themselves upon a uniform rate at which they would make their respective gold coins legally current. By so doing, the goldsmiths and others would no longer find it profitable to shift gold from this country to that in exchange for silver, and vice versa. Unfortunately, however, at this period of history, when civilisation had not reached its present state of development, when both England and the principal Continental nations were continually engaged in attempts to despoil or conquer one another, and when, consequently, international agreements, such as are common now, were unknown, the possibility of united action does not appear to have even suggested itself to the statesmen of Europe. Another solution had to be found, one in which, whilst each nation could act for itself, the result would be such as to prevent the money of one country being melted down and sent abroad, owing to the legislation of a rival power.

That such a solution was eventually found goes without saying. As it will be necessary, however, to explain the growth of economic ideas by the influence of which the new currency legislation found favour in the eyes of Europe, it will be necessary to devote a separate chapter to its explanation.

UNIVERSITY

OF

CHAPTER III.

Effects of the advance of civilisation on the recognised methods of obtaining gold and silver-Growth of economic ideas in England-A new conception of "wealth"-Influence of the new conception of wealth on currency legislation.

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HE latter half of the last century was marked by an evolution in the views held regarding the nature and functions of money, to which students of currency matters cannot devote too much attention. Up to this time the actions of mankind, both individually and collectively, had been very largely influenced by their desire to obtain silver and gold money; for not only did the possession of this money gratify most powerful vanities, but it carried with it, for this and other reasons before mentioned, an almost irresistible power. We have seen that in rude ages every feeling of humanity was consequently subverted in the national effort to acquire the all-important metals. Weaker races had frequently been cruelly slaughtered or made to slave in the mines at the will of their conquerors. With the advance of civilisation such methods of acquiring metallic wealth were gradually abandoned, and more crafty means adopted. Kings cunningly defrauded their subjects by falsifying the money issued from the mint, whilst the people defrauded each other by clipping the silver or gold coins as they passed from hand to hand. With the increase of knowledge these practices were at length considered dishonourable. The alterations of the legal rating of the gold coins with the express intention of attracting gold from abroad was also given up, and the attention of rulers and ruled directed to what was then considered more legitimate methods of acquiring wealth.

But the belief in the power of gold and silver remained as strong as ever, although an advancing civilisation would not permit its acquisition to be compassed by the fraudulent and often inhuman means employed in earlier ages. The great Locke, towards the end of the seventeenth century, wrote: "All movable goods are of so consumable a nature that the wealth which consists in them cannot be much depended on, and a nation which abounds in them one year may, without any exportation, but merely by their own waste and extravagance, be in great want of them the next. Money, on the contrary, is a steady friend, which, though it may travel about from hand to hand, yet if it can be kept from going out of the country is not very liable to be wasted or consumed." He therefore believed it to be the most solid and substantial part of the movable wealth of a nation, and that to multiply the precious metals ought to be the great object of every government.

This view of money was the one generally accepted in England until the latter end of the last century. It was the popular belief that if a country possessed neither silver nor gold mines within its_own boundaries, foreign trade was the means by which it could be most satisfactorily enriched. As gold and silver were the principal forms of wealth (for did not all nations who could do so make their money of these precious metals ?), it was argued that any trade which sent more money out of the country than it brought in, was, for this reason, disadvantageous to the country at large. All export trades were consequently favoured and encouraged, because it was thought that payment for the goods exported would eventually be made in money, and gold and silver would accordingly flow into the country. Import trades, on the other hand, unless the goods imported were specially intended for after exportation at a profit, were generally regarded with disfavour, for the payment of gold and silver money was considered a loss to the nation. It will be seen that the inevitable result of these ideas was, that the commerce of the world gradually came to be regarded in the light of a struggle for the precious metals,

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a struggle in which no nation that lacked gold or silver mines could grow rich except at the expense of a rival. Thus we find that although it was no longer in accordance with public sentiment to wrest gold and silver from the weak and defenceless by brute force, the precious metals were nevertheless as much esteemed and sought for during the last century as they had ever been before.

In 1776, however, a work appeared which was destined to entirely overthrow the long-established belief that gold and silver were the principal forms of wealth. The condition of development at which civilised Europe had arrived by the middle of the last century was such, that men generally began to interest themselves in many of those social and political problems that had engaged the attention of the great philosophers of ancient Greece. Life was now not only very complex, but in some parts of the world-notably in France-the great mass of the people were undergoing intolerable hardships. The outcome of this condition of affairs was an increasing belief that there must be in nature some great laws or principles regarding the social relations of mankind, the operations of which were not yet understood. Several philosophers in France produced works in which they investigated, amongst other matters, the duties of government, the laws of commerce, and the nature of wealth. In this