metals from country to country is determined much more than was formerly supposed by the state of the loan market in different countries, and much less by the state of prices.
If there be, at any time, an increase in the number of money transactions, a thing continually liable to happen from differences in the activity of speculation, and even in the time of year (since certain kinds of business are transacted only at particular seasons), an increase of the currency which is only proportional to this increase of transactions, and is of no longer duration, has no tendency to raise prices.
Chapter VI. Of The Value Of Money, As Dependent On Cost Of Production.
§ 1. The value of Money, in a state of Freedom, conforms to the value of the Bullion contained in it.
But money, no more than commodities in general, has its value definitely determined by demand and supply. The ultimate regulator of its value is Cost of Production.
We are supposing, of course, that things are left to themselves. Governments have not always left things to themselves. It was, until lately, the policy of all governments to interdict the exportation and the melting