Chapter CLVIII: Section VI: Paper Money—A Curse Or A Blessing? (9)

_ 694 Sismondi_, N.P., I, 131, very rightly remarks that this has made
practice as much easier as it has theory more difficult.

_ 695 Law_, Trade and Money, 19. Hence, before the invention of money,
scarcely anything but the things most indispensable to existence
were produced. Were there no money, there would be very few
scholars, artists etc.; for the classes who produce most of the
things indispensable to existence make but few demands for them.
_Büsch_, Geldumlauf, I, 11 ff., 36, II, 54.

_ 696 Turgot_, Formation et Distribution, § 48 ff. Commodities which
perish rapidly could be produced by persons devoting themselves to
their production as a business only after the invention of small
coin. (_Lueder_, N. Œk., 1820, 283.)

697 Compare _Knies_, Geld und Credit, I, 219.

698 Compare _Schmitthenner_, loc. cit., I, 457. One of the principal
advantages of money consists in this, that every producer can
discover what there is an over-supply or under-supply of in the
nation, by means of the relation of the price in money of his
products to the cost of producing them, estimated in money, (_v.
Thünen_, Isolirte Staat, II, 2, 235.)

699 Hence it is that so many socialists attack money. _Th. More_ assures
us that with the simple abolition of money, vice and misery would,
for the most part, disappear of themselves. Hence in his Utopia,
criminals are bound in golden chains and the chamber-pots are made
of gold and silver in order to make these metals contemptible. (Ed.
1555, ff., 197 ff.) Similar views among the over-cultured Romans.
(Compare §§ 79, 204.) _Auri sacra fames_. _Virgil_, Æneid, III, 56.
_Pliny_, too, would recall the days of trade by barter. (H. N.,
XXXIII, 3.) Even in _Boisguillebert_, Factum de la France, ch. 4, we
find, together with many correct views on the nature of money,
passionate declamation against it because of its darker side.
_Argent criminel_. (Détail de la France, 7. Dissertation sur la
Nature des Richesses etc.) More recently this darker side has been
dwelt upon by _F. Möser_, Patriot. Phant., I, 28; _Ortes_, Economia
nazionale, II, 17, and the would-be restorer of the middle ages,
_Ad. Müller_. While the latter writer lauds the feudal system as a
“sublime fusion of person and thing” (Elemente I, 221), the present
system of wages, because it is a system of compensation, he blames,
and prefers the feudal for the opposite reason (?). “The only
_merit_ which the state recognizes in our day is one _of service_.”
(III, 259.) _Kosegarten_, Geschichtliche systematische, Uebersicht
der N. Oek., 1856, 146 ff., is no friend to the economic system to
which money gives a distinctive character. _Per contra_, compare
_Bastiat_, Maudit Argent, 1849.

_ 700 Mirabeau_, Philosophie rurale, 1763, ch. 2, adds as the third great
invention the _tableau économique_ of the Physiocrates. For a
comparison of money and language, see _Hamann_, Werke, II, 135 ff.,
509. _Hehn_, Kulturpflanzen und Hausthiere, finds it characteristic
of the race, that wine, writing with letters, and money, all owe
their origin to the monotheistic stem of the Semitic people.

701 Where every man becomes a merchant, and the society itself a
commercial society. _Ad. Smith_, Wealth of Nations, I, ch. 4.

702 Just as descriptive is the German word _billig_ (_equitable_) for
cheap. Here it is plain that language takes sides with the possessor
of money!

703 The contrast between barter-economy and money-economy is of great
and fundamental importance. It repeats itself with so much
regularity in the history of every highly developed nation, that
political economists gifted with perception for the historical,
could not possibly overlook it. Thus, _Aristotle_, for instance,
establishes with the utmost care and accuracy the difference between
οἰκονομικὴ and χρηματιστικὴ, that is, between natural economy and
artificial economy, corresponding to the difference between value in
use and value in exchange. (Polit., I, 3, Schn.) Similarly _D.
Hume_, who allows a period of luxury, culture, industry, of trade
and manufactures, of freedom and circulation of money, to be
preceded by one in which the feeling of wants is not awakened, in
which coarseness and idleness prevail, one in which agriculture is
alone pursued, and monetary economy and freedom decline, and trade
by barter obtains. (Discourses, passim, especially On Interest and
on Money.) A similar contrast we find frequently, and as one of his
fundamental thoughts, in _J. Steuart_.

As to how the transition from barter-economy to monetary-economy is
generally effected, see _F. G. Hoffmann_, Lehre vom Gelde, 1838, 176
ff. In the Tyrol, as late as 1820, the greater portion of purely
mechanical work, such as that of the smith, the carpenter, and the
washerwoman, were purely feudal duties. On the other hand, payment
in money was the rule, in the beginning of the fourteenth century.
(_F. Beidermann_, Technische Bildung in Oesterreich, 3.) Yet, for a
long time after, the functions of a measure of value were performed
by pieces of land, and those of an instrument of exchange by cattle
and natural products. (_Arnold, Gesch. des Eigenth_., 207.) In
France, money-economy, i.e., trade by money, had grown to importance
earlier. (_Nitsch_., Ministerialität und Bürgerthum, im 11. und 12.
Jahr., 143.) Even in the time of Mary Stuart, the Scotch estimated
the rent of land in “cauldrons of victuals.” (_Moryson_, Itinerary,
1617, III, 155.) In ancient Italy, during the first three centuries
of Rome, there was, with the exception of the Greek colonies, only
trade by barter. _Mommsen_, Römische Gesch., I, 293, shows that the
oldest ases were not money in the higher sense of the word, but
belonged rather to the stage of barter-economy. On the other hand,
we find in the time of the classic jurists, much as slavery had
limited the sphere of action of money, the principle: _pecuniæ
nomine non solum numerata pecunia, sed omnes res, tam soli quam
mobiles, et tam corpora quam jura continentur_. (L. 222, Digest L.
16; compare 4, 5, 178.) Similarly in _Cicero_, Top. 6. De Invent,
II, 21. De Legg, II, 19, 21; III, 3. Compare _Dionys. Hal._, N.R.
IV, 15.

704 Were money nothing but a measure of values in exchange, it should on
that account, if on no other, have value in exchange itself, as a
measure of length must necessarily have length itself. (We measure
time on a clock by means of the revolution of the hands on the
dial.) Again, value in exchange supposes value in use. The so-called
“money of account,” such as the East Indian _lac de roupies_, the
Portuguese reis, and the earlier English _pound_ sterling are no
imaginary magnitudes, which would disappear with the figures of our
system of counting (see _Hufeland_, N. Grundlegung, II, 33, in reply
to _Struensee_, Abh., III, 501); but real coin-values which can not
be represented by only single pieces of coin, units of value for the
most part no longer recognized by the state, but which the people
still retain. See _M. Park’s_ (Travels, 27) refutation of the fable
circulated by _Montesquieu_, Esprit des Lois, XXII, 8, that the
regular standard money of the Mandingo negroes was a mere imaginary
standard. _Hobbes_, Leviathan, 24, exhibits a very good knowledge of
this subject.

705 Compare _P. Neri_, Osservazioni, 1751, VI, 1. _Lord Liverpool_,
Treatise on the Coins of the Realm, 1805. The person who takes money
as such must always harbor the hope of being able to dispose of it
again as money. Hence, such an acceptance always supposes the
existence of a certain amount of commercial confidence. The savage
Goahiros, between Rio de la Hacha and Maracaibo, are too
“distrustful” to take anything in trade but commodities fit for the
most immediate use. (_Depons_, Voyage dans la Terrefirme, I, 314.)
Similarly in the twelfth century, the heathen Laplanders. (_Arndt_,
Liefl. Chronik, II, 3.) Commodities which barbarians can consume
immediately are objects of the first necessity, whereas more
civilized people, who are in a condition to undergo greater expense,
look more to the technic qualities of money, such as divisibility,
capacity for transportation and durability. _v. Scheel_ shows in a
very happy manner how, as commerce increases, money comes to be, as
it were, subjected to a process resembling that of distillation:
first mere increase of stores for use, next preponderating values in
exchange, lastly mere orders for the same possessing no independent
value. _Hildebrand’s_ Jahrbb., 1866, I, 16.

706 The last circumstance continues to be one of great importance for a
long period of time in the frigid zones. Thus, the beaver-skin
continues still to be the unit of measure of trade in much of the
territory of the Hudson Bay Company. Three martens are estimated to
be equal in value to one beaver, one white fox to two beavers, one
black fox or a bear to four beavers, a rifle to fifteen beavers.
(Ausland, 1846, No. 21.) The Esthonian word, _raha_, money, means in
the related language of the Laplanders, fur. (_Krug_, Zur Münzkunde
Russlands, 1805.) Concerning skin-money in the middle age of Russia,
see _Nestor_, _Schlözer’s_ translation, III, 90. The old word
_kung_, money, means marten. By degrees it came to pass that instead
of whole skins, only two “snouts” were given or other pieces of
leather about a square inch in size, which were probably stamped by
the government and redeemed in whole skins at the government
magazines. Hence, there is here supposed a species of assignats, and
of disturbances of credit. The Mongolian conquerors would not
recognize them, and they therefore became suddenly valueless. In
Novgorod and Pskow, the system continued some time longer, for the
reason that these places had little trade with the Mongols. In the
rest of the kingdom it now became necessary to introduce silver
money, and in the north to return to real squirrel and beaver skins.
_Karamsin_, Russ. Gesch., I, 203, 385; I, 96, 191 f. Voyage de
Rubruquis, in _Bergeron_, Voyages I, 91. _Herberstein_, Rer. moscov.
Commentt, 58 ff. Even in 1610, a Russian military chest was captured
by the enemy, and in it were found 5450 silver rubles, and 7000 fur
rubles. (_Karamsin_, XI, 183.)

707 When the Danes progressed so far as to practice agriculture, they
used grain instead of cattle, in quantities corresponding to the
value of one cow or one sheep, for money, to the end that their idea
of a unit of measure might not become obscured. (_Ravit_, Beiträge,
3.)

708 Homeric determination of prices in oxen. Iliad, II, 449; VI, 236;
XXI, 79; XXIII, 703 ff; Odyss., I, 431. Compare, however, II, VII,
473 ff. In Draco’s time, money-fines were imposed in cattle
(_Pollux_, IX, 60 ff.), and in Athens, before Solon’s time, even the
metal coins were, for the most part, stamped with the figure of an
ox. _Plutarch_, Theseus, 25. _Böckh_., Metr. Uuntersuch., 121 ff.
Among the most ancient Romans (_Cicero_, de Rep., II, 35) the
imposition of fines in property, the coins first stamped by Servius,
_boum oviumque effigie_ (_Plin._, H. N., XVIII, 3, _Cassiodor._,
Var., VII, 32), and the words _pecunia_, _peculium_, _peculatus_,
derived from _pecus_, point to something analogous. (_Varro_, De L.
L., V, 19; De Re rust., II, 1; _Cicero_, De Rep., II, 9; _Ovid_,
Fast., V, 281; _Plutarch_, Publicola, 11.) Old German fines in
cattle, in _Tacitus_, Germ., 12, 21; Lex Ripuar, 36, 11; Lex
Saxonum, 19. _Ulfilas_ translates αργύριον δοῦναι (_Mark_, 14, 11),
_faihu giban_. Very old German documents, of the seventh and eighth
centuries, name horses as purchase-price. (_Grimm_, Deutsche
Rechtsalterth., 586 f.) Otho the Great imposed cattle-fines.
(_Widuk_ Corb., II, 6.) Similarly, in King Stephen’s laws of Hungary
(_Wachsmuth_, Europäische Sitturgesch., II), in the old Irish Brehon
laws (_Leland_; History of Ireland, 36 ff.), as well as in the
Scotch collection of laws, _Regiam Majestatem_, of 1330. (_Honard_,
II, 263 f, 537.) _Viva pecunia_ of the Anglo-Saxons in the laws of
William I. In ancient Sweden, all property was estimated in
_fä_=cattle (_Geijer_, Schw. Gesch., I, 100), just as now, in
Icelandic, _fe_=property. In Berne, the German _vieh_, cattle, is
used to express commodities. Among really nomadic races this is, of
course, still more the case. Thus the Kirghises use horses and sheep
as money, and wolf-skins and lamb-skins for small change. (_Pallas_,
Reise durch Russland, 1771, I, 390.) Among some of the Tartar
tribes, everything is stipulated for in cows. (_v. Haxthausen_,
Studien, II, 371.) Among the Persian nomads, sheep are used as
money; or when they are held in subjection in the cities, corn,
straw and wool. (_Ritter_, Erdkunde, VIII, 386.) Oxen in use as
money among the Tscherkessens. (_Klemm_, Kulturgeschichte, IX, 16.)
_W. B. Hermann_ doubts, however, whether cattle were ever used as a
medium of exchange. He thinks rather they were employed only as a
measure of price. (Münchener Gel. Anz., 580.)

709 That of vanity which presents itself among some people sooner than
that of clothing.

710 In Genesis, 1, 24, gold appears only as a valuable ornament. Abraham
paid for his purchases in silver.

711 For this reason, zinc-money is just as natural with the Malays and
Chinese as iron-money with the Senegambians. (_Mungo Park_, Travels,
27.) And so _Plutarch_, Lysand., 17, may be right when he calls iron
the earliest universal means of payment. In Sparta, too, where
industrious efforts were made to maintain the lower stage of
culture, this medium of payment was longest maintained. Compare,
however, _St. John_, The Hellenes, III, 260 ff. The first copper
coins were stamped a short time before Philip, father of Alexander
the Great. (_Eckhel_, Doctr. Numm, I, XXX ff.) On the other hand,
Italy, partly because it had mines of its own, and partly because of
its intercourse with Carthage (Cyprus), had become, at a very
distant period, so rich in copper that the circulation of copper, or
to speak more accurately, of bronze, was naturally introduced.
Compare _Niebuhr_, Röm. Gesch., I, 475 ff. (_Aes alienum, obæratus,
ærarium, æstimare._) Copper was all the more adapted to this end the
more frequently it was found unmixed. It was generally used in
preference to iron because of the greater facility of working it.
(_Hesiod._, Opp., 150 f.; _Lucret._, V, 1285 f.) In modern nations
copper money seems to have been employed only after silver money.
Thus, it was not stamped in England before the time of James I.
(_Adam Smith_, I, ch. 5), nor in Sweden before 1625. (_Geijer_,
Schwed., Gesch., III, 56.) Money was struck from the metal of molten
bells during the French Revolution!

712 In Russia, between 1763 and 1788, there were 76 million rubles of
gold and silver coins struck, against 54 million of copper rubles.
(_Hermann_). On the other hand, in France, between 1727 and 1796,
there were struck only 40 million francs of copper, 10 million of
_billon_ or base coin, and 3967 million of gold and silver.

_ 713 Michaelis_, De Pretiis Rerum apud veteres Hebræos, 183.

_ 714 Strabo_, VIII, 358. Hiero, tyrant of Syracuse, found it exceedingly
difficult to obtain gold. When the Spartans wished to make an
offering of gold at Delphi they were obliged to have recourse to
Crœsus. (_Herodot._, I, 69; _Theopomp._, in _Athen_, VI, 231 ff.)
_Aristoph._, Ranae, 720, calls gold “new” in contradistinction to
the “old money,” that is, silver.

_ 715 Plin._, H. N., XXXIII, 13. Compare, however, _Dureau de la Malle_,
Economie polit. des Romans, I, 69, after _Varro_, apud Charisium, I,
81. (_Putsch._) It is certain, however, that when Italy was
conquered, the Romans had introduced a circulating medium of silver,
and that it was the prevailing medium; but in the time of Cæsar and
Augustus, a gold circulation was the prevalent one. Yet the state
treasure was deposited in gold during the period of silver
circulation, because gold was, without question, better adapted to
storing up and transportation.

_ 716 Muratori_, Antiquitt., IV, Diss., 28.

717 Henry was obliged to issue an order to the mayor and sheriffs of
London, to get his gold into circulation; but he soon saw himself
compelled to desist from executing his design. Edward III. was able
only after a voluntary circulation of them had continued for a long
time, to prohibit any one’s refusing the rose-nobles. (_L.
Liverpool_, loc. cit.)

718 German., 5. Still more striking is the example cited by _Herbelot_,
Bibliothéque Orientale (1697), 485. _Rubruquis_, Voyage, ch. 13. In
the time of Nadir-shah, the Kurds gave, without the slightest
hesitation, a pound of gold for a pound of silver or copper.
(_Ritter_, Erdkunde, VIII, 395.)

719 Recommended even by _Adam Smith_, ch. 5, and for Germany by _F. G.
Hoffmann_, Drei Aufsätze über das Münzwesen, 1832. In Egypt, also,
for a long time the wealthiest country of the middle ages, the
circulation of gold prevailed until the twelfth century. (_Macrisi_,
Historia Monetae Arab., cap. 3 ed., _Tychsen_.) Harun Alraschid’s
income was estimated at about 7,500 cwt. of gold. (_Ritter_,
Erdkunde, X, 235.) Something similar related of the Carnatic, “the
land of ancient emporiums.” _Ritter_, Erdkunde, V, 564, after
_Ferishta_.

720 The use of the _cauris_ (_Cypræa moneta_) in India this side and
beyond the Ganges, in upper Asia, and in southern Africa depends on
their employment for purposes of ornament, on their greater
uniformity, and on the rarity of copper which would otherwise be
better suited to purposes of change. In Calcutta, 1280 _cauris_ are
equivalent to about half a shilling. (_McCulloch._) Compare _K.
Ritter_, Africa, 149, 324, 422, 1038; Asien, I,964; II, 120; III,
233, 739; IV, 53, 420; _Salin_, III, 62; _Botz_, in the Tübinger
Ztschr. Similarly among the fishing population of Northwestern
America. (_Stein-Wappäus_, Handbuch I, 352.) Salt as money on the
Chinese-Birman boundary (_Marco Polo_, 38), but especially in the
interior of Africa, where nature does not at all produce it, but
into which it is brought by caravans from the deserts, where salt is
found in great quantities. _M. Polo_, Travels, 305, found the
current price of a salt-tablet, two and a half feet long, one foot,
two inches broad, and two inches thick, to be equal to the value of
two pounds sterling among the Mandingos. In Abyssinia, the salt-bars
are generally six inches long, three inches broad, one and a half
inches thick, and they are bound with an iron ring to protect them
against fracture. Sixty of them are worth one thaler. (Ausland,
1846, No. 35.) Slaves used as money: _Barth_, Reise, III, 338, 344.
Tea-blocks in upper Asia and Siberia; and they are given by the
Chinese to the Mongols as pay for troops. (_Ritter_, Asien, III,
252,) In Keachta, a tea-block is equal in price to one paper ruble.
(Ausland, 1846, No. 20. _Timkowski_, Reise nach China, 143.)
Date-money in the Sivah oasis. (_Hornemann_, Reise, 21.) Also in the
Persian date-country, where, formerly, the lowest silver piece of
money was coined in the form of a date (_Ritter_, Asien, VIII, 752,
819.)

The ancient Mexicans used as money cocoa-nuts, in bags of 24,000
pieces, cotton-stuffs, small pieces of copper, and gold dust in
quills. (_Humboldt_, N. Espagne, IV, 11.) Cocoa-beans are still used
as small change there. (Ibidem, IV, 10.) On the Amazon, wax-cakes
weighing one pound are used. (_Smyth_, Journey from Lima to Para,
1836.) Among the ancient inhabitants of Rügen, linen (_Helmold_, I,
39); and still among the Icelanders, the so-called _Vadhmâl_. During
the middle ages, 120 ells of _Vadhmâl_ were equal in value to one
milch cow or six milch sheep, or two and a half ounces of silver.
(_Leo_ in _Raumer’s_ histor. Taschenbuch, 1835, 515.) That the
ancient northern mode of valuation, by the _Vadhmâl_ and in cows is
older than by the _mark_ is shown by _Wilda_, Gesch. des deutschen
Strafrechts, I, 331. The cod-fish money used by the Icelanders was,
on account of its great commercial importance as an article of
export, an advance upon the use of the _Vadhmâl_. Among the Caffirs,
besides _cauris_, mats, javelins, glass corals, but particularly
brass rings, are used as money. From three to four hundred of these
rings are strung together, and two such strings are equal in value
to one cow. (_Klemm_, Kulturgeschichte, III, 308, 320 f.) Ivory used
as money in the neighborhood of the Portuguese colonies in Africa.
(_Martius_, Reise, II, 670.) In Logone, _Denham_ (1822) ff., had met
with pieces of iron as a medium of circulation; but on the other
hand, _Barth_ (1849), with small strips of cotton from 2 to 3 inches
in breadth, and shirts for larger sums. (A. R., III, 274, 297, 538.)
In colonies, money of this nature is continued for a long time. Thus
cod-fish used in Newfoundland, sugar in the English West Indies
(_Adam Smith_, I, ch. 4), tobacco in Maryland and Virginia.
(_Douglas_, V, 2, 389; _Ebeling_, V, 435 ff.) The last was related
to the inspection and storage of the tobacco intended for
exportation. Payment was made in orders on the stored and inspected
tobacco, even as late as the end of the eighteenth century. In 1618,
the forced circulation of tobacco was decreed in Virginia, and under
severe penalties. (_Gouge_, History of Paper-Money and Banking in
the United States, ch. 1.)

721 When the caravans no longer touched at the oasis Agades, gold and
silver money fell into disuse, and grain, stuffs etc. did service as
instruments of circulation. (_Barth_, Reisen und Endeckungen, I,
144.)

_ 722 Ad. Müller_ says very pertinently, but in a very mystical vein,
that the precious metals combine in a very high degree and yet in a
very simple manner, the principal qualities in which man’s greatness
finds expression: rarity, flexibility, uniformity, mobility,
durability and beauty. (Elemente, II, 266.) In another place, he
says, the highest ideal good is God, the highest material good,
gold! (III, 65.) The mysticism of gold was most highly developed
among the alchymists of the sixteenth and seventeenth centuries.

723 Iron beds are worked only when they contain at least 18 per cent. of
metal. Generally it is estimated that the furnace should yield 30
per cent. In the copper mines of Mansfield, Norway, Agordo and
Venice, it goes as low as from one to three per cent. On the other
hand, silver mines which yield 0.17 per cent. of metal are
considered worth working. Lastly, gold is so rare that generally it
can be extracted only from time to time by the ordinary mining
processes. As a rule, men are content to gather it where nature has
charged itself with its refining. The extreme limit of the working
of gold appears, according to _Plattner_ and _Haussmann_, at Goslar,
to be reached when in 5,200,000 parts of mineral earth there is one
of gold. Spite of this, however, by reason of their great ductility,
the precious metals have been able to penetrate even into the
meanest huts in one form or another. It has been estimated that a
silver leaf may be attenuated by beating to a thickness of only
0.00001 of an inch, and a gold leaf to 0.0000035 of an inch. An
ounce of gold spread on a silver thread may attain a length of
13,000 English miles. (_McCulloch._)

724 How easily, for instance, could leather-money, such as was used by
the ancient Galls (_Cassiodor._, Varia, II, 32,) be increased to any
desired quantity, and thus its price brought down.

_ 725 Engel_, at the usual tariff for land and railroad freight (10 and 5
_pfennigs_ per mile and hundredths of a mile) estimates the
enhancement of the price of the following commodities, for one mile
of transportation of a custom-hundred-weight (_Zollcentner_) at the
following percentage of their average value:

Gold, value 47610 German _Reichsthaler_ per cwt., 0.000007 by land,
0.0000035 by railroad.
Silver, value 3000, 0.00111 by land, 0.00055 by railroad.
Cotton, value 45, 0.074 by land, 0.037 by railroad.
Tin, value 24, 0.1389 by land, 0.0694 by railroad.
Lead, value 8, 0.416 by land, 0.208 by railroad.
Iron, value 2.5, 1.333 by land, 0.666 by railroad.
Rye, value 2, 1.666 by land, 0.833 by railroad.
Potatoes, value 0.6, 5.555 by land, 2.777 by railroad.
Coal, value 0.12, 27.777 by land, 13.888 by railroad.

Their great specific gravity, also, makes the precious metals easy
of transportation. Thus _Cazeau_ calculates that a given value of
gold is 17,222 times as easy to transport as the same value in
wheat. But as, where the weight is the same, the labor of
transportation is inversely as the volume, this number must be
multiplied by 26, and we therefore have 447,772 times. In the case
of silver, the relation to wheat is as 1:15,554. Concerning copper,
see _Storch_, Handbuch 1, 488. _Chevalier_, Cours, III, 17 ff.

726 This, at bottom, is also true, of the various kinds of copper; only,
here, complete refining is impracticable on account of the relation
between the cost of production and the product-price.

727 On the other hand, copper, and still more zinc, tin and lead lose
much of their value in the fire. Pearls may lose their entire value
by fire, and diamonds more than half of it.

_ 728 Aqua-regia_, a mixture of nitric and muriatic acid, dissolves gold.
Chlorine and bromine attack it. It has been noticed to vaporize at a
very high temperature. A gold thread vaporizes when a strong
electric current is passed through it. A small ball of gold gives
off a great deal of vapor if placed between two carbon points and
subjected to the action of a powerful galvanic pile. (_K. F.
Naumann._)

729 Compare _Hatchett_, Experiments and Observations of the various
Alloys, On the specific Gravity and comparative Weight of Gold,
1863. The French five-franc pieces wear away, on an average, in a
year, 0.00016; the English crown, 0.00018; the half crown, about
0.00173; and the shilling, about 0.00456. (_L. Liverpool_, Treatise
on the Coins. 204; _M. Chevalier_, Cours, III, 128 ff.) The wear
from use of the south German gulden is 0.292 per 1,000. (_Rau_, in
the Archiv. N.F.X, 256.) According to _Jacob_, the average wear of
coin is 2.38 per 1,000. (Historical Inquiry into the Production and
Consumption of the Precious Metals, ch. 23.)

_ 730 Adam Smith_, Wealth of Nations, I, ch. II, Digr.

_ 731 Solera_, Sur les Valueurs, 1785, 271 ff.; _Custodi_. Half an ox,
for instance, is worth half the value of a whole one only for a few
well defined purposes. As to how much the value of the diamond
varies with the size etc., see _Dufrênoy_, Traité de Minéralogie,
II, 77 f. On the other hand, the separated parts of a piece of metal
are very readily reduced to a whole.

732 In the case of the ox, it is impossible to imagine a mark which
might not be eluded by its losing flesh.

733 The cost of coinage since 1849 has been ¾ of 1 per cent. in the case
of silver, and in that of gold not quite 2 per 1,000. (_M.
Chevalier_, Cours, III, 110.)

734 Platinum possesses many of the properties necessary to an instrument
of exchange in as high a degree as gold and silver,—great value in
exchange, great specific gravity and great durability. On the other
hand, its pliability as to form is very small, and therefore the
cost of coining it would be high. The conversion of platinum coins
into utensils, and of utensils into coin, which would contribute to
the supply of money when needed, and to a diminution of that supply
when the demand decreased, would be much more difficult on this
account; and also because of the small degree of beauty possessed by
that metal, which renders it little adapted to purposes of luxury.
Under these circumstances, the rarity in nature of the metal is a
great drawback; for the discovery of a new mine would create a great
perturbation in prices. For this reason, the Russian platinum coins
have been generally very much undervalued since 1828 in the
commercial world, and the whole experiment was given up in 1845-46.
Compare _J. Schòn_, National Œkonomie, 128 ff. Aluminum, discovered
by Wöhler, and which can be prepared from argillaceous earth, is
capable of manipulation in a very high degree (_malléable et ductile
à peu près sans limite, excessivement fusible_), almost as
indestructible as the precious metals, but easily distinguished from
silver by a fine bluish color, which has been compared to that of
tin; by its small specific gravity, from 2.5 to 2.67, and its ring
like that of iron. Hence it is very doubtful whether aluminum can be
made to play the part of a substitute for silver, and still more so
whether it can be used for coining.

_ 735 Lingot, bullion_. In India, beyond the Ganges, and in China, bars
are very much used. (_Sycee._) In the latter country, besides these
bars, there is no coinage except that of a mixture of copper and
lead, for small change. (_Th. Smith_, An attempt to define some of
the first Principles of Political Economy, 31. _Timkowski_, Reise
nach China, III, 366.) Concerning Brazilian trade by bars, see _Spix
und Martius_, Reise, I, 346 f. They are stamped with the national
coat of arms, the sign of the mint, the number by which registered,
that of the year and of the degree of fineness. Concerning the
Persian bars, the _laries_, see _Noback_, Handbuch der Munzverrh.,
III, Taf. 29.

736 Concerning the utility of the precious metals for purposes of money,
see _Pliny_, A.N. XXXIII, 3; _Oresmius_, De Mutatione Monetarum, ch.
2; _Law_, Sur l’ Usage des Monnaies, 683 f. _Daire_, where we read
that before the invention of money, silver had served all kinds of
useful purposes, but that now it served its most important purpose,
namely the making of the best material for money on many accounts.
Yet _Law’s_ book, Money and Trade considered (1705) is based mainly
on the idea that pieces of land are much better adapted for purposes
of money than the precious metals (185)! _Galliani_, Della Moneta,
1750, I, 3, 4, and _P. Neri_, Osservazioni, 1751 ff, Cust., have
very correct ideas on this subject.

_ 737 North_, Discourses upon Trade, 16. The capacity of money to act as
a storer of wealth has been as much over-estimated by the so called
Mercantile System, as its capacity to transfer wealth has been by
the so called currency-school.

_ 738 Adam Smith_ compares money to a large wheel, by means of which a
due share of the means of subsistence and of enjoyment is
distributed to each member of society. Elsewhere he compares its
utility to streets and roads. (Wealth of Nations, II, ch. 2.)
_Hume_, On Money, Pr., prefers to compare it to the oil with which
the wheels of circulation are greased. _Sismondi_ compares money to
porters. (N. Principes, II, ch. 2.) “Money is to commerce what
railways are to locomotion, a contrivance to diminish friction.”
(_J. S. Mill._) According to _Schmitthenner_, 455, it bears the same
relation to other commodities that the written language of a
people’s literature does to their dialects.

_ 739 Law’s_ views on money are, in part, excellent. Thus, for instance,
he says that the debasement of the coin from financial necessity is
as great a folly as it would be to try to enlarge a piece of goods
too small for the purpose for which it was intended, by diminishing
the length of the yard-stick. (Sur l’Usage des Monnaies, 697.) A
country entirely isolated from all others could get along as well
with one hundred pounds sterling as with a million. (Money and
Trade, p. 88.) Elsewhere, he confounds money and capital to such a
degree that he considers every increase of the amount of money in a
country as an enrichment of the people, a means to give employment
to the poor, to carry on manufactures etc. (Money and Trade, 23, 26
ff., 168.) A given quantity of money is capable of giving employment
at most only to a certain number of men. (21.) A nation’s power and
wealth depend on the population and its stores of goods, these on
commerce, and commerce in turn on the amount of money. (Pp. 110,
220.) The advice given, in 1848, to the National Assembly of France,
but which it had the good sense to reject, to overflow all France
with the so-called _bons hypothécaires_, is akin to Law’s practical
propositions. _M. Chevalier_, Cours, III, 8, rightly ridicules the
literal construction of the words: _l’argent est abondant_, when
merchants find it easy to obtain credit, and considers it as well
grounded as it would be to infer from the maxim: _l’argent est le
nerf de la guerre_, that rifles and bullets were made of silver.

_ 740 Adam Smith_ was not entirely clear, in his own mind, on this point.
Thus inconsistently enough, he calls money unproductive—“dead
stock,” for the reason that it leaves no material traces behind it
of the goods which it has transferred from one hand to another. (II,
ch. 2.) Is not the same true of trade itself? And yet Adam Smith
calls trade productive. His error is doubtless a remnant of the
Physiocratic doctrine, to which Smith still held. Compare _Quesnay_,
94, éd. Daire. Even _Twiss_ says that money employed as money is
unproductive, but that, when employed as a commodity, it is
productive. (View of the Progress of Political Economy, since the
sixteenth Century, 1847.) Besides it is not a peculiarity of money
alone, that, after it has served the purposes of production, it
comes out of the product unaltered. The same is true of quicksilver
employed in amalgamation. (_Hermann_, 2nd edition, 302.)

_ 741 Senior_, Three Lectures on the Value of Money, 1840, is, in so far,
not wrong when he says that the value in exchange of the precious
metals is still ultimately determined by the want of such
commodities as are luxuries. This last determines to what extent the
production shall be extended by the working of the poorest mines,
whereas the wants of circulation can be met as well by small as
large quantities of the metals.

742 The good or bad result of this production depends on many different
elements which may compensate on another. In California and
Australia gold is to be found in large quantities, and is easily
mined; but the workmen make large demands which the nature of the
country renders it difficult to meet. In the Harz mines, where the
cost is scarcely covered, (_Lehzen_, Hannover’s Staatshaushalt,
1853, I, 139), the shafts are sometimes 175-½ fathoms deep, but this
is made up for in a measure by the moderate demands of the workmen
and their skill in mining. Among the Mandingos, the auriferous
material is so rich that ⅓ per 1,000 of the weight of the sand is
washed out into pure gold in ten minutes (_M. Park_, Journal, 53
ff., addenda, XIX), while in Europe, where the proportion is only
1/100 per 1,000, mines are still considered worth working. But then,
what workmen there are there! In Peru, the burdensome height of the
mines above the level of the sea and the want of combustible
material more than counterbalance many favorable advantages, while
in Norway the cheapness of wood compensates for a great many
disadvantages. Another thing which contributes towards the
uniformity of the price of the precious metals is the circumstance
that the great amount of fixed capital required in the greater
number of mining enterprises, postpones for a long time the working
of good mines as well as the abandonment of poor ones.

743 Older writers have estimated the amount of money necessary in a
country at 1/5, 1/10 (_Petty_), 1/15, and even 1/30 of the yearly
income of a people (_Adam Smith_, II, ch. 2.) According to
_Cantillon_, Sur la Nature du Commerce, p. 73, it is from 1/6 to
1/10 of the annual gross production of a nation.

_ 744 Davanzati_, Lezione sulle Moneta, 1588, 32 ff., Cust., thinks that
all terrestrial things which serve to satisfy the wants of men are,
by virtue of agreement, equal in value to all the gold, silver and
copper; and that the parts comport themselves as the whole. The
price of a commodity is based on this, that men find in it as much
of their _beatitudine_ as is afforded them by a given quantum of
gold etc. Similarly, _Montanari_, who adds as a limitation the
quantity of money _spendibile in commercio_. (Della Moneta, 45, 64,
Cust.) The same opinion leads _Locke_ to the singular conclusion,
that, as there is now in the world, ten times as much silver as
there was previous to the discovery of America, each single piece of
silver, separately considered, and taken in relation to such
commodities as have not varied, is worth only one-tenth of what it
was then. _Locke_, here, starts out with the gross assumption,
shared even by _Ganilh_, Théorie, II, 386 ff., that in the case of
money the demand is always, relatively speaking, equally strong and
just as great as the supply, or as the amount in the market. (Works,
II, 23 ff.) Further, _Montesquieu_, Esprit des Lois, XXII, 7, 8. Per
contra, however, see _Montesquieu_, ibid. XXII, 5, 6, and _Hume_, On
Money and on the Balance of Commerce, Essays II, 1752.

Hume knew perfectly well, that only circulating money and
circulating commodities operated on price, but failed to take the
rapidity of circulation into account. Similarly, _Forbonnais_,
Eléments du Commerce, II, 212; even _Canard_, Principes, ch. 6;
_Fichte_, Geschloss. Handelstaat, 93 ff., and _Stein_, Lehrbuch, 58.
Contested by _Law_, Trade and Money considered, 140, a work directed
especially against the Mercantilistic essay, Britannia languens;
1680, by _Mélon_, Essai politique sur le Commerce, ch. 22;
_Genovesi_, Economia civile, 1764, II, 1, 15; _Steuart_, Principles,
II, ch. 28; _Verri_, Meditazioni, XVII, 3 ff.; _Büsch_, Gedlumlauf,
II, 40. The simple taking of an inventory of most private resources
which possess so much greater value in other commodities than in
money is enough to demonstrate the error of _Davanzati’s_ doctrine.
Thus, in France, in Necker’s time, the cash money in the kingdom was
estimated at 2,200,000,000 livres, and the average value of the
wheat crop alone at 1,000,000,000. _Necker_, Législation et Commerce
des Grains, 1776, I, 215. Recently, _Michel Chevalier_, estimated
the amount of money in France at from 3-½ to 4 milliards, while the
official estimate of its immovable property alone was over 83
milliards.

745 When money becomes dearer, less of it is of course needed; and when
cheaper, more, for the same purpose.

746 In contradistinction to presents, acts of spoliation, but especially
to barter.

747 The discoverer of this truth is supposed by many to be _Bandini_,
Discorso economico, 1737, 141 f., Cust. _Berkely_, however, in the
Querist, 1735, 477 f, writes: “A sixpence twice paid is as good as a
shilling once paid.” Much earlier yet, in 1797, _Boisguillebert_,
Détail de la France, II, 19, had the germ of this doctrine, but he
confounds circulation with consumption. And _Locke_, Considerations,
II, 13 ff., presented it in 1691 with great clearness, although he
did not always remain true to his theory. Compare _Quesnay_, éd.
Daire, 64; _Cantillon_, 159 ff., 382.

748 If the number of annual exchanges effected by 1 dollar = u; the
total number of dollars in the store of money = m; the rapidity of
circulation, that is the number of exchanges effected on an average
by each dollar in a year, = s: then is u = m s, s = u/m, m = u/s.

749 Since good money is so easily stored away and preserved, no one is
in haste to get rid of it. _St. Chamans_, N. Essai sur la Richesse
des Nations, 122 ff.

750 Among the Kurds, all the money in their camps is used for
head-ornaments for their women. (_K. Ritter_, Erdkunde, X, 887.)

751 Thus, _Sir David North_, Discourse on Trade, 1691, Postscr.

_ 752 Lotz_, Handbuch, 377, is of opinion that even in England £100,000
employed in trade in land can scarcely effect exchanges to the
amount of £1,000,000 in a year. The same sum employed for the same
purpose in London, in stocks and in the trade in commodities, will
effect exchanges to the amount of £160,000,000.

_ 753 Cernuschi_, Mécanique de l’Échange, 1865, 132 ff.

754 Thus _Petty_ (ob. 1687) is of opinion that England needed as much
money as ½ of all its ground-rents amounted to, as the ¼ of all
house-rents, and 1/52 of all the wages of labor for a year; for the
reason that ground-rents are paid semi-annually, house-rents
quarterly, and wages weekly. (Several Essays, 179; Political Anatomy
of Ireland, 116.) _Locke_, on the other hand, assumes 1/50 of the
wages of labor, ¼ of all the revenue of land owners, and 1/20 of the
amount cash money taken in in a year by merchants. Of these amounts,
there should be always, at least, one-half in ready money on hand,
if commerce would not be brought to a stand-still. If leases were to
be paid for on short terms, a great saving of money would be
possible. (Works, II, 13 ff.) _Pinto_, Traité du Crédit et de la
Circulation, 34, calls special attention to the case of Tournay, in
which the commandant, during the siege of 1745, made 7,000 florins
serve him for seven weeks to pay the garrison; by borrowing that sum
anew every week from the inn-keepers etc.; which they, again, had
received from the soldiers.

755 If all were to commit their payments to the care of the same banker,
it would be possible to do with almost no money. But even now, if
100 separate merchants were obliged to keep each 3,000 dollars in
their money-chests for unforseen contingencies, a banker might
accomplish the same for them with 50,000 dollars, because it is not
probable that the unforseen contingencies in question would occur to
all at the same time.

756 In the London Clearing-House, in 1839, £954,401,600 were paid by
means of the use of £66,275,600 as a circulating medium, for the
most part notes of the Bank of England. (_Tooke_, Inquiry into the
Currency Principle, 27.) From May, 1868, until May, 1869,
£7,068,078,000. (Statist. Journal, 1869, 229.) The New York Clearing
House, in 1867, effected payments to the amount of £5,735,031,900
(Ibid., 1867, 577), and in 1868, $30,880,000,000. (_Hildebrand’s_
Jahrb., 1869, II, 168.)

757 This system began in the middle of the seventeenth century. (A
Discourse of Trade Coyn and Paper Credit, 64.) As early a writer as
_Sir J. Child_, N. Discourse on Trade, 46, says, that for some time,
every man who had from £50 to £100 in money, sent it to his banker,
and that since that time, all the money flowed towards London and
the country was deprived of it. (127 ff.) As a rule, the goldsmiths
were also bankers. One such smith had at the time of the Great Fire
of 1666, emitted £1,200,000 in notes. (A Discourse etc., 67.) The
Bank of England, as a money center, dates from 1694. The London
banks developed into intermediaries principally before the time of
the French Revolution. (_Thornton_, Paper-Credit of Great Britain,
1802.) This remarkable institution had grown to vast dimensions even
in Thornton’s time, although it has been much enlarged since 1825.
(_Tooke_, History of Prices, 152 f.) Similar conditions among almost
all highly civilized peoples. Thus in Greece, compare _Becker_,
Charicles, I, 294. Concerning a person who had 14 talents’ worth of
resources, 26 minæ, and therefore three per cent. in cash, see
Lysias, adv. Diog., 6. In Rome, compare _Polyb._, XXXII, 13.
_Cicero_, pro Font., I, 1. For Italian analogous cases, part of
which may be traced back as far as the twelfth century, see
_Lobero_, Memorie storiche della Banca de S. Georgio, 1832; or the
Dutch “cassiere” Richesse de Hollande, I, 376, ff. In France an ever
increasing centralization of the money-trade is to be noticed in
Paris (_M. Chevalier_, Cours., III, 418); and now of the money-trade
of Germany in Berlin.

758 Compare _Fullarton_, On the Regulation of Currencies, 1845. Among
the Dutch, the custom of using all commercial commodities as much as
possible, as a basis of the circulating medium, was much earlier
developed. (_Child_, Discourse on Trade, 65, 264 f.) In Great
Britain, the aggregate amount of bills of exchange put in
circulation was, in 1839, £528,000,000, which sum has been increased
annually at the rate of about £24,000,000. (_Tooke_, Inquiry into
the Currency Principle, 26.) Between 1828 and 1847, there circulated
at the same moment, on an average, £79,127,000 in bills of exchange
in England, and in Scotland, £17,380,000 (Athenæum, 1850, No. 175),
and in Great Britain and Ireland, from £180,000,000 to £200,000,000.
(_Tooke_, History of Prices, VI, 588,) According to _Macleod_, the
bills of exchange and promissory notes together amounted to
£500,000,000; bills of exchange, bank-notes and bank-credits, to
over £600,000,000. (Elements, 12, 325.) _Macleod_ calls the currency
the sum total of all debts due by every individual in the country.
(Elements, 43.)

759 A case in England, in 1857, in which a house with £10,000 capital
failed with liabilities amounting to £900,000. (Report of the select
Committee on the Bank Act, 1858, XV.) Or where a speculator with
£1,200 made purchases on credit to the amount of £80,000, and then
failed with a deficit of £16,000. (_Fawcett_, Manual, 442 f.)

760 Remarked by as early a writer as _Davenant_, Works, IV, 106 ff.
Compare, however, II, 238. _Quesnay_, éd. Daire, 75 ff. _Lord King_,
Thoughts on the Effects of the Bank Restriction, 1804, 17 ff.
Exhaustively treated by _Chevalier_, Cours., III, 397 ff. He very
much laments the fact that the customs of France cause it to need
from 3½ to 4 milliards of cash money, while England does a much
larger trade with 1,200 millions. (I, 207 ff.) In France, it is said
that the amount of money, in 1812, was 1,500,000,000 francs(?).
(_Peuchet_, Statistique élémentaire, 473.) In Prussia, in 1805, it
was 90,000,000 thalers. (_Krug_, Betracht. über den
Nationalwohlstand des preuss. St., I, 244.) The annual amount of
production in the former country was, 7,036,000,000 francs; in the
latter it was estimated at 261,000,000 thalers, so that in Prussia
the relation of money to national income was, as 1:2.9; in France,
as 1:4.69.

761 It is scarcely possible to determine exactly the amount of money in
a country; for the reason that, outside of the suppositions of
bankers etc., there is no authority which can be safely relied on,
unless it be the reports concerning the coinage, and of the emission
of paper money. The information, no less necessary, to be derived
from the statistics of the importation and exportation of money, the
melting down of coin by gold smelters etc., can never be exactly
obtained. In England, at the end of the sixteenth century, the
circulating medium was estimated at £4,000,000 (_Hume_, History of
England, ch. 44, App.); under Charles II., at £6,000,000, when the
population was 6,000,000. (_Petty_, Several Essays, 179.) About
1711, _Davenant_, New Dialogues, 11 ff., mentions £12,000,000 as the
amount; and _Anderson_, Origin of Commerce, a., 1659, £16,000,000 in
1762. The circulation of gold, shortly before 1797, was estimated by
_Rose_ at, at least, £40,000,000; by Lord _Liverpool_, at
£30,000,000; by _Tooke_, at only £22,500,000. (History of Prices, V,
130 ff.) _Moreau de Jonnés_, 1837, assumed £43,500,000 (Statistique,
I, 329), and _Helferich_ (Schwankungen der edlen Met., 1843, 147),
£45,000,000. _Sir Robert Peel_, estimated the amount in 1845 at
£59,000,000, to which was to be added an average of £28,000,000 in
bank notes, after deduction made of the metallic reserve. According
to _Jevons_, the amount of British money is now £80,000,000 in gold,
£14,000,000 in silver, £1,000,000 in copper; the sum total,
including bullion and bank notes, after the deduction of their
metallic representatives, £134,000,000. (Economist, December, 1868,
July, 1869.) In France, _Vauban_, Dîme royale, 104 (Daire),
estimated the cash money at about 500,000,000 livres, over
750,000,000 francs, with which _Voltaire_, Siècle de Louis, XIV, ch.
30, agrees so far as the year 1683 is concerned. In 1730,
_Voltaire_, assumes the amount to be 1,200,000,000 of the coins of
that time. _Necker_, Administration des Finances, III, 66, estimated
it, in 1784, at 2,200,000,000 livres; _Mollien_, about 1806, at
2,300,000,000. The valuations in Louis Philippe’s time varied from
2,400,000,000 to 2,500,000,000 (Chamber of Deputies, April, 13,
1847), and 4,000,000,000. (_Blanqui._) The valuations of 1870 were,
according to _Wolowski_, 4 milliards; and to _Bonnet_, from 5 to 6
milliards. Compare _Wolowski_, L’Or et l’Argent, 383 ff., Euquête,
42. The German Zollverein is said to have had, at the beginning of
1870 (_Soetbeer_) 480,000,000 or 520,000,000 thalers (_Weibezahn_)
cash money.

In Wirtemberg, _Memminger_, 1840, estimated the resources of the
country at 1,600,000,000 guldens, of which 36,000,000 were cash; and
the yearly gross income at 179,000,000 guldens; so that the money
was 20 per cent. of the latter and 2¼ per cent. of the former. The
annual sales = 226,000,000. Therefore the coin currency must have
circulated on an average between six and seven times in a year. In
the electorate of Hesse, there were _per capita_ 4 thalers, 18
sgrs., 9 hellers, metallic money, and 3 thalers, 9 sgrs., 4 hellers,
paper-money. (_B. Hildebrand_, Statist. Mitth., 1853, 185.) The
amount of money in Naples, in 1840, was estimated at 42,000,000
ducats. (_Scialoja._) It has been estimated that, in 1830, Spain
possessed 1,725,000,000 francs. (_Barrego von Rottenkamp_, 330.)

_ 762 Montanari_, Della Moneta, 52 ff.

_ 763 David Hume’s_ very influential essay on the balance of trade does
not give expression to this error, but he certainly was the occasion
of making a great many of his disciples advocate it. It is related
to the error mentioned in § 123. _Quesnay_, 101 (Daire) saw this
point in a much clearer light. So did _Graumann_, Gesammelte Briefe
vom Gelde (1762), 12 ff.; 73 ff.

764 This is seen, for instance, when paper money is issued, in times
when trade is thriving, and is withdrawn when this conjuncture
ceases.

765 Very well elaborated by _Fullarton_, On the Regulation of
Currencies, 71 ff., 139 ff. Compare, however, _Becaria_, Economica
publica, IV, 4, 27. When England on the occasion of the removal of
the bank restriction in 1821 and 1822, caused £9,520,759 and
£5,356,788 to be stamped, this powerful demand scarcely affected the
gold-agio in Paris. (_M. Chevalier_, Cours, III, 157.) And, on the
other hand, the system of assignats, developed during the first
French Revolution, on so large a scale, had no influence on the
price of silver in the rest of Europe. (_Lord King_, Thoughts on the
Bank Restriction, 1804.) And so, _Tooke_, History of Prices, I, 205,
describes a very large increase of the medium of circulation, after
which the prices of commodities remained unchanged, corn fell,
colonial products rose in price, both as they had done before, and
from causes inherent in the commodities themselves. During the first
years of the bank restriction, 1799-1801, grain rose very rapidly in
price, while all trans-Atlantic products sank. (_Tooke_, I, 232 ff.)
The unusually large importation of wheat from January 1, 1846, to
January 14, 1847, was paid in France by a decrease of the bank
metallic reserve (_encaisse_) to the extent of 172,000,000 francs.
(_M. Chevalier_, Cours, III, 470.) An experienced practitioner in
England is of opinion that an increase of bank notes to the amount
of about £5,000,000 would not raise prices nor increase the tendency
to speculation, but only enlarge the deposits of the bankers. But,
if on the other hand, £5,000,000, by any sudden contingency, were to
be put into the hands of the working classes, this money would, for
the most part, enter immediately into circulation; the price of
commodities would, therefore, rise and continue to rise until that
amount had come into closer fists, as it would after some time.
(_Tooke_, III, 156 ff., II, 323.)

766 This explains the high price of gold in Farther Asia, which was
formerly separated from America, the principal source of supply of
the precious metals, by a journey around the earth, the then usual
course of the world’s trade.

The precious metals are generally higher in country places than in
large cities, and in the interior than on the sea-coast. Since the
public highways etc. in Germany have been so much improved, the
difference in the value of money in upper and lower Germany has
almost disappeared. (_Rau_, in the Archiv der polit. Oek., III,
338.)

767 Happy beginning of this doctrine in _Hume_, On the Balance of Trade.
Further, _Thornton_, The Paper Credit of Great Britain, ch. 11.
_Adam Smith_, on the other hand, claims that gold and silver,
because they are costly superfluities are uniformly paid most dearly
for, in the richest countries. (Wealth of Nations, I, ch. 11, 3:
Digr.)

768 Similarly in China, and even in Upper Egypt, the China, so to speak,
of antiquity! Compare _Herodot._, II, 112 ff; _Homer_, Od., IV, 354
ff. The religion of the Egyptians prescribed to them a mode of life
which was scarcely practicable in foreign parts. They were
systematically inspired with a horror for everything foreign. They
had a strong antipathy for salt, fish and pilots. In Egyptian
mythology, Osiris represents the Nile, Typhon the desert and the
sea! (_Plutarch_, De Iside, 32.)

769 The other party, of course, makes a profit also. He is in a better
condition than if he wished to produce the desired commodity in his
own country.