Principles of Political Economy · John Stuart Mill
MONEY.
142. Point out the difference between the scientific and popular conceptions implied in the terms wealth and money. 143. Show the fallacy of confounding capital with money. Can there be a glut of capital? 144. What is money? To what sort of necessity does it owe its existence? What articles have been used for money? Enumerate the qualities which render a commodity fit to serve as money. 145. What are the qualities requisite in any commodity in order that it may serve as money? 146. Distinguish accurately between the functions of money. 147. How far is a fixed standard of value possible? 148. What effect does the great durability of gold and silver have upon the value of money? 149. How far does the law of demand and supply govern the value of money? 150. Explain fully how it is that the value of the precious metals is affected by “questions of quantity only, with little reference to cost of production.” 151. What is to be said to the following: “Some political economists have objected altogether to the statement that the value of money depends on its quantity combined with the rapidity of circulation; which, they think, is assuming a law for money that does not exist for any other commodity”? 152. Under what conditions is it true that the “value of money is inversely as its quantity”?
153. Explain carefully the following: “The average value of gold is made to conform to its natural value in the same manner as the values of other things are made to conform to their natural value.” 154. In what various meanings is the phrase “the value of money” used? How far does the value of money in each of these meanings depend on (1) the cost of production, (2) supply and demand? 155. Are the values of gold and silver subject to exactly the same natural laws as other commodities? 156. Give the explanations and qualifications required to render the following proposition true: “The quantity of coin in every country is regulated by the value of the commodities which are to be circulated by it.” 157. Would the world be richer if every individual in it suddenly found the quantity of money in his possession doubled? 158. How far, or in what way, do you consider it correct to say that the general level of prices in a country depends upon the quantity of gold coin existing in that country? 159. A single good harvest causes a considerable fall in the value of _wheat_; but a great addition to the year’s supply of _gold_ from the mines produces little effect on its general value. How do you account for the difference?
160. Show the effect of establishing a double standard. 161. Show how Gresham’s law is illustrated by the history of the currency in the United States between 1834 and 1873. 162. What effect had the discovery of gold in this century upon the coinage of the United States? 163. What is the system upon which the small silver currency of the United States is coined and issued? 164. State briefly the aim of the United States coinage act of 1853.
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