MRS. B

BEFORE we proceed to the subject of trade, it is necessary that you should understand what is meant by the value of commodities.

CAROLINE

That cannot be very difficult; it is one of the first things we learn.

MRS. B

What is learnt at an age when the understanding is not yet well developed, is not always well learnt. What do you understand by the value of commodities?

CAROLINE

We call things valuable which cost a great deal of money; a diamond necklace, for instance, is very valuable.

MRS. R.

But if, instead of money, you gave in exchange for the necklace silk or cotton goods, tea, sugar, or any other commodity, would you not still call the necklace valuable?

CAROLINE

Certainly I should; for, supposing the necklace to be worth 1000l., it is immaterial whether I give 1000l. in money, or 1000l. worth of any thing else in exchange for it.

MRS. B

The value of a commodity is therefore estimated by the quantity of other things generally for which it will exchange, and hence it is frequently called exchangeable value.

CAROLINE

Or, in other words, the price of a commodity.

MRS, B.

No; price does not admit of so extensive a signification. The price of a commodity is its exchangeable value, estimated in money only. It is necessary that you should remember this distinction.