This proportion of gold coins is replaced by silver or copper tokens.Various commodities can thus serve as coin alongside gold,although only one specific commodity can function as the measure of value and therefore also as money within a particular country.These subsidiary means of circulation,for instance silver or copper tokens,represent definite fractions of gold coins within the circulation.The amount of silver or copper these tokens themselves contain is,therefore,not determined by the value of silver or copper in relation to that of gold,but is arbitrarily established by law.They may be issued only in amounts not exceeding those in which the small fractions of gold coin they represent would constantly circulate,either as small change for gold coin of higher denominations or to realise correspondingly low prices of commodities.The silver tokens and copper tokens will belong to distinct soheres of retail trade.It is self-evident that their velocity of circulation stands in inverse ratio to the price they realise in each individual purchase and sale,or to the value of the fraction of the gold coin they represent.The relatively insignificant total amount of subsidiary coins in circulation indicates the velocity with which they perpetually circulate,if one bears in mind the huge volume of retail trade daily transacted in a country like England.A recently published parliamentary report shows,for instance,that in 1857the English Mint coined gold to the amount of £4,859,000and silver having a nominal value of £733,000and a metal value of £363,000.In the ten-year period ending December 31,1867,the total amount of gold coined came to £5S,239,000and that of silver to only £2,434,000.
The nominal value of copper coins issued in 1857was only £6,720,while the value of the copper contained in them was £3,492;of this total £3,136was issued as pennies,£2,464as halfpennies and £1,120as farthings.The total nominal value of the copper coin struck during the last ten years came to £141,477,and their metal value to £73,503.Just as gold coin is prevented from perpetually functioning as coin by the statutory provision that on losing a certain quantity of metal it is demonetised,so conversely by laying down the price level which they can legally realize silver and copper counters are prevented from moving into the sphere of gold coin and from establishing themselves as money.Thus for example in England,copper is legal tender for sums up to 6d.and silver for sums up to 40s.The issue of silver and copper tokens in quantities exceeding the requirements of their spheres of circulation would not lead to a rise in commodity-prices but to the accumulation of these tokens in the hands of retail traders,who would in the end be forced to sell them as metal.In 1798,for instance,English copper coins to the amounts of £20,£30and £50,spent by private people,had accumulated in the tills of shopkeepers and,since their attempts to put the coins again into circulation failed,they finally had to sell them as metal on the copper market.[3]
The metal content of the silver and copper tokens,which represent gold coin in distinct spheres of home circulation,is determined by law;but when in circulation they wear away,just as gold coins do,and,because of the velocity and constancy of their circulation,they are reduced even faster to a merely imaginary,or shadow existence.If one were to establish that silver and copper tokens also,on losing a certain amount of metal,should cease to function as coin,it would be necessary to replace them in turn in certain sections of their own sphere of circulation by some other symbolic money,such as iron or lead;and in this way the representation of one type of symbolic money by other types of symbolic money would go on for ever.The needs of currency circulation itself accordingly compel all countries with a developed circulation to ensure that silver and copper tokens function as coin independently of the percentage of metal they lose.
It thus becomes evident that they are,by their very nature,symbols of gold coin not because they are made of silver or copper,not because they have value,but they are symbols in so far as they have no value.
Relatively worthless things,such as paper ,can function as symbols of gold coins.Subsidiary coins consist of metal,silver,copper,etc.,tokens principally because in most countries the less valuable metals circulated as money --e.g.,silver in England,copper in the ancient Roman Republic,Sweden,Scotland,etc.--before the process of circulation reduced them to the status of small coin and put a more valuable metal in their place.
It is in the nature of things moreover that the monetary symbol which directly arises from metallic currency should be,in the first place,once again a metal.Just as the portion of gold which would constantly have to circulate as small change is replaced by metal tokens,so the portion of gold which as coin remains always in the sphere of home circulation,and must therefore circulate perpetually,can be replaced by tokens without intrinsic value.
The level below which the volume of currency never falls is established in each country by experience.What was originally an insignificant divergence of the nominal content from the actual metal content of metallic currency can therefore reach a stage where the two things are completely divorced.
