The Value of Money

New York THE MACMILLAN COMPANY 1917 All rights reserved
Copyright, 1917 By THE MACMILLAN COMPANY Set up and electrotyped. Published May, 1917.
To B. M. A., III AND J. C. A. WHO OFTEN INTERRUPTED THE WORK BUT NONE THE LESS INSPIRED IT
The following pages have as their central problem the value of money. But the value of money cannot be studied successfully as an isolated problem, and in order to reach conclusions upon this topic, it has been necessary to consider virtually the whole range of economic theory; the general theory of value; the rôle of money in economic theory and the functions of money in economic life; the theory of the values of stocks and bonds, of good will, established trade connections, trade-marks, and other intangibles ; the theory of credit; the causes governing the volume of trade, and particularly the place of speculation in the volume of trade; the relation of static economic theory to dynamic economic theory.
Dynamic economics is concerned with change and readjustment in economic life. A distinctive doctrine of the present book is that the great bulk of exchanging grows out of dynamic change, and that speculation, in particular, constitutes by far the major part of all trade. From this it follows that the main work of money and credit, as instruments of exchange, is done in the process of dynamic readjustment, and, consequently, that the theory of money and credit must be a dynamic theory . It follows, further, that a theory like the quantity theory of money, which rests in the notions of static equilibrium and normal adjustment, abstracting from the transitional process of readjustment, touches the real problems of money and credit not at all.
This thesis has seemed to require statistical verification, and the effort has been made to measure the elements in trade, to assign proportions for retail trade and for wholesale trade, to obtain indicia of the extent and variation of speculation in securities, grain, and other things on the organized exchanges, and to indicate something of the extent of less organized speculation running through the whole of business. The ratio of foreign to domestic trade has been studied, for the years, 1890-1916.