It would seem, from this explanation of the way in which money is sold or let for an annual interest, that there are two ways of valuing money in commerce. In purchases and sales, a certain weight of money represents a certain quantity of values, or of merchandise of every kind: for example, an ounce of silver is the equivalent of a certain quantity of corn or a certain number of days' labour. In lending and in the money-trade, a capital is the equivalent of a rent equal to a certain fixed portion of that capital; and conversely an annual rent represents a capital equal to the amount of that rent repeated a certain number of times, according as interest is at a higher or lower penny.
S78
These two valuations are independent of each other, & are governed by quite different principles.
These two different reckonings[1] have much less connection and depend much less on each other than one would be tempted to believe at first sight. Money may be very common in ordinary commerce, may there have very little value, may answer to a very small quantity of commodities, and the interest of money may at the same time be very high.
Suppose that when there are a million ounces of silver circulating in commerce, an ounce of silver is given in the market for a measure of corn. Suppose there comes into the State, it matters not how, a second million ounces of silver, and that this increase is distributed to every purse
- ↑ Appréciations.
