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.[A] In France, as we know, the currency is almost
entirely metallic, while in England it is metallic so far as the lesser
exchanges of commerce are concerned; there is an obvious impropriety,
therefore, in extending to the financial difficulties of those nations a
theory founded upon a peculiarity in the position of our own.

[Footnote A: A failure of one half the cotton or wheat crop, we suspect,
would play a considerable part among "the prices," whatever the state of
the note circulation.]

If, however, it be alleged that the disturbances there are only a
reaction from the disturbances here, we must say that that point is
not clear, and Brother Jonathan may be exaggerating his commercial