losses, and therefore the least power of meeting the pressure of circumstances by prudence and forethought. ----- Footnote G: Berkeley the Banker. ----- To stimulate the production of labour by the increase of the circulating medium, the fruits of which must be wrested away by an inevitable contraction, is a policy whose glory is not to be coveted; and surely no statesman will be found to adventure it till the last tradition of the consequent woes of our working-classes shall have died away. By that time, it is probable that the danger of such recurrence will be obviated by the adoption of some principle of security, which will give society the advantage of a free trade in money. It must be long before this can take place; for it must be long before the values of commodities are allowed to adjust themselves; and money must, from its importance, be very cautiously and gradually committed to the equalizing influences of the natural laws of demand. But, however long it may be, the woes of past convulsions will not till then be forgotten. That the time of arbitrary interference will, however, cease, can scarcely be doubted, if the following be true principles. In exchanging commodities for one another directly, that is, in the way of barter, much time is lost, and trouble incurred, before the respective wants of the exchanging parties can be supplied. This trouble and waste may be avoided by the adoption of a medium of exchange,—that is, a commodity generally agreed upon, which, in order to effect an exchange between two other commodities, is first received in exchange for the one, and then given in exchange for the other. This commodity is Money. The great requisites in a medium of exchange are, that it should be— What all sellers are willing to receive;— Capable of division into convenient portions;— Portable, from including great value in small bulk;— Indestructible, and little liable to fluctuations of value. Gold and silver unite these requisites in an unequalled degree, and have also the desirable quality of beauty; gold and silver have therefore formed the principal medium of exchange hitherto adopted; usually prepared, by an appointed authority, in the form most suitable for the purposes of exchange, in order to avoid the inconveniences of ascertaining the value of the medium on every occasion of purchase. Where the supply of money is left unrestricted, its exchangeable value will be ultimately determined, like that of all other commodities, by the cost of production. Where the supply is restricted, its exchangeable value depends on the proportion of the demand to the supply. In the former case, it retains its character of a commodity, serving as a standard of value in preference to other commodities only in virtue of its superior natural requisites to that object.