Page:The American Cyclopædia (1879) Volume XI.djvu/762

 744 MONEY Britain and Ireland at the close of 1872 placed the gold coin at 105,000,000, the silver coin at 15,000,000, and the bronze coin at 1,148,- 000; total metallic circulation, 121,148,000. The circulation of the bank of England on Oct. 16, 1872, was 34,328,708.. The notes in circulation in the United Kingdom, other than those. of the bank of England, in September, 1872, were as follows: England, 5,057,910; Scotland, 5,313,560 ; Ireland, 7,242,081 ; making a total paper circulation of 51,942,- 259, and of metal and paper combined of 173,090,259 = 841,218,658. According to Necker, the circulation of France in 1789 was equivalent to $450,000,000, all metallic. The assign ats issued by the revolutionary gov- ernment of France during the years 1790-'96 are estimated as high as $9,000,000,000. The circulation of France at the present time is estimated at 4,000,000,000 francs metallic, while the notes of the bank of France in circulation Oct. 9, 1874, were 2,970,881,660 francs; total, 6,970,881,660 francs = $1,394,- 176,332. Money of Account. A full and clear understanding of money can hardly be had without a realization of the true position and office of money of account ; a subject seldom even adverted to in any of the treatises upon money. When any coin or weight of gold or silver, or any other article of value or of general acceptability, has for a considerable time been used as an equivalent or in payment for things purchased, the people using it as- sume the value of the article in question as the unit of a money of account, and employ it to express prices. By incessant use it is im- pressed upon and becomes familiar to the mind, is " committed to the memories of a whole na- tion," and " performs the same office with re- gard to the value of things that degrees, min- utes, seconds, &c., do with regard to angles, or as scales do to geographical maps, or to plans of any kind." It becomes in fact " an arbitra- ry scale of equal parts, invented for measur- ing the respective values of things vendable." The use of a money of account is in no respect a mechanical process by which other articles are compared by weight or bulk with gold or silver ; but it is an arithmetical one, by which they are compared with a unit of value, which has had its origin in some coin or other com- modity which possesses the quality of accepta- bility for the payment of debts and the pur- chase of commodities. Hence it is that a money of account, having been long in use, and become a part of the modes of thought of a people, often long survives the existence of the coin or other commodity upon which it was based. The money of account of the bank of Venice, undisturbed for 500 years, had no coins to correspond with it, and the value of all coins was expressed in it. A money of account is a language in which all values or prices may be expressed, and by means of which the relative values of commodities may be stated. It is something which each and every one carries in his mind, as he does his knowledge of words or of arithmetic, and in so doing he is quite independent of any thought of coinage or of circulating notes. These are facts which have in whole or in part been recognized by various writers differing in almost all other respects in regard to money, and they have been contro- verted by but few. But being facts close at hand, familiar, and almost self-evidently true, their full significance and far-reaching impor- tance have been overlooked and disregarded by almost all .economists. Count Gamier and Stephen Colwell have of all writers probably most fully appreciated the importance of a clear understanding of money of account. Ac- cording to the latter, it is the central point from which the whole science of money must be studied, and without which mode of pro- cedure no true conception of it can be had. The money of account in use by a people is not only the standard by the aid of which the value of commodities may be stated, but is used to express the value of coins or circulating notes, and, if these coins or notes be of the same denomination as the money of account, unerringly indicates whether such coins or notes are at par, at a discount, or at a premium. Had men better understood this subject in Great Britain during the suspension of the bank of England, 1797-1823, there would have been far less discussion than there was as to whether bank of England notes were then at a discount or gold was at a premium. The bullion committee had a glimmering of the truth when they " doubted whether, since the new system of bank of England payments has been fully established, gold has in truth con- tinued to be our measure of value." The mo- ney of account had in fact adjusted itself to the standard of payment furnished by the bank, and the committee half suspected that such was the case. Theory of Money. In its theoretic or economic aspects, money presents a field of apparently hopeless discord, controversy, and confusion, without a single doctrine established as a principle of universal or even of general acceptance. In a word, no one of these doc- trines can be presented as a truth which needs only to be stated, not demonstrated ; no one who writes upon them can properly lay down any so-called principles without at the same time giving the ground upon which each one of them claims to rest. To go no further back, Montesquieu and Hume about the middle of the 18th century laid down the dictum which, stated in the words of Hume, is as follows : " It seems a maxim almost self-evident, that the prices of everything depend on the pro- portion between commodities and money, and that any considerable alteration on either has the same effect of heightening or lowering the price ;" and from that time to the pres- ent hour there has been a sharp and never ceasing controversy upon every phase of the subject. A memorable era in this contro- versy was the period between the suspension