4 
MONEY 
or value of money can and do occur, and that we can 
appreciate their existence and approximately measure 
their magnitude, we can proceed to consider their 
causes. In other words we can ask why is it that a 
unit of account such as the pound sterling or the 
rupee is of greater value—will buy more—at one 
time than at another? The subject, or so much of 
it as is of immediate modern interest, may be divided 
according as the unit of account is a mere quantity 
of bullion, a coin kept by limitation at a value above 
that of its bullion contents, or, finally, a note. 
§ 3. The value of money or general level of prices where 
the unit of account is a fixed quantity of bullion, 
uncoined or coined. 
The unit of account has often and for long periods 
been nothing but a quantity—which has almost 
always if not always meant a weight—of a particular 
metal. The English “ pound,” still indicated by 
the initial letter of the Roman libra, being the name 
of a weight as well as a unit of account, serves to 
remind us of that time. The introduction of coinage 
makes it possible to count the amount of metal, 
“reckon it by tale,” instead of weighing it with 
scales every time it passes from hand to hand, which 
is a great improvement, but it need not make, and 
sometimes has not made, any material difference to 
the value of the unit ; a mint may coin all the bullion 
which any one chooses to bring to it and give it back 
to him free of any deduction or charge, while at the 
same time the law allows any one to do what he likes 
with the coin—to export it from the country in which 
it is or to melt it down at home for any purpose 
whatever. In this case a pound weight of bullion 
is freely convertible into a pound weight of coin and 
a pound weight of coin is freely convertible into a 
pound of bullion, and the two must therefore be of