166 MODERN MONETARY SYSTEMS 
“an object which is received in exchange for goods or 
services with a view to subsequent exchange.” 
On the other hand, we hold that if money is not 
essentially a commodity this does not prevent the quantity 
theory from being applicable to it, subject to the remarks 
made in the preceding chapter. A monetary instrument, 
whether it be actual coin or a mere token, may be more or 
less abundant. Its abundance, by according additional 
purchasing media, may provoke a rise in prices or in other 
words depreciate its exchange value in relation to the 
goods or services demanded. 
But monetary phenomena cannot be explained solely 
by variations in value similar to the variations in the value 
of any commodity on any market. On the contrary, we 
believe it can be shown by an analysis of the facts described 
in the first part of this book that the value of precious 
metals under a system of free coinage, i.e., convertible in 
unlimited quantities into a given number of units of 
account, is determined under very special conditions and 
we believe that this analysis will help us to define more 
accurately the exact meaning of a monetary standard. 
§ 2. The value of money. 
We have already shown (Part I, Ch. II) that, contrary to 
the expectations of the legislators of the Year XI and to 
the views still commonly accepted, the experience of 
bimetallists in the 19th century showed that it was 
possible to maintain a stable exchange ratio between two 
monetary metals which were both accepted for free coinage 
and which were meant to be treated like any other com- 
modity. And the explanation of this phenomenon is 
quite simple. For, owing to the freedom of coining both 
metals, which enabled each of them to be converted 
ad libitum into coin, the institution of a legal ratio between 
gold and silver currencies resulted in a constant exchange 
ratio between the metals even without their being actually 
coined. The stable exchange ratio between the two metals 
in bimetallist countries was the direct result of the fact that 
any individual could transform either at will into currencies