appears desirable for the money material is, that its value shall be steady. This, however, is of but slight importance in early societies, and it is only as deferred payments become a prominent feature of industrial life that this requisite is much needed. It is enough for the other purposes of money that it shall not vary within short periods, which is found to be a feature of metals, and especially of silver and gold, while corn especially varies widely in value from season to season. From the foregoing examination of the requisites desirable in the material of money it is easy to deduce the empirical laws which the history of money discloses, since metals, as compared with non-metallic substances, evidently possess those requisites in a great degree. They are all durable, homogeneous, divisible, and recognizable, and in virtue of these superior advantages they are the only substances now used for money by advanced nations. Nor is the case different when the decision has to be made between the different metals. Iron has been rejected because of its low value and its liability to rust, lead from its extreme softness, and tin from its tendency to break. Both these metals, as well as copper also, are unsuitable from their low value, which hinders their speedy transmission
so as to adjust inequalities of local prices.The elimination of these metals leaves silver and gold as the only suitable materials for forming the principal currency. Of late years there has been a movement towards the adoption of the latter as the sole monetary standard, silver being regarded as suitable only for a subsidiary coinage. Indeed this question, which is reserved for subsequent discussion, may be regarded as the principal matter of controversy in the field of metallic currency. The special features of gold and silver which render them the most suitable materials for currency may here be noted. “The value of these metals changes only by slow degrees; they are readily divisible into any number of parts which may be reunited by means of fusion without loss; they do not deteriorate by being kept; their firm and compact texture makes them difficult to wear; their cost of production, especially of gold, is so considerable that they possess great value in small bulk, and can of course be transported with comparative facility; and their identity is perfect.”[1] The possession by both these metals of all the qualities needed in money is more briefly but forcibly put by Cantillon when he says that “gold and silver alone are of small volume, of equal goodness, easy of transport, divisible without loss, easily guarded, beautiful and brilliant, and durable almost to eternity.”[2] This view has even been pushed to an extreme form in the proposition of Turgot, that they became universal money by the nature and force of things, independently of all convention and law, from which the deduction has been drawn that to proscribe silver by law is a violation of the nature of things.[3]
has now been traced down to the establishment of metallic currencies. These, in the early stages of their existence, passed by weight. The Hebrew records bear witness to this fact, as also do the Greek writers. Aristotle, for example, after indicating the circumstances which led to the invention of currency, proceeds to point out that it was “afterwards determined in value by men putting a stamp upon it, in order that it may save them from the trouble of weighing it.”[4] There are two distinct stages in the introduction of coining. In the first, only the quality or fineness of the metal is denoted by the stamp, no attempt being made to fix the weight. In other words, the stamp acts as a kind of hall-mark. The Chinese cubes of gold may have been the earliest money. Herodotus attributes the first use of coined gold and silver to the Lydians,[5] while in another passage he mentions that the first Greek coinage was at Ægina, by Pheidon of Argos.[6] The second step was to certify the weight as well as the fineness of the metal, thus completing the invention. The necessity of preventing any interference with the coin after it had been stamped led to the adoption of a regular form, and, though hexagonal or octagonal coins are to be found, the received shape of a coin is that of a flat circle, each side of which is stamped, as well as in many cases the edge. By this contrivance all persons into whose hands the coin came had a guarantee as to its quality and quantity, and we may reasonably infer that the great improvement in coinage among the Grecian colonies was the effect, and also in some degree the cause, of the expansion of their commerce in the 6th century B.C. From Greece the art of coining spread to Italy, being introduced by the Greek colonists in Lower Italy. Since then coinage as an art has always existed in the more advanced societies. The progress of invention, however, does not end with the introduction of the art of coining, since a number of practical questions arise with reference to the best system to be adopted, which for a protracted period present great difficulties to those who are called upon to solve them. One of these, before touched on, is: What is the best shape for coins? The answer has finally been in favour of the circular, but square and oblong pieces are also to be found.[7] Closely allied with this is the question of the most suitable limits of size. The inferior limit is plainly fixed by the convenience of those using the coins. They ought not to be so small “that they can be easily lost, or can with difficulty be picked up.”[8] Instances of violations of this principle occur in the case of the English threepenny piece and the American one-dollar gold piece. The superior limit is a more difficult point. Its determination turns partly on the difficulty of coining large pieces, and partly on the facilities which such large coins as the American gold double-eagle give for improper treatment. It is an easy process to drill holes, which can be concealed by hammering, while in some cases the coin has been sawn in two, and the interior gold removed, the outside surfaces being soldered together, while platinum is put in the midst to maintain the weight. As a general rule it may be laid down that no gold coin much larger than the English sovereign, or silver one at all larger than the half-crown, should be issued. Another consideration to be borne in mind when determining the proper size of coins is the relative amount of wear which takes place. Experience proves that large coins are less worn than small ones. “According to experiments made at the mint in 1833, the loss per cent. per annum on half-crowns is about 2s. 6d., on shillings, 4s., and on sixpences, 7s. 6d.” This result has been confirmed by other inquiries. From this it follows that the larger coins are less expensive, but their size is limited by the fear of their being tampered
with. Again, the character of the stamp to be impressed
- ↑ Ency. Brit. (8th ed.), art. “Money,” vol. xv. p. 417.
- ↑ W. S. Jevons in the Contemporary Review, January 1881. See also Lord Liverpool, Coins of the Realm (Bank of England reprint), p. 10.
- ↑ See Cairnes, Logical Method of Pol. Econ., p. 131, note; and for an application of the argument to Bimetallism, see É. de Laveleye, Fort. Rev., July 1881.
- ↑ Pol., i. 9, 8. The whole passage is worthy of quotation, as showing how clearly Aristotle conceived the primary function of money: διὸ πρὸς τὰς ἀλλαγάς τοιοῦτόν τι συνέθεντο πρὸς σφᾶς αὐτοὺς διδόναι καὶ λαμβάνειν, ὃ τῶν χρησίμων αὐτὸ ὂν εἶχε τὴν χρείαν εὐμεταχείριστον πρὸς τὸ ζῆν, οἷον σίδηρος καὶ ἄργυρος, κἂν εἴ τι τοιοῦτον ἕτερον, τὸ μὲν πρῶτον ἁπλῶς ὀρισθὲν μεγέθει καὶ σταθμῷ, τὸ δὲ τελευταῖον καὶ χαρακτῆρα ἐπιβαλλόντων, ἵνα ἀπολύσῃ τῆς μετρήσεως αὐτούς.
- ↑ Herodotus, i. 94.
- ↑ Ib., vi. 127. See also for a discussion of Pheidon's coinage, Grote, Hist. of Greece, ii. pp. 319 sq. (Cabinet ed.).
- ↑ An instance of the latter is the itzibu of the Japanese coinage, which is an oblong flat piece of silver.
- ↑ Jevons, Money, p. 155.
