The Online Library of Liberty A Project Of Liberty Fund, Inc. William Stanley Jevons, Money and the Mechanism of Exchange [1875] The Online Library Of Liberty This E-Book (PDF format) is published by Liberty Fund, Inc., a private, non-profit, educational foundation established in 1960 to encourage study of the ideal of a society of free and responsible individuals. 2010 was the 50th anniversary year of the founding of Liberty Fund. It is part of the Online Library of Liberty web site http://oll.libertyfund.org, which was established in 2004 in order to further the educational goals of Liberty Fund, Inc. To find out more about the author or title, to use the site's powerful search engine, to see other titles in other formats (HTML, facsimile PDF), or to make use of the hundreds of essays, educational aids, and study guides, please visit the OLL web site. This title is also part of the Portable Library of Liberty DVD which contains over 1,000 books and quotes about liberty and power, and is available free of charge upon request. The cuneiform inscription that appears in the logo and serves as a design element in all Liberty Fund books and web sites is the earliest-known written appearance of the word “freedom” (amagi), or “liberty.” It is taken from a clay document written about 2300 B.C. in the Sumerian city-state of Lagash, in present day Iraq. To find out more about Liberty Fund, Inc., or the Online Library of Liberty Project, please contact the Director at [email protected]. LIBERTY FUND, INC. 8335 Allison Pointe Trail, Suite 300 Indianapolis, Indiana 46250-1684 Online Library of Liberty: Money and the Mechanism of Exchange Edition Used: Money and the Mechanism of Exchange (New York: D. Appleton and Co. 1876). Author: William Stanley Jevons About This Title: Jevons’s formative 1875 classic work came into print at the height of interest in gold, silver, and international monetary standards. Refreshingly written, widely quoted, and authoritatively researched, the book begins with the origins of money and works its way through to international banking and credit. Of particular interest are the clear PLL v6.0 (generated September, 2011) 2 http://oll.libertyfund.org/title/318 Online Library of Liberty: Money and the Mechanism of Exchange discussions of Gresham’s Law (Ch. VIII), competitively supplied money (Ch. VII), and fractional-reserve- and Free-banking (Ch. XVII-XVIII and XXIV). Also: If you think the only reason to not use coins worth their weight in precious metal is their weight, I recommend Chapter X for an excellent reminder of additional drawbacks. Jevons is best known for his work on marginal utility, which he describes with customary succinctness in the book. His interest in the way the forces of the market evolve toward an equilibrium without (and often in opposition to) government influence runs throughout the book. PLL v6.0 (generated September, 2011) 3 http://oll.libertyfund.org/title/318 Online Library of Liberty: Money and the Mechanism of Exchange About Liberty Fund: Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals. Copyright Information: The text is in the public domain. Fair Use Statement: This material is put online to further the educational goals of Liberty Fund, Inc. Unless otherwise stated in the Copyright Information section above, this material may be used freely for educational and academic purposes. It may not be used in any way for profit. PLL v6.0 (generated September, 2011) 4 http://oll.libertyfund.org/title/318 Online Library of Liberty: Money and the Mechanism of Exchange PLL v6.0 (generated September, 2011) 5 http://oll.libertyfund.org/title/318 Online Library of Liberty: Money and the Mechanism of Exchange Table Of Contents Preface Chapter I: Barter Want of Coincidence In Barter. Want of a Measure of Value. Want of Means of Subdivision. Chapter II: Exchange Utility and Value Are Not Intrinsic. Value Expresses Patio of Exchange. Chapter III: The Functions of Money A Standard of Value. A Store of Value. Separation of Functions. Chapter IV: Early History of Money Currency In the Hunting State. Currency In the Pastoral State. Articles of Ornament As Currency. Currency In the Agricultural State. Manufactured and Miscellaneous Articles As Currency. Chapter V: Qualities of the Material of Money 1. Utility and Value. 2. Portability. 3. Indestructibility. 4. Homogeneity. 5. Divisibility. 6. Stability of Value. 7. Cognizability. Chapter VI: The Metals As Money Iron. Lead. Tin. Copper. Silver. Gold. Platinum. Nickel. Other Metals. Alloys of Metals. Chapter VII: Coins The Invention of Coining. What Is a Coin? Various Forms of Coins. The Best Form For Coins. Coins As Works of Art. Historical Coins. PLL v6.0 (generated September, 2011) 6 http://oll.libertyfund.org/title/318 Online Library of Liberty: Money and the Mechanism of Exchange The Royal Attribute of Coining. Chapter VIII: The Principles of Circulation The Standard Unit of Value. Coin, Money of Account, and Unit of Value. Standard and Token Money. Metallic and Nominal Values of Coins. Legal Tender. The Force of Habit In the Circulation of Money. Gresham's Law. Extension of Gresham's Law. Chapter IX: Systems of Metallic Money Currency By Weight. Unrestricted Currency By Tale. Single Legal Tender System. Multiple Legal Tender System. Composite Legal Tender. Chapter X: The English System of Metallic Currency English Gold Coin. English Silver Coin. English Bronze Coinage. Deficiency of Weight of the English Gold Coin. Withdrawal of Light Gold Coin. Supply of Gold Coin. Supply of Silver Coin. The Royal Mint. Chapter XI: Fractional Currency Billon Coin. Composite Coin. Bronze Coin. English Bronze Coin. Weight of the Currency. Nickel, Manganese, Aluminium, and Other Metals and Alloys. Chapter XII: The Battle of the Standards The Double Standard. Compensatory Action. The Demonetization of Silver. Disadvantages of the Double Standard. The Monetary Systems of the World. Chapter XIII: Technical Matters Relating to Coinage The Alloys In Coin. The Size of Coins. The Wear of Coin. Methods of Counting Coins. Cost of the Metallic Currency. Chapter XIV: International Money Advantages of International Money. Disadvantages of International Money. Conflict of Monetary Systems. PLL v6.0 (generated September, 2011) 7 http://oll.libertyfund.org/title/318 Online Library of Liberty: Money and the Mechanism of Exchange International Monetary Negotiations. Decimalization of English Money. The Future American Dollar. German Monetary Reform. Systems of Fractional Money. Final Selection of the Unit of International Money. Chapter XV: The Mechanism of Exchange Progressive Development of the Methods of Exchange. Representative Money. Cheque and Clearing System. Chapter XVI: Representative Money Early History of Representative Money. Reasons For the Use of Representative Money. Inconvenience of Metallic Money. The Weight of Currency. Saving of Interest. Chapter XVII: The Nature and Varieties of Promissory Notes Specific Deposit Warrant. General Deposit Warrant. Difference Between a Special and a General Promise. Pecuniary Promissory Notes. Principles of the Circulation of Representative Money. Chapter XVIII: Methods of Regulating a Paper Currency 1. Simple Deposit. 2. Partial Deposit. 3. Minimum Reserve. 4. Proportional Reserve. 5. Maximum Issue. 6. Elastic Limit. 7. Documentary Reserve. 8. Real Property Reserve. 9. Regulation By the Foreign Exchanges. 10. Free Issue System. 11. The Gold Par Method. 12. Convertibility By Revenue Payments. 13. Deferred Convertibility. 14. Inconvertible Paper Money. Over Issue of Paper Money. Want of Elasticity of Paper Money. Chapter XIX: Credit Documents Measurement of Credit. Bank-notes. Cheques. Bills of Exchange. Interest-bearing Documents. Definition of Money. Chapter XX: Book Credit and the Banking System Single Bank System. PLL v6.0 (generated September, 2011) 8 http://oll.libertyfund.org/title/318 Online Library of Liberty: Money and the Mechanism of Exchange System of Two Banks. Complex Bank System. Branch Bank System. Bank Agency System. London Agency System. Country Clearing System. Chapter XXI: The Clearing-house System Transaction of Business At the London Clearing House. Manchester Clearing House. New York Clearing House. Extension of the Clearing System. Advantages of the Cheque and Clearing System. Proportion of Cash Payments. Cases to Which the Clearing System Is Inapplicable. Chapter XXII: The Cheque Bank Relation of the Cheque Bank to Other Banks. The Cheque Bank As a Monetary Agent. Payment of Wages By Cheques. The Cheque Bank As a Savings Bank. Results of the Cheque Bank System. Chapter XXIII: Foreign Bills of Exchange Origin and Nature of Bills of Exchange. Trade In Foreign Bills. The World's Clearing House. Centralization of Financial Transactions In London. Representation of Foreign Bankers In London. Chapter XXIV: The Bank of England and the Money Market Expansion of Trade. Competition of Bankers. The Bank Charter Act of 1844. The Free-banking School. Possibility of Over-issue. The Right of Coining Bank Notes. Scotch and English Banking. Cash Reserves of Bankers. Remedy For the Sensitiveness of the Money Market. Chapter XXV: A Tabular Standard of Value Corn Rents. A Multiple Legal Tender. Lowe's Proposed Table of Reference. Poulett Scrope's Tabular Standard of Value. Difficulties of the Scheme. Chapter XXVI: The Quantity of Money Needed By a Nation Quantity of Work to Be Done By Money. Efficiency of the Currency.