VALUE OF GOLD 
IE 
is the lowest note, a great deal of coin will be required, 
if £1 or ros. much less, and if a dollar, still less. 
Increases of income will make no difference except 
in so far as they go to the very poorest class : longer 
or shorter intervals between periodical payments 
will only make this difference, that *“ change *’is less 
likely to be required in payments made at longer 
intervals, since salaries, rents and other payments 
are more likely to be for multiples of the smallest 
note when they are paid at long intervals than when 
paid at short ones. Diminution in the value of 
money (higher prices) will not greatly tend to increase 
the want for coin, since it is not in the least likely 
to cause a withdrawal of the smallest note from 
circulation, and when prices are higher, more things 
will be in the region where purchases are made by 
notes : given that ten-shilling notes are in circulation, 
and are to continue in circulation, doubling prices 
will not make people want many more half-crowns 
or other silver coins and will make them want fewer 
halfpennies. 
How much coin will be held by the governments 
whichissue paper currency and by banks, whether they 
issue bank-notes or not, actually depends at present 
not so much on what would be thought necessary 
or desirable by a dispassionate and well-informed 
observer who could feel confidence that his opinion 
would be accepted by all, as on the decision arrived 
at by government and banking authorities, who 
often accept wholly erroneous theories, and who have 
to be guided to a large extent by the erroneous 
theories held by the public even when they do not 
accept them. So we find in different countries very 
different amounts of coin held “in reserve ”’ against 
liabilities which seem on the face of them ver much 
the same and very great changes in quit. short 
periods. In practic: therefore in modern times.