1. The amount of the currency of a nation is determined for it not
simply by its size and population but by the nature and extent of
its trading transactions; and yet, when these elements are given,
the currency of one nation will stand to the currency of another in
some ascertainable normal proportion, to alter which is to alter the
relative value of the currencies affected (VI, VII, X).
2. Such events as a bad harvest, a change in articles of consumption
or the transmission of a subsidy abroad, will, by altering the
relative value of our currency, produce effects on the exchanges
which, apart from their own specific remedy, are permanent, not
transitory (I, VII, X).
3. An increase in the amount of gold and silver in a country will
lead to an increased use of these metals for general purposes rather
than to a proportionate fall in their value, there (II, III).
4. An increase in the value of a nation's exports and imports may
involve no increase of its wealth or its capital, but may be due to
a mere change from one set of articles of consumption to another, or
to a carrying trade with foreign capital (IV).
5. In any case, such an increase is not the cause, but the effect of
a change in the currency; it is a sign that money is going from
where it is cheap to where it is dear (IV, VI, IX, cf. XII and
XVII), and the Exchanges are an accurate measure of the difference
(VII).
6. There has certainly been an increase of wealth in our own country
in recent years, but it has not necessarily been accompanied with an
increased rate of profits (V, cf. XX).