also lost. This again brings to mind the fallacy of the theory of the superior relative increase of food; labor-made fertility, although it may tend to keep up the rate of profit, can never increase it; because, first, the extra labor must be paid for out of the extra crop; and, secondly, what is saved is previously abstracted from other soils. Thus, if the mass of human beings did not abstract one atom of fertility from the earth, nor were there one atom wasted, we could not reach beyond the original fertility, and the rate of profit would even then diminish, from the cost of the extra labor required in cultivation.

I should have preferred to have closed this article at this point, which is already too long, but there is another important point, which I must beg to be excused for noticing, with regard to the continued depreciation of capital. The Professor acknowledges the error he fell into in a former article, but afterward endeavors to confuse and mystify the subject. His original proposition stands thus: "Mr. Carey shows that capital in land obeys the same law as capital invested in machinery; among other things, like other commodities, it will never bring as much as it cost to produce," because the progress of capital and improvement enables man to reproduce the same thing with less expenditure of labor." And he thus acknowledges its general incorrectness: "The proposition which I stated of course did not relate to an immediate sale. It is doubtless true, as a general rule, that any piece of machinery, upon its completion, will bring its cost. Every improved machine for which a patent can be procured, will, during the duration of the patent, produce more than the cost and the ordinary rate of profit. But every improvement is such in virtue of the fact that it cheapens something else. The moment it comes into use, the commodity, whatever it may be, the process of obtaining which it facilitates, is offered in the market at reduced cost. But all existing commodities of the same kind must also fall to the same price. They will bring only what it now costs to produce them."

Now, I think it would be difficult to imagine a more complete repudiation of any proposition than the Professor has been forced into, in the present instance. He has acknowledged that "every improved machine will, during the term of the patent, produce more than the cost and the ordinary rate of profit." And, in fact, that all commodities "will bring what it now costs to produce them," and of course a profit besides, or, instead of improvements continuing to increase, machinery must cease to exist, and society, instead of becoming more numerous and wealthy, must decrease in number. I merely mention these circumstances to show the Professor how persons are "betrayed by the necessities of a false system into flagrant inconsistencies." In speaking of improved methods, the Professor says: "The moment it comes into use the commodity is offered at reduced cost." By which I presume he meant to say, "at reduced price." But I humbly conceive that this depends upon circumstances, and is not true as a general rule. It is not for the interest of individuals who invent improved methods to reduce the price of their machinery below that of the old; for although in some instances it may cost less, they generally expect and always obtain, if it be really an improvement, a greater price, and consequently an increased profit. Neither is it for the interest of the manufacturer who uses improved machinery immediately to reduce the price of his commodity. They each have an interest opposed to this; both would naturally wish to be paid for extra capital expended, before the price is reduced; and therefore this is not

done unless the state of the market enforces it. It is not the interest of the public which the inventor or manufacturer wishes to serve, but his own. And as improvements cannot become general at once, the old machinery is generally worn out in due time, having paid its cost and profit long before that period, which enables the manufacturer to replace it with new. If this were not the case, who would be found to invest capital in machinery? The Professor endeavors further to illustrate his views upon this subject by borrowing an idea from M. Bastiat, who says he can now purchase a Bible for fifty cents, or half a day's labor, which formerly cost the labor of three hundred days to produce a worse copy. We must remember, however, that fifty cents is what it now costs to produce it.

The idea, also, expressed in the following quotation, if I rightly understand it, is also erroneous: "Every step in improvement gives labor an additional command over some one of the constituents of capital, and consequently raises the rate, between the value of existing labor and the sum total of capital." If it is intended to say, as I presume it is, that these improvements in labor increase its relative value to that of capital, I must object to the assertion as being contrary to fact. The Professor has himself given us an incident by which we may prove the matter, pro or con. It is stated that we can now purchase a Bible for the price of half a day's labor, which at one time would take the price of three hundred days' labor to purchase. Now, let us suppose the value of the raw material necessary for the production of the Book to have remained stationary at one-eighth of a day's labor. At one time it would take 2,400 times as much raw material to purchase the Book as was required for its production; whereas at present it would require only four times as much. Has labor gained "additional command" over capital, or has capital gained additional command over labor in this instance? It matters not whether raw material has increased in price, or whether labor has decreased; or whether each have moved in the direction indicated; it shows the same operating principle: all improvements increase the relative value of the land. It is not therefore true, "that the capital of a nation which is making the slightest industrial progress, will each day command less labor than it would the preceding day." The amount of capital being limited, by circumstances which we have previously explained, while it requires less labor each succeeding day to effect the same amount of production upon a given amount of capital-capital must, of course, as we have seen in the instance above, continue to purchase or command, a larger amount of labor instead of a smaller. In continuation of the subject the Professor says: "To show that the same proposition holds good as to land, it is only necessary to demonstrate that it owes its whole value to labor." And then quotes from a speech of Mr. Webster's at Buffalo, to show, that "without human labor land is not worth a rush, from Dan to Beersheba." I must beg, however, to differ from both these great authorities, with all due humility. But the Professor turns round upon his own proposition and Mr. Webster's opinion, and restates the proposition in the following manner: "Now the proposition is, that the land will not bring as much as the cost of the labor in and near it, to which it owes its entire value. In the case of a farm in the neighborhood of a city suggested by R. S., the difficulty is to enumerate and estimate the value of the labor expended in the city, and to apportion it among the various tracts which have had their value enhanced by such expenditure." The second proposition is a direct acknowledgment that the first was untenable. It is admit

ted indirectly, that the land will always bring more than the cost of the improvements and the cultivation expended upon it; but to make out the original proposition, "that land will not bring as much as it cost to produce," the Professor has attacked the value of all "the roads, railways, and canals, the buildings, public and private, the fences, wharves, bridges, and structures of every description, that go to make the State what it is," as though the land itself had been produced by this expenditure of labor, instead of the expenditure having been produced from the land. It would, apparently, be almost as reasonable to expect that the value of a machine for the production of cloth, which had been at work for an extended period, could purchase back the whole of its productions. But the cases are not parallel. However large a quantity the machine had produced, it would only purchase back a certain amount-the necessary cost of its original production, with a deficiency for wear and tear. But the position of the land is different, notwithstanding the assertion of Professor Smith and Mr. Carey to the contrary. The amount of land being limited, the more other capital and wealth is accumulated the larger relative price it will bring in the market; but whether it would purchase the whole of the other capital and wealth of the State, or the world, I am not able to say: neither do I think it important to study that problem.

With regard to Madame de Savigne having arrived at the conclusion that land is not wealth, I think we may give her credit for the possession of common sense, but I presume she did not, like Professor Smith and Mr. Webster, conclude that land was not valuable.

Having now thoroughly examined what the Professor has said in favor of Mr. Carey's theory, I must beg leave to say, with all due deference and respect to all men who are earnestly engaged in the search after truth, that although learned and eminent men in other countries may think it necessary to study Mr. Carey's economical works, I have seen no reason in this discussion, to alter my previously expressed opinion with regard to them, and I hope it will not be deemed presumptuous in me to say, that in my opinion "it is a theory of antagonisms and is crammed with absurdities." And as Professor Smith has more than once intimated, in this correspondence, that the truth of Mr. Carey's theory is the only tenable ground for "protection to rest upon, I hope I shall, like Jack Lanton in the "Spy," have the pleasure of welcoming his return to the ranks of freedom (of trade).

R. S.

Art. VII.-OF THE COINAGE OF THE UNITED STATES.

CHANGE IN THE RELATIVE PRICES OF GOLD AND SILVER DUE TO THE RISE OF THE ONE AS WELL AS THE FALL OF THE OTHER-REMARKS ON MR. GOUGE'S OBJECTIONS TO THE REDUCTION OF THE AMOUNT OF SILVER IN HALF DOLLARS-SUGGESTIONS AS TO THE COINAGE OF LARGE COIN OF FROM FIFTY TO FIVE HUNDRED DOLLARS EACH, OF A MEAN STANDARD BETWEEN THE MARKET VALUE OF GOLD AND SILVER.

Freeman Hunt, Esq., Editor of the Merchants' Magazine, etc:—

DEAR SIR. The subjoined was written with the intention of sending it to you for the Merchants' Magazine. I have been induced to publish it first in the North American by the publication of some opinions which seemed to me erroneous, or unsatisfactory, and of which I hoped to lessen the influence by publishing mine. In your periodical it will have a more permanent and accessible position.

Yours, &c.,

ROBERT HARE.

THE price of mercury rose within a quarter of a century to double that which it previously commanded, and as the extrication of silver from its

ores in Spanish America has been effected by a process requiring a proportion of this metal to be consumed, the rise in the price of the one could not but augment the price of the other.

Moreover, the anarchical state of Mexico and other argentiferous regions, caused the working of very productive mines to be suspended or abandoned. Meanwhile, the growth of population in countries where silver is used for table service, and as specie, must have caused the demand for this metal to increase.* These circumstances have no doubt raised the market price of silver.

Gold is for the most part extricated by washing, and even so far as mercury is used to extricate this metal, the increase of its price would affect gold as much less, as gold is dearer than silver for equal weight. Then, again, the mercury used to collect gold is recovered by distillation. This is not the case with the mercury used in the Mexican process for silver. In that the mercury is wasted.

urges

I presume I have said enough to show that there is good reason to suppose that the change in the relative market price of gold and silver has been due in part to the decline in the supply of silver, in proportion to the demand, as well as to the augmentation of the supply of gold. In a recent letter of Mr. Gouge to Mr. Hunter, Chairman of the Financial Committee of the Senate of the United States, objecting to the proposed reduction of the amount of silver in half-dollars, the idea that the change in relative value is in part due to the enhancement of silver, does not seem to have been considered. He that the proposed change in the quantity of pure silver in the half-dollar coinage, must tend to change or debase the standard of our curreney. Had not that standard been already lowered relatively to silver by the influx of gold from California, and the price of mercury, and other causes making the extrication of silver more costly or disadvantageous, Mr. Gouge's allegations might be true. But the degradation has taken place. Gold, relatively to its former value, has fallen; silver has risen.

Agreeably to Mr. Gouge's just impressions, when a cheaper metal is circulated at the same nominal value, the dearer disappears; under these circumstances gold has become the standard, being a legal tender at its former weight. The reasons assigned by Mr. Gouge would induce a wish that, instead of lowering the weight of our silver coin, that of the gold could be raised by using as much more of that metal as will compensate the decline in price. But as an obstacle to this, we have the practical necessity of calling in all of the present gold coinage, because the more valuable coin would be hoarded, or selected for hoarding, for exportation, or manufacturing, so that it could not be got into circulation. Moreover, as our gold coin is no less a legal tender than our silver half-dollars, I do not understand how a creditor, in receiving payment in half dollars, of which two will be equal to one gold dollar, will be placed in a situation less advantageous than if they were not introduced into circulation; since, in the absence of the silver, he would be paid only in equally depreciated gold.

* [was well informed that a mine, which yielded two million of dollars annually, was abandoned in consequence of the caving in of the earth so as to require about two millions to put it into working order. An effort was made, not without great encouragement, to obtain in this country the capital requisite to restore the mine to a state of productiveness. A succeeding money pressure put an end to the project.

Unless equalization be effected by lessening the amount of silver in the half-dollar coinage, or augmenting it in that of the gold dollars, or altering both so as to bring them to meet half way, the two coins cannot both remain in circulation. An enhancement in relative value has driven the silver from the field, and will of course, a fortiori, so long as it endures, prevent it from recovering the participation which it enjoyed.

Doubtless, were it not for the cost of recoinage, it would be better to increase the weight of gold representing a dollar, and to diminish that of the silver in the dollars of that metal; but this would be expensive. Therefore, I would suggest that, while the diminution of silver in the half-dollar coin shall be carried out, Mr. Gouge's objections notwithstanding, that a coinage of gold pieces of fifty, one hundred, and five hundred dollars should be resorted to, holding as much more gold as may bring them to a mean standard between the existing gold and silver coinage.

This would cause half the difference of value arising from the deviation to fall on the payer, and half on the receiver of the gold. Coin of all the larger sizes would serve only to be hoarded or exported, since no one wanting gold as cash would wish to exchange the smaller pieces, however lighter in proportion to nominal value, for the larger pieces.

The ability to change the smaller coin for the larger, would cause the lat ter, in an ordinary state of things, to be as valuable as if they were to be of the same standard.

Where strict reference to standard value should be required, resort to the scale-beam would put it in the power of those concerned to compensate for the difference between the nominal value and standard value. Placing one of a large coin in one scale, and its nominal equivalent in smaller pieces in the other, it were easy to see how much its nominal equivalent should be below the standard equivalent. Of course a weight made to balance a coin accurately would serve in its place.

One obvious advantage of the proposed arrangement would be that our smaller coin would be less in demand for exportation. We should not coin money for foreign crucibles. It may be conceived that ingots would serve as well as coin for the larger pieces, but the process of coinage affords a greater security for uniformity in dimensions than any other, and is, upon the whole, as I suppose, about as cheap a mode of attaining the object as any which can be devised.

The practicability of having a coin of standard weight issued by the government, exchangeable for smaller pieces, representing fractions of its value, which have notoriously less silver than they ought to have in order to justify and sustain their nominal value, is manifest from the commutability of silver halves at the present time (which have not perceptibly diminished in weight by rubbing) for smooth quarters, eighths, and sixteenths of a dollar, which are notoriously below the standard."

In fact, the currency of the small pieces would be sustained in a way analogous to that of bank-notes, with this difference, that only a fraction of the value would be confided to the faithfulness of the issuer.

I am of opinion that for the smaller change, metallic tokens, wholly dependent on commutability for value, would answer every purpose of gold or silver coin, without being liable to be carried off to pay a balance of trade arising from a famine, as in Great Britain in 1848, or in this country, by the fall of the price of cotton, as in 1837.

It would seem as if only one side of the question was stated as respects