This we have already stated to consist of the promises of government to pay money, which, by force of law or the necessities of the people, are received as money. It is simply the credit of the nation, used as currency. The element of value does not enter into it at all. It is precisely the opposite of a value currency its characteristics

Such a currency may transfer debts, but it cannot pay them. The creditor may accept the promises of the government in place of that of an individual, but he receives no value. So far as issued by the government and accepted for taxes and other public dues, such notes are mere counters, used for cancelling reciprocal obligations. If such notes are issued beyond the natural volume of the currency, they can never be kept at par with specie, or circulate at their nominal value. Gold, as compared with them, will bear a premium, the amount of which will indicate the excess and depreciation of the currency, and the want of confidence in the promisors.

This premium is the result of the operation of the laws of value; and no legislation of free government or edict of despotism can permanently change it. Governors might as well prescribe the height to which the tides of ocean shall rise, as to restrict or reduce the premium on gold.

Such legislation is not only futile, but injurious, producing an effect just opposite to that intended. It disturbs the market price of gold, destroys confidence in its actual price, and, by exciting distrust, drives the premium far up beyond its natural limit.

The experiment made by the Congress of the United States in 1864 showed most conclusively the utter folly of attempting to interfere with the laws of value. After the " gold bill," so called, became a law, the premium rose at once some fifty per cent above its previous rate. The unwise act was speedily repealed, and the excessive premium it had caused fell off.