and might finally come to the conclusion that the value of money, whether paper, silver, or gold depends on something else than its weight; that free coinage, upon which he bases all his discussion of money, is no more a natural system of money than capitalism is the natural and eternal system of economy; that free coinage is only a method of allowing private persons, (mine owners,) to issue money the same as bank owners are allowed to do the same thing by issuing paper money; that the nationalization of all money and credits, as demanded in the Communist Manifesto would abolish free coinage and knock the bottom out of Marx's whole theory of money.
Marx cannot understand how one ounce of metal can be of equal exchange value with two ounces of the same metal; neither can we. But we can readily understand how one ounce of metallic coin can be of equal value with two ounces of metallic coin, or two ounces of uncoined metal, and the illustration of the Indian rupee under limited coinage, and Mexican dollars under free coinage will explain it.
THAT THE PRICE LEVEL IS ALWAYS CONSTANT.
All of Marx's theories about money are based upon this assumption, and it is necessary to keep this constantly in mind when reading what he has to say. Marx tells us frankly that in his reasoning he considers the value of gold as given, as fixed, which of course implies that the price level is also fixed, for the price level is the way the value of gold is indicated. Do not confound price level with particular prices; particular prices may change, and yet the general range of prices, the price level, may be stable. A clear perception of this fact is indispensable to an understanding of money.
With a fixed price level, Marx asserts that the quantity of currency or gold in circulation depends on the price sum, that is the aggregate of all prices realized, or the aggregate of sales. These terms, price level and price sum, are Marx's own words, (Preisgrad, Preissumme.) The aggregate of sales, or price sum, is made up of two factors, the price level or rate of sale and the quantity of commodities sold. As the price level is fixed, to say that the quantity of currency depends on the price sum is the same as to say that the quantity of currency depends on the quantity of commodities sold. What Marx says, therefore, amounts to this: the price level being fixed, the quantity of money depends on the quantity of commodities. So far as we can see, Marx is right; his conclusion is unassailable. It is a poor rule that will not work both ways, and we find that Marx's rule will work both ways. The other way to work it would be to say that with a fixed price level the amount of commodities sold depends on the amount of gold in circulation. This conclusion is also unassailable. Tak-
