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in exchange. The attribute of legal tender is conferred by 
law, but the fundamental economic tendency to produce 
given results with the minimum expenditure of labour or 
force makes it inconceivable that society will voluntarily 
revert from the legal tender method of exchange to the 
cruder and more costly method of pure barter. It only 
remains, therefore, to devise a legal tender standard of value 
which will have the theoretic desideratum of relative 
invariability. 
In the endeavour to solve this problem I have found 
Adam Smith very helpful. The Wealth of Nations is 
essentially an analytical work. Its analyses are sound, and, 
therefore, if we accept the conclusions of Adam Smith as 
the basis of argument, we may save ourselves considerable 
preliminary trouble. But there is nothing in Adam Smith’s 
analyses which bars the way to a modification of existing 
conventional arrangements, any more than an analysis of 
the constitution of water bars the way to the re-combina- 
tion of oxygen and hydrogen in other forms in accordance 
with their physical nature. 
In treating of the problem of value in exchange and “ the 
real and nominal price” of commodities, Adam Smith 
earnestly entreats both the patience and attention of the 
reader, and admits that, after the fullest explication which 
he is capable of giving it, the subject may still appear ob- 
scure. It is worth while to call attention to the warning, 
in order that readers may be guarded against the imminent 
danger of too hastily assuming, in connection with a matter 
of so common-place and yet abstracted a character, that 
they fully understand all that Adam Smith means. 
“Labour alone,” says Adam Smith, “never varying in its 
own value, is alone the ultimate and real standard by which 
the value of all commodities can at all times and places be 
estimated and compared. It is their real price ; money is 
