Online Library of Liberty: Economics, vol. 2: Modern Economic Problems

This adjustment of the value of commodity-money to other things is made also on the side of supply, in the use of labor and material agents to produce the precious metals and to produce other things. Gold-mining, for example, is one among various industries to which men may apply their labor and their available material agents. Some mines are superior, others medium, others marginal which it barely pays to work. There is, therefore, a rise and fall of the margin of gold production, with changes in prices and changes in the cost of production. Large new deposits of gold are discovered from time to time, and new methods of extracting gold are invented. If, when it barely pays to work a mine, such changes occur, gold becomes worth less, and the poorer mines eventually must go out of use. As gold rises in value some abandoned mines again come into use. A similar variation may be noted in the utilization of marginal land, marginal factories, marginal forges, and marginal agents of every kind.8

References.

Jevons, W. S., Money and the mechanism of exchange. N. Y. Appleton. 1875. Chs. III-VII, XIII.

Johnson, J. F., Money and currency. N. Y. Ginn & Co. 1905. Chs. I, II, IX. Phillips, C. A. (Ed.), Readings in money and banking. N. Y. Macmillan. 1916. Chs. I-III, XIV.

Walker, F. A., Money in its relations to trade and industry. 1st ed. N. Y. Holt. 1879. Chs. I, II.

White, Horace, Money and banking illustrated by American history. Ed. Bost. Ginn & Co. 1914. Bk. I.

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