ABSTRACT
Banking had its origin in the practice of depositing money with goldsmiths for safe custody. A minted sovereign is a piece of gold certified by the Government as to weight and quality. Gold is a standard of value by which a survey of the terms on which all manner of alternatives are offered can be facilitated, or, it furnishes the scale on which exchange values are expressed. Expositions of the theory of foreign exchanges often dwell too much upon the form which the transactions take without connecting it sufficiently closely with the ultimate movements of trade which it represents. A treatise on currency frequently expounds what is known as the 'quantity law', as regulating the value of the currency. The supposed law may be stated as follows: The exchange medium of every country has to carry on the business of the country, and this business consists in the whole volume of exchanges.
