Money and trade considered

by John Law

Goods of the same kind and quality differ in value, from any change in their quantity, or in the demand for them: in either of these cases goods are said to be dearer, or cheaper, being more or less valuable, and equal to a greater or lesser quantity of other goods, or of money.

Silver in bullion or money changes its value, from any change in its quantity, or in the demand for it: in either of these cases goods are said to be dearer, or cheaper; but ’tis silver or money is dearer or cheaper, being more or less valuable, and equal to a greater or lesser quantity of goods.

Perishable goods as corns, &c. increase or decrease in quantity as the demand for them increases or decreases; so their value continues equal or near the same.

More durable goods as mettals, materials for shipping, &c. increase in quantity beyond the demand for them, so are less valuable.

Silver or money increases in quantity by so much as is imported to Europe, more than is consumed or exported. the demand has encreased, but not in proportion to the quantity; for, 1st. the same quantity of silver or money, won’t purchase the same quantity of goods as before. 2dly. 10 per cent was payed for the use of it; now ’tis to be had at 6, in Holland at 3 or 4.

An ounce of silver being worth 5 sh. and 2 pence, and a crown worth 60 pence, unless altered by the prince, makes most people insensible of any change in the value of silver or money: but as one year the boll of barley is sold for 2 crowns, and the year after for 3; this difference comes from a change in the quantity or demand of the barley, or of the money: and that of the money will occasion a difference in the price, as well as that of the barley.

If last year a 100 sheep were sold for a 100 crowns, and the person sold them desires this year to buy the same number of sheep; tho’ the quantity of the sheep, and the demand for them be the same as last year: yet if the money is increased in quantity, and the demand for it not increased in proportion, the 100 sheep will be equal in value to more money than the year before, so the money is cheaper. if the quantity of the money, and the demand for it be the same as before; yet if the sheep are lesser in quantity, or the demand for them greater: the 100 sheep will be equal to a greater quantity of money, so the sheep are dearer.

So tho’ the magistrate did never alter the money, yet ’tis liable to a change in its value as silver; from any change in its quantity, or in the demand for it: and the receiver is doubly uncertain whether the money he receives or contracts for, will, when he has occasion, buy him the same goods he has sold, or other goods equal in value to them; because of the difference may happen in the value of the money, or the goods he is to buy.

And this uncertainty is, tho’ both money and goods were certain in their quality.

The difference of the prices of most goods, from changes in their quantity, or in the demand for them, would be much prevented, if magazines were kept; but the difference in their prices from the greater or lesser quantity of, or demand for money; cannot be prevented so long as silver is the money.