terms, the common measure of values should be as nearly as possible on a par with that of its corresponding nations, whose medium is in a sound state; that is to say, not in an accidental state of excess or deficiency. Now, one of the great advantages of specie as a medium is, that being of universal value, it will keep itself at a general level, flowing out from where it is too high into parts where it is lower. Whereas, if the medium be of local value only, as paper-money, if too little, indeed, gold and silver will flow in to supply the deficiency; but if too much, it accumulates, banishes the gold and silver not locked up in vaults and hoards, and depreciates itself; that is to say, its proportion to the annual produce of industry being raised, more of it is required to represent any particular article of produce than in the other countries. This is agreed by Smith (B. 2. c. 2. 437.), the principal advocate for a paper circulation; but advocating it on the sole condition that it be strictly regulated. He admits, nevertheless, that ‘the commerce and industry of a country cannot be so secure when suspended on the Daedalian wings of paper-money, as on the solid ground of gold and silver; and that in time of war the insecurity is greatly increased, and great confusion possible where the circulation is for the greater part in paper.’(B. 2. c. 2. 484.) But in a country where loans are uncertain, and a specie circulation the only sure resource for them, the preference of that circulation assumes a far different degree of importance, as is explained in my former letters.