The first visible effect of an augmentation of the medium and the consequent fluctuation of value, was, a host of jockies, who followed a species of itinerant commerce; and subsisted upon the ignorance and honesty of the country people; or in other words, upon the difference in the value of the currency, in different places. Perhaps we may safely estimate, that not less than 20,000 men in America, left honest callings, and applied themselves to this knavish traffic. A sudden augmentation of currency flattered people with the prospect of accumulating property without labor.
The first effect of too much money is to check manual labor, the only permanent source of wealth. Industry, which secures subsistence and advances our interest by slow and regular gains, is the best preservative of morals; for it keeps men employed, and affords them few opportunities of taking unfair advantages. A regular commerce has nearly the same effect as agriculture or the mechanic arts; for the principles are generally fixed and understood.
Speculation has the contrary effect. As its calculations for profit depend on no fixed principles, but solely on the different value of articles in different parts of the country, or accidental and sudden variations of value, it opens a field for the exercise of ingenuity in taking advantage of these circumstances. The speculator may begin with honest intentions; and may justify his business, by saying, that he injures no man, when he givs the current value of an article in one place, and sells it for its current value in another; altho in this case he is a useless member of society, as he livs upon the labor of others, without earning a farthing. But he does not stop here; he takes an advantage of ignorance and necessity; he will, if possible, monopolize an article to create a necessity. Repeated opportunities of this kind gradually weaken the force of moral obligation; and nine persons of ten, who enter into the business of speculation with a good character, will, in a few years, lose their principles, and probably, their reputation.
Speculation is pernicious to morals, in proportion as its effects are extensiv. Speculation in the English funds is practised on principles destructiv of justice and morals; but it consists in the transfer of large sums; the contingencies on which it depends are not frequent, and the business is confined to a few sharpers in the metropolis. Such a speculation affects not the body of the people. The medium circulating in the kingdom, has a fixed permanent value, and affords no opportunities for irregular gains.
Very different is speculation in America. Here its objects are in every person's hands; changes of value are frequent; opportunities of gain, numberless; and the evil pervades the community. The country swarms with speculators, who are searching all places, from the stores of the wealthy, to the recesses of indigence, for opportunities of making lucrativ bargains. Not a tavern can we enter, but we meet crowds of these people, who wear their character in their countenances.
But the speculators are not the only men whose character and principles are exposed by such a state of the currency; the honest laborer and the regular merchant are often tempted to forsake the established principles of advance. Every temptation of this kind attacks the moral principles, and exposes men to small deviations from the rectitude of commutativ justice.
Such are the sources of corruption in commercial intercourse. A relaxation of principle, in one instance, leads to every species of vice, and operates till its causes cease to exist, or till all the supports of social confidence are subverted. It is remarked by people very illiterate and circumscribed in their observation, that there is not now the same confidence between man and man, which existed before the war. It is doubtless true; this distrust of individuals, a general corruption of manners, idleness, and all its train of fatal consequences, may be resolved into two causes: The sudden flood of money during the late war, and a constant fluctuation of the value of the currencies.
The effects of a sudden augmentation of the quantity of money in circulation were so obvious, during the war, and the example is so recent, that the subject requires no illustration, but a recollection of facts. Yet there is an example recorded in the History of France, so exactly in point, that I cannot omit it.
During the regency of the Duke of Orleans, one Law, who had fled from punishment in Scotland, and taken refuge in France, obtained, by his address, a great share of confidence in the councils of the regent. He formed a plan of drawing all the specie from circulation, and issuing bills upon the royal treasury. It is not necessary to name the expedients he used to effect his purpose. It is sufficient to observe, that by various methods, he drew most of the specie of the kingdom into the public treasury, and issued bills to about one hundred times the value of the specie, which had before circulated. The notes or securities depreciated as they were thrown into circulation, like our continental currency. The nature of a medium of trade, it seems, was not well understood: Such a sudden depreciation was a surprising phenomenon at that period; men of property, who were the holders of the paper, were alarmed; the kingdom was in confusion. When the bills had sunk to a fifth of their value, a royal edict was issued, ordaining that the remaining specie in circulation should be sunk to a level with paper. This resembles, in some respects, the regulation of prices in America. An edict, so rash and absurd, increased the evils it was meant to remedy, and filled the kingdom with clamor.
In a short time, the paper was sunk as low as our continental currency, before its death.