ABSTRACT
The Scottish Enlightenment philosopher and historian David Hume is justly
renowned as a monetary economist for his specie-flow mechanism of bal-
ance-of-payments adjustment and his analysis of the short-run non-neu-
trality of money. The memorable use of playing cards as the paper currency
of New France (Norrie, Owram, and Emery 2002, 44; Lester 1939) is a
commonplace of monetary economics, second only to the stone money of
the island of Yap. The two resulting, extensive literatures have remained
separate: writers on Hume’s economics have concentrated almost exclusively on the essays he published in 1752 (to which he added ‘‘Of the Jealousy of
Trade’’ in 1758), while the literature on Canadian monetary history has
failed to identify Mr. Hume, the British charge´ d’affaires in Paris who
attempted a settlement of the outstanding paper currency of New France
after the British conquest, as having been the eminent philosopher. Hume’s
draft memorandum of 25 September 1765 on the proposed settlement of the
Canada Bills, together with the related correspondence, constitutes Hume’s
only known contribution to economics after his 1752 and 1758 essays (apart from brief passages in letters1 and the passages in his History of England
noted by Eugene Rotwein (1970 [1955], lxxix-lxxx)), and differs from his
published economic essays in dealing with an applied problem of economic
policy rather than theory. Taking account of Hume’s involvement in the
Canada Bills leads to no dramatic re-evaluation of his monetary theory (or
of the history of the Canada Bills), but it serves to remind us of Hume’s
participation in practical affairs, which has been forgotten in the literature
on Hume as an economist. Articles whose titles emphasize the practicality of Hume’s economics or Hume on economic policy (Velk and Riggs 1985;
Davlantes 1990; Soule 2000) consider Hume’s economics as practical in the
senses of rejecting utopian projects or of still remaining relevant, and con-
sider the policy implications of Hume’s theorizing, without mentioning his
involvement in the practice of economic policy as well as its theory. Hume’s
prote´ge´ Gibbon reflected that the captain of the Hampshire grenadiers had
not been useless to the historian of the Roman empire. The lasting reputa-
tions of Hume and Gibbon do not result from their participation in affairs of state; rather, such practical experience (Hume as diplomat and under-
secretary of state, Gibbon in the county militia and Parliament) made their
understanding of how the world works more insightful and more applicable
to the issues facing the nation.
