Chapter XVII: Section III: Riches (2)

[83] There is, therefore, observe, no such thing as cheapness
(in the common use of that term), without some error or
injustice. A thing is said to be cheap, not because it is
common, but because it is supposed to be sold under its
worth. Everything has its proper and true worth at any given
time, in relation to everything else; and at that worth
should be bought and sold. If sold under it, it is cheap to
the buyer by exactly so much as the seller loses, and no
more. Putrid meat, at twopence a pound, is not "cheaper"
than wholesome meat at sevenpence a pound; it is probably
much dearer; but if, by watching your opportunity, you can
get the wholesome meat for sixpence a pound, it is cheaper
to you by a penny, which you have gained, and the seller has
lost. The present rage for cheapness is either, therefore,
simply and literally, a rage for badness of all commodities,
or it is an attempt to find persons whose necessities will
force them to let you have more than you should for your
money. It is quite easy to produce such persons, and in
large numbers; for the more distress there is in a nation,
the more cheapness of this sort you can obtain, and your
boasted cheapness is thus merely a measure of the extent of
your national distress.

There is, indeed, a condition of apparent cheapness, which
we confuse, in practice and in reasoning, with the other;
namely, the real reduction in cost of articles by right
application of labour. But in this case the article is only
cheap with reference to its former price, the so-called
cheapness is only our expression for the sensation of
contrast between its former and existing prices. So soon as
the new methods of producing the article are established, it
ceases to be esteemed either cheap or dear, at the new
price, as at the old one, and is felt to be cheap only when
accident enables it to be purchased beneath this new value.
And it is to no advantage to produce the article more
easily, except as it enables you to multiply your
population. Cheapness of this kind is merely the discovery
that more men can be maintained on the same ground; and the
question, how many you will maintain in proportion to your
means, remains exactly in the same terms that it did before.

A form of immediate cheapness results, however, in many
cases, without distress, from the labour of a population
where food is redundant, or where the labour by which the
food is produced leaves much idle time on their hands, which
may be applied to the production of "cheap" articles.

All such phenomena indicate to the political economist
places where the labour is unbalanced. In the first case,
the just balance is to be effected by taking labourers from
the spot where the pressure exists, and sending them to that
where food is redundant. In the second, the cheapness is a
local accident, advantageous to the local purchaser,
disadvantageous to the local producer. It is one of the
first duties of commerce to extend the market and thus give
the local producer his full advantage.

Cheapness caused by natural accidents of harvest, weather,
etc., is always counterbalanced, in due time, by natural
scarcity similarly caused. It is the part of wise
Government, and healthy commerce, so to provide in times and
places of plenty for times and places of dearth, as that
there shall never be waste, nor famine.

Cheapness caused by gluts of the market is merely a disease
of clumsy and wanton commerce.

But their price is dependent on the human will.

Such and such a thing is demonstrably good for so much. And it may demonstrably be bad for so much.

But it remains questionable, and in all manner of ways questionable, whether I choose to give so much.[84]

[84] Price has already been defined (pp. 214, 215) to be the
quantity of labour which the possessor of a thing is willing
to take for it. It is best to consider the price to be that
fixed by the possessor, because the possessor has absolute
power of refusing sale, while the purchaser has no absolute
power of compelling it; but the effectual or market price is
that at which their estimates coincide.

This choice is always a relative one. It is a choice to give a price for this, rather than for that;--a resolution to have the thing, if getting it does not involve the loss of a better thing. Price depends, therefore, not only on the cost of the commodity itself, but on its relation to the cost of every other attainable thing.

Farther. The power of choice is also a relative one. It depends not merely on our own estimate of the thing, but on everybody else's estimate; therefore on the number and force of the will of the concurrent buyers, and on the existing quantity of the thing in proportion to that number and force.

Hence the price of anything depends on four variables.[85]

1. Its cost.
2. Its attainable quantity at that cost.
3. The number and power of the persons who want it.
4. The estimate they have formed of its desirableness.

(Its value only affects its price so far as it is contemplated in this estimate; perhaps, therefore, not at all.)

[85] The two first of these variables are included in the _x_,
and the two last in the _y_, of the formula given at p. 162
of "Unto This Last," and the four are the radical conditions
which regulate the price of things on first production; in
their price in exchange, the third and fourth of these
divide each into two others, forming the Four which are
stated at p. 186 of "Unto This Last."

Now, in order to show the manner in which price is expressed in terms of a currency, we must assume these four quantities to be known, and the "estimate of desirableness," commonly called the Demand, to be certain. We will take the number of persons at the lowest. Let A and B be two labourers who "demand," that is to say, have resolved to labour for, two articles, _a_ and _b_. Their demand for these articles (if the reader likes better, he may say their need) is to be absolute, existence depending on the getting these two things. Suppose, for instance, that they are bread and fuel in a cold country, and let _a_ represent the least quantity of bread, and _b_ the least quantity of fuel, which will support a man's life for a day. Let _a_ be producible by an hour's labour but _b_ only by two hours' labour; then the cost of _a_ is one hour, and of _b_ two (cost, by our definition, being expressible in terms of time). If, therefore, each man worked both for his corn and fuel, each would have to work three hours a day. But they divide the labour for its greater ease.[86] Then if A works three hours, he produces 3_a_, which is one _a_ more than both the men want. And if B works three hours, he produces only 1-1/2_b_, or half of _b_ less than both want. But if A works three hours and B six, A has 3_a_, and B has 3_b_, a maintenance in the right proportion for both for a day and a half; so that each might take a half a day's rest. But as B has worked double time, the whole of this day's rest belongs in equity to him. Therefore, the just exchange should be, A, giving two _a_ for one _b_, has one _a_ and one _b_;--maintenance for a day. B, giving one _b_ for two _a_, has two _a_ and two _b_;--maintenance for two days.

[86] This "greater ease" ought to be allowed for by a diminution
in the times of the divided work; but as the proportion of
times would remain the same, I do not introduce this
unnecessary complexity into the calculation.

But B cannot rest on the second day, or A would be left without the article which B produces. Nor is there any means of making the exchange just, unless a third labourer is called in. Then one workman, A, produces _a_, and two, B and C, produce _b_;--A, working three hours, has three _a_;--B, three hours, 1-1/2_b_;--C, three hours, 1-1/2_b_. B and C each give half of _b_ for _a_, and all have their equal daily maintenance for equal daily work.

To carry the example a single step farther, let three articles, _a_, _b_, and _c_, be needed.

Let _a_ need one hour's work, _b_ two, and _c_ four; then the day's work must be seven hours, and one man in a day's work can make 7_a_, or 3-1/2_b_, or 1-3/4_c_. Therefore one A works for _a_, producing 7_a_; two B's work for _b_, producing 7_b_; four C's work for _c_, producing 7_c_.

A has six _a_ to spare, and gives two _a_ for one _b_, and four _a_ for one _c_. Each B has 2-1/2_b_ to spare, and gives 1/2_b_ for one _a_, and two _b_ for one _c_. Each C has 3/4 of _c_ to spare, and gives 1/2_c_ for one _b_, and 1/4 of _c_ for one _a_. And all have their day's maintenance.

Generally, therefore, it follows that, if the demand is constant,[87] the relative prices of things are as their costs, or as the quantities of labour involved in production.

[87] Compare "Unto This Last," p. 177, et seq.

Then, in order to express their prices in terms of a currency, we have only to put the currency into the form of orders for a certain quantity of any given article (with us it is in the form of orders for gold), and all quantities of other articles are priced by the relation they bear to the article which the currency claims.

But the worth of the currency itself is not in the slightest degree founded more on the worth of the article for which the gold is exchangeable. It is just as accurate to say, "So many pounds are worth an acre of land," as "An acre of land is worth so many pounds." The worth of gold, of land, of houses, and of food, and of all other things, depends at any moment on the existing quantities and relative demands for all and each; and a change in the worth of, or demand for, any one, involves an instantaneously correspondent change in the worth, and demand for, all the rest--a change as inevitable and as accurately balanced (though often in its process as untraceable) as the change in volume of the outflowing river from some vast lake, caused by change in the volume of the inflowing streams, though no eye can trace, no instrument detect motion either on its surface, or in the depth.

Thus, then, the real working power or worth of the currency is founded on the entire sum of the relative estimates formed by the population of its possessions; a change in this estimate in any direction (and therefore every change in the national character), instantly alters the value of money, in its second great function of commanding labour. But we must always carefully and sternly distinguish between this worth of currency, dependent on the conceived or appreciated value of what it represents, and the worth of it, dependent on the existence of what it represents. A currency is true or false, in proportion to the security with which it gives claim to the possession of land, house, horse, or picture; but a currency is strong or weak, worth much or worth little, in proportion to the degree of estimate in which the nation holds the house, horse, or picture which is claimed. Thus the power of the English currency has been, till of late, largely based on the national estimate of horses and of wine: so that a man might always give any price to furnish choicely his stable, or his cellar, and receive public approval therefor: but if he gave the same sum to furnish his library, he was called mad, or a Bibliomaniac. And although he might lose his fortune by his horses, and his health or life by his cellar, and rarely lost either by his books, he was yet never called a Hippomaniac nor an Oinomaniac; but only Bibliomaniac, because the current worth of money was understood to be legitimately founded on cattle and wine, but not on literature. The prices lately given at sales for pictures and MSS. indicate some tendency to change in the national character in this respect, so that the worth of the currency may even come in time to rest, in an acknowledged manner, somewhat on the state and keeping of the Bedford missal, as well as on the health of Caractacus or Blink Bonny; and old pictures be considered property, no less than old port. They might have been so before now, but it is more difficult to choose the one than the other.

Now, observe, all these sources of variation in the power of the currency exist wholly irrespective of the influences of vice, indolence, and improvidence. We have hitherto supposed, throughout the analysis, every professing labourer to labour honestly, heartily, and in harmony with his fellows. We have now to bring farther into the calculation the effects of relative industry, honour, and forethought, and thus to follow out the bearings of our second inquiry: Who are the holders of the Store and Currency, and in what proportions?

This, however, we must reserve for our next paper,--noticing here only that, however distinct the several branches of the subject are, radically, they are so interwoven in their issues that we cannot rightly treat any one, till we have taken cognisance of all. Thus the quantity of the currency in proportion to number of population is materially influenced by the number of the holders in proportion to the non-holders; and this again by the number of holders of goods. For as, by definition, the currency is a claim to goods which are not possessed, its quantity indicates the number of claimants in proportion to the number of holders; and the force and complexity of claim. For if the claims be not complex, currency as a means of exchange may be very small in quantity. A sells some corn to B, receiving a promise from B to pay in cattle, which A then hands over to C, to get some wine. C in due time claims the cattle from B; and B takes back his promise. These exchanges have, or might have been, all effected with a single coin or promise; and the proportion of the currency to the store would in such circumstances indicate only the circulating vitality of it--that is to say, the quantity and convenient divisibility of that part of the store which the habits of the nation keep in circulation. If a cattle-breeder is content to live with his household chiefly on meat and milk, and does not want rich furniture, or jewels, or books,--if a wine- and corn-grower maintains himself and his men chiefly on grapes and bread;--if the wives and daughters of families weave and spin the clothing of the household, and the nation, as a whole, remains content with the produce of its own soil and the work of its own hands, it has little occasion for circulating media. It pledges and promises little and seldom; exchanges only so far as exchange is necessary for life. The store belongs to the people in whose hands it is found, and money is little needed either as an expression of right, or practical means of division and exchange.

But in proportion as the habits of the nation become complex and fantastic (and they may be both, without therefore being civilized), its circulating medium must increase in proportion to its store. If everyone wants a little of everything,--if food must be of many kinds, and dress of many fashions,--if multitudes live by work which, ministering to fancy, has its pay measured by fancy, so that large prices will be given by one person for what is valueless to another,--if there are great inequalities of knowledge, causing great inequalities of estimate,--and finally, and worst of all, if the currency itself, from its largeness, and the power which the possession of it implies, becomes the sole object of desire with large numbers of the nation, so that the holding of it is disputed among them as the main object of life:--in each and all these cases, the currency enlarges in proportion to the store, and, as a means of exchange and division, as a bond of right, and as an expression of passion, plays a more and more important part in the nation's dealings, character, and life.

Against which part, when, as a bond of Right, it becomes too conspicuous and too burdensome, the popular voice is apt to be raised in a violent and irrational manner, leading to revolution instead of remedy. Whereas all possibility of Economy depends on the clear assertion and maintenance of this bond of right, however burdensome. The first necessity of all economical government is to secure the unquestioned and unquestionable working of the great law of Property--that a man who works for a thing shall be allowed to get it, keep it, and consume it, in peace; and that he who does not eat his cake to-day, shall be seen, without grudging, to have his cake to-morrow. This, I say, is the first point to be secured by social law; without this, no political advance, nay, no political existence, is in any sort possible. Whatever evil, luxury, iniquity, may seem to result from it, this is nevertheless the first of all Equities; and to the enforcement of this, by law and by police-truncheon, the nation must always primarily set its mind--that the cupboard door may have a firm lock to it, and no man's dinner be carried off by the mob, on its way home from the baker's. Which, thus fearlessly asserting, we shall endeavour in the next paper to consider how far it may be practicable for the mob itself, also, in due breadth of dish, to have dinners to carry home.

III.

THE CURRENCY-HOLDERS AND STORE-HOLDERS. THE DISEASE OF DESIRE.

It will be seen by reference to the last paper that our present task is to examine the relation of holders of store to holders of currency; and of both to those who hold neither. In order to do this, we must determine on which side we are to place substances such as gold, commonly known as bases of currency. By aid of previous definitions the reader will now be able to understand closer statements than have yet been possible.

The currency of any country consists of every document acknowledging debt which is transferable in the country.

This transferableness depends upon its intelligibility and credit. Its intelligibility depends chiefly on the difficulty of forging anything like it;--its credit much on national character, but ultimately always on the existence of substantial means of meeting its demand.

As the degrees of transferableness are variable (some documents passing only in certain places, and others passing, if at all, for less than their inscribed value), both the mass and, so to speak, fluidity, of the currency, are variable. True or perfect currency flows freely, like a pure stream; it becomes sluggish or stagnant in proportion to the quantity of less transferable matter which mixes with it, adding to its bulk, but diminishing its purity. Substances of intrinsic value, such as gold, mingle also with the currency, and increase, while they modify, its power; these are carried by it as stones are carried by a torrent, sometimes momentarily impeding, sometimes concentrating its force, but not affecting its purity. These substances of intrinsic value may be also stamped or signed so as to become acknowledgments of debt, and then become, so far as they operate independently of their intrinsic value, part of the real currency.

Deferring consideration of minor forms of currency, consisting of documents bearing private signature, we will examine the principle of legally authorized or national currency.

This, in its perfect condition, is a form of public acknowledgment of debt, so regulated and divided that any person presenting a commodity of tried worth in the public market, shall, if he please, receive in exchange for it a document giving him claim for the return of its equivalent, (1) in any place, (2) at any time, and (3) in any kind.

When currency is quite healthy and vital, the persons entrusted with its management are always able to give on demand either--

A. The assigning document for the assigned quantity of goods. Or,

B. The assigned quantity of goods for the assigning document.

If they cannot give document for goods, the national exchange is at fault.

If they cannot give goods for document, the national credit is at fault.

The nature and power of the document are therefore to be examined under the three relations which it bears to Place, Time, and Kind.

1. It gives claim to the return of equivalent wealth in any Place. Its use in this function is to save carriage, so that parting with a bushel of corn in London, we may receive an order for a bushel of corn for the Antipodes, or elsewhere. To be perfect in this use, the substance of currency must be to the maximum portable, credible, and intelligible. Its non-acceptance or discredit results always from some form of ignorance or dishonour: so far as such interruptions rise out of differences in denomination, there is no ground for their continuance among civilized nations. It may be convenient in one country to use chiefly copper for coinage, in another silver, and in another gold,--reckoning accordingly in centimes, francs, or sequins; but that a French franc should be different in weight from an English shilling, and an Austrian zwanziger vary in weight and alloy from both, is wanton loss of commercial power.

2. It gives claim to the return of equivalent wealth at any Time. In this second use, currency is the exponent of accumulation: it renders the laying up of store at the command of individuals unlimitedly possible;--whereas, but for its intervention, all gathering would be confined within certain limits by the bulk of poverty, or by its decay, or the difficulty of its guardianship. "I will pull down my barns and build greater" cannot be a daily saying; and all material investment is enlargement of care. The national currency transfers the guardianship of the store to many; and preserves to the original producer the right of re-entering on its possession at any future period.

3. It gives claim (practical, though not legal) to the return of equivalent wealth in any Kind. It is a transferable right, not merely to this or that, but to anything; and its power in this function is proportioned to the range of choice. If you give a child an apple or a toy, you give him a determinate pleasure, but if you give him a penny, an indeterminate one, proportioned to the range of selection offered by the shops in the village. The power of the world's currency is similarly in proportion to the openness of the world's fair, and commonly enhanced by the brilliancy of external aspect, rather than solidity of its wares.

We have said that the currency consists of orders for equivalent goods. If equivalent, their quality must be guaranteed. The kinds of goods chosen for specific claim must, therefore, be capable of test, while, also, that a store may be kept in hand to meet the call of the currency, smallness of bulk, with great relative value, is desirable; and indestructibility, over at least a certain period, essential.

Such indestructibility and facility of being tested are united in gold; its intrinsic value is great, and its imaginary value is greater; so that, partly through indolence, partly through necessity and want of organization, most nations have agreed to take gold for the only basis of their currencies;--with this grave disadvantage, that its portability enabling the metal to become an active part of the medium of exchange, the stream of the currency itself becomes opaque with gold--half currency and half commodity, in unison of functions which partly neutralize, partly enhance each other's force.

They partly neutralize, since in so far as the gold is commodity, it is bad currency, because liable to sale; and in so far as it is currency, it is bad commodity, because its exchange value interferes with its practical use. Especially its employment in the higher branches of the arts becomes unsafe on account of its liability to be melted down for exchange.

Again. They partly enhance, since in so far as the gold has acknowledged intrinsic value, it is good currency, because everywhere acceptable; and in so far as it has legal exchangeable value, its worth as a commodity is increased. We want no gold in the form of dust or crystal; but we seek for it coined because in that form it will pay baker and butcher. And this worth in exchange not only absorbs a large quantity in that use,[88] but greatly increases the effect on the imagination of the quantity used in the arts. Thus, in brief, the force of the functions is increased, but their precision blunted, by their unison.

[88] The waste of labour in obtaining the gold, though it cannot
be estimated by help of any existing data, may be understood
in its bearing on entire economy by supposing it limited to
transactions between two persons. If two farmers in
Australia have been exchanging corn and cattle with each
other for years, keeping their accounts of reciprocal debt
in any simple way, the sum of the possessions of either
would not be diminished, though the part of it which was
lent or borrowed were only reckoned by marks on a stone, or
notches on a tree; and the one counted himself accordingly,
so many scratches, or so many notches, better than the
other. But it would soon be seriously diminished if,
discovering gold in their fields, each resolved only to
accept golden counters for a reckoning; and accordingly,
whenever he wanted a sack of corn or a cow, was obliged to
go and wash sand for a week before he could get the means of
giving a receipt for them.

These inconveniences, however, attach to gold as a basis of currency on account of its portability and preciousness. But a far greater inconvenience attaches to it as the only legal basis of currency. Imagine gold to be only attainable in masses weighing several pounds each, and its value, like that of a malachite or marble, proportioned to its largeness of bulk;--it could not then get itself confused with the currency in daily use, but it might still remain as its basis; and this second inconvenience would still affect it, namely, that its significance as an expression of debt, varies, as that of every other article would, with the popular estimate of its desirableness, and with the quantity offered in the market. My power of obtaining other goods for gold depends always on the strength of public passion for gold, and on the limitation of its quantity, so that when either of two things happen--that the world esteems gold less, or finds it more easily,--my right of claim is in that degree effaced; and it has been even gravely maintained that a discovery of a mountain of gold would cancel the National Debt; in other words, that men may be paid for what costs much in what costs nothing. Now, if it is true that there is little chance of sudden convulsion in this respect, the world will not rapidly increase in wisdom so as to despise gold, and perhaps may even desire it more eagerly the more easily it is obtained; nevertheless the right of debt ought not to rest on a basis of imagination; nor should the frame of a national currency vibrate with every miser's panic and every merchant's imprudence.

There are two methods of avoiding this insecurity, which would have been fallen upon long ago if, instead of calculating the conditions of the supply of gold, men had only considered how the world might live and manage its affairs without gold at all.[89] One is to base the currency on substances of truer intrinsic value; the other, to base it on several substances instead of one. If I can only claim gold, the discovery of a continent of cornfields need not trouble me. If, however, I wish to exchange my bread for other things, a good harvest will for the time limit my power in this respect; but if I can claim either bread, iron, or silk at pleasure, the standard of value has three feet instead of one, and will be proportionally firm. Thus, ultimately the steadiness of currency depends upon the breadth of its base; but the difficulty of organization increasing with this breadth, the discovery of the condition at once safest and most convenient[90] can only be by long analysis which must for the present be deferred. Gold or silver[91] may always be retained in limited use, as a luxury of coinage and questionless standard, of one weight and alloy among nations, varying only in the die. The purity of coinage when metallic, is closely indicative of the honesty of the system of revenue, and even of the general dignity of the State.[92]

[89] It is difficult to estimate the curious futility of
discussions such as that which lately occupied a section of
the British Association, on the absorption of gold, while no
one can produce even the simplest of the data necessary for
the inquiry. To take the first occurring one,--What means
have we of ascertaining the weight of gold employed this
year in the toilettes of the women of Europe (not to
speak of Asia); and, supposing it known, what means of
conjecturing the weight by which, next year, their fancies,
and the changes of style among their jewellers, will
diminish or increase it?

[90] See, in Pope's epistle to Lord Bathurst, his sketch of the
difficulties and uses of a currency literally "pecuniary"--

"His Grace will game--to White's a bull he led," etc.

[91] Perhaps both; perhaps silver only. It may be found
expedient ultimately to leave gold free for use in the arts.
As a means of reckoning, the standard might be, and in some
cases has already been, entirely ideal.--See Mill's
"Political Economy," book iii., chap. 7, at beginning.

[92] The purity of the drachma and sequin were not without
significance of the state of intellect, art, and policy,
both in Athens and Venice;--a fact first impressed upon
me ten years ago, when, in daguerreotypes of Venetian
architecture, I found no purchasable gold pure enough
to gild them with, but that of the old Venetian sequin.

Whatever the article or articles may be which the national currency promises to pay, a premium on that article indicates bankruptcy of the Government in that proportion, the division of the assets being restrained only by the remaining confidence of the holders of notes in the return of prosperity to the firm. Incontrovertible currencies, those of forced acceptance, or of unlimited issue, are merely various modes of disguising taxation, and delaying its pressure, until it is too late to interfere with its causes. To do away with the possibility of such disguise would have been among the first results of a true economical science, had any such existed; but there have been too many motives for the concealment, so long as it could by any artifices be maintained, to permit hitherto even the founding of such a science.

And, indeed, it is only through evil conduct, wilfully persisted in, that there is any embarrassment either in the theory or the working of currency. No exchequer is ever embarrassed, nor is any financial question difficult of solution, when people keep their practice honest, and their heads cool. But when Governments lose all office of pilotage, protection, scrutiny, and witness; and live only in magnificence of proclaimed larceny, effulgent mendacity, and polished mendicity; or when the people choosing Speculation (the S usual redundant in the spelling) instead of Toil, pursue no dishonesty with chastisement, that each may with impunity take his dishonest turn; and enlarge their lust of wealth through ignorance of its use, making their harlot of the dust, and setting Earth, the Mother, at the mercy of Earth, the Destroyer, so that she has to seek in hell the children she left playing in the meadows,--there are no tricks of financial terminology that will save them; all signature and mintage do but magnify the ruin they retard; and even the riches that remain, stagnant or current, change only from the slime of Avernus to the sand of Phlegethon;--quicksand at the embouchure;--land fluently recommended by recent auctioneers as "eligible for building leases."

Finally, then, the power of true currency is fourfold.

1. Credit power. Its worth in exchange, dependent on public opinion of the stability and honesty of the issuer.

2. Real worth. Supposing the gold, or whatever else the currency expressly promises, to be required from the issuer, for all his notes; and that the call cannot be met in full. Then the actual worth of the document (whatever its credit power) would be, and its actual worth at any moment is to be defined as being, what the division of the assets of the issuer, and his subsequent will work, would produce for it.

3. The exchange power of its base. Granting that we can get five pounds in gold for our note, it remains a question how much of other things we can get for five pounds in gold. The more of other things exist, and the less gold, the greater this power.

4. The power over labour, exercised by the given quantity of the base, or of the things to be got for it. The question in this case is, how much work, and (question of questions) whose work, is to be had for the food which five pounds will buy. This depends on the number of the population; on their gifts, and on their dispositions, with which, down to their slightest humours and up to their strongest impulses, the power of the currency varies; and in this last of its ranges,--the range of passion, price, or praise (converso in pretium Deo), is at once least, and greatest.

Such being the main conditions of national currency, we proceed to examine those of the total currency, under the broad definition, "transferable acknowledgment of debt";[93] among the many forms of which there are in effect only two, distinctly opposed; namely, the acknowledgments of debts which will be paid, and of debts which will not. Documents, whether in whole or part, of bad debt, being to those of good debt as bad money to bullion, we put for the present these forms of imposture aside (as in analysing a metal we should wash it clear of dross), and then range, in their exact quantities, the true currency of the country on one side, and the store or property of the country on the other. We place gold, and all such substances, on the side of documents, as far as they operate by signature;--on the side of store as far as they operate by value. Then the currency represents the quantity of debt in the country, and the store the quantity of its possession. The ownership of all the property is divided between the holders of currency and holders of store, and whatever the claiming value of the currency is at any moment, that value is to be deducted from the riches of the store-holders, the deduction being practically made in the payment of rent for houses and lands, of interest on stock, and in other ways to be hereafter examined.

[93] Under which term, observe, we include all documents of debt
which, being honest, might be transferable, though they
practically are not transferred; while we exclude all
documents which are in reality worthless, though in fact
transferred temporarily as bad money is. The document of
honest debt, not transferred, is merely to paper currency as
gold withdrawn from circulation is to that of bullion. Much
confusion has crept into the reasoning on this subject from
the idea that withdrawal from circulation is a definable
state, whereas it is a gradated state, and indefinable. The
sovereign in my pocket is withdrawn from circulation as long
as I choose to keep it there. It is no otherwise withdrawn
if I bury it, nor even if I choose to make it, and others,
into a golden cup, and drink out of them; since a rise in
the price of the wine, or of other things, may at any time
cause me to melt the cup and throw it back into currency;
and the bullion operates on the prices of the things in the
market as directly, though not as forcibly, while it is in
the form of a cup, as it does in the form of a sovereign. No
calculation can be founded on my humour in any ease. If I
like to handle rouleaus, and therefore keep a quantity of
gold, to play with, in the form of jointed basaltic columns,
it is all one in its effect on the market as if I kept it in
the form of twisted filigree, or steadily amicus lamnae, beat
the narrow gold pieces into broad ones, and dined off them.
The probability is greater that I break the rouleau than
that I melt the plate; but the increased probability is not
calculable. Thus, documents are only withdrawn from the
currency when cancelled, and bullion when it is so
effectually lost as that the probability of finding it is no
greater than that of finding new gold in the mine.

At present I wish only to note the broad relations of the two great classes--the currency-holders and store-holders.[94] Of course they are partly united, most monied men having possessions of land or other goods; but they are separate in their nature and functions. The currency-holders as a class regulate the demand for labour, and the store-holders the laws of it; the currency-holders determine what shall be produced, and the store-holders the conditions of its production. Farther, as true currency represents by definition debts which will be paid, it represents either the debtor's wealth, or his ability and willingness; that is to say, either wealth existing in his hands transferred to him by the creditor, or wealth which, as he is at some time surely to return it, he is either increasing, or, if diminishing, has the will and strength to reproduce. A sound currency, therefore, as by its increase it represents enlarging debt, represents also enlarging means; but in this curious way, that a certain quantity of it marks the deficiency of the wealth of the country from what it would have been if that currency had not existed.[95] In this respect it is like the detritus of a mountain; assume that it lies at a fixed angle, and the more the detritus, the larger must be the mountain; but it would have been larger still, had there been none.

[94] They are (up to the amount of the currency) simply creditors
and debtors--the commercial types of the two great sects of
humanity which those words describe; for debt and credit are
of course merely the mercantile forms of the words "duty"
and "creed," which give the central ideas: only it is more
accurate to say "faith" than "creed," because creed has been
applied carelessly to mere forms of words. Duty properly
signifies whatever in substance or act one person owes to
another, and faith the other's trust in his rendering it.
The French "devoir" and "foi" are fuller and clearer words
than ours; for, faith being the passive of fact, foi comes
straight through fides from fio; and the French keep the
group of words formed from the infinitive--fieri, "se fier,"
"se defier," "defiance," and the grand following "defi." Our
English "affiance," "defiance," "confidence," "diffidence,"
retain accurate meanings; but our "faithful" has become
obscure, from being used for "faithworthy," as well as "full
of faith." "His name that sat on him was called Faithful and
True."

Trust is the passive of true saying, as faith is the passive
of due doing; and the right learning of these etymologies,
which are in the strictest sense only to be learned "by
heart," is of considerably more importance to the youth of a
nation than its reading and ciphering.

[95] For example, suppose an active peasant, having got his
ground into good order and built himself a comfortable
house, finding still time on his hands, sees one of his
neighbours little able to work, and ill lodged, and offers
to build him also a house, and to put his land in order, on
condition of receiving for a given period rent for the
building and tithe of the fruits. The offer is accepted, and
a document given promissory of rent and tithe. This note is
money. It can only be good money if the man who has incurred
the debt so far recovers his strength as to be able to take
advantage of the help he has received, and meet the demand
of the note; if he lets his house fall to ruin, and his
field to waste, his promissory note will soon be valueless:
but the existence of the note at all is a consequence of his
not having worked so stoutly as the other. Let him gain as
much as to be able to pay back the entire debt; the note is
cancelled and we have two rich store-holders and no
currency.

Finally, though, as above stated, every man possessing money has usually also some property beyond what is necessary for his immediate wants, and men possessing property usually also hold currency beyond what is necessary for their immediate exchanges, it mainly determines the class to which they belong, whether in their eyes the money is an adjunct of the property, or the property of the money. In the first case, the holder's pleasure is in his possessions, and in his money subordinately, as the means of bettering or adding to them. In the second, his pleasure is in his money, and in his possessions only as representing it. In the first case, the money is as an atmosphere surrounding the wealth, rising from it and raining back upon it; but in the second, it is a deluge, with the wealth floating, and for the most part perishing in it. The shortest distinction between the men is that the one wishes always to buy and the other to sell.

Such being the great relations of the classes, their several characters are of the highest importance to the nation; for on the character of the store-holders depends the preservation, display, and serviceableness of its wealth;--on that of the currency-holders its nature, and in great part its distribution; and on both its production.

The store-holders are either constructive, or neutral, or destructive; and in subsequent papers we shall, with respect to every kind of wealth, examine the relative power of the store-holder for its improvement or destruction; and we shall then find it to be of incomparably greater importance to the nation in whose hands the thing is put, than how much of it is got; and that the character of the holders may be conjectured by the quality of the store, for such and such a thing; nor only asks for it, but if to be bettered, betters it: so that possession and possessor reciprocally act on each other through the entire sum of national possession. The base nation asking for base things sinks daily to deeper vileness of nature and of use; while the noble nation, asking for noble things, rises daily into diviner eminence in both; the tendency to degradation being surely marked by [Greek: ataxia], carelessness as to the hands in which things are put, competition for the acquisition of them, disorderliness in accumulation, inaccuracy in reckoning, and bluntness in conception as to the entire nature of possession.

Now, the currency-holders always increase in number and influence in proportion to the bluntness of nature and clumsiness of the store-holders; for the less use people can make of things the more they tire of them, and want to change them for something else, and all frequency of change increases the quantity and power of currency; while the large currency-holder himself is essentially a person who never has been able to make up his mind as to what he will have, and proceeds, therefore, in vague collection and aggregation, with more and more infuriate passion, urged by complacency in progress, and pride in conquest.

While, however, there is this obscurity in the nature of possession of currency, there is a charm in the absoluteness of it, which is to some people very enticing. In the enjoyment of real property others must partly share. The groom has some enjoyment of the stud, and the gardener of the garden; but the money is, or seems shut up; it is wholly enviable. No one else can have part in any complacencies arising from it.

The power of arithmetical comparison is also a great thing to unimaginative people. They know always they are so much better than they were, in money; so much better than others, in money; wit cannot be so compared, nor character. My neighbour cannot be convinced I am wiser than he is, but he can that I am worth so much more; and the universality of the conviction is no less flattering than its clearness. Only a few can understand, none measure, superiorities in other things; but everybody can understand money, and count it.

Now, these various temptations to accumulation would be politically harmless, if what was vainly accumulated had any fair chance of being wisely spent. For as accumulation cannot go on for ever, but must some day end in its reverse--if this reverse were indeed a beneficial distribution and use, as irrigation from reservoir, the fever of gathering, though perilous to the gatherer, might be serviceable to the community. But it constantly happens (so constantly, that it may be stated as a political law having few exceptions), that what is unreasonably gathered is also unreasonably spent by the persons into whose hands it finally falls. Very frequently it is spent in war, or else in stupefying luxury, twice hurtful, both in being indulged by the rich and witnessed by the poor. So that the _mal tener_ and _mal dare_ are as correlative as complementary colours; and the circulation of wealth, which ought to be soft, steady, strong, far-sweeping, and full of warmth, like the Gulf Stream, being narrowed into an eddy, and concentrated on a point, changes into the alternate suction and surrender of Charybdis. Which is, indeed, I doubt not, the true meaning of that marvellous fable, "infinite," as Bacon said of it, "in matter of meditation."[96]

[96] It is a strange habit of wise humanity to speak in enigmas
only, so that the highest truths and usefullest laws must be
hunted for through whole picture-galleries of dreams, which
to the vulgar seem dreams only. Thus Homer, the Greek
tragedians, Plato, Dante, Chaucer, Shakespeare, and Goethe,
have hidden all that is chiefly serviceable in their work,
and in all the various literature they absorbed and
re-embodied, under types which have rendered it quite
useless to the multitude. What is worse, the two primal
declarers of moral discovery, Homer and Plato, are partly at
issue; for Plato's logical power quenched his imagination,
and he became incapable of understanding the purely
imaginative element either in poetry or painting; he
therefore somewhat overrates the pure discipline of
passionate art in song and music, and misses that of
meditative art. There is, however, a deeper reason for his
distrust of Homer. His love of justice, and reverently
religious nature made him dread as death, every form of
fallacy; but chiefly, fallacy respecting the world to come
(his own myths being only symbolic exponents of a rational
hope). We shall perhaps now every day discover more clearly
how right Plato was in this, and feel ourselves more and
more wonderstruck that men such as Homer and Dante (and, in
an inferior sphere, Milton), not to speak of the great
sculptors and painters of every age, have permitted
themselves, though full of all nobleness and wisdom, to coin
idle imaginations of the mysteries of eternity, and mould
the faiths of the families of the earth by the courses of
their own vague and visionary arts: while the indisputable
truths respecting human life and duty, respecting which they
all have but one voice, lie hidden behind these veils of
phantasy, unsought and often unsuspected. I will gather
carefully, out of Dante and Homer, what of this kind bears
on our subject, in its due place; the first broad intention
of their symbols may be sketched at once. The rewards of a
worthy use of riches, subordinate to other ends, are shown
by Dante in the fifth and sixth orbs of Paradise; for the
punishment of their unworthy use, three places are assigned;
one for the avaricious and prodigal whose souls are lost
("Hell": Canto 7); one for the avaricious and prodigal whose
souls are capable of purification ("Purgatory": Canto 19);
and one for the usurers, of whom none can be redeemed
("Hell": Canto 17). The first group, the largest in all hell
(gente piu che altrove troppa), meet in contrary currents,
as the waves of Charybdis, casting weights at each other
from opposite sides. This weariness of contention is the
chief element of their torture; so marked by the beautiful
lines, beginning, Or puoi, figliuol, etc. (but the usurers,
who made their money inactively, sit on the sand, equally
without rest, however, "Di qua, di la soccorrien," etc.).
For it is not avarice but contention for riches, leading to
this double misuse of them, which, in Dante's sight, is the
unredeemable sin. The place of its punishment is guarded by
Plutus, "the great enemy," and "la fiera crudele," a spirit
quite different from the Greek Plutus, who, though old and
blind, is not cruel, and is curable, so as to become
far-sighted ([Greek: hou typhlos all' oxy blepon]--Plato's
epithets in first book of the Laws). Still more does this
Dantesque type differ from the resplendent Plutus of Goethe
in the second part of "Faust," who is the personified power
of wealth for good or evil; not the passion for wealth; and
again from the Plutus of Spenser, who is the passion of mere
aggregation. Dante's Plutus is specially and definitely the
spirit of Contention and Competition, or Evil Commerce; and
because, as I showed in my last paper, this kind of commerce
"makes all men strangers," his speech is unintelligible, and
no single soul of all those ruined by him has recognizable
features.

(La sconescente vita--
Ad ogni conoscenza or li fa bruni).

On the other hand, the redeemable sins of avarice and
prodigality are, in Dante's sight, those which are without
deliberate or calculated operation. The lust, or lavishness,
of riches can be purged, so long as there has been no
servile consistency of dispute and competition for them. The
sin is spoken of as that of degradation by the love of
earth; it is purified by deeper humiliation--the souls crawl
on their bellies; their chant, "my soul cleaveth unto the
dust." But the spirits here condemned are all recognizable,
and even the worst examples of the thirst for gold, which
they are compelled to tell the histories of during the
night, are of men swept by the passion of avarice into
violent crime, but not sold to its steady work. The precept
given to each of these spirits for its deliverance is--Turn
thine eyes to the lucre (lure) which the Eternal King rolls
with the mighty wheels: otherwise, the wheels of the
"Greater Fortune," of which the constellation is ascending
when Dante's dream begins. Compare George Herbert,--

"Lift up thy head;
Take stars for money; stars, not to be told
By any art, yet to be purchased."