By reason of these recommendations, gold and silver are used for money in every quarter of the world; and one or both are made the standard of the value of everything else.

In countries in which those metals are neither produced nor can be obtained by commerce in sufficient abundance, various substitutes for a currency have been resorted to. Thus, in the early settlement of the British colonies on this continent, where gold and silver were scarce, substitutes were found in commodities which were extensively used in commerce. Tobacco was thus used in Virginia and

Maryland, fish in New England, rice in South Carolina, and in most of those colonies a paper currency, consisting of written engagements by the colonial governments to pay money, which were receivable for all dues at the public treasury.

2. The useful functions of money are very great in all civilized countries. It can be accommodated to all exchanges, whether of small or large amount; and it thus saves the time and labor which would be required by the circuitous, tedious, and imperfect process of barter. It encourages productive industry, by enabling a manufacturer, by a single exchange, or set of exchanges, to dispose of his fabrics in large quantities; and as some have money, which, from their age, their sex, or their other occupations, they cannot personally manage, while there are others who possess the enterprise and capacity for employing it profitably, it can be transferred from one to the other, to the advantage of both parties.

Money also gives great facilities to governments in the collection of their revenue, which would be otherwise collected in bulky articles; transported at a great expense, and be liable to waste, injury, and peculation. There would be the same advantage in disbursing the revenue as in collecting it; and lastly, it enables one country to pay its debts to another, in their commercial intercourse, by a commodity of universal circulation, which can be transported with more safety, and at less expense, than any other.

The useful offices of money are indeed so great and so various, that it would seem impossible for a community to execute the complicated and diversified purposes of civilized life without such a general medium of exchange.

Though the functions of money are of such importance, yet, as its materials are very costly, it is desirable to have as little of it as will suffice to perform its useful purposes. To have twice as much money in a community as its circumstances require, is as unwise as to have an hundred wagons for transport when fifty would be sufficient; or two bridges to cross a stream at the same place.

The quantity of money required in a country depends partly on the value of the money, and partly on the number and amount of its ordinary exchanges.

The value of the precious metals, like that of other products of human industry, depends on the cost of procuring them; and, from their natural scarcity, their value has been always very high, in proportion to their bulk, and that value is uniform at the same time and place. But it varies very greatly in different ages and in different countries. Thus, it has generally been considered that the discovery of America, by reason of the unwonted richness of its mines, lowered the value of those metals from one-third to one-fourth of their previous value; and the recent discoveries of gold in California and Australia seem destined to lower the value of that metal - to what extent will be hereafter considered.

These metals have also very different values in different places. The principal cause of this diversity is the difference of distance from the most productive mines - the value increasing with the distance. They are thus dearer in Europe than America, and in Asia than in Europe.

It might seem at first that, when a commodity contains so much value in a small bulk and weight as gold, its transportation would be proportionally cheap, and that the cost of carriage could not add much to its value. Thus, 100 pounds of gold would be worth about $20,000, the freight of which, 3000 miles by water, would not be more than $2, and by railroad about thrice as much. The insurance and other charges would scarcely exceed the half of one per cent. Let us, however, suppose the whole expense of transport to be $200. This would be but one per cent. of the value of the gold, which seems to indicate that such value must be nearly the same at a distance of 3000 miles from the mines as at the mines themselves. But it must be recollected that the gold, thus transmitted to a distant country, must be purchased by the products of that country; and that these being probably of great bulk compared with their value, the cost of their transport is proportionally high; and that the payment of this expense is an indispensable prerequisite to the transfer of the gold from the mines. It must, therefore, be added to the cost of the gold in the distant country. Besides, if the mining country produces little else for foreign exchange than gold, as is sometimes the case, then the cost of the gold transported must be enhanced by the expense of two voyages.

Another circumstance which influences the quantity of these metals in each country is its wealth. Rich countries having more exchanges to make, and to a larger amount, require more gold and silver than poor ones.

The substitution of paper money for specie, and other expedients for economising the use of the precious metals, has a tendency to diminish their amount. This circumstance in England may tend as much to lessen its specie currency as its great wealth tends to increase it.

The combined influence of all these circumstances is shown in the amount of gold and silver required by each country in proportion to its population. In Great Britain, the amount to each inhabitant is about $16. In France, where bank paper is much less used, but where there has not been as great an accumulation of wealth as in England, it is $12. In the other parts of Europe, it is much less. In the United States, supposing their present population to be thirty millions, it is about $8. It is much reduced by the very extensive use of bank paper.