“A law!” exclaimed Melea. “Was there ever a law to prevent an article which is particularly plentiful being cheap? It seems to me that the shortest and surest way for the lawmakers is to destroy the superabundance, and thus put cheapness out of the question.”
Horace laughed, and asked what she thought of a government that first encouraged an unlimited issue of paper money by withdrawing the limitations which had previously existed, and then made a solemn declaration that the notes thus issued were and must remain, in despite of their quantity, of the same value as the scarce metal they were intended to represent. Melea supposed this an impossible case; a caricature of human folly.
“Do you mean,” said she, “that if where there had been a hundred pounds in gold to exchange against commodities, eighty of them disappeared, and a hundred and eighty pound notes were added, those two hundred notes and pounds were each to buy as much as when there was only one hundred? Did the government declare this?”
“Its declaration was precisely on this principle.”
“How very absurd! It is only condemning half the money to remain over, unused, when the commodities are all exchanged.”
“It might as well have been thrown into the fire before the exchanging began,” observed Fanny.
“If it had been held in a common stock,” replied her brother: “but as long as it is private property, how is it to be determined whose money shall be destroyed?”
“Or whose to remain unused,” added Melea.
“Is it not to be supposed,” asked Horace, that the buyers and sellers will make any kind of sly and circuitous bargain which may enable them to suit their mutual convenience, or that the buyers will, if possible, avoid buying, rather than submit to have half their money rendered useless by an interference which benefits nobody?”
“The buyers and sellers will come to a quiet compromise,” observed Fanny. “The seller will say, ‘You shall have thirty shillings’ worth of goods for two pound notes, which will be better worth your while than getting nothing in exchange for your second note, and better worth my while than letting you slip as a customer, though I, in my turn, shall get only thirty shillings’ worth for these two notes.’ And the buyer agreeing to this, the notes will continue to circulate at the value of fifteen shillings each.”