Page:Encyclopædia Britannica, Ninth Edition, v. 16.djvu/748

720   MONDOVl, a city of Italy, in the province of Cuneo, 15 miles east of Cuneo and about 55 west of Genoa by rail, was formerly the chief town of the Sardinian province of Mondovi, and between 1560 and 1719 the seat of a Piedmontese university. The central quarter occupies the summit of a hill 1670 feet high, and contains the hexagonal piazza, a citadel erected in 1573 by Emanuel Philibert, the cathedral of St Donatus, a spacious episcopal palace, and the statue of Beccaria, who was a native of the town. At the foot of the hill along the banks of the Ellero (a tributary of the Po) lie the industrial and commercial suburbs of Breo, Borgatto, Pian della Valle, and Carassone, with their potteries, tanneries, marbleworks, &c. The mansion of Count San Quintino in Pian della Valle was the seat of the printing-press which from 1472 issued books with the imprint Mons Regalis; and in modern times the Ducal press founded by Emanuel Philibert has acquired a great reputation. The population of the town was 9637 in 1871, with the suburbs 11,958; that of the commune 17,726 in 1861, and 17,902 in 1881.

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  1.Definition and Functions of Money.—The precise definition of Money is a question presenting no small difficulty, and it has been complicated by the attempts of some writers to define the term so as to lend support to their favourite theories. The real difficulties of the subject are, however, chiefly connected with paper-money, and as that side of the question has been dealt with in the article (q.v.) it will here be sufficient to adopt the clear and careful description of money given by a distinguished American economist as being &ldquo;that which passes freely from hand to hand throughout the community in final discharge of debts and full payment for commodities, being accepted equally without reference to the character or credit of the person who offers it and without the intention of the person who receives it to consume it or enjoy it or apply it to any other use than in turn to tender it to others in discharge of debts or payment for commodities.&rdquo; In this passage the essential features of money are plainly set forth, though, as is frequently the case in economics, particular cases hard to bring within the description may be found. The functions which money discharges in the social organism are—at least in the opinion of all writers worth noticing here—clearly manifest. The most important is that of facilitating exchanges. It is not necessary to dwell on the great importance of this office. The mere consideration of industrial organization shows that it is based on the division of employments; but the earliest economic writers saw clearly that division of employments was rendered possible only by the use of a medium of exchange. They saw that the result of increasing specialization of labour was to bring about a state of things in which each individual produced little or nothing directly adapted to satisfy his own wants, and that each one was to live by exchanging his products for those of others. They saw, moreover, that this was not feasible without some object which all would be willing to accept for their peculiar products, for otherwise, the difficulty of getting those together whose wants were reciprocal would be a complete hindrance to the development of exchange, which alone made division of labour possible. A second function hardly inferior in importance to the one just mentioned is that of affording a ready means of estimating the comparative value of different commodities, Without some common commodity as a standard of comparison this would be almost impossible. &ldquo;If a tailor had only coats and wanted to buy bread or a horse, it would be very troublesome to ascertain how much bread he ought to obtain for a coat or how many coats he should give for a horse;&rdquo; and as the number of commodities to be dealt with increased the problem would be come harder, &ldquo;for each commodity would have to be quoted in terms of every other commodity.&rdquo; Indeed it may be reasonably maintained that the idea of general value could not be formed without the existence of money, and all that is known of savage races tends to bear out this view. The adoption of some one commodity renders the comparison of values easy. &ldquo;The chosen commodity becomes a common denominator or common measure of value in terms of which we estimate the values of all other goods,&rdquo; and thus money, which in its primary function renders exchanges possible by acting as an intermediate term in each exchange, also makes exchanges easier by making them definite. Another function of money comes into being with the progress of society. One of the most distinctive features of advancing civilization is the increasing tendency of people to trust each other. Thus there is a continual increase in relations of contract, as may be seen by examining the development of any legal system. Now a contract implies something to be done in the future, and for estimating the value of that future act a standard is required; and here money, which already acts as a medium of exchange and as a measure of value at a given time, performs a third function, by affording an approximate means of estimating the present value of the future act, and in this respect may be regarded as a standard of value, or, if the phrase be preferred, of deferred payments. Some writers attribute a fourth function to money, inasmuch as they regard it as being a means of easily storing up value. Doubtless it does supply this need, which is a specially pressing one in early civilizations owing to the insecurity which then exists, but with the progress of settled government the need becomes less extreme. Other forms of investment grow up, and the habit of hoarding money becomes unusual. It is therefore better to regard the functions of money as being only three in number, viz., to furnish—(1) the common medium by which exchanges are rendered possible, (2)the common measure by which the comparative values of those exchanges are estimated, and (3)the standard by which future obligations are determined.

2.Causes which Determine the Value of Money. Quantity of Money needed by a Nation.—The problem of the determining causes of the value of money is a particular case of the general problem of values, but there are circumstances which render the inquiry more than usually complicated. Before considering these it will be well to deal with a use of the phrase “value of money" which has led to much 