THE MONETARY MATERIAL AND THE BULLION
Among all civilized peoples and for a long period a mass habit of use has attached to the precious metals. These metals do not satisfy all the requirements of a perfect money. As we shall show later money is subject to a variability of value because the quantity of money in circulation depends on the fluctuating productivity of the mines. This detracts from its usefulness as money. Aside from this
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consideration coined money is excessively bulky for large payments. Credit instruments are particularly convenient media of payment in these cases; they perform the service with scarcely any difficulty and almost without expense. On the other hand the precious metals do possess in high degree the quality of divisibility which is important in minting. They have greater durability than most other monetary materials. Moreover they have purity, lustre and a high bullion value due to their scarcity: all qualities that were particularly important in the beginning of the monetary economy and that are not to be overlooked today. Ultimately the historical force which was invoked by the use of precious metals among the most advanced peoples determined the dominance of these metals over all other monetary materials. Unity of the monetary systems is essential to an unchallenged functioning. Thus the backward economies were forced to adopt the material used for money by the nations controlling world commerce unless they wished to be isolated from the money economy of the world. The ousting of silver and the transition to the gold standard, which most advanced nations have accomplished with the last decades, is to be traced back to this cause. However, it is not part of our task to describe these events which are not adapted to purely theoretical exposition but demand extensive materials that may only be collected by empirical methods of investigation.