"Whence flows all this gold? From the countries in which employments are not diversified ; from those in which there is little power of association and combination ; from those in which, therefore, credit has no existence ; from those, finally, which do not use that machinery which so much increases the utility of the precious metals, and which we are accustomed to designate by the term bank-note. The precious metals go from California, from Mexico, from Peru, from Brazil, from Turkey, and from Portu gal, the lands in which property in money is transferred only by means of actual delivery of the coin itself, to those in which it is transferred by means of a check or note. It goes from the plains of Kansas, where notes are not in use, to New York and New England, where they are, from Siberia to St. Petersburg, from the banks of Afri can rivers to London and Liverpool, and from the diggings' of Australia to the towns and cities of Germany, where wool is dear and cloth is cheap.
"All the facts exhibited throughout the world tend to prove that every commodity seeks that place at which it has the highest utility ; and all those connected with the movement of the precious metals prove that they constitute no exception to the rule. Bank-notes increase the utility of those metals, and should, therefore, attract, and not repel, them. Nevertheless, the two nations of the world which claim best to under stand the principles of commerce are now engaged in a crusade against those notes, in the vain hope of thereby rendering their several countries more attractive of the produce of the mines of Peru and Mexico, Australia and California. In this case
England follows in our lead,—Sir Robert Peel's restrictions being later in date, by several years, than the declaration of war against circulating notes fulminated by our Government.
" It is a pure absurdity, and its adoption here is due to the fact that our system of policy tends to that expulsion of the precious metals which always must result from the long-continued export of the raw products of the earth. The administration that adopted what is called free trade was the same that commenced the system of com pelling the community to use gold instead of notes ; and the result was found in the disappearance from circulation of coin of any description whatsoever. From that time to the present, the motto of the generally dominant party of the Union has been, 'War to the death against bank-notes ;' and, with a view to promote their expulsion, laws have been passed in various States forbidding their use except when of too large size to enter freely into the transactions of the community. As must, however, inevitably be the case, the tendency to the loss of the precious metals has always been in the direct ratio of the diminution in their utility thus produced. At one time only in almost twenty years has there been an excess import of those metals ; and that was under the tariff of 1842. Then money became abundant and cheap, because the policy of the country looked to the promotion of association and the extension of commerce. Now it is scarce and dear, because that policy limits the power of association and establishes the supremacy of trade."*