MONEY

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exorbitant  sums.  A  quire  of  paper  sold  for  ten
pesos  de  oro  ”—the  normal  purchasing  power
of  a  peso  de  oro  was,  we  are  informed,  equal  to
the  purchasing  power  of  something  between
£2  and  £3  to-day—“  a  bottle  of  wine,  for
sixty  ;  a  sword,  for  forty  or  fifty  ;  a  cloak,  for
a  hundred,—sometimes  more  ;  a  pair  of  shoes
cost  thirty  or  forty  pesos  de  oro,  and  a  good
horse  could  not  be  had  for  less  than  twentyfive
  hundred.  Some  brought  a  still  higher
price.  Every  article  rose  in  value,  as  gold
and  silver,  the  representatives  of  all,  declined.
Gold  and  silver,  in  short,  seemed  to  be  the
only  things  in  Cuzco  that  were  not  wealth.”
The  quantity  theory  of  money,  of  course,
holds  also  for  the  totality  of  money,  including
credit  media  of  exchange,  which  will  be  dealt
with  next
At  last,  with  the  introduction  of  credit
money,  we  are  brought  into  touch  with  a  new
fact.  Broadly  speaking,  credit  money  which
is  not  inconvertible  consists  in  documentary
promises  to  pay  commodity  money,  and
these  promises,  when  complete  confidence
is  reposed  in  those  who  are  pledged  by
them,  happen,  curiously  enough,  to  be
competent  for  effecting  exchanges.  This  is
the  only  case,  so  far  as  I  am  aware,  in  which