VALUE OF NOTES 
39 
ultimately be melted to be turned into something 
else. Consequently where the unit of account is a 
coin regulated in supply, the value of money is never 
lower, may by chance occasionally be equal to, and is 
ordinarily higher than it would be under free and 
gratuitous coinage. How much higher depends on 
the particular standard of restriction adopted: it 
may be higher by a given percentage; it may be 
higher by the amount necessary to make it conform 
with the variations of some other money, as the 
Indian rupee was kept higher by the amount necessary 
to make it one-fifteenth of £1; or it may be kept 
as much higher as the restricting authority judges 
desirable by some rough estimate, or as much higher 
as will preserve stability of value as indicated by some 
index number of prices. 
It is no objection to this conclusion to say that the 
value of a coin restricted in supply may be reduced by 
the competition of paper currency. That is merely 
one of the numerous things which tend to reduce the 
demand for the coin, and may make the demand 
insufficient to keep its value over that of its bullion 
contents. The case will come under notice again in 
the course of the arecument of the next section. 
§ 5. The value of money or general level of prices where 
the unit of account is a bank-note or currency note. 
In modern times metal discs stamped with certain 
designs and lettering are not the only things with 
which people buy and for which they sell. They also 
use scraps of paper on which are figures or words (or 
both for safety) indicating amounts of the unit of 
account, for example ““ £1,” ‘‘ Ten shillings *’ (which 
is half a pound sterling). There is usually other 
reading matter on the scraps, but it is not commonly 
read or regarded as of any more importance than 
(what is to most people quite unintelligible) the