The Value of Money

This study examines what determines the value of money, insisting that the question cannot be divorced from the broader theory of value. It proposes that most exchange arises from continual change and readjustment, with speculation playing a dominant role. By treating money as a dynamic instrument rather than a static quantity, the author challenges the traditional quantity theory and its equilibrium assumptions.

To support these ideas, the author presents extensive data on retail and wholesale trade, foreign versus domestic transactions, and the scale of speculation in commodities and securities. He also surveys banking activity, revealing that most clearings are tied to market speculation and that modern banks fund industry largely through stock‑related credit. The analysis suggests that the close relationship between banks and the exchange actually strengthens ordinary commerce, offering a nuanced view of monetary policy’s foundations.