It is very important to bear in mind that money does not determine value; money only expresses it. Value is determined by each man's personal feeling. The maker or owner, on the one side- and the motives which act on his feeling may be most numerous and varied - decides how much he must receive in exchange before he consents to part with his property. When he proceeds to sell, he meets a counter feeling, a counter estimation of the values of the property and the money in the buyer. The resultant between these two forces is the market value of the commodity at the time. In the exchange, the gold and the commodity are valued on identically the same conditions; the money is as much bought as the coat which it purchases.

The equality of position of the buyer and the seller leads up to the question-What is the value, the market price, of gold? How is it to be expressed? Put in this form, the question admits of no single answer. The market value or price of a sovereign is a hat for the hatter, a pair of shoes for the shoemaker, and so on throughout all the list of things sold. A hat is the price of a sovereign, just as a sovereign is the price of a hat. But the answer we are in search of will be found in the analysis of what is implied in an act of barter. What is the value of a coat to a tailor? Its cost of production, including the reward-both in wages and profit-without which he will not make the coat? It is the same with the gold of money-either the owner of it or the miner from whom he ultimately got it calculates its value in the same identical manner. If the miner fails to obtain for his gold ore a quantity of goods sufficient to replace what the mining has cost him, with a reasonable profit for himself, he gives up the business and abandons the mine. Less gold is produced and the dedemand for it continues; it rises in value; it exchanges, in buying, for a larger quantity of all other commodities. That is, the price of everything sold falls. On the contrary, a rise in general prices indicates that gold has become cheaper, a larger quantity of it must be given for the same goods.

There remains a question of supreme importance for a clear understanding of currency: the power of dealing with theories of currency, and language used on every side is intimately connected with the question and its answer. How much gold, how many sovereigns or dollars, does a country want? To the multitude the question seems absurd. How can there be too much money? the more money a nation has the better. With money one can buy every thing: money is true riches, so says the mercantile theory, so do English newspapers every day, so say the inflationists of the United States all over that great country. Every arrival of gold from California or Australia is hailed with delight in England; manifestly the country is so much the richer, the money market so much the stronger. But those who talk in this manner totally forget that gold has to be paid for like every thing else. It is a very expensive affair to get gold out of a mine; the glorious ingots which have reached London have not made England one pound the richer. They have all been paid for with English property of equal value. Why then all this rejoicing? There are few more melancholy delusions than this indestructible folly of believing that it is always good for a country to get more money. If farmers were to hail with incessant delight cargoes of carts ever streaming in, men would pity them as insane; yet in what respect are these jubilations over gold more rational? Carts and money are both tools - instruments of conveyance, endowed with the same nature, and subject to the same general laws. The question for each is the same - how many are wanted for the work which they were invented to do? In the case of money, how much gold can a nation use? How much can it find employment for? The answer, as with carts, must be sought from the special work money has to perform - that is, from the amount of exchanging which calls for the agency of this tool, the quantity of property of which the ownership has to be transferred by this instrument. A cart transfers weight; money, ownership; and all the world knows that the cartage to be done determines the number of carts. In the same way, the ownership of property which requires to be transferred by the actual employment of money itself determines how much money there ought to be in a nation. No other answer is possible, unless it is denied that money is only a tool; if so, another explanation of the nature of money must be produced. A certain amount of buying and selling and paying of debts goes on daily in every country through the agency of money; enough for effecting this purpose is wanted and no more. The number of tools needed depends on the quantity of work to be done by them; that rule comes from the nature itself of a tool, and it is complete. Spare money is desirable, no doubt, just as spare hats and spare shoes, to guard against the inconvenience of there being none when work or accident calls for them; but this fact does not come into consideration in this place. And further, the necessary quantity of reserve for banks must be reckoned as money needed for use. The one point is, has every man who wants to buy or pay with coin a coin to do it with? If he has, the supply of money is complete; all further purchase of coin or money is senseless and a waste.

But an important distinction must be noticed here. The same collective amount of cash transactions will not always require the same quantity of money. The same coin may effect few or many purchases, according to the circumstances of the locality. In a gambling house the same dollar or sovereign may settle twenty transactions in a quarter of an hour. In the great West it may remain weeks or months in a farmer's pocket before it can be used. In a nation in which life moves slowly, or buyers or sellers live wide asunder, or when no credit is given, a much larger number of coins will be required to settle transactions which could be completed by much fewer but more rapidly moving coins under the opposite circumstances. Hence rapidity of circulation when practicable will diminish the quantity of money or coins required. The rule, however, remains the same under either circumstances; enough money to carry out the cash business, be it much or little, must be provided, and no more; for more cannot be used (omitting spare stocks), all merchants, shop-keepers, inflationists, bankers, stock exchanges, and newspapers notwithstanding. We thus make a deduction of considerable scientific value, that the question of the distribution of the precious metals, on which so much stress is so often laid, is at bottom only a question of the commercial habits of different countries and localities. A nation is not the poorer for having little gold, nor the richer for having much, if only it has enough. The precious metals flow to countries of low civilisation, of political insecurity, where the law is weak and justice uncertain; also to nations using large banking reserves, of which more hereafter; whilst they find scant resting-place in lands of high commercial development, where property is safe, credit secure, the recovery of debts easy and to be relied upon, and where the owners of goods are willing to part with them for cheques and bills, and similar processes of deferred payment. There is probably no country in the world which, in comparison with the extent of its wealth and its trade, needs and uses so little money, metallic money, as England.