MONET. 



31 



this material is moulded into a particular form, and 

 stamped with a mark denoting its value, so that it is i 

 appropriated expressly to the exchanging of articles 

 having value, it is called money, in distinction from 

 other articles which have value, but which are not 

 Used as a medium of exchange. The materials of 

 which money is made, as well as the coin, are mer- 

 chandise, like other articles that are bought and sold. 

 Different nations, in the early periods of their culti- 

 vation, have chosen for money different materials, 

 all having more or less of the above-mentioned 

 peculiarities. All nations, advanced in trade and the 

 arts, give preference to metals, especially the pre- 

 cious metals; for, 1. they derive value from the 

 smallness of their quantities, compared with the 

 demand for them in the ornamental and useful arts. 

 2. They are very little subject to corrosion and 

 destruction by use. 3. They are susceptible 

 of minute division, and may be used in small 

 quantities or masses. 4. They are easily trans- 

 ported, as their transportation to any distance will 

 cost but a small part of their value. 5. The 

 quantity is increased by labour. The advantage of 

 using the precious metals for a universal currency is 

 still greater, when it is not left for every private 

 man to divide the pieces of metal, to weigh them, 

 and fix their fineness, but persons are appointed 

 under the authority of the law, to decide what pieces 

 shall be circulated as money, to stamp them so as 

 to fix their weight and fineness, and to furnish them 

 with the superscription of the authority by which 

 they are authorized. Such pieces are called coins ; 

 (for the process of coining, see Coinage) . Instead of 

 money the merchant often receives a promissory note 

 or bill : this substitute is sometimes improperly termed 

 money. It is manifest that promissory notes or bills 

 of exchange are of tlie same value with the real 

 money only while they can be readily exchanged for 

 coin, and that they must lose their value in propor- 

 tion as the credit of those who issue them, sinks. 

 This is true of all paper money (see Circulating Me- 

 dium) , and all metallic money whose current value 

 is higher than its real value, all notes or bonds taken 

 instead of money. That any sort of money may be 

 received for its real value, or that which it represents, 

 and trade be carried on by means of it, it is necessary 

 that its value should be acknowledged wherever it 

 is used. A distinction, however, is made between 

 money which is received in only one trading-place 

 or small circle, issued in time of peculiar necessity, 

 denominated tokens, &c., also coins current in only 

 o'ne country, and money which is everywhere ac- 

 knowledged and received, such as bars of gold and 

 silver, of a certain weight and fineness, also Dutch 

 ducats, Spanish dollars. The exchangeable value of 

 gold and silver, like that of all other commodities, 

 depends, in the first place, on their plenty or scarce- 

 ness, or, in other words, the quantity supplied in 

 comparison with the quantity wanted, or for which 

 there is a demand ; and, in the second place, upon 

 the labour necessary in extracting the ore from the 

 mines, and refining it. As a general rule, it may be 

 assumed that if, taking the aggregate of silver mines, 

 and that of iron mines, the expense, that is, the 

 labour, including the use of machinery, necessary to 

 extract a pound of silver from the ore, and refine it, 

 is twenty times the expense, or labour, of smelting, 

 forging, and refining a pound of iron, silver will be 

 worth twenty times as much as iron. The compar- 

 ative value of gold and silver will depend upon the 

 same causes as that of either compared with iron, 

 copper, or tin. In Britain, the value of gold, com- 

 pared to that of silver, is as 15 i to 1 ; in France, as 

 15, i", to 1 ; in Geneva, as 15 Ji to 1; and in the 

 States of America as 15Jf to 1. The com- 



parative value is necessarily very nearly the same 

 all over the world, since each metal costs but a trifle 

 for transportation, and both are articles of value 

 everywhere. The quantities of gold, in its various 

 forms of coin and bullion of all descriptions, including 

 bars, plate, c., has been estimated to be 10,000,000 

 of pounds, troy weight. 



A scarcity of money can occur only when, 1. the 

 material of which it is manufactured is deficient, or, 

 2. when those in want of it have nothing to give in 

 exchange to its possessors. In the last place, there 

 is no real deficiency of money, for there are indivi- 

 duals who, by the terms of the supposition, possess 

 the money : there is only a deficient demand for goods 

 on hand, and those only are in want of money who 

 are unable to dispose of these goods. Scarcity of 

 money, therefore, is only a relative expression ; i. e. 

 there are certain places or persons without money 

 to obtain certain articles which they desire to pos- 

 sess. All mechanics, artisans, and manufacturers 

 want money enough to purchase the raw materials 

 which they consume, and to pay the wages of their 

 labourers. Merchants need money to pay manufac- 

 turers and producers for their goods, and to transport 

 them where they are wanted, and the last consumer 

 needs it to give in exchange for what he eats, drinks, 

 wears, &c., to the dealer of whom he procures the 

 requisite articles. Now, if any one of these classes 

 has not the money required for any of those purposes, 

 there is a scarcity of money for that class of indivi- 

 duals. In these and similar cases, the scarcity of 

 money does not suppose a real scarcity of gold and 

 silver, or a deficiency of coined metals. The scarcity 

 arises from the want of industry, or means, in any 

 class of citizens, to procure the money in circulation, 

 or from their industry being directed to the produc- 

 tion of such articles as there is no present demand 

 j for among the actual possessors of money; as when, 

 for instance, in grain-growing countries, there is a 

 deficiency of purchasers of the grain produced, there 

 not being consumers enough of the grain, who can 

 obtain or produce desirable articles in exchange for 

 it. In such a case, the producers of grain can obtain 

 money only by exportation of the article to foreign 

 ports. And if it happens that the foreign lands to 

 which it is exported are already provided with grain 

 from some other quarter, it will remain unsold not 

 because there is no money, but because there is no 

 motive to induce its possessors to part with it for 

 grain. In places where manufactures of any kind 

 prosper, a certain quantity of money is required to 

 provide the materials. This sum is easily ascertain- 

 ed, according to a certain average, and there is no 

 scarcity of money for these purposes, as long as this 

 sum is on hand. But when the manufacture is in- 

 creased, by the operation of particular circumstances, 

 and the place produces more goods than common 

 upon this account, a scarcity of money may easily 

 occur among those devoted to this branch of business. 

 If now these persons possess goods or credit, they 

 make use of both to obtain the money required from 

 other parts ; which will depend, again, upon their 

 being able to pay the expenses of transporting their 

 goods, or to give to the holders of money a higher 

 interest than they can elsewhere obtain. Money, in 

 these cases, becomes of more value in these places 

 than in those where it is not so much in demand ; 

 and it follows, from this, that money will leave the 

 places where it is plenty to seek those where, from 

 the want of it, more will be paid for its use ; and, 

 in this manner, a scarcity of money will work its 

 own cure. 



Money is profitable to any country only by means 

 of its circulation (q. v.) ; for circulation makes money 

 the continually repeated cause of the production of 



