quantity yielded by California has scarcely yet produced a sensible effect; but it must be recollected that the quantity, great as it is, does not yet bear a considerable proportion to the quantity that was previously in circulation; and that before these large recent accessions there was an inadequate supply of the metal, which was manifested by its gradual rise of price. But when the quantities drawn from California alone, to say nothing of the products of the Ural Mountains, Siberia, Australia, &c., shall double the quantity in the world, as it bids fair to do, the price must inevitably fall. As the amount of other commodities will remain nearly the same, or will increase in a far less ratio, either the value of gold must fall or it must cease to be used. Since this last alternative is inadmissible, since not one man in a thousand hoards away specie, we must of necessity adopt the first. Indeed, when we see that a large addition to the supply affects the price of everything else, how can it be supposed that gold alone is not obedient to this universal law?

But a writer in the Intelligencer, under the signature of "An Observer," objects to silver as the standard on two grounds-One, that it will impair the obligation of contracts: and the other, that it will occasion too heavy a charge on the Treasury. Let us examine these objections.

The adoption of silver as the sole standard will, according to the view I have taken, so far from impairing the obligation of contracts, tend to prevent, or at least to lessen, their violation. Let us look at the source and extent of these obligations. Contracts ought to be fulfilled, because policy, justice, and honesty enjoin their fulfillment; but when their execution is inconsistent with these conditions, the obligation ceases. The law refuses to give its sanction to contracts to violate law, or that are made in bad faith, or when made with incompetent persons, &c. But a contract made to payso much money is substantially one to pay so much value, in human labor, food, and raiment, which money is meant to represent; and this contract is essentially violated if the debtor pays his creditor but two-thirds of his debt, or anything less than the whole value he stipulated to pay. To say that the debtor has the right to pay the pieces of money he contracted to pay, however they have depreciated, is to say that he has a right to do wrong.

It is true that, under ordinary circumstances, the parties may be considered as agreeing to run the risk of those small and gradual alterations in value to which the precious metals have always been liable, but when they exceed that limit it is not honest nor just that either party should profit by the letter of his contract to violate its substance; and Legislatures, in the exercise of one of their highest attributes, will prevent such injustice, by rendering the metal that is in a course of depreciation, no longer a legal tender.

But, it is urged, when both metals were legal tenders at the time the contract was made, the debtor had the right to pay in either metal; and that this right to pay in the one that has fallen in value might have been taken into consideration by the parties when the contract was made, and the debtor, having thus paid the price for this advantage, it is not just to deprive him of it. The argument would be fair if this were the sole contingency contemplated; but there was another and a very important one on this question, which is, that it was competent for the Legislature at any time to change the law of legal tender, and, for the furtherance of public policy or justice, to alter the proportionate values of these metals, and have two standards instead of one, or one instead of two. Every nation has oc

casionally done this, and it has been done more than once by the United States. These changes have been made under the power given to Congress to regulate the value of coin, and no alteration has been made, or can be made, that does not lessen the legal value of one metal or the other, and so far serve to affect the property of those who hold coins of that metal. Thus, when, by the act of 1837, the gold eagle, which had previously contained 247 grains of fine gold, was required to contain but 232 grains, the government undertook to give its creditors less gold for ten dollars by fifteen grains than its coins had previously promised. As to the greater part of these fifteen grains the law did no injustice. It merely conformed to the market prices of these metals; but the same thing may be said of the change I propose, and the government has the right, in common with every one else, to make its payments in conformity with that change.

The second objection of "An Observer" is, that the adoption of silver would occasion a great loss to the Treasury. He assumes that the government, having coined eagles and stamped them as being worth ten dollars, could not, without a breach of faith, receive them for less; but that in paying them away they must be passed at what they are fairly worth in the market, and thus the loss by their depreciation would fall on the Treasury.

To this objection there are two answers. In the first place, when the government coins gold, and stamps on it its equivalent in silver, it does not guaranty that it shall always be worth the same quantity. It gives no such insurance. It is merely responsible for the weight of the coin, for the degree of purity required by law, and for the value at the time. It undertakes no more. Its functions are analogous to that exercised in its inspections for flour; it ascertains and certifies the quantity and quality, and leaves the future price to the uncontrollable arbiter of prices-the market. It must be remembered that the State does not go abroad to purchase the bullion for the mint, but merely coins that which individuals choose to bring to it, to benefit themselves by the manufacture into coin, which, moreover, has hitherto been gratuitous. All the gold which the mint has ever coined has been procured in this way; there is, then, neither reason nor justice in supposing a gratuitous insurance added to a gratuitous coinage.

But, in the second place, if the writer was correct in his premises, they would not warrant his conclusion. It is admitted that, in paying its creditors, the government cannot rate gold beyond its market price, but it is perfectly immaterial whether it receives it at its original or depreciated rate. To make this clear, let us suppose that the annual wants of the government are fifteen millions of dollars, and that the proportion of value of gold to silver is at fifteen to one. In this case, supposing the public revenue equal to the expenditure, the Treasury must receive fifteen millions in silver, or one-fifteenth part of the same quality in gold, its equivalent; and whether the gold coins be received at one rate or another-whether an eagle be called one dollar or one hundred dollars-is as unimportant as the name of a rose is to its sweetness.

Thus, too, in the case put by "An Observer" of an eagle being worth in the market but $89 50, it will be the same thing both to the tax-payers and the government whether the eagle be received at $10 or $9 50. If at the higher rate, then, as every one will pay in gold, the taxes must be raised 5 per cent (or rather) to make the real equal to the nominal amount of the revenue. The Treasury will then have the same amount as if the revenue were paid in silver, or gold at its market price, and it will be the

same thing to the tax-payers whether they pay in silver or gold. All that they would gain by passing the gold at more than it was worth, they would lose by the additional tax.

The public, therefore, supposing it to have common sense, would not object to the government receiving gold at the same rate at which every one else received it, that is, at its fair market value; and though it did object, and the objection were respected, the State could neither gain nor lose.

I have thought it worth the trouble to take this notice of "An Observer's " objections to silver as the sole standard, because those objections are spacious and well stated; but, judging from one or two passages in his articles, I infer that, whatever may be his other attainments, he is not very conversant in this branch of political economy-certainly not in its history. He supposes that in 1700 the precious metals were worth three or four times as much as at present. Now it is generally admitted that they had attained their utmost limit of depreciation some fifty or sixty years before. Adam Smith, indeed, thinks that from 1700 to the time he wrote, about 1775, silver had slightly risen in value; and supposing him mistaken, there is no reason to suppose it had fallen. After the disturbances in Spanish America, in 1810, by which the mines were for many years less productive, the price of both had unquestionably risen, and some suppose that they have hardly yet fallen to their former level.

For the preceding reasons I feel anxious that Congress should adopt a single standard, and make that standard silver.

Mr. Hunter's bill, which has passed the Senate, will indeed furnish a temporary remedy for the scarcity of silver now felt, but the objection to it is, that it is temporary. By the adoption of a single standard the remedy would be as lasting as efficient.

T.

Art. V. THE LAW OF PROGRESS IN THE RELATIONS OF CAPITAL AND

LABOR, &c.

Ir has become apparent that the controversy between Mr. Sulley and myself may as well be brought to a close. It can possess no interest for the public, farther, than we are respectively the representatives of great schools and systems of Political Economy. I understood him in the outset to hold such a position, and to come into the field prepared to defend the views of Malthus, Ricardo, and the modern English Economists. He was indignant that "the great men who have written on Political Economy since Adam Smith, should be set aside to make room for Mr. Carey," and appeared as their champion. I proposed to make good the defense of Mr. Carey out of the mouths of the very persons whose superiority Mr. Sulley sought to vindicate. I cited with this object Adam Smith, Malthus, Ricardo, M'Culloch, and John Stuart Mill. In his reply, Mr. Sulley overruled their testimony. "It matters little," said he, in September, "what Smith, Ricardo, M'Culloch, and Mill conceded-that would not make a proposition true if it were originally false." Doubtless; but it might help to determine whether it was true or false, and whether Mr. Carey or myself were to be impeached in their names, and summarily smote down, for contempt of those whom the

world has agreed to regard as great teachers in this department of inquiry. Inasmuch as Mr. Sulley only indicated his great men in general terms, without naming them, and was at liberty to say, if I should call any new witness, that they were not the persons he had in mind, I distinctly invited him in your November number to specify who he meant, and pledged myself to go to them for my citations. I showed in this the truest respect for the Economists as a body, by announcing my belief that they contained sufficient truth to furnish a corrective for their own errors. I went further, I challenged him to name any single one, and proposed to refute him by that one; and in reference to the general question took upon myself the task of showing that there is not a single one who has not made fatal concessions and been betrayed by the necessities of a false system into flagrant inconsistencies. This was bold enough to be exposed to the imputation of arrogance. It courted chastisement from a man whom I supposed able to inflict it, if I was in error, and very willing to do so if he could. He had shown no mercy to Carey whom he had not read, how should I, whom he had read, escape simple justice? No man would have pitied me in my discomfiture.

Whether because I am right, or because Mr. Sulley cannot show that I am wrong, he declines the issue. He tells us in your April number, that "it would be more to the purpose, if my opponent could show that my facts and theories are inconsistent in themselves, than to trouble himself whether they agree with Smith, Ricardo, &c., or whether they agree with me." But I did not undertake to discuss the correctness of Mr. Sulley's opinions, except in so far as they are those of the Ricardo school, or derived from them. Error in those men is mischievous, because it derives credit from the deference paid to great names-because multitudes rely on their guidance, and because we can never present an argument in behalf of the protection system, without having their authority appealed to, as settling the question against us. There are hosts of practical men who take it for granted, so often and so confidently do they hear the Economists cited as having disposed of the point forever, that they must discredit the science and its teachers as merely visionary. These men suffer their sons to be taught the doctrines of Ricardo and his school in our colleges, with as little apprehension apparently of their exercising a permanent control in their opinions, as they have of their imbibing a belief in the heathen mythology from the classics. In this they err greatly. It is a great object to make them see that the most vital interests hinge upon the point, which they are apt to regard as purely speculative, whether men commence the work of cultivation upon the rich soils and proceed to the poorer, as population and capital increase, or begin upon the inferior soils, and pass to the occupation of the more fertile, as the increased power of associated labor, and the acquisition of capital enable them to do so. It was for this purpose mainly, that I addressed a communication to your Magazine; it was also my object to show, that the question having been solved correctly by Mr. Carey, the science of Political Economy constructed by him upon the basis of fact, instead of the plausible fictions which Malthus and Ricardo assumed, was entirely competent to account for, and explain the history of human progress. "In order "-says Mr. Mill, in his Logic, quoting Comte-" to prove that our science and our knowledge of the particular case render us competent to predict the future, we must show that they would have enabled us to predict the present and the past."

I brought the science of Carey on the one hand, and the hypothetical

dogmas of Ricardo and Malthus on the other, to this test. I admit the logical power of the latter to the fullest extent. The fault is in their premises. These granted, their conclusions follow-prove them inevitably. I know no other class of writers who pursue their inferences to their full logical extent, and stand to them so unflinchingly. So much the more are they stumbling blocks in the road to truth. So much the more was it worth while to discuss what is due to their pretensions, especially to one who fancied he could make it evident that he knew and appreciated them. Whenever Mr. Sulley becomes the tenth part as formidable an obstacle to the spread of correct views, as they are, he will find plenty of abler opponents than myself, ready to contest his notions per se, without troubling themselves whether they agree with Smith, Ricardo, &c. Meantime I must decline the effort. What the case of the English Economists is, I thought myself able to understand and to meet, for it is extant in print, and I was willing to argue it with him as counsel in their behalf, but when it comes to his own untold fullness, I leave it to men of more courage and endur

ance.

For there is yet another difficulty which I could not overcome, even if his self isolation from the great men, in matters of reasoning, did not remove the inducements for discussion. He holds authority in quite as little esteem in regard to matters of fact. I cited some very interesting tables from Moreau de Jonnes, to establish the facts that the agricultural production of France had, in the last one hundred and fifty years, increased twice as much as the population, the first having quadrupled, while the second has doubled that the proportion of the entire product going to the laborer, has risen from 35 per cent to 60,-that notwithstanding this increase in the proportion of the laborer, the total product is so much enlarged as to leave. a larger amount, though a less proportion, to the capitalists and non-agricultural classes-they having increased 100 per cent, while the surplus left, after giving the agricultural laborers their enlarged proportion, has increased 127 per cent. These statistics Mr. Sulley thinks no person who glances over them with the eye of a critic, will consider of the least weight." The fact that Moreau de Jonnes, the highest statistical authority in Europe, has been occupied, with persevering pains, twenty-five years, in collecting the materials for his tables, "from historical, economical and administrative documents," shows to Mr. Sulley "at once that no dependence can be placed on them. The official position of De Jonnes in that period, his precise duty, indeed, for he is at the head of the department of statistics, in that nation which more than any other in the world excels in such inquiries -has given him such means of information as no other man ever possessed. A nation which has half a million civil officers to collect statistics for itwhose franked letters to and from the executive departments rose in the year 1843 to the number of 16,363,956, equal, comparing their weight with the mean weight of the letters of individuals to 130,529,450 single letters*whose system of centralization is such, that the ministry at Paris may be said to have a finger in every business transaction in France-can obtain reliable statistics, if the thing is possible. De Jonnes had no theory to support like that under our consideration, and there is nothing tending in the slightest degree to convict him of prejudice. Moreover, his statement has been be

Report of M. Chegary to the Chamber of Deputies on Postal Reform, 5th July, 1844, quoted in Journal des Economistes, for January, 1852.