, 1840-09-26
B~OWLING-GREEN NC. SATURDAY, SEPTEMBER 2s, 1910.

P'cS'dies itsels mat is 10 say, us proportion
to the annual produce of industry being rails
ed, more Of it is required to represent any
particular article of produce than in the
other countries. This is agreed by Smith,
(B. 2. C. 2. 437) the principal advocate for
a paper circulation; but advocating it on the
sole condition that it be strictly regulated
He admits, nevertheless, that sthe commerce
and industry Of a country cannot he so Sc
cue when suspended on tie Dedalian wings
OF paper money, as IN the solid ground of
gold and silver; and that in time of war.
the insecurity is greatly increased. and great
confusion possible where the circulation is
for The Grarier part in paper B. 2. C. 2.
4S4. But in a country where loans are I'M
certain. and n specie circulation thessQnly
sure resource for them, the preferrenceA Qf
that circulation assumes a far different oe,
gree of Importance, as is explained in my
former letters.
The only advantage which Smith propo-
ses by substituting paper in the room Of gold
and silver money, B. 2. C. 9. 434. is, to
replace an expensive instrument with one
much less costly. and sometimes equally con-
venient;' that is TO say. page 437, to allow
the gold and silver to he sent abroad and con-
verted into foreign goods and to substitute
.plp.r as being n cheaper measure. But
this makes no addition to the stock or capi.
tai Of the nation. The coin sent out was
worth rs much. while in the connrry. rs the
goods imported and taking its place. i, is
only, then. a change Of form in part of the
national capital, from that Of gold and silver
TO other goods. He admits, too. that while
n part al the goods received in exchange for
the coin exported. may he mareri Is, tool,
and provisions i"' the employment Of an ad-
d!ti"n 81 industry. 4 part. also. may he tai en-
hHck IN foreign wines, silks. &c. 10 be con
Sumed by idle pe"p'e who produce nothing:
and so far the substitution promotes prodigali
". increases expense and consumption.
without increasing production. So far also.
then. II lessons the capital of The nation
Whit NAV BE- the amount which the cnnver-
sion oi the p trf exchanged for productive
goods may adfto the former productive mass.
1t Is not ersv TO ascertain, because, as he
SAYS. page AL, III is imp 'sShle L. determine
what IS the prnpnrrion WHICH the circular ting
money nf any country hears 10 the whole
value Of the annual produce. II has been
Computed by different authors. rom y ffih*
Ia a thirrieth of that %valne.' Ia The United
States it must he less than in any other part
Of the commercial world: because The mass
their inhabitants being in responsible cir
cumstanceS. the great mass Of their ,xchan
ges in the Country is effected on credit. in
their merchants ledger. who supplies all their
wants through the year. and ut the end Of IL
the produce of their farms. or other
articles of their industry. II is a fact, that
n farmer with a revenue Of ten thousand do
a year, may obtain all his supplies from
his merchants. and liqui ate them at the end
of the year, by sale Of his produce 10 him.
without the Intervention Of a single dollar
of cash. This. then. is merely barter, and
in this way of barter a great portion of the
annual produce of the United States is eS-
changed without the INTERPRETATION Of cash.
We might safely. then stare our medium a,
the minimum of one thiriieth. But what j.
thirtieih Of The value of the annual pro-
duce of the industry of the United Sta'es7I
Or what is the whole value of the annual
Of the United States! An able wri-
Ter and competent Judge of the subject. in
1899, on as good grounds as probably could
be taken. estimated II, on the then population
nf four and a half millions Of inhabrtan,s. to
thirty seven and a half millions sterling.
Or one hundred and sixty eight and three
millions of dollars. See Cooper's
Arithmetic, page Al. According
to the same estimate for our present popu-
alton it will be three hundred millions Of
one thirtieth of which, Smiths min
Imum, would be ten millions. and one fifth,
MS maximum, would be sixty millions for the
luantum of circulating medium Of any ma
lion, from the circumstance before mention
ID, we should place ourselves in the middle
.erm of the calculation. to wit, at thirty five
One fifth of this, at the le1st Smith
should be retained in specie, which
leave t~wenty-eight millions of specie
70 be exported in exchange for other COM
nodities; and if fifteen millions Of that should
be returned in productive goods. and not in
of p~rodigality, that would be the
mount of capital which this operation would
add to the existing mass. But to what mass!
Not that of the three hundred millions,
which is only its gross annual ~prodhce; hut
that capital of which the three hundred
millions are but the annual produce. But
this being gross, we NAV infer from it the
valna If the canital nv considerino that the