Simon Newcomb’s monetary theory: a reappraisal

I wish to thank Samuel Demeulemeester, Rebeca Gomez Betancourt, Laurent Le Maux, Stephen Meardon, Nathalie Sigot as well as the participants of the 2019 ESHET Annual Conference, the 21st ESHET Summer School and the seminar Atelier de PHARE for their comments and suggestions. I also wish to thank the two anonymous referees, this article has largely benefited from their comments and suggestions. Finally, I thank Jeffrey Althouse for answering my multiple questions relative to the English language.International audienceWhereas Simon Newcomb formulated the equation of exchange, he rejected the causality and the proportionality postulates of the quantity theory in some cases. To solve this puzzle, this paper relies on the distinction between the classical theory of money and the quantity theory of money and shows that, according to Newcomb, the quantity theory applied only for inconvertible paper money, while metallic money and convertible bank issues were regulated by different mechanisms. Understanding Newcomb’s distinction between the different types of issues also sheds light on his stance in the monetary debate of the U.S. Reconstruction period