Gold, value 47610 German Reichsthaler per cwt., 0.000007 by land, 0.0000035 by railroad.
Silver, value 3000, 0.00111 by land, 0.00055 by railroad.
Cotton, value 45, 0.074 by land, 0.037 by railroad.
Tin, value 24, 0.1389 by land, 0.0694 by railroad.
Lead, value 8, 0.416 by land, 0.208 by railroad.
Iron, value 2.5, 1.333 by land, 0.666 by railroad.
Rye, value 2, 1.666 by land, 0.833 by railroad.
Potatoes, value 0.6, 5.555 by land, 2.777 by railroad.
Coal, value 0.12, 27.777 by land, 13.888 by railroad.
Their great specific gravity, also, makes the precious metals easy of transportation. Thus Cazeau calculates that a given value of gold is 17,222 times as easy to transport as the same value in wheat. But as, where the weight is the same, the labor of transportation is inversely as the volume, this number must be multiplied by 26, and we therefore have 447,772 times. In the case of silver, the relation to wheat is as 1:15,554. Concerning copper, see Storch, Handbuch 1, 488. Chevalier, Cours, III, 17 ff.
Davanzati, Lezione sulle Moneta, 1588, 32 ff., Cust., thinks that all terrestrial things which serve to satisfy the wants of men are, by virtue of agreement, equal in value to all the gold, silver and copper; and that the parts comport themselves as the whole. The price of a commodity is based on this, that men find in it as much of their beatitudine as is afforded them by a given quantum of gold etc. Similarly, Montanari, who adds as a limitation the quantity of money spendibile in commercio. (Della Moneta, 45, 64, Cust.) The same opinion leads Locke to the singular conclusion, that, as there is now in the world, ten times as much silver as there was previous to the discovery of America, each single piece of silver, separately considered, and taken in relation to such commodities as have not varied, is worth only one-tenth of what it was then. Locke, here, starts out with the gross assumption, shared even by Ganilh, Théorie, II, 386 ff., that in the case of money the demand is always, relatively speaking, equally strong and just as great as the supply, or as the amount in the market. (Works, II, 23 ff.) Further, Montesquieu, Esprit des Lois, XXII, 7, 8. Per contra, however, see Montesquieu, ibid. XXII, 5, 6, and Hume, On Money and on the Balance of Commerce, Essays II, 1752.
Hume knew perfectly well, that only circulating money and circulating commodities operated on price, but failed to take the rapidity of circulation into account. Similarly, Forbonnais, Eléments du Commerce, II, 212; even Canard, Principes, ch. 6; Fichte, Geschloss. Handelstaat, 93 ff., and Stein, Lehrbuch, 58. Contested by Law, Trade and Money considered, 140, a work directed especially against the Mercantilistic essay, Britannia languens; 1680, by Mélon, Essai politique sur le Commerce, ch. 22; Genovesi, Economia civile, 1764, II, 1, 15; Steuart, Principles, II, ch. 28; Verri, Meditazioni, XVII, 3 ff.; Büsch, Gedlumlauf, II, 40. The simple taking of an inventory of most private resources which possess so much greater value in other commodities than in money is enough to demonstrate the error of Davanzati's doctrine. Thus, in France, in Necker's time, the cash money in the kingdom was estimated at 2,200,000,000 livres, and the average value of the wheat crop alone at 1,000,000,000. Necker, Législation et Commerce des Grains, 1776, I, 215. Recently, Michel Chevalier, estimated the amount of money in France at from 3-½ to 4 milliards, while the official estimate of its immovable property alone was over 83 milliards.
It is scarcely possible to determine exactly the amount of money in a country; for the reason that, outside of the suppositions of bankers etc., there is no authority which can be safely relied on, unless it be the reports concerning the coinage, and of the emission of paper money. The information, no less necessary, to be derived from the statistics of the importation and exportation of money, the melting down of coin by gold smelters etc., can never be exactly obtained. In England, at the end of the sixteenth century, the circulating medium was estimated at £4,000,000 (Hume, History of England, ch. 44, App.); under Charles II., at £6,000,000, when the population was 6,000,000. (Petty, Several Essays, 179.) About 1711, Davenant, New Dialogues, 11 ff., mentions £12,000,000 as the amount; and Anderson, Origin of Commerce, a., 1659, £16,000,000 in 1762. The circulation of gold, shortly before 1797, was estimated by Rose at, at least, £40,000,000; by Lord Liverpool, at £30,000,000; by Tooke, at only £22,500,000. (History of Prices, V, 130 ff.) Moreau de Jonnés, 1837, assumed £43,500,000 (Statistique, I, 329), and Helferich (Schwankungen der edlen Met., 1843, 147), £45,000,000. Sir Robert Peel, estimated the amount in 1845 at £59,000,000, to which was to be added an average of £28,000,000 in bank notes, after deduction made of the metallic reserve. According to Jevons, the amount of British money is now £80,000,000 in gold, £14,000,000 in silver, £1,000,000 in copper; the sum total, including bullion and bank notes, after the deduction of their metallic representatives, £134,000,000. (Economist, December, 1868, July, 1869.) In France, Vauban, Dîme royale, 104 (Daire), estimated the cash money at about 500,000,000 livres, over 750,000,000 francs, with which Voltaire, Siècle de Louis, XIV, ch. 30, agrees so far as the year 1683 is concerned. In 1730, Voltaire, assumes the amount to be 1,200,000,000 of the coins of that time. Necker, Administration des Finances, III, 66, estimated it, in 1784, at 2,200,000,000 livres; Mollien, about 1806, at 2,300,000,000. The valuations in Louis Philippe's time varied from 2,400,000,000 to 2,500,000,000 (Chamber of Deputies, April, 13, 1847), and 4,000,000,000. (Blanqui.) The valuations of 1870 were, according to Wolowski, 4 milliards; and to Bonnet, from 5 to 6 milliards. Compare Wolowski, L'Or et l'Argent, 383 ff., Euquête, 42. The German Zollverein is said to have had, at the beginning of 1870 (Soetbeer) 480,000,000 or 520,000,000 thalers (Weibezahn) cash money.
In Wirtemberg, Memminger, 1840, estimated the resources of the country at 1,600,000,000 guldens, of which 36,000,000 were cash; and the yearly gross income at 179,000,000 guldens; so that the money was 20 per cent. of the latter and 2¼ per cent. of the former. The annual sales = 226,000,000. Therefore the coin currency must have circulated on an average between six and seven times in a year. In the electorate of Hesse, there were per capita 4 thalers, 18 sgrs., 9 hellers, metallic money, and 3 thalers, 9 sgrs., 4 hellers, paper-money. (B. Hildebrand, Statist. Mitth., 1853, 185.) The amount of money in Naples, in 1840, was estimated at 42,000,000 ducats. (Scialoja.) It has been estimated that, in 1830, Spain possessed 1,725,000,000 francs. (Barrego von Rottenkamp, 330.)
This explains the high price of gold in Farther Asia, which was formerly separated from America, the principal source of supply of the precious metals, by a journey around the earth, the then usual course of the world's trade.
The precious metals are generally higher in country places than in large cities, and in the interior than on the sea-coast. Since the public highways etc. in Germany have been so much improved, the difference in the value of money in upper and lower Germany has almost disappeared. (Rau, in the Archiv der polit. Oek., III, 338.)
The first clear germ of this doctrine, which is one of the most important theoretical principles of international-trade politics, is to be found in David Hume, On Interest; Cantillon, Nature du Commerce, 226, 369 ff. Ricardo, Principles, ch. 7. “Gold and silver having been chosen for the general medium of circulation, they are, by the competition of commerce, distributed in such proportions amongst the different countries of the world, as to accommodate themselves to the natural traffic which would take place if no such metals existed, and the trade between countries were purely a trade of barter.” Rebenius, Oeff. Credit, I, 29 ff. Still further developed, especially by John Stuart Mill, Elements, 1821, III, 4, 13 f.; Torrens, The Budget, 1844. John Stuart Mill, Essays on some unsettled Principles of Political Economy, 1844, No. 1, and Principles, III, ch. 19, § 3, 5th ed.: “The opening of a new branch of export trade from England; an increase in the foreign demand for English products, either by the natural course of events or by the abrogation of duties; a check to the demand in England for foreign commodities, by the laying on of import duties in England, or of export duties elsewhere; these and all other events of similar tendency, should make the imports of England, bullion and other things taken together, no longer an equivalent for the exports; and the countries which take her exports would be obliged to offer their commodities, and bullion among the rest, on cheaper terms, in order to re-establish the equation of demand; and thus England would obtain money cheaper, and would acquire a generally higher range of prices.”
Obscurely surmised by Beccaria, E.P., 3, 18, and even by Galiani, Della Moneta, II, 2. Senior's admirable work, Three Lectures on the Cost of Obtaining Money, 1830, follows up the thought that every country obtains indigenous and foreign products at a cost which grows smaller in the same proportion as the productiveness of its people's labor is large. This would, certainly, explain why it is that perhaps one hundred English days' work in cotton manufactures will exchange against as much silver as is produced by two hundred days' work in Mexican mines and foundries. This would not, by any means, produce a lowering of the price of the precious metals relatively to other English commodities, but the influence would be felt equally by all the products of English national industry.