5 
MONEY 
we tend to diminish the demand for it and conse 
quently to reduce its value. For the most part every 
week or month or year we give as much as we get, 
and the temporary ups and downs of our stocks 
cancel each other quickly; but when we increase 
our holding for good or diminish it for good we 
exercise a permanent influence. 
The exposition so far given may seem to leave no 
place for the theory of value being connected with 
marginal utility, as taught in the economic text- 
books in regard to ordinary commodities. But 
marginal utility plays just the same part with regard 
to gold (both for ordinary purposes and for currency) 
as it does with other commodities. The lower the 
value of gold, the lower will be the uses to which 
it will be put, and the poorer will be the classes of 
people who are able to use it ; as has been suggested 
above, if gold were cheap enough, it would be used 
for roofs, and many people who do not have things 
which are now made of gold because they cannot 
afford them would have them. This is really easy 
enough to understand, but it may be a little difficult 
to see how the marginal utility theory applies to 
currency. Can we say that the value of sovereigns 
falls as they become more plentiful and their marginal 
utility diminishes ? Where is the marginal purchaser 
or the marginal purchase? Where the elasticity of 
demand? The answer is that the difficulty we feel 
is only the result of the strangeness of estimating 
the value of sovereigns in other things instead of, as 
usual, the value of other things in sovereigns. The 
marginal purchaser is the man who is only just 
convinced, or in practice in modern times the bank 
or Government which is only just convinced, of the 
desirability of increasing or diminishing the stock of 
coin in hand, just as the marginal purchaser of house 
room is the man who is only just convinced of the