workmen are deterred from entering it; and as the old ones die off, or leave, as opportunity offers, the supply becomes gradually lessened to the effectual demand, without severe loss or inconvenience to any party. More important than in any other article, on account of the greater extent to which its advantages reach, and on account of the more frequent recurrence of gluts and deficiencies, is, an extended market for corn, and a perfect freedom in the trade of this most essential but precarious article of subsistence. More extended, too, and greater are the evils, which, on the other hand, are occasioned by a confined market, and a restraint on the trade in corn. The production of wrought goods may be so regulated as to be nearly a constant quantity, and precisely adapted to the demand and consumption; but this is impossible with the produce of the soil. However much attention may be given to apportion the supply to the demand, the inequalities of seasons will inevitably occasion a fluctuation in the supply of grain; rendering it at one time too large, and at another too small, for the consumption. It is not to be denied that the supply and price of corn cannot be exactly uniform. The variation in the seasons will occasion an inequality in the supply and price, which the utmost freedom in trade both internal and external cannot wholly prevent a variation in years of scarcity and plenty should not be entirely prevented. : In a confined market, the profits of the farmer are obtained chiefly in years of scarcity, while he gains only ordinary profits in years of plenty. If the supply of corn in any year be reduced one half in quantity below the average, the price rises to more than double; and the whole quantity, though small, sells for a larger sum than the greater quantity before. On the other hand, if the quantity in any year be double the average quantity, the price falls to less than half, and the profit on the whole is comparatively small. In an extended market, the profits of the farmer are made chiefly in years of plenty. The freedom to export, in fruitful years, relieves the market from the extreme depreciation of price which the superabundance would otherwise occasion; and the freedom to import, in years of scarcity, while it relieves the people from the exorbitant price they must otherwise pay, at the same time must save the farmer as much at least as the expense of transport of foreign corn, and thus in some degree counterbalance the loss from the diminution of quantity. If the price of corn were the same in years of scarcity as in years of plenty, the natural circumstance which regulates the exchange of one article for another, according to the cost of production, would be destroyed; and the violent fluctuations in the profits and losses, and amount of capital of the agriculturists, must occasion injurious effects on the steadiness of the trade and wealth of a country generally, considering the large amount of these profits and losses, and of this capital, and the great proportion which they bear to those in other branches of industry. A third circumstance necessary to preserve a steadiness and uniformity in the supply of commodities, and a profitable vend for them when produced, is, a steadiness in the amount and value of the currency. A paper currency, as it depends on public confidence, is liable to sudden changes; especially when the security offered for its repayment is exceptionable, or when it is issued in immoderate quantities. Its value may be lost and its currency destroyed in an instant. Without an alteration of public confidence, it is liable to be increased or diminished from time to time, occasioning great differences in the quantities of commodities produced, and an entire derangement of the market. When the currency is increased, there is a great facility of borrowing money; some traders are induced to extend their business beyond the means of their actual capitals, and to manufacture in larger quantities than usual, while others who have not this accommodation offered them continue to produce and send to market only their usual quantity of goods. If these two quantities are to be exchanged against each other, the supply and demand become deranged, and a loss to one party ensues. The abundance of money at first, when measured with the ordinary quantity of commodities it has to purchase, causes money to fall in value, or, which is the same thing, commodities to rise. When a currency is reduced in amount, the scarcity of it raises its value, and goods fall in price. Whoever borrows when money is plentiful, and is called upon to pay the same nominal sum when it is scarce, has therefore to pay with what is equal to a greater quantity of commodities, than that which the sum borrowed would purchase when he received it. It is the same as though he had borrowed a quarter of wheat in a year of plenty, and were called upon to pay a quarter of wheat of equal quality in a year of famine. A fourth circumstance essential for preventing gluts, or mitigating their effects when they occur, is, to afford every facility for borrowing money and assuring its repayment; for selling, conveying, and mortgaging property; and allowing the rate of interest of money to be determined by the free competition between borrowers and lenders. The more easily money can be borrowed, and a valid security given for its repayment, the less likely is the market to be at any time seriously overburthened with goods, from a necessity of turning them into money to answer urgent demands. Money, like everything else brought to market, is liable to vary in value and in the rate of interest, and should, like other things, be left to find its own level. Usury laws, though intended to protect the borrower, prove, in times of distress, the most serious inconvenience to him, compelling him to pay a higher interest than he otherwise would do, in consequence of the risk which the lender runs, from the illegality of the transaction; and for which risk he must be indemnified at the expense of the borrower. The more easily property can be transferred, or money borrowed, on its security, the more easily will capital and workmen pass from those occupations in which they are in excess to those in which they are deficient, and the shorter will be the period during which commodities will be brought to market in undue proportions to each other;-on one side to be sold at a loss, and on the other at what is equivalent to an exorbitant gain. CHAPTER XVI. OF MONEY. SECTION I. Of the Functions, Properties, and Origin of Money. NATURE or art, and circumstances of a personal or local character, enable one man to produce some particular article, or perform some particular kind of work, with greater ease or of better quality than other men; while, in like manner, other men by the same means are enabled to produce some other articles with superior advantage. Hence the origin and reason of the division of labour; and when an exact distribution of employments is established, there are few persons who produce more than one single description of articles; the greater part not doing even so much as this, but, performing only one simple operation, their labour serves only to add one stage of advancement in the progress of an article towards completion, in which progress the combined labours of several other persons are occupied, in carrying the article through all its stages, and completely finishing it for use or consumption. It is therefore but a small part of a man's wants which the actual products of his own personal labour can supply. He supplies the far greater part of them by exchanging that surplus of these products, which is over and above his own consumption, for such of the products of other men's labour as he has occasion for. Thus men live by exchanging; and almost all the products of industry arrive at the consumer by means of exchanges. We have seen that the division of employment, the acquisition of knowledge, moral, intellectual, and physical, the existence of capital, and the means of supporting a large population in affluence, are dependent on the exchange of commodities and labour of different kinds for one another. To effect these exchanges involves a labour, which, before the invention of money, must have been attended with difficulties and embarrassments of nearly insuperable magnitude; but which are removed by its employment. The invention of money, therefore, must be ranked as one that stands conspicuous amongst those methods which the ingenuity of man has found out to lighten his labour, and raise its efficiency to the highest point. It is of so early a date, as to have been attributed by the Jews to Cain; with what probability, however, it is of small moment to inquire. The functions that money performs, the mode in which it assists in effecting exchanges, and removing the embarrassments under which industry would otherwise labour, as well as the mode in which it produces the various effects that its employment occasions to society, constitute part of the subjects connected with social industry, the consideration and development of which belong to national economy; and the proper understanding of which, is essential to elucidate many otherwise obscure topics connected with it, to remove prevalent misconceptions, and to form just conceptions respecting them. This branch of the subject, in consequence, is worthy of a deliberate attention. The different functions which money performs, cause us to regard it in two different points of view;-as a practical standard by which the value of all things is measured and expressed, and as an instrument of exchange. The advantages which the use of a circulating medium confers on mankind, may be understood by reflecting on the circumstances in which they would be placed were that medium wholly withdrawn, and all commercial transactions performed by the simple mode of truck or barter in kind, of commodities and services of different sorts directly against each other, as is still the practice in some uncivilized nations. The power of exchanging things of dissimilar magnitude and character for one another, by a barter in kind, is very limited. If we had to procure all the things which we consume by exchanging other things directly for them, the difficulty which would be experienced of procuring them in suitable quantities, and at seasons to meet our desires and means of payment, would be so great, and the inconveniences attending it so many, as to |