but an active share in the regeneration of the French government. The conquest of Dantzic was but the occasion seized to confer the honours upon Lefebvre, which were merited before At the same time this promotion contradicts the assertion of violent partisans, that an active share in the earlier events of the revolution, is a ba to advancement under the Emperor. The present Duke of Dantzic, has been, at al: times, a zealous and impassioned, but at the same time, noble-minded Republican; he fought under Dumourier at Jemappe; and in November 1792, at the head of 25,000 men, stormed at Mons the redoubts of the Austrians, singing republican songs. His sentiments are unchanged."

"We are all curious to see whether the Emperor, on his arrival in the metropolis, will not publish a commentary to the words twice alluded to in the official Bulletins, concerning those who prefer the enjoyments of the great city, to the honourable toils of war. This, it is supposed, had a reference to certain distinguished persons here." [To be concluded in our next.]

THEORY OF MONEY,-Continued. - ON EXCHANGE.

The intercourse between two countries was first carried on by barter, or the giving one article for another. When the precious metals were introduced as mediums of circulation, then they were employed in facilitating the interchange, until the discovery of paper money, produced a very great improvement in the substitution of drafts or bills of exchange. A bill of exchange may be defined, " a written order by a merchant in one country, upon a merchant in another, to pay a certain sum specified in the body thereof, at a certain time also specified;" and if the merchant, upon whom it is drawn, accept the same, then he becomes bound to pay it when due: When a merchant sends goods to another country, he draws a bill of exchange for the amount thereof, and that bill he sells to any of his neighbours, who may have to pay for goods gotten from that country; or else, he receives from the person, to whom he has sent the goods, a draft upon his neighbour for the amount. Thus, bills are drawn or accepted for all the goods sent out of, or received into a country; and, as far as the amount of the goods, exported from a country, are equal to those imported into it, the mutual debt may be discharged by them. In the use of bilis, however, one great difficulty occurs, which is, that each commercial country has a different standard unit, and also different coins or tokens thereof; so that to ascertain in one country the amount of a debt in another, requires a knowledge, not only of the standard and coins of each country, but of their respective values one to another; and, as in some cases, those have never been exactly ascertained, a good deal of confusion has ensued. All this might be completely avoided, and the business made perfectly easy, were the commercial world to agree to one standard unit for the whole, then the proportion that the coins of each country bore to that standard,would be accurately known; but this, like the idea of an universal standard of weights and measures, may be talked or in theory, but will never be reduced to practice.

The common mode followed, is, that when goods are bought in one country for behoof of a merchant in another, they are first charged according to the currency where bought, but when a bill is drawn for them, the value is changed into the cur rency of the country they are going to, according to the proportion the two currencies bear to one another, at the time; and the proportion is called "the rate of exchange. For instance, a merchant in London, orders from Russia a quantity of goods, which the agent there purchases, and states the invoice as amounting to so many roubles, which is the unit of that country; a rouble is supposed equal to thirty pence British, or 30-240th of the British unit; but this proportion fluctuates, and is sometimes two or three pence below, and sometimes as much above that rate, according to the less or greater demand for drafts. When the agent draws for the amount, he either calculates the sum in pounds sterling, according to the rate of exchange, at the time, or else he just states in the bill so many roubles at so many pence per rouble, by which means the amount in British money is easily ascertained.

In consequence of bills of exchange being now constantly used, in thus liquidating the debts of one country with another, they are become a complete article of mer chandize, they are bought and sold, and vary in their price as much as any other goods; but, as they will only be bought in one country, to pay a debt due to another, it must be evident, that the demand for them, and, consequently, their value, will entirely depend upon the debt due by that country being more or less than the debt

due to it; and therefore, it was always understood, that the high or low rate of exchange, was an indication that the imports or exports of a country were greatest; in short, that their value was entirely regulated by the balance of trade, or, at least, by the number of bills brought to market. It remained for the ingenuity of the present times to discover, that "the effect of the balance of trade upon the rate of exchange, was very small in comparison to the effect of currency thereon;" and that, consequently, whenever the rate of exchange got very high in any country, then it might be positively concluded, that the currency of that country was depreciated. As this doctrine has now gained almost universal credit, even amongst the best informed, it will be necessary to be particularly explicit in attempting to refute it.

The error appears to have originated in ignorance of the principle of a standard unit in each country, and in wrong ideas of the nature of depreciation. Not attending to the principle of a standard unit, writers on this subject have puzzled themselves, and their readers, by attempting to establish gold and silver as the universal standard; and, by conceiving that the value of these articles should be the same all over the commercial world, they have been led to make such conclusions, as have involved the subject in very great obscurity. A pound of silver in Peru is not of half so much value as it is in Spain; in Spain it is of less value than in England, and in England it is just of half the value that it is in China; yet, in all these places, silver may be, and is employed in common circulation, not as the standard of value itself, but as a symbol or token of it; but it must appear absurd to say, that, if a merchant gives so many pounds weight of silver for a draft on another country, when he sends the draft to that country, he is to receive exactly the same weight of silver for it. Should one in Britain purchase a draft on Spain, and receive payment in this way, he would lose by it; if the draft was on China, he would gain. Were gold and silver of exactly the same value in all commercial countries, then the trade, on these articles, would be at an end, and the quantity of them, in each country, would always continue the same; or, should accidents diminish it in any particular country, it would remain diminished, as there would be no inducement to merchants to supply the deficiency. It is the constant fluctuation in the comparative values of these, with other articles of merchandize, that causes the conveyance of them from one country to another.

If it be allowed that there exists, in every commercial country, a standard unit, by which the relative value of all articles in that country is truly ascertained, then it must be evident, that it is of no consequence what symbols or tokens the people of a country employ to represent that standard unit, provided only that these tokens readily pass at the value they are issued for; and it must also be evident, that, when a merchant sends goods to any country, and draws a bill for the amount, it can be of no consequence to him how, or in what way, that bill is paid, provided only that, in the first instance, he gets value for it, equivalent to the amount in the standard unit of his country; and that, in the second, the person he passes it to, be also satisfied by receiving payment, in token, representing the amount in the standard unit of the country it is payable in. For example, a merchant in London sends to Hamburgh, goods to the value of 100/. British, and draws for the amount; in doing so he will state a sum in Hamburgh currency, equivalent to the pounds sterling, according to the rate of exchange at the time; suppose that at 357. then his draft will be for 1751. Flemish. Now, if he gets 100/. in this country, for this draft, and the person to whom he sells it, or to whom it is sent at Hamburgh, gets equivalent to 175/. flemish for it there, it certainly matters not to the London merchant, whether the payment at Hamburg is made in gold, silver, or brass coin, paper money or goods; in the same manner, should a merchant at Hamburgh send goods to London, and draw for the amount, he will state the draft at so much sterling for Flemish, and if it is settled for in London, according to the sum stated, it is certainly of no consequence to him whether it is paid in guineas, shillings, crown pieces, dollars, bank tokens, or bank notes. When a merchant, therefore, purchases a bill on a foreign country, and remits it to that country, he does not expect that it will be paid by the exact same quantity of gold or silver being delivered for it, that he gave: indeed, in the present improved state of commercial intercourse, it very seldom happens, that gold or silver are really given, either in the purchase or payinent of a draft; the settlement is more generally made by bank notes, or a check on a bank, and not unfrequently by goods, or inland bills; it would, therefore, often be very difficult to as

certain the exact quantity of gold, equivalent to the value either given for, or received in payment, of such a draft. Luckily for the mercantile world, there does not exist the least necessity for such troublesome calculation, although the late writers on this subject have amused themselves with some very abstruse speculations thereon. These writers have also stated some very mistaken ideas, as to depreciation in connection with exchange. The true nature of depreciation has already been explained; it is said really to exist only when a symbol, or token, passes, in common currency, for a less proportion of the standard unit than it was originally issued to represent; for instance, should a gold guinea pass for 18, or 18-20th of a pound sterling, it would really and truly be depreciated. Now, if a merchant in London had a bill upon Hamburgh, for a sum equivalent to 1051. British, say 100 guineas, in selling it, he certainly would not take, as payment, 100 of these guineas that pass currently at 18s. because 100 of these would not be equivalent to 1057. but only to 90l.; it would, therefore, require 116 and a fraction, to make the equivalent; and should he get that quantity, he would just have sold his bill at par; but, if, when guineas were passing currently at 21s. 116 of them were demanded for a draft of 105l. exchange might then justly be said to be 16 per cent. against Britain. The distinction is obvious; when the symbol, or tokens, of circulation pass at an under value, in purchase of all commodities, and are taken for bills of exchange at exactly the same underrate, then these symbols, or tokens, are, without doubt, depreciated; but when the symbols, or tokens, pass readily in all cases, at the full proportion of the standard unit they were issued for, and, at the same time, will not purchase a bill of exchange, or draft on a foreign country, according to that proportion, then may it be concluded, with certainty, that the exchange is in favour of that foreign country. The only case in which the currency can have any effect upon the course of exchange, is, when that course is against a country; then, if the coins, passing in that country, really contain a proportion of metal equivalent to the value they pass for, they will be employed as a remittance, until the rate of exchange is lowered. This will clear up a circumstance which Mr. Fox mentioned in the House of Commons, some time in March, 1804, in talking of the bank of Ireland restriction bill, he said, "that he was convinced, that the currency of a country had some effect on the exchange, though he could not exactly tell how, for at a certain period, the guineas in this country were very much debased, (not depreciated*) and the exchange with Hamburgh was up 2 and 3 per cent; but, upon a new coinage being issued, the exchange fell to par." The cause is very plain, the balance being, at that time, against this country, bills were in demand, and therefore their price rose; the merchants finding it more their interest to pay 2 or 3 per cent. for them, than to send guineas, because those guineas, which passed here at 21s. would, at Hamburgh, only bring their value as bullion, which might not be more than 18 or 19s. ; but, whenever government issued new guineas, the gold in which was equivalent to what they pass for, and which, consequently, would be worth as much at Hamburgh as here, then the merchants found it their interest to send them, and they accordingly did so, until bills, being less in demand, fell to par. In this manner has this country been, from time to time, drained of its specie, so that, out of 60 millions of guineas coined during his present majesty's reign, it is believed, that there are not 10 millions remaining in it.

STATE PAPER.

RUSSIAN TRADE.

UKASE.BY ORDER OF HIS IMPERIAL MAJESTY.

The senate having taken into consideration the representation of count Romantzoff, in which he sets forth, That the college of commerce has demanded of himFrom what date are English merchants, trading here, to reckon the term of six months, allowed to itinerant merchants-whether from the date of the imperial manifesto, that is, from the 1st of January of this year, or from the date on which the English treaty of commerce expired?" He, the minister of commerce, following

* This distinction is important, a guinea is said to be debased when it has too little gold in it, yet it passes at its full value; to be depreciated, when it passes at an under value.

due to it; and therefore, it was always understood, that the high or low rate of ex change, was an indication that the imports or exports of a country were greatest; in short, that their value was entirely regulated by the balance of trade, or, at least, by the number of bills brought to market. It remained for the ingenuity of the present times to discover, that "the effect of the balance of trade upon the rate of exchange, was very small in comparison to the effect of currency thereon ;" and that, consequently, whenever the rate of exchange got very high in any country, then it might be positively concluded, that the currency of that country was depreciated. As this doctrine has now gained almost universal credit, even amongst the best informed, it will be necessary to be particularly explicit in attempting to refute it.

The error appears to have originated in ignorance of the principle of a standard unit in each country, and in wrong ideas of the nature of depreciation. Not attending to the principle of a standard unit, writers on this subject have puzzled themselves, and their readers, by attempting to establish gold and silver as the universal standard; and, by conceiving that the value of these articles should be the same all over the commercial world, they have been led to make such conclusions, as have involved the subject in very great obscurity. A pound of silver in Peru is not of half so much value as it is in Spain; in Spain it is of less value than in England, and in England it is just of half the value that it is in China; yet, in all these places, silver may be, and is employed in common circulation, not as the standard of value itself, but as a symbol or token of it; but it must appear absurd to say, that, if a merchant gives so many pounds weight of silver for a draft on another country, when he sends the draft to that country, he is to receive exactly the same weight of silver for it. Should one in Britain purchase a draft on Spain, and receive payment in this way, he would lose by it; if the draft was on China, he would gain. Were gold and silver of exactly the same value in all commercial countries, then the trade, on these articles, would be at an end, and the quantity of them, in each country, would always continue the same; or, should accidents diminish it in any particular country, it would remain diminished, as there would be no inducement to merchants to supply the deficiency. It is the constant fluctuation in the comparative values of these, with other articles of merchandize, that causes the conveyance of them from one country to another.

If it be allowed that there exists, in every commercial country, a standard unit, by which the relative value of all articles in that country is truly ascertained, then it must be evident, that it is of no consequence what symbols or tokens the people of a country employ to represent that standard unit, provided only that these tokens readily pass at the value they are issued for; and it must also be evident, that, when a merchant sends goods to any country, and draws a bill for the amount, it can be of no consequence to him how, or in what way, that bill is paid, provided only that, in the first instance, he gets value for it, equivalent to the amount in the standard unit of his country; and that, in the second, the person he passes it to, be also satisfied by receiving payment, in token, representing the amount in the standard unit of the country it is payable in. For example, a merchant in London sends to Hamburgh, goods to the value of 100l. British, and draws for the amount; in doing so he will state a sum in Hamburgh currency, equivalent to the pounds sterling, according to the rate of exchange at the time; suppose that at 351. then his draft will be for 1751. Flemish. Now, if he gets 100/. in this country, for this draft, and the person to whom he sells it, or to whom it is sent at Hamburgh, gets equivalent to 175l. flemish for it there, it certainly matters not to the London merchant, whether the payment at Hamburg is made in gold, silver, or brass coin, paper money or goods; in the same manner, should a merchant at Hamburgh send goods to London, and draw for the amount, he will state the draft at so much sterling for Flemish, and if it is settled for in London, according to the sum stated, it is certainly of no consequence to him whether it is paid in guineas, shillings, crown pieces, dollars, bank tokens, or bank notes. When a merchant, therefore, purchases a bill on a foreign country, and remits it to that country, he does not expect that it will be paid by the exact same quantity of gold or silver being delivered for it, that he gave: indeed, in the present improved state of commercial intercourse, it very seldom happens, that gold or silver are really given, either in the purchase or payinent of a draft; the settlement is more generally made by bank notes, or a check on a bank, and not unfrequently by goods, or inland bills; it would, therefore, often be very difficult to as

certain the exact quantity of gold, equivalent to the value either given for, or received in payment, of such a draft. Luckily for the mercantile world, there does not exist the least necessity for such troublesome calculation, although the late writers on this subject have amused themselves with some very abstruse speculations thereon. These writers have also stated some very mistaken ideas, as to depreciation in connection with exchange. The true nature of depreciation has already been explained; it is said really to exist only when a symbol, or token, passes, in common currency, for a less proportion of the standard unit than it was originally issued to represent; for instance, should a gold guinea pass for 18, or 18-20th of a pound sterling, it would really and truly be depreciated. Now, if a merchant in London had a bill upon Hamburgh, for a sum equivalent to 105/. British, say 100 guineas, in selling it, he certainly would not take, as payment, 100 of these guineas that pass currently at 18s. because 100 of these would not be equivalent to 1057. but only to 90l.; it would, therefore, require 116 and a fraction, to make the equivalent; and should he get that quantity, he would just have sold his bill at par; but, if, when guineas were passing currently at 21s. 116 of them were demanded for a draft of 105l. exchange might then justly be said to be 16 per cent. against Britain. The distinction is obvious; when the symbol, or tokens, of circulation pass at an under value, in purchase of all commodities, and are taken for bills of exchange at exactly the same underrate, then these symbols, or tokens, are, without doubt, depreciated; but when the symbols, or tokens, pass readily in all cases, at the full proportion of the standard unit they were issued for, and, at the same time, will not purchase a bill of exchange, or draft on a foreign country, according to that proportion, then may it be concluded, with certainty, that the exchange is in favour of that foreign country. The only case in which the currency can have any effect upon the course of exchange, is, when that course is against a country; then, if the coins, passing in that country, really contain a proportion of metal equivalent to the value they pass for, they will be employed as a remittance, until the rate of exchange is lowered. This will clear up a circumstance which Mr. Fox mentioned in the House of Commons, some time in March, 1804, in talking of the bank of Ireland restriction bill, he said, "that he was convinced, that the currency of a country had some effect on the exchange, though he could not exactly tell how, for at a certain period, the guineas in this country were very much debased, (not depreciated*) and the exchange with Hamburgh was up 2 and 3 per cent; but, upon a new coinage being issued, the exchange fell to par." The cause is very plain, the balance being, at that time, against this country, bills were in demand, and therefore their price rose; the merchants finding it more their interest to pay 2 or 3 per cent. for them, than to send guineas, because those guineas, which passed here at 21s. would, at Hamburgh, only bring their value as bullion, which might not be more than 18 or 19s. ; but, whenever government issued new guineas, the gold in which was equivalent to what they pass for, and which, consequently, would be worth as much at Hamburgh as here, then the merchants found it their interest to send them, and they accordingly did so, until bills, being less in demand, fell to par. In this manner has this country been, from time to time, drained of its specie, so that, out of 60 millions of guineas coined during his present majesty's reign, it is believed, that there are not 10 millions remaining in it.

STATE PAPER.

RUSSIAN TRADE.

UKASE. BY ORDER OF HIS IMPERIAL MAJESTY.

The senate having taken into consideration the representation of count Romantzoff, in which he sets forth, "That the college of commerce has demanded of himFrom what date are English merchants, trading here, to reckon the term of six months, allowed to itinerant merchants-whether from the date of the imperial manifesto, that is, from the 1st of January of this year, or from the date on which the English treaty of commerce expired?" He, the minister of commerce, following

* This distinction is important, a guinea is said to be debased when it has too little gold in it, yet it passes at its full value; to be depreciated, when it passes at an under value.