Front Page Titles (by Subject) Conclusion. - Money and the Mechanism of Exchange
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Conclusion. - William Stanley Jevons, Money and the Mechanism of Exchange 
Money and the Mechanism of Exchange (New York: D. Appleton and Co. 1876).
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From all the above considerations it follows that the only method of regulating the amount of the currency is to leave it at perfect freedom to regulate itself. Money must find its own level like water, and flow in and out of a country, according to fluctuations of commerce which no government can foresee or prevent. The manner in which paper notes may be used to represent and replace part of the metallic currency should be strictly regulated, because otherwise belief in the existence of metallic money is created when there is no such money to warrant the belief. But the amount of money itself can be no more regulated than the amounts of corn, iron, cotton, or other common commodities produced and consumed by a people. It must be allowed, indeed, to be no easy matter to discriminate precisely and soundly between those points at which the legislator must interfere in the management of the currency and lay down a fixed rule, and those points at which perfect freedom must be maintained.
A comparison of our present laws regarding currency and trade, with those which existed in this country from the tenth to the fourteenth century, will show a curious double progress. Many things which our ancestors attempted to regulate by law are now left free by general consent, and other things which they left free, or nearly so, are now strictly regulated. The rates of wages, the price of the quartern loaf, the exercise of various trades, were then the subject of legislation, though we now know that they cannot be properly brought within the scope of legislative control. On the other hand, an endless diversity of weights and measures were formerly used in different parts of the country, and little or no attempt was made to reduce them to any system or precise definition. Almost every important town, too, had its mint in the earlier centuries, and barons and great ecclesiastics often exercised the right of issuing their own money. There are still a very few persons who advocate free coinage; but, by almost general consent, the work of coining metallic money is now, in every civilized country, committed to the care of the state. We provide for a uniform system of coins with the same care that we establish a national system of weights and measures. But while we thus take the greatest care of the metallic currency in one respect, we have utterly abandoned all the futile attempts which were in former centuries made to bring bullion into the kingdom in order to set the mint to work.
We must deal with the paper currency in analogous manner, and regulate it both more and less than hitherto. Private issues should disappear like private mints, and each kingdom should have one uniform paper circulation, issued from a single central state department, more resembling a mint than a bank. The manner of issuing this paper currency should strictly regulated in one sense; the paper circulation should be made to increase and diminish with the amount of gold deposited in exchange for it. At the same time, no thought need be taken about the amount so issued. The purpose of the strict regulation is not to govern the amount, but to leave that amount to vary according to the natural laws of supply and demand. In my opinion, it is the issue of paper representative notes, accepted in place of coin, which constitutes an arbitrary interference with the natural laws governing the variations of a purely metallic currency, so that strict legislative control in one way leads to more real freedom in another. I am quite willing to allow, however, that questions of great nicety and subtlety arise in this subject, and that only in the gradual progress of economic science can they be finally set at rest.