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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 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.

There is another point of view in which exchanges have been to a certain extent modified by the invention of money, and which it may not be unnecessary here to notice; it has permitted the postponement of payments which were almost always made promptly under the system of barter. Thus the door has been opened to all those transactions in which credit performs its part. In return for what may have been received in the form of a variety of goods, or of different services, a party who, indeed, may be a city, a county, or a state, is enabled to bargain to pay, after a certain interval, a number, fixed at the time, of pieces of money, that is to say of metal. In many cases, but particularly where the contracting party was, as has been said, a city, a county, or a state, the engagement to pay has taken the form of a rent or annual interest, consisting of a quantity of metal exactly agreed upon. In such a case, the fluctuations in value which, owing to time and circumstances, the metal of which money is made might undergo, would possibly affect seriously the interests of the debtor or creditor.

If the value of the metal declined, the creditor would suffer a loss upon the quantity he had to receive; if, on the contrary, it rose, the debtor would have to pay more than he had calculated upon. In this manner it would seem that the chances between debtor and creditor were about equal. There is, however, a general cause which forbids a perfect equality. Doubtless we are correct in saying that the precious metals, of which money is made, are liable to fluctuations, which as often raise as depress them in value, although in this respect they possess a certain relative stability which we vainly seek in any other products of human industry. But there is a general cause tending to produce a depreciation, which, by its continuous action, prevails finally over the accidental causes which create fluctuations in their value. I speak of the unceasing progress of the arts. The working of the mines is ever an improving industry, and the same law of progress applies to the metallurgic processes for separating the metals from the rude ore which is extracted from the bowels of the earth. If, therefore, the mines continued always of the same richness, and there were no decided disturbance in the relation between supply and demand, the cost price of a given weight of gold or silver would constantly diminish with the lapse of ages;—and since, at least with a great and fluctuating disproportion between the supply and demand, the value of an article varies pretty nearly in conformity with its cost price, the value of gold and silver should, under this influence, experience a constant decline. Thence springs a process of depreciation obviously disadvantageous to the creditor, which operates gradually, or rather in a series of rebounds, but against which there is no safeguard from the time contracts are payable in gold and silver,* a custom now all but universal. Here, at least, is a reason why, in a wise spirit of equity, we should preserve for creditors all the favourable chances which legitimately belong to them.

It is rarely that circumstances occur, proper to the two metals of which money is made, which in a marked degree affect their value; they arise from changes in the conditions of their production, and the consequent supply in the market. It cannot be too often repeated that the very rarity of these occurrences is one of the principal reasons why gold and silver are more suited than any other commodities to perform the part assigned to them in commercial exchanges. Still, circumstances of this kind do recur at certain intervals with much violence. The most memorable example that can be cited is that of the discovery of the mines of gold and silver in America. History, however, records a certain number of similar events, regarding which the reader is referred to the works that specially treat of the matter.†

The effects of a rise or fall in the precious metals are displayed in a manner peculiar to themselves, owing to the attribute of money with which they are invested. When it is said that a commodity falls in value, it means that we must give a larger proportion of it than previously to procure in exchange the same quantity of any other article of commerce. The price of that article, whether it be iron, lead, corn, wine, or any other product, excepting the metal or metals of which money is made, falls accordingly; for the price of a thing is its value, specially compared with those metals, or, to express differently the same idea, it is the number of monetary units which it is necessary to give in exchange for a certain weight or volume of another commodity. A diminution in the value of the metal from which money is essentially coined is shown differently, in this respect that its price remains the same; but then the price of all other commodities, without exception, rises if its value compared with itself has fallen, and falls if it has risen. I say that its price as measured by itself remains the same, since, for this metal, specially and exclusively, the price is its value compared with itself. If, for example, the value of silver falls one half, as the monetary unit, the franc consists, in France, of four grammes and a half of silver,* a kilogramme in weight of fine metal will still be worth 222 francs, 22 cents, because one kilogramme contains four grammes and a half, 222 times and a small fraction; but in this case the price of lead, iron, wheat, wine, and all other commodities will be doubled, because, to obtain the same quantity of these articles, it is necessary to give double the quantity of silver.

[*]To meet this, a plan has been recommended, and sometimes put in force, of paying in specified measures of corn instead of gold or silver, where the contract extends over a long period, or where it involves the payment of perpetual rents or annuities. These stipulations have, in some instances, endured for centuries in England, and the annuitants interested have derived great advantage therefrom.

On this subject, Lord Liverpool's treatise may be consulted with advantage. He cites, in particular, some examples of rents payable to colleges at Oxford and Cambridge.—(Page 117, edition of 1805.)

[†]See among others, the Principles of Political Economy, by M. Koscher, translated by M. Wolowski, Vol. I., Book II., Chap. IV., p. 338.

[*]When in the course of this work we speak of a fixed weight of gold or silver, without indicating its degree of fineness, the reader will be pleased to bear in mind that we mean those metals when absolutely pure and free from alloy. It is this which is ordinarily meant by the standard of 1,000 milliemes. We know that the standard of fineness of French coins is 900 milliemes, or nine-tenths, that is to say that they contain one-tenth of alloy.