great disturbance of all contracts and debts stipulating payment in these metals. They may subsequently have undergone some further depreciation, although this by no means must be taken as proved; nevertheless they are less open to the charge of changeableness than any other commodities.

These weighty considerations combined have prevailed in establishing metallic coin as the universal money; and this money is a collection of small portions of a precious metal, called coins, whose weight and purity are attested by the State.

The right of attesting the public money, of coining, is usually claimed as a prerogative inherent in the State; but this doctrine belongs to a political philosophy which is fast passing away. Thomas Aquinas saw the truth long before it dawned on the mass of mankind-"Rex datur propter regnum, non regnum propter regem." Whatever authority or right is possessed by rulers had its origin in the interest of the whole people; but mediæval kings, who reaped large profits from the adulteration of the coin, were slow to perceive the application of this principle to currency. That coining should be exclusively vested in the State rests on a vastly stronger foundation than prerogative; the State can do the work best, and that reason is sufficient and decisive. That the public money should be honest and be what it professes to be, deeply concerns the public welfare; and no attestation furnished by private persons

B

18

THE GOVERNMENT THE BEST COINER.

can compete in authority with the stamp imposed by the Government Mint. Private persons are capable of putting as good coin into circulation as the State, just as they circulate ingots; still no authentication can give a warranty as good as that of the State.

5. Our analysis lastly teaches us the origin of the expression Currency. It is derived from the Latin curro, I run; and our description shows that money runs. It circulates. Its office is to place certain goods in a buyer's hands: that done, it leaves him in order to repeat the same operation for the seller who took it. He has no motive-save occasionally for a spare stock -for keeping the money; he accepted it for his goods only to buy with it in turn. The sooner he calls upon it to fulfil its office, and to run away from him, and to transfer itself to the pocket of some other seller, the better. The faster money circulates, the greater is the quantity of work got out of it. The longer it lies in a pocket or a till, the more it assumes the character of a cart or a plough lying unused under a shed.

We now reach the second great benefit conferred by money. It was invented in order to escape the insuperable difficulty presented by single barter to the exchanging of the products of industry, which, by the law of human life, no man can make entirely for himself. So they are all first bartered for money, and the money re-exchanged for other goods. Thus, as a necessary consequence, every commodity is compared with money;

the quantity of money to be given for a particular quantity of the article is determined; in other words, every article acquires its price. But, by the fact that each article is compared with money, and its exchangeable value with money affirmed, all commodities can be compared in value with one another. Price is the value of an article calculated in money; and as every article has its price, the prices of all can be compared with another. Money becomes a standard of measurement, precisely as the yard is the standard of length. Lengths and distances can be stated as longer or shorter than each other by each being expressed in yards; so the relative worth of saleable goods is measured by the worth of each singly being expressed in money. Thus money is the common measure of value. Money, however, I conceive, was not invented for effecting this great service of providing a common measure of value; the service was the result of the fact that money, by its very nature, was measured in barter against every commodity, all being sold for money. To get over the difficulty that a seller of goods might not want the other goods offered by the buyer was alone the true origin of money.

It is very important to bear in mind that money does not determine value; money only expresses it. Value is determined by each man's personal feeling. The maker or owner, on the one side-and the motives which act on his feeling may be most numerous and varied―decides how much he must receive in exchange

20

WHAT DETERMINES THE VALUE OF MONEY.

before he consents to part with his property. When he proceeds to sell, he meets a counter feeling, a counter estimation of the values of the property and the money in the buyer. The resultant between these two forces is the market value of the commodity at the time. In the exchange, the gold and the commodity are valued on identically the same conditions; the money is as much bought as the coat which it purchases.

The equality of position of the buyer and the seller leads up to the question-What is the value, the market price, of gold? How is it to be expressed? Put in this form, the question admits of no single answer. The market value or price of a sovereign is a hat for the hatter, a pair of shoes for the shoemaker, and so on throughout all the list of things sold. A hat is the price of a sovereign, just as a sovereign is the price of a hat. But the answer we are in seach of will be found in the analysis of what is implied in an act of barter. What is the value of a coat to a tailor? Its cost of production, including the reward—both in wages and profit— without which he will not make the coat? It is the same with the gold of money—either the owner of it or the miner from whom he ultimately got it calculates its value in the same identical manner. If the miner fails to obtain for his gold ore a quantity of goods sufficient to replace what the mining has cost him, with a reasonable profit for himself, he gives up the business and abandons the mine. Less gold is produced and the de

mand for it continues; it rises in value; it exchanges, in buying, for a larger quantity of all other commodities. That is, the price of everything sold falls. On the contrary, a rise in general prices indicates that gold has become cheaper, a larger quantity of it must be given for the same goods.

There remains a question of supreme importance for a clear understanding of currency: the power of dealing with theories of currency, and language used on every side is intimately connected with the question and its answer. How much gold, how many sovereigns or dollars, does a country want? To the multitude the question seems absurd. How can there be too much money? the more money a nation has the better. With money one can buy every thing: money is true riches, so says the mercantile theory, so do English newspapers every day, so say the inflationists of the United States all over that great country. Every arrival of gold from California or Australia is hailed with delight in England; manifestly the country is so much the richer, the money market so much the stronger. But those who talk in this manner totally forget that gold has to be paid for like every thing else. It is a very expensive affair to get gold out of a mine; the glorious ingots which have reached London have not made England one pound the richer. They have all been paid for with English property of equal value. Why then all this rejoicing? There are few more