OF

POLITICAL ECONOMY

WITH

SOME OF THEIR APPLICATIONS TO SOCIAL PHILOSOPHY,

BY

JOHN STUART MILL.

IN TWO VOLUMES.

VOL. II.

FROM THE FIFTH LONDON EDITION.

NEW YORK:

D. APPLETON AND COMPANY,
1, 3, AND 5 BOND STREET.

1881.

ENERAL LIBRA
Universi

CHAPTER VII. Of Money.

1. Purposes of a Circulating Medium,

2. Gold and Silver, why fitted for those purposes,

3. Money a mere contrivance for facilitating exchanges, which

does not affect the laws of Value,

PAGE

17

19

22

CHAPTER VIII. Of the Value of Money, as dependent on

Demand and Supply.

1. Value of Money, an ambiguous expression, .

2. The Value of Money depends, cæteris paribus, on its quantity,

3.

together with the rapidity of circulation,

4. Explanations and limitations of this principle,

25

26

31

33

CHAPTER IX. 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, .

37

--

2. which is determined by the cost of production,

40

3. This law, how related to the principle laid down in the pre-

ceding chapter,

42

CHAPTER X. Of a Double Standard, and Subsidiary Coins.

2. The use of the two metals as money, how obtained without

making both of them legal tender,

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46

48

CHAPTER XI. Of Credit, as a Substitute for Money.

§ 1. Credit not a creation but a transfer of the means of produc-

2. In what manner it assists production,

3. Function of credit in economizing the use of money,

4. Bills of exchange, .

5. Promissory notes,.

6. Deposits and cheques,

CHAPTER XII. Influence of Credit on Prices.

§ 1. The influence of bank notes, bills, and cheques, on price, a
part of the influence of Credit,.

2. Credit a purchasing power similar to money,

3. Effects of great extensions and contractions of credit.
nomena of a commercial crisis analyzed,

4. Bills a more powerful instrument for acting on prices than

book credits, and bank notes than bills,

Phe-

8. No generic distinction between bank notes and other forms

5.

-

the distinction of little practical importance,

6. Cheques an instrument for acting on prices, equally power-

ful with bank notes,.

7. Are bank notes money?

CHAPTER XIII. Of an Inconvertible Paper Currency.

§ 1. The value of an inconvertible paper, depending on its quan-
tity, is a matter of arbitrary regulation,

2. If regulated by the price of bullion, an inconvertible cur-
rency might be safe, but not expedient,

3. Examination of the doctrine that an inconvertible currency
is safe if representing actual property,

4.

of the doctrine that an increase of the currency promotes

PAGE

industry, .

5. Depreciation of currency a tax on the community, and a
fraud on creditors,

6. Examination of some pleas for committing this fraud,

CHAPTER XIV. Of Excess of Supply.

§ 1. Can there be an oversupply of commodities generally?

2. The supply of commodities in general, cannot exceed the

power of purchase,

3.

never does exceed the inclination to consume,

99

100

105

4. Origin and explanation of the notion of general oversupply,. 110

CHAPTER XV. Of a Measure of Value.

§ 1. A Measure of Exchange Value, in what sense possible,

2. A Measure of Cost of Production,

114

116

CHAPTER XVI. Of some Peculiar Cases of Value.

§ 1. Values of commodities which have a joint cost of production, 120

2. Values of the different kinds of agricultural produce,

CHAPTER XVII. Of International Trade.

123

§ 1. Cost of production not the regulator of international values, 126

2. Interchange of commodities between distant places, deter-

mined by differences not in their absolute, but in their

comparative, cost of production,

3. The direct benefits of commerce consist in increased effi-
ciency of the productive powers of the world, .

4.

not in a vent for exports, nor in the gains of merchants,
5. Indirect benefits of commerce, economical and moral; still
greater than the direct,

§ 1. The values of imported commodities depend on the terms of

international interchange,

137