As money commodity, gold acts as measure of value, because it represents a given value, of a quantity of labour-time, required for its production, like every other commodity, and so its exchange-value, against these commodities, can be established, and is given the name price. The value of gold, as commodity, is not constant, because the value of gold, as with other commodities, constantly changes, because the labour required for its production changes. But, as measure of this price, it changes proportional to all other commodities, and so forms a stable measure of these prices.
“Gold is the measure of value because its value is variable; it is the standard of price because it has been established as an invariable unit of weight. Here, as in all cases of measuring quantities of the same denomination, stability and exactitude of the proportions is essential. The necessity of establishing a quantity of gold as the unit of measure and its aliquot parts as subdivisions of this unit has given rise to the idea that a fixed ratio of values has been set up between a definite quantity of gold, whose value is of course variable, and the exchange-values of commodities. But such a view simply ignores the fact that the exchange-values of commodities are turned into prices, into quantities of gold, before gold becomes the standard of price. Quite irrespective of any changes in the value of gold, different quantities of gold will always represent the same ratio of values with regard to one another.” (p 71)
On this point, Bailey was correct, as against Ricardo and his followers. Marx quotes Bailey to that effect.
““Money may continually vary in value, and yet be as good a measure of value as if it remained perfectly stationary. Suppose, for example, it is reduced in value.... Before the reduction, a guinea would purchase three bushels of wheat or six days’ labour, subsequently, it would purchase only two bushels of wheat, or four days’ labour. In both these cases, the relations of wheat and labour to money being given, their mutual relations can be inferred; in other words, we can ascertain that a bushel of wheat is worth two days’ labour. This, which is all that measuring value implies, is as readily done after the reduction as before. The excellence of any thing as a measure of value is altogether independent of its own variableness in value” (Samuel Bailey, Money and its Vicissitudes, London, 1837, pp. 9, 10).” (Note *, p 71)
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