Section CXIX.
The Metals As Money.
C. That metals were used for the purpose of money much later than the commodities above mentioned, and the precious metals in turn later than the non-precious metals, cannot by any means be shown to be universally true. Rather is gold in some countries to be obtained by the exercise of so little skill, and both gold and silver satisfy a want[709] so live and general, and one so early felt, that they are to be met with as an instrument of exchange in very early times.[710] In the case of isolated races, much depends on the nature of the metals with which the geologic constitution of the country has furnished them.[711] In general, however, the above law is found to prevail here. The higher the development of a people becomes, [pg 355] the more frequent is the occurrence of large payments; and to effect these, the more costly a metal is, the better, of course, it is adapted to effect such payments. Besides, only rich nations are able to possess the costly metals in a quantity absolutely great.[712] Among the Jews, gold as money, dates only from the time of David.[713] King Pheidon, of Argos, it is said, introduced silver money into Greece, about the middle of the eighth century before Christ. Gold came into use at a much later period.[714] The Romans struck silver money, for the first time, in 209 before Christ, and, in 207, the first gold coins.[715] Among modern nations, Venice (1285) and Florence seem to have been the first to have coined gold in any quantity.[716] Henry III. of England (ob. 1272), was the first to coin gold, but with so little success, that for a long time after, Edward III. (ob. 1377) was regarded as the first English monarch who had coined gold.[717] How little a barbarous people are in a condition to make use of very costly material as money, is [pg 356] proved by the account which Tacitus gives of the ancient Germans, who preferred silver to gold in trade.[718] England presents us with an instance of the other extreme. Since 1816, silver, in that country, has been used only as a species of change, and the circulation of gold governs in almost all commercial transactions.[719]
D. The local usage of some countries has raised many other commodities to the dignity of instruments of exchange, especially where the population are poor and the metals which might be used as money have not existed in sufficient quantities or in the requisite proportion. But people have always limited themselves in the material of their money to such commodities as are universally acceptable, as uniform as may be, and current as articles of export or import.[720]
Section CXX.
Money—The Precious Metals.
That the precious metals are uniformly preferred in highly [pg 358] cultivated nations[721] as the instrument of exchange, depends on the greatness and uniformity of their value in exchange, but especially on their durability and pliancy as to form.
This value in exchange is great, because their beauty, which consists in their luster and their sonorous ring,[722] gives them great value in use; and because, at the same time, their rarity in nature makes the supply of them relatively small,[723] and not susceptible of increase at pleasure.[724] As they contain so large [pg 359] a value in so small a volume, they are adapted to transportation from one place to another, with but little difficulty—a matter of the greatest importance in an instrument of exchange.[725] Hence, it is much easier to keep the demand for them and the supply of them at a level all over the world, than it is the demand and supply of most other commodities. And this all the more as there are not different kinds of gold and silver, but only different qualities of their fineness.[726] It also contributes to the uniformity of their value in exchange, that they minister mainly only to wants of luxury. The most indispensable commodities are subject to the greatest variations [pg 360] in price (see § [103]), whereas, in the case of the precious metals, the diversity of uses to which they may be turned contributes greatly to render their value, as instruments of exchange, more equable. If the supply of them be small, gold and silver vessels are less in demand; a part of the old ones are melted down, and vice versa.