commodity. Such coinage is essentially but the stamp and certificate
that the coin contains a certain weight and fineness of metal. Where
coinage is free and gratuitous each coin will be worth the same as the
bullion that is in it so far as the citizens exercise their choice.
They will not long keep uncoined metal in their possession when it is
worth more in the form of money, nor will they long keep money from
the melting-pot when it is worth more as bullion. Yet there may be
a slight disparity between the bullion value and the monetary value
before the metal is converted into coin or the coin melted down into
metal.

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.[5]

§ 8. #The general level of prices#. We come now to a more peculiar
aspect of the monetary value problem. In performing its function
as general medium of trade, money determines the general level