTr 
 
 for the greatest evils! 
 
 CHAPTER Vn.* 
 Kemedrj. 
 
 mmmm 
 
 •'■g-^r :'r 
 
 shall pledge his farm to produce upou an , •„(.' 
 
 amount in value of raw material, upon the appnzal ot wh;<''^'»« 
 
35 
 
 Secondly the farmer shall ri'turn a small percentnffe of these bills 
 he I'l^L t'!\''^P<'"«''« of ll'e institution Thirdly 
 
 he shall be bound to furnish within a certain time, not less than 
 one per cent, and not more than ten per cent of specie, to be de" 
 posited .n the vanlts of the instit.uion. to redeem the bills if neces- 
 
 Fourthlv^^Tt nffl ''""'"r value for the currency. 
 
 *ourthly. The officers of these institutions shall be elected 
 
 Sartrb''' '^"'i*'',"'''^^* "'"^ valuations of the 
 larms are to be revised, and the currency enlarged or contracted 
 according to the productions of the soil ° contracted, 
 
 nrfrini'J^'r^''°"?i.''"'""^'''''''"''^'"'vethe representative of the 
 I °'^.™<"<^ then a certain limited number of acres, wh ch 
 shall be designated by the Legislature of each State. ' 
 toixtlily. These bi I Is should be made legal tender for debt I 
 
 CONCLUDING REiVIARKS. 
 The cause of the present distress of our country may therefore 
 
 Scatimf ; "The '"T"'!r perverted a" 
 
 r„^n, h f ^ ^° •^^"P '""'"^y without bein-r re- 
 
 offer of sun^'/'n'"""' "'"^ '""""^ t''" P'''<i"cer by" the 
 
 otter of superficial loans, to suspend his ieaitimaie business and 
 
 rhirds'of l"""' ^r'^"" "'^ °f the count" 'Two 
 
 thirds of our population have theref„re become dependent on the 
 
 tZj ' P'",f''''^. the remaining third. The productions of t l is 
 third has been directed into limited speculating" channels and we 
 have now a few staples, such as cotton, flou?, pork" corn and 
 lumber m abundance,but nothing else. We are in debt to 
 they do no want our staples to the full amount of the deb and 
 nothing but specie will supply ihe deficiency. The banks cannot 
 ^°Zh l':""'°"'^y'>^ formerly, for there is nothing producerin 
 which the borrowers can speculate to advantac^e. and consequent v 
 
 Jlirf!'/ 'T'^'^'"^ ""P'ofil^ble'channels S"? 
 
 reach of the borrowers fiom whence it will be returned to the bank^ 
 
 wherTW!irb^o:t7oTe^cr^7"^--' "^^^^'^ 
 
 mlf :tir "ofmat tT£r:„:fe X:::.!-^:: ^ 
 
 .alutary effects produced by revolutions when '^^^nderiaken'^l^ the 
 prrr^y Thi ^".-'P'-' whether they affect either persons or 
 einh wa, Jro J 7"" Geology, teaches that at one time the 
 eaitn was a confused mass of crude matter, inhabited bv animals 
 
 fL"an "!.''"''?""''^.''""'^"''«°^^^<"d with a growlh\TZ7e 
 fern, and other imperfectly formed planls. Gradually Volcanfa 
 
 the :u"rfacTlf^'tli;r-yb^"^''-'.^ 'h''"' produc\Zs, uphft nj 
 pressing ?t„ fL ^"th, forming hills and mountains, or de- 
 pressing Its f,ice in valleys and receptacles for oceans and seas 
 lerp n"' P'-°^'=t'""« of the vegetable kingdom as now existfn^" 
 aVI P''<"i."<^ed; animals of a more perfect form creal' 
 rir.^'^ surface of the Globe fitted, as V abode of man 
 From that period the machinery of visible Nature has beenTm" 
 perceptibly producing perfect "border, vl^^os and ear hq"aL« 
 
 uong ot ihe earth, acquired increased value and perfection by 
 
86 
 
 bultivation, to the exclusion of those which wefe ii03[i0US 
 useless. 
 
 The argument drawn from this theory is, that there is a perfect 
 analogy between all those principles of Nature which have a ma^ 
 terial action. Society now occupies the same position in its civil 
 organization, to a more perfect system for the regulation of 
 social rights and liberty, as did the primitive world, with its v;ild 
 productions, to the earth as at present peopled and arranged ; and 
 v/e have just the same certainty of the ultimate perfection of our 
 financial laws, and perverted representative capital, as we have 
 that the earth itself, has attained its present harmonious order, after 
 a preparatory course of stupendous chemical convulsions. 
 
 All men are born v/iih talents, v/hich require a peculiar course of 
 education, fitted to the capacity of each individual mind, to culti-^ 
 Tate and render useful in those spheres in which the»y are intended 
 by Nature to move. The amount of degraded intellect now incor- 
 porated with community, is a subject which demands the consider- 
 ation of every thinking man of the age. Why has this mass of 
 intellect been perverted.^ It is here contended, that the present 
 concentration of power in useless national aristocracies or irrespon- 
 sible monied monopolies, f3rms a nucleus around which hover the 
 comparatively weak individual men^bers of society. Tiie greater 
 the condensation of power in the iqv7, the more of strength is ab- 
 stracted from the mass of population ; the progress of healthy com» 
 petition is obstructed, and the decline of one class of community j 
 always ensues in ratio with the advancement of the other, it 
 is now the morning of a great revolution, a revolution of mind 
 a§ well as physical action 1 ¥/e have too long neglected the duty 
 of supervising our national financial affairs, and too much of 
 public liberty has already been sacrificed upon the corrupt self in- 
 terested premises,established by those whom the people have blindly 
 trusted. The time has come for each individual to think for him- 
 self, and that thought should not only be well considered but bold- 
 ly expressed ! A remedy must be provided for the evils which are 
 nov^ paralyzing the energies of the nation, or we must expect a 
 revolution "proportioned in the severity of i'-^s results, to the increas- 
 ing magnitude of those pernicious operations which will eventual- 
 ly call it into action. 
 
 It is not here contended for a moment, that the gains of an in- 
 dividual, as long as sanctioned by lav/, however unjust that law 
 may be, are not~as clearly and substantially his own property, a& 
 if he had procured them under the supervision of the most 
 equable lav/s, but it is contended and emphatically repeated, that 
 the lav/s under v/hich eur present banking institutions are 
 chartered, are unji'st and partial. Recind these j adopt a more 
 correct system of distributing the nominal representative of 
 wealth, to the producers of that wealth, upon which the rep- 
 resentative is founded ; then an honorable channel of equal 
 competition will be opened, and then, and not till then, will revo- 
 lutions, as an exciting cause for national disenthralment be obviat- 
 ed, and the advancement of the civilized v/orld, be based upon the 
 sure foundation, of protected individual enterprise, applied to re- 
 productive objects, and rewarded and encouraged genius,produeing 
 tintaxed ofieringSy for the promotion of science and art. 
 
332 
 
 -NivEWTY or 
 
 •Ll-tNOiS LISRAFT 
 AT URBANA-CHAMP^IGr 
 eoOKSTACKS 
 
I