The Joint Standard - A Plain Exposition Of Monetary Principles And Of The Monetary Controversy (1894) (Paperback)

Purchase of this book includes free trial access to www.million-books.com where you can read more than a million books for free. This is an OCR edition with typos. Excerpt from book: CHAPTER II THE CONSTITUENTS OF MONEY The inquiry now arises, what things constitute money ? The thought called up in most minds by the word " money" is simply that of coined metal ?gold or silver. But, whether the function of medium of exchange or that of standard of value be regarded, the term " money " has a much wider signification. It includes anything which serves the purpose of such a medium, all instruments of credit which are used as substitutes for coin. It may be objected that a cheque, for example, is not money, but only evidence of a right to demand money, and, in a legal sense, that is quite true. But we are now considering its economic function, the purpose which it actually serves, and, unquestionably, a cheque does perform the work of money as a medium of exchange. The importance of including in the category of money all kinds of credit instruments which do duty for money is obvious, when we recall to mind the relation between the quantity of money in use and its effect upon prices described in the preceding chapter. An increase or decrease in the number and amount of these instruments in use is the same thing, in this respect, as an increase or decrease in the amount of metallic money in use. Obviously, therefore, when considering variations in the standard of value, we must take into account not only changes in the quantity of metallic money, but also changes in the volume of credit instruments. Before dealing with this point, however, it will be of advantage to state, categorically, the several constituents of the whole mass of money used in this country. These are: ? 1. Gold, silver, and bronze coins. 2. Bank-notes, secured by an equivalent amount of gold coin or bullion. 3. Bank-notes not so secured. 4. Cheques, bills of exchange, and other c...