If what has been said in regard to this kind of currency is correct, such an influence cannot for a moment be questioned. If it excites to wild and extravagant speculation at one time, and plunges its victims into bankruptcy and ruin without fault at another; if it excites hopes and expectations which must necessarily come to disappointment and distress; if it increases to an enormous extent the natural risks of trade, and exposes all business operations to an incalculable hazard, then the mercantile character and the general tone of morals cannot but be unfavorably affected.

The influences that hold men to strict probity, steady industry, and a strong sense of honor, are feeble enough, and have enemies enough, without the discouragements and embarrassments arising from such causes as we have described.

Society should place its premium on virtue, and not on vice.

Those who have witnessed the terrible convulsions occurring in the United States within forty years, know but too well how sad has been the effect on individual and national character.

It is unnecessary to dwell upon a point so evident, and so generally admitted by all who understand the matter; yet its recognition could not properly be omitted in the examination of the mixed-currency system.

III. A mixed currency endangers the national safety in

war.

With the existing ideas and institutions of society, and while no preparations are made in time of peace to prevent the recurrence of war, but every effort to meet it, and thus, of course, to strengthen and perpetuate the war system, it becomes a matter of great interest to inquire as to the effects of a mixed currency on the safety of a nation in the event of war.

We have already shown that a mixed currency is greatly affected by a demand for specie to send abroad. Hence, as

war must always call for an extraordinary importation of foreign merchandise and materials, and as such extraordi nary importation must require the shipment of specie, a contraction and panic, or speedy suspension, must be the certain consequence.

Again, since so great a part of a mixed currency usually consists of credit, and since credit rests wholly on confidence, any thing which impairs the latter compels a contraction or withdrawal of the currency.

Now, war generally, we may say uniformly, does this: for how long it may last, how great may be the demand for money, how large the destruction of capital, and what the final issue, must be a matter of doubt; and therefore its occurrence always impairs public confidence to a greater or less extent.

These two causes, then, are at once brought to bear upon a mixed currency with fatal effect. The result has always been, and always must be, that, under such circumstances, the mixed-currency banks suspend; because their circulation cannot be withdrawn at the time without producing universal bankruptcy, annihilating their own capital, and stopping the wheels of government.

It was so in England during the war with Napoleon; in the United States during the war of 1812, and in the time of the great Rebellion.

What comes in consequence of all this? The nation is obliged to carry on its vast pecuniary operations with a broken-down currency. This, of course, involves the finances in great embarrassment, vastly increases the public expenditures and the national indebtedness. The whole financial system of the country is crippled, and becomes as weak as its currency.

No better illustration of the truth of this statement was perhaps ever afforded than that found in the experience of the United States during its great struggle.

The country was suddenly involved in a stupendous war,

-technically, only a civil war, but, practically, a great international struggle, so vast were its dimensions, so strictly was it sectional; a conflict between two different civilizations, on different though contiguous portions of the American continent.

At the commencement of the struggle, the currency, as we have before said, amounted, circulation and deposits, to four hundred and sixty millions against eighty-three millions of specie. Upon the mere threat of secession, so greatly did it impair public confidence that the banks at the South began to suspend; and their example was followed until most of the Western, and many of the Eastern, were in a state of suspension. After the first shock had passed by, most of the banks in the loyal States resumed specie payments; but the large demands of the government, in the course of about a twelvemonth, compelled a universal suspension by both the national treasury and the banks, and the whole country was thrown upon an irredeemable paper

currency.

All this happened, not because the currency was so redundant, but because it was so unsound. Had it been based in full on specie, this disastrous result would have been avoided.

Now, if it ever could be supposed politic or safe to send away the real money of a country and live on credit, if this could ever be regarded as good economy or statesmanship, when should it be done? When the nation is in prosperity, and does not need this little gain, or when it is strained to agony in the struggles of war? If this is really a resource, should it be spent in time of peace for extra imports of wine and silks, or reserved to the great trial of life for the people, when it may bring back the munitions of war?

If we were to dispense with three hundred millions of gold that form our material currency, was it wise to send it off in years of quiet and prosperity, instead of reserving it to the decisive hour of our nationality?

In time of war, a mixed currency always becomes an un

mixed paper currency. Being at all times really inconvertible, any disturbance in public affairs which destroys, or even essentially impairs public confidence, will cause a general suspension of the mixed-currency banks, and, of course, of the government, and the substitution of a credit for a value currency.

If this is true, and all the facts of history go to prove it, then every nation, which, in time of peace, relies upon a mixed currency, must, in time of war, suffer all the disasters incident to an irredeemable paper currency; must pay a great deal more in all its purchases, require larger loans, and accumulate greater debt, greater in proportion as the currency is deficient in the element of value.

"A nation may almost as well go to war with paper guns as a paper currency."-J. Y. SMITH.

The truth of this was certainly very strongly exhibited in the experience of the government of the United States dur ing the Rebellion. The failure of the currency compelled the national legislature to adopt the arbitrary measure of making its own irredeemable notes legal tender.

This was a palpable violation of the most sacred rights of the people, and involved the treasury in a labyrinth of embarrassment and wasteful expenditure. Necessity, which knows no law, demanded all this; and there may be little or no blame on the immediate agents. The law of value had already been violated by the introduction, in peace, of the element of credit into that currency, which the government was obliged to make use of in time of war. It was not easy to change its character at such a crisis, and it was allowed to go on to its proper consequences.

If these are the natural and inevitable results of a mixed currency in such an event, is it not true that a people imposing on themselves a mixed currency can never be financially "prepared for war"?

IV. A mixed currency discourages domestic manufac

tures, disturbs the proper relation of exports and imports, and puts the balance of trade against the people employing the greater proportion of credit.

These effects will be recognized as injurious by all classes of persons; but those who are so solicitous for the positive encouragement of domestic manufactures, and for the restraint of imports, as to favor the enactment of prohibitory or protective laws imposing duties on the foreign article, will, of course, most fully appreciate and deeply feel this tendency of a mixed currency.

The course of this will be best observed in an illustration from the manufacture of a specific article:

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Suppose that a certain kind of broadcloth can be afforded by the foreign manufacturer, delivered at New York, for two dollars per yard; the same article might be made in this country, but would cost two dollars a yard, without any profit whatever. Of course, then, we cannot afford to make the article. The government, in order to encourage its production here, lays a duty upon the imported article of fifty cents per yard; but, at the same time, establishes banks which manufacture a mixed currency, and double the natural amount of money. The American manufacturer now proceeds to erect his mills; but wages and materials have so advanced in price, by the expansion of the currency, that it costs him twenty-five to fifty per cent more than it otherwise would have done. He builds machinery; but this also costs him proportionably high. He proceeds to purchase raw materials, and employ labor in manufacturing; but all are advanced in price for the same reason. His own expenses for living are also greater; and, should he be obliged to hire money, that will generally be found to have advanced in price, or rate of interest. Under these circumstances, he cannot make the cloth so as to afford a profit; and it will not be surprising if he should clamor for more protection. But it may be said, that the same causes that have advanced the expenses of living, and, consequently, of labor, will equally have advanced the price of broadcloth. Not so. The price of the broadcloth will be determined by the rate at which it can be afforded by the foreign manufacturer; and if he can pay the duty of fifty cents per yard, and yet obtain a fair profit, he will send all the market demands.