tting
authority apart, we will examine whether the legislature ought to comply
with it, even if they had the power.

Proceeding to reason on this subject, some principles must be premised
as forming its basis. The adequate price of a thing depends on the
capital and labor necessary to produce it. (In the term capital, I mean
to include science, because capital as well as labor has been employed
to acquire it.) Two things requiring the same capital and labor should
be of the same price. If a gallon of wine requires for its production
the same capital and labor with a bushel of wheat, they should be
expressed by the same price, derived from the application of a common
measure to them. The comparative prices of things being thus to be
estimated, and expressed by a common measure, we may proceed to observe,
that were a country so insulated as to have no commercial intercourse
with any other, to confine the interchange of all its wants and supplies
within itself, the amount of circulating medium, as a common measure
for adjusting these exchanges, would be quite immaterial. If their
circulation, for instance, were of a million of dollars, and the annual
produce of their industry equivalent to ten millions of bushels of
wheat, the price of a bushel of wheat might be one dollar. If, then, by
a progressive coinage, their medium should be doubled, the price of a
bushel of wheat might become progressively two dollars, and without,
inconvenience. Whatever be the proportion of the circulating medium to
the value of the annual produce of industry, it may be considered as the
representative of that industry. In the first case, a bushel of wheat
will be represented by one dollar; in the second, by two dollars. This
is well explained by Hume, and seems admitted by Adam Smith, (B. 2. c.
2. 436, 441, 490.) But where a nation is in a full course of interchange
of wants and supplies with all others, the proportion of its medium
to its produce is no longer indifferent, (lb. 441.) To trade on equal
terms, the common measure of values should be as nearly as possible on
a par with that of its corresponding nations, whose medium is in a
sound state; that is to say, not in an accidental state of excess or
deficiency. Now, one of the great advantages of specie as a medium is,
that being of universal value, it will keep itself at a general level,
flowing out from where it is too high into parts where it is lower.
Whereas, if the medium be of local