In the circulation of tokens of value all the laws governing the circulation of real money seem to be reversed and turned upside down.Gold circulates because it has value，whereas paper has value because it circulates.If the exchange-value of commodities is given，the quantity of gold in circulation depends on its value，whereas the value of paper tokens depends on the number of tokens in circulation.The amount of gold in circulation increases or decreases with the rise or fall of commodity-prices，whereas commodity-prices seem to rise or fall with the changing amount of paper in circulation.The circulation of commodities can absorb only a certain quantity of gold currency，the alternating contraction and expansion of the volume of money in circulation manifesting itself accordingly as an inevitable law，whereas any amount of paper money seems to be absorbed by circulation.The State which issues coins even 1/100of a grain below standard weight debases gold and silver currency and therefore upsets its function as a medium of circulation，whereas the issue of worthless pieces of paper which have nothing in common with metal except the denomination of the coinage is a perfectly correct operation.The gold coin obviously represents the value of commodities only after the value has been assessed in terms of gold or expressed as a price，whereas the token of value seems to represent the value of commodities directly.It is thus evident that a person who restricts his studies of monetary circulation to an analysis of the circulation of paper money with a legal rate of exchange must misunderstand the inherent laws of monetary circulation.These laws indeed apoear not only to be turned upside down in the circulation of tokens of value but even annulled；for the movements of paper money，when it is issued in the appropriate amount，are not characteristic of it as token of value，whereas its specific movements are due to infringements of its correct proportion to gold，and do not directly arise from the metamorphosis of commodities.
FOOTNOTES
[1.]Dodd，The Curiosities of Industry ，London，1854[p.16].
[2.]The Currency Theory Reviewed ....By a Banker，Edinburgh，1845，p.
69."If a slightly worn coin were to be considered to be worth less than a completely new one，then circulation would be continuously impeded，and not a single payment could be made without argument"(G.Garnier，Histoire de la monnaie ，tome I，p.24).
[3.]David Buchanan，Observations on the Subjects Treated of in Doctor Smith's Inquiry into the Nature and Causes of the Wealth of Nations ，Edinburgh，1814，p.31.
[4.]Henry Storch，Cours d'économie politique ...avec des notes par J.B.Say，Paris，1823，tome IV，p.79.Storch published his work in French in St.Pctersburg.J.B.Say immediately brought out a reprint in Paris supplemented by so-called notes，which in fact contain nothing but platitudes.Storch's reaction to the annexation of his work by the "prince de la science "was not at all polite (see his Considérations sur le nature du revenu national ，Paris，1824).
[5.]Plato，De Republica，L.II."The coin is a token of exchange"(Opera omnia etc.，ed.G.Stallbaumius，London，1850，p.304).Plato analyses only two aspects of money，i.e.，money as a standard of value and a token of value；apart from the token of value circulating within the country he calls for another token of value serving in the commerce of Greece with other countries (cf.book 5of his Lar~s).
[6.]Aristotele，Ethica Nicomachea ，L.5，C.8[p.98]."But money has become by convention a sort of representative of demand；and this is why it has the name 'money'--because it exists not by nature but by 'law'，and it is in our power to change it and make it useless."[The English translation is from Aristotle，Ethica Nicomachea，Oxford，1925，1133a.]
Aristotle's conception of money was considerably more complex and profound than that of Plato.In the following passage he describes very well how as a result of barter between different communities the necessity arises of turning a specific commodity，that is a substance which has itself value，into money."When the inhabitants of one country became more dependent on those of another，and they imported what they needed，and exported what they had too much of，money necessarily came into use ...and hence men agreed to employ in their dealings with each other something which was intrinsically useful and easily applicable to the purposes of life，for example，iron，silver and the like."(Aristotele，De Republica ，L.I，C.9，loc.cit [p.14].[The English translation is from Aristotle，Politica ，by Benjamin Jowett，Oxford，1966，1257a.])Michel Chevalier，who has either not read or not understood Aristotle，quotes this passage to show that according to Aristotle the medium of circulation must be a substance which is itself valuable.Aristotle，however，states plainly that money regarded simply as medium of circulation is merely a conventional or legal entity，as even its name indicates，and its use-value as specie is in fact only due to its function and not to any intrinsic use-value."Others maintain that coined money is a mere sham，a thing not natural，but conventional only，because，if the users substitute another commodity for it，it is worthless，and because it is not useful as a means to any of the necessities of life."(Aristoteles，De Republica [p.15].[The English translation is from Aristotle，Politica ，1257b.])[7.]Sir John Mandeville，Voyages and Travels ，London，1705，p.105.
