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MONEY 
England notes which could be * converted into ” 
sovereigns by demand on the Bank. So that anyone 
paying or receiving ‘‘ pounds’ was always giving 
or getting something equivalent to 113 grains of 
gold. Thus the value of the pound was identical 
with the value of gold—what a pound would “ buy” 
was just the same as what 113 grains of gold would 
exchange for. 
So the value or purchasing power of English money 
—of the pound sterling—could be, and generally 
was, quite properly discussed as the value of gold. 
An answer to the question what made gold exchange 
for more of other commodities on the whole was an 
answer to the question what made the pound exchange 
for or “ buy” more of other commodities on the 
whole. 
The value of a precious metal is dependent on just 
the same things as the value of any other metal. If 
more people demand it (that is want it and have 
means to pay forit), orif thesame number of persons 
demand more, it will rise in value, and vice versa. 
If more persons are willing and able to produce it, 
or if the persons already engaged in its production 
are able and willing to produce more of it, its value 
will tend to fall. 
No one will find much difficulty in appreciating 
this so far as the demand for purposes other than 
currency are concerned. Any one can see that gold 
is a metal which is prized for purposes of ornament, 
which is extraordinarily convenient for hoarding as 
a store of treasure to be expended at a future date, 
and which is at present very useful for many industrial 
purposes and would be gladly used for many more 
if only it were cheaper. About the changes of demand 
in relation to all these there is so little difficulty that 
they are often ignored. But they are far too import- 
ant for that, as is suggested by the fact that they are