Credit Money and the Precious Metals. 245 



that if wages remained unchanged with falling prices, they 

 would, for the same reason, rise with rising prices under 

 the assumed conditions, and, as a certain portion of the 

 workman's expenditure is of the nature of a fixed charge 

 unaffected by a variation in the measure of values, he 

 would clearly be a gainer. 



Again, the influence of credit money on prices is partial 

 and arbitrary : it is not diffused. As I have said, the 

 creation of credit money is in the hands of the capitalist 

 financier, or banker. He is able to monetise any commodity 

 he pleases, and to charge any seignorage he likes for the 

 service. Now, when this power of monetisation is distinctly 

 used for the purpose of advancing prices, it is, as a rule,, 

 employed on securities, or on raw materials in the operations 

 known as "corners." The particular articles are monetised at 

 a rising ratio to gold, and so long as the " corner" lasts the 

 operator obtains in exchange for his monetised commodity or 

 bonds a proportionately greater quantity of gold, or of other 

 wealth measured in gold. I am not discussing the utility or 

 justification of these operations ; I merely wish to cite 

 unmistakeable illustrations of the fact, that the quantitative 

 influence of credit money on prices, as a partner with gold, 

 does not diffuse itself over labour and commodities 

 generally. In this respect a credit inflation of prices is a 

 very different thing from an advance of prices due to an 

 increase in the volume of metallic money of full liberatory 

 power throughout the world, as such money, in accordance 

 with the natural economic laws on which the whole science 

 is based, does tend to search out all commodities and all 

 labour throughout the world and affect them proportionately. 



Finally, the volume of credit money depends on the 

 volume of gold under a gold monometallic system, or, to 

 speak in more general terms, on the volume of money of 

 full, universal, and permanent liberatory power. The precise 

 relation cannot be stated ; it is sufficient to say that there 



