Middlebury register. (Middlebury, Vt.) 1886-1937, 1895-07-19

at leaSU as REGARDS single country. fOr /
the continuance of the two metals in the |
currency depends on the market ratio |
and the legal ratio between gold and sill |
yer being the same. The slightest exam |
ination of the history of these metals will
show how variable they have been. With
out accepting the estimates which regard
silver as being more valuable than gold, !
the well-attested variations of the pre-
BILE. Thus, Herodotus estimates the ra-
ito as ! to 10. Plato ! to u. Menander
to 10, and in Caesars time the ratio was
TO 8. In the nth century the value of
gold rose remarkably and the gradual
movement has ever since been toward an
appreciation of gold relatively to silver"
money is that which passes freely
from hand to hand throughout the COM
munity in final discharge of debts and
full payments for commodities, being
accepted equally without reference to
the character or credit of the person who
offers 1t and without the intention of the
person who receives it to consume 1t or
enjoy it or to apply it to any other use
than in turn to tender it to others in dis
charge of debts or payment for commod-
tiles" The above definition of money is
by the American authority, f. A. Walk
er, and is considered one of the best.
The most important function of
money is to facilitate exchanges. A
second function is to assist in estimating
values. a third is as a standard of value
in system of credit by which fu-
ture obligations are determined. The
value of money, other things being
equal, depends upon its quantity. When
abundant it is worth less; when scarce,
more. Upon this subject the article on
"Money" in the British Encyclopedia
says: sin mercantile phraseology, the
value of money means the interest charg-
ed for the use Of loanable capital. Thus,
when the market rate of interest is high,
money is regarded as cheap. Whatever
may be the force of the reasons in favor
of this use, it is only mentioned fOr the
purpose of excluding it. For our pres
ent subject, the value of a thing is what
it will exchange for; the value of money
Is what money will exchange for or its
purchasing power If prices are low
money will buy much of other things
and is of high value; if prices are high
it will buy little of other things and is of
low value. The value of money is in.
versely as general prices-falling as they
rise, and rising rs they fall. Now in the
general theory of values it appears that
the pr0rinidte condition which determines
It, is the equation between supply and
demand; and this is clearly the case in
reference to money. The terms, supply
and demand. need, however, some eluc
dation. Let us consider what is meant
by the supply of, and the demand for
money. The supply of a commodity
means the quantity of it which is Offered
for sale. But in what shape does the
sale of money take place? By beins
offered for goods. The supply O
money, then, is the quantity of it which
the people are wanting to lay OUT; or
to put the point more concisely, it is al
the money IN circulatiOn at the time.
, Again, to take the case of demand-thC
demand for a commodity is the purchas
ing power offered for it. Demand in the
! special case of money consists o
, all the goods offered for sale. There is
however, a peculiar feature in the east
! of money which arises from its position
q rs a means of exchange viz, that none,
is, so to say, in a constant state of sup
ply and demand, since its principal ser
j. vice is to act as the means of purchasing
commodities. From this it follows tina
= the factors which determine the value o
t money within a given time are: % tn
1 amount of money in cir culation, and G
= the amount of goods to be sod. o.
e closer examination it will, however, ap
e pear that there are other elements to b
: taken into account In the first place
o the quantity of money is not by itsel
G the sole element on the supply side. |
l. some Instances coin will not circulat
it more than two or three times in ii yeal
|. while another coin may make hundred
T. of purchases. In determining the valu
of money these varying rates OF circulG
S ton have to be considered, and by tai
d ing an average we may establish the eN
a istence of fresh element to be estimat
d ed, namely, the average rapidity wit
l. which money does its work, or, to us
e Mills expression, the efficiency of MOI
o ey.' On the side of demand, again, it is nc
= the quantity of commodities that is tn
e determining element, but the amount {
n sales, and the same article may, an
n generally does, pass through sewers
y hands before it reaches the consumer
From this it follows that Cif the col
l. sideration of credit in its various form
If be omitted) the value of money is il
e yersely as its quantity multiplied by il
: I,o Of