for more than two centuries. Rents of farm land are contracted for in terms of grain but paid for in money at the average price of the grain as judicially determined.
In the reign of Queen Elizabeth a statute was passed requiring that one third of the rental of college lands should be expressed in wheat or malt. Blackstone, commenting on this law two centuries afterwards, observed that the one third in wheat or malt rent had come to be generally worth twice as much as the two thirds in money! This saved, for the colleges of England, a very important part of their revenues which would otherwise have become dissipated by the depreciation of money.
Of these acts, Professor Jevons says,[1] "The question arises whether, having regard to these extreme changes in the value of the precious metals, it is desirable to employ them as the standard of value in long lasting contracts. We are forced to admit that the statesmen of Queen Elizabeth were far-seeing."
Mr. C. W. Barron of the Boston News Bureau and the Wall Street Journal has supplied me with a more modern instance: On September 8, 1817, David Sears, of Boston, leased to Uriah Cutting, of Boston, for 1000 years from December 1, 1817, at a yearly rental of 10 tons of First Quality of Russia Sables Iron, the land and building thereon at the northeast corner of Scollay Square and Court Street. Similar leases were executed at the time by the same parties on eleven other pieces of property. In each lease the rental is actually payable in money equal in value to the specified amount of iron.
2. The Tabular Standard
Instances have come to light of contracts based on more than one commodity, thus involving the very principle of the index number or "tabular standard."
Twice in the Colonial history of Massachusetts—-
- ↑ In his Money and the Mechanism of Exchange, p. 326.
