The value of money, other things being the same, varies inversely as its quantity; every increase of quantity lowering the value, and every diminution raising it in a ratio exactly equivalent.
And again:
Alterations in the cost of the production of the precious metals do not act upon the value of money, except just in proportion as they increase or diminish its quantity.
Ricardo (reply to Bosanquet) says:
The value of money in any country is determined by the amount existing. * * *
That commodities would rise or fall in price in proportion to the increase or diminution of money, I assume as a fact that is incontrovertible. * * *
Ricardo further says:
There can exist no depreciation in money but from excess; however debased a coinage may become, it will preserve its mint value; that is to say, it will pass in circulation for the intrinsic value of the bullion which it ought to contain, provided it be not in too great abundance.
In this case Ricardo's illustration is the supposed case of a country actually using one million gold pieces each containing 100 grains. He maintains that they would be of the same purchasing power, if the Government took out 1 grain, or even 50 grains, the quantity remaining the same, but that if, from the grains so deducted, an additional number of pieces were struck, a corresponding depreciation would result.
William Huskisson ("The Depreciation of the Currency," 1819), says: