90
 

IV
 

CHAPTER   IV.

Qn the Fluctuation of the Market Price of Money above and

below its Mint Priae,

chapter As I attempted in the preceding chapter to explain the
effect, which the uniform gravitation of money to its level
produced on the course of exchange, I shall now endea¬
vour to shew the effect, which it produces on the price of
bullion.

There is no subject that appears to me to have given
more perplexity to the statesmen of the last century than
the fluctuation of the market price of money above and
below its mint price ; nor any one which, notwithstanding
the efforts that were made by the ablest political writers
to elucidate it, has been less satisfactorily explained. Mr.
Locke, Sir Isaac Newton, and Dr. Adam Smith, succes¬
sively bent their extraordinary powers to discover the
governing principle of the variation ; but from the inade¬
quate view, which they took of the functions of money, of
it^ characteristic attribute as an uniform measure, the
real cause eluded their research.

As a general tendency to a relative excess of currency
in this country occasioned a constant inclination in the
market price to a superiority above, rather than an infe-