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• Translator's Preface
• Section I.: Preliminary Observations.
• Chapter I.: The Question Stated
• Chapter II.: Preliminary Observations On the Rise of Prices Which Has Characterised the Last Few Years.
• Section II.: An Appeal to Some of the Fundamental Notions Upon the Nature and Characteristics of Money.
• Chapter I.: What We Ought to Understand By Value and Price.—twofold Definition of Money.—the Standard Or Fineness of Money.
• Chapter II.: Of the Meaning of the Word Standard.— the Metal-standard Is That From Which Is Derived the Monetary Unit.—the Two Ideas Standard and Monetary Unit Imply Each the Other.
• Chapter III.: Of the Character of Exchanges As Affected By the Invention of Money —how the Rise and Fall of the Precious Metals Are Manifested In the Course of Trade.—phenomena of the Rise and Fall In Commodities.
• Chapter IV.: On the Possibility of Conferring the Quality of Standard Upon Two Metals At Once.
• Chapter V: Of the Meaning of Certain Words Specially Applicable to Money and the Precious Metals.—price, Value, Premium, Dearness, Cheapness
• Section III.: Of the Present Production of Gold and Its Outlet.
• Chapter I.: Of the Increase In the Present Production of Gold As Compared With the Past —the Extended Coinage of Gold Which Has Followed.
• Chapter II.: Diminished Coinage of Silver In France—gold Is Already At a Discount In Comparison With Silver.
• Chapter III.: Extraordinary Exportation of Silver From the Civilised Countries of the Western World Towards India and China —to What Extent It Is Likely to Continue.
• Chapter IV.: France Serves Temporarily As a Parachute to Retard the Fall of Gold.
• Chapter V.: Whether the Extraordinary Production of Gold Ought to Be Considered As an Ephemeral Accident.—the Crushing of the Quartz Veins —mines In Siberia and Elsewhere.
• Section IV.: On the New Outlet That May Be Expected For the Production of the New Gold Mines, and Whether It Will Be In Proportion to the Extent of This Production.
• Chapter I.: Of the Outlet Afforded By Those Countries Which At Present Have Evidently an Insufficient Proportion of Metal In Their Currencies.
• Chapter II.: Of the Increase of Gold Money Which May Arise From the Development of Business, and the Increase of Population.—of Wear and Tear.—of Hoarding.—of Shipwrecks.
• Chapter III.: On the Employment Which Habits of Luxury May Offer to the Gold of the New Mines.
• Chapter IV.: Conclusion of the Preceding Chapters.—the Fall of Gold Very Probable, If Not Inevitable, In Relation to All Other Commodities.
• Section V.
• Chapters I. to V.: On the Part Assigned to Gold In the Monetary Legislation of France.
• Section VI.: Consequences of the Fall In the Value of Gold.
• Chapter I.: A General Distinction Between Those Private Incomes Which Will, and Those Which Will Not Be Affected. of a Certain Collective Loss Which the People of France Will Suffer.
• Chapter II.: Of the Sufferings and Difficulties Which Will Accompany the Transition.
• Chapter III.: On the Gain Which Would Result to Certain Classes of Persons, and to Society, From the Fall In Gold. the Saving to the State From the Payment of the Dividends On the Public Debt.
• Section VII.: Of the Measures to Be Taken to Avert the Evil Effects of the Fall of Gold.
• Chapter I.: Case of a State Like England, Where Gold Is the Standard, and Where There Is No Other Money But Gold.
• Chapter II.: Case of a State Such As France, Where There Is a Silver Standard, But Also a Gold Currency.
• Chapter III.: The Measure Here Recommended Is a Necessary Complement of the Law of Germinal, Year XI.
• Chapter IV.: On Some Inconveniences Inherent In the Combination, Respecting a Gold Currency, Recommended In This Work.
• Chapter V.: Of a Plan Recommended For Maintaining the Parallel Circulation of Silver and Gold.
• Chapter VI.: Of the Resolutions of a Commission Appointed By the Minister of Finance In Mdccclvii.
• Chapter VII.: Of Various Acts Which the Legislation of the Ancient Regime Upon Money Treated As Crimes, and With Regard to Which Some Persons of Our Day Propose to Establish Penalties. —selecting, and Melting; Trade In Coins; Exportation.
• Chapter VIII.: Of a Different Solution Which Has Been Recommended, and Which Would Consist In the Adoption of a Gold Standard.
• Chapter IX.: Appreciation of the System Which Consists In Adjourning Indefinitely the Legislative Solution.

CHAPTER I.

what we ought to understand by value and price.—twofold definition of money.—the standard or fineness of money.

In order to clear the ground as much as possible, it may be well, before entering further upon our task, to call attention to some fundamental notions upon the subject of money, which may be found more or less ably expounded in almost every treatise upon political economy. I repeat them here, however, that I may spare such of my readers as have not these writings fresh in their recollection, the trouble of referring to some special work for information.*

Gold and silver are articles of commerce, that is to say, objects having relations to our wants, and which are bought and sold. Like all other commodities, they have their own peculiar value for which they are in request; and this demand, arising from their utility, combined with the circumstances of their production, and particularly of their quantity, determines their value.

Let it here be observed that value is a word the meaning of which is relative, inasmuch as the attribute to which it relates always implies a comparison. If I say that meat is worth twice as much as bread, I establish, a relation between these two articles; and in thus expressing myself I compare meat with bread.

When we speak of the value of an object, we ought, for the sake of a rigorous precision in expressing our meaning, to point out the other object with which we compare it. It is true, that very often it is understood that we compare it with the generality of other commodities;* or pretty frequently, indeed, it is the price that is meant.

The price of a certain thing is its value in relation to a substance specially designated, that is to say, to the material of which money is made. Thus, whilst in ordinary language we often confound these two words, value and price, and use them as synonymous terms, they have in reality a distinct meaning. Both have a relative sense; but value is a more general and indeterminate expression, or to use a better word, more vague; price is more special, and has a meaning perfectly precise.*

Money is a certain commodity out of which we create an instrument that serves, in exchanges, as a common measure of value, because it is with it that, in transactions, all other commodities are compared. But it is not merely & measure; it figures in exchanges in another capacity, that of a material recompense or equivalent. The twenty francs with which a hectolitre of wheat can ordinarily be bought, and which are also at the present moment the price of a hectolitre of common wine in many departments, give me the measure of the value of the wheat and wine, as compared with other commodities of which the price is known; but they do more, they serve, at the moment of the transaction, and in the market where it takes place, as an equivalent for the hectolitre of wheat or the hectolitre of wine. We must, therefore, guard ourselves from viewing money as simply and purely a representative sign of value, although this meaning is sanctioned by usage in nearly every class of society. Money is not a sign; each piece of money is a certain fixed quantity of a definite fineness, very real and very effective, of the metal of which money is made; and it is no more true to say that the twenty francs are the sign of the hectolitre of wheat or the hectolitre of wine, than it would be to pretend that the hectolitre of wheat or wine is the sign of the twenty francs. The definition of the word money which I have given, namely, that it is at once a measure and an equivalent, is that which is acknowledged by all modern authorities. It is remarkable that it should agree exactly with that which Aristotle has given us.

“It was agreed,” says he, “to give and to receive a substance which, useful in itself, was easily transferred from hand to hand in the ordinary transactions of life; it was iron, for instance, or silver, or some other substance of which the size and weight were in the first place determined, and on which, to escape from the inconvenience of continual measurings, a particular stamp was affixed as a sign of its value,”*

From the moment that man forms a society—and how can we conceive it otherwise?—money becomes necessary to him. The division of labour, by which the sociability, as well as the different aptitudes, of mankind is manifested, has existed ever since a few individuals were grouped together, and it has been developed in proportion to the progress of civilisation. It subjects man to the necessity of exchanging, incessantly, the material products of his labour, or the services which he is in a position to render, against the productions and the services of others. If money did not exist, this exchange could only be carried on by barter. The man who had harvested his corn, and was in want of a pair of shoes, would be obliged to seek a shoemaker who had not supplied himself with corn, and was willing to deal with him. and even when he had found one, he would have had to bargain with him as to the proportionate value at which the article of clothing he wanted, and the corn he desired to sell, ought to be exchanged. From the moment when, among all kinds of merchandise, one article has been selected to serve as a standard by which the relative prices of all others may be measured, in other words where money is used, transactions become simplified and facilitated,” In a system of barter,” says M. Eoscher,* “how difficult it would be to find exactly the man in a condition to be able to supply our wants, and at the same time to have occasion for our superfluities! How much more rarely would it happen that the want and the superfluity met each other in equal proportions, that, for example, the manufacturer of nails, who wished to barter his goods for a cow, should find a grazier who had occasion for as many nails as would pay for a cow,” Again, says the same writer:—” Under this system, the strongest party, in an economical sense, would, in every bargain, enjoy an advantage much greater than he possesses at present; the buyer of bread, for instance, might be half-starved before he came to terms with a baker upon the price of the articles he had to offer him in exchange,”

When once the use of money is adopted, the grower of corn exchanges his product for a certain quantity of money which is its price, and with this money he afterwards goes in quest of any other commodity for which he has occasion to those who make it the object of their industry. At first view it might seem that the use of money complicates transactions, inasmuch as it necessitates two exchanges, where otherwise there would be but one; but, in truth, its use is of enormous advantage, and we should take an immense step backwards in civilisation if we were to return to barter. It has been wisely said that there is no machine which economises labour like money, and its adoption has been likened to the discovery of letters.

Gold and silver were not, in the earliest stages of society, invested with the attributes of money. In their primitive communities men resorted for a medium of exchange to those objects which were more immediately at their command, as, for example, cattle. But almost from the very dawn of civilisation it was some kind of metal, and especially copper, which served the purposes of money. In proportion as society advanced, first silver, and then gold, became the instrument of exchange, and it may be said that, from time immemorial, these metals have been chosen as the preferred commodities, the constant intermediaries in transactions. For this purpose, they offer a combination of advantages which no other product possesses to anything like the same extent.

1. In the first place, these commodities are very much prized by mankind. 2. Independently of the facility with which they can be coined, they are more portable than almost any other products, that is to say, within the same weight and volume they comprise a greater relative value. 3. Of all bodies they are the most unalterable. 4. They are completely homogeneous, and being substances simple in their nature, their verification is easy. It is even not difficult to ascertain that which is called the standard, in other words the degree of fineness, or the proportion which each ingot contains of pure metal exempt from all alloy. 5. They are very easily divided, so as, in case of need, to represent small values without thereby impairing any of their advantages; for the detached pieces can be reunited almost without expense; and, on the other hand, they can be separated very cheaply from most of the combinations into which they can enter with other substances, and particularly so from their union with other metals. 6. They are admirably adapted for receiving a delicate impression, which they faithfully preserve, and this, added to their sonorous quality, affords an almost infallible test by which to recognise with readiness their value. Finally, they are less liable than other commodities to the influence of those causes which might tend to lower or to raise their value. Undoubtedly, their value varies in comparison with other goods, but this almost always arises from causes belonging to these, and is not attributable to motives originating with themselves.

Originally, in the operations of buying and selling, the quantity of gold or silver delivered by the buyer of a commodity to the seller was weighed by the parties. Afterwards, to simplify and shorten transactions, certain discs of unvarying size were invented, containing quantities of metal fixed by law, which, by being struck or moulded, received an official stamp serving for a public voucher of the weight of fine metal contained in each piece of money. For a long succession of ages, all the nations of the West have adopted this system in the constitution of their currency, whilst, on the contrary, the most populous and the most civilised nation of the East has remained faithful to the old system of weighing,—the same as was practised by the patriarch Abraham, when he paid for his burial ground; by King Priam, when he ransomed the body of his son Hector from Achilles; and by the ancient Egyptians. Nevertheless, in China, of which I was about to speak, to give to the operations of commerce a security which the process of weighing in the time of Abraham did not sufficiently afford, since there was no assurance there that the pieces of metal put into the scales were absolutely pure, or of a known degree of purity, another process has been added. The metal is tested by an assayer, by which means the quality as well as quantity of each ingot or fragment is known. In a word, in every commercial transaction in China, the metal counts both for its quantity and fineness. The various pieces of silver which there pass from hand to hand are ingots of a certified weight and fineness like our own money; but there is this difference, that with the Chinese the certificate of quality and quantity emanates from individuals, whereas in Europe it comes from the government, and, moreover, in China the weight and standard are variable from ingot to ingot, whilst in every country of Europe they are fixed for each description of coin.

Let us insist upon this truth, which may be given for another definition of money—a definition that can hardly be kept too much in mind, for it carries with it the refutation of many sophisms which have borne disastrous fruits in times past, and which some persons would still like to revive from the oblivion in which they appeared to be buried: pieces of money are merely ingots of uniform weight and fineness for each description of coin, and certified as such by government, by means of an impression which it stamps upon them. They are so much and no more. Government places its mark on them in order to attest their uniformity, but there its mission and its duty end. The form which it gives them, the effigies and inscriptions with which they are impressed, are of precisely the same character as the marks stamped upon silver plates or spoons, and which are a guarantee* that the government has verified its fineness.

[*]We know that France is of all the countries of Europe, or of Christendom, that in which political economy is the least taught. There are but two professorships: the one public, that of the College of France, and the other restricted to a special class of functionaries attached to the school of the Board of Works. Everywhere else, whether in Europe or America, each university has at least one chair of political economy; this will be found equally in Russia and in England, in Prussia and in Spain. The little kingdom of Portugal supports three professors of political economy. In France, instead of extending, we seem to be curtailing this useful branch of instruction. The chair of industrial economy, which was filled with such success by M. Blanqui, at the Conservatoire des Arts et Métiers, and which, as its title indicates, was devoted to but one branch of political economy, has been suppressed since the death of that brilliant professor. Another chair has been founded in its place, but it has been, by an accident no doubt, filled by a person whose chief claim to public attention consists in the propensity he has shown to throw insults on political economy and those who study it.

[*]It is this meaning which must be nearly always accepted in the course of the following arguments.

[*]On the subject of the true meaning to be attached to the word value, I entreat the reader to consult a work of the highest order, for which we are indebted to one whose premature loss the student of political economy will long deplore,—I allude to the “Harmonies Economiques" of Frederic Bas-tiat.

[*]Aristotle, Politics, Book I., Chap. III —This definition of the word money is that which Lord Liverpool has given in his treatise “On the Coins of the Realm,” He probably derived it from a work by Mr. Harris, Assayer General of the Mint, which appeared in two parts in 1757 and 1758. This valuable pamphlet, entitled “Essay upon Money and Coins,” has just been reprinted under the auspices of the London “Political Economy Club,” in a volume of old tracts upon money, with a preface by Mr. McCulloch, whose eminent qualifications are known to all political economists. (For the definition of money, by Mr. Harris, see p. 370 of the above volume.)

[*]Principles of Political Economy; translated, with notes, by M. Wolowski, Book II., Chapter III.

[*]It has been the custom for governments to levy a tax on plate and jewellery, in addition to the cost of affixing these stamps; but for the convenience of commerce it is necessary that nothing of the kind should take place in the case of money, and all the civilised states of our day recognise this principle and act upon it