Exchanging

"It is conceivable in fact, that the operation that pledges the money is guaranteed by the marketable value of the material from which it is made; or, on the other hand, by another quantity of merchandise, exterior to it, but linked to it by collective consent or the will of the prince. it is this second solution that Law chose, on account of the rarity of precious metal and the fluctuations in its market value. He thought that one could circulate paper money backed by landed property: in which case it was simply a matter of issuing 'banknotes mortgaged against lands and due to be redeemed by annual payments..., these notes will be exchanged, like minted coin, for the value printed on them' As we know, Law was obliged to renounce this technique in his French experiment and subsequently provided surety for his money by means of a trading company. The failure of his enterprise in no way affected the validity of the money-pledge theory that made it possible, but that had also made possible all reflection of any kind on money, even that opposed to Law's conceptions. And when a stable metallic money was established in 1726, the pledge was required to be provided by the actual substance of the coins. What ensured the exchangeability of money, it was decided, was the market value of the metal to be found in it; and Turgot was to criticise Law for having believed that

money is only a sign of wealth, a sign whose credit is based upon the mark of the prince. The mark is on each coin only in order to certify its weight and title...It is therefore as merchandise that money is, not the sign, but the common measure of all other merchandise...
Gold derives its price from its rarity, and far from its being an evil that it should be employed at the same time as both merchandise and measure, these two uses maintain its price"

The Order of Things.