54 BANKING THEORIES IN UNITED STATES

at which they have the highest utility, and at which the interest
rate is lowest. Bank notes increase the utility of gold and silver
and accordingly attract them! It is to England, that one of all
the countries in Europe in which the use of bank notes has been
most universal, that the precious metals have flowed.”
The belief that bank notes tend to supersede gold and silver
failed, in Carey’s opinion, to regard “the real Man — the being
made in the image of his Creator. . . . The desires of taf man are
infinite, and the more they are gratified, the more rapidly do they
increase in number.”’?
“Money tends to diminish the obstacles interposed between
the producer and the consumer,” Carey further argued, in a belated
 defence of the balance of trade doctrine, “precisely as do
railroads and mills — all of them tending to the raising the value
of labor and land while cheapening the finished products of
labor.” ¢ While increase of the supply of money tends to raise
prices, it augments also the “power of association,” causing so
large an increase of the supply of manufactures and of food as
more than to offset the tendency toward a rise in prices.’
1 H. C. Carey, Money (1855), p. 21.
2 1bid., p. 14.
3 Idem, Principles of Social Science (18598), ii, 332.
1 Ibid., ii, 327.
5 Money (1855), P- IO. Although Carey had direct reference here to metallic
money, similar reasoning is apparently implied with respect to bank paper. Compare
 with the point Carey has just made, Hamilton's reply, earlier in the chapter,
to the doctrine that banks expel specie.