The book covers the monetary systems of all the major civilizations of the Ancient World, including the eastern civilizations of Japan, China, and India. Of greatest interest, is an extended history of money during the Kingdom, Republican, and Imperial periods of ancient Rome including an analysis of how the sudden influx of precious metals following the conquest of Spain and Carthage greatly complicated the politics and decline of the Republic. Show All     Download:     PDF       EPUB

preface

The great political revolutions which, during the half-century from 1775 to 1825, destroyed the Colonial governments in America and uprooted the feudal system in Europe, also broke down the most formidable barriers that stood in the way of international commerce. Corn, bullion, and other commodities, formerly forbidden to be shipped from one country to another, are now free to go whither price or profit may determine.

These radical changes, followed by the extensive application of steam to water and land transit, and the opening of the Asiatic ports, have ushered in a new era of commerce, which, dealing with an infinite variety of objects, stretches its arms to the remotest corners of the earth.

Among the notable consequences of this development of commerce has been the creation of a more or less common measure of value. This phrase is not used approvingly, as though a common measure of value were yet desirable; it is not used in the sense that a geographical mile or a second of time are common measures, because these measures are employed in common and simultaneously by all countries, whereas the gold and silver portion of the world's stock of money—the only portion used by various nations in common—is used by them, to a certain extent, in turns, whilst the paper and copper portions are not used in common at all. The term common measure of value is employed simply to explain the different status of money, now and formerly. The money metals are no longer sought to be monopolized by means of commercial interdicts. Restraints, indeed, still exist, but they are all soluble in price; and these metals, wherever they may be, stand ready to become the property of any nation or nations who command the means to purchase them with other commodities. It is in this sense that they and their complementary adjuncts, paper notes, have, as a mass, become in a restricted sense a common measure of value: the metals by means of free export and coinage, and the notes by means of elastic issues and a promised convertibility. As a mass of money, it is really heterogeneous and ill-cemented, but during the intervals when it does hold together it certainly operates as a common measure of value; a fact abundantly proved by the approximate uniformity of prices in various countries at such periods.

The European system of money—if indeed that may be called a system which is chiefly distinguished by its lack of system—has thus become not merely the arbiter of the social order in a given state, it has assumed almost universal sway over the destinies of mankind, a sway in one sense more potent, because more palpable and direct, than either politics or religion. Up to the present time, China is the one important country which has not succumbed to its influence.

The study and regulation of this mighty engine concerns not only the nations to whom particular portions of it may belong; they are of importance to all the nations whom the new development of commerce has knit together. Nor can this study and regulation be longer conducted on its present loose basis of partial or fragmentary information. Money has a history which is fifty centuries old, and filled with an experience too valuable and too dearly bought to be ignored or thrown away.

From the fall of the Eoman Commonwealth to the French Revolution, coins, (made partly from old accumulations of metal,) were substantially the only moneys of Europe. During this lengthy period, all general and long-sustained changes in the level of prices are attributed to the changing level of the stock of coins, which slowly but continually diminished until the tenth century, and then slowly increased until near the nineteenth. So gradual were these changes that it has been remarked that in the first part of the fourteenth century and the last part of the eighteenth identically the same prices prevailed in at least one important country for all the common necessaries of life and articles of greatest consumption, such as corn and domestic animals and their products. "^

But with the introduction of bank and government paper notes, which only became an important part of the monetary systems of the various states of the Western world after the occurrence of the great revolutions above alluded to, this comparative permanency in the value of money has passed away. Paper notes now form an essential portion of the volume of money or Measure of Value in all countries; and in some of them it is, or has been, the only measure of the sort. Viewing the subject from a comprehensive standpoint, it may be stated that, during the past thirty years alone, the proportion of state and bank paper-money which helps to form the Measure of Value employed by civilized nations, has increased from thirty to fifty per cent, of the Entire Measure, and that the tendency—arising from insufiicient supplies of the coinage metals—is toward a further increase of paper. Not only has the paper portion of money increased, the whole volume of money, comprising both coins and notes, has increased, even when compared with a vastly increased population. The volume of money in the European world, which, thirty years ago, scarcely exceeded nine dollars, or, say, thirty-eight shillings sterling per capita of population, now amounts to fourteen dollars, or, say, sixty shillings per capita.

This tendency of the volume of money to increase cannot be viewed by Capital but with alarm. It is not as though money consisted, as it did during the Middle Ages, nearly entirely of coins made from a stock of metals which could only be kept up or increased by prodigious exertions and during a long period of time. It now consists very largely of paper notes, which are emitted both by governments and banks without any reference to the Whole Volume of Money, in which volume, alone, is Price susceptible of expression. In consequence of this loose system the measure of value is being continually swollen (this is not stated in reference to any particular country, but to all countries), so that it continually disturbs the natural tendency of prices towards an equilibrium. Barring occasionally brief periods of reaction, the constant tendency of prices during the period adverted to has been upward. The result of this movement is that property has passed and is still passing away, insensibly, from the hands of its original possessors and rightful owners, to be distributed among classes who never earned it, and who neither know how to keep it nor to dispose of it economically.

On the other hand, the interests of Labour forbid the consideration of any policy designed to diminish the Measure of Value. We may with justice oppose further inflation, we may put an end to those mischievous agencies which tamper with the Measure of Value; but we can never dare, we should never wish, to contract it, nor permit it to contract; for, as history abundantly testifies, a contraction of money, when production is increasing and commerce expanding, means the arrest of one and extermination of the other. And it is, perhaps, the conviction of these consequences, crudely formed in the popular mind, which lies at the basis of the many illiterate plans and ill-advised clamours for inflation, which, both in Europe and America, mark the financial and political measures of recent years. Amid this conflict of interests and the arguments by which the pretensions and claims of each interested class are strengthened, the student, the legislator, the magistrate the advocate, seeks in vain for that steady light of recorded experience, those fixed monuments of history, which can alone guide him toward correct theories and practical results. To offer such a guide—howsoever much the execution of the work might fall short of the design—was one of the principal motives which led to the preparation of the present volume. If we turn from illiterate plans and popular clamours to those teachers whom the world has been led to regard as masters of financial science, instead of obtaining from them a ready solution of the difficulties surrounding the question of Money, we only encounter discordance, dogmatism, and intolerance, a condition of afiairs which, it is believed, has resulted solely from the want of some general fund of information, open to all, which should embrace the monetary experience of many countries, of many ages, and of many phases of society: for if there is any one great truth which more than another is bound to impress itself upon the student of monetary history, it is this, that the evolution of money as an institution of law, is inalienably connected with the evolution of society, and that monetary systems which are quite impossible at one period may be entirely practicable at another.

Many of the prevalent fallacies concerning the nature function, and use of money have arisen from the systems now in vogue, all of which are of feudal origin. These fallacies are similar in character to those fictions of the Common Law which were only dissipated when the older and clearer light of the Roman Law was brought to bear upon them, and they can only be successfully dealt with in a similar way. To the modern mind, money is a commodity which derives its value from the cost of production. In the free states of antiquity money was a concrete series of numbers whose value arose from state monopoly, legal limitation, and forced currency. The growth, establishment, and decay of this conception of money and its displacement by the feudal conception of it as a commodity, lie at the threshold of all precise inquiries into the science of money, and must be thoroughly mastered by the student who designs to make any practical use of his researches. To afford ample opportunity for the study of this essential feature of monetary history, extended space has been accorded to the experience of China and Rome, in which two great states of the ancient world numerical systems of money have left behind them the clearest traces and most important consequences. Where the imperfection of existing evidences may lead to doubt concerning the details of the systems described, it is hoped that the conclusions at which the author has arrived will be found as worthy the scrutiny of the learned as it is confident they must awaken the attention of the curious.