t the pleasure of the holder, and
would result simply from the redundancy of their quantity. It
is important to a just understanding of the subject, that the
relative depreciation of bank paper at different places, as
compared with specie, should not be confounded with this
general depreciation of the entire mass of the circulating
medium, including specie."

Although the principle appears to us to be laid down somewhat too
broadly by Mr. M'Duffie, as we shall presently state, yet he is
supported in his position, to the letter, by Hume, by Mr. Jefferson, and
virtually by Adam Smith, if we suppose that from any cause the excess of
gold and silver, which causes the depreciation, cannot be exported. They
all agree in this, that the amount of money which can circulate, and
which does in fact circulate in any country, depends upon the number and
value of its exchanges, and that, as its quantity increases, its value
diminishes. But Hume and Smith, concurring in this general principle,
drew very different inferences from it as to the paper currency of
banks. Hume thought that the equilibrium between the money required for
the country and that in circulation, was effected by depreciation; while
Smith considered, that it was maintained by an exportation of the
precious metals in proportion to the increase of paper. And the general
principle thus ably supported by authority, was all, no doubt, that Mr.
M'Duffie meant to assert. There is then probably no real difference
between him and his reviewer in the North American.

We conceive that Mr. M'Duffie, in his application of the principle to
our own situation, twelve or fifteen years since, has not greatly
overrated the depreciation, if we regard the effect of the increase of
money on every species of exchangeable value; but that it was very
different with the different kinds. This difference requires
explanation; but first, of the general principle itself, which, it seems
to us, must be received with some qualification.

The effect of an increase of money is certainly to diminish its value;
but the extent of the diminution is one of those nice problems in
political economy which has never been accurately settled. It has not
yet been adjusted to a formula which will explain all the facts
attending such increase. Although the quantity of money required in a
country mainly depends upon the number and value of its purchases in a
given time, yet with th