TBANSACTIONS OF SECTION F. 837 



FRIBA T, A UG VST 29. 



The following Papers were read : — 



1 Media of Exchange : some Notes on the Precious Metals and their 

 Equivalents. 1 By John B. Martin, M.A., F.S.S. 



Gold, or the pursuit of gold, has from all times lain under a ban, but the political 

 economist recognises the fact that the pursuit is common to all time and every race, 

 and that, unless its distribution be altogether unjust, the prosperity of a country 

 goes hand in hand with its increase of wealth. The present paper does not embrace 

 so wide a scope as the nature and distribution of wealth, but deals with some 

 points concerning the nature of the substances to which the word ' money ' is more 

 commonly applied, or their equivalents ; and the phenomena which attend the use 

 of them. The qualities inherent in gold and silver have caused them to be accepted 

 from the earliest time in almost every quarter of the globe as a medium of exchange. 

 The acquisition of gold and silver exercises an uncontrollable fascination ; to 

 acquire them appears synonymous with getting richer, to part with them seems a 

 loss of wealth. Hence the ' gold-fevers ' of California and Australia, which have 

 no doubt stimulated the development of the country ; but, with the exception of 

 some lucky prize-winners, have not enriched the majority of the venturers. Hence, 

 too, it has been an aim of statecraft to attract the import of bullion and to dis- 

 courage its export ; but the true nature and functions of gold and silver are now 

 better understood, and they are recognised to be merely commodities which, 

 neither as regards each other nor in reference to other commodities, can be of 

 fixed value. Their comparative steadiness in exchangeable power is mainly due to 

 the small proportion which the annual increment bears to the total of the world's 

 stock, and in this respect they differ in a marked degree from articles of food 

 or manufacture ; but at the same time the purchasing power of gold appears on the 

 whole to have increased steadily. The oscillations of prices observable during 

 brief cycles of years are the subject of great difference of opinion among experts, 

 and their cause is only partially due to increase or decrease in the out-put of gold 

 and silver. 



The precious metals are of comparatively little service for the needs of home 

 trade until they are converted into coin : in this latter condition the advantages are 

 obvious, the disadvantages are less patent. The question as to the rights and respon- 

 sibilities of the Executive power in the matter of coining are the subject of con- 

 troversy, especially in view of the fact that any excess over its bullion value that 

 coin may possess necessarily disappears at the frontier. At the best a mint-charge 

 is a tax on the mine. To make any charge beyond the cost of manufacture is a 

 dangerous temptation that has before now often overcome rulers to the confusion 

 of the trade of their country. The loss by wear and tear is another drawback to 

 the use of a metallic currency, for the loss is total and irreparable. 



The admitted advantages of a metallic currency do not prevent it from being 

 inconvenient in the settlement of large transactions, or in transport in considerable 

 bulk. Hence has arisen the widespread use of Bank-notes, originally certificates 

 for bullion or coin deposited with a goldsmith of good credit. In many European 

 countries State-banks were founded by the grant of issuing powers from the State 

 to an association of individuals who had made advances to the public exchequer. 

 The most complete State-bank is that of Russia ; England, France, and Germany 

 have only quasi-State banks ; Switzerland and Italy most closely approximate to the 

 National Bank system of the United States. But paper money can never be, it can 

 only represent, money ; the absorption of paper money in any country depends on 

 a variety of causes, such as wealth, habit, stability of government, and especially 

 on the extent to which the banking system is developed. A comparison of the gold 

 value of the paper circulation per head in various countries shows some singular 



1 Printed hi extenso for private circulation only, by Blades, East, & Blades, Ab- 

 church Lane, E.C. 



