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the culture of the earth commenced, it is obvious that but few exchanges could have taken place between the new colony of Connecticut and the people of Boston; since the time and labor expended in transporting the articles to be exchanged, would nearly equal, or exceed their value. If the people of Hartford proposed to exchange corn for axes, or nails, with the merchant at Boston, the owner of the grain would receive but a very small proportion of the value paid by the merchant, while the latter would receive but a small proportion of the value of the grain paid by the agriculturalists: the transporter in both instances coming between the producer and consumer to absorb the largest proportion of the value of the articles exchanged. In the fourteenth, fifteenth, and sixteenth centuries, the Venetians, the Florentines, the Genoese, and the Dutch, were the common carriers of the produce and merchandise of all the nations of Western Europe, and thereby gained immense wealth. We nowhere read, however, that the other nations, whose merchandise and productions were thus transported, attained to any high degree of prosperity during this period. On the contrary, they were poor, and so continued until the producers and consumers perceived the necessity of so perfecting the machinery of exchange that the bulk of the profit should not accrue to the intermediate agents-the transporters. When progress has once commenced in this direction, the Indian trail is converted into a road, the fordway gives place to a bridge, and the frail canoe to a commodious and gallant vessel. Goods are no longer transported upon the shoulders of men, or the backs of horses, but in wagons, and these in turn, at a later day, are succeeded by rail-roads and canals. With every facility thus afforded, the cost of transportation is diminished, the producer and consumer are brought nearer to each other; and the profits of both being increased, the amount of their ex

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changes increase; production is every where stimulated, population becomes concentrated, accumulation becomes easy, and labor is in demand.

Equally necessary is it for the perfection of the great system of exchange, that the machinery by which change of form in matter is effected should be complete as possible. It is immaterial to the consumer whether the high price he pays for his article of consumption results from costliness of manufacture, or costliness of transportation. In either case, an undue enhancement of value, limits demand, and consequently exchange and production are restricted. In those countries where the application of machinery to effect changes in form is rude and imperfect, or no machinery is used at all, the amount of labor that intervenes between the production of the raw material and the consumption of the manufactured product, is frequently immense. The price of labor, equally with the price of transportation in the former instance, is chargeable upon the value of the article when in the market, and nearly equals that value. India formerly supplied the world with cotton-cloth, but the labor of producing the fabric from the fiber was so enormous and expensive, even in a country where wages are merely nominal, that comparatively little cloth was used or consumed. Exchange consequently with India for this article was limited.

Now, by the perfection of machinery, an operative at Lowell can spin more cotton in a single day than three thousand Hindoo artisans can accomplish in the same time. And it has been calculated that the machinery of Great Britain alone produces more cloth each week than the whole population of the globe could by their unassisted labor produce in the same time, working night and day. This perfection of machinery has been followed by a very great reduction of price, and a better article of cloth may now be purchased for six or eight cents per yard than could formerly have

EXCHANGE LIMITED IN NEW COUNTRIES.

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Reduction of

been obtained for thirty or forty cents. price has increased the demand for the manufactured product beyond all precedent, and this, in turn, has been fol lowed by an increased demand for labor, and for the supply of raw material. Thus the labor of many persons has been brought into use, which would otherwise have been wasted or misapplied, and many natural productions are rendered available, which would otherwise have been worthless. The former producer finds that his time is better occupied in increasing the quantity of cotton rather than in manufacturing it, and he thereby increases his exchanges. The three thousand Indians whose labor is performed by one person now find it more profitable to impart value to other substances which they can exchange for cloth rather than manufacture for themselves; and thus an immense addition of industrial capital is added to the aggregate before existing. Every improvement in machinery perfects the product manufactured or decreases the cost-results invariably attended with increased exchanges, increased production and consumption, and a rapid increase of the power of accumulation. So long as India, with imperfect machinery for effecting the change of cotton into cloth, continued to supply the world, the production, consumption, accumulation, and exchange involved were comparatively unimportant; but now, when by the aid of machinery one man is enabled to accomplish the work of three thousand in the same business, the production, manufacture, and exchange of cotton and its products require the skill, labor, and capital of millions, while the accúmulation consequent involves the profit and wealth of nations.

Take another example as given by Mr. Carey. In the early stages of society, the quantity of labor that intervenes. between the production of grain and the consumption of bread is very great. The producer has to grind his rye or his wheat between stones, and a considerable portion of the

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time is thus occupied, when it could be better employed in increasing the quantity of grain. By degrees the grist-mill comes nearer to him, and he saves much time by going to it, although far distant. Population and wealth increases. A new mill is established in his immediate neighborhood, and he now exchanges directly with the miller, saving nearly all the time he had before wasted on the road; and the consumers of food by whom he is surrounded now obtain nearly all the wheat given for cloth, while its producer obtains nearly all the cloth given for the wheat.

The intimate relation existing between commerce, or the machinery used for effecting change in place and manufactures, or the machinery employed for effecting changes in form, is strikingly shown by the manner in which any thing that increases the facilities of transit acts as a stimulus upon manufactures; and, on the other hand, every great improvement in manufactures necessarily leads to an increased development of commerce. More horses are now employed in the city of New York, in connection with the various rail-roads, than were formerly used upon all the stage routes leading directly to New York. As a consequence of this increased number of horses within the city, increased amounts of hay are required from the country for their support. This hay must be transported, and increased facilities of transportation have therefore been created. But hay is an article too bulky to be sent for any considerable distance as it comes from the field or the barn. It must be pressed and made into bales; and this new requirement has been so great, that within a few years several large establishments have been built for a new business-the manufacture of haypresses-employing directly the services of a large number of carpenters, blacksmiths, and laborers, and indirectly all concerned in preparing or transporting the wood and iron from which the presses are constructed.

CHANGE IN OWNERSHIP.

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An immense traffic in eggs, fruit, fish, and fresh provisions is continually carried on between the great cities of our Atlantic seaboard and the distant States of the West by means of the facilities afforded by rail-way conveyance, all of which business, with nothing but the old wagons to depend on, would be obviously impossible.

Notwithstanding the perfection attained to in the construction of machinery for effecting changes in the place and form of material objects, but few exchanges could be made, unless some standard were adopted, known and recognized by all, by which all other values might be compared and measured, and through which exchange in ownership might be accomplished. The difficulty and inconvenience which, as we have before shown, the prodigal would have experienced had he received a remuneration for his labor, either in coal, in food, or in drink, would be experienced in a greater or less degree by every other person who is obliged to effect his exchanges in kind, as salt for wheat, sugar for iron, etc. The farmer may not require iron utensils of the blacksmith or shoes of the shoemaker, and yet the latter may have nothing else to offer him for his wheat. Again, if the blacksmith or the shoemaker desire clothing, it is by no means certain that the cloth-maker requires iron or shoes, although he would gladly exchange cloth for cotton or wool. In short, so insuperable are the difficulties of effecting any system of exchanges in kind, that some machinery for facilitating these transactions has always been devised, even by the rudest nations. We designate such machinery employed for facilitating exchanges as a circulating medium-money.

Among the North American Indians, the circulating medium was wampum and beaver-skins; among the natives of West Africa, it consists of small shells, called cowries. Our Anglo-Saxon ancestors used slaves and cattle as the mediums of exchange; and going back to remote periods, we find in