Page:Inquiry into the Principles and Policy of the Government of the United States.djvu/352

342 friendly, to imposts and banking. Duties add to nomiual price; do they also enrich nations?

The inefficacy of banking for enhancing the value of the products of labour, was demonstrated in the United States by an embargo. The exportable, instantly lost two-thirds of its price, without any change in the bank currency. And the price of the consumable, was instantly regulated by the home demand, just as the demand of foreign markets, when these markets are open, regulates the price of exportable labour. Could banking have regulated value or even price, the exact regulation of both, by need, would not have appeared in this complete experiment, of an intercourse between its currency and the products of labour, upon a theatre, isolated by this embargo against every species of foreign influence.

Its impotence for enhancing value, between the people of the same country, is not however conclusive evidence of its effects between distinct nations. Seeing that price and value are regulated at home by the market or need, we may certainly conclude that products consumed abroad, will be regulated by the same standard, and therefore the only question is, in what mode banking affects these regulators. This is done by increasing or diminishing the labour of a country, employed in providing for human wants. If it increases this labour, it diminishes; if it diminishes this labour, it increases the price of its products. It is certain that banking produces the latter effect, to the extent of the labour employed in its operations, and of that enabled to live in idleness upon the income of its stock. So far as it thus enhances the price or value of labour at home, it is a mode of doing it, precisely equivalent to effecting the same end by neutralising an equal portion of labour, with useless offices, endowed with unearned income. But so far as it thus enhances price abroad, it is a solid enhancement of value in favour of the nation which has the understanding to avail itself of the circumstance. The enhancement of the price of wheat in England, for instance, so long as its bank