So long as it operates as specie, an influx of bank paper
into this country, produces an efflux of specie, which departs to raise the real value of foreign labour, whilst the remaining local currency, can at most bestow only a nominal increase upon domestick. Bank currency, passing as
specie, is embodied with the general business of commerce,
and like specie, is governed by the principles of commerce.
These have declared, that even a redundancy of specie itself,
cannot be made to render permanent local benefits. If
bank currency is inextricably interwoven with and influenced by the principles of commerce, it is simply a redundancy of specie, under a prohibition against exportation. It will enhance the value of the commodities, bought by the banking nation of another, periodically, by producing a redundancy of specie; and permanently, by a diminution of
labour. Whilst a country can give high prices in specie,
for foreign manufactures, on account of a redundancy of
money caused by bank currency, foreigners will prefer them
to high-priced commodities. After the s|»ecie is gone, the
price of the same commodities, as to foreigners, will be fixed by the markets abroad, and not by the paper at home.
But reasoning upon the question, whether bank currency will enhance or depress prices, is superseded by experience. The philosophers no longer debated whether a monster was in the sun, after they saw the fly in the telescope. Through the experience of England, we are presented with the disputed fact. England has the most paper currency of any country of the commercial world, and the price of her maniifactures is the lowest.
In contemplating the example of England, we must discern compulsion at the beginning, as well as at the end of her commerce. Her labour is compelled to sell low to her mercantile interest, and foreign nations or her colonies are compelled to purchase high of the same interest. Her maritime power is the instrument of the latter compulsion, and her bank currency of the former. This bank currency cannot force up the prices in foreign nations, as her fleet does
