176 ECONOMIC PRINCIPLES

part of the current output, the poorest sources of supply are
likely to be abandoned, so that the cost of the most costly
part of what continues to be produced is less than was the
cost of the abandoned supplies, while the check to new
supplies gradually affects the exchange-value of that in use.
Gold is, thus, not independent in value of its cost of produc-‘ion,
 and money, in this, resembles other goods continuously
oroduced for regular consumption.
If the output of new gold fall off, two influences tend to
increase the power of gold to purchase other commodities.
One is that the annual consumption of gold for industrial
and artistic purposes is considerable, while the wear and tear
of coined metal in use needs to be made good. Unless the
production be considerable, these purposes will only be served
Hy drawing on the accumulated supply, thus decreasing the
sum-total of gold in circulation and in reserves of banks, etc.
The other is, that growth of population and exploitation of
new regions, with the increasing use of coin where less or
aone was used before, and the growing wealth of modern
peoples, leading to the use of more coin, increases the need
for metallic currency. Thus it is probable that the gold
output of the late seventies and the eighties was not
sufficient to add any substantial amount to the total
monetary supply, while the field for its use in the expanding
 trade of the world was growing with considerable
-apidity.
If gold be relatively cheap, that is if prices be high, the
use of gold in industry and the arts is stimulated, and if it be
dear, that is if prices be low, the opposite effect is produced.
Since the acceptability of gold as money rests on its value,
that is on the esteem in which it is held for artistic and
:ndustrial uses, the way in which the value as money tends
‘0 be modified in correspondence with the value for other
ases is both interesting and important.
Before passing to the discussion of paper currency, we
must give some brief consideration to a function of money
which is accounted important by Jevons, namely that of
serving as a store of value. For purposes of hoarding,
the material of which money is made, or the money itself,