become more constant every year, while the price of rye has become
more variable; for the reason that rye has gradually ceased to be an
article of popular consumption, and therefore to be an important
article in trade, and is consumed almost entirely and directly by
its producers. (_Horn_, Statist. Gemälde von B., 1853, 185.)
_Rodbertus_ rightly conjectures that the price of wheat was much
more variable in ancient times than it is with us. (_Hildebrand’s_
Jahrb., 1870, I, 36.) That it was so may be inferred from the
surprisingly large family supplies which were laid in, as appears
from Digest, XXXIII, De Penu legato.
681 In Würtemberg even officials etc. buy their own wine almost always
directly from the vintner. This causes prices there to be
exceedingly variable, frequently from hour to hour. (_v. Reden_,
Statist. Zeitschrift, Nov. 1847, 1008.) How greatly the mere
presence of a regular market has contributed to make prices more
constant, may be seen in the suburbs of Hamburg, where fish offered
for sale on the street are sold in the evening for one-third of the
price asked for them in the morning. Besides, purchases made with a
view to speculation may increase the variations of price, if the
speculation is unskillfully conducted, especially when a low rate of
interest, and of the profit of the person engaged in it, has
produced a blind race among the speculators. Here the price of a
commodity rises, not from any natural cause, but because it once
rose before, and _vice versa_. (_Senior_, Outlines, 17 ff.;
_Hermann_, 90 ff.)
682 That fixed prices suppose that men are engaged in the production of
the commodity in question, as their calling in life, see _Garve_, Zu
Cicero’s Pflichten, III, 64 ff. Chess-like commerce of colporteurs,
and in caravans etc. Concerning the dreadful higgling of the
Bedouins, see _Wellsted_, Reise in Arabien, _Rödiger’s_ translation,
I, 147; and the still worse bantering in Cashmere, where the
merchant, in the first place, always denies that he possesses the
desired commodity, then begins to search for it, in order to
discover what value the purchaser puts upon it etc. (_K. Ritter_,
Erdkunde, III, 475.) On the practices in Indian fairs, see _Th.
Skinner_, Excursion in India, 1832, I, ch. 6; on the bazaars in
Asia, _Andree_, Globus XII, 7, 211. _Herberstein_ says of the
Russians in the sixteenth century: _mercantur fallacissime et
dolosissime nec paucis verbis ... mercatores nonnunquam non uno
tantum aut altera mense suspensos detinent, verum ad extremam
desperationem perducere solent_. Hence the great variations in
prices and commodities. (Rerum Moscov. Commentt., ed. Starczewski,
39 f.) Similarly also, in 1674, according to _Kilburger_: Büsching’s
Magazin, III, 249. But, on the contrary, it is said of the
Plescovers, educated by intercourse with the Hanse; _tanta
integritas ... in contractibus, ut uno tantum verbo res ipsas
indicarent omni verbositate in fraudem emptoris omissa_.
(_Herberstein_, 52.) In the England of the present day, the custom
of marking each piece of goods with its price is very general.
Concerning the rapidity and the paucity of words with which prices
are settled in that country, where business men do not even salute
their customers, nor customers the business man, see _C. G. Simon_,
Observations recueillies en Angleterre, 1835, I, 129 f. The Athenian
laws (?), that fixed prices should be asked, and that sellers should
not sit down that that they might sell more rapidly, points to
something similar. (_Athen._, VI, 226 f. _Plato_, De Legg., XI, 916
f.) Athenian law prohibiting mendacity in the markets. (See
_Demosth._, Lept., 459.)
683 Thus the German book-trade has fixed prices. Many merchants never
make an offer to their educated customers who are wont to do so with
peasants etc.; because they are aware that the latter purchase only
after they have compelled the seller to come down greatly from his
first proposed price. Among the Quakers it has been a rule from the
beginning, never to ask more for their wares than they were
determined to accept. (_Hume_, History of England, ch. 62.)
_ 684 Sir William Temple_, Observations upon the Netherlands, Works I,
134, compares honor in trade to discipline in an army. Similarly,
_Law_, Trade and Money, 209 f. _Ferguson_, History of Civil Society,
III, 4. Where the seller is not obliged to make known the existence
of certain defects in his wares to the purchaser before sale, there
is always scope for fraud. Compare Digest De Edict. aedilit., XXI,
I. On the meaning of the German legal maxims: _Hand muss Hand
wahren_, and _Ein Wort, ein Mann_, see _Eisenhart_, Deutsches Recht
in Sprüchwörtern, 311 f., 319 f. It is a principle in matters of
business, that the person who through malice or carelessness
recommends a man of whose probity there is already some doubt,
should bear the damage caused by his recommendation. (_Martens_,
Grundriss des Handelsrechtes, 24 ff.) Many attempts at dishonesty
are prevented by laws which in important contracts, especially in
sales of land etc., require the presence of witnesses, and this
particularly in the lower stages of civilization. (_Meier_ and
_Schömann_, Attischer Process, 522; Roman, Emancipatio; _Grimm_,
Deutsche Rechtsalterthümer, 608 f.), or even a public proclamation
before the assembled community, at least written documents invested
with all legal formalities as practiced among civilized peoples. On
Greek laws of this nature, see especially, _Theophrast._, in
_Stobaeus_, Sermon., XLIV, 22. Very remarkable in Sparta. _Schol.
Aristophan._, Aves, 1284.
685 Compare _Lotz_, Revision, I, 255 ff. In England the price of wheat
scarcely ever varied more than from 1 to 2. In Ireland the price of
potatoes varied from 1 to 6. (_McCulloch_, Comm. Dict., v.
Potatoes.) Compare _Engel_, Jahrbuch für Sachsen, I, 491 ff. The
custom of asking enormous prices with the expectation of being
beaten down, is usual in Italy and carried to a frightful extent,
and related to the bad custom prevalent there of begging a little
after-payment to every little gratuity or drink-money which has been
received.
_ 686 Storch_, Handbuch, I, 311. _J. B. Say_, Traité I, ch. 16. As to how
commerce, when fully developed, is wont to be more moral than when
only half developed, see _Garve_, loc. cit., and Versuche IV, 149
ff. How fortunate for the public economy of nations that the prices
of corn especially have been growing more steady all the time since
the middle ages. See _Roscher_, Ueber Kornhandel, 56, 61.
687 Trade by barter was very general in several states of the American
Union about the close of the eighteenth century. In Vermont, for
instance, it was usual for a doctor to exchange his medicines
against a horse, and for the printer to buy corn, butter etc. with a
newspaper. (_Ebeling_, Geschichte und Erdbeschreibung, II, 537.) In
Maryland, the Assembly fixed by law the relative proportions at
which tobacco, pork, corn and wheat should be exchanged the one
against the other. (_Ebeling_, V, 435 ff. _Douglas_, Summary of the
British Settlements in N. America, 1670, V, 2, 359.) Even as late as
1815, children were wont to run the streets of Corrientes, crying:
“Salt for candles, tobacco for bread etc.” It was commerce with
England that first led to trade by money in the United States.
(_Robertson_, Letters on South America, 1843, I, 52.) Similarly in
Rhokand until the end of the eighteenth century, where the cities,
as a consequence, presented the appearance of a fair the whole year
round. In the beginning of this century, the khan introduced the use
of copper money made from Persian cannons; and much later yet, there
were scarcely a million rubles in money to a million men. (_Ritter_,
Erdkunde, VII, 753.) _Basil Hall_ found the uncivilized inhabitants
of the Loo-Choo Islands ignorant of the use of money. (Voyage of
Discovery, 1818.) Concerning trade by barter in the Homeric age, see
the Iliad, VII, 472 ff. A supposed law of Lycurgus prohibited the
use of money in purchases, and allowed barter only. (_Justin._, III,
2.) According to _Pausan._, III, 12, only barter existed in India
(?) in his time.
688 The person who has been used to paying for four pounds of meat with
twenty pounds of bread, and is asked to give twenty pounds of bread
in exchange for some other article, must of course have some unit of
measure in his mind to serve as a means of comparison between the
value of that article and that of four pounds of meat. In Denmark,
during the rule of the aristocracy, there were fixed prices
sanctioned by the tradition of long usage, in accordance with which
the prices of all commodities were estimated in relation to a ton of
barley or rye—a natural consequence, apparently, of the want of a
common measure to govern in the greater number of transactions.
_Bergsoe_, Archiv der Polit. Œk., IV, 314; _Graugan’s_ Icelandic
Code contains a remarkable fixed price of this nature in the
supplement to the _Kaupa-Balkr_ or Commercial Code, I, p. 500.
Similarly among the ancient Persians. _Reynier_, Economie publique
des Perses, 308.
689 That is, (200x(200-1))/2. Compare _Rau_ in _Storch_, Handbuch, III,
253. The “at least” has reference to the fact, that in barter, the
many different kinds of most commodities has to be borne in mind.
(_Knies_, Geld und Credit, I, 218.)
690 This transportation of values supposes an equality of values of the
money in two places, while the transportation of goods supposes
different values of the same kind of goods in both places. (_Knies_,
Geld und Credit, I, 218.)
691 While the words _pecunia_, _danaro_, _dinero_, and _argent_, are all
derived from unessential qualities, the German word for money,
_Geld_, corresponds with the essential quality of money, since it
denotes that which is of value everywhere (_gilt_). On the other
hand, _nummus_ and νόμισμα from νόμος, (_Bœckh._ Metrolog. Unters.,
310.), _moneta_ (the English, money), are from the temple of Juno
Moneta, in which the Roman coins were for a long time stamped. In
old German, the word for money, _Geld_, means everything that is
paid by any one. (_Grimm_, D. Rechtsalterth., 382.) The present
meaning of the word is to be met with in a very old document of
1327. (_Arnold_, z. Geschichte des Eigenthums in den deutschen
Städten, 89.)
692 The wrong definitions of money may be divided into two classes:
those which convey the idea that it is more than a commodity, and
those which imply that it is less.
This was a point which was contested even among the Greeks. There
were many who claimed that wealth consisted exclusively in the
possession of much money; as we find, for instance, in the
pseudo-Platonic dialogue Eryxias; while others insisted that money
was something purely imaginary (λῆρος), and the creation,
exclusively, of human laws. (_Aristot._, Polit., I, 3, 16, Schn.)
Νόμισμα σύμβολον τῆς ἀλλαγῆς ἔνεκα. (_Plato_, De Rep., II, 371.)
_Anacharsis_ compares money to counters. (_Plutarch_, De Profectt in
Virtute.) _Aristotle_, himself, subscribed to the second opinion,
although he saw clearly, that only useful and current things (χρείαν
εὐμεταχείριστον πρὸς τὸ ζῆν) could be used as money. (Polit., I, 3,
14 ff. Eth. Nicom., V, 5, 6, Rhet., II, 16.) _Xenophon_ ascribed
properties to money which no other commodity possessed; especially
when he said that it could never be too plentiful, and that its
price could never fall. (De Vectt. Ath., 4.) The finest ancient
explanation of the nature of money is that of the jurisconsult
_Paullus_, L. I.; Digest, XVIII, 1; and it well deserves the long
commentary devoted to it by _P. Neri_, Osservazioni etc., in
_Custodi_, P.A., VI, 324, ff.
Among the moderns, _Melancthon._, Corp. Ref., XVI, 498, and _Seb.
Frank_, Chronik., 760, consider money as a mere symbol. On the other
hand, the over-estimation in which the precious metals were held by
the adherents of the Mercantile System was owing, without doubt, to
their very superior utility as money; for we very frequently find
that the adherents of that school insist that the precious metals
must circulate. (See § 9 and § 210.) _v. Schröder_, Fürstl. Schatz-
und Rentkammer, III f., considers new copper coins as an increase of
the national wealth, but not other copper which is merely a
commercial commodity. He frequently calls money, the _pendulum
commercii_, and expresses ideas concerning it as enthusiastic as
they are obscure (p. 86.) _Horneck_, in his Oesterreich über Alles
wenn es will, 1864, calls gold and silver “our best blood, the very
marrow of our strength,” and “the two most indispensable universal
instruments of human activity and existence.” (p. 188.) _Th. Mun_,
England’s Treasure by forraign Trade, 1664, (ch. 2) considers
cash-money and resources as synonymous in every way. Only, he says
(ch. 4) that it is sometimes advisable to allow one’s money to
remain in foreign countries, and to use bills of exchange, banks
etc., at home, as a substitute. _F. Gee_, Trade and Commerce of Gr.
Britain, edition of 1738, laments the “stiff-necked folly of those
who think money a commodity like any other.” It is one of the most
common demands of the adherents of the Mercantile System that the
home mines of gold and silver should be worked at no matter what
sacrifice, since the money employed in working them continues to
remain in the country and the newly coined precious metal is clear
gain. Compare _Schröder_, loc. cit. 109 ff., 181. _Horneck_, loc.
cit. 173. _Broggia_, Della Monete, 1743, cap. 33; _v. Fusti_,
Staatswirthschaft, 1755, I, 246: _Forbonnais_, Finances de France,
1758, I, 148. _Ulloa_, Noticias Americanas, 1772, ch. 12. We seldom
meet with the correct view on this subject in the seventeenth
century. _Sully_, of whom Henry IV. said that he never found
anything to be possessed of beauty which cost double its real value,
had it at times. (Economies royales, LXXIII.) So had _v.
Seckendorff_, Teutscher Fürstenstaat, 1655, 5th edition.
It is in accordance with the usual course of human development that
the exaggerations of the Mercantile System led to a reaction
characterized by an exaggeration in the opposite direction. Even
_Davanzati_, Sulle Monete, 1588, traces the value of money back to
human convention and refuses to find it in nature. A natural calf,
he thinks, is _più nobile_ than a golden one; although he elsewhere
expresses his admiration of the precious metals, calls them _cagioni
seconde della vita beata_, and lauds them because they procure us
_tutt’essi beni_ (20, 21, Cust.) _Montanari_ (ob., 1687)
demonstrates from the use of leather money etc., that the authority
of the state is the only power which gives money its character as
money. (Della Moneta, 35.) _Davenant_ (ob., 1714) carries his
inclination to call money “the servant of trade, measure of trade,”
so far as to compare it to a ticket or counter. (Works, I, 355,
444.) Strongly as _Law_, himself, opposes the convention theory
(Trade and Money, ch. I; Sur l’ Usage des Monnaies, 1720, p. 1.),
his disciple _Dutot_, in his Réflexions polit. sur le Commerce et
les Finances, 1738, 905, éd. Daire, contrasts not only paper money
but also gold and silver as representative wealth, with real wealth.
_Berkeley_, Querist, 1735, teaches that the real notion of money is
not that of a “commodity, standard, measure, pledge, but [No. 23]
ticket or counter, entitling to power and fitted to record and
transfer such power.” (441, 475.) Even if the names, _livre_,
shilling etc., remain, and the metal is dropped, every article may
still as well as before be counted and sold, industry promoted and
the course of commerce preserved. (p. 440.) According to
_Montesquieu_, Esprit des Lois, XXI, 22, gold and silver are a
_richesse de fiction ou de signe_. Compare Lettres persanes, II, 18.
_Benjamin Franklin_ also maintains that the value of gold, for
instance, is principally a credit-value. Remarks relative to the
American Paper-Money, 1765, Works, II, Sparks’ edition.
_Forbonnais_, Finances de France, I, 86 f., calls money, simply a
means to put commodities, which alone have value originally, in
circulation. Hence it is, in itself, a matter of indifference
whether, for a given quantity of coin, a person gives one thaler, or
ten. In the Elements de Commerce, I, 11, II, 67 ff., he draws a
distinction between _richesses naturelles_ (raw material),
_artificielles_ (manufactured products), and _richesses_ de
convention (money.) _von Schlözer_, Aufangsgründe, 1805, 100, 138,
calls money something imagined; and _Th. Smith_, Essay on the Theory
of Money and Exchange, 1807, asserts, that true money is only an
ideal measure of value, of which coins in turn are only the
representatives. Compare, however, Edinb. Review, Oct., 1808.
_Oppenheim_, Die Natur des Geldes, 1855, grants that in the
beginnings of trade, money possessed the character of a commodity;
but says that as soon as the services of circulation of the
money-commodity prevailed over its services in consumption, it lost
all its importance for the latter purpose, and that all relations
dependent thereon ceased. At present, he claims money is only the
representative of commodities, but no commodity itself. See, on the
other hand, _Roscher’s_ critical analysis in the Literarisches
Centralblatt, 1855, December.
The true doctrine was advocated in a classic form by _Nicolaus
Oresmius_ (ob. 1382). See his Tractatus de Origine et Jure nec non
et Mutationibus Monetarum, newly edited by _Wolowski_: Paris, 1864.
See _Roscher’s_ essay in the Comptes rendus of the Académie des
Sciences morales et politiques, vol. 62, 435 ff. Based on the latter
we have _Gabr. Biel_ (ob. 1495), De Monetarum Potestate simul et
Utilitate, 1542, and _G. Agricola_, De Re metallica, 1556, I, 4 ff.
This true doctrine was acclimated earliest in England and Holland,
and before the mercantile system invaded them. Compare _Hobbes_,
Leviathan, 24, in which the _concoctio bonorum_ is described by
means of money, and the full and clear chapter 12 of _Salmasius_, De
Usuris (1638), who, among other things, shows how Midas, who turned
everything into bread, died of thirst. _Petty_ shows very clearly
that national wealth does not consist exclusively nor mainly in
money. Every country, he says, needs a certain quantity of money to
carry on trade. It would be a waste to increase the former, the
latter remaining the same. But the precious metals, by reason of
their durability and universally recognized value, possess the
character of wealth in a higher degree than other commodities.
On the whole, the use of money in a nation is like the use of fat in
the individual. (Quantulumcunque concerning Money, 1682.) Compare
_Roscher_, z. Geschichte der eng. Volkswirthschaftslehre, 80 f.
_Davanzati_ and _Hobbes_ had compared it to the blood, as has
recently _Schmitthenner_, Staatswissenschaften, 1839, I, 459.
_North_ calls money a commodity of which there may be an excess as
well as a want. (Discourse on Trade, preface and postscript.)
Compare _Locke_, Considerations on the Lowering of Interest, 1691,
Works II, 13 ff., 19. _Galiani_, 1750, Della Moneta, IV, holds a
very happy middle place between the alchymists and the philosophic
contemners of gold. See, further, _Quesnay, éd. Daire_, 64, 75 ff.
_Turgot_, Sur la Formation des Richesses, § 30 ff, had many clear
views on this subject. _Verri_, Meditazioni, 1771, II, 1, calls
money the universally current commodity. The expressions, measure of
value, pledge, representative of all commodities might be true also
of all other wares. It cannot, however, be denied that most modern
political economists have not borne sufficiently in mind the
peculiarities which distinguish money from all other commodities, as
is apparent from the doctrine of the balance of trade prevalent in
Hume’s and Adam Smith’s time. To this extent, therefore, the
semi-mercantilistic reaction instituted by _Ganilh_, Théorie de
l’Economie politique, 2822, II, 380 ff., 426; _St. Chamans_, N.
Essai sur la Richesse des Nations, 1824, ch. 3; and _Colton_, Public
Economy for the United States, 1849, 203 ff., who bring into relief
the difference between “money as the subject” and “money as the
instrument of trade,” was not wholly unfounded. _Ad. Müller_
exaggerates a correct thought, and causes it to degenerate into a
species of mystic pleasantry, when he calls every individual in the
state and every commodity that possesses value, in exchange or a
social character, money.
The highest object of the state is to develop this money-character
more and more. (Elemente der Staatskunst, II, 194, 199.) The
statesman, he says, should be money. (III, 206.) A very valuable
monograph on this subject is _M. Chevalier’s_ De la Monnaie, 1850,
constituting the third volume of his Cours d’Economie polititique.
_Knies_, Geld und Credit, I, 1873, is here most thorough and acute,
especially in keeping separate, by well defined lines of
demarcation, the five different functions of money: measure of value
(by proper division into parts: price-measure), instrument of
exchange, means of transportation of values, and means of storing up
and preserving values.
_ 693 Knies_ shows how the making of money legal tender by the state,
although of only secondary importance, is by no means an irrelevant
matter, since persons must then have it, even if they do not want it
for purposes of use or exchange, to discharge their liabilities
thereby etc., etc. (Tübinger, Zetschrift, 1858, 272.)
In all these cases, barter-economy (_Naturalwirthschaft_) meets with
greater and greater difficulties as civilization advances. How, for
instance, could 50 days annually of socage-service or labor be
redeemed by the achievement at one time of 1,000 days of
socage-service or labor? The rich man requires money principally as
a means of payment, the poor man as a medium of exchange. The
requirement or need of a people of media of payment is much more
susceptible of extension or contraction, than that of media of
exchange, made especially so by the intervention of claim-rights
instead of money. _(Knies_, loc. cit, 200 ff.) _Ravit_, Beitr. z.
Lehre vom Gelde, emphasizes this feature of money altogether too
much after the manner of a jurist. But he is entirely right in
adopting the exclusion of the _rei vindicatio_ against the honest
possessor as necessary to the completion of the idea of money.
_ 694 Sismondi_, N.P., I, 131, very rightly remarks that this has made
practice as much easier as it has theory more difficult.
_ 695 Law_, Trade and Money, 19. Hence, before the invention of money,
scarcely anything but the things most indispensable to existence
were produced. Were there no money, there would be very few
scholars, artists etc.; for the classes who produce most of the
things indispensable to existence make but few demands for them.
_Büsch_, Geldumlauf, I, 11 ff., 36, II, 54.
_ 696 Turgot_, Formation et Distribution, § 48 ff. Commodities which
perish rapidly could be produced by persons devoting themselves to
their production as a business only after the invention of small
coin. (_Lueder_, N. Œk., 1820, 283.)
697 Compare _Knies_, Geld und Credit, I, 219.
698 Compare _Schmitthenner_, loc. cit., I, 457. One of the principal
advantages of money consists in this, that every producer can
discover what there is an over-supply or under-supply of in the
nation, by means of the relation of the price in money of his
products to the cost of producing them, estimated in money, (_v.
Thünen_, Isolirte Staat, II, 2, 235.)
699 Hence it is that so many socialists attack money. _Th. More_ assures
us that with the simple abolition of money, vice and misery would,
for the most part, disappear of themselves. Hence in his Utopia,
criminals are bound in golden chains and the chamber-pots are made
of gold and silver in order to make these metals contemptible. (Ed.
1555, ff., 197 ff.) Similar views among the over-cultured Romans.
(Compare §§ 79, 204.) _Auri sacra fames_. _Virgil_, Æneid, III, 56.
_Pliny_, too, would recall the days of trade by barter. (H. N.,
XXXIII, 3.) Even in _Boisguillebert_, Factum de la France, ch. 4, we
find, together with many correct views on the nature of money,
passionate declamation against it because of its darker side.
_Argent criminel_. (Détail de la France, 7. Dissertation sur la
Nature des Richesses etc.) More recently this darker side has been
dwelt upon by _F. Möser_, Patriot. Phant., I, 28; _Ortes_, Economia
nazionale, II, 17, and the would-be restorer of the middle ages,
_Ad. Müller_. While the latter writer lauds the feudal system as a
“sublime fusion of person and thing” (Elemente I, 221), the present
system of wages, because it is a system of compensation, he blames,
and prefers the feudal for the opposite reason (?). “The only
_merit_ which the state recognizes in our day is one _of service_.”
(III, 259.) _Kosegarten_, Geschichtliche systematische, Uebersicht
der N. Oek., 1856, 146 ff., is no friend to the economic system to
which money gives a distinctive character. _Per contra_, compare
_Bastiat_, Maudit Argent, 1849.
_ 700 Mirabeau_, Philosophie rurale, 1763, ch. 2, adds as the third great
invention the _tableau économique_ of the Physiocrates. For a
comparison of money and language, see _Hamann_, Werke, II, 135 ff.,
509. _Hehn_, Kulturpflanzen und Hausthiere, finds it characteristic
of the race, that wine, writing with letters, and money, all owe
their origin to the monotheistic stem of the Semitic people.
701 Where every man becomes a merchant, and the society itself a
commercial society. _Ad. Smith_, Wealth of Nations, I, ch. 4.
702 Just as descriptive is the German word _billig_ (_equitable_) for
cheap. Here it is plain that language takes sides with the possessor
of money!
703 The contrast between barter-economy and money-economy is of great
and fundamental importance. It repeats itself with so much
regularity in the history of every highly developed nation, that
political economists gifted with perception for the historical,
could not possibly overlook it. Thus, _Aristotle_, for instance,
establishes with the utmost care and accuracy the difference between
οἰκονομικὴ and χρηματιστικὴ, that is, between natural economy and
artificial economy, corresponding to the difference between value in
use and value in exchange. (Polit., I, 3, Schn.) Similarly _D.
Hume_, who allows a period of luxury, culture, industry, of trade
and manufactures, of freedom and circulation of money, to be
preceded by one in which the feeling of wants is not awakened, in
which coarseness and idleness prevail, one in which agriculture is
alone pursued, and monetary economy and freedom decline, and trade
by barter obtains. (Discourses, passim, especially On Interest and
on Money.) A similar contrast we find frequently, and as one of his
fundamental thoughts, in _J. Steuart_.
As to how the transition from barter-economy to monetary-economy is
generally effected, see _F. G. Hoffmann_, Lehre vom Gelde, 1838, 176
ff. In the Tyrol, as late as 1820, the greater portion of purely
mechanical work, such as that of the smith, the carpenter, and the
washerwoman, were purely feudal duties. On the other hand, payment
in money was the rule, in the beginning of the fourteenth century.
(_F. Beidermann_, Technische Bildung in Oesterreich, 3.) Yet, for a
long time after, the functions of a measure of value were performed
by pieces of land, and those of an instrument of exchange by cattle
and natural products. (_Arnold, Gesch. des Eigenth_., 207.) In
France, money-economy, i.e., trade by money, had grown to importance
earlier. (_Nitsch_., Ministerialität und Bürgerthum, im 11. und 12.
Jahr., 143.) Even in the time of Mary Stuart, the Scotch estimated
the rent of land in “cauldrons of victuals.” (_Moryson_, Itinerary,
1617, III, 155.) In ancient Italy, during the first three centuries
of Rome, there was, with the exception of the Greek colonies, only
trade by barter. _Mommsen_, Römische Gesch., I, 293, shows that the
oldest ases were not money in the higher sense of the word, but
belonged rather to the stage of barter-economy. On the other hand,
we find in the time of the classic jurists, much as slavery had
limited the sphere of action of money, the principle: _pecuniæ
nomine non solum numerata pecunia, sed omnes res, tam soli quam
mobiles, et tam corpora quam jura continentur_. (L. 222, Digest L.
16; compare 4, 5, 178.) Similarly in _Cicero_, Top. 6. De Invent,
II, 21. De Legg, II, 19, 21; III, 3. Compare _Dionys. Hal._, N.R.
IV, 15.
704 Were money nothing but a measure of values in exchange, it should on
that account, if on no other, have value in exchange itself, as a
measure of length must necessarily have length itself. (We measure
time on a clock by means of the revolution of the hands on the
dial.) Again, value in exchange supposes value in use. The so-called
“money of account,” such as the East Indian _lac de roupies_, the
Portuguese reis, and the earlier English _pound_ sterling are no
imaginary magnitudes, which would disappear with the figures of our
system of counting (see _Hufeland_, N. Grundlegung, II, 33, in reply
to _Struensee_, Abh., III, 501); but real coin-values which can not
be represented by only single pieces of coin, units of value for the
most part no longer recognized by the state, but which the people
still retain. See _M. Park’s_ (Travels, 27) refutation of the fable
circulated by _Montesquieu_, Esprit des Lois, XXII, 8, that the
regular standard money of the Mandingo negroes was a mere imaginary
standard. _Hobbes_, Leviathan, 24, exhibits a very good knowledge of
this subject.
705 Compare _P. Neri_, Osservazioni, 1751, VI, 1. _Lord Liverpool_,
Treatise on the Coins of the Realm, 1805. The person who takes money
as such must always harbor the hope of being able to dispose of it
again as money. Hence, such an acceptance always supposes the
existence of a certain amount of commercial confidence. The savage
Goahiros, between Rio de la Hacha and Maracaibo, are too
“distrustful” to take anything in trade but commodities fit for the
most immediate use. (_Depons_, Voyage dans la Terrefirme, I, 314.)
Similarly in the twelfth century, the heathen Laplanders. (_Arndt_,
Liefl. Chronik, II, 3.) Commodities which barbarians can consume
immediately are objects of the first necessity, whereas more
civilized people, who are in a condition to undergo greater expense,
look more to the technic qualities of money, such as divisibility,
capacity for transportation and durability. _v. Scheel_ shows in a
very happy manner how, as commerce increases, money comes to be, as
it were, subjected to a process resembling that of distillation:
first mere increase of stores for use, next preponderating values in
exchange, lastly mere orders for the same possessing no independent
value. _Hildebrand’s_ Jahrbb., 1866, I, 16.
706 The last circumstance continues to be one of great importance for a
long period of time in the frigid zones. Thus, the beaver-skin
continues still to be the unit of measure of trade in much of the
territory of the Hudson Bay Company. Three martens are estimated to
be equal in value to one beaver, one white fox to two beavers, one
black fox or a bear to four beavers, a rifle to fifteen beavers.
(Ausland, 1846, No. 21.) The Esthonian word, _raha_, money, means in
the related language of the Laplanders, fur. (_Krug_, Zur Münzkunde
Russlands, 1805.) Concerning skin-money in the middle age of Russia,
see _Nestor_, _Schlözer’s_ translation, III, 90. The old word
_kung_, money, means marten. By degrees it came to pass that instead
of whole skins, only two “snouts” were given or other pieces of
leather about a square inch in size, which were probably stamped by
the government and redeemed in whole skins at the government
magazines. Hence, there is here supposed a species of assignats, and
of disturbances of credit. The Mongolian conquerors would not
recognize them, and they therefore became suddenly valueless. In
Novgorod and Pskow, the system continued some time longer, for the
reason that these places had little trade with the Mongols. In the
rest of the kingdom it now became necessary to introduce silver
money, and in the north to return to real squirrel and beaver skins.
_Karamsin_, Russ. Gesch., I, 203, 385; I, 96, 191 f. Voyage de
Rubruquis, in _Bergeron_, Voyages I, 91. _Herberstein_, Rer. moscov.
Commentt, 58 ff. Even in 1610, a Russian military chest was captured
by the enemy, and in it were found 5450 silver rubles, and 7000 fur
rubles. (_Karamsin_, XI, 183.)
707 When the Danes progressed so far as to practice agriculture, they
used grain instead of cattle, in quantities corresponding to the
value of one cow or one sheep, for money, to the end that their idea
of a unit of measure might not become obscured. (_Ravit_, Beiträge,
3.)
708 Homeric determination of prices in oxen. Iliad, II, 449; VI, 236;
XXI, 79; XXIII, 703 ff; Odyss., I, 431. Compare, however, II, VII,
473 ff. In Draco’s time, money-fines were imposed in cattle
(_Pollux_, IX, 60 ff.), and in Athens, before Solon’s time, even the
metal coins were, for the most part, stamped with the figure of an
ox. _Plutarch_, Theseus, 25. _Böckh_., Metr. Uuntersuch., 121 ff.
Among the most ancient Romans (_Cicero_, de Rep., II, 35) the
imposition of fines in property, the coins first stamped by Servius,
_boum oviumque effigie_ (_Plin._, H. N., XVIII, 3, _Cassiodor._,
Var., VII, 32), and the words _pecunia_, _peculium_, _peculatus_,
derived from _pecus_, point to something analogous. (_Varro_, De L.
L., V, 19; De Re rust., II, 1; _Cicero_, De Rep., II, 9; _Ovid_,
Fast., V, 281; _Plutarch_, Publicola, 11.) Old German fines in
cattle, in _Tacitus_, Germ., 12, 21; Lex Ripuar, 36, 11; Lex
Saxonum, 19. _Ulfilas_ translates αργύριον δοῦναι (_Mark_, 14, 11),
_faihu giban_. Very old German documents, of the seventh and eighth
centuries, name horses as purchase-price. (_Grimm_, Deutsche
Rechtsalterth., 586 f.) Otho the Great imposed cattle-fines.
(_Widuk_ Corb., II, 6.) Similarly, in King Stephen’s laws of Hungary
(_Wachsmuth_, Europäische Sitturgesch., II), in the old Irish Brehon
laws (_Leland_; History of Ireland, 36 ff.), as well as in the
Scotch collection of laws, _Regiam Majestatem_, of 1330. (_Honard_,
II, 263 f, 537.) _Viva pecunia_ of the Anglo-Saxons in the laws of
William I. In ancient Sweden, all property was estimated in
_fä_=cattle (_Geijer_, Schw. Gesch., I, 100), just as now, in
Icelandic, _fe_=property. In Berne, the German _vieh_, cattle, is
used to express commodities. Among really nomadic races this is, of
course, still more the case. Thus the Kirghises use horses and sheep
as money, and wolf-skins and lamb-skins for small change. (_Pallas_,
Reise durch Russland, 1771, I, 390.) Among some of the Tartar
tribes, everything is stipulated for in cows. (_v. Haxthausen_,
Studien, II, 371.) Among the Persian nomads, sheep are used as
money; or when they are held in subjection in the cities, corn,
straw and wool. (_Ritter_, Erdkunde, VIII, 386.) Oxen in use as
money among the Tscherkessens. (_Klemm_, Kulturgeschichte, IX, 16.)
_W. B. Hermann_ doubts, however, whether cattle were ever used as a
medium of exchange. He thinks rather they were employed only as a
measure of price. (Münchener Gel. Anz., 580.)
709 That of vanity which presents itself among some people sooner than
that of clothing.
710 In Genesis, 1, 24, gold appears only as a valuable ornament. Abraham
paid for his purchases in silver.
711 For this reason, zinc-money is just as natural with the Malays and
Chinese as iron-money with the Senegambians. (_Mungo Park_, Travels,
27.) And so _Plutarch_, Lysand., 17, may be right when he calls iron
the earliest universal means of payment. In Sparta, too, where
industrious efforts were made to maintain the lower stage of
culture, this medium of payment was longest maintained. Compare,
however, _St. John_, The Hellenes, III, 260 ff. The first copper
coins were stamped a short time before Philip, father of Alexander
the Great. (_Eckhel_, Doctr. Numm, I, XXX ff.) On the other hand,
Italy, partly because it had mines of its own, and partly because of
its intercourse with Carthage (Cyprus), had become, at a very
distant period, so rich in copper that the circulation of copper, or
to speak more accurately, of bronze, was naturally introduced.
Compare _Niebuhr_, Röm. Gesch., I, 475 ff. (_Aes alienum, obæratus,
ærarium, æstimare._) Copper was all the more adapted to this end the
more frequently it was found unmixed. It was generally used in
preference to iron because of the greater facility of working it.
(_Hesiod._, Opp., 150 f.; _Lucret._, V, 1285 f.) In modern nations
copper money seems to have been employed only after silver money.
Thus, it was not stamped in England before the time of James I.
(_Adam Smith_, I, ch. 5), nor in Sweden before 1625. (_Geijer_,
Schwed., Gesch., III, 56.) Money was struck from the metal of molten
bells during the French Revolution!
712 In Russia, between 1763 and 1788, there were 76 million rubles of
gold and silver coins struck, against 54 million of copper rubles.
(_Hermann_). On the other hand, in France, between 1727 and 1796,
there were struck only 40 million francs of copper, 10 million of
_billon_ or base coin, and 3967 million of gold and silver.
_ 713 Michaelis_, De Pretiis Rerum apud veteres Hebræos, 183.
_ 714 Strabo_, VIII, 358. Hiero, tyrant of Syracuse, found it exceedingly
difficult to obtain gold. When the Spartans wished to make an
offering of gold at Delphi they were obliged to have recourse to
Crœsus. (_Herodot._, I, 69; _Theopomp._, in _Athen_, VI, 231 ff.)
_Aristoph._, Ranae, 720, calls gold “new” in contradistinction to
the “old money,” that is, silver.
_ 715 Plin._, H. N., XXXIII, 13. Compare, however, _Dureau de la Malle_,
Economie polit. des Romans, I, 69, after _Varro_, apud Charisium, I,
81. (_Putsch._) It is certain, however, that when Italy was
conquered, the Romans had introduced a circulating medium of silver,
and that it was the prevailing medium; but in the time of Cæsar and
Augustus, a gold circulation was the prevalent one. Yet the state
treasure was deposited in gold during the period of silver
circulation, because gold was, without question, better adapted to
storing up and transportation.
_ 716 Muratori_, Antiquitt., IV, Diss., 28.
717 Henry was obliged to issue an order to the mayor and sheriffs of
London, to get his gold into circulation; but he soon saw himself
compelled to desist from executing his design. Edward III. was able
only after a voluntary circulation of them had continued for a long
time, to prohibit any one’s refusing the rose-nobles. (_L.
Liverpool_, loc. cit.)
718 German., 5. Still more striking is the example cited by _Herbelot_,
Bibliothéque Orientale (1697), 485. _Rubruquis_, Voyage, ch. 13. In
the time of Nadir-shah, the Kurds gave, without the slightest
hesitation, a pound of gold for a pound of silver or copper.
(_Ritter_, Erdkunde, VIII, 395.)
719 Recommended even by _Adam Smith_, ch. 5, and for Germany by _F. G.
Hoffmann_, Drei Aufsätze über das Münzwesen, 1832. In Egypt, also,
for a long time the wealthiest country of the middle ages, the
circulation of gold prevailed until the twelfth century. (_Macrisi_,
Historia Monetae Arab., cap. 3 ed., _Tychsen_.) Harun Alraschid’s
income was estimated at about 7,500 cwt. of gold. (_Ritter_,
Erdkunde, X, 235.) Something similar related of the Carnatic, “the
land of ancient emporiums.” _Ritter_, Erdkunde, V, 564, after
_Ferishta_.
720 The use of the _cauris_ (_Cypræa moneta_) in India this side and
beyond the Ganges, in upper Asia, and in southern Africa depends on
their employment for purposes of ornament, on their greater
uniformity, and on the rarity of copper which would otherwise be
better suited to purposes of change. In Calcutta, 1280 _cauris_ are
equivalent to about half a shilling. (_McCulloch._) Compare _K.
Ritter_, Africa, 149, 324, 422, 1038; Asien, I,964; II, 120; III,
233, 739; IV, 53, 420; _Salin_, III, 62; _Botz_, in the Tübinger
Ztschr. Similarly among the fishing population of Northwestern
America. (_Stein-Wappäus_, Handbuch I, 352.) Salt as money on the
Chinese-Birman boundary (_Marco Polo_, 38), but especially in the
interior of Africa, where nature does not at all produce it, but
into which it is brought by caravans from the deserts, where salt is
found in great quantities. _M. Polo_, Travels, 305, found the
current price of a salt-tablet, two and a half feet long, one foot,
two inches broad, and two inches thick, to be equal to the value of
two pounds sterling among the Mandingos. In Abyssinia, the salt-bars
are generally six inches long, three inches broad, one and a half
inches thick, and they are bound with an iron ring to protect them
against fracture. Sixty of them are worth one thaler. (Ausland,
1846, No. 35.) Slaves used as money: _Barth_, Reise, III, 338, 344.
Tea-blocks in upper Asia and Siberia; and they are given by the
Chinese to the Mongols as pay for troops. (_Ritter_, Asien, III,
252,) In Keachta, a tea-block is equal in price to one paper ruble.
(Ausland, 1846, No. 20. _Timkowski_, Reise nach China, 143.)
Date-money in the Sivah oasis. (_Hornemann_, Reise, 21.) Also in the
Persian date-country, where, formerly, the lowest silver piece of
money was coined in the form of a date (_Ritter_, Asien, VIII, 752,
819.)
The ancient Mexicans used as money cocoa-nuts, in bags of 24,000
pieces, cotton-stuffs, small pieces of copper, and gold dust in
quills. (_Humboldt_, N. Espagne, IV, 11.) Cocoa-beans are still used
as small change there. (Ibidem, IV, 10.) On the Amazon, wax-cakes
weighing one pound are used. (_Smyth_, Journey from Lima to Para,
1836.) Among the ancient inhabitants of Rügen, linen (_Helmold_, I,
39); and still among the Icelanders, the so-called _Vadhmâl_. During
the middle ages, 120 ells of _Vadhmâl_ were equal in value to one
milch cow or six milch sheep, or two and a half ounces of silver.
(_Leo_ in _Raumer’s_ histor. Taschenbuch, 1835, 515.) That the
ancient northern mode of valuation, by the _Vadhmâl_ and in cows is
older than by the _mark_ is shown by _Wilda_, Gesch. des deutschen
Strafrechts, I, 331. The cod-fish money used by the Icelanders was,
on account of its great commercial importance as an article of
export, an advance upon the use of the _Vadhmâl_. Among the Caffirs,
besides _cauris_, mats, javelins, glass corals, but particularly
brass rings, are used as money. From three to four hundred of these
rings are strung together, and two such strings are equal in value
to one cow. (_Klemm_, Kulturgeschichte, III, 308, 320 f.) Ivory used
as money in the neighborhood of the Portuguese colonies in Africa.
(_Martius_, Reise, II, 670.) In Logone, _Denham_ (1822) ff., had met
with pieces of iron as a medium of circulation; but on the other
hand, _Barth_ (1849), with small strips of cotton from 2 to 3 inches
in breadth, and shirts for larger sums. (A. R., III, 274, 297, 538.)
In colonies, money of this nature is continued for a long time. Thus
cod-fish used in Newfoundland, sugar in the English West Indies
(_Adam Smith_, I, ch. 4), tobacco in Maryland and Virginia.
(_Douglas_, V, 2, 389; _Ebeling_, V, 435 ff.) The last was related
to the inspection and storage of the tobacco intended for
exportation. Payment was made in orders on the stored and inspected
tobacco, even as late as the end of the eighteenth century. In 1618,
the forced circulation of tobacco was decreed in Virginia, and under
severe penalties. (_Gouge_, History of Paper-Money and Banking in
the United States, ch. 1.)
721 When the caravans no longer touched at the oasis Agades, gold and
silver money fell into disuse, and grain, stuffs etc. did service as
instruments of circulation. (_Barth_, Reisen und Endeckungen, I,
144.)
_ 722 Ad. Müller_ says very pertinently, but in a very mystical vein,
that the precious metals combine in a very high degree and yet in a
very simple manner, the principal qualities in which man’s greatness
finds expression: rarity, flexibility, uniformity, mobility,
durability and beauty. (Elemente, II, 266.) In another place, he
says, the highest ideal good is God, the highest material good,
gold! (III, 65.) The mysticism of gold was most highly developed
among the alchymists of the sixteenth and seventeenth centuries.
723 Iron beds are worked only when they contain at least 18 per cent. of
metal. Generally it is estimated that the furnace should yield 30
per cent. In the copper mines of Mansfield, Norway, Agordo and
Venice, it goes as low as from one to three per cent. On the other
hand, silver mines which yield 0.17 per cent. of metal are
considered worth working. Lastly, gold is so rare that generally it
can be extracted only from time to time by the ordinary mining
processes. As a rule, men are content to gather it where nature has
charged itself with its refining. The extreme limit of the working
of gold appears, according to _Plattner_ and _Haussmann_, at Goslar,
to be reached when in 5,200,000 parts of mineral earth there is one
of gold. Spite of this, however, by reason of their great ductility,
the precious metals have been able to penetrate even into the
meanest huts in one form or another. It has been estimated that a
silver leaf may be attenuated by beating to a thickness of only
0.00001 of an inch, and a gold leaf to 0.0000035 of an inch. An
ounce of gold spread on a silver thread may attain a length of
13,000 English miles. (_McCulloch._)
724 How easily, for instance, could leather-money, such as was used by
the ancient Galls (_Cassiodor._, Varia, II, 32,) be increased to any
desired quantity, and thus its price brought down.
_ 725 Engel_, at the usual tariff for land and railroad freight (10 and 5
_pfennigs_ per mile and hundredths of a mile) estimates the
enhancement of the price of the following commodities, for one mile
of transportation of a custom-hundred-weight (_Zollcentner_) at the
following percentage of their average value:
Gold, value 47610 German _Reichsthaler_ per cwt., 0.000007 by land,
0.0000035 by railroad.
Silver, value 3000, 0.00111 by land, 0.00055 by railroad.
Cotton, value 45, 0.074 by land, 0.037 by railroad.
Tin, value 24, 0.1389 by land, 0.0694 by railroad.
Lead, value 8, 0.416 by land, 0.208 by railroad.
Iron, value 2.5, 1.333 by land, 0.666 by railroad.
Rye, value 2, 1.666 by land, 0.833 by railroad.
Potatoes, value 0.6, 5.555 by land, 2.777 by railroad.
Coal, value 0.12, 27.777 by land, 13.888 by railroad.
Their great specific gravity, also, makes the precious metals easy
of transportation. Thus _Cazeau_ calculates that a given value of
gold is 17,222 times as easy to transport as the same value in
wheat. But as, where the weight is the same, the labor of
transportation is inversely as the volume, this number must be
multiplied by 26, and we therefore have 447,772 times. In the case
of silver, the relation to wheat is as 1:15,554. Concerning copper,
see _Storch_, Handbuch 1, 488. _Chevalier_, Cours, III, 17 ff.
726 This, at bottom, is also true, of the various kinds of copper; only,
here, complete refining is impracticable on account of the relation
between the cost of production and the product-price.
727 On the other hand, copper, and still more zinc, tin and lead lose
much of their value in the fire. Pearls may lose their entire value
by fire, and diamonds more than half of it.
_ 728 Aqua-regia_, a mixture of nitric and muriatic acid, dissolves gold.
Chlorine and bromine attack it. It has been noticed to vaporize at a
very high temperature. A gold thread vaporizes when a strong
electric current is passed through it. A small ball of gold gives
off a great deal of vapor if placed between two carbon points and
subjected to the action of a powerful galvanic pile. (_K. F.
Naumann._)
729 Compare _Hatchett_, Experiments and Observations of the various
Alloys, On the specific Gravity and comparative Weight of Gold,
1863. The French five-franc pieces wear away, on an average, in a
year, 0.00016; the English crown, 0.00018; the half crown, about
0.00173; and the shilling, about 0.00456. (_L. Liverpool_, Treatise
on the Coins. 204; _M. Chevalier_, Cours, III, 128 ff.) The wear
from use of the south German gulden is 0.292 per 1,000. (_Rau_, in
the Archiv. N.F.X, 256.) According to _Jacob_, the average wear of
coin is 2.38 per 1,000. (Historical Inquiry into the Production and
Consumption of the Precious Metals, ch. 23.)
_ 730 Adam Smith_, Wealth of Nations, I, ch. II, Digr.
_ 731 Solera_, Sur les Valueurs, 1785, 271 ff.; _Custodi_. Half an ox,
for instance, is worth half the value of a whole one only for a few
well defined purposes. As to how much the value of the diamond
varies with the size etc., see _Dufrênoy_, Traité de Minéralogie,
II, 77 f. On the other hand, the separated parts of a piece of metal
are very readily reduced to a whole.
732 In the case of the ox, it is impossible to imagine a mark which
might not be eluded by its losing flesh.
733 The cost of coinage since 1849 has been ¾ of 1 per cent. in the case
of silver, and in that of gold not quite 2 per 1,000. (_M.
Chevalier_, Cours, III, 110.)
734 Platinum possesses many of the properties necessary to an instrument
of exchange in as high a degree as gold and silver,—great value in
exchange, great specific gravity and great durability. On the other
hand, its pliability as to form is very small, and therefore the
cost of coining it would be high. The conversion of platinum coins
into utensils, and of utensils into coin, which would contribute to
the supply of money when needed, and to a diminution of that supply
when the demand decreased, would be much more difficult on this
account; and also because of the small degree of beauty possessed by
that metal, which renders it little adapted to purposes of luxury.
Under these circumstances, the rarity in nature of the metal is a
great drawback; for the discovery of a new mine would create a great
perturbation in prices. For this reason, the Russian platinum coins
have been generally very much undervalued since 1828 in the
commercial world, and the whole experiment was given up in 1845-46.
Compare _J. Schòn_, National Œkonomie, 128 ff. Aluminum, discovered
by Wöhler, and which can be prepared from argillaceous earth, is
capable of manipulation in a very high degree (_malléable et ductile
à peu près sans limite, excessivement fusible_), almost as
indestructible as the precious metals, but easily distinguished from
silver by a fine bluish color, which has been compared to that of
tin; by its small specific gravity, from 2.5 to 2.67, and its ring
like that of iron. Hence it is very doubtful whether aluminum can be
made to play the part of a substitute for silver, and still more so
whether it can be used for coining.
_ 735 Lingot, bullion_. In India, beyond the Ganges, and in China, bars
are very much used. (_Sycee._) In the latter country, besides these
bars, there is no coinage except that of a mixture of copper and
lead, for small change. (_Th. Smith_, An attempt to define some of
the first Principles of Political Economy, 31. _Timkowski_, Reise
nach China, III, 366.) Concerning Brazilian trade by bars, see _Spix
und Martius_, Reise, I, 346 f. They are stamped with the national
coat of arms, the sign of the mint, the number by which registered,
that of the year and of the degree of fineness. Concerning the
Persian bars, the _laries_, see _Noback_, Handbuch der Munzverrh.,
III, Taf. 29.
736 Concerning the utility of the precious metals for purposes of money,
see _Pliny_, A.N. XXXIII, 3; _Oresmius_, De Mutatione Monetarum, ch.
2; _Law_, Sur l’ Usage des Monnaies, 683 f. _Daire_, where we read
that before the invention of money, silver had served all kinds of
useful purposes, but that now it served its most important purpose,
namely the making of the best material for money on many accounts.
Yet _Law’s_ book, Money and Trade considered (1705) is based mainly
on the idea that pieces of land are much better adapted for purposes
of money than the precious metals (185)! _Galliani_, Della Moneta,
1750, I, 3, 4, and _P. Neri_, Osservazioni, 1751 ff, Cust., have
very correct ideas on this subject.
_ 737 North_, Discourses upon Trade, 16. The capacity of money to act as
a storer of wealth has been as much over-estimated by the so called
Mercantile System, as its capacity to transfer wealth has been by
the so called currency-school.
_ 738 Adam Smith_ compares money to a large wheel, by means of which a
due share of the means of subsistence and of enjoyment is
distributed to each member of society. Elsewhere he compares its
utility to streets and roads. (Wealth of Nations, II, ch. 2.)
_Hume_, On Money, Pr., prefers to compare it to the oil with which
the wheels of circulation are greased. _Sismondi_ compares money to
porters. (N. Principes, II, ch. 2.) “Money is to commerce what
railways are to locomotion, a contrivance to diminish friction.”
(_J. S. Mill._) According to _Schmitthenner_, 455, it bears the same
relation to other commodities that the written language of a
people’s literature does to their dialects.
_ 739 Law’s_ views on money are, in part, excellent. Thus, for instance,
he says that the debasement of the coin from financial necessity is
as great a folly as it would be to try to enlarge a piece of goods
too small for the purpose for which it was intended, by diminishing
the length of the yard-stick. (Sur l’Usage des Monnaies, 697.) A
country entirely isolated from all others could get along as well
with one hundred pounds sterling as with a million. (Money and
Trade, p. 88.) Elsewhere, he confounds money and capital to such a
degree that he considers every increase of the amount of money in a
country as an enrichment of the people, a means to give employment
to the poor, to carry on manufactures etc. (Money and Trade, 23, 26
ff., 168.) A given quantity of money is capable of giving employment
at most only to a certain number of men. (21.) A nation’s power and
wealth depend on the population and its stores of goods, these on
commerce, and commerce in turn on the amount of money. (Pp. 110,
220.) The advice given, in 1848, to the National Assembly of France,
but which it had the good sense to reject, to overflow all France
with the so-called _bons hypothécaires_, is akin to Law’s practical
propositions. _M. Chevalier_, Cours, III, 8, rightly ridicules the
literal construction of the words: _l’argent est abondant_, when
merchants find it easy to obtain credit, and considers it as well
grounded as it would be to infer from the maxim: _l’argent est le
nerf de la guerre_, that rifles and bullets were made of silver.
_ 740 Adam Smith_ was not entirely clear, in his own mind, on this point.
Thus inconsistently enough, he calls money unproductive—“dead
stock,” for the reason that it leaves no material traces behind it
of the goods which it has transferred from one hand to another. (II,
ch. 2.) Is not the same true of trade itself? And yet Adam Smith
calls trade productive. His error is doubtless a remnant of the
Physiocratic doctrine, to which Smith still held. Compare _Quesnay_,
94, éd. Daire. Even _Twiss_ says that money employed as money is
unproductive, but that, when employed as a commodity, it is
productive. (View of the Progress of Political Economy, since the
sixteenth Century, 1847.) Besides it is not a peculiarity of money
alone, that, after it has served the purposes of production, it
comes out of the product unaltered. The same is true of quicksilver
employed in amalgamation. (_Hermann_, 2nd edition, 302.)
_ 741 Senior_, Three Lectures on the Value of Money, 1840, is, in so far,
not wrong when he says that the value in exchange of the precious
metals is still ultimately determined by the want of such
commodities as are luxuries. This last determines to what extent the
production shall be extended by the working of the poorest mines,
whereas the wants of circulation can be met as well by small as
large quantities of the metals.
742 The good or bad result of this production depends on many different
elements which may compensate on another. In California and
Australia gold is to be found in large quantities, and is easily
mined; but the workmen make large demands which the nature of the
country renders it difficult to meet. In the Harz mines, where the
cost is scarcely covered, (_Lehzen_, Hannover’s Staatshaushalt,
1853, I, 139), the shafts are sometimes 175-½ fathoms deep, but this
is made up for in a measure by the moderate demands of the workmen
and their skill in mining. Among the Mandingos, the auriferous
material is so rich that ⅓ per 1,000 of the weight of the sand is
washed out into pure gold in ten minutes (_M. Park_, Journal, 53
ff., addenda, XIX), while in Europe, where the proportion is only
1/100 per 1,000, mines are still considered worth working. But then,
what workmen there are there! In Peru, the burdensome height of the
mines above the level of the sea and the want of combustible
material more than counterbalance many favorable advantages, while
in Norway the cheapness of wood compensates for a great many
disadvantages. Another thing which contributes towards the
uniformity of the price of the precious metals is the circumstance
that the great amount of fixed capital required in the greater
number of mining enterprises, postpones for a long time the working
of good mines as well as the abandonment of poor ones.
743 Older writers have estimated the amount of money necessary in a
country at 1/5, 1/10 (_Petty_), 1/15, and even 1/30 of the yearly
income of a people (_Adam Smith_, II, ch. 2.) According to
_Cantillon_, Sur la Nature du Commerce, p. 73, it is from 1/6 to
1/10 of the annual gross production of a nation.
_ 744 Davanzati_, Lezione sulle Moneta, 1588, 32 ff., Cust., thinks that
all terrestrial things which serve to satisfy the wants of men are,
by virtue of agreement, equal in value to all the gold, silver and
copper; and that the parts comport themselves as the whole. The
price of a commodity is based on this, that men find in it as much
of their _beatitudine_ as is afforded them by a given quantum of
gold etc. Similarly, _Montanari_, who adds as a limitation the
quantity of money _spendibile in commercio_. (Della Moneta, 45, 64,
Cust.) The same opinion leads _Locke_ to the singular conclusion,
that, as there is now in the world, ten times as much silver as
there was previous to the discovery of America, each single piece of
silver, separately considered, and taken in relation to such
commodities as have not varied, is worth only one-tenth of what it
was then. _Locke_, here, starts out with the gross assumption,
shared even by _Ganilh_, Théorie, II, 386 ff., that in the case of
money the demand is always, relatively speaking, equally strong and
just as great as the supply, or as the amount in the market. (Works,
II, 23 ff.) Further, _Montesquieu_, Esprit des Lois, XXII, 7, 8. Per
contra, however, see _Montesquieu_, ibid. XXII, 5, 6, and _Hume_, On
Money and on the Balance of Commerce, Essays II, 1752.
Hume knew perfectly well, that only circulating money and
circulating commodities operated on price, but failed to take the
rapidity of circulation into account. Similarly, _Forbonnais_,
Eléments du Commerce, II, 212; even _Canard_, Principes, ch. 6;
_Fichte_, Geschloss. Handelstaat, 93 ff., and _Stein_, Lehrbuch, 58.
Contested by _Law_, Trade and Money considered, 140, a work directed
especially against the Mercantilistic essay, Britannia languens;
1680, by _Mélon_, Essai politique sur le Commerce, ch. 22;
_Genovesi_, Economia civile, 1764, II, 1, 15; _Steuart_, Principles,
II, ch. 28; _Verri_, Meditazioni, XVII, 3 ff.; _Büsch_, Gedlumlauf,
II, 40. The simple taking of an inventory of most private resources
which possess so much greater value in other commodities than in
money is enough to demonstrate the error of _Davanzati’s_ doctrine.
Thus, in France, in Necker’s time, the cash money in the kingdom was
estimated at 2,200,000,000 livres, and the average value of the
wheat crop alone at 1,000,000,000. _Necker_, Législation et Commerce
des Grains, 1776, I, 215. Recently, _Michel Chevalier_, estimated
the amount of money in France at from 3-½ to 4 milliards, while the
official estimate of its immovable property alone was over 83
milliards.
745 When money becomes dearer, less of it is of course needed; and when
cheaper, more, for the same purpose.
746 In contradistinction to presents, acts of spoliation, but especially
to barter.
747 The discoverer of this truth is supposed by many to be _Bandini_,
Discorso economico, 1737, 141 f., Cust. _Berkely_, however, in the
Querist, 1735, 477 f, writes: “A sixpence twice paid is as good as a
shilling once paid.” Much earlier yet, in 1797, _Boisguillebert_,
Détail de la France, II, 19, had the germ of this doctrine, but he
confounds circulation with consumption. And _Locke_, Considerations,
II, 13 ff., presented it in 1691 with great clearness, although he
did not always remain true to his theory. Compare _Quesnay_, éd.
Daire, 64; _Cantillon_, 159 ff., 382.
748 If the number of annual exchanges effected by 1 dollar = u; the
total number of dollars in the store of money = m; the rapidity of
circulation, that is the number of exchanges effected on an average
by each dollar in a year, = s: then is u = m s, s = u/m, m = u/s.
749 Since good money is so easily stored away and preserved, no one is
in haste to get rid of it. _St. Chamans_, N. Essai sur la Richesse
des Nations, 122 ff.
750 Among the Kurds, all the money in their camps is used for
head-ornaments for their women. (_K. Ritter_, Erdkunde, X, 887.)
751 Thus, _Sir David North_, Discourse on Trade, 1691, Postscr.
_ 752 Lotz_, Handbuch, 377, is of opinion that even in England £100,000
employed in trade in land can scarcely effect exchanges to the
amount of £1,000,000 in a year. The same sum employed for the same
purpose in London, in stocks and in the trade in commodities, will
effect exchanges to the amount of £160,000,000.
_ 753 Cernuschi_, Mécanique de l’Échange, 1865, 132 ff.
754 Thus _Petty_ (ob. 1687) is of opinion that England needed as much
money as ½ of all its ground-rents amounted to, as the ¼ of all
house-rents, and 1/52 of all the wages of labor for a year; for the
reason that ground-rents are paid semi-annually, house-rents
quarterly, and wages weekly. (Several Essays, 179; Political Anatomy
of Ireland, 116.) _Locke_, on the other hand, assumes 1/50 of the
wages of labor, ¼ of all the revenue of land owners, and 1/20 of the
amount cash money taken in in a year by merchants. Of these amounts,
there should be always, at least, one-half in ready money on hand,
if commerce would not be brought to a stand-still. If leases were to
be paid for on short terms, a great saving of money would be
possible. (Works, II, 13 ff.) _Pinto_, Traité du Crédit et de la
Circulation, 34, calls special attention to the case of Tournay, in
which the commandant, during the siege of 1745, made 7,000 florins
serve him for seven weeks to pay the garrison; by borrowing that sum
anew every week from the inn-keepers etc.; which they, again, had
received from the soldiers.
755 If all were to commit their payments to the care of the same banker,
it would be possible to do with almost no money. But even now, if
100 separate merchants were obliged to keep each 3,000 dollars in
their money-chests for unforseen contingencies, a banker might
accomplish the same for them with 50,000 dollars, because it is not
probable that the unforseen contingencies in question would occur to
all at the same time.
756 In the London Clearing-House, in 1839, £954,401,600 were paid by
means of the use of £66,275,600 as a circulating medium, for the
most part notes of the Bank of England. (_Tooke_, Inquiry into the
Currency Principle, 27.) From May, 1868, until May, 1869,
£7,068,078,000. (Statist. Journal, 1869, 229.) The New York Clearing
House, in 1867, effected payments to the amount of £5,735,031,900
(Ibid., 1867, 577), and in 1868, $30,880,000,000. (_Hildebrand’s_
Jahrb., 1869, II, 168.)
757 This system began in the middle of the seventeenth century. (A
Discourse of Trade Coyn and Paper Credit, 64.) As early a writer as
_Sir J. Child_, N. Discourse on Trade, 46, says, that for some time,
every man who had from £50 to £100 in money, sent it to his banker,
and that since that time, all the money flowed towards London and
the country was deprived of it. (127 ff.) As a rule, the goldsmiths
were also bankers. One such smith had at the time of the Great Fire
of 1666, emitted £1,200,000 in notes. (A Discourse etc., 67.) The
Bank of England, as a money center, dates from 1694. The London
banks developed into intermediaries principally before the time of
the French Revolution. (_Thornton_, Paper-Credit of Great Britain,
1802.) This remarkable institution had grown to vast dimensions even
in Thornton’s time, although it has been much enlarged since 1825.
(_Tooke_, History of Prices, 152 f.) Similar conditions among almost
all highly civilized peoples. Thus in Greece, compare _Becker_,
Charicles, I, 294. Concerning a person who had 14 talents’ worth of
resources, 26 minæ, and therefore three per cent. in cash, see
Lysias, adv. Diog., 6. In Rome, compare _Polyb._, XXXII, 13.
_Cicero_, pro Font., I, 1. For Italian analogous cases, part of
which may be traced back as far as the twelfth century, see
_Lobero_, Memorie storiche della Banca de S. Georgio, 1832; or the
Dutch “cassiere” Richesse de Hollande, I, 376, ff. In France an ever
increasing centralization of the money-trade is to be noticed in
Paris (_M. Chevalier_, Cours., III, 418); and now of the money-trade
of Germany in Berlin.
758 Compare _Fullarton_, On the Regulation of Currencies, 1845. Among
the Dutch, the custom of using all commercial commodities as much as
possible, as a basis of the circulating medium, was much earlier
developed. (_Child_, Discourse on Trade, 65, 264 f.) In Great
Britain, the aggregate amount of bills of exchange put in
circulation was, in 1839, £528,000,000, which sum has been increased
annually at the rate of about £24,000,000. (_Tooke_, Inquiry into
the Currency Principle, 26.) Between 1828 and 1847, there circulated
at the same moment, on an average, £79,127,000 in bills of exchange
in England, and in Scotland, £17,380,000 (Athenæum, 1850, No. 175),
and in Great Britain and Ireland, from £180,000,000 to £200,000,000.
(_Tooke_, History of Prices, VI, 588,) According to _Macleod_, the
bills of exchange and promissory notes together amounted to
£500,000,000; bills of exchange, bank-notes and bank-credits, to
over £600,000,000. (Elements, 12, 325.) _Macleod_ calls the currency
the sum total of all debts due by every individual in the country.
(Elements, 43.)
759 A case in England, in 1857, in which a house with £10,000 capital
failed with liabilities amounting to £900,000. (Report of the select
Committee on the Bank Act, 1858, XV.) Or where a speculator with
£1,200 made purchases on credit to the amount of £80,000, and then
failed with a deficit of £16,000. (_Fawcett_, Manual, 442 f.)
760 Remarked by as early a writer as _Davenant_, Works, IV, 106 ff.
Compare, however, II, 238. _Quesnay_, éd. Daire, 75 ff. _Lord King_,
Thoughts on the Effects of the Bank Restriction, 1804, 17 ff.
Exhaustively treated by _Chevalier_, Cours., III, 397 ff. He very
much laments the fact that the customs of France cause it to need
from 3½ to 4 milliards of cash money, while England does a much
larger trade with 1,200 millions. (I, 207 ff.) In France, it is said
that the amount of money, in 1812, was 1,500,000,000 francs(?).
(_Peuchet_, Statistique élémentaire, 473.) In Prussia, in 1805, it
was 90,000,000 thalers. (_Krug_, Betracht. über den
Nationalwohlstand des preuss. St., I, 244.) The annual amount of
production in the former country was, 7,036,000,000 francs; in the
latter it was estimated at 261,000,000 thalers, so that in Prussia
the relation of money to national income was, as 1:2.9; in France,
as 1:4.69.
761 It is scarcely possible to determine exactly the amount of money in
a country; for the reason that, outside of the suppositions of
bankers etc., there is no authority which can be safely relied on,
unless it be the reports concerning the coinage, and of the emission
of paper money. The information, no less necessary, to be derived
from the statistics of the importation and exportation of money, the
melting down of coin by gold smelters etc., can never be exactly
obtained. In England, at the end of the sixteenth century, the
circulating medium was estimated at £4,000,000 (_Hume_, History of
England, ch. 44, App.); under Charles II., at £6,000,000, when the
population was 6,000,000. (_Petty_, Several Essays, 179.) About
1711, _Davenant_, New Dialogues, 11 ff., mentions £12,000,000 as the
amount; and _Anderson_, Origin of Commerce, a., 1659, £16,000,000 in
1762. The circulation of gold, shortly before 1797, was estimated by
_Rose_ at, at least, £40,000,000; by Lord _Liverpool_, at
£30,000,000; by _Tooke_, at only £22,500,000. (History of Prices, V,
130 ff.) _Moreau de Jonnés_, 1837, assumed £43,500,000 (Statistique,
I, 329), and _Helferich_ (Schwankungen der edlen Met., 1843, 147),
£45,000,000. _Sir Robert Peel_, estimated the amount in 1845 at
£59,000,000, to which was to be added an average of £28,000,000 in
bank notes, after deduction made of the metallic reserve. According
to _Jevons_, the amount of British money is now £80,000,000 in gold,
£14,000,000 in silver, £1,000,000 in copper; the sum total,
including bullion and bank notes, after the deduction of their
metallic representatives, £134,000,000. (Economist, December, 1868,
July, 1869.) In France, _Vauban_, Dîme royale, 104 (Daire),
estimated the cash money at about 500,000,000 livres, over
750,000,000 francs, with which _Voltaire_, Siècle de Louis, XIV, ch.
30, agrees so far as the year 1683 is concerned. In 1730,
_Voltaire_, assumes the amount to be 1,200,000,000 of the coins of
that time. _Necker_, Administration des Finances, III, 66, estimated
it, in 1784, at 2,200,000,000 livres; _Mollien_, about 1806, at
2,300,000,000. The valuations in Louis Philippe’s time varied from
2,400,000,000 to 2,500,000,000 (Chamber of Deputies, April, 13,
1847), and 4,000,000,000. (_Blanqui._) The valuations of 1870 were,
according to _Wolowski_, 4 milliards; and to _Bonnet_, from 5 to 6
milliards. Compare _Wolowski_, L’Or et l’Argent, 383 ff., Euquête,
42. The German Zollverein is said to have had, at the beginning of
1870 (_Soetbeer_) 480,000,000 or 520,000,000 thalers (_Weibezahn_)
cash money.
In Wirtemberg, _Memminger_, 1840, estimated the resources of the
country at 1,600,000,000 guldens, of which 36,000,000 were cash; and
the yearly gross income at 179,000,000 guldens; so that the money
was 20 per cent. of the latter and 2¼ per cent. of the former. The
annual sales = 226,000,000. Therefore the coin currency must have
circulated on an average between six and seven times in a year. In
the electorate of Hesse, there were _per capita_ 4 thalers, 18
sgrs., 9 hellers, metallic money, and 3 thalers, 9 sgrs., 4 hellers,
paper-money. (_B. Hildebrand_, Statist. Mitth., 1853, 185.) The
amount of money in Naples, in 1840, was estimated at 42,000,000
ducats. (_Scialoja._) It has been estimated that, in 1830, Spain
possessed 1,725,000,000 francs. (_Barrego von Rottenkamp_, 330.)
_ 762 Montanari_, Della Moneta, 52 ff.
_ 763 David Hume’s_ very influential essay on the balance of trade does
not give expression to this error, but he certainly was the occasion
of making a great many of his disciples advocate it. It is related
to the error mentioned in § 123. _Quesnay_, 101 (Daire) saw this
point in a much clearer light. So did _Graumann_, Gesammelte Briefe
vom Gelde (1762), 12 ff.; 73 ff.
764 This is seen, for instance, when paper money is issued, in times
when trade is thriving, and is withdrawn when this conjuncture
ceases.
765 Very well elaborated by _Fullarton_, On the Regulation of
Currencies, 71 ff., 139 ff. Compare, however, _Becaria_, Economica
publica, IV, 4, 27. When England on the occasion of the removal of
the bank restriction in 1821 and 1822, caused £9,520,759 and
£5,356,788 to be stamped, this powerful demand scarcely affected the
gold-agio in Paris. (_M. Chevalier_, Cours, III, 157.) And, on the
other hand, the system of assignats, developed during the first
French Revolution, on so large a scale, had no influence on the
price of silver in the rest of Europe. (_Lord King_, Thoughts on the
Bank Restriction, 1804.) And so, _Tooke_, History of Prices, I, 205,
describes a very large increase of the medium of circulation, after
which the prices of commodities remained unchanged, corn fell,
colonial products rose in price, both as they had done before, and
from causes inherent in the commodities themselves. During the first
years of the bank restriction, 1799-1801, grain rose very rapidly in
price, while all trans-Atlantic products sank. (_Tooke_, I, 232 ff.)
The unusually large importation of wheat from January 1, 1846, to
January 14, 1847, was paid in France by a decrease of the bank
metallic reserve (_encaisse_) to the extent of 172,000,000 francs.
(_M. Chevalier_, Cours, III, 470.) An experienced practitioner in
England is of opinion that an increase of bank notes to the amount
of about £5,000,000 would not raise prices nor increase the tendency
to speculation, but only enlarge the deposits of the bankers. But,
if on the other hand, £5,000,000, by any sudden contingency, were to
be put into the hands of the working classes, this money would, for
the most part, enter immediately into circulation; the price of
commodities would, therefore, rise and continue to rise until that
amount had come into closer fists, as it would after some time.
(_Tooke_, III, 156 ff., II, 323.)
766 This explains the high price of gold in Farther Asia, which was
formerly separated from America, the principal source of supply of
the precious metals, by a journey around the earth, the then usual
course of the world’s trade.
The precious metals are generally higher in country places than in
large cities, and in the interior than on the sea-coast. Since the
public highways etc. in Germany have been so much improved, the
difference in the value of money in upper and lower Germany has
almost disappeared. (_Rau_, in the Archiv der polit. Oek., III,
338.)
767 Happy beginning of this doctrine in _Hume_, On the Balance of Trade.
Further, _Thornton_, The Paper Credit of Great Britain, ch. 11.
_Adam Smith_, on the other hand, claims that gold and silver,
because they are costly superfluities are uniformly paid most dearly
for, in the richest countries. (Wealth of Nations, I, ch. 11, 3:
Digr.)
768 Similarly in China, and even in Upper Egypt, the China, so to speak,
of antiquity! Compare _Herodot._, II, 112 ff; _Homer_, Od., IV, 354
ff. The religion of the Egyptians prescribed to them a mode of life
which was scarcely practicable in foreign parts. They were
systematically inspired with a horror for everything foreign. They
had a strong antipathy for salt, fish and pilots. In Egyptian
mythology, Osiris represents the Nile, Typhon the desert and the
sea! (_Plutarch_, De Iside, 32.)
769 The other party, of course, makes a profit also. He is in a better
condition than if he wished to produce the desired commodity in his
own country.
770 The first clear germ of this doctrine, which is one of the most
important theoretical principles of international-trade politics, is
to be found in _David Hume_, On Interest; _Cantillon_, Nature du
Commerce, 226, 369 ff. _Ricardo_, Principles, ch. 7. “Gold and
silver having been chosen for the general medium of circulation,
they are, by the competition of commerce, distributed in such
proportions amongst the different countries of the world, as to
accommodate themselves to the natural traffic which would take place
if no such metals existed, and the trade between countries were
purely a trade of barter.” _Rebenius_, Oeff. Credit, I, 29 ff. Still
further developed, especially by _John Stuart Mill_, Elements, 1821,
III, 4, 13 f.; _Torrens_, The Budget, 1844. _John Stuart Mill_,
Essays on some unsettled Principles of Political Economy, 1844, No.
1, and Principles, III, ch. 19, § 3, 5th ed.: “The opening of a new
branch of export trade from England; an increase in the foreign
demand for English products, either by the natural course of events
or by the abrogation of duties; a check to the demand in England for
foreign commodities, by the laying on of import duties in England,
or of export duties elsewhere; these and all other events of similar
tendency, should make the imports of England, bullion and other
things taken together, no longer an equivalent for the exports; and
the countries which take her exports would be obliged to offer their
commodities, and bullion among the rest, on cheaper terms, in order
to re-establish the equation of demand; and thus England would
obtain money cheaper, and would acquire a generally higher range of
prices.”
Obscurely surmised by _Beccaria_, E.P., 3, 18, and even by
_Galiani_, Della Moneta, II, 2. _Senior’s_ admirable work, Three
Lectures on the Cost of Obtaining Money, 1830, follows up the
thought that every country obtains indigenous and foreign products
at a cost which grows smaller in the same proportion as the
productiveness of its people’s labor is large. This would,
certainly, explain why it is that perhaps one hundred English days’
work in cotton manufactures will exchange against as much silver as
is produced by two hundred days’ work in Mexican mines and
foundries. This would not, by any means, produce a lowering of the
price of the precious metals relatively to other English
commodities, but the influence would be felt equally by all the
products of English national industry.
771 To be found in germ in _Cantillon_, Nature du Commerce, 1755, 249
ff. 307. _Büsch_, Geldumlauf, 14. _Kaufmann_, Untersuchungen, I, 75
ff. Many of the doctrines of the so-called Mercantile System, of
which I shall treat in my projected work on the Political Economy of
Commerce, have given expression to this truth in an inexact and
exaggerated way; but they were not entirely erroneous, as is
supposed by the adherents of Hume and Smith. However, _J. S. Mill_,
Principles II, ch. 19, § 2, does not fully admit the degree of the
cheapness of money in England usually assumed. According to him it
is wants of luxury (luxury-wants) become such through habit, that
produce “the dearness of living in England.”
_ 772 Petty_ considers the search for a measure which could be applied
both to land and labor as one of the principal problems of Political
Economy. (Political Anatomy of Ireland, 62 ff.) _Sir J. Steuart_,
Principles, III, ch. I, took the matter very easy by considering the
so-called “coin of account,” for instance, “bank-money,” as an
invariable value-magnitude. Compare _Jacob_, Grundsätze der National
Œkonomie, II, 441 ff. _Cazaux_, Economie politique et privée, 1825,
16 ff., has a not uninteresting study on this subject; but he goes,
throughout his argument, on the assumption that the rate of interest
is the price of money! If the rate of interest in two countries = I
and i, the prices of the same commodity = P and p, the true
thing-values, V and v; then we have v: V:: i p: I P!
_ 773 Law_, Trade and Money, 181. Before him, and quite correctly,
_Montanari_, Della Moneta, I, p. 84 ff., compares the means employed
of measuring one commodity by another, to the means used to estimate
time in terms of space, as when it is measured by the revolutions of
the hands of a clock, and again, space in terms of time.
774 The solvability or capacity to pay of buyers cannot be taken into
consideration here, because it is synonymous with the amount of
counter-values which are to be measured.
_ 775 Adam Smith_, Wealth of Nations, I, ch. 5. Similarly _Luther_, vom
Kaufhandel: Werke, ed. _Walch_, X, 1098 f. _B. Franklin_ considered
the labor employed in the production of wheat as the best measure of
prices. (Letter to Ld. Kames: Works, ed. _Sparks_, VII.) As Adam
Smith, so also _Sismondi_, Richesse commerciale, I, 371 f.; _Kraus_,
Staatswirthschaft, I, 84,; v. _Schlözer_, Anfangsgründe, I, 41. Also
_Malthus_, in the second and succeeding editions of his Principles,
ch. I, 6, and Definitions, ch. 8, 9. The Measure of Value, 1823.
_Zachariä_, Vierzig Bücher, VII, 53 f., maintains that, at least
within the limits of every separate nation, the average labor-power
of one man is invariable. Assuming this principle, therefore, to be
true, the means of subsistence necessary to support a laborer for
one work-day constitutes, indirectly, a measure of prices. _Tooke_,
History of Prices, I, 56, says that the amount of a day’s wages is
always a better measure of the price of the precious metals than the
price of wheat. Even in 1750, _Galiani_, Della Moneta, II, 2, had
denied the impossibility of an entirely invariable measure of price
in this world of change, but he considered man himself the least
variable of measures, and in a country where slavery prevailed,
slaves. He thought that the _macuta_ of the negroes were a part of
the average price of slaves. Practically, Adam Smith’s proposed
measure was used in the French constitution of 1791, in as much as
it provided that participation in primary assemblies should depend
on the participant’s paying an annual tax equal to the wages of
three days’ work, and eligibility as an _èlecteur_, on the
possession of an income equal in value to the wages paid for two
hundred days’ day-labor. _Owen_ endeavored to base the value of the
paper money in circulation in his Utopian commonwealth, not on any
metal of a certain weight or stamp, but on hours of labor as the
unit. (_Reybaud_, Réformateurs Contemporains, I, 255.)
776 The wretched condition, until within a short time since, of the
Irish working class, is well known; how they dwelt in mud cabins
without windows, board-floors or chimneys etc., in the same
apartment with their pigs; how they lived almost exclusively on
potatoes, and went about in rags. These same Irish, _coelum, non
animum mutantes_, received in North America for the coarsest kind of
labor, 50 to 75 cents wages, besides wheat bread and meat three
times a day, coffee and sugar twice a day, butter once, and seven or
eight glasses of whisky or brandy. (_M. Chevalier_, Lettres sur
l’Amérique du Nord, I, 159.)
777 Thus in Mauritius, the immigration of the coolies has produced a
decrease of negro wages, but an increase of negro industry. In the
Barbadoes, the negroes are more industrious and their wages lower
than in Jamaica. The wages of good workmen, as for instance during
the commercial crisis in Manchester, often sink, while the wages of
bad workmen rise; as, for example, in a village through which a
railroad is made to pass. Compare _Lauderdale_ Inquiry, ch. 1;
_Sartorius_, Abhandlungen, 1806, I, 16 ff.; _Lotz_, Revision, I, 99
ff.; _M. Chevalier_, Cours, III, 88 f.
778 Besides the passages cited in § 107, compare also _Harris_, On Money
and Coins, II, 1757 f.; _Jacob_ also preceded _Ricardo_. See the
German translation of _Say_, II, 435, 507.
779 The introduction of the words “the socially necessary time of labor”
into the formulæ does not make the measure any more practical for
political economists or for socialists.
_ 780 Cantillon_, who reduces all the cost of production to land and
labor, considers the “at par” between these two to be this: that the
labor of the meanest slave corresponds to the quantity of land which
the owner is obliged to employ for his support, and the support of
the slave and of the children who are to take his place. (Nature du
Commerce, 42.) The Physiocrates thought that the internal (_innere_)
value of two commodities stood in the same relation to each other as
the area of land directly or indirectly necessary to their
production. _Schlettwein_, Grundfeste der Staaten, 1792, 230.
781 The so-called _Sachwerth_ (thing-value, real-value) of _Hermann_,
St. Untersuchungen, 101 ff. Thus _Poulett Scrope_ recommended a
“tabular standard,” to be officially established and renewed from
time to time, to serve as an anchor to those persons who wished
permanently to fix their money in such a manner as to make it
exchangeable for an equal value in _things_. (Principles of
Political Economy, 1833, 406.) Something of this kind was tried for
50 commodities, between 1833 and 1837, by _Porter_, Progress of the
Nation, 1st ed., II, 236 ff., then for 40 commodities by _Jevons_ in
the Statistical Journal, 1865. Of course, all commodities of a given
price are not equally important in this respect. Thus, for instance,
a fluctuation in the price of diamonds would have no effect on the
thing-value or real-value of a day’s wages, but it certainly would
on the thing-value of a princely income. There are some excellent
remarks on this very important subject in _Lowe’s_ work, On the
Actual Condition of England, chs. 8 and 9. The controversy carried
on between _Jevons_, A serious Fall in the Value of Gold, and its
social Effects, 1863; Statist. Journal, 1865; and _Laspeyres_,
_Hildebrand’s_ Jahrb., 1864, 81 ff.; 1871, I, 296 ff; in which the
former recommends the geometric mean of the relative prices of
separate commodities at different points of time, in order to
calculate the average relative price: and the latter, as usual, the
arithmetical mean, is very thoroughly reviewed and criticised by
_Drobisch_, who shows that neither of these methods is sufficient,
but that the quantity of every separate commodity must also be taken
into account, for which he furnishes practical formulæ. (Math. phys.
Berichte der _K._ Sächs. Gesellsch., 1871, I, 143 ff, 416 ff.) It is
certain that a fixed income in money could maintain its real value
or thing-value (_Sachwerth_) just as little if the cwt. of bread
rose by as many dollars as the cwt. of pepper had fallen; as if the
increasing price of bread depended on a decreasing price of pepper.
_ 782 Senior_, Outlines, 187. In addition to this, we may draw from the
thing-value of a day’s wages a right conclusion as to the economic
condition of the majority of the people; and assuming the customary
division of the national wealth, also as to the degree, to which the
people have subjected the forces of nature to their service.
_ 783 Ricardo_, ch. 22, refuted, indeed, only the view that an increase
in the wages of labor produced by the higher prices of corn, would
necessarily make all goods or products of labor, correspondingly
dearer.
784 Compare § 103. In Paris, in 1817, the _setier_ of wheat cost March
5, 55½ francs; April 2, 57 fr.; April 23, 60 fr.; May 14, 63 fr.;
May 21, 66 fr.; May 28, 75 fr.; June 4, 82 fr.; June 11, 92 fr.
(_Tooke_, History of Prices, II, 17.)
_ 785 Locke_, 98. When _Condillac_ asserts that wheat is the best measure
of prices, he adds, when free trade in wheat obtains. (Commerce et
Gouvernement, 1, 23.) _Fichte_, on the other hand, while advocating
the despotic guidance of all trade by the state, would employ wheat
as the fundamental measure of prices. (Geschl. Handelstaat, 47 ff.)
That grain does not afford a good measure of prices in very highly
cultivated nations nor in barbaric ones, see _Hermann_, II, Aufl.,
451.
786 The average price must be based on the prices of a great many years,
since crops vary not only from year to year in price, but from
decade to decade. See _Roscher_, Nationalökonomik des Ackerbaues, §
152, and _Roscher_, Kornhandel und Theuerungspolitik, 47 ff. Great
wars are wont to disturb agriculture in such a manner that the price
of corn is very much increased by them. Hence, it is not
unfrequently possible to use the prices of grain as a species of
barometer to determine the real pressure of a war upon the economic
life of a people. Judging by this standard, England suffered much
less from the War of the Roses in the fifteenth century, than from
the civil wars in the seventeenth; and less than France from the
religious wars of the sixteenth. The war year 1631-2, in which
Gustavus Adolphus and the emperors had to spare the country, must
have been far less oppressive for Saxony than the later Swedish
campaigns. _Roscher_, in the Tübinger Zeitschrift, 1857, 471.
787 Most countries go through these successive periods in their corn
trade: in the first, exportation preponderates; in the second, there
is an equilibrium; in the third, importation preponderates. (_M.
Chevalier_, III, 74 ff.) Compare _Tacit._, Ann., XII, 43. Omitting
the two dearest and the two cheapest years, the Prussian provinces
were circumstanced as follows:
In The Whole Kingdom, the price of Rye, 1816 to 1837, was 40.
silver groschens. The population per square mile, 2,776
In Prussia, 32.2 silver groschens, and 1,827
In Posen, 34.3 silver groschens, and 2,180
In Brandeburg, Pomerania, 38.4 silver groschens, and 2,093
In Saxony, 40.3 silver groschens, and 2,366
In Silesia, 38.0 silver groschens, and 3,612
In Westphalia, 47.7 silver groschens, and 3,600
In Rhine Province, 49.4 silver groschens, and 5,078
_Rau_, Lehrbuch, I, § 183. As to when it may be assumed that the
price of corn has remained unchanged, see _Hermann_, loc. cit., 125
ff.
_ 788 Petty_ recommended the average daily food necessarily required by
one man as the measure of price, estimated on the basis of the
cheapest means of subsistence. (Polit. Anatomy of Ireland, 62 ff.)
_Thaer_ used as such a measure the smallest day’s wages; as he
supposed, expressed in rye, that is, 1/9 of the Prussian _scheffel_.
Similarly, _Malthus_, in his first edition, and _Buquoy_, Theorie
der Nationalwirthschaft, 240. But this is simply to substitute for
wheat an arbitrarily determined quantity and quality of the same as
a measure of prices. For practical experiments of this kind, made by
the depreciation of paper money during the French Revolution, see
_M. Chevalier_, Cours, III, 98; and Constitution de 1795, V, 68, VI,
173. _Count Soden_, Nat. Œk., II, 338 f., demands that all taxes,
salaries of state officials etc., should be regulated in accordance
with the price of corn. This same view has been suggested recently
in many German States.
789 Recognized generally by _Locke_, Considerations 24. Further,
_Galliani_, Della Moneta, II, 2; _Adam Smith_, I, ch. 5. _Schäffle_,
N. Œk., II, Aufl., 127, maintains that a constant measure of price,
such as would enable a person to stipulate for a salary for instance
that would be always of the same value, is impossible. Similarly,
_Hildebrand’s_ Jahrb., 1871, 315 ff.
790 Compare _J. Tucker_, Four Tracts on political and commercial
Subjects, 28 ff., who maintains that it is a rule, almost without
exception, that “operose or complicated manufactures” are cheapest
in rich countries; “raw materials,” in poor ones. Thus, for
instance, corn (?), garden products in the former; cattle, wool,
milk, skins, flesh-meat, in the latter. Ships and movable property
are cheaper in the former, whereas wood may be said to be almost the
free product of nature here. See especially _Adam Smith_, Wealth of
Nations, ch. 11, Digr.
_ 791 Senior_, Outlines 119 f., makes the following calculation: Of the
15d. which a loaf of bread costs in England, 10d. goes to buy the
wheat, the other 5d. to the miller, baker etc. If now, we suppose,
that in consequence of an increased demand, and therefore of
increased production under more unfavorable circumstances, the price
of wheat should rise to 20d., the cost of production would possibly,
because of an improved division of labor, come down to 3-¾d., and
hence the price of the loaf of bread would be increased to 23-¾d. It
is quite the reverse in the case of lace, because here a piece of
raw material worth only 2 shillings may, by reason of the labor
expended on it, become worth as much as £105. If the consumption of
lace should increase so that the value of the raw material rose to 4
shillings, the simultaneous decrease of the cost of manufacture to
the extent of one-quarter of the aggregate price, would leave the
price of the manufactured article £78, 19s.
792 When, for instance, the inhabitants of the Baltic coasts, by way of
preference, kept up their relations with the Hanseatic cities, the
Dutch and English, that is with the most important industrial and
commercial nations in their own sphere, they in all this pursued
only their own interest. As to how this intercourse between “old”
and “new” countries is susceptible of the very highest development,
see _Torrens_, The Budget: On Commercial and Colonial Policy, 1844,
and earlier, _Wakefield_, England and America, II, 1823.
793 The clearing up of primeval forests, the cultivation of natural
meadows, etc.
794 In Hungary, during the sixteenth century, the choicest venison was
consumed by plebeians and nobles alike. _Herberstein_, Rer. Moscov.
Comm., 97. In Russia, even the lowest classes not unfrequently
partake of roast hare and duck etc. _Kohl_, Reise in Russland, II,
386. Still, in St. Petersburg, wild-fowl game rose between the time
of Peter the Great and Alexander I. 600 per cent. in price.
(_Storch_, Handbuch, I, 368.) In Pittsburg, in 1807, mutton, beef
and veal cost from 4 to 6 cents a pound, and game only from 3 to 4-½
cents a pound. (_Melish_, Travels through the United States, II,
57.) The more the game laws are enforced, the longer does the low
price of game continue, especially when it is not easy for the poor
to procure them. The moderns have seldom thought of raising game
artificially; among the Romans, artificial raising was confined to
the hare and fieldfare. (_Varro_, R.R., III, 12 ff.; _Columella_,
R.R., VIII, 10.) Hence, the enormous prices paid for game, of which
_Pliny_, H. N. X., 43, relates an example from the time of the
emperors. On the other hand, Polybius assures us that, in his time,
game was to be had as good as gratis in Lusitania. XXXIV, 8, 7.
795 In Buenos Ayres, in the nineteenth century, beggars on horseback
were to be seen. (_Robertson_, Letters on South America, II, 294.)
In Krasnojarsk, in 1770, 1-½ rubles was the price of an ox, 1 ruble
of a cow, from 2 to 3 of a horse, from O.3 to O.5 of a sheep; O.15
of a deer. (_Pallas_, Sibirische Reise, III, 5, II 12.) According to
the Tables of Prices in _Sir F. M. Eden_, State of the Poor, Append.
I, and _Rogers_, History of Agriculture and Prices (1866), I, 245,
361, the following prices obtained in England;
(On an average.)
in 1125-26, one ox, 1 shilling; one quarter of wheat, 20 shillings;
in 1260-1400, one ox, 13 shillings 1-¼d; one quarter of wheat, 5
shillings 10-¾d;
in 1406, one ox, 9-½ shillings; one quarter of wheat, 4-½
shillings;
in 1463, one ox, 10-20 shillings; one quarter of wheat, 1-⅔-4-⅔
shillings.
Compare _Hume_, History of England, a. 1327. Under Henry VIII. veal,
beef, mutton and pork were food for the poor in England, and cost on
an average 1-½d per pound; while wheat cost from 7 to 8 shillings a
quarter. (24 Henry VII, c. 3. _Price_, Observations, II, 148 f.) The
same appears from the “reasonable prices” which Charles I, in 1663,
had established by sworn juries viz.: that the different kinds of
meat were much cheaper comparatively than corn in our days.
_(Rymer_, Foedera, XIX, 511. _Anderson_, Origin of Commerce, a.
1633.) In many places in the highlands of Scotland, in the middle of
the seventeenth century, one pound of oat-bread cost as much or more
than one pound of the best meat. The union of Scotland with more
highly civilized England soon changed the relation, so that in _Adam
Smith’s_ time, good meat, in nearly all parts of Great Britain was
worth from 2 to 4 times as much as the same weight of wheat bread.
(Wealth of Nations, I, ch. 11, 1.) The Thomas Hospital in London
paid, on an average, for good beef per stone weight:
1701-1710: 1s. 7.9d.
1764-1773: 1s. 3.7d.
1794-1803: 1s. 5.d.
1804-1821: 1s. 10.9d.
1822-1842: 1s. 1.5d.
(_Porter_, Progress of the Nation, III, 112.) Among the most certain
proofs of the high degree of economic civilization attained in upper
Italy about the close of the medieval times is the fact, that the
price of cattle, compared with that of wheat in the thirteenth and
fourteenth centuries, varies very little from what it is to-day.
(_Cibrario_, Economia politica del medio Evo, III, 335-383.) Compare
_Rau_, Lehrbuch I, § 185. In Athens, the cost of a _medimnos_ of
wheat was as great as that of a sheep in Solon’s time. In the age of
Demosthenes, it cost only half as much. (_Böckh_, Staatshaushalt der
Athener, I, 107, 132.) It is obvious, however, that the price of
meat compared with that of corn, was lowered by the great extension
of the artificial cultivation of meadows; for, when the former has
reached its maximum, it becomes a great spur to the promotion of the
latter. Thus, in England, the price of meat, at the beginning of the
sixteenth century, was on an average, higher than in _Adam Smith’s_
time. (loc. cit.) To the same cause is to be ascribed the state of
things in Prussia mentioned by _v. Podewils_, Wirth
schaftserfahrungen, II, 15.
As a common basis for such calculations, the following may be
accepted. It is plain that meadows, pasturages and forage-fields
must yield as much in meat, as corn-fields of the same dimensions of
equal goodness, and situated as favorably, in corn. According to
_Block_, a Prussian acre (_Morgen_) of the best quality, used as a
meadow, produces a hay-value equal to 1,000 pounds, a clover-value
equal to 2,420; as a vegetable field, a beet or potato-value equal
to 6,050-6,930 pounds, _v. Lengerke’s_ estimate is that 110 pounds
of cattle-fodder expressed in terms of hay, produces on an average
40 pounds of milk, and from 3-½ to 4 pounds of meat. This would, at
most, give 36, 88 and 220-252 pounds of meat. The yield of wheat,
_v. Lengerke_ estimates, on the best soil, and on an average, at 14
Prussian _scheffels_ (at 80 pounds, i.e. 1,120 pounds) yearly per
acre (_Morgen_). The three periods in the history of the prices of
cattle were clearly recognized by _Thaer_, Landw. Gewerblehre, 1815,
100.
796 It is a very characteristic fact, in relation to the river
fisheries, that the fable that servants formerly stipulated not to
eat salmon except twice a week is to be found in so many places.
Thus on the Elbe and the Rhine. Compare _Thaarup_, Dänische
Statistik, I, 112. In Scotland, about the end of the seventeenth
century, the story in places ran, that it was five times a week.
(_Walter Scott_, Old Mortality, ch. 8.) In England, fish seems to
have been a tid-bit among the poorer classes in the fourteenth
century. (_Rogers_, I, 606.) It was dearer especially during Lent.
(Statist. Journ., 1861, 544 ff.) The artificial production of
sea-fish seems to have been tried only by the ancient Romans. On the
whole, _Adam Smith’s_ law that a ten-fold demand can, as a rule, be
met only by a greater than ten-fold labor, applies here. (I, 370,
ed. Basil.) But this relation is obscured to a certain extent, from
the fact that the source of the production of sea-fish, the ocean,
which may be claimed at any time by occupation, is, practically,
boundless. Here, therefore, the improvements made in nautical
science, and the progress of geographical knowledge, may yet for a
long time compensate for the exhaustion of the nearer seas, and even
more than counterbalance it.
797 Among a great many nations in a low stage of civilization,
agriculture consists in the burning down of the forest. In 1594, the
Lauenförder forest produced 1,110 thalers’ worth of food for hogs,
and wood to the amount of 44 thalers. (_v. Berg_,
Staatsforstwirthsch., 213.) The Harzgerode woods, at the ducal line
of Anhalt-Bernburg, were estimated at 6,000 thalers. A hundred years
later, they brought in yearly 70,000 thalers, although, in the
meantime, very little progress was made in the science of
cultivating them, (_v. Justi_, Staatswirthschaft, II, 211.) We may
form a notion of the relativity of the idea of the dearness of wood
from the fact that in Bavaria, for instance, in 1840, there was a
great deal of complaint, that in the district of Isark the price
rose from 6 to 9 florins; in the districts of Regen and the lower
Maine, from 11 to 14 florins to from 15 to 18; in the Rhine
district, from 20 to 26 florins per cord (_Klafter_). (_Rau_,
Lehrbuch, III, § 150, a.) Besides, the price of wood in the forest
rises, with an advance in civilization, much more rapidly than it
does in the market; in which last, labor and capital play a greater
part. (_Rau_, I, § 385.)
798 Plan for the artificial production of pearl oysters. (Novara-Reise,
I, 303.) Ostriches seem now to be ceasing to be objects of mere
occupation, and to be becoming objects of breeding. (Ausland, 1869,
§ 13.)
799 Thus Wolff’s experiments made at Möckern have shown that in the case
of sheep fed with hay, the wool becomes much heavier and the flesh
leaner than those of sheep fed with a more concentrated food. While
it is estimated in England, at the present time, that the wool of
South-Down sheep is worth scarcely one-tenth what their flesh is
(_Jacob_, On Corn Trade, 166), mutton, from the year 1260 to 1400,
was, on an average, worth 17 pence; and this even at a time when
prices were gradually rising; but the wool of one animal (1 lb., 7-¾
ounces), 5-¼ pence. (_Rogers_, I, 362, 395.) Even under Anglo-Saxon
kings the fleece was worth 40 per cent. of the value of the whole
sheep, (_David Hume_.) And so _W. Macann_, Two Thousand Miles Ride
through the Argentine Provinces, 1853, I, 151, says that in the
interior of Buenos Ayres, he purchased 8,000 sheep at 18 pence a
dozen, and after a march of 200 English miles, sold the skins for
sixty pence a dozen. In Goya, formerly, a live horse cost 3 pence,
its skin on the coast 12 pence; and the slaughtering of the beast
cost 3 pence, the removal and cleaning of the skin 3 pence; and 3
pence were paid for transportation. (_Robertson_.)
In Ireland, in 1763, it not unfrequently happened that the skin and
tallow of an ox cost as much in a commercial city as the whole ox
had cost in the nearest market town. (_Temple_, Works III, 13.) In
England, from 1260 to 1400, the average price of a whole cow was 9s.
9d.; of the hide 1s. 8d., and cows were cheapest in the first
decade, i.e., 6s. 2d., and the hides dearer than they were generally
afterwards, i.e., by from 1-9-¼d. (_Rogers_, I, 361, 451.) In
Saxony, according to _Engel_ (1853), the average price of horned
cattle was about 46 thalers; of their hide, 4 thalers and 21 silver
groschens. Russia exported, 1842-1847, 72,636,166 silver rubles
worth of tallow, 1,832,137 silver rubles worth of horse hair,
10,811,735 worth of bristles (_Borsten_), 7,387,140 of uncured
skins, 36,159,452 of sheep’s wool, but flesh-meat only to the amount
of 370,362 rubles, and entire animals to the value of 6,853,241
rubles. (_P. Storch_, Der Bauernstand Russlands, 289 ff.) Tallow is
there ten times dearer than the same volume of wheat. (_Steinhaus_,
Russlands industrielle und commercielle Verhältnisse, 294 ff.);
while in Saxony, according to _Engel_ (1821), a pound of wheat cost
on an average 7.8 _pfennigs_, and a pound of tallow 30 _p._ However,
Russia’s recent progress in civilization has had for effect: that
the exportation of tallow (1833 = 4-½ million _puds_; 1869 = 2-¼
mill.) has greatly fallen off; while that of butter and live stock
has increased. (_v. Lengefeld_, R. im 19. Jahrh., 220 ff.)
In England, during the fourteenth century, a pound of meat cost, on
an average, ¼d.; of lard, from 1-½ to 2. (_Rogers_, I, 411.) On the
other hand, from 1848 to 1856, the average January price of beef
from America was 110 shillings; of tallow from St. Petersburg, 48s.
11d. per cwt. (_Newmarch_.) And so, in the time of _Pallas_, the
Cossacks chased the deer of their steppes only for the sake of its
skin and horns. (_Pallas_, Reise, III, 524.) While the Greeks got
horn from Macedonia and Thrace (_Herodot._, VII, 156), it is a
striking proof of high civilization that at Athens (?), about the
time of the hundredth Olympiad, an ox-hide was worth only 3
drachmas, and the whole ox 77 drachmas. (_Böckh_, Staatshaushalt, I,
105 ff.)
As the ox is primarily serviceable as an object of food and an
instrument of labor, and the sheep on the other hand, only an
instrument to produce wool, it is easy to understand why, with the
further advance of civilization, the price of oxen rises
comparatively much more than the price of sheep. In Athens, during
the time of Solon, an ox was equal in value to five sheep.
(_Plutarch_, Solon, 23.) So also in countries with a low
civilization in the time of Polybius. (_Polyb._, XXXIV, 8; _Gell._,
XI, 1.) Why the same was the case in Rome at the beginning of the
Republic? (_Plut._, Popl., 11). In England the proportion between
the price of an ox and that of a sheep was,
in 927 as 6:1 (_Henry_.)
in 1125 as 3:1
in 1182 as 6.3:1
in 1197 as 9:1
in 1229 as 8:1 (_Eden_.)
in 1260-1492 (av.) as 9.2:1 (_Rog._)
in 1497 as 10:1
in 1500 as 11.6:1
in 1511 as 8:1
in 1528 as 10:1
in 1529 as 12.8:1
in 1531 as 9.4:1
in 1551 as 10.6:1
in 1597 as 8.2:1 (_Eden_.)
At present the proportion may be from 10 to 20:1. In Saxony, it is
as 48 thalers to 5.27. (_Engel_.)
800 About 1793, Russia exported 10,000 rubles worth of fish, 452,000 of
sturgeon bladders, 188,000 of caviar. (_Storch_, Russland, II, 184.)
But this had undergone a great change even in 1850. At present,
there are 64 per cent. of sturgeon bladders, 27 of caviar, and 7 of
whole fish. (_Steinhaus_, Russland’s industrielle und commercielle
Verhältnisse, 102, 368.) Yet the Astrakan fishermen still throw the
greater number of the sturgeon they catch back into the water.
(_Pallas_, Reise im süd. Russland, I, 189; _Steinhaus_, 99.) Salt
fish are adapted for transportation to a distance not only because
they can be preserved, but also because they may be caught and
prepared on the great highway of the water. Athens got from the
Black Sea besides wood, tar, wool, hides, cordage, honey, wax and
slaves, also salt fish. (_Wolf_, z. Demosth. Leptin., 252; _Bockh_,
Staatshaush. I, 51.) The latter from Sardinia, Egypt and Spain.
(_Pollux_, VI, 48.)
801 The principal countries that produce potash are Russia and North
America. It is estimated that a cwt. of potash requires, on an
average, 480 cwt. of wood. (_Pfeil_, Grundsätze der Forstwirthsch.
in Bezug. auf National-Oekon. etc., I, 128.) From 1800 to 1840, wood
for fuel in Würtemberg trebled its price; for building material the
price increased 1.6 times. (Deutsche Vierteljahrsschrift, 1847, No.
4, 104.)
802 Whereas barbarous nations take little trouble to turn the milk from
their cows to account (_Roscher_, Ideen z. Politik und Statistik der
Ackerbausysteme, Archiv. der politische Œkonomie, neue Folge, III,
202), _Reuning_, in 1844, calculated that the milk from all the cows
in Saxony amounts to a value of 10,000,000 thalers, their meat to
over 2,000,000, and the labor performed by them in various ways to
3,000,000. In Silesia, in the last decade of the eighteenth century,
a quart of milk was estimated to be worth 2 _pfennigs_ (Festschrift
der deutschen Landwirthschaftsversammlung, 1869, 343), whereas as
now it is sold almost everywhere for 12 _pfennigs_. (_Schmoller_.)
In the rather high state of civilization which Saxony had reached at
the end of the sixteenth century, when game was already dear, and
the prices of other meat were almost as high as in 1800, a _sheffel_
of rye was worth 44 measures (_Mass._) of milk, and recently 82-⅔
measures. (_Schmoller_, Tübinger Ztschr., 1871. 336 ff.)
803 The principal cheese-producing countries and cities are Holland,
Limburg, Switzerland, Gloucester, Chester, Ayrshire etc. Compare
_Roscher_, loc. cit., 195 ff.
804 In England, in the year 1000, a cow was worth only as much as two
sheep. (_Anderson_, Origin of Commerce, a., 979.) The best butter
was worth only 1d. per pound in 1550, while pork was worth 1-1/8,
veal and mutton, 1-½, and beef, 2-¼d. The price of butter was
exceedingly variable in the sixteenth century. (_Eden_.)
805 During the middle ages, pork constituted the most usual animal food
even of the best classes. (_Büsching_, Ritterzeit und Ritterwesen,
I, 164.) Immense importance attached to pork by the _Lex Salica_.
(Tit., II, XIV; Emendatt. Caroli Magni, II, 1 ff.) The archbishop of
Cologne used every day 24 large and 8 medium-sized hogs, and four
more on the three great festivals. The abbot of Corvey used daily
five fat and one lean hog, besides two young ones. (_Kindlingen_,
Münsterische Beitr., Urkunden, 147, 126.) In 1345, at the court of
Dauphiny, there were used annually for 30 persons, 30 salt and 52
fresh hogs; whereas, in modern Paris, with 800,000 inhabitants, only
32,000 hogs are consumed yearly. (_Roquefort_, De la Vie privée des
Fr., I, 310 f.) Compare herewith the place occupied by the
swine-herds in the Odyssey in Greece’s age of chivalry. In England,
in the time of William I., woods were taxed according to the number
of hogs they might feed. At present, there is an enormous production
of hogs in Servia, which, in many places, constitutes the only
source of ready money to the agricultural population.