medium of circulation—is thus nothing but an assertion through the process of circulation of a law mechanically violated from without; namely, that the quantity of gold in circulation is determined by the prices of commodities, and the quantity of tokens of value in circulation is determined by the quantity of gold coin which it represents. For that reason any desired number of paper notes will be absorbed and equally digested by the process of circulation, because the token of value, no matter with what gold title it may enter circulation, will be compressed within the latter to a token of that quantity of gold which could actually circulate in its place.
In the case of the circulation of tokens of value all laws pertaining to the circulation of real money appear to be reversed and standing on their heads. While gold circulates because it has value, paper has value because it circulates. While with a given exchange value of commodities, the quantity of gold in circulation depends on its own value, the value of paper depends on its own quantity in circulation. While the quantity of gold in circulation rises or falls with the rise or fall of prices of commodities, the prices of commodities seem to rise or fall with the change in the quantity of paper in circulation. While the circulation of commodities can absorb only a definite quantity of gold coin and as a result of that the alternating contraction and expansion of the currency appears as a necessary law, paper money seems to enter circulation in any desired amount. While the state is guilty of debasing gold and silver coin and of disturbing their function of a medium of circula-
