propose to examine in the present chapter is not those circumstances affecting money which alter the permanent conditions of its value, but the effects produced on international trade by casual or temporary variations in the value of money, which have no connection with any causes affecting its permanent value.
§ 2. Effect of a sudden increase of a metallic Currency, or of the sudden creation of Bank-Notes or other substitutes for Money.
Let us suppose in any country a circulating medium purely metallic, and a sudden casual increase made to it; for example, by bringing into circulation hoards of treasure, which had been concealed in a previous period of foreign invasion or internal disorder. The natural effect would be a rise of prices. This would check exports and encourage imports; the imports would exceed the exports, the exchanges would become unfavorable, and a newly acquired stock of money would diffuse itself over all countries with which the supposed country carried on trade, and from them, progressively, through all parts of the commercial world. The money which thus overflowed would spread itself to an equal depth over all commercial