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motive power, so interest absorbs a part of the value of all commodities sold on credit. Interest, the necessary accompaniment of credit, produces no wealth; but, on the contrary, absorbs wealth and tends to concentrate it in the hands of the few; and, necessarily, in the same ratio it takes from the masses the power to purchase the things they desire and would otherwise consume. Its ultimate result must be to lower prices. Credit burdened with interest, as it always is, may temporarily increase the demand for a certain commodity and consequently temporarily raise its price; but it must do this at the expense of other commodities. Like a stimulant administered to a human being, it may produce spasmodic results of extraordinary power; but when the stimulant has spent its force it leaves the individual weaker and in a worse condition than he was before the stimulant was administered. Henry Thornton, an English economist, attempts to prove that a bill of exchange is money, and that, being money, it acts on prices. He says: Let us imagine a farmer in the country to discharge a debt of L10 to his neighboring grocer by giving him a bill for that sum, drawn on his corn-factor in London, for grain sold in the metropolis; and the grocer to transmit the bill, he having previously indorsed it, to a neighboring sugar-baker in discharge of a like debt; and the sugar-baker to send it, when again indorsed, to a West India merchant in an outport; and the West India merchant to deliver it to his country banker, who also indorses it and sends it into further circulation. The bill in this case will have effected five payments, exactly as if it were a L10 note payable to the bearer on demand. A multitude of bills pass this way between traders in the country, in the manner which has been described; _and they evidently form in the strictest sense a part of the circulating medium of the kingdom_. Mill in his "Political Economy" quotes this illustration with approval. Is the conclusion arrived at correct? Suppose that instead of a bill of exchange for L10, a horse worth L10 had been made use of, and the farmer had delivered the horse to the grocer in satisfaction of his debt, and the grocer had turned it over to the sugar-baker, and the sugar-baker to the West India merchant, etc. The horse would have paid the five debts in precisely the same manner that the bill of
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