To commence an investigation of the principles of currency is to enter a region which may be justly described as chaos. The very sound of the word currency makes a man turn his back or shut his ears; his immediate instinct is to fly from a subject with which he associates such unendurable jargon. To obtain clear, definite, and intelligible knowledge in currency almost seems to be a task exceeding the powers of the human intellect. "There was no need" exclaimed recently an Ex-Lord Mayor in the House of Commons, "to go into all the deeper quagmires of bank-notes and such things, which no man could understand in this world, or, as he believed, in the next" Yet what is currency but one of man's own inventions, a contrivance which he has himself devised for rendering an indespensable service to the practical life of every civilized people? It is easy to conceive that the most familiar natural objects should possess secrets which no research nor acuteness can explore; the meanest plant and the humblest animal inexorably refuse to reveal what life is. But that machinery expressly invented by man himself to accomplish any obvious purpose - that tools which men constructed at the dawn of civilization, and which are now at work every hour and in every country - that the action of such instruments should be incomprehensible to man's reason is assuredly a most astonishing marvel. And what increases the wonder is the certain fact that it is of vital importance to every nation to solve correctly the questions of currency. A bad currency, as experience has only too often shown, inflicts severe calamities on a nation; loss and ruin, public and private, all history teaches, are the deadly arrows which an ill-constructed currency carries in its quiver. Thus every kind of political and social motive calls for the right understanding of a tool which is in every man's hand, and yet, if we may judge from the floods of speaking and writing which have been poured forth about it, what money is and does, what is a sound and what a bad money, how it works, what effects it has and what it has not, are matters absolutely undiscoverable.

This failure, had it been inevitable, would have constituted the most wonderful enigma in the history of the human mind; but it is neither necessary nor real. Currency can be easily and naturally explained if only men choose that it shall be. It is the one subject which mortals refuse to study. Every man thinks himself qualified to lay down rules concerning it, but without any sense of responsibility of first learning what it is. Thus currency has become the prey of every kind of arbitrary and ignorant assumption. In other subjects men know that they must not speak about them until they have mastered them by systematic study; but every one thinks himself fit to dogmatise off-hand on currency. And who are the persons who inevitably come to the front as leaders under such circumstances? The practical men, those who make large fortunes by handling these tools: who so likely to know all about them? But do great bankers and bill-brokers study currency? Have they, generally, any conception of disciplined and methodical investigation of the real nature of the operations they carry on? Do they follow the road of all true science, and analyse down to first principles? Had such been the course pursued by so-called authorities, currency would not be in the mire of confusion where we find it to-day. To extemporise dogma is far easier; just as great astronomical authorities laid down, as the first principle of their science, that the planets moved in circles, for God Almighty would not suffer them to revolve in any but perfect curves.

True science alone is clear: and there is but one road to true science, a thorough analysis of all the facts and elements of a subject. With this law must be combined another - a firm determination to accept all that analysis teaches, and resolutely to reject all that is inconsistent with it. This last rule is of supreme importance in currency. No one accepts calculations which contradict the multiplication table; in currency the common practice is to have no multiplication table, to lay down no first principle to which every doctrine must be referred. The absence of any effort to establish logical connection between new utterances and previously established conclusions is the peculiar misfortune of currency. Let us then eschew a priori and gratuitous theory, the theory of the great City practical man, the man of money; let us seek, as others seek, that carefully co-ordinated science, founded on the facts yielded by analysis, which alone constitutes true knowledge.

We now proceed with our investigation. We seek to discover the motive, the action, and the laws of currency. But the word currency is an abstract term, a generic expression; we must begin with the concrete, before we can sum up and generalise in an abstract formula. We must go to another word, money, for our starting point. Diverse meanings are loosely given to this word, many inconsistent with each other; so that to say that currency is money would throw no light upon our path. Fortunately, however, there is a sense of the word money which no one disputes, which is recognised by the whole world. Whatever else may or may not be money, coin, at any rate, is money; and coin is a definite, concrete, substance. The derivation itself of the word proclaims the fact: it comes from Juno Moneta, whose temple was the mint in which Roman coin was made, the stamped pieces of metal which constituted the currency of Rome. Thus the word money implies minting, that is, the shaping and stamping those bits of metal which are employed in buying and selling. Here we are on solid ground: we have an objective substance which it is our business to analyse, as to what it is and what it does; every logical consequence we obtain from it we may rely on with perfect safety. No one denies that coin is true and complete money; what coin yields us belongs to money. Now what does the examination of a coin teach us? It is a shaped piece of metal with a mark upon it. The first point we observe is - (we will speak here of gold, confessedly the best material for coin) - that it is composed of a metal, and that this metal is a very valuable commodity. It is an article very expensive to procure, possessed of high value before it was manufactured into a coin. Whoever has obtained a sovereign, whether on the sale of goods or in payment of a debt, has given twenty shillings worth of property to acquire it. It has cost miners in distant regions, and under circumstances often of great difficulty and trial, a large amount of labour and a heavy expenditure for maintenance and tools, to extract it from the bowels of the earth. They can afford to part with it only on the same general conditions as those on which iron or tin miners give their metals to the community. They must be repaid their expenses and receive an adequate reward for the services which they render to society. The quantity of gold won is small compared with the cost of working a gold mine; gold consequently is dear: a small portion of it will fetch in exchange a large amount of other commodities. This satisfaction must be rendered to the miners or the gold coin will not be produced: and every one who acquires that coin in succession, except as a gift, has been obliged to restore to the person from whom he got it the cost originally paid to the miner. This is a fact of capital importance in currency. No man acquires a piece of metallic currency, of money, except by giving for it its full value in other goods. From this fact it necessarily follows that to sell property and to receive in the place of it golden coins, money, is no increase of riches. It is an exchange of two equal quantities of wealth, of a precious metal for some other article. In the estimation of the two parties to a purchase, the coin is worth the property, and the property the coin; and that is the whole of the matter. The bearing of this truth on the common idea that money is in a peculiar sense riches - that the object of all trade should be to obtain money - that a trade which exports more goods than it imports, and brings in the difference in gold is the truly beneficial trade - that gold is a possession more to be rejoiced in than any other by every nation is obvious and will be considered hereafter.