2i 4 POPULAR SCIENCE MONTHLY. 



tion as the theory of prices. Practical monetary legislation, in more 

 than one countr} T , would he radically modified, accordingly as the so- 

 called ( quantity-theory ' of money is accepted or not. In my humble 

 opinion, that theory is indefensible and erroneous; and yet our great 

 politicians in the United States, in their fencing on the monetary 

 problem, have decided that the question of the gold standard has been 

 definitively settled, because of the large recent production of gold. The 

 partisans of gold have thus accepted the principle on which the de- 

 mands for an extension of the circulation of silver and greenbacks 

 have been based in the past; and the position is absolutely untenable. 

 The issues in this crucial problem are unmistakable ; and they must 

 be threshed out to a conclusion before any practical applications can 

 be attempted. These issues may be briefly stated in the following 

 heads : 



1. Is the price of goods the quantity of some standard commodity 

 for which they will exchange, or is it the relation between goods and 

 a variety of several media of exchange? 



2. If true money is a commodity, like gold, then what determines 

 the exchange value between goods and that commodity? Is the prob- 

 lem in any way different from that of obtaining the exchange value 

 of any two commodities? 



3. What is the actual process of evaluation between goods and gold? 



4. If demand and supply regulate the value of money (cost of pro- 

 duction apart), what is the exact meaning of demand for money, and 

 of supply of money? 



5. Is the demand for a money-metal only the monetary demand? 

 Is the demand for a commodity as money something sui generis? 



6. In the theory of prices, what is meant by ' money ' ? Is it only 

 gold, or gold together with everything, such as deposit-currency, which 

 acts as a medium of exchange? In short, what constitutes the supply 

 of money? 



7. If prices are influenced by 'purchasing power/ is that synonymous 

 with the sum of the existing media of exchange, multiplied by their 

 rapidity of circulation? Or, is purchasing power in its ultimate 

 analysis synonymous with the offer of saleable goods? 



8. Have the expenses of production, or progress in the arts, no in- 

 fluence on the general level of prices? 



9. What is the effect of credit on general prices? 



10. How do fluctuations in bank reserves actually affect general 

 prices? Does the rate of interest, being paid for capital and not for 

 money, have an effect on prices through its effect on loans? 



11. By what economic process would a great new supply of gold 

 influence general prices? Only by being directly offered for goods 

 as a medium of exchange? 



