A currency of government notes never issued for the purpose of facilitating

Their value never affected by the number of exchanges taking place.

Wholly dependent upon the credit of the issuer

Usually repudiated

Symbolic money simply the record of transactions.

The propriety of its issue shown by its return in the payment of the bills in

the discount of which it was issued

Every possessor of merchandise competent to issue a convertible currency.

The greater part of the currencies to be issued locally . .

Convertible currencies will never circulate far from the place of their

issue ..

Erroneous assumptions in reference to money

60

Methods followed in the investigation of its laws those of the Schoolmen

Their exposure and refutation the necessary condition of progress in mone-

tary science

61

61

The other for use in the family

The former justly censurable; the latter commendable

65

65

Usury money born of money - most contrary to nature

Falseness of Aristotle's method.

65

65

The great obstacle in the way of all progress

Complete failure of the Aristotelian method (Whewell)

Bacon in reference to (note)

66

68

68

The legitimate founder of the Schoolmen (Whewell)

Becomes an authority with the Church

69

70

Methods of the two the same.

70

Each alike fatal to scientific progress

70

Emancipation from either could come only from the new races.

70

Bacon the first to teach the proper method of scientific investigation.

70

Difference between his method and that of Aristotle

Emancipation of the exact sciences from the Aristotelian methods.
In the moral, the methods of the Schoolmen still prevail
No considerable progress made in any but Law (note)
Unlawfulness of usury first attacked by Bentham
Money not yet emancipated from the teachings of Aristotle
Permanence of theories in themselves wholly absurd (note)

The people for a time without a currency (Macaulay)

The inconvenience and distress

74

74

74

75

77

78

78

78

79

79

80

80

JOHN LAW.

"Money and Trade Considered," 1700

His object to supply Scotland with capital

82

82

The value of gold and silver their value in barter

They acquire additional value from their use as money

"Money not the value for which goods are exchanged, but the value by

Land better than silver as a basis of currency

85

86

86

888

86

87

Money for domestic exchanges may differ from that used in foreign

exchanges

Holds that its issues might be made the basis of industrial enterprises

Money a thing of no importance

Its value imaginary

An imaginary value no value

Hume's plan for debasing the currency

His untrustworthiness shown by it.

Prices reduced by reducing the amount of the currency
Prices increased by reducing the currency
Money is in ratio to products exchanged.

Paper money displaces a corresponding amount of coin
Does not displace a corresponding amount of coin
His views upon money wholly erroneous.

His ignorance, and indifference to truth

The anomalous character of the Bank of England

Its success due to the practical sense of its managers

(For Bank of England, see infra, p. 183.)

90

90

91

94

94

95

95

95

95

97

98

98

98

99

Labor, as an abstract notion, the real measure of values; coin, the appar-

Fluctuates more from year to year: less from age to age

110

The money or coin price the one by which transactions are made

110

The universal preference for the precious metals renders them money

The convenient, the natural medium of exchange

Contradictions in which Smith involved himself

Puerility of his illustrations and arguments

The price of every commodity resolves itself into wages, profit, and rent 112

The gross and neat revenue of society. .

113

The expense of maintaining its fixed capital no part of its neat revenue

The expense of maintaining its circulating capital may form a part of its

Money is the only one the maintenance of which can occasion any

diminution in the neat revenue

114

It forms no part of either the gross or neat revenue

114

It is the wheel of circulation, not the thing circulated

Smith's elements of price and classifications of property arbitrary and

Money the highest form of finished work

The legal division into “real” and “personal” the only proper one

Defect of Smith and the Economists in overlooking interest as an element

in price.

The expense of maintaining all kinds of property is in ratio to its cost

Money essential to the value of all other commodities

Need not be actively employed to be productive.

Groundlessness and absurdity of Smith's assumptions and conclusions

Distinction between real and nominal prices

A person's income is not the money he receives

Absurdity of such distinctions

Paper money a substitute for metallic money

That of Banks and bankers "seems" to be the best
Advantages of such substitution

Mode of its issue.

It circulates upon the credit of the issuer

Only occasionally returns for redemption

Reserves necessary to be held. .

The word "seems" illustrative of Smith's method

Wholly failed to comprehend the nature of paper money

All notes issued return regularly for redemption

If good bills only be discounted, the notes return in their payment
Manner in which paper money may be substituted for coin

An amount of coin equal to the issue liberated from use

The channels of circulation will only hold a certain quantity of money
If there be too much, they will overflow

The available capital of a country increased by the amount issued

Mode of issue of a symbolic currency.

Never issued in the manner supposed by Smith

A growth, not an improvisation.

Its issue no increase of the relative amount of money

125

The holders of money never send it abroad as the condition of using it as

capital ..

125

Exported in consequence of previous expenditures

126

Smith wholly misconceived the object and effect of paper money

Provision, material, and finished work, the only things that can set indus-

try in motion . .

126

Money neither of these

126

Wages do not consist of money

126

Money only a small, and always the most unproductive part of a nation's

capital.

126

Money material for the reason that it is always going into the arts

All kinds of capital necessary to the operations of society equally valuable

and equally productive. . .

127

The proportion of money to the merchandise circulated by it.

The advantage of substituting paper for gold

Proper limit of paper money the amount of merchandise to be symbolized

Tendency of all commercial countries to symbolize their products.

Paper money (unless legal tender) cannot be substituted for coin

The greater the amount of paper, the greater that of coin.

Advantages resulting from the use of the former .

129

The amount of paper money can never exceed that of the coin it displaces 129

All excess immediately drawn in coin

129

Disproved by reference to the currencies of England and Scotland.

Paper money used in foreign as in domestic commerce .

Only the excess of paper money issued returns to the issuer

The coin liberated will go abroad

Increased cost of maintaining excessive issues

There can be no excess of symbolic money

All regularly returns for redemption

The amount of notes issued has nothing to do with their return

A currency not symbolic is in excess to its whole amount.

Cost of maintaining a currency in ratio to its amount

The advances that Banks may make to merchants never to exceed the

amount of coin which would otherwise be in circulation

Advances to be made to merchants only as the representatives of manu-

facturers.

133

133

To equal the amount of merchandise entering into consumption.

Paper money does not supersede, but supplements the use of coin

A community will “absorb" all the money it can get

The promptness in payment of merchants would show that an excess of

currency had not been issued . . .

Such promptness for a time rather a proof of excessive issues

All reserves, and all gold and silver used as currency, dead stock

The object of banking to convert this dead stock into active capital

Paper money a wagon-way through the air.

Increase of money increases the price of commodities

The quantity of paper money added to the circulation, always to equal

the amount of coin taken from it

"The principles of the Commercial or Mercantile System

The assumed science of Political Economy a modern one

The Greeks, though addicted to commerce, seldom speculated upon subjects

coming within the range of the economic sciences

140

The Romans never a commercial or manufacturing people

The overthrow of the Empire by the Northern races

Freedom the necessary condition and result of the commercial spirit

Contempt of the Greeks and Romans for the useful industries

High estimation placed by the latter on gold and silver

The error not in the importance attached to them, but in the modes in which