Neither do we conceive it as sufficiently expressing or explaining the
whole facts of the case, to say that the currency has been deranged.
There has been unquestionably a great derangement of the currency; but
this may have been an effect rather than a cause of the more general
disturbance; or, again, it may have been only one cause out of many
causes. In an article in the first number of this magazine, the
financial fluctuations in this country are ascribed to the alternate
inflation and collapse of our factitious paper-money. Adopting the
prevalent theory, that the universal use of specie in the regulation
of the international trade of the world determines for each nation the
amount of its metallic treasure, it was there argued that any redundant
local circulation of paper must raise the level of local prices above
the legitimate specie over exports; which imports can be paid for only
in specie,--the very basis of the inordinate local circulation. Of
course, then, there is a rapid contraction in the issue of notes, and an
inevitable and wide-spread rupture of the usual relations of trade. But
although this view is true in principle, and particularly true in its
application to the United States, where trade floats almost exclusively
upon a paper ocean, it is yet an elementary and local view;--local, as
not comprising the state of facts in England and France; and elementary,
inasmuch as it omits all reference to the possibility of a great
fluctuation of prices being produced by other means than an excess or
deficiency of money.
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