Chapter CLVII: Section VI: Paper Money—A Curse Or A Blessing? (8)

626 In _Tooke_, History of Prices (2d edition of the Thoughts and
Details etc.), we meet repeatedly with the assertion that when the
price of wheat rises, the price of colonial products and
manufactured articles sinks, and _vice versa_. Thus, in England, the
price of the evidences of national debt increases from two to three
per cent. in fruitful years above what it is after a bad harvest.
(_Lauderdale_, Inquiry, 93.) The British nation paid for the cotton
it needed for their own consumption in 1845 over £19,500,000; in
1847 only £9,500,000. (_Banfield_, Organization of Industry, 162.)

627 Hence _J. B. Say_ has said that the disposable wealth of a people is
like a pyramid, with the scale of prices of the various commodities
inscribed on its side. The higher a commodity is in this scale of
prices, the smaller is the corresponding section of the pyramid.
Compare _Sir W. Temple_, Essay on the Origin and Nature of
Government, Works I, 23 ff.

628 This fact, in connection with the preceding, explains the well known
puzzle, why the remnant of a piece of goods is comparatively cheaper
than the whole piece, while a small share in the public debt is
dearer than a large one. (_Lauderdale_, ch. 1.)

629 Rhode Island was, it is said, bought from the Indians in 1638 for a
pair of spectacles. (_B. Franklin_, Political ... Pieces, 1707.)
According to _Chalmers_, it was bought for 50 threads of coral, 12
hatchets and 12 overcoats. (Political Annals of the U. States.)
Compare _Ebeling_, II, 108. Holland cloths and opium were exchanged
for a long time at Sumatra for gold dust worth ten times their
value. (_Saalfeld_, Geschichte des holl. Kolonialwesens, I, 260.)
The Hudson Bay Company realized, it is said, at the beginning of
this century, in trading with the Indians, a profit of 2000 per
cent. (_Anderson_, Origin of Commerce, a. 1751.) When Altai was
discovered, the natives gave as many sable-skins for a Russian
kettle or boiler as could be crammed into it. With 10 rubles in iron
it was an easy easy matter to gain 500-660 rubles. _Storch_, Gemälde
des russ., R., II, 16; _K. Ritter_, Erdkunde, II, 557. Similar cases
among the Germans: _Tacit._, Germ., 5.

630 A seller not actually engaged in the business of selling for a
livelihood, and who has not purchased or produced with the intention
of selling, is apt to consider instead of this the market price,
towards the determination of which those actually engaged in trade
have coöperated. Somewhat inaccurately, the amount of the cost of
production is called by _Adam Smith_ and _Ricardo_, “natural price,”
by _J. B. Say_, _prix naturel_, also _prix originaire_, because the
commodity at its first entrance into the world cost so much.
_Sismondi_ and _Storch_ call it _prix nécessaire_, and _Lotz,
Kostenpreis. P. Cantillon_, Nature de Commerce, 33 ff., understands
by the _prix intrinsique_ of a commodity, the amount of land and
labor, taking the quality of both also into consideration, necessary
to its production.

631 The cheapest cotton thread is numbered from 60 to 80. The coarser is
dearer on account of the quantity of raw material in it, and the
finer because of the greater amount of labor in it. (_Babbage._) For
similar reasons, the Venetian chains cost per _braccio_, No. 0, the
finest, 60 francs; No. 1, 40 francs; Nos. 2 and 3, 20 francs; No.
24, coarsest, 60 francs. (_Rau._)

632 If a person engaged in production has himself furnished certain of
the elements of production; if, for instance, he has worked with his
own hands, employed his own capital etc., he is wont to charge as
much for these as they would be worth, if he hired himself out or
loaned his capital.

633 The greater number of political economists consider the cost of
production only from the standpoint of the individual engaged in
production. Thus _Darjes_, Erste Gründe, 218 seq.; _Ad. Smith_,
Wealth of Nations, I, ch. 6. _J. B. Say_ calls even production an
exchange in which the productive services of natural forces, of
labor and of capital are parted with in order to obtain products.
The estimate put upon the value of these services is the cost of
production. For some interesting examples as to how the cost of
production, in this sense, is calculated, see _Hermann_, I ed., 136
ff.

_ 634 Jacob_ translated by _Say_, 1807, II, 450. _Hufeland_, N.
Grundelgung, I, 309.

635 Compare _L. Lauderdale_, Inquiry, 124, against the Physiocrates.
(_Riedel_, Nat.-Oekonomie, 1838, I, 68.) A country which possesses
advantages over other countries, in respect to the cost of
production of a commodity, can offer it in the market cheapest.
Where, for instance, with the employment of the same amount of
capital, a specially large quantity of wheat can be produced,
whether it be because of the unusual fertility of the soil, or
because of the _extensiveness_ of agriculture (farming over a large
area), wheat will, the demand being the same, be specially cheap,
whatever the proportion of the three branches of income may have
been. If relatively a great number of workmen have been employed in
its cultivation, each will receive smaller wages, and _vice versa_.

636 Copper and steel engraving affords an example of the different kinds
of wear of fixed capital, and the influence it may have on prices.
_Canard_, Principes, ch. IV, considers that one of the most
important elements in the cost of production is the length of time
that capital must “stagnate” for the sake of production.

637 On this risk depends, for instance, the high price of vanilla
(_Humboldt_, N. Espagne, IV, 10,), sparkling wines and articles of
fashion.

_ 638 Mangoldt_, Lehre vom Unternehmergewinn, 1855, 81 ff. Compare _v.
Thünen_, Der isolirte Staat, II, 1, 80 ff.

639 Wool and mutton, brandy and fattened cattle, calves and milk, honey
and wax, gas and coke, hens and eggs etc.

_ 640 Adam Smith_ himself remarked that all artificial lowering of the
price of skins or wool must necessarily raise the price of the meat,
and _vice versa_. (Wealth of Nations, I, ch. 11, 3.) For a very
elaborate theory on this subject, see _J. S. Mill_, Principles, III,
ch. 16, § 1. Thus Australian wool did not rise as much in price as
the production of gold there might have led us to suppose, for the
reason that mutton rose to an exceedingly high price.

641 It is an important and correct remark of _Carey’s_, that the price
of a commodity depends much more on the cost of producing its like
than on its own cost of production, which already belongs to the
past.

642 Compare _J. S. Mill_, III, ch. 3, § 1. A much too high price, caused
by speculation, or a much too low one, by depreciation, is regularly
followed by an ebb or flow just as much too great. (_Tooke_, History
of Prices, III, 55.) And _Law_, Trade and Money, 41, remarks that
the price of a commodity always tends to coincide with the “first
cost.” This fact _Adam Smith_ expresses by saying that the cost of
production is the center about which the market price always
gravitates. (I, ch. 7.) But here there is still the error lurking,
that the producer’s profit is a part of the cost of production.
Compare _Malthus_, Definitions, ch. 6.

643 The English view, one very characteristic of the people, is that the
equilibrium of prices depends on this, that all commodities should
have a value equal to that of the labor they have cost. (Compare
_Aristot._, Eth. Nicom., V, 5.) The same doctrine is to be found in
its germinal state in _Hobbes_, Leviathan, 24, 1651, and _Rice
Vaughan_, Discourse of Coin and Coinage, 1675. More exhaustively in
_Petty_, Treatise of Taxes and Contributions, 1679, 24, 31, 67.
(Compare _Locke_, Civil government, II, § 40 ff.; _B. Franklin_,
Inquiry into the Nature and Necessity of a paper Currency, 1729;
Works, ed. Sparks, vol. II.) _Adam Smith_ admits this to be true
only of the first beginnings of society, before the origin of
property in land and in capital. (Wealth of Nations, I, ch. 5.) Most
largely developed in _Ricardo_, Principles, ch. I, 4, 30. _Marx_,
Zur Kritik der polit. Œkonomie, 1859, 6, endeavors to improve on
this by calling all values in exchange “a determinate quantity of
thickly curdled working-time,” meaning by work an averaged
_qualitätslose_, social work of production. _Per contra_, compare
_Hufeland_, N. Grundlegung, I, 134, 156 ff.; and _Malthus_,
Principles, ch. 2, secs. 2, 3, who claims very earnestly that price
is not determined by the cost of production, but by the relation
existing between demand and supply, the cost of production
influencing it only to the extent that it influences this relation.
He calls attention to the poor-rates by which the cost of production
of labor is raised, but its wages decreased; also to the case of
bank notes etc. (_Tooke_, History of Prices, V, 49 ff; _J. S. Mill_,
Principles, III, ch. 16, 2.) For a very marked case of reaction
against Adam Smith and Ricardo, see _Macleod_, Elements, ch. 2, who,
however, is much too one-sided in considering only the amount
necessary to the purchaser, and his means. Even _Condillac_ had
said: _une chose n’a pas une valeur, parcequ’elle coûte, mais elle
coûte (du travail ou de l’argent), parcequ’elle a une valeur_.
(Commerce et Gouvernement, 16.) _Ricardo’s_ doctrine is more tenable
than appears at first blush. We need only to interline his theory of
rent, admit that capital is accumulated labor, subtract all objects
constituting a natural monopoly, and not forget that the intrinsic
value of labor is one of the causes of the difference of price of
different sorts of labor. _Ricardo_ does justice to value in use
even _en passant_. A strange effort by _McCulloch_ to make labor the
cause of the non-use of capital. (Principles, III, ch. 6, 2.)
_McCulloch_ has not unfrequently exaggerated the half-truths of his
doctrines to such an extent as to produce unwittingly a _reductio ad
absurdum_. According to _Torrens_, before any separation of
capitalists from workmen, price depends entirely on the work done,
and afterwards on the capital expended, inasmuch as wages, rent etc.
are covered by the capital of the person who engages in the
enterprise. (Production of Wealth, ch. 1.)

_ 644 Ce que l’ on appelle chereté, c’est l’ unique remède à la chereté._
(_Dupont de Nemours._) Tenders of division in common, in England,
increase and decrease according to the higher or lower price of corn
during the preceding year. (_Tooke_, Thoughts and Details, III, 105
ff.) The cotton famine after 1861 increased the price of flax-yarn
in a short time fifty per cent., although the raw material of flax
did not rise in price, but only because care was not taken to
increase the number of flax-spinners. (_Ausland_, I, 1865.) However,
there were in 1864, 490,000 flax-machine spindles in course of
erection. (Report of the Chemnitz Chamber of Commerce, 1864, 101.)

645 By the discovery, for instance, of new natural forces, the invention
of machines, improved division of labor, improved roads etc. In
France, in consequence of technic improvement, a quintal of
saltpeter fell from 100 to 9 francs. See a similar instance in
_Chaptal_, De l’ Industrie française, II, 64, 70, 434.

_ 646 Hermann_, Staatsw. Untersuchungen, 212.

647 The highest but unattainable ideal of such progress would consist in
this, that all products should be obtained without cost. If this
ideal were attainable, every one would be infinitely rich and all
wealth would be free, like the air and the sunshine. (Compare _J. B.
Say_, Traité, II, 2.) The complete victory of mankind over nature
would consist in that all men should be free and all the forces of
nature the slaves of man. (_Smitthenner._) _Carey_ intimates
something similar when he says that, with the advance of
civilization the tendency is for men to become more and more
valuable and commodities to have less of “value.”

648 We might here speak of an aristocratic and democratic principle of
the determination of prices. The greater utility of the latter is
advocated in the Discourse of Trade, Coyn and Credit, London, 1697.
_Bacon_ has a good word to say for the maxim: “Light gains make
heavy purses; for light gains come thick, whereas great come now and
then.” Similarly, _Gurnay_ in _Cliquot de Blervache_, Considérations
sur le Commerce etc., 1758, 48, 54. As to how Morrison, the
celebrated merchant, became rich by adhering to the principles: “to
sell cheap as well as to buy cheap,” and “always tell the truth,”
see _Chadwick_, in the Statistical Journal, 1862, 503. Compare the
related opinion of _Adam Smith’s_ continuator in an ethical
direction, _Garve_, zu Cicero’s Pflichten, III, 100. The contrary
principle, the cunning of the Judæans, according to _Strabo_, XVII,
800, was followed by the Dutch East India Company, when it, in 1652,
caused the greater number of the vegetable roots on the Moluccas to
be destroyed. _Saalfeld_, Geschichte des holländischen
Kolonialwesens, I, 272. Also, when great quantities of roots were
destroyed by burning in the East Indies. (_Huysers_ Beschryving der
Oostindischen Etablissmenten, 1789, 22.) For a clever argument
against such practice, see _de la Court_, Anwysing der heilsame
Gronden, 1663. The principle similar to that of the patent,
mentioned in the text, works at the same time democratically and
aristocratically, both words understood in their best sense.

649 This is true, first of all, in those industries which are intimately
connected with one another, or of those which are carried on with
scarcely any fixed capital; also in lower stages of civilization,
where the lights and shades caused by a highly developed division of
labor are not very intense. On the numerous difficulties overlooked
by Ricardo in every other case, see _Sismondi_, N. P., II, ch. 2.
The workman thereby loses his former skill, that is his principal
capital, and can certainly not wait until he has acquired other and
different skill.

650 When a lowering of prices is expected, demand is less than
consumption: “postponed demand;” whereas, an expectation that the
price will rise, produces “anticipated demand.” _Tooke_, History of
Prices, II, 155.

651 Thus, for instance, if the workmen were exposed to starvation, or
were likely to take their departure; if great stores of raw material
were in danger of spoiling; if fixed capital of great value were
engaged in one industry and could not be easily transferred to
another. The first and third causes are frequently met with in
mining, and give rise to the mode of carrying on the operation known
as _Zubusgruben_, that is, a species of working mines upon shares.
In England, after the spring of 1862, cotton yarn was not so much
dearer than raw cotton, that the loss caused by the decline could be
made up. (_Ausland_, 24 Sept., 1862.)

652 Besides, in the time immediately following, the price lowered by too
great a supply, may produce a species of desperation among
producers, which would lead them, in the hope of covering their
losses, to increase the supply still more, until many of them were
ruined. Generally, when a time of high prices is followed by a time
of low prices, we find an interval during which sellers endeavor to
defend themselves against the decline, and during which, as a
consequence, scarcely any business is transacted, while high prices
are nominally continued. And so _vice versa_. _Tooke_, History of
Prices, II, 62.

653 Thus, for instance, when the change of fashion brought about the
disuse of long periwigs in every-day life, their price did not cease
to fall until they had entirely disappeared. But, if a person wishes
to have one made to-day for a masquerade, for the stage, etc., he
would pay as much for it as its former price. On the other hand, the
price of whalebone has never been again as high as it was in the
time when hooped petticoats were worn.

654 The great plague in the time of Edward III. caused during the first
year, on account of the decreased consumption, an extraordinary
cheapness of provisions. In the following year, however, they became
alarmingly dear, because there were few producers, especially among
the humble classes. A quarter of wheat cost in 1348, 4s. 2d.; in
1349, 5s. 5d.; in 1350, 8s. 3d.; in 1351, 10s. 2d.; while in 1346
and 1347, its average price was 6s. 8-7/8d. _Rogers_, History of
Agriculture and Prices, I, 232.

655 As for instance when new taxes or excises are imposed. Generally
when the cost of production has largely increased, purchasers do not
wait until a decrease of competition among sellers compels them to
exact higher prices, but meet them half way, especially when many
greatly desire the commodity, and the increase of the cost is only
small. (_Rau_, Handbuch, I, § 163.)

656 Under this rule fall, according to § 33, most products of industry
properly so called. “If we lose a market for a year, we generally
lose it for all time,” said an experienced manufacturer before the
parliamentary hand-loom weavers’ committee, 1840-42. Of course the
cost of transportation as far as the market must be estimated as
part of the cost of production. In consequence of this, as well as
of the difference of taxation duties etc., the superiority of one
producer to another may be more than overcome. In the case of
colonial commodities, which go into the interior of a country from
different sea-ports, the territory supplied from each port is
determined for the most part by these data. Thus, in Switzerland,
for instance, we find the districts supplied by Havre, Genoa and
Rotterdam; in Austria, the districts supplied by Hamburg and Triest
contiguous, but the boundary line subject to many changes. (_Rau_,
Lehrbuch, I, § 164.) It must be understood that we do not here speak
of abnormal expenses made by producers individually, whether in
consequence of want of skill or because of accident.

657 This is true especially of agricultural production, in which, as a
rule, beside the most fertile and most advantageously situated land,
the worse must be used. What _Whately_ calls “surplus-profit”
appears here in the form of rent, whereas, in other cases, it takes
the shape of unusually high wages, or profit on capital. This is
very beautifully and systematically developed by _Schäffle_, N. Œk.,
II; Aufl., 192 ff. According to _Senior_, Outlines, 15, the
price-relation of two commodities to each other depends not on the
quantities of them which come to market, but on the relative power
of the difficulties which stand in the way of an increase in these
quantities. If the same producers can pursue the cheaper mode of
production which does not suffice to supply the market, as well as
the dearer, we have, generally, a price which is the mean between
the two costs of production. The same is true in the case of
“smuggled” goods which ought to have paid duty. (_Hermann_, loc.
cit., 83, seq.)

658 To this section belong the secrets of production which may be taken
advantage of either _ad libitum_ or within certain limits. In
agriculture, advantages of production can seldom remain secret.
Compare, however, the case mentioned in _Garnier’s_ translation of
_Adam Smith_, V, 119, and that of the orchards which yielded £1,000
yearly for every 32 acres, and which were a result of the recent
introduction of the culture of the cherry in Kent, in the reign of
Henry VIII. (_Anderson_, Origin of Commerce, a, 1540.) There is
therefore, a certain odium attached by agricultural producers to
keeping secret a means of agricultural improvement.

659 Compare _Boisguillebert_, Traité des Grains, II, ch. 2. _John Stuart
Mill_ speaks of an equation: the price of a commodity in a given
market is always high enough to produce a demand corresponding to
the present supply, or to an expected supply. The price of such
commodities only which may not be increased to any desirable extent
depends on supply and demand. In the case of all others, on the
other hand, demand and supply depend on the price, and this on the
cost of production. Supply and demand always tend to an equilibrium
which is never really attained where the price is high enough to
cover the cost of production (?). (Principles, III, ch. 2, § 4; ch.
3, § 2.) _Schäffle’s_ theory of prices is topped by the proposition
that all competing sellers and all competing buyers, after an
economic fashion, do not wish to sell below individual cost-value,
nor to rise above individual value in use, in purchasing. Hence, in
a throng of competition of supply the costliest productions step out
of the field of competition in a descending cost-value series; and
in a throng of competition of demand, the most wearied cravings in
an ascending value-in-use series; until the quantities offered in
supply and asked for cover each other without loss, and have placed
each other in quantitative equilibrium. (N. Œk. Aufl., I, 188 ff.;
compare 173, 185.) It is, however, to say the least, an instance of
baseless solicitude, when _Wade_, History of the middle and working
Classes, 214, says that one unemployed workman might depress the
aggregate wages of labor, almost _ad infinitum_.

_ 660 Hufeland_, N. Grundlegung, I, 78; _Ricardo_, Principles, ch. 31.

_ 661 Dunoyer_, Liberté du Travail, VIII, ch. 4; _Rau_, Lehrbuch, I, §
158.

662 For a good classification of monopolies, see _Senior_, Outlines, 103
ff. _Menger_, Grundsätze, I, 195, shows that no monopolist can
arbitrarily determine the extent of the market for his
monopoly-product when the price is fixed, nor when the extent of the
market is known, the height of the price. Moreover, the price may
remain longer above than under the cost of production, for the
reason that it is easier to abandon a business than to begin one,
and that the fear of loss is more frequently an incentive to action
than the hope of gain. Hence the price of corn, when everything else
is very dear, is more apt to vary from the average price, than in
times when everything is very cheap. For instance, the Munich prices
from 1750 to 1800 show that its highest price was 147 per cent.
above, and its lowest 47 per cent. below the average of twenty
years. (_Rau_, Lehrbuch, § 162, 182.)

663 Chance plays a great part here. Thus, Murillo’s Conception which
Marshal Soult had offered several times for 150,000 francs, but in
vain, was sold in May, 1852, for 586,000 francs. Paul Potter’s young
bull at the Hague, which cost 625 florins in 1748, was valued before
the middle of the nineteenth century at 200,000 florins.
(_Dethmar._)

664 The purchaser resolves to do so because it would, in all
probability, cost him more to go to India or Brazil in search of
precious stones. Besides after the working of the Brazilian mines in
1728, and again after the French Revolution, the price of diamonds
fell greatly; in the one case, from an increase of the supply, in
the other from a decrease of the demand. (_Ritter_, VI, 355, 365.)

665 Thus, the Champagne and Johannisberg grapes, when transplanted to
the Crimea, lost most of their native taste. On China’s practical
monopoly of tea culture, and Ceylon’s, especially in its
southwestern part, of cinnamon, at least so far as the peculiar
aroma is concerned, compare _Ritter_, Erdkunde, VI, 123 ff. The
small deer of Angora no sooner leave the little district of Asia
Minor to which they belong, than they are in danger of degenerating.
(Revue des deux Mondes, May 15, 1850.) Indian birds-nests cost no
more than 11 per cent. to gather, dry etc., of the market price.
(_Crawfurd_, East India Archipelago, III, 432 ff.; _Hogendorp_, Sur
l’Ile de Java, 201.)

666 Poor material for fuel, poor day-laborer work—dwellings, medical
attendance. (_Menger_, Grundsätze, I, 116.)

667 Thus sea fish, oysters etc. were formerly much cheaper during the
summer than during the winter, at Ostend and Scheveningen, because
during winter they could be sent to a distance. At Billingsgate
market, in the mackerel season, fish cost per hundred 48 to 50
shillings at 5 o’clock in the morning, 36 shillings at 10 o’clock,
and 24 shillings in the afternoon. (_H. Schulze_, Nat-Œkonomische
Bilder aus England, 1853, 241.) In the Rhine country, the price of
fruit does not vary so much as in Saxony, because it is customary
there to employ the surplus in the manufacture of cider, of
preserves etc., thus making it transportable and durable.
Frequently, after a very abundant crop of grapes or olives,
under-prices prevail, sometimes on account of a want of vessels,
cellar-room etc.; they must, therefore, be sold rapidly.

668 Compare _Adam Smith_, Wealth of Nations, I, ch. 7.; _Tooke_, History
of Prices, I, 97. Furs vary very much in price, sometimes 300 per
cent. in a year, because, in the case of this entirely natural
product, every thing depends on the stores of them, on the
temperature etc. (_McCulloch_, Commerc. Dict., s.v.) On the other
hand, the price of coffee usually varies only after periods of a
number of years, because new plantations produce only after a lapse
of years. (_Ibid._) Pigs vary much more than cattle in price,
because the former may be made ready for the slaughter house in
one-third of the time required for the latter. (_Thaer_, Rationelle
Landwirthschaft, IV, 374.)

669 Thus the rent of farms, where a numerous proletarian population will
live exclusively from agriculture, depends on scarcely anything but
the number of people and the extent of the land. (_J. S. Mill_,
Principles, III, ch. 2.) In retail trade, where personal want comes
in question, prices are much more subject to be modified by small
circumstances, than in wholesale trade, where both parties are only
intent on “doing business.” (_J. S. Mill_, III, ch. 1, § 5. _Tooke_,
II, 72 f.)

670 Hucksters, butchers, dealers in corn, inn-keepers etc. A remarkable
case where Parisian dealers in hare-skins attempted to ruin the new
fashion in silk hats by distributing a great number of them among
the rabble, at mock-prices. (_Hermann_, 1st ed., 91.) The author
witnessed a similar but unsuccessful attempt in Berlin in 1838-39,
by the tailors against the so-called Macintosh coat. On the
conspiracy of the English dealers in second-hand goods against
auctions, see Athæneum, Dec. 5, 1863. It is one of _McCulloch’s_
characteristic exaggerations, that he says that conspiracies to
raise the price of a commodity by artificial means, are broken just
as soon as they begin to obtain their object by the interest of the
individual members to profit by the advanced prices. (Edition of
_Adam Smith_, Edinb., 1863, p. 59.)

_ 671 J. S. Mill_, Principles, II, ch. 4.

672 Monopolies universally prohibited: L. un. C. De Monopol. (IV, 59.)
Police-order of the Empire, 1548, tit. 18.

673 Privileges which the purchaser voluntarily accords to the seller are
wont to be useful to both parties. (_Hermann_, loc. cit. 155, 158.)

674 Besides, guilds, castes, corporations etc. may, when the vent
diminishes, produce under-prices as readily as they may
monopoly-prices when the vent is very good. (See _Adam Smith_,
Wealth of Nations, I, ch. 7.)

675 Thus, for instance, the traveler who wanted to cross a stream, would
find himself delivered over to the tender mercies of the ferry-man,
without protection of any kind against his demands. But repeated
impositions in the matter of prices would have for effect to bring a
point into disrepute as a place of crossing, and would induce the
public to seek another. Similarly in the case of hackney-coachmen
and carriers in large cities, and in that of innkeepers, at hotels
and postal termini etc.

676 Fixed prices by governmental authority were soonest attempted after
bad harvests, but, indeed, with a strange ignorance of the natural
grounds of the increase in price of bread-stuffs. Thus in the time
of Charlemagne. (Capitul. a, 805; _Baluz_, I, 423.) Similarly in the
case of other articles of universal necessity, when oppressively but
necessarily dear. (See § 175.) During the last centuries of the
middle ages, with their multitude of actual monopolies, and at the
beginning of the modern era, fixed prices became more and more
general. The earliest instance in the history of England of a fixed
price for bread was in 1202 (_v. Raumer_, Hohenstaufen, V, 372), and
in 1266, 51 Henry III. The earliest in Prussia was in 1393.
(_Voigt_, Geschichte von Preussen, II, 659.) Many instances of fixed
prices in the Rhine provinces of Austria in 1530. In _Mylius_, Corp.
Const. March, V, 2, 587 ff., we find an ordinance of 1653 fixing
prices in Berlin, and including 72 industries. There is a very
complicated system of fixed prices in the police ordinance of the
electorate of Saxony of 1612, and in the decree concerning the coin
of 1822. As to how, in Saxony in 1578, an attempt was made to
ascertain the cost of the production of shoes by shoemakers, see
_Joh. Falke_, Gesch. des Kurf. August in volkswirthschaft.
Beziehung, 1868, 252. There was an enormous extension of
governmental fixing of prices under Philip II.; one of the principal
causes why Castile was so far behind Aragon economically.
(_Townsend_, Journey through Spain, II, 221.) Sometimes these
measures were adopted to prevent distress-prices; as in Hochheim, in
favor of the vintners. (_Becher_, Polit. Discurs, II, 1652.) The
predilection especially of German authorities for the fixing of
prices by governmental power, in the sixteenth and seventeenth
centuries is very remarkable. Thus _Luther_, vom Kaufhandel und
Wucher, 1524; _Calvin_, Leben Calvins, by _Henry_, II, Beilage, 3,
23; _Bornitz_, De Rerum Sufficientia, 1625, 246; _Seckendorff_,
Teutscher Fürstenstaat, 5th ed., 1776, 210; _Becher_, II, 1823 ff.;
_Horneck_, Oesterrich über Alles, wenn es will, 1684, 123; _Leibniz
ed. Dutens_, VI, I, 250; _Thomasius_, Göttl. Rechtsgelahrtheit,
1709, 209; even _Frederick_ the Great, _Mylius_, N. Corp. Const.
March, I, 190. Similarly, _Mariana_, De Rege et Regis Institutione,
III, c. 9. Compare, however, III, c. 8, and _Bacon_, Serm., 15;
Historia Henrici, 1037, 1040. On the other hand, _Child_, 1690, and
_North_, 1691, reprove all such measures. _Roscher_, Zur Geschichte
der englischen Volkswirthschaftslehre, 65, 90 f. Earlier yet,
_Salmasius_, who would allow the free _fori ratio_ to govern. (De
Usuris, 1638, 583.) For a very rigorous price-tariff in the old
Indian laws, by which, _inter alia_, the price of provisions was to
be fixed anew every fourteen days, see _Menu_, Laws, VIII, ch. 401
ff.

677 Where trade is free, the _filet de boeuf_, for instance, is worth
four times as much as the flesh of the ox’s neck or throat; but
prices fixed by a government can scarcely take cognizance of the
difference. How easily might not a fixed price for beer, for
instance, be evaded by diluting that beverage with water, or fixed
prices for inn-keepers by dealing out portions smaller in quantity
or of an inferior quality. Moreover, as early a writer as _De la
Court_, Polit. Discoursen, 1662, c. 4, remarks that the
establishment of fixed prices by governmental authority raises the
average price of all commodities rather than lowers it, for the
reason that the few who are sellers by trade can do more to
influence the authorities than the many buyers, whose interests are
divided among numberless different commodities.

_ 678 Schäffle_, Nat.-Œkonomie, II, 384 f.

_ 679 Banfield_, Organization of Industry, 120. “Where the economic life
of a people is still undeveloped, and the production of one
enterprise is not from the first based on the estimated consumption
of another, the circulation of goods brings with it great profits
and great losses; whereas, profits and losses grow smaller, but at
the same time more uniform and regular, in proportion as the
circulation of goods increases in rapidity and regularity.”
(_Stein_, Lehrbuch, 212.)

680 In Belgium, during the last forty years, the price of wheat has
become more constant every year, while the price of rye has become
more variable; for the reason that rye has gradually ceased to be an
article of popular consumption, and therefore to be an important
article in trade, and is consumed almost entirely and directly by
its producers. (_Horn_, Statist. Gemälde von B., 1853, 185.)
_Rodbertus_ rightly conjectures that the price of wheat was much
more variable in ancient times than it is with us. (_Hildebrand’s_
Jahrb., 1870, I, 36.) That it was so may be inferred from the
surprisingly large family supplies which were laid in, as appears
from Digest, XXXIII, De Penu legato.

681 In Würtemberg even officials etc. buy their own wine almost always
directly from the vintner. This causes prices there to be
exceedingly variable, frequently from hour to hour. (_v. Reden_,
Statist. Zeitschrift, Nov. 1847, 1008.) How greatly the mere
presence of a regular market has contributed to make prices more
constant, may be seen in the suburbs of Hamburg, where fish offered
for sale on the street are sold in the evening for one-third of the
price asked for them in the morning. Besides, purchases made with a
view to speculation may increase the variations of price, if the
speculation is unskillfully conducted, especially when a low rate of
interest, and of the profit of the person engaged in it, has
produced a blind race among the speculators. Here the price of a
commodity rises, not from any natural cause, but because it once
rose before, and _vice versa_. (_Senior_, Outlines, 17 ff.;
_Hermann_, 90 ff.)

682 That fixed prices suppose that men are engaged in the production of
the commodity in question, as their calling in life, see _Garve_, Zu
Cicero’s Pflichten, III, 64 ff. Chess-like commerce of colporteurs,
and in caravans etc. Concerning the dreadful higgling of the
Bedouins, see _Wellsted_, Reise in Arabien, _Rödiger’s_ translation,
I, 147; and the still worse bantering in Cashmere, where the
merchant, in the first place, always denies that he possesses the
desired commodity, then begins to search for it, in order to
discover what value the purchaser puts upon it etc. (_K. Ritter_,
Erdkunde, III, 475.) On the practices in Indian fairs, see _Th.
Skinner_, Excursion in India, 1832, I, ch. 6; on the bazaars in
Asia, _Andree_, Globus XII, 7, 211. _Herberstein_ says of the
Russians in the sixteenth century: _mercantur fallacissime et
dolosissime nec paucis verbis ... mercatores nonnunquam non uno
tantum aut altera mense suspensos detinent, verum ad extremam
desperationem perducere solent_. Hence the great variations in
prices and commodities. (Rerum Moscov. Commentt., ed. Starczewski,
39 f.) Similarly also, in 1674, according to _Kilburger_: Büsching’s
Magazin, III, 249. But, on the contrary, it is said of the
Plescovers, educated by intercourse with the Hanse; _tanta
integritas ... in contractibus, ut uno tantum verbo res ipsas
indicarent omni verbositate in fraudem emptoris omissa_.
(_Herberstein_, 52.) In the England of the present day, the custom
of marking each piece of goods with its price is very general.
Concerning the rapidity and the paucity of words with which prices
are settled in that country, where business men do not even salute
their customers, nor customers the business man, see _C. G. Simon_,
Observations recueillies en Angleterre, 1835, I, 129 f. The Athenian
laws (?), that fixed prices should be asked, and that sellers should
not sit down that that they might sell more rapidly, points to
something similar. (_Athen._, VI, 226 f. _Plato_, De Legg., XI, 916
f.) Athenian law prohibiting mendacity in the markets. (See
_Demosth._, Lept., 459.)

683 Thus the German book-trade has fixed prices. Many merchants never
make an offer to their educated customers who are wont to do so with
peasants etc.; because they are aware that the latter purchase only
after they have compelled the seller to come down greatly from his
first proposed price. Among the Quakers it has been a rule from the
beginning, never to ask more for their wares than they were
determined to accept. (_Hume_, History of England, ch. 62.)

_ 684 Sir William Temple_, Observations upon the Netherlands, Works I,
134, compares honor in trade to discipline in an army. Similarly,
_Law_, Trade and Money, 209 f. _Ferguson_, History of Civil Society,
III, 4. Where the seller is not obliged to make known the existence
of certain defects in his wares to the purchaser before sale, there
is always scope for fraud. Compare Digest De Edict. aedilit., XXI,
I. On the meaning of the German legal maxims: _Hand muss Hand
wahren_, and _Ein Wort, ein Mann_, see _Eisenhart_, Deutsches Recht
in Sprüchwörtern, 311 f., 319 f. It is a principle in matters of
business, that the person who through malice or carelessness
recommends a man of whose probity there is already some doubt,
should bear the damage caused by his recommendation. (_Martens_,
Grundriss des Handelsrechtes, 24 ff.) Many attempts at dishonesty
are prevented by laws which in important contracts, especially in
sales of land etc., require the presence of witnesses, and this
particularly in the lower stages of civilization. (_Meier_ and
_Schömann_, Attischer Process, 522; Roman, Emancipatio; _Grimm_,
Deutsche Rechtsalterthümer, 608 f.), or even a public proclamation
before the assembled community, at least written documents invested
with all legal formalities as practiced among civilized peoples. On
Greek laws of this nature, see especially, _Theophrast._, in
_Stobaeus_, Sermon., XLIV, 22. Very remarkable in Sparta. _Schol.
Aristophan._, Aves, 1284.

685 Compare _Lotz_, Revision, I, 255 ff. In England the price of wheat
scarcely ever varied more than from 1 to 2. In Ireland the price of
potatoes varied from 1 to 6. (_McCulloch_, Comm. Dict., v.
Potatoes.) Compare _Engel_, Jahrbuch für Sachsen, I, 491 ff. The
custom of asking enormous prices with the expectation of being
beaten down, is usual in Italy and carried to a frightful extent,
and related to the bad custom prevalent there of begging a little
after-payment to every little gratuity or drink-money which has been
received.

_ 686 Storch_, Handbuch, I, 311. _J. B. Say_, Traité I, ch. 16. As to how
commerce, when fully developed, is wont to be more moral than when
only half developed, see _Garve_, loc. cit., and Versuche IV, 149
ff. How fortunate for the public economy of nations that the prices
of corn especially have been growing more steady all the time since
the middle ages. See _Roscher_, Ueber Kornhandel, 56, 61.

687 Trade by barter was very general in several states of the American
Union about the close of the eighteenth century. In Vermont, for
instance, it was usual for a doctor to exchange his medicines
against a horse, and for the printer to buy corn, butter etc. with a
newspaper. (_Ebeling_, Geschichte und Erdbeschreibung, II, 537.) In
Maryland, the Assembly fixed by law the relative proportions at
which tobacco, pork, corn and wheat should be exchanged the one
against the other. (_Ebeling_, V, 435 ff. _Douglas_, Summary of the
British Settlements in N. America, 1670, V, 2, 359.) Even as late as
1815, children were wont to run the streets of Corrientes, crying:
“Salt for candles, tobacco for bread etc.” It was commerce with
England that first led to trade by money in the United States.
(_Robertson_, Letters on South America, 1843, I, 52.) Similarly in
Rhokand until the end of the eighteenth century, where the cities,
as a consequence, presented the appearance of a fair the whole year
round. In the beginning of this century, the khan introduced the use
of copper money made from Persian cannons; and much later yet, there
were scarcely a million rubles in money to a million men. (_Ritter_,
Erdkunde, VII, 753.) _Basil Hall_ found the uncivilized inhabitants
of the Loo-Choo Islands ignorant of the use of money. (Voyage of
Discovery, 1818.) Concerning trade by barter in the Homeric age, see
the Iliad, VII, 472 ff. A supposed law of Lycurgus prohibited the
use of money in purchases, and allowed barter only. (_Justin._, III,
2.) According to _Pausan._, III, 12, only barter existed in India
(?) in his time.

688 The person who has been used to paying for four pounds of meat with
twenty pounds of bread, and is asked to give twenty pounds of bread
in exchange for some other article, must of course have some unit of
measure in his mind to serve as a means of comparison between the
value of that article and that of four pounds of meat. In Denmark,
during the rule of the aristocracy, there were fixed prices
sanctioned by the tradition of long usage, in accordance with which
the prices of all commodities were estimated in relation to a ton of
barley or rye—a natural consequence, apparently, of the want of a
common measure to govern in the greater number of transactions.
_Bergsoe_, Archiv der Polit. Œk., IV, 314; _Graugan’s_ Icelandic
Code contains a remarkable fixed price of this nature in the
supplement to the _Kaupa-Balkr_ or Commercial Code, I, p. 500.
Similarly among the ancient Persians. _Reynier_, Economie publique
des Perses, 308.

689 That is, (200x(200-1))/2. Compare _Rau_ in _Storch_, Handbuch, III,
253. The “at least” has reference to the fact, that in barter, the
many different kinds of most commodities has to be borne in mind.
(_Knies_, Geld und Credit, I, 218.)

690 This transportation of values supposes an equality of values of the
money in two places, while the transportation of goods supposes
different values of the same kind of goods in both places. (_Knies_,
Geld und Credit, I, 218.)

691 While the words _pecunia_, _danaro_, _dinero_, and _argent_, are all
derived from unessential qualities, the German word for money,
_Geld_, corresponds with the essential quality of money, since it
denotes that which is of value everywhere (_gilt_). On the other
hand, _nummus_ and νόμισμα from νόμος, (_Bœckh._ Metrolog. Unters.,
310.), _moneta_ (the English, money), are from the temple of Juno
Moneta, in which the Roman coins were for a long time stamped. In
old German, the word for money, _Geld_, means everything that is
paid by any one. (_Grimm_, D. Rechtsalterth., 382.) The present
meaning of the word is to be met with in a very old document of
1327. (_Arnold_, z. Geschichte des Eigenthums in den deutschen
Städten, 89.)

692 The wrong definitions of money may be divided into two classes:
those which convey the idea that it is more than a commodity, and
those which imply that it is less.

This was a point which was contested even among the Greeks. There
were many who claimed that wealth consisted exclusively in the
possession of much money; as we find, for instance, in the
pseudo-Platonic dialogue Eryxias; while others insisted that money
was something purely imaginary (λῆρος), and the creation,
exclusively, of human laws. (_Aristot._, Polit., I, 3, 16, Schn.)
Νόμισμα σύμβολον τῆς ἀλλαγῆς ἔνεκα. (_Plato_, De Rep., II, 371.)
_Anacharsis_ compares money to counters. (_Plutarch_, De Profectt in
Virtute.) _Aristotle_, himself, subscribed to the second opinion,
although he saw clearly, that only useful and current things (χρείαν
εὐμεταχείριστον πρὸς τὸ ζῆν) could be used as money. (Polit., I, 3,
14 ff. Eth. Nicom., V, 5, 6, Rhet., II, 16.) _Xenophon_ ascribed
properties to money which no other commodity possessed; especially
when he said that it could never be too plentiful, and that its
price could never fall. (De Vectt. Ath., 4.) The finest ancient
explanation of the nature of money is that of the jurisconsult
_Paullus_, L. I.; Digest, XVIII, 1; and it well deserves the long
commentary devoted to it by _P. Neri_, Osservazioni etc., in
_Custodi_, P.A., VI, 324, ff.

Among the moderns, _Melancthon._, Corp. Ref., XVI, 498, and _Seb.
Frank_, Chronik., 760, consider money as a mere symbol. On the other
hand, the over-estimation in which the precious metals were held by
the adherents of the Mercantile System was owing, without doubt, to
their very superior utility as money; for we very frequently find
that the adherents of that school insist that the precious metals
must circulate. (See § 9 and § 210.) _v. Schröder_, Fürstl. Schatz-
und Rentkammer, III f., considers new copper coins as an increase of
the national wealth, but not other copper which is merely a
commercial commodity. He frequently calls money, the _pendulum
commercii_, and expresses ideas concerning it as enthusiastic as
they are obscure (p. 86.) _Horneck_, in his Oesterreich über Alles
wenn es will, 1864, calls gold and silver “our best blood, the very
marrow of our strength,” and “the two most indispensable universal
instruments of human activity and existence.” (p. 188.) _Th. Mun_,
England’s Treasure by forraign Trade, 1664, (ch. 2) considers
cash-money and resources as synonymous in every way. Only, he says
(ch. 4) that it is sometimes advisable to allow one’s money to
remain in foreign countries, and to use bills of exchange, banks
etc., at home, as a substitute. _F. Gee_, Trade and Commerce of Gr.
Britain, edition of 1738, laments the “stiff-necked folly of those
who think money a commodity like any other.” It is one of the most
common demands of the adherents of the Mercantile System that the
home mines of gold and silver should be worked at no matter what
sacrifice, since the money employed in working them continues to
remain in the country and the newly coined precious metal is clear
gain. Compare _Schröder_, loc. cit. 109 ff., 181. _Horneck_, loc.
cit. 173. _Broggia_, Della Monete, 1743, cap. 33; _v. Fusti_,
Staatswirthschaft, 1755, I, 246: _Forbonnais_, Finances de France,
1758, I, 148. _Ulloa_, Noticias Americanas, 1772, ch. 12. We seldom
meet with the correct view on this subject in the seventeenth
century. _Sully_, of whom Henry IV. said that he never found
anything to be possessed of beauty which cost double its real value,
had it at times. (Economies royales, LXXIII.) So had _v.
Seckendorff_, Teutscher Fürstenstaat, 1655, 5th edition.

It is in accordance with the usual course of human development that
the exaggerations of the Mercantile System led to a reaction
characterized by an exaggeration in the opposite direction. Even
_Davanzati_, Sulle Monete, 1588, traces the value of money back to
human convention and refuses to find it in nature. A natural calf,
he thinks, is _più nobile_ than a golden one; although he elsewhere
expresses his admiration of the precious metals, calls them _cagioni
seconde della vita beata_, and lauds them because they procure us
_tutt’essi beni_ (20, 21, Cust.) _Montanari_ (ob., 1687)
demonstrates from the use of leather money etc., that the authority
of the state is the only power which gives money its character as
money. (Della Moneta, 35.) _Davenant_ (ob., 1714) carries his
inclination to call money “the servant of trade, measure of trade,”
so far as to compare it to a ticket or counter. (Works, I, 355,
444.) Strongly as _Law_, himself, opposes the convention theory
(Trade and Money, ch. I; Sur l’ Usage des Monnaies, 1720, p. 1.),
his disciple _Dutot_, in his Réflexions polit. sur le Commerce et
les Finances, 1738, 905, éd. Daire, contrasts not only paper money
but also gold and silver as representative wealth, with real wealth.
_Berkeley_, Querist, 1735, teaches that the real notion of money is
not that of a “commodity, standard, measure, pledge, but [No. 23]
ticket or counter, entitling to power and fitted to record and
transfer such power.” (441, 475.) Even if the names, _livre_,
shilling etc., remain, and the metal is dropped, every article may
still as well as before be counted and sold, industry promoted and
the course of commerce preserved. (p. 440.) According to
_Montesquieu_, Esprit des Lois, XXI, 22, gold and silver are a
_richesse de fiction ou de signe_. Compare Lettres persanes, II, 18.
_Benjamin Franklin_ also maintains that the value of gold, for
instance, is principally a credit-value. Remarks relative to the
American Paper-Money, 1765, Works, II, Sparks’ edition.
_Forbonnais_, Finances de France, I, 86 f., calls money, simply a
means to put commodities, which alone have value originally, in
circulation. Hence it is, in itself, a matter of indifference
whether, for a given quantity of coin, a person gives one thaler, or
ten. In the Elements de Commerce, I, 11, II, 67 ff., he draws a
distinction between _richesses naturelles_ (raw material),
_artificielles_ (manufactured products), and _richesses_ de
convention (money.) _von Schlözer_, Aufangsgründe, 1805, 100, 138,
calls money something imagined; and _Th. Smith_, Essay on the Theory
of Money and Exchange, 1807, asserts, that true money is only an
ideal measure of value, of which coins in turn are only the
representatives. Compare, however, Edinb. Review, Oct., 1808.
_Oppenheim_, Die Natur des Geldes, 1855, grants that in the
beginnings of trade, money possessed the character of a commodity;
but says that as soon as the services of circulation of the
money-commodity prevailed over its services in consumption, it lost
all its importance for the latter purpose, and that all relations
dependent thereon ceased. At present, he claims money is only the
representative of commodities, but no commodity itself. See, on the
other hand, _Roscher’s_ critical analysis in the Literarisches
Centralblatt, 1855, December.

The true doctrine was advocated in a classic form by _Nicolaus
Oresmius_ (ob. 1382). See his Tractatus de Origine et Jure nec non
et Mutationibus Monetarum, newly edited by _Wolowski_: Paris, 1864.
See _Roscher’s_ essay in the Comptes rendus of the Académie des
Sciences morales et politiques, vol. 62, 435 ff. Based on the latter
we have _Gabr. Biel_ (ob. 1495), De Monetarum Potestate simul et
Utilitate, 1542, and _G. Agricola_, De Re metallica, 1556, I, 4 ff.
This true doctrine was acclimated earliest in England and Holland,
and before the mercantile system invaded them. Compare _Hobbes_,
Leviathan, 24, in which the _concoctio bonorum_ is described by
means of money, and the full and clear chapter 12 of _Salmasius_, De
Usuris (1638), who, among other things, shows how Midas, who turned
everything into bread, died of thirst. _Petty_ shows very clearly
that national wealth does not consist exclusively nor mainly in
money. Every country, he says, needs a certain quantity of money to
carry on trade. It would be a waste to increase the former, the
latter remaining the same. But the precious metals, by reason of
their durability and universally recognized value, possess the
character of wealth in a higher degree than other commodities.

On the whole, the use of money in a nation is like the use of fat in
the individual. (Quantulumcunque concerning Money, 1682.) Compare
_Roscher_, z. Geschichte der eng. Volkswirthschaftslehre, 80 f.
_Davanzati_ and _Hobbes_ had compared it to the blood, as has
recently _Schmitthenner_, Staatswissenschaften, 1839, I, 459.
_North_ calls money a commodity of which there may be an excess as
well as a want. (Discourse on Trade, preface and postscript.)
Compare _Locke_, Considerations on the Lowering of Interest, 1691,
Works II, 13 ff., 19. _Galiani_, 1750, Della Moneta, IV, holds a
very happy middle place between the alchymists and the philosophic
contemners of gold. See, further, _Quesnay, éd. Daire_, 64, 75 ff.
_Turgot_, Sur la Formation des Richesses, § 30 ff, had many clear
views on this subject. _Verri_, Meditazioni, 1771, II, 1, calls
money the universally current commodity. The expressions, measure of
value, pledge, representative of all commodities might be true also
of all other wares. It cannot, however, be denied that most modern
political economists have not borne sufficiently in mind the
peculiarities which distinguish money from all other commodities, as
is apparent from the doctrine of the balance of trade prevalent in
Hume’s and Adam Smith’s time. To this extent, therefore, the
semi-mercantilistic reaction instituted by _Ganilh_, Théorie de
l’Economie politique, 2822, II, 380 ff., 426; _St. Chamans_, N.
Essai sur la Richesse des Nations, 1824, ch. 3; and _Colton_, Public
Economy for the United States, 1849, 203 ff., who bring into relief
the difference between “money as the subject” and “money as the
instrument of trade,” was not wholly unfounded. _Ad. Müller_
exaggerates a correct thought, and causes it to degenerate into a
species of mystic pleasantry, when he calls every individual in the
state and every commodity that possesses value, in exchange or a
social character, money.

The highest object of the state is to develop this money-character
more and more. (Elemente der Staatskunst, II, 194, 199.) The
statesman, he says, should be money. (III, 206.) A very valuable
monograph on this subject is _M. Chevalier’s_ De la Monnaie, 1850,
constituting the third volume of his Cours d’Economie polititique.
_Knies_, Geld und Credit, I, 1873, is here most thorough and acute,
especially in keeping separate, by well defined lines of
demarcation, the five different functions of money: measure of value
(by proper division into parts: price-measure), instrument of
exchange, means of transportation of values, and means of storing up
and preserving values.

_ 693 Knies_ shows how the making of money legal tender by the state,
although of only secondary importance, is by no means an irrelevant
matter, since persons must then have it, even if they do not want it
for purposes of use or exchange, to discharge their liabilities
thereby etc., etc. (Tübinger, Zetschrift, 1858, 272.)

In all these cases, barter-economy (_Naturalwirthschaft_) meets with
greater and greater difficulties as civilization advances. How, for
instance, could 50 days annually of socage-service or labor be
redeemed by the achievement at one time of 1,000 days of
socage-service or labor? The rich man requires money principally as
a means of payment, the poor man as a medium of exchange. The
requirement or need of a people of media of payment is much more
susceptible of extension or contraction, than that of media of
exchange, made especially so by the intervention of claim-rights
instead of money. _(Knies_, loc. cit, 200 ff.) _Ravit_, Beitr. z.
Lehre vom Gelde, emphasizes this feature of money altogether too
much after the manner of a jurist. But he is entirely right in
adopting the exclusion of the _rei vindicatio_ against the honest
possessor as necessary to the completion of the idea of money.