continually interfered with, and not a payment would take place that would not give rise to controversy.”)
[78] W. Jacob, “An Inquiry Into the Production and Consumption of the Precious Metals.” (London, 1831, vol. II., ch. XXVI.)
[79] David Buchanan, “Observations on the Subjects Treated of in Dr.
Smith’s Inquiry on the Wealth of Nations,” etc. (Edinburgh, 1841, p. 3.)
[80] Henry Storch, “Cours d’Economic Politique.” etc., avec des notes par J. B Say. Paris, 1823, tom. IV., p. 179. Storch published his work in French at St. Petersburg. J. B. Say immediately issued a Parisian reprint, supplemented with alleged “notes,” which as a matter of fact contain nothing but commonplaces. Storch (see his “Considerations sur la Nature du Revenue National,” Paris, 1824) took by no means kindly to this annexation of his work by the “prince de la science.”
[81] Plato de Rep. L. II “νόμισμα ξύμβολον τῆς ἀλλαγῆς.” (“Money symbol of exchange.”) Opera omnia, etc., ed. G. Stallbumius, London, 1850, p.
304. Plato develops money only in two capacities―as a measure of value and a token of value, but demands, in addition to the token of value serving for home circulation, another one for trade between Greece and foreign countries. (See also Book V of his Laws.)
τῆς χρείας τὸ νόμισμα γέγονου κατὰ συνθήκην καὶ διὰ τοὔτο τοὔνομα ἔχει νόμισμα. ὅτι οὐ φὐσει ἀλλὰ νόμῳ, καὶ ἐφ’ ἡμῖν μεταβαλεῖν καὶ ποιῆσαι ἄχρηστον.” (“In the satisfaction of wants money became the medium of exchange by agreement. And for that reason it bears the name νόμισμα, because it owes its existence, not to nature, but to law (νόμω), and it is in our power to change it and make it void.”) Aristotle had a far more comprehensive and deep view of money than Plato. In the following passage he beautifully shows how barter between different communities creates the necessity of assigning the character of money to a specific commodity, i. e., one which has itself an intrinsic value. “Ξενικωτέρας γὰρ γενομένης τῆς βοηθείας τῷ εἰσάγεσθαι hὦν ἐνδεεῖς καὶ ἔκπεμπειν ὥν ἐπλέοναζον, ἐξ ἀνάγκης ἡ τοῦ νομίσματος ἐπορίσθη χρῆσις· διὸ πρὸς τὰς ἀλλαγας τοιοῦτόν τι συνέθεντο πρὸς σφᾶς αὐτοὺς διδόναι καὶ λαμβάνειν, δ’ τῶν χρησίμων αὐτὸ ὂν εἶχε τὴν χρείαν εὐμεταχείριστον...οἶον σίδηρος καὶ ἄργυρος κἂν εἴ τι τοιοῦτον ἕτερον”. (Arist. De Republica, (“When the inhabitants of one country became more dependent on those of another, and they imported what they needed and exported the surplus, money necessarily came into use...and hence men agreed to employ in their dealings with each other something which was intrinsically useful and easily applicable to the purposes of life, for example, iron, silver and the like.” Trans, by B. Jowett, “The Politics of Aristotle, Oxford, 1885, p. 16). This passage is quoted by Michel Chevalier, who either has not read Aristotle or did not understand him, to prove that in Aristotle’s opinion currency must consist of a substance having intrinsic value. On the contrary, Aristotle says expressly that money as a mere medium of circulation seems to owe its existence to agreement or law, as is shown by its name νόμισμα, and that in reality it owes its utility as coin to its function and not to any intrinsic use-value of its own. λῆρος εἶναι δοκεῖ τὸ νόμισμα καὶ νόμος παντάπασι, φύσει δ’ οὐδὲν ὅτι μεταθε ενων τε τῶν χρωμένων οὐδενὸς ἄξιον οὐδὲ χρήσιμον πρὸς οὐδὲν τῶν ἀναγκαίων ἑοτί’ (“Others maintain that coined money is a mere sham, a thing not natural, but conventional only, which would have no value or use for any of the purposes of daily life if another commodity were substituted by the users.”) (l. c. sec. 11.)
“This Emperor (of Cattay or China) may dispende ols muche as he wile withouten estymacion. For he despendethe not, nor makethe no money, but of lether empredeth, or of papyre. And when that money bathe ronne so longe that it begynethe to waste, than men beren it to the Emperoure Tresorye, and then they taken newe Money for the old. And that money gothe thorghe out all the contree, and thorge out all his Provynces...They make no money neither of Gold nor of Sylver,” and “therefore,” thinks Mandeville, “he may despende ynew and outrageously.”
[84] Benjamin Franklin, “Remarks and Facts Relative to the American Paper Money,” 1764, p. 348, l. c. “At this very time, even the silver money in England is obliged to the legal tender for part of its value; that part which is the difference between its real weight and its denomination. Great part of the shillings and sixpences now current are by wearing become 5, 10, 20, and some of the sixpences even 50 per cent., too light. For this difference between the _real_ and the _nominal_ you have no intrinsic value. You have not so much as paper, you have nothing. It is the legal tender, with the knowledge that it can easily be repassed for the same value, that makes three-pennyworth of silver pass for a sixpence.”
retained, although the bullion were gone...might not nevertheless...a circulation of commerce (be) maintained?”
[86] “Non solo i metalli ricchi son segni delle cose...; ma Genovesi, “Lezioni di Economia Civile,” 1765. p. 281 in Custodi, Parte Mod. 1. VIII.) (“Not only are precious metals tokens of things, but vice versa, things are tokens of gold and silver.”)
[87] Petty. “Gold and silver are universal wealth.” (Political [88] E. Misselden. “Free Trade, or the Means to Make Trade Flourish,” etc., London, 1622. “The natural matter of Commerce is Merchandise, which Merchants from the end of Trade have stiled Commodities. The Artificiall matter of Commerce is Money, which hath obtained the title of sinewes of warre and of State...Money, though it be in nature and time after Merchandise, yet forasmuch as it is now in use become the chiefe.” (p. 7.) He compares his own treatment of merchandise and money with the manner of “Old Jacob, who, blessing his Grandchildren, crost his hands, and laide his right hand on the yonger, and his left hand on the elder.” (l. c.) Boisguillebert, “Dissert. sur la Nature Des Richesses,” etc. “Voilà donc l’esclave du commerce devenu son maître...La misère des peuples ne vient que de ce qu’on a fait un maître, ou plutôt un tyran de ce qui était un esclave.” (p. 395, 399.)
[89] Boisguillebert, l. c. “On a fait une idole de ces métaux (l’or et l’argent) et laissant là, l’objet et l’intention pour lesquels ils avaient été appelés dans le commerce, savoir, pour y servir de gages dans l’échange et la tradition réciproque, on les a presque quittés de ce service pour en former des divinités, aux quelles on a sacrifié et sacrifie toujours plus de biens et de besoins précieux et même d’hommes, que jamais l’aveugle antiquité n’en immola à ces fausses [90] In the first halt of the perpetuum mobile, _i. e._, in the suspension of the function of money as a medium of circulation, Boisguillebert at once suspects its independent existence from commodities. Money, he says, must be “in constant motion, it can be money only by being mobile, but as soon as it becomes motionless all is lost.” (“Dans un mouvement continuel, ce qui ne peut être que tant qu’il est meuble, mais sitôt qu’il devient immeuble tout est perdu.”
“Le Détail de la France,” p. 231.) What he overlooks is that this halt constitutes the condition of its movement. What he really wants is that the value form of commodities should appear merely in the transitory form of their change of matter, but should never become an end in itself.
[91] “...The more the stock...is...encreased in wares, the more 269. Transl.)
[94] Francois Bernier, “Voyage contenant la description des états du [95] Dr. Martin Luther, “Bücher vom Kaufhandel und Wucher,” 1524.
In the same passage Luther says: “Gott hat uns Deutsche dahin geschleidert, dass wir unser gold und silber müssen in fremde Länder stossen, alle Welt reich machen und selbst Bettler Bleiben. England sollte wohl weniger Goldes haben, wenn Deutschland ihm sein Tuch liesse, und der König von Portugal sollte auch weniger haben, wenn wir ihm die Würze liessen. Rechne Du, wie viel eine Messe zu Frankfurt aus Deutschen Landen gefürt wird, ohne Not und Ursache: so wirst Du Dich wundern, wie es zugehe, dass noch ein heller in Deutschen Landen sei. Frankfurt ist das Silber-und Goldloch, dadurch aus Deutschem Lande fleisst, was nur guillet und wächst, gemünzt oder geschlagen wird bei uns; wäre das Loch zuegestopft, so dürft man itzt der Klage nicht hören, die allethalben eitel Schuld und kein Geld, alle Land und Städte ausgewuchert sind. Aber lass gehen, es will doch also gehen; wir Deutsche müssen Deutsche bleiben! wir lassen nicht ab, wir müssen denn.”
In the work quoted above Misselden wishes to retain the gold and silver at least within the confines of Christendom: “The other forreine remote causes of the want of money, are the Trades maintained out of Christendome to Turky, Persia and the East Indies, which trades are maintained for the most part with ready money, yet in a different manner from the trades of Christendome within itselfe. For although the trades within Christendome are driven with ready monies, yet those monies are still contained and continued within the bounds of Christendome. There is indeede a fluxus and refluxus, a flood and ebbe of the monies of Christendome traded within it selfe; for sometimes there is more in one part of Christendome, sometimes there is lesse in another, as one Country wanteth and another aboundeth: It cometh and goeth, and whirleth about the Circle of Christendome, but is still contained within the compasse thereof. But the money that is traded out of Christendome into the parts aforesaid is continually issued out and [96] “A nummo prima origo avaritiae...haec paulatim exarsit rabie quadam, non jam avaritia, sed fames auris.” (Plin., Hist. Nat., l.
XXXIII., c. XIV.)
(“From money first springs avarice...the latter gradually grows into a kind of madness, which is no more avarice, but a thirst for gold.”)
[97] Horace thus understands nothing of the philosophy of hoarding when he says (Satir. l. II., Satir. III): “Siquis emat citharas, emptas comportat in unum, Nec studio citharae nec musae deditus ulli; Si scalpra et formas non sutor; nautica vela Aversus mercaturis; delirus et amens, Undique dicatur merito. Qui discrepat istis, Qui nummos aurunque recondit nescius uti Compositis metuensque velut contingere sacrum?”
“If one buys fiddles, hoards them up when bought, Though music’s study ne’er engaged his thought, One lasts and awls, unversed in cobbler’s craft, One sails for ships, not knowing fore from aft, You’d call them mad: but tell me, if you please, How that man’s case is different from these, Who as he gets it, stows away his gain, And thinks to touch a farthing were profane?”
(Transl. by John Covington, London, 1874, p. 60.)
Mr. Senior understands the question much better: “L’argent paraît être la seule chose dont le désir est universel, et il en est ainsi parceque l’argent est _une richesse abstraite_ et parceque les hommes, en la possédant peuvent satisfaire à tous leur besoins de quelque nature tirés de leçons edites et inedites de N. W. Senior, par Comte Jean Arrivabene,” Paris, 1836, p. 221. The corresponding passage in the English edition of his Political Economy, London, 1863, is to be found on p. 27. Translator.) So does Storch: “Since money represents all other forms of wealth, it is only necessary to accumulate it to provide for oneself all kinds of wealth existing in the world.” (l. c., v. 2, p. 134.)
[98] To what extent the inner man of the commodity owner remains unchanged, even when he has become civilized and has developed into a capitalist, is shown by the example of a London representative of a cosmopolitan banking house who adopted as a fitting coat of arms for his family a £100,000 bank note, which he had hung up in a glass frame.
The point here is in the mocking contempt of the note for circulation.
[99] See the passage from Xenophon, quoted below.
[101] “In times of great agitation and insecurity, especially during internal commotions or invasions, gold and silver articles are rapidly converted into money; whilst during periods of tranquility and prosperity, money is converted into plate and jewelry.” (l. c., v. 2, p. 357.)
[102] In the following passage Xenophon develops money in its specific forms of money and hoard: “ἐν μόνω τούτῳ ὦν ἐγω οἴδα ἔργων οὐδὲ φθονεῖ οὐδεις τοῖς ἐπισκευαζομένοις...ἀργυρῖτις δὲ ὅσω ἄν πλείων φαίνηται, καὶ ἀργύριον πλεῖον γίγνηται, τοσούτῳ πλείονες ἐπί τὸ ἔργον τοῦτο ἔρχονται...καὶ γὰρ δὴ ἔπιπλα μὲν ἐπειδὰν ἰκανά τις κτήσηται τῇ οἰκίᾳ, οὐ μάλα ἔἱτι προσωνοῦνται· ἀργύριον δὲ οὐδείς πω οὔτω πολὺ ἐκτήσατο ὥστε μὴ ἔτι προσθεῖσθαι, ἀλλ’ ἤν τισι γένηται παμπληθὲς, τὸ περιττεῦον κατορύττοντες οὐδὲν ἥττον ἥδονται ἥ χρώμενοι αὐτᾠ· καὶ μὲν ὅταν γε εὗ πράττωσιν αἰ πόλεις ἰσχυρῶς, οἰ ἄνθρωποι ἀργυρίου δέονται. Οἰ μὲν γὰρ ἄνδρες ἀμφι ὅπλα τε καλὰ καὶ ἵππους ἀγαρθοὺς καὶ οἰκίας καὶ κατασκευὰς μεγαλοπρεπεῖς βοὐλονται δαπανᾶν, αἰδὲ γυναῖκες εἰς ἐσθῆτα πολυτελῆ καὶ χρυσοῦν κόσμον τρέπονται· ὅταν δε αὔ νοσήσωσι πόλεις ἠ ἀφορίαις καρπῶν ῆ πολέμω ἔτι καὶ πολὺ μἄλλον τῆς γῆς ἀρυοῦ γιγνομενης καὶ εἰς ἐπιτήδεια καὶ εἰς ἐπικουροὺς νομίσματος δέονται.” (Xen. de Vectigalibus, c. IV.)
(“Of all operations with which I am acquainted, this is the only one in which no sort of jealousy is felt at a further development of the industry...the larger the quantity of ore discovered and the greater the amount of silver extracted, the greater the number of persons ready to engage in the operation...No one when he has got sufficient furniture for his house dreams of making further purchases on this head, but of silver no one ever yet possessed so much that he was forced to cry “Enough.” On the contrary, if ever anybody does become possessed of an immoderate amount he finds as much pleasure in digging a hole in the ground and hoarding it as an actual employment of it...When a state is prosperous there is nothing which people so much desire as silver. The men want money to expend on beautiful armor and fine horses, and houses and sumptuous paraphernalia of all sorts. The women betake themselves to expensive apparel and ornaments of gold. Or when states are sick, either through barrenness of corn and other fruits, or through war, the demand for current coin is even more imperative (whilst the ground lies unproductive), to pay for necessaries or military aid.” Transl. by H. G. Dakyns, London, 1892, v. 2, Revenues, p. 335-336.) Aristotle develops in Book I., ch. 9 of his Politics the two opposite movements of circulation. C-M-C and M-C-M, calling them “economics” and “chrematistics” respectively. The two forms are represented by the Greek tragedian Euripides as Sikn (right) and Keodos (profit).
[103] Of course, capital also is advanced in the shape of money, and the money thus advanced may be advanced capital, but this point of view does not fall within the horizon of simple circulation.
[104] “The difference between the means of purchase and the means of payment” is emphasized by Luther.
[105] Mr. MacLeod, in spite of his doctrinaire conceit about definitions, fails so utterly to grasp the most elementary economic relations that he tries to deduce the very origin of money from its crowning form, viz., that of a means of payment. He says among other things that since people do not always need each other’s services at the same time, and not to the same extent, “there would remain over a certain difference or amount of service due from the first to the second―debt.” The owner of this debt needs the services of a third person, who does not directly need those of the second, and “transfers to the third the debt due to him from the first. Evidence of debts changes so hands―currency...When a person received an obligation expressed by metallic currency, he is able to command the services not only of the original debtor, but of the whole of the industrious community.” (MacLeod, “Theory and Practice of Banking,” etc., London, [106] Bailey, l. c., p. 3. “Money is the general commodity of contracts, or that in which the majority of bargains about property, to be completed at a future time, are made.”
[107] Says Senior (in his Lectures, published by Comte Arrivabene, l.
c., p. 117): “Since the value of everything changes within a certain period of time, people select as a means of payment an article whose value changes least and which retains longest a given average ability to buy things. Thus, money becomes the expression or representative of values.” On the contrary: just because gold, silver, etc., have become money, i. e., the embodiment of independently existing exchange value, they become the universal means of payment. When the consideration as to the stability of the value of money mentioned by Mr. Senior comes into play, i. e., in periods when money asserts itself as the universal means of payment through the force of circumstances, then is just the time when fluctuations in the value of money are discovered. Such was the time of Elizabeth in England, when Lord Burleigh and Sir Thomas Smith, in view of the manifest depreciation of the precious metals, put through an act of parliament which obliged the universities of Oxford and Cambridge to stipulate the payment of one-third of their ground rents in wheat and malt.
[108] Boisguillebert, who would stem the development of bourgeois relations of production and violently attacks the bourgeois personally, has a soft heart for those forms of money in which it appears only ideally or transiently. Thus he speaks first of the medium of circulation and next of the means of payment. What he does not see is the direct transition of money from its ideal to the material form, since the hard cash is latently present in the ideal measure of value.
That money is but another form of commodities, he says, is shown by wholesale trade, in which exchange takes place without the intervention of money, after “les marchandises sont appreciés.” (“Le Detail de la [110] “Il danaro ammassato supplisce a quella somma, che per essere attualmente in circolazione, per l’eventuale promiscuità de’ commerci si allontana _e sorte della sfera della circolazione medesima_.”
(“The accumulated money supplements that amount which, in order to be actually in circulation and to meet all possible perturbations of trade, retires from that sphere of circulation.” G. R. Carli, note Custodi’s l. c.)
diffusa per tutto il globo terrestre la communicazione de’ populi insieme, che puo quasi dirsi esser il mondo tutto divinuto una sola citta in cui si fa perpetua fiera d’ogni mercanzia, e dove ogni uomo di tutto cio che la terra, gli animali e l’umana industria altrove producono, puo mediante il danaro stando in sua casa provedersi e godere. Maravigliosa invenzione.” (“The communication of nations among themselves is so widely extended all over the globe that it may be almost said that the entire world has become one city in which a perpetual fair of merchandise is held and where every man may by means of money acquire and enjoy, while staying at home, all that the earth, the animals and human industry produce elsewhere. Marvelous invention.”)
[112] I metalli han questo di proprio e singulare che in essi soli tutte le ragioni si riducono ad una che è la loro quantità, non avendo ricevuto delle natura diversa qualità nè nell’interna loro 130.) (“Metals have this singular property, that everything in them is reduced to one consideration, viz., that of quantity, since they are not endowed by nature with any differences in quality either in their internal structure or in their external form and shape.”)
[113] De Orbe Novo. “O, happy coin, which furnishes mankind with a pleasant and useful beverage and keeps its possessors immune from the hell-born pest of avarice, since it can not be either buried or preserved long.”
[114] In 760 a multitude of poor people emigrated to the south of Prague to wash the gold sand found there, and three men were able to extract three marks of gold a day. As a result of that the run on the “diggings” and the number of hands taken away from agriculture became so great that the country was visited by a famine the following year. See M. G. Körner, “Abhandlung von dem Alterthum des Böhmischen [115] So far the Australian and other discoveries have not affected the ratio of the values of gold and silver. The assertions to the contrary of Michel Chevalier are worth as much as the Socialism of this ex-St.
Simonist. The quotations of silver on the London market prove, however, that the average gold price of silver during 1850-1858 is not quite 3 per cent. higher than the price during 1830-1850. But this rise in price is accounted for simply by the Asiatic demand for silver. In the course of the years 1852-1858 the price of silver was changing in certain years and months only with a change in this demand, and in no case with the importation of gold from the newly discovered sources.
The following is a summary of the gold prices of silver on the London market.
PRICE OF SILVER PER OUNCE.
1858 61-5/8 pence [116] “Gold is a wonderful thing! Whoever possesses it, is master of all that he desires. By means of gold even admission to Heaven may be gained for souls.” (Columbus in a letter from Jamaica in 1503).
[117] The slowness of the process was admitted by Hume, although it but little agrees with his principle. See David Hume “Essays and Treatises prices do not so much depend on the absolute quantity of commodities, and that of money, which are in a nation, as on that of the commodities, which can or may come to market, and of the money which circulates. If the coin be locked up in chests, it is the same thing with regard to prices, as if it were annihilated; if the commodities be hoarded in magazines and granaries, a like effect follows. As the money and commodities in these cases, never meet, they cannot affect each other. The whole (of prices) at last reaches _a just proportion with the new quantity of specie which is in the kingdom_.”
[123] See _Law_ and _Franklin_ about surplus value which gold and silver are supposed to acquire from their function of money. Also _Forbonnais_.
[124] This fiction is literally advanced by Montesquieu. [The passage from Montesquieu is quoted by Marx in his Capital, v. I. Part 1, Ch.
III, section 2, b, foot-note. Note by K. Kautsky to 2nd German edition].
London edition. Translator).
400. Transl.).
[128] “The additional coin will be locked up, or converted into plate...As for the paper money, so soon as it has served the first purpose of supplying the demand of him who borrowed it, it will return upon the debtor in it and become realized...Let the specie of a country, therefore, be augmented or diminished in ever so great a proportion, commodities will still rise and fall according to the principles of demand and competition, and these will constantly depend upon the inclinations of those who have property or any kind of equivalent whatsoever to give, but never upon the quantity of coin they are possessed of...Let it (namely, the quantity of specie in a country) be ever so low, while there is real property of any denomination in the country, a competition to consume in those who possess it, prices will be high, by the means of barter, symbolical money, mutual prestations and a thousand other inventions...If this country has a communication with other nations, there must be a proportion between the prices of many kinds of merchandize there and elsewhere, and a sudden augmentation or diminution of the specie, supposing it could of itself operate the effects of raising or sinking prices, would be restrained in its operation by foreign must be in proportion to the industry of the inhabitants producing the commodities which come to market...If the coin of a country, therefore, falls below the proportion of the price of industry offered to sale, inventions, like symbolical money, will be fallen upon, to provide for an equivalent for it. But if the specie be found above the proportion of industry, it will have no effect in raising prices, nor will it enter into circulation: it will be hoarded up in treasures...Whatsoever be the quantity of money in a nation, in correspondence with the rest of the world, there never can remain in circulation, but the quantity nearly proportional to the consumption of the rich and to the labour and industry of the poor inhabitants,” and this proportion is not determined “by the quantity of money actually in the country” (l.
c. p. 403-408 passim.) “All nations will endeavor to throw their ready money, not necessary for their own circulation, into that country where the interest of money is high with respect to their own.” (l. c. v. 2.
p. 5). “The richest nation in Europe may be the poorest in circulating specie.” l. c., v. 2, p. 6. For the polemics against Steuart see Arthur Young. [In his foot-note in Capital, v. 1, Part 1, ch. III., section 2, b. p. 62, Humboldt ed., Marx says: The theory of Hume was defended against the attacks of J. Steuart and others, by A. Young, in his “Political Arithmetic,” London, 1774, in which work there is a special chapter entitled “Prices depend on quantity of money.” Note by K.
Kautsky to 2nd German edition].
expression “money of the society” which stands for home or national money, as socialist money, which is perfectly meaningless and makes a Socialist of John Law. (See the first volume of his History of the French Revolution).
[130] Maclaren, l. c. p. 43 seq. Patriotism led Gustav Julius, a German writer who met with very early death, to hold up old Büsch as an authority as against the Ricardian school. Honest Büsch rendered Steuart’s elegant English into Hamburg Platt and by trying to improve upon the original spoiled it as often as he could.
[131] Note to the 2nd edition: This is not an exact statement. Adam Smith expresses the law correctly on many occasions. [See Capital, Humboldt edition, p. 62, ft-note 1, where writing seven years later, Marx makes the following qualification: “This statement applies only in so far as Adam Smith, _ex officio_, treats of money. Now and then, however, as in his criticism of the earlier systems of political economy, he takes the right view. ‘The quantity of coin in every country is regulated by the value of the commodities which are to be circulated by it...The value of the goods annually bought and sold in any country requires a certain quantity of money to circulate and distribute them to their proper consumers, and can give employment to no more. The channel of circulation necessarily draws to itself a sum sufficient to fill it, and never admits any more.’ Wealth of Nations, Book iv., ch. I.”]
[132] The distinction between currency and money is therefore not found in “Wealth of Nations.” Deceived by the apparent impartiality of Adam Smith, who knew his Hume and Steuart very well, honest Maclaren remarks: “The theory of the dependence of prices on the extent of the currency had not as yet, attracted attention; and Doctor Smith, like Mr. Locke (Locke undergoes a change in his view), considers metallic [133] David Ricardo, “The High Price of Bullion, a Proof of the Depreciation of Bank-notes.” 4th edition, London, 1811. (The first edition appeared in 1809). Further, “Reply to Mr. Bosanquet’s Practical Observations on the Report of the Bullion Committee.” London, 1811.
[134] David Ricardo: “On the Principles of Political Economy, etc.” p. 77. “Their value [of metals] [like that of all other commodities], depends on the total quantity of labour necessary to obtain the metal, and to bring it to market.”
[136] Ricardo, l. c. p. 421. “The quantity of money that can be employed in a country must depend on its value: if gold alone were employed for the circulation of commodities, a quantity would be required, one fifteenth only of what would be necessary, if silver were made use of for the same purpose.” See also Ricardo’s: “Proposals for an Economical and Secure Currency,” London, 1816, p. 89, where he says: “The amount of notes in circulation depends on the amount required for the circulation of the country; which is regulated...by the value of the standard [of money], the amount of payments, and the economy practised in effecting them.”
[138] David Ricardo, “Reply to Mr. Bosanquet’s Practical Observations, etc.” p. 49. “That commodities would rise or fall in price, in proportion to the increase or diminution of money, _I assume as a fact which is incontrovertible_.”
[139] David Ricardo, “The High Price of Bullion,” etc. “Money would have the same value in all countries.” p. 4. In his Political Economy Ricardo modified this statement, but not in a way to affect what has been said here.
[140] l. c. p. 3-4.
[141] l. c., p. 4.
[144] l. c., p. 17.
harvest, would come under the case of a country having been deprived of a part of its commodities, and, therefore, requiring a diminished amount of circulating medium. The currency which was before equal to her payments would now become superabundant and relatively cheap, in proportion...of her diminished production; the exportation of this sum, therefore, would restore the value of her currency to the value of the currencies of other countries.” His confusion of money and commodity, and of money and coin borders on the ludicrous in the following passage: “If we can suppose that after an unfavorable harvest, when England has occasion for an unusual importation of corn, another nation is possessed of a superabundance of that article, but has no wants for any commodity whatever, it would unquestionably follow that such nation would not export its corn in exchange for commodities: _but neither would it export corn for money_, as that is a commodity which no nation ever wants absolutely, but relatively.” l. c., p.
75. Pushkin in his hero poem makes the father of his hero incapable of comprehending that commodities are money. But that money is a commodity, the Russians have understood from times of yore as is proven not only by the English corn imports in 1838-1842, but by the entire history of their commerce.
[146] Conf. Thomas Tooke, “History of Prices,” and James Wilson, “Capital, Currency and Banking.” (The latter work is a reprint of a series of articles which appeared in the London Economist in 1844, 1845 and 1847.)
[147] James Deacon Hume: “Letters on the Corn Laws.” London, 1834, p.
29-31. [Letter by H. B. T. on the Corn Laws and on the Rights of the Working Classes. Transl.]
[150] James Mill: “Elements of Political Economy.” [London, 1821, p.
95-101 passim. Transl.]
[151] A few months before the outbreak of the commercial crisis of 1857, a committee of the House of Commons was in session to inquire into the effect of the bank-laws of 1844 and 1845. Lord Overstone, the theoretical father of these laws, delivered himself of this boast in his testimony before the committee: “By strict and prompt adherence to the principles of the act of 1844, everything has passed off with regularity and ease; the monetary system is safe and unshaken, the prosperity of the country is undisputed, the public confidence in the wisdom of the act of 1844 is daily gaining strength; and if the committee wish for further practical illustration of the soundness of the principles on which it rests, or of the beneficial results which it has assured, the true and sufficient answer to the committee is, look around you; look at the present state of trade of the country, look at the contentment of the people; look at the wealth and prosperity which pervades every class of the community; and then, having done so, the committee may be fairly called upon to decide whether they will interfere with the continuance of an act under which these results have been developed.” Thus did Overstone blow his own horn on the fourteenth of July, 1857; on the twelfth of November of the same year the Ministry had to suspend on its own responsibility the wonderful law of 1844.
[152] Tooke was entirely ignorant of Steuart’s work, as may be seen from his “History of Prices for 1839-1847,” London, 1848. where he reviews the history of the theories of money.
[153] Tooke’s most important work besides the “History of Prices” which his co-worker Newmarch published in six volumes, is “An Inquiry into the Currency Principle, the Connection of the Currency with Prices” etc., 2nd edition, London, 1844. Wilson’s book we have already quoted.
Finally there is to be mentioned John Fullarton’s “On the Regulation of