188 Professor Whewell on the 



p(\ +—\ when g is the quantity of gold requisite for the in- 



to 



ternal circulation of the country in its new condition. If we 

 suppose g'=g+mh where m is a fraction; the price at last 



c ^-p( 1+ ^7 m /) =p ( 1 + 



g + mh' M . h. 



s 



Or more generally we may suppose p' =p\l + <j>-) > when (p- is 

 some quantity depending on 



h 



8' 



It appears to be very difficult to find any criterion or measure 

 of the quantity of gold requisite for the independent interior cir- 

 culation of a country : consequently it is extremely difficult to 

 ascertain the effect on prices produced by the country having 

 more than this quantity, which, as will be seen, is the result of 

 a superiority in manufacturing skill. 



It is manifest, however, that the quantity of gold requisite for 

 circulation in any country is diminished by any contrivance which 

 introduces any other circulating medium, as paper; or which in- 

 creases the velocity and facility of any portion of the circulation. 

 The value of the paper (if convertible) depends immediately on 

 the value of the gold ; but the quantity of gold wanted, may 

 depend on the use and quantity of paper; and the quantity of 

 gold wanted in a country is one of the conditions which affects 

 its value there relatively to that in other countries. 



If a part of the currency of the country be paper, the effect 

 on prices produced by the introduction of superfluous gold will 

 be more difficult to estimate. For the sake of simplicity how- 



