money; it creates price without value. As it furnishes no value to export in exchange for an equivalent value in the imports, the value necessarily exported in monev to make room for it in the currency is sent abroad in pure loss; it is an exhaustion of so much pre-created capital, leaving only paper memorandums of debt in its place. Whereas, if the increase of currency were in money, whether mined or imported, it would furnish a value to export in exchange for an equivalent value in the imports, and instead of being a loss it would be a gain of national wealth; precisely like an increase of wheat or corn or beef or any other commodity the excess of which is exported in exchange for other capital that is in less supply and greater demand, and, therefore, of higher value.

44

It is the difference of international value alone which determines whether money shall be exported or imported. California exports money because it is cheap from an excess of supply, precisely as Illinois exports wheat; it continually exceeds the natural volume of currency required by her circulating capital; and California grows rich by producing and exporting money, as Illinois grows rich by producing and exporting wheat, and exchanging it for other capital more needed, and consequently of higher local value. The so-called "balance of trade" must be always against California and Australia while they produce money in excess of the equivalent value required by their capital for its circulating medium, and their general prices must be always high enough to attract imports to dispose of their surplus money. By the same rule the "balance of trade" in wheat is against Illinois, and by the same rule the balance of trade" in money is against any state or nation while the volume of its currency is convertible at par, or at a discount, in excess of the normal money measure, in spite of tariffs, or prohibitory laws of every description. A tariff, such as Congress has just enacted, raising the rate of duties fifty per cent, will check the exports and imports of merchandise alike; it will simply criple commerce, leaving the export demand for gold precisely as before, depending upon the volume of currency convertible in relation to our circulating capital. It is the simplest rule in the world. that sellers must be buyers to the same extent. If the imports exceed the exports in value, the balance is obviously profit. If, on the other hand, the exports exceed the imports, the balance is loss, gold and silver being included either way. Just so far as we cease to be buyers we must cease to be producers and sellers, for men will not produce what they can neither sell nor use; and just so far we limit our capital and cheapen money.

It follows from these considerations that the difference to the wealth of the nation between producing a currency of money and a currency of debt is double the convertible amount of the debt currency, like the difference to a merchant between making or losing one thousand dollars, which is two thousand dollars in his stock account. ADAM SMITH's theory of the economy of the precious metals by the use of a currency of debt in their stead, which is adopted by nearly every European economist, including JOHN STUART MILL, is the most remarkable and the most mischievous heresy that ever found an advocate in any science.

The fallacy consists in the supposition that the normal value of the gold and silver displaced by the debt currency, or "paper money," is returned in the imports; whereas, they are exported only by reason of the abnormal pre-depreciation of their value in the paper increase and adulteration of the currency. The value returned, therefore, is not the natural value

like that of money, from its natural increase, but the degraded value produced or caused by the spurious currency, the returns being in price and not in value. The practical effect is to raise the price of imports but not of exports. We cannot, with our spurious currency, make a price for other nations to pay, except for commodities of which we have virtually the monopoly of production; and, with regard to them, every unnatural rise of price is a damage to ourselves, because it limits consumption and accordingly production.

Wealth consists of value, not of price-of utilities and quantities at low prices, not of scarcity at high prices. The lower the prices by the increase of supplies the greater is the national wealth. Temporarily an increase of currency raises the price of exportable proudcts and causes the export of gold in their place; but when their supply permanently exceeds the quantity required for home consumption their price must fall to meet the demand and price of foreign markets; and then the price of imports rises still higher to absorb the fictitious currency and price that is no longer employed bp the exportable commodities held above the shipping price. As our exports fall in price, unless by reason of an increase of quantity, the imports must rise to fill up the measure of the currency.

Every merchant is familiar with the manner in which the holders of flour, grain and provisions frequently keep their commodities above the shipping price by obtaining funds through discounts at bank. These discounts cost the owners of the commodities interest for the benefit of bank stockholders, while they create the currency, with its false price that stops the sale of the commodities, turning the foreign exchanges against the country, and the export demand upon gold in pure loss.

At this moment-May, 1864-our cheap currency is stimulating imports in immense quantities at enormous real prices in gold value, while we hold a large excess of grain, provisions and other exportable commodities unsold, and are shipping gold at the rate of one to four millions of dollars per week. It is all being paid away in the prices created by the fictitious currency for the benefit of foreign producers. It will be observed that this money goes directly into the hands of the producers of our imports to raise their prices against ourselves, while the effect it has upon our exports beyond our own borders is inappreciable. The nation might as well plunge so much money and capital into the middle of the Atlantic

ocean.

C. H. C.

OFFICIAL STATEMENT OF THE PUBLIC DEBT OF THE UNITED STATES, JUNE 14th, 1864.

$870,170 09

No interest. United States Notes July 17, Aug. 5, '61,

and Feb. 12, 1862,
Less am't withdra'n

60,000,000 00

59,166,212 00

No interest. United States Notes Feb. 25, July 11,'6%,

Am't outstanding,
and July 17, 1863

833,788 00

399,166,212 00

COMMERCIAL CHRONICLE AND REVIEW.

EXPENSES OF THE GOVERNMENT FOR THE FIRST THREE QUARTERS OF THE YEAR-FIVE PRO CENT LOAN NOT SUCCESSFUL-GOVERNMENT PRESSED FOR MONEY-AMOUNT IN THE TREASURY MAY 1 AND JUNE 1-CERTIFICATES OF DEPOSIT-INTEREST RAISED TO SIX PER CENT. THE SIX PER CENT LOAN-LOAN BY THE BANKS-THE GOLD BILL, MEETING OF BANKEES-OPINION OF 80LICITOR-RATES OF EXCHANGE-COIN IN U. 8. TREASURY-PRICE OF U. 8. PAPER-SPECIE AND PRICE OF GOLD.

THE expenses of the government, which have been on a very large scale, are still on the increase, and require larger revenues from loans since the operation of the taxes devised by Congress are prospective. The official statements of the revenue and expenditure, the first three quarter of the fiscal year, 1864, are as follows:

Customs..

U. S. REVENUE AND EXPENSES THREE QUARTERS OF 1864.

Lands..

136,182

170,503

Tax.

14,035

397,167

Tax, Internal.

17,599,713

27,262,631

27,685,212

Miscellaneous

The gross amount of money raised for three quarters is over nine hundred millions or at the rate of $1,200,000,000 a year, or $1,000,000 every secular day. Of the money raised in the last quarter more than one half was in cur

$144,627,598 899,137,777 $287,016,814 357,260,081 329,945,872 906,566,424