re, government
should exact 100 quarters as a tax, the remaining 900 quarters would
exchange for the same quantity of other commodities that 1000 did
before; but if the same thing took place with respect to gold, if of
every 1000_l._ money now in the country, or in future to be brought into
it, government could exact 100_l._ as a tax, the remaining 900_l._
would purchase very little more than 900_l._ purchased before. The tax
would fall upon him, whose property consisted of money, and would
continue to do so till its quantity were reduced in proportion to the
increased cost of its production caused by the tax.

This perhaps would be more particularly the case with respect to a metal
used for money, than any other commodity, because the demand for money
is not for a definite quantity, as is the demand for clothes, or for
food. The demand for money is regulated entirely by its value, and its
value by its quantity. If gold were of double the value, half the
quantity would perform the same functions in circulation, and if it were
of half the value, double the quantity would be required. If the market
value of corn be increased one tenth by taxation, or by difficulty of
production, it is doubtful, whether any effect whatever would be
produced on the quantity consumed, because every man's want is for a
definite quantity, and, therefore, if he has the means of purchasing, he
will continue to consume as before; but for money, the demand is
exactly proportioned to its value. No man could consume twice the
quantity of corn, which is usually necessary for his support, but every
man purchasing and selling only the same quantity of goods, may be
obliged to employ twice, thrice, or any number of times the same
quantity of money.

The argument which I have just been using, applies only to those states
of society in which the precious metals are used for money, and where
paper credit is not established. The metal gold like all other
commodities has its value in the market ultimately regulated by the
comparative facility or difficulty of producing it; and although from
its durable nature, and from the difficulty of reducing its quantity, it
does not readily bend to variations in its market value, yet that
difficulty is much increased from the circumstance of its being used as
money. If the quantity of gold in the market for the purpose of commerce
only, were 10,000 ounces, and the consumption in our manufactures were
2000 ounces annua