How Cantillon and Hume Propose the Same Theory of First-Round Effects

Richard Cantillon and David Hume both propose the theory of monetary non-neutrality, whereby the money supply changes through the money balances of specific individuals. Such an uneven distribution of monetary change then spreads throughout the economy step by step and changes relative prices. While a number of authors note that Hume and Cantillon both present the same theory, they do so without seeking confirmation from the original texts. I fill this gap in the literature by identifying the main constituent parts of the theory in the contributions of both Cantillon and Hume

The effect of war on prices

It is scarcely necessary to say that the common opinion upon this question?an opinion, too, that is shared by some economists of eminence ? is that a state of war necessarily tends to produce a general rise in the prices of commodities. The expression "war-prices" shows what is the popular notion: the doctrine which this expression implies has been supported by some grave and plausible arguments; and it cannot be denied that it is at the present moment countenanced by some very obvious and striking tacts. It will, therefore, not be out of place if I invite the attention of the society for a short space to some of the economic principles which affect this question

The laws, according to which a depreciation of the precious metals consequent upon an increase of supply takes place, considered in connection with the recent gold discoveries

It appears to me, however, that misconceptions respecting the influence of an increased supply of gold upon its value and upon general prices are by no means confined to the class who could be misled by such fallacies, but that even among economists (at least among economists in this country) we may observe the same indisposition to believe in an actual and progressive depreciation of this metal. It is not indeed denied ? at least, I presume it is not denied ? by anyone pretending to economic knowledge, that the enlarged production of gold now taking place has a tendency to lower its value; but it seems to be very generally supposed that the same cause ? the increased gold production ? has the effect, through its influence on trade, of calling into operation so many tendencies of a contrary nature, that on the whole, the depreciation must proceed with extreme slowness, the results being dispersed over a period so great as to take from them any practical importance, and that, at all events, up to the present time no sensible effect upon prices has hence arisen

On the best means of raising the supplies for a war expenditure

The question respecting the raising of the supplies for a war expenditure, by what means they can be most efficiently obtained, and with the least inconvenience to the community, has been of late years allowed to fall in some degree into abeyance; owing, perhaps, to the small probability there seemed of there being any occasion for bringing it to a practical decision. It appears, however, that it is not likely to enjoy this exemption from discussion much longer. On the contrary, there seems now to be little doubt that the financial problem of a war expenditure will soon assume a character of formidable and pressing importance; and under these circumstances, a brief notice of this question, and of some of the arguments and statistics applying to it, may perhaps possess some interest for this society

An examination into the principles of currency involved in the Bank Charter Act of 1844

The prospects of the country at the present moment, on the opening of a European war, present many aspects of anxious interest, and afford indications of a revival of many subjects of discussion, as well of an economical and financial as of a political character, which have long been allowed to slumber in silence. Amongst these we may expect to find our monetary laws pretty severely canvassed; and it is certain that the necessity of supporting large military expenditure in foreign countries is a circumstance of precisely that kind which is likely to bring these laws to a severe test. We have already parted with some four or five millions of bullion in discharge of foreign liabilities of one kind or another; and though the exchanges may have rallied for the present, it is not possible that the country should carry on its warlike proceedings on the scale which seems to be contemplated, without becoming subject to occasional drains of the precious metals of a more extensive character than we have for many years experienced. The occasion, therefore, seems not to be unsuitable for inviting public attention to a consideration of the principles upon which our currency laws are based. These principles, so far at least as regards the control of our paper circulation, are embodied in the Bank Charter Act of 1844. Into all the provisions of that Act it is not intended in the following observations to enter: the points which it is proposed to discuss are those only which affect the central establishment in London; according to which an artificial limit, prescribed by the legislature, is placed upon the issue of notes payable on demand

The slave power : its character, career, and probable designs : being an attempt to explain the real issues involved in the American contest / by J. E. Cairnes.

1 p. L., [vii]-xv, [17]-171 p. 25 cm.Cover title: Cairnes on the slave power