Currency fallacies refuted, and paper money ... - University Library

PAPER MONEY VINDICATED. 55dissatisfied, and want still more, demanding asmuch as 100^. per quarter. What is the result? The foreigner sends his corn here, andsells it for 100.?. in paper money. He takesthis to the bank, and buys gold or silver withit.If he can get more gold or silver in exchangethan the natural price of his corn will bringhim in thecommon market of Europe, he profitsby the transaction to the amount of thedifference. This advantage leads him to repeatthe operation, and others to follow hisexample, till the English farmer is forced toreduce his price to that quantity of papermoney, say 80*. which exchanges in Englandfor so much gold or silver as constitutes theforeign price of his corn. Now that which is acheck on the farmer, is equally a check on everyother producer, with the exception before mentionedof such as are disproportionably chargedwith a tax, for which they require, in additionto the difference between paper and gold, aprotecting duty on importation, and a drawbackon exportation.But if this be true, and it cannotbe controverted, it is equally true thatpaper money, however willing the issuers maybe to part with it, and the borrowers to get it,cannot be issued in excess ; for the moment it isso issued, as to yield prices, which exceed theamount collectively of natural and taxationprice, foreign competition immediately pullsdown the excess, by compelling the English