We have seen that changes in the value of gold and silver do not affect their functions as measure of value and money of account.But with regard to hoarded money these changes are of decisive importance,since with the rise or fall in the value of gold and silver the value of the hoard of gold or silver will rise or fall.Such changes are of even greater importance for money as means of payment.The payment is effected at a date subsequent to the sale of the commodities;that is to say,money performs two different functions at two different periods,acting first as a measure of value,and then as the means of payment appropriate to this measure.If meanwhile a change has occurred in the value of the precious metals,or in the labour-time needed for their production,the same quantity of gold or silver will have a greater or smaller value when it functions as means of payment than at the time it served as measure of value,when the contract was signed.The function which a specific commodity,such as gold or silver,performs as money,or as exchange-value that has assumed an independent form,comes here into conflict with the nature of the specific commodity,whose value depends on variations in its costs of production.It is well-known that the fall in the value of precious metals in Europe gave rise to a great social revolution,just as the ancient Roman Republic at an early stage of its history experienced a reverse revolution caused by a rise in the value of copper,the metal in which the debts of the plebeians were contracted.
Even without further examination of the influence which fluctuations in the value of precious metals exert on the system of bourgeois economy,it is clear that a fall in the value of precious metals favours debtors at the expense of creditors,while a rise in their value favours creditors at the expense of debtors.c.World Money Gold becomes money,as distinct from coin,first by being withdrawn from circulation and hoarded,then by entering circulation as a non-means of circulation,finally however by breaking through the barriers of domestic circulation in order to function as universal equivalent in the world of commodities.It thus becomes world money .
In the same way as originally the commonly used weights of precious metals served as measures of value,so on the world market the monetary denominations are reconverted into corresponding denominations of weight.
Just as amorphous crude metal (aes rude )was the original form of means of circulation,and originally the coined form was simply the of official indication of metallic weight,so precious metal serving as universal coin discards its specific shape and imprint and reverts to neutral bullion form;that is when national coins,such as Russian imperials,Mexican thalers and English sovereigns,circulate abroad their titles become unimportant and what counts is only their substance.Finally,as international money the precious metals once again fulfil their original function of means of exchange:a function which,like commodity exchange itself,originated at points of contact between different primitive communities and not in the interior of the communities.Money functioning as world money reverts to its original natural form.When it leaves domestic circulation,money sheds the particular forms occasioned by the development of exchange within particular areas,or the local forms assumed by money as measure of price --specie,small change,and token of value.
We have seen that only one commodity serves as a measure of value in the internal circulation of any country.But since in one country gold performs this function,in another silver,a double standard of value is recognised on the world market,and all functions of money are duplicated.
The translation of the values of commodities from gold prices into silver prices and vice versa always depends on the relative value of the two metals;this relative value varying continuously and its determination appearing accordingly as a continuous process.Commodity-owners in every country are compelled to use gold and silver alternately for foreign commerce thus exchanging the metal current as money within the country for the metal which they happen to require as money in a foreign country.
Every nation thus employs both gold and silver as world money.
Gold and silver in the sphere of international commodity circulation appear not as means of circulation but as universal means of exchange .
