er money. The part of
the story that we do not know is (_a_) what thereupon happened to the
aggregate amount of "currency" of all kinds then in circulation within
the island, in relation to the work which that currency had to do; (_b_)
what happened to the prices of commodities.

It may well have been that the issue of paper money was promptly
followed by some shipments of metallic money to England or
France--perhaps even in payment for imported materials for the market
house--so that the aggregate amount of "currency" in the island was not
in fact increased. Accordingly, no change of prices may have taken
place. In such a case, Guernsey would merely have substituted paper for
gold in its currency. The gold-capital heretofore in use as currency,
and there, of course, yielding no capitalist any toll of interest,
would, in effect, have been borrowed to expend upon the building of the
Market House. And, as paper money probably served the purposes of the
island every bit as well as gold, nobody was any the worse. By giving up
the needless extravagance of using gold coins as counters, and by taking
to paper counters instead, Guernsey really got its Market House without
cost. The same resource is open to any community already possessing a
gold currency, and becoming civilised and self-restrained and sensible
enough to arrange to do without gold counters in its internal trade. But
Guernsey could not have gone on equipping itself with endless municipal
buildings as out of a bottomless purse. The resource is a limited one.
This is a trick which can only be played once. When the gold has once
been withdrawn from the currency, and diverted to another use, there is
no more left with which to repeat the apparent miracle.

On the other hand, there may easily have been no special shipments of
metallic money from the island, and the aggregate "currency" may have
been increased, in relation to the work that it had to do, by the amount
of the note issue. In that case, the economist would, for reasons into
which I have no space to go on the present occasion, expect to see a
gradual and silent rise of prices. Such a rise would seem, to the
ordinary Guernsey housekeeper and shopkeeper, as inevitable, and at the
same time as annoying as any other of those mysterious increases in the
cost of eggs and meat that Anthony Trollope described with such
uneconomic charm in _Why Frau Frohmann raised her prices_--a work which
I do not find prescribed