NOTES:
　　1。Montesquieu，EspritdesLois，liv。xxii，ch。8。
　　ThePrinciplesofPoliticalEconomy
　　byJohnStuartMill
　　Book3:Distribution
　　Chapter8
　　OftheValueofMoney，asDependentonDemandandSupply
　　1。Itisunfortunatethatintheveryoutsetofthesubject
　　wehavetoclearfromourpathaformidableambiguityof
　　language。TheValueofMoneyistoappearanceanexpressionas
　　precise，asfreefrompossibilityofmisunderstanding，asanyin
　　science。Thevalueofathing，iswhatitwillexchangefor:the
　　valueofmoney，iswhatmoneywillexchangefor;thepurchasing
　　powerofmoney。Ifpricesarelow，moneywillbuymuchofother
　　things，andisofhighvalue;ifpricesarehigh，itwillbuy
　　littleofotherthings，andisoflowvalue。Thevalueofmoney
　　isinverselyasgeneralprices:fallingastheyrise，andrising
　　astheyfall。
　　Butunhappilythesamephraseisalsoemployed，inthe
　　currentlanguageofcommerce，inaverydifferentsense。Money，
　　whichissocommonlyunderstoodasthesynonymeofwealth，is
　　moreespeciallytheterminusetodenoteitwhenitisthe
　　subjectofborrowing。Whenonepersonlendstoanother，aswell
　　aswhenhepayswagesorrenttoanother，whathetransfersis
　　notthemeremoney，butarighttoacertainvalueoftheproduce
　　ofthecountry，tobeselectedatpleasure;thelenderhaving
　　firstboughtthisright，bygivingforitaportionofhis
　　capital。Whathereallylendsissomuchcapital;themoneyis
　　themereinstrumentoftransfer。Butthecapitalusuallypasses
　　fromthelendertothereceiverthroughthemeanseitherof
　　money，orofanordertoreceivemoney，andatanyrateitisin
　　moneythatthecapitaliscomputedandestimated。Hence，
　　borrowingcapitalisuniversallycalledborrowingmoney;theloan
　　marketiscalledthemoneymarket:thosewhohavetheircapital
　　disposableforinvestmentonloanarecalledthemoniedclass:
　　andtheequivalentgivenfortheuseofcapital，orinother
　　words，interest，isnotonlycalledtheinterestofmoney，but，
　　byagrosserperversionofterms，thevalueofmoney。This
　　misapplicationoflanguage，assistedbysomefallacious
　　appearanceswhichweshallnoticeandclearuphereafter，（1*）has
　　createdageneralnotionamongpersonsinbusiness，thatthe
　　ValueofMoney，meaningtherateofinterest，hasanintimate
　　connexionwiththeValueofMoneyinitspropersense，thevalue
　　orpurchasingpowerofthecirculatingmedium。Weshallreturnto
　　thissubjectbeforelong:atpresentitisenoughtosay，thatby
　　ValueIshallalwaysmeanExchangeValue，andbymoneythemedium
　　ofexchange，notthecapitalwhichispassedfromhandtohand
　　throughthatmedium。
　　2。Thevalueorpurchasingpowerofmoneydepends，inthe
　　firstinstance，ondemandandsupply。Butdemandandsupply，in
　　relationtomoney，presentthemselvesinasomewhatdifferent
　　shapefromthedemandandsupplyofotherthings。
　　Thesupplyofacommoditymeansthequantityofferedfor
　　sale。Butitisnotusualtospeakofofferingmoneyforsale。
　　Peoplearenotusuallysaidtobuyorsellmoney。This，however，
　　ismerelyanaccidentoflanguage。Inpointoffact，moneyis
　　boughtandsoldlikeotherthings，wheneverotherthingsare
　　boughtandsoldformoney。Whoeversellscorn，ortallow，or
　　cotton，buysmoney。Whoeverbuysbread，orwine，orclothes，
　　sellsmoneytothedealerinthosearticles。Themoneywithwhich
　　peopleareofferingtobuy，ismoneyofferedforsale。Thesupply
　　ofmoney，then，isthequantityofitwhichpeoplearewantingto
　　layout;thatis，allthemoneytheyhaveintheirpossession，
　　exceptwhattheyarehoarding，oratleastkeepingbythemasa
　　reserveforfuturecontingencies。Thesupplyofmoney，inshort，
　　isallthemoneyincirculationatthetime。
　　Thedemandformoney，again，consistsofallthegoods
　　offeredforsale。Everysellerofgoodsisabuyerofmoney，and
　　thegoodshebringswithhimconstitutehisdemand。Thedemand
　　formoneydiffersfromthedemandforotherthingsinthis，that
　　itislimitedonlybythemeansofthepurchaser。Thedemandfor
　　otherthingsisforsomuchandnomore;butthereisalwaysa
　　demandforasmuchmoneyascanbegot。Personsmayindeedrefuse
　　tosell，andwithdrawtheirgoodsfromthemarket，iftheycannot
　　getforthemwhattheyconsiderasufficientprice。Butthisis
　　onlywhentheythinkthatthepricewillrise，andthatthey
　　shallgetmoremoneybywaiting。Iftheythoughtthelowprice
　　likelytobepermanent，theywouldtakewhattheycouldget。It
　　isalwaysasinequanonwithadealertodisposeofhisgoods。
　　Asthewholeofthegoodsinthemarketcomposethedemand
　　formoney，sothewholeofthemoneyconstitutesthedemandfor
　　goods。Themoneyandthegoodsareseekingeachotherforthe
　　purposeofbeingexchanged。Theyarereciprocallysupplyand
　　demandtooneanother。Itisindifferentwhether，in
　　characterizingthephenomena，wespeakofthedemandandsupply
　　ofgoods，orthesupplyandthedemandofmoney。Theyare
　　equivalentexpressions。
　　Weshallproceedtoillustratethispropositionmorefully。
　　Andindoingthis，thereaderwillremarkagreatdifference
　　betweentheclassofquestionswhichnowoccupyus，andthose
　　whichwepreviouslyhadunderdiscussionrespectingValues。In
　　consideringValue，wewereonlyconcernedwithcauseswhichacted
　　uponparticularcommoditiesapartfromtherest。Causeswhich
　　affectallcommoditiesalike，donotactuponvalues。Butin
　　consideringtherelationbetweengoodsandmoney，itiswiththe
　　causesthatoperateuponallgoodswhatever，thatweare
　　speciallyconcerned。Wearecomparinggoodsofallsortsonone
　　side，withmoneyontheotherside，asthingstobeexchanged
　　againsteachother。
　　Suppose，everythingelsebeingthesame，thatthereisan
　　increaseinthequantityofmoney，saybythearrivalofa
　　foreignerinaplace，withatreasureofgoldandsilver。Whenhe
　　commencesexpendingit（forthisquestionitmattersnotwhether
　　productivelyorunproductively），headdstothesupplyofmoney，
　　andbythesameact，tothedemandforgoods。Doubtlessheadds，
　　inthefirstinstance，tothedemandonlyforcertainkindsof
　　goods，namely，thosewhichheselectsforpurchase;hewill
　　immediatelyraisethepriceofthose，andsofarasheis
　　individuallyconcerned，ofthoseonly。Ifhespendshisfundsin
　　givingentertainments，hewillraisethepricesoffoodandwine。
　　Ifheexpendstheminestablishingamanufactory，hewillraise
　　thepricesoflabourandmaterials。Butatthehigherprices，
　　moremoneywillpassintothehandsofthesellersofthese
　　differentarticles;andthey，whetherlabourersordealers，
　　havingmoremoneytolayout，willcreateanincreaseddemandfor
　　allthethingswhichtheyareaccustomedtopurchase:these
　　accordinglywillriseinprice，andsoonuntiltherisehas
　　reachedeverything。Isayeverything，thoughitisofcourse
　　possiblethattheinfluxofmoneymighttakeplacethroughthe
　　mediumofsomenewclassofconsumers，orinsuchamannerasto
　　altertheproportionsofdifferentclassesofconsumerstoone
　　another，sothatagreatershareofthenationalincomethan
　　beforewouldthenceforthbeexpendedinsomearticles，anda
　　smallerinothers;exactlyasifachangehadtakenplaceinthe
　　tastesandwantsofthecommunity。Ifthiswerethecase，then
　　untilproductionhadaccommodateditselftothischangeinthe
　　comparativedemandfordifferentthings，therewouldbeareal
　　alterationinvalues，andsomethingswouldriseinpricemore
　　thanothers，whilesomeperhapswouldnotriseatall。These
　　effects，however，wouldevidentlyproceed，notfromthemere
　　increaseofmoney，butfromaccessorycircumstancesattendingit。
　　Wearenowonlycalledupontoconsiderwhatwouldbetheeffect
　　ofanincreaseofmoney，consideredbyitself。Supposingthe
　　moneyinthehandsofindividualstobeincreased，thewantsand
　　inclinationsofthecommunitycollectivelyinrespectto
　　consumptionremainingexactlythesame;theincreaseofdemand
　　wouldreachallthingsequally，andtherewouldbeanuniversal
　　riseofprices。Wemightsuppose，withHume，thatsomemorning，
　　everypersoninthenationshouldwakeandfindagoldcoinin
　　hispocket:thisexample，however，wouldinvolveanalterationof
　　theproportionsinthedemandfordifferentcommodities;the
　　luxuriesofthepoorwould，inthefirstinstanceberaisedin
　　price，inamuchgreaterdegreethanotherthings。Letusrather
　　suppose，therefore，thattoeverypound，orshilling，orpenny，
　　inthepossessionofanyone，anotherpound，shilling，orpenny，
　　weresuddenlyadded。Therewouldbeanincreasedmoneydemand，
　　andconsequentlyanincreasedmoneyvalue，orprice，forthings
　　ofallsorts。Thisincreasedvaluewoulddonogoodtoanyone;
　　wouldmakenodifference，exceptthatofhavingtoreckonpounds，
　　shillings，andpence，inhighernumbers。Itwouldbeanincrease
　　ofvaluesonlyasestimatedinmoney，athingonlywantedtobuy
　　otherthingswith;andwouldnotenableanyonetobuymoreof
　　themthanbefore。Priceswouldhaveriseninacertainratio，and
　　thevalueofmoneywouldhavefalleninthesameratio。
　　Itistoberemarkedthatthisratiowouldbepreciselythat
　　inwhichthequantityofmoneyhadbeenincreased。Ifthewhole
　　moneyincirculationwasdoubled，priceswouldbedoubled。Ifit
　　wasonlyincreasedone—fourth，priceswouldriseone—fourth。
　　Therewouldbeone—fourthmoremoney，allofwhichwouldbeused
　　topurchasegoodsofsomedescription。Whentherehadbeentime
　　fortheincreasedsupplyofmoneytoreachallmarkets，or
　　（accordingtotheconventionalmetaphor）topermeateallthe
　　channelsofcirculation，allpriceswouldhaverisenone—fourth。
　　Butthegeneralriseofpriceisindependentofthisdiffusing
　　andequalizingprocess。Evenifsomepriceswereraisedmore，and
　　othersless，theaveragerisewouldbeone—fourth。Thisisa
　　necessaryconsequenceofthefact，thatafourthmoremoneywould
　　havebeengivenforonlythesamequantityofgoods。General
　　prices，therefore，wouldinanycasebeafourthhigher。
　　Theverysameeffectwouldbeproducedonpricesifwe
　　supposethegoodsdiminished，insteadofthemoneyincreased:and
　　thecontraryeffectifthegoodswereincreasedorthemoney
　　diminished。Iftherewerelessmoneyinthehandsofthe
　　community，andthesameamountofgoodstobesold，lessmoney
　　altogetherwouldbegivenforthem，andtheywouldbesoldat
　　lowerprices;lower，too，inthepreciseratioinwhichthemoney
　　wasdiminished。Sothatthevalueofmoney，otherthingsbeing
　　thesame，variesinverselyasitsquantity;everyincreaseof
　　quantityloweringthevalue，andeverydiminutionraisingit，in
　　aratioexactlyequivalent。
　　This，itmustbeobserved，isapropertypeculiartomoney。
　　Wedidnotfindittobetrueofcommoditiesgenerally，that
　　everydiminutionofsupplyraisedthevalueexactlyinproportion
　　tothedeficiency，orthateveryincreaselowereditinthe
　　preciseratiooftheexcess。Somethingsareusuallyaffectedin
　　agreaterratiothanthatoftheexcessordeficiency，others
　　usuallyinaless:because，inordinarycasesofdemand，the
　　desire，beingforthethingitself，maybestrongerorweaker:
　　andtheamountofwhatpeoplearewillingtoexpendonit，being
　　inanycasealimitedquantity，maybeaffectedinveryunequal
　　degreesbydifficultyorfacilityofattainment。Butinthecase
　　ofmoney，whichisdesiredasthemeansofuniversalpurchase，
　　thedemandconsistsofeverythingwhichpeoplehavetosell;and
　　theonlylimittowhattheyarewillingtogive，isthelimitset
　　bytheirhavingnothingmoretooffer。Thewholeofthegoods
　　beinginanycaseexchangedforthewholeofthemoneywhich
　　comesintothemarkettobelaidout，theywillsellforlessor
　　moreofit，exactlyaccordingaslessormoreisbrought。
　　3。Fromwhatprecedes，itmightforamomentbesupposed，
　　thatallthegoodsonsaleinacountryatanyonetime，are
　　exchangedforallthemoneyexistingandincirculationatthat
　　sametime:orinotherwords，thatthereisalwaysincirculation
　　inacountry，aquantityofmoneyequalinvaluetothewholeof
　　thegoodsthenandthereonsale。Butthiswouldbeacomplete
　　misapprehension。Themoneylaidoutisequalinvaluetothe
　　goodsitpurchases;butthequantityofmoneylaidoutisnotthe
　　samethingwiththequantityincirculation。Asthemoneypasses
　　fromhandtohand，thesamepieceofmoneyislaidoutmany
　　times，beforeallthethingsonsaleatonetimearepurchased
　　andfinallyremovedfromthemarket:andeachpoundordollar
　　mustbecountedforasmanypoundsordollars，asthenumberof
　　timesitchangeshandsinordertoeffectthisobject。The
　　greaterpartofthegoodsmustalsobecountedmorethanonce，
　　notonlybecausemostthingspassthroughthehandsofseveral
　　setsofmanufacturersanddealersbeforetheyassumetheformin
　　whichtheyarefinallyconsumed，butbecauseintimesof
　　speculation（andalltimesareso，moreorless）thesamegoods
　　areoftenboughtrepeatedly，toberesoldforaprofit，before
　　theyareboughtforthepurposeofconsumptionatall。
　　Ifweassumethequantityofgoodsonsale，andthenumberof
　　timesthosegoodsareresold，tobefixedquantities，thevalue
　　ofmoneywilldependuponitsquantity，togetherwiththeaverage
　　numberoftimesthateachpiecechangeshandsintheprocess。The
　　wholeofthegoodssold（countingeachresaleofthesamegoods
　　assomuchaddedtothegoods）havebeenexchangedforthewhole
　　ofthemoney，multipliedbythenumberofpurchasesmadeonthe
　　averagebyeachpiece。Consequently，theamountofgoodsandof
　　transactionsbeingthesame，thevalueofmoneyisinverselyas
　　itsquantitymultipliedbywhatiscalledtherapidityof
　　circulation。Andthequantityofmoneyincirculation，isequal
　　tothemoneyvalueofallthegoodssold，dividedbythenumber
　　whichexpressestherapidityofcirculation。
　　Thephrase，rapidityofcirculation，requiressomecomment。
　　Itmustnotbeunderstoodtomean，thenumberofpurchasesmade
　　byeachpieceofmoneyinagiventime。Timeisnotthethingto
　　beconsidered。Thestateofsocietymayhesuch，thateachpiece
　　ofmoneyhardlyperformsmorethanonepurchaseinayear;butif
　　thisarisesfromthesmallnumberoftransactions—fromthesmall
　　amountofbusinessdone，thewantofactivityintraffic，or
　　becausewhattrafficthereis，mostlytakesplacebybarter——it
　　constitutesnoreasonwhypricesshouldbelower，orthevalueof
　　moneyhigher。Theessentialpointis，nothowoftenthesame
　　moneychangeshandsinagiventime，buthowoftenitchanges
　　handsinordertoperformagivenamountoftraffic。Wemust
　　comparethenumberofpurchasesmadebythemoneyinagiven
　　time，notwiththetimeitself，butwiththegoodssoldinthat
　　sametime。Ifeachpieceofmoneychangeshandsonanaverageten
　　timeswhilegoodsaresoldtothevalueofamillionsterling，it
　　isevidentthatthemoneyrequiredtocirculatethosegoodsis
　　100，000l。Andconversely，ifthemoneyincirculationis
　　100，000l。，andeachpiecechangeshandsbythepurchaseofgoods
　　tentimesinamonth，thesalesofgoodsformoneywhichtake
　　placeeverymonthmustamountontheaverageto1，000，000l。
　　Rapidityofcirculationbeingaphrasesoilladaptedto
　　expresstheonlythingwhichitisofanyimportancetoexpress
　　byit，andhavingatendencytoconfusethesubjectbysuggesting
　　ameaningextremelydifferentfromtheoneintended，itwouldbe
　　agoodthingifthephrasecouldbegotridof，andanother
　　substituted，moredirectlysignificantoftheideameanttobe
　　conveyed。Somesuchexpressionas"theefficiencyofmoney，"
　　thoughnotunexceptionable，woulddobetter;asitwouldpoint
　　attentiontothequantityofworkdone，withoutsuggestingthe
　　ideaofestimatingitbytime。Untilanappropriatetermcanbe
　　devised，wemustbecontentwhenambiguityistobeapprehended，
　　toexpresstheideabythecircumlocutionwhichaloneconveysit
　　adequately，namely，theaveragenumberofpurchasesmadebyeach
　　pieceinordertoeffectagivenpecuniaryamountof
　　transactions。
　　4。Thepropositionwhichwehavelaiddownrespectingthe
　　dependenceofgeneralpricesuponthequantityofmoneyin
　　circulation，mustbeunderstoodasapplyingonlytoastateof
　　thingsinwhichmoney，thatis，goldorsilver，istheexclusive
　　instrumentofexchange，andactuallypassesfromhandtohandat
　　everypurchase，creditinanyofitsshapesbeingunknown。When
　　creditcomesintoplayasameansofpurchasing，distinctfrom
　　moneyinhand，weshallhereafterfindthattheconnexionbetween
　　pricesandtheamountofthecirculatingmediumismuchless
　　directandintimate，andthatsuchconnexionasdoesexist，no
　　longeradmitsofsosimpleamodeofexpression。Butonasubject
　　sofullofcomplexityasthatofcurrencyandprices，itis
　　necessarytolaythefoundationofourtheoryinathorough
　　understandingofthemostsimplecases，whichweshallalways
　　findlyingasagroundworkorsubstratumunderthosewhicharise
　　inpractice。Thatanincreaseofthequantityofmoneyraises
　　prices，andadiminutionlowersthem，isthemostelementary
　　propositioninthetheoryofcurrency，andwithoutitweshould
　　havenokeytoanyoftheothers。Inanystateofthings，
　　however，exceptthesimpleandprimitiveonewhichwehave
　　supposed，thepropositionisonlytrueotherthingsbeingthe
　　same:andwhatthoseotherthingsare，whichmustbethesame，we
　　arenotyetreadytopronounce。Wecan，however，pointout，even
　　now，oneortwoofthecautionswithwhichtheprinciplemustbe
　　guardedinattemptingtomakeuseofitforthepractical
　　explanationofphenomena;cautionsthemoreindispensable，asthe
　　doctrine，thoughascientifictruth，hasoflateyearsbeenthe
　　foundationofagreatermassoffalsetheory，anderroneous
　　interpretationoffacts，thananyotherpropositionrelatingto
　　interchange。Fromthetimeoftheresumptionofcashpaymentsby
　　theActof1819，andespeciallysincethecommercialcrisisof
　　1825，thefavouriteexplanationofeveryriseorfallofprices
　　hasbeen"thecurrency;"andlikemostpopulartheories，the
　　doctrinehasbeenappliedwithlittleregardtotheconditions
　　necessaryformakingitcorrect。
　　Forexample，itishabituallyassumedthatwheneverthereis
　　agreateramountofmoneyinthecountry，orinexistence，arise
　　ofpricesmustnecessityfollow。Butthisisbynomeansan
　　inevitableconsequence。Innocommodityisitthequantityin
　　existence，butthequantityofferedforsale，thatdeterminesthe
　　value。Whatevermaybethequantityofmoneyinthecountry，only
　　thatpartofitwillaffectprices，whichgoesintothemarketof
　　commodities，andisthereactuallyexchangedagainstgoods。
　　Whateverincreasestheamountofthisportionofthemoneyinthe
　　country，tendstoraiseprices。Butmoneyhoardeddoesnotacton
　　prices。Moneykeptinreservebyindividualstomeet
　　contingencieswhichdonotoccur，doesnotactonprices。The
　　moneyinthecoffersoftheBank，orretainedasareserveby
　　privatebankers，doesnotactonpricesuntildrawnout，noreven
　　thenunlessdrawnouttobeexpendedincommodities。
　　Itfrequentlyhappensthatmoney，toaconsiderableamount，
　　isbroughtintothecountry，isthereactuallyinvestedas
　　capital，andagainflowsout，withouthavingeveronceactedupon
　　themarketsofcommodities，butonlyuponthemarketof
　　securities，or，asitiscommonlythoughimproperlycalled，the
　　moneymarket。Letusreturntothecasealreadyputfor
　　illustration，thatofaforeignerlandinginthecountrywitha
　　treasure。Wesupposedhimtoemployhistreasureinthepurchase
　　ofgoodsforhisownuse，orinsettingupamanufactoryand
　　employinglabourers;andineithercasehewould，caeteris
　　paribus，raiseprices。Butinsteadofdoingeitherofthese
　　things，hemightveryprobablyprefertoinvesthisfortuneat
　　interest;whichweshallsupposehimtodointhemostobvious
　　way，bybecomingacompetitorforaportionofthestock，
　　exchequerbills，railwaydebentures，mercantilebills，mortgages，
　　&c。，whichareatalltimesinthehandsofthepublic。Bydoing
　　thishewouldraisethepricesofthosedifferentsecurities，or
　　inotherwordswouldlowertherateofinterest;andsincethis
　　woulddisturbtherelationpreviouslyexistingbetweentherate
　　ofinterestoncapitalinthecountryitself，andthatinforeign
　　countries，itwouldprobablyinducesomeofthosewhohad
　　floatingcapitalseekingemployment，tosenditabroadfor
　　foreigninvestmentratherthanbuysecuritiesathomeatthe
　　advancedprice。Asmuchmoneymightthusgooutashadpreviously
　　comein，whilethepricesofcommoditieswouldhaveshownno
　　traceofitstemporarypresence。Thisisacasehighlydeserving
　　ofattention:anditisafactnowbeginningtoberecognised，
　　thatthepassageofthepreciousmetalsfromcountrytocountry
　　isdeterminedmuchmorethanwasformerlysupposed，bythestate
　　oftheloanmarketindifferentcountries，andmuchlessbythe
　　stateofprices。
　　Anotherpointmustbeadvertedto，inordertoavoidserious
　　errorintheinterpretationofmercantilephenomena。Iftherebe，
　　atanytime，anincreaseinthenumberofmoneytransactions，a
　　thingcontinuallyliabletohappenfromdifferencesinthe
　　activityofspeculation，andeveninthetimeofyear（since
　　certainkindsofbusinessaretransactedonlyatparticular
　　seasons）;anincreaseofthecurrencywhichisonlyproportional
　　tothisincreaseoftransactions，andisofnolongerduration，
　　hasnotendencytoraiseprices。Atthequarterlyperiodswhen
　　thepublicdividendsarepaidattheBank，asuddenincrease
　　takesplaceofthemoneyinthehandsofthepublic;anincrease
　　estimatedatfromafifthtotwo—fifthsofthewholeissuesof
　　theBankofEngland。Yetthisneverhasanyeffectonprices;and
　　inaveryfewweeks，thecurrencyhasagainshrunkintoitsusual
　　dimensions，byamerereductioninthedemandsofthepublic
　　（aftersocopiousasupplyofreadymoney）foraccommodationfrom
　　theBankinthewayofdiscountorloan。Inlikemannerthe
　　currencyoftheagriculturaldistrictsfluctuatesinamountat
　　differentseasonsoftheyear。ItisalwayslowestinAugust:"it
　　risesgenerallytowardsChristmas，andobtainsitsgreatest
　　elevationaboutLady—day，whenthefarmercommonlylaysinhis
　　stock，andhastopayhisrentandsummertaxes，"andwhenhe
　　thereforemakeshisprincipalapplicationstocountrybankersfor
　　loans。"Thosevariationsoccurwiththesameregularityasthe
　　season，andwithjustaslittledisturbanceofthemarketsasthe
　　quarterlyfluctuationsofthenotesoftheBankofEngland。As
　　soonastheextrapaymentshavebeencompleted，thesuperfluous"
　　currency，whichisestimatedathalfamillion，"ascertainlyand
　　immediatelyisreabsorbedanddisappears。"（2*）
　　Ifextracurrencywerenotforthcomingtomaketheseextra
　　payments，oneofthreethingsmusthappen。Eitherthepayments
　　mustbemadewithoutmoney，byaresorttosomeofthose
　　contrivancesbywhichitsuseisdispensedwith;ortheremustbe
　　anincreaseintherapidityofcirculation，thesamesumofmoney
　　beingmadetoperformmorepayments;orifneitherofthese
　　thingstookplace，moneytomaketheextrapaymentsmustbe
　　withdrawnfromthemarketforcommodities，andprices，
　　consequently，mustfall。Anincreaseofthecirculatingmedium，
　　conformableinextentanddurationtothetemporarystressof
　　business，doesnotraiseprices，butmerelypreventsthisfall。
　　Thesequelofourinvestigationwillpointoutmanyother
　　qualificationswithwhichthepropositionmustbereceived，that
　　thevalueofthecirculatingmediumdependsonthedemandand
　　supply，andisintheinverseratioofthequantity;
　　qualificationswhich，underacomplexsystemofcreditlikethat
　　existinginEngland，renderthepropositionanextremely
　　incorrectexpressionofthefact。
　　NOTES:
　　1。Infra，chap。xxiii。
　　2。FullartonontheRegulationofCurrencies，2ndedit。，pp。
　　87—9。
　　ThePrinciplesofPoliticalEconomy
　　byJohnStuartMill
　　Book3:Distribution
　　Chapter9
　　OftheValueofMoney，asDependentonCostofProduction
　　1。Butmoney，nomorethancommoditiesingeneral，hasits
　　valuedefinitivelydeterminedbydemandandsupply。Theultimate
　　regulatorofitsvalueisCostofProduction。
　　Wearesupposing，ofcourse，thatthingsareleftto
　　themselves。Governmentshavenotalwaysleftthingsto
　　themselves。Theyhaveundertakentopreventthequantityofmoney
　　fromadjustingitselfaccordingtospontaneouslaws，andhave
　　endeavouredtoregulateitattheirpleasure;generallywitha
　　viewofkeepingagreaterquantityofmoneyinthecountry，than
　　wouldotherwisehaveremainedthere。Itwas，untillately，the
　　policyofallgovernmentstointerdicttheexportationandthe
　　meltingofmoney;while，byencouragingtheexportationand
　　impedingtheimportationofotherthings，theyendeavouredto
　　haveastreamofmoneyconstantlyflowingin。Bythiscoursethey
　　gratifiedtwoprejudices;theydrew，orthoughtthattheydrew，
　　moremoneyintothecountry，whichtheybelievedtobetantamount
　　tomorewealth;andtheygave，orthoughtthattheygave，toall
　　producersanddealers，highprices，which，thoughnoreal
　　advantage，peoplearealwaysinclinedtosupposetobeone。
　　Inthisattempttoregulatethevalueofmoneyartificially
　　bymeansofthesupply，governmentshaveneversucceededinthe
　　degree，oreveninthemanner，whichtheyintended。Their
　　prohibitionsagainstexportingormeltingthecoinhavenever
　　beeneffectual。Acommodityofsuchsmallbulkinproportionto
　　itsvalueissoeasilysmuggled，andstillmoreeasilymelted，
　　thatithasbeenimpossiblebythemoststringentmeasuresto
　　preventtheseoperations。Alltheriskwhichitwasinthepower
　　ofgovernmentstoattachtothem，wasoutweighedbyavery
　　moderateprofit。（1*）Inthemoreindirectmodeofaimingatthe
　　samepurpose，bythrowingdifficultiesinthewayofmakingthe
　　returnsforexportedgoodsinanyothercommoditythanmoney，
　　theyhavenotbeenquitesounsuccessful。Theyhavenot，indeed，
　　succeededinmakingmoneyflowcontinuouslyintothecountry;but
　　theyhavetoacertainextentbeenabletokeepitatahigher
　　thanitsnaturallevel;andhave，thusfar，removedthevalueof
　　moneyfromexclusivedependenceonthecauseswhichfixthevalue
　　ofthingsnotartificiallyinterferedwith。
　　Weare，however，tosupposeastate，notofartificial
　　regulation，butoffreedom。Inthatstate，andassumingnocharge
　　tobemadeforcoinage，thevalueofmoneywillconformtothe
　　valueofthebullionofwhichitismade。Apoundweightofgold
　　orsilverincoin，andthesameweightinaningot，will
　　preciselyexchangeforoneanother。Onthesuppositionof
　　freedom，themetalcannotbeworthmoreinthestateofbullion
　　thanofcoin;forasitcanbemeltedwithoutanylossoftime，
　　andwithhardlyanyexpense，thiswouldofcoursebedoneuntil
　　thequantityincirculationwassomuchdiminishedastoequalize
　　itsvaluewiththatofthesameweightinbullion。Itmaybe
　　thoughthoweverthatthecoin，thoughitcannotbeofless，may
　　be，andbeingamanufacturedarticlewillnaturallybe，of
　　greatervaluethanthebullioncontainedinit，onthesame
　　principleonwhichlinenclothisofmorevaluethananequal
　　weightoflinenyarn。Thiswouldbetrue，wereitnotthat
　　Government，inthiscountry，andinsomeothers，coinsmoney
　　gratisforanyonewhofurnishesthemetal。Thelabourand
　　expenseofcoinage，whennotchargedtothepossessor，donot
　　raisethevalueofthearticle。IfGovernmentopenedanoffice
　　where，ondeliveryofagivenweightofyarn，itreturnedthe
　　sameweightofclothtoanyonewhoaskedforit，clothwouldbe
　　worthnomoreinthemarketthantheyarnitcontained。Assoon
　　ascoinisworthafractionmorethanthevalueofthebullion，
　　itbecomestheinterestoftheholdersofbulliontosenditto
　　becoined。IfGovernment，however，throwstheexpenseofcoinage，
　　asisreasonable，upontheholder，bymakingachargetocover
　　theexpense（whichisdonebygivingbackratherlessincoin
　　thanhasbeenreceivedinbullion，andiscalledlevyinga
　　seignorage），thecoinwillrise，totheextentoftheseignorage，
　　abovethevalueofthebullion。IftheMintkeptbackoneper
　　cent，topaytheexpenseofcoinage，itwouldbeagainstthe
　　interestoftheholdersofbulliontohaveitcoined，untilthe
　　coinwasmorevaluablethanthebullionbyatleastthat
　　fraction。Thecoin，therefore，wouldbekeptonepercenthigher
　　invalue，whichcouldonlybebykeepingitonepercentlessin
　　quantity，thanifitscoinageweregratuitous。
　　TheGovernmentmightattempttoobtainaprofitbythe
　　transaction，andmightlayonaseignoragecalculatedforthat
　　purpose;butwhatevertheytookforcoinagebeyonditsexpenses，
　　wouldbesomuchprofitonprivatecoining。Coining，thoughnot
　　soeasyanoperationasmelting，isfarfromadifficultone，
　　and，whenthecoinproducedisoffullweightandstandard
　　fineness，isverydifficulttodetect。If，therefore，aprofit
　　couldbemadebycoininggoodmoney，itwouldcertainlybedone:
　　andtheattempttomakeseignorageasourceofrevenuewouldbe
　　defeated。Anyattempttokeepthevalueofthecoinatan
　　artificialelevation，notbyaseignorage，butbyrefusingto
　　coin，wouldbefrustratedinthesamemanner。（2*）
　　2。Thevalueofmoney，then，conforms，permanently，and，ina
　　stateoffreedom，almostimmediately，tothevalueofthemetal
　　ofwhichitismade;withtheaddition，ornot，oftheexpenses
　　ofcoinage，accordingasthoseexpensesarebornebythe
　　individualorbythestate。Thissimplifiesextremelythe
　　questionwhichwehaveheretoconsider:sincegoldandsilver
　　bullionarecommoditieslikeanyothers，andtheirvaluedepends，
　　likethatofotherthings，ontheircostofproduction。
　　Tothemajorityofcivilizedcountries，goldandsilverare
　　foreignproducts:andthecircumstanceswhichgovernthevalues
　　offoreignproducts，presentsomequestionswhichwearenotyet
　　readytoexamine。Forthepresent，therefore，wemustsupposethe
　　countrywhichisthesubjectofourinquiries，tobesupplied
　　withgoldandsilverbyitsownmines，reservingforfuture
　　considerationhowfarourconclusionsrequiremodificationto
　　adaptthemtothemoreusualcase。
　　Ofthethreeclassesintowhichcommoditiesaredivided——
　　thoseabsolutelylimitedinsupply，thosewhichmaybehadin
　　unlimitedquantityatagivencostofproduction，andthosewhich
　　maybehadinunlimitedquantity，butatanincreasingcostof
　　production——thepreciousmetals，beingtheproduceofmines，
　　belongtothethirdclass。Theirnaturalvalue，therefore，isin
　　thelongrunproportionaltotheircostofproductioninthemost
　　unfavourableexistingcircumstances，thatis，attheworstmine
　　whichitisnecessarytoworkinordertoobtaintherequired
　　supply。Apoundweightofgoldwill，inthegold—producing
　　countries，ultimatelytendtoexchangeforasmuchofeveryother
　　commodity，asisproducedatacostequaltoitsown;meaningby
　　itsowncostthecostinlabourandexpense，attheleast
　　productivesourcesofsupplywhichthethenexistingdemandmakes
　　itnecessarytowork。Theaveragevalueofgoldismadeto
　　conformtoitsnaturalvalue，inthesamemannerasthevaluesof
　　otherthingsaremadetoconformtotheirnaturalvalue。Suppose
　　thatitweresellingaboveitsnaturalvalue;thatis，abovethe
　　valuewhichisanequivalentforthelabourandexpenseof
　　mining，andfortherisksattendingabranchofindustryinwhich
　　nineoutoftenexperimentshaveusuallybeenfailures。Apartof
　　themassoffloatingcapitalwhichisonthelookoutfor
　　investment，wouldtakethedirectionofminingenterprise;the
　　supplywouldthusbeincreased，andthevaluewouldfall。If，on
　　thecontrary，itweresellingbelowitsnaturalvalue，miners
　　wouldnotbeobtainingtheordinaryprofit;theywouldslacken
　　theirworks;ifthedepreciationwasgreat，someoftheinferior
　　mineswouldperhapsstopworkingaltogether:andafallingoffin
　　theannualsupply，preventingtheannualwearandtearfrombeing
　　completelycompensated，wouldbydegreesreducethequantity，and
　　restorethevalue。
　　Whenexaminedmoreclosely，thefollowingarethedetailsof
　　theprocess。Ifgoldisaboveitsnaturalorcostvalue——the
　　coin，aswehaveseen，conforminginitsvaluetothe
　　bullion—moneywillbeofhighvalue，andthepricesofall
　　things，labourincluded，willbelow。Theselowpriceswilllower
　　theexpensesofallproducers;butastheirreturnswillalsobe
　　lowered，noadvantagewillbeobtainedbyanyproducer，except
　　theproducerofgold:whosereturnsfromhismine，notdepending
　　onprice，willbethesameasbefore，andhisexpensesbeing
　　less，hewillobtainextraprofits，andwillbestimulatedto
　　increasehisproduction。Econversoifthemetalisbelowits
　　naturalvalue:sincethisisasmuchastosaythatpricesare
　　high，andthemoneyexpensesofallproducersunusuallygreat:
　　forthis，however，allotherproducerswillbecompensatedby
　　increasedmoneyreturns:themineralonewillextractfromhis
　　minenomoremetalthanbefore，whilehisexpenseswillbe
　　greater:hisprofitsthereforebeingdiminishedorannihilated，
　　hewilldiminishhisproduction，ifnotabandonhisemployment。
　　Inthismanneritisthatthevalueofmoneyismadeto
　　conformtothecostofproductionofthemetalofwhichitis
　　made。Itmaybewell，however，torepeat（whathasbeensaid
　　before）thattheadjustmenttakesalongtimetoeffect，inthe
　　caseofacommoditysogenerallydesiredandatthesametimeso
　　durableasthepreciousmetals。Beingsolargelyusednotonlyas
　　moneybutforplateandornament，thereisatalltimesavery
　　largequantityofthesemetalsinexistence:whiletheyareso
　　slowlywornout，thatacomparativelysmallannualproductionis
　　sufficienttokeepupthesupply，andtomakeanyadditiontoit
　　whichmayberequiredbytheincreaseofgoodstobecirculated，
　　orbytheincreaseddemandforgoldandsilverarticlesby
　　wealthyconsumers。Evenifthissmallannualsupplywerestopt
　　entirely，itwouldrequiremanyyearstoreducethequantityso
　　muchastomakeanyverymaterialdifferenceinprices。The
　　quantitymaybeincreased，muchmorerapidlythanitcanbe
　　diminished;buttheincreasemustbeverygreatbeforeitcan
　　makeitselfmuchfeltoversuchamassofthepreciousmetalsas
　　existsinthewholecommercialworld。Andhencetheeffectsof
　　allchangesintheconditionsofproductionoftheprecious
　　metalsareatfirst，andcontinuetobeformanyyears，questions
　　ofquantityonly，withlittlereferencetocostofproduction。
　　Moreespeciallyisthisthecasewhen，asatthepresenttime，
　　manynewsourcesofsupplyhavebeensimultaneouslyopened，most
　　ofthempracticablebylabouralone，withoutanycapitalin
　　advancebeyondapickaxeandaweek’sfood;andwhenthe
　　operationsareasyetwhollyexperimental，thecomparative
　　permanentproductivenessofthedifferentsourcesbeingentirely
　　unascertained。
　　3。Since，however，thevalueofmoneyreallyconforms，like
　　thatofotherthings，thoughmoreslowly，toitscostof
　　production，somepoliticaleconomistshaveobjectedaltogetherto
　　thestatementthatthevalueofmoneydependsonitsquantity
　　combinedwiththerapidityofcirculation;which，theythink，is
　　assuringalawformoneythatdoesnotexistforanyother
　　commodity，whenthetruthisthatitisgovernedbytheverysame
　　laws。Tothiswemayanswer，inthefirstplace，thatthe
　　statementinquestionassumesnopeculiarlaw。Itissimplythe
　　lawofdemandandsupply，whichisacknowledgedtobeapplicable
　　toallcommodities，andwhich，inthecaseofmoneyasofmost
　　otherthings，iscontrolled，butnotsetaside，bythelawof
　　costofproduction，sincecostofproductionwouldhavenoeffect
　　onvalueifitcouldhavenoneonsupply。But，secondly，there
　　reallyis，inonerespect，acloserconnexionbetweenthevalue
　　ofmoneyanditsquantity，thanbetweenthevaluesofother
　　thingsandtheirquantity。Thevalueofotherthingsconformsto
　　thechangesinthecostofproduction，withoutrequiring，asa
　　condition，thatthereshouldbeanyactualalterationofthe
　　supply:thepotentialalterationissufficient;andifthereeven
　　beanactualalteration，itisbutatemporaryone，exceptinso
　　farasthealteredvaluemaymakeadifferenceinthedemand，and
　　sorequireanincreaseordiminutionofsupply，asaconsequence，
　　notacause，ofthealterationinvalue。Nowthisisalsotrueof
　　goldandsilver，consideredasarticlesofexpenditurefor
　　ornamentandluxury;butitisnottrueofmoney。Ifthe
　　permanentcostofproductionofgoldwerereducedone—fourth，it
　　mighthappenthattherewouldnotbemoreofitboughtforplate，
　　gilding，orjewellery，thanbefore;andifso，thoughthevalue
　　wouldfall，thequantityextractedfromtheminesforthese
　　purposeswouldbenogreaterthanpreviously。Notsowiththe
　　portionusedasmoney;thatportioncouldnotfallinvalue
　　one—fourth，unlessactuallyincreasedone—fourth;for，atprices
　　one—fourthhigher，one—fourthmoremoneywouldberequiredto
　　maketheaccustomedpurchases;andifthiswerenotforthcoming，
　　someofthecommoditieswouldbewithoutpurchasers，andprices
　　couldnotbekeptup。Alterations，therefore，inthecostof
　　productionofthepreciousmetals，donotactuponthevalueof
　　moneyexceptjustinproportionastheyincreaseordiminishits
　　quantity;whichcannotbesaidofanyothercommodity。Itwould
　　therefore，Iconceive，beanerrorbothscientificallyand
　　practically，todiscardthepropositionwhichassertsaconnexion
　　betweenthevalueofmoneyanditsquantity。
　　Itisevident，however，thatthecostofproduction，inthe
　　longrun，regulatesthequantity;andthateverycountry
　　（temporaryfluctuationsexcepted）willpossess，andhavein
　　circulation，justthatquantityofmoney，whichwillperformall
　　theexchangesrequiredofit，consistentlywithmaintaininga
　　valueconformabletoitscostofproduction。Thepricesofthings
　　will，ontheaverage，besuchthatmoneywillexchangeforits
　　owncostinallothergoods:and，preciselybecausethequantity
　　cannotbepreventedfromaffectingthevalue，thequantityitself
　　will（byasortofself—actingmachinery）bekeptattheamount
　　consistentwiththatstandardofprices—attheamountnecessary
　　forperforming，atthoseprices，allthebusinessrequiredofit。
　　"Thequantitywantedwilldependpartlyonthecostof
　　producinggold，andpartlyontherapidityofitscirculation。
　　Therapidityofcirculationbeinggiven，itwoulddependonthe
　　costofproduction:andthecostofproductionbeinggiven，the
　　quantityofmoneywoulddependontherapidityofits
　　circulation。"（3*）Afterwhathasbeenalreadysaid，Ihopethat
　　neitherofthesepropositionsstandsinneedofanyfurther
　　illustration。
　　Money，then，likecommoditiesingeneral，havingavalue
　　dependenton，andproportionalto，itscostofproduction;the
　　theoryofmoneyis，bytheadmissionofthisprinciple，striptof
　　agreatpartofthemysterywhichapparentlysurroundedit。We
　　mustnotforget，however，thatthisdoctrineonlyappliestothe
　　placesinwhichthepreciousmetalsareactuallyproduced;and
　　thatwehaveyettoenquirewhetherthelawofthedependenceof
　　valueoncostofproductionappliestotheexchangeofthings
　　producedatdistantplaces。Buthoweverthismaybe，our
　　propositionswithrespecttovaluewillrequirenoother
　　alteration，wheremoneyisanimportedcommodity，thanthatof
　　substitutingforthecostofitsproduction，thecostof
　　obtainingitinthecountry。Everyforeigncommodityisboughtby
　　givingforitsomedomesticproduction;andthelabourand
　　capitalwhichaforeigncommoditycoststous，isthelabourand
　　capitalexpendedinproducingthequantityofourowngoodswhich
　　wegiveinexchangeforit。Whatthisquantitydependsupon，——
　　whatdeterminestheproportionsofinterchangebetweenthe
　　productionsofonecountryandthoseofanother，——isindeeda
　　questionofsomewhatgreatercomplexitythanthosewehave
　　hithertoconsidered。Butthisatleastisindisputable，that
　　withinthecountryitselfthevalueofimportedcommoditiesis
　　determinedbythevalue，andconsequentlybythecostof
　　production，oftheequivalentgivenforthem;andmoney，whereit
　　isanimportedcommodity，issubjecttothesamelaw。
　　NOTES:
　　1。Theeffectoftheprohibitioncannot，however，havebeenso
　　entirelyinsignificantasithasbeensupposedtobebywriters
　　onthesubject。ThefactsadducedbyMrFullerton，inthenoteto
　　page7ofhisworkontheRegulationofCurrencies，showthatit
　　requiredagreaterpercentageofdifferenceinvaluebetweencoin
　　andbullionthathascommonlybeenimagined，tobringthecointo
　　themeltingpot。
　　2。InEngland，thoughthereisnoseignorageongoldcoin，（the
　　Mintreturningincointhesameweightofpuremetalwhichit
　　receivesinbullion）thereisadelayofafewweeksafterthe
　　bullionisdeposited，beforethecoincanbeobtained，
　　occasioningalossofinterest，which，totheholder，is
　　equivalenttoatriflingseignorage。Fromthiscause，thevalue
　　ofcoinisingeneralslightlyabovethatofthebullionit
　　contains。Anounceofgold，accordingtothequantityofmetalin
　　asovereign，shouldbeworth3l。17s。101/2d。;butitwas
　　usuallyquotedat3l。17s。6d。，untiltheBankCharterActof
　　1844madeitimperativeontheBanktogiveitsnotesforall
　　bullionofferedtoitattherateof3l。17s。9d。
　　3。Fromsomeprinted，butnotpublished，LecturesofMrSenior:
　　inwhichthegreatdifferencesinthebusinessdonebymoney，as
　　wellasintherapidityofitscirculation，indifferentstates
　　ofsocietyandcivilization，areinterestinglyillustrated。
　　ThePrinciplesofPoliticalEconomy
　　byJohnStuartMill
　　Book3:Distribution
　　Chapter10
　　OfaDoubleStandard，andSubsidiaryCoins
　　1。Thoughthequalitiesnecessarytofitanycommodityfor
　　beingusedasmoneyarerarelyunitedinanyconsiderable
　　perfection，therearetwocommoditieswhichpossesstheminan
　　eminent，andnearlyanequaldegree;thetwopreciousmetals，as
　　theyarecalled;goldandsilver。Somenationshaveaccordingly
　　attemptedtocomposetheircirculatingmediumofthesetwometals
　　indiscriminately。Thereisanobviousconvenienceinmakinguse
　　ofthemorecostlymetalforlargerpayments，andthecheaperone
　　forsmaller;andtheonlyquestionrelatestothemodeinwhich
　　thiscanbestbedone。Themodemostfrequentlyadoptedhasbeen
　　toestablishbetweenthetwometalsafixedproportion;to
　　decide，forexample，thatagoldcoincalledasovereignshould
　　beequivalenttotwentyofthesilvercoinscalledshillings:
　　boththeoneandtheotherbeingcalled，intheordinarymoneyof
　　accountofthecountry，bythesamedenomination，apound:andit
　　beingleftfreetoeveryonewhohasapoundtopay，eitherto
　　payitintheonemetalorintheother。
　　Atthetimewhenthevaluationofthetwometalsrelatively
　　toeachother，saytwentyshillingstothesovereign，or
　　twenty—oneshillingstotheguinea，wasfirstmade，the
　　proportionprobablycorresponded，asnearlyasitcouldbemade
　　todo，withtheordinaryrelativevaluesofthetwometals
　　groundedontheircostofproduction:andifthosenaturalor
　　costvaluesalwayscontinuedtobearthesameratiotoone
　　another，thearrangementwouldbeunobjectionable。This，however，
　　isfarfrombeingthefact。Goldandsilver，thoughtheleast
　　variableinvalueofallcommodities，arenotinvariable，anddo
　　notalwaysvarysimultaneously。Silver，forexample，waslowered
　　inpermanentvaluemorethangold，bythediscoveryofthe
　　Americanmines;andthosesmal1variationsofvaluewhichtake
　　placeoccasionally，donotaffectbothmetalsalike。Supposesuch
　　avariationtotakeplace:thevalueofthetwometalsrelatively
　　tooneanothernolongeragreeingwiththeirratedproportion，
　　oneorotherofthemwillnowberatedbelowitsbullionvalue，
　　andtherewillbeaprofittobemadebymeltingit。
　　Suppose，forexample，thatgoldrisesinvaluerelativelyto
　　silver，sothatthequantityofgoldinasovereignisnowworth
　　morethanthequantityofsilverintwentyshillings。Two
　　consequenceswillensue。Nodebtorwillanylongerfindithis
　　interesttopayingold。Hewillalwayspayinsilver，because
　　twentyshillingsarealegaltenderforadebtofonepound，and
　　hecanprocuresilverconvertibleintotwentyshillingsforless
　　goldthanthatcontainedinasovereign。Theotherconsequence
　　willbe，thatunlessasovereigncanbesoldformorethantwenty
　　shillings，allthesovereignswillbemelted，sinceasbullion
　　theywillpurchaseagreaternumberofshillingsthanthey
　　exchangeforascoin。Theconverseofallthiswouldhappenif
　　silver，insteadofgold，werethemetalwhichhadrisenin
　　comparativevalue。Asovereignwouldnotnowbeworthsomuchas
　　twentyshillings，andwhoeverhadapoundtopaywouldprefer
　　payingitbyasovereign;whilethesilvercoinswouldbe
　　collectedforthepurposeofbeingmelted，andsoldasbullion
　　forgoldattheirrealvalue，thatis，abovethelegalvaluation。
　　Themoneyofthecommunity，therefore，wouldneverreallyconsist
　　ofbothmetals，butoftheoneonlywhich，attheparticular
　　time，bestsuitedtheinterestofdebtors;andthestandardof
　　thecurrencywouldbeconstantlyliabletochangefromtheone
　　metaltotheother，ataloss，oneachchange，oftheexpenseof
　　coinageonthemetalwhichfelloutofuse。
　　Itappears，therefore，thatthevalueofmoneyisliableto
　　morefrequentfluctuationswhenbothmetalsarealegaltenderat
　　afixedvaluation，thanwhentheexclusivestandardofthe
　　currencyiseithergoldorsilver。Insteadofbeingonlyaffected
　　byvariationsinthecostofproductionofonemetal，itis
　　subjecttoderangementfromthoseoftwo。Theparticularkindof
　　variationtowhichacurrencyisrenderedmoreliablebyhaving
　　twolegalstandards，isafallofvalue，orwhatiscommonly
　　calledadepreciation;sincepracticallythatoneofthetwo
　　metalswillalwaysbethestandard，ofwhichtherealhasfallen
　　belowtheratedvalue。Ifthetendencyofthemetalsbetorise
　　invalue，allpaymentswillbemadeintheonewhichhasrisen
　　least;andiftofall，theninthatwhichhasfallenmost。
　　2。Theplanofadoublestandardisstilloccasionally
　　broughtforwardbyhereandthereawriterororatorasagreat
　　improvementincurrency。Itisprobablethat，withmostofits
　　adherents，itschiefmeritisitstendencytoasortof
　　depreciation，therebeingatalltimesabundanceofsupporters
　　foranymode，eitheropenorcovert，ofloweringthestandard。
　　Some，however，areinfluencedbyanexaggeratedestimateofan
　　advantagewhichtoacertainextentisreal，thatofbeingable
　　tohaverecourse，forreplenishingthecirculation，totheunited
　　stockofgoldandsilverinthecommercialworld，insteadof
　　beingconfinedtooneofthem，which，fromaccidentalabsorption，
　　maynotbeobtainablewithsufficientrapidity。Theadvantage
　　withoutthedisadvantagesofadoublestandard，seemstobebest
　　obtainedbythosenationswithwhomoneonlyofthetwometalsis
　　alegaltender，buttheotheralsoiscoined，andallowedtopass
　　forwhatevervaluethemarketassignstoit。