Page:The Real Cause of the High Price of Gold Bullion.djvu/39



real criterion of the necessary quantity of a circulating medium for a great community, is its adequacy to circulate the whole exchangeable, annual value of all its labour, ingenuity, productions, and imports, and to support the payment of all its taxes and of all its expenditures in war. And the relaxation or increase of demand for such medium, is the measure of its deficiency or excess.

Our Circulation was originally purely Metallic. But when it was found impossible to procure any longer a sufficiency of the precious metals, for answering all the demands of a great community, increasing rapidly in wealth and produce, and in requisition of supplies for a war expenditure,—a second system was introduced; and a Bank Paper Currency was engrafted on the basis of Coin, which formerly constituting the whole, was now only to form a third of the currency. But to give this currency the appearance of perfect solidity and intrinsic value, the Bank Paper was made convertible into Coin, at the option of the holder; and as it was hoped the public would prefer the Paper to Coin, it was conceived, that two thirds of the