Goldasmeasureofvalueandasstandardofpricehasquitedistinctspecificfunctions,andtheconfusionoftheonewiththeotherhasledtothemostabsurdtheories。Goldasmaterialisedlabour—timeisameasureofvalue,asapieceofmetalofdefiniteweightitisthestandardofprice。Goldbecomesthemeasureofvaluebecauseasanexchange—valueitiscomparedwiththeexchange—valuesofothercommodities;initsaspectasastandardofpriceadefinitequantityofgoldservesasaunitforotherquantitiesofgold。Goldisthemeasureofvaluebecauseitsvalueisvariable;itisthestandardofpricebecauseithasbeenestablishedasaninvariableunitofweight。Here,asinallcasesofmeasuringquantitiesofthesamedenomination,stabilityandexactitudeoftheproportionsisessential。Thenecessityofestablishingaquantityofgoldastheunitofmeasureanditsaliquotpartsassubdivisionsofthisunithasgivenrisetotheideathatafixedratioofvalueshasbeensetupbetweenadefinitequantityofgold,whosevalueisofcoursevariable,andtheexchange—valuesofcommodities。Butsuchaviewsimplyignoresthefactthattheexchange—valuesofcommoditiesareturnedintoprices,intoquantitiesofgold,beforegoldbecomesthestandardofprice。Quiteirrespectiveofanychangesinthevalueofgold,differentquantitiesofgoldwillalwaysrepresentthesameratioofvalueswithregardtooneanother。lfthevalueofgoldshouldfallby1,000percent,thenthevalueoftwelveouncesofgoldwouldstillbetwelvetimesbiggerthanthatofoneounceofgold,andsofaraspricesareconcernedwhatmattersisonlytheproportionofthedifferentquantities^
ofgoldtooneanother。Since,ontheotherhand,ariseorfallinthevalueofanounceofgolddoesnotinanywayaffectitsweight,theweightofitsaliquotpartsremainslikewiseunaffected;goldcanthusalwaysserveasastablestandardofprice,regardlessofanychangesinitsvalue。[3]
Asaresultofanhistoricalprocess,which,asweshallexplainlater,wasdeterminedbythenatureofmetalliccurrency,thenamesofparticularweightswereretainedforconstantlychanginganddiminishingweightsofpreciousmetalsfunctioningasthestandardofprice。ThustheEnglishpoundsterlingdenoteslessthanone—thirdofitsoriginalweight,thepoundScotsbeforetheUniononly1/36,theFrenchlivre1/74,theSpanishmaravedilessthan1/1,000andthePortuguesereianevensmallerproportion。
Historicaldevelopmentthusledtoaseparationofthemoneynamesofcertainweightsofmetalsfromthecommonnamesoftheseweights。[4]Becausethedesignationoftheunitofmeasure,itsaliquotpartsandtheirnamesis,ontheonehand,purelyconventional,andontheotherhandmustbeacceptedasuniversalandindispensablewithinthesphereofcirculation,ithadtobeestablishedbylegalmeans。Thepurelyformalenactmentthusdevolveduponthegovernment。[5]Whichparticularmetalservedasthematerialofmoneydependedonthegivensocialconditions。Thestandardofpriceisofcoursedifferentindifferentcountries。InEngland,forexample,theounceasaweightofmetalisdividedintopennyweights,grainsandcaratstroy;buttheounceofgoldastheunitofmoneyisdividedinto37/8sovereigns,thesovereigninto20shillingsandtheshillinginto12pence,sothat100
poundsof22—caratgold（1,200ounces）equal4,672sovereignsand10shillings。