178 MODERN MONETARY SYSTEMS 
silver écus, which were the only monetary instruments in 
the Spanish circulation to have a market value ! And so, 
with any monetary system which includes an available 
metal circulation, we are accustomed to consider as the 
basis of the system or the standard that currency which 
gives to the entire monetary system a stable basis for its 
monetary relations with foreign countries. This currency is 
usually of metal, i.e., gold. Therefore, in practice, we are 
right in considering gold as the basis of the system. But in fact 
gold only plays this part because, being accepted for free coinage 
in a large number of countries, a given weight corresponds 
in each of these countries to a given number of monetary units 
and because its international circulation makes it possible for 
one national monetary unit to be converted into another at a 
fairly constant rate. 
Therefore this does not mean that the value of these 
various national units of account, which are only connected 
with each other by the fact of their being convertible into 
gold, is determined by gold, and gold is the standard 
because it is a commodity; and so the above remarks can 
be easily reconciled with the conclusions which we have 
reached earlier; and we may deduce from them that an 
international fiduciary currency such as notes, which have 
currency in several countries, would constitute, as between 
those countries and without any support from metal, an 
1 This idea has, of course, been known for a long time. It was brought out 
in particular by Cernuschi in “La monnaie métallique.” It has usually 
been rejected. M. Bourguin, in his work already quoted on “La mesure 
de la valeur et la monnaie,” stated that he could not understand how notes 
issued in the form of abstract monetary units could fail to be connected 
with a definite quantity of commodities. Without disputing that there is 
a real truth in M. Bourguin’s remarks, it does not seem to us that the 
problem has been quite accurately stated. It is true in our opinion that the 
monetary unit was originally connected with a certain quantity of a 
commodity; and it would be a curious proceeding to issue notes in a new 
monetary unit unconnected with previous units; but we believe that an 
analysis of the notion of a standard and of the part played nowadays by 
precious metals in determining the value of monetary units shows 
logically that the value of such units which was originally determined by 
the exchange of precious metal as a commodity and in some sort established 
on this historic basis, has continued to develop under the system of free