ABSTRACT
The definition of the unit of value requires not only the selection of a commodity, but also the determination of the quantity of the commodity the value of which is the general unit of value. When the state began to issue money, the duty of defining this unit fell upon the state. In theory the state was at liberty to make its choice without restriction, and to alter the definition of the unit as frequently as it chose. But as soon as the unit of value was used also as a measure of indebtedness, which happened as soon as the practice of incurring debts appeared, changes in the unit of value meant changes in the burden of debts. It was highly undesirable that the state should take action likely to result in such a disturbance of economic relations. Even in a community where no such debts were outstanding, alterations in the unit would give rise to unnecessary confusion. For both these reasons, but principally the former, continuity in the unit of value was desirable. The unit could, in fact, be regarded as an abstraction, which was translated by the state into terms of the commodity in use for monetary purposes at any time. If the commodity was changed, the unit would then be stated in terms of the new material, the state aiming in normal times at a definition which would cause the minimum of alteration in the burden of the debts outstanding at the time of the change. But apart from occasions upon which the material of the standard has been changed, states have not often taken the trouble to prevent alterations in the burden of debts; they have even on occasion deliberately caused such alterations in their own favour. The large amount of continuity in the unit supplies a thread by which modern units of value can be traced back to the very beginning of money. But even this is not far enough, for, as we have seen, the first coins took the place of the pieces of metal of unit weight which were already in circulation. We must, therefore, go back still further and examine the units of weight which were in use in the pre-money era. Deliberate alterations of the unit of value break the thread, and the consequent gaps can be bridged only by considering the monetary policy which gave rise to the change, an aspect of the history of early monetary administration which will be dealt with later. 1
