“Money is gold, and nothing else” J. P. Morgan (1912)
I only learnt this original quote when reading an excellent article by James Turk today. He said that the quote was often erroneously stated as: “Gold is money, and nothing else.” Indeed it is, because that is the only quote that I had ever seen and it is not only misleading; it is wrong.
Mr. Morgan’s actual statement is much closer to the mark, but still does not hit the nail on the head. He spoke on the assumption of Gold being a coin or bullion, which it commonly was in 1912. Today there is no such familiarity. Mr. Morgan’s quote, more precisely stated, would read: “Money is a known weight and fineness (purity) of Gold, and nothing else.”
As long as it satisfies these criteria, money could be a coin or bullion, or any shape whatsoever. We have tended toward coins and bullion for the practical reason that they are easily recognisable.
Gold that is unrefined, or refined but of an unknown weight or fineness, is not money. It remains in the state of being a good as its value is still subjective.
It is only when the stable value of Gold becomes of a known weight and fineness that it transitions from the status of good, to the status of money. Once a clear understanding of a good and money is achieved, it becomes crystal clear that they are not the same thing. Money is not a good – ‘most marketable’ or otherwise.
There is no other money than a known weight and purity of Gold, because nothing else has the objective value necessary to measure the subjective value of goods.
I am indebted to Mr. Turk for clarifying Mr. Morgan’s real words and, though I disagree with a few points (Gold has only been money for 3,500 years/gold is not a good), for one of the better articles on Gold that I have ever read. He clearly recognises the connection between money and the existence of societies, which was touched upon in Dawn of Gold and which I have never seen mentioned elsewhere. Bravo Mr Turk.