The workingman's advocate. [volume] (Chicago [Ill.]) 1864-1877, 1868-09-12
fro BE coSrrNUsD.l
From the London Bee Hiv'
THE A ID G OF SOCIAL sCIENC
PAPER MONEY AND CREDIT.


and was great improvement upon the mode
Of exchanging them BY barter but the pro-
gress of commerce has led msn to adopt
other and still more Important expedients
for facilitating their Interchanges With one
another, such as the use Of paper money and
credit. f4
The use and wear and tear OF coins Of the
precious metals Is not only very expensive
medium Of interchange. bat occasions great
labor 10 the weighing and counting Of coins
necessary for all large transactions, as well
as great expense and risk in conveying large
sums from place to place. and from one
place to another. This trouble, expense and
risk have led men to adopt the use OF
paper for facilitating their exchanges, it be-
ing a more portable and convenient substi-
stute for paying large sums, and in most
cases guards them against risk
In addition TO which . the trade and COM
merce Of this country is now 30 extensive
tina: we have not golo aud silver coins sufi-
cient TO effect the thousandth part OF our
exchanges, and hence still further ne
cessity for the use OF some substitutes for
coin.
The great expense we incur in purchasing
our metallic currency, and the disadvantages
attending it, might perhaps cause some per
sons to ask why &c is that paper money is
not wholly substituted for I'll The reason
Is that paper money has no ialrinsIc value in
itself, its value altogether depending on the
confidence people repose in il, add which
confidence doubt or suspicion would at once
annihilate-nay, even in the paper money
guaranteed by Observation-Disclosures gold
and SILVER are appreclated for their own iu-
trinsic value, and can be readily exchanged
for the COMMODITIES Of every civilized coun-
tIy.
bank notes, promissoIy notes, foreign and
inland bAis Of exchange, payment ~ cheque,
book debts, &c.
bank mole is promise made upon pa
per by some authorized person on behalf of
the bank that issues it, to pay the bearer Of
it on demand its amount in coin, its value
consisting wholly in the belief that the bank
is both able and Wiling to pay it. The pow
er of issuing such notes ni England is vested
in corporate body of wealthy capitalists,
known as "The Bank Of England" which is
under the authority Of Cover nment, ard re-
gulsted and controlled by law, the bank Civ
ing an equivalent to the state for the privi-
lege they enjoy s.
A promissory note is also promise made
upon paper bv debtor to creditor, that
he will pay the amount specified on it at
sight, or at the end OF specified tune, which
Promissory note may continue TO circulate
from hand to hand till it becomes due, il
sufficient confidence is rePosed in the per :
son who issues it.
bill of exchange il an order addressed
by creditor TO q debtor, requesting him to
pay the amount of the debt he owes him to
the person in whose favor the bill is drawn,
or to bis order. Ia other words il is an or
der for exchanging the debt Of one person to
another. The bill is said to be an inland
bill Of exchange, or foreign bill of exchange
according as it is used for paying debts at
acme or abroad.
payment are, that IT guards against the great
risk, as well as the expense Of sending coin
for payment from one town, or from one
country to another; for it will be perceived
that in this way he lebts OF different dis
uicts at home. or countries abroad, may b.
paid by these bills without the transmission
of any coin, hey ond what may be necessary
to balance their accounts. Another advan-
ia ge is, that if the bills are by any accident
lost, theJ are Of little value; whereas the
loss of the coin would be loss to the coun-
try Of so much capital.
Persons, therefore, wanting to discharge
any debt at distance goes to banker or
bill-broker, and buys Gee Of those bills Of ex-
change, the price Of which for the following
reasons, will bs subject to fluctuations.
When the debts Of one country exceed 10
amount those of another. the competition
in the country wanting thea will cause them
to fetch higher price, or to be at pre-
MUM, SC as 10 indemnify the psrson who
sell them, or who would have TO export tae
balance 10 coin. When the reverse Of this
takes place bills will be at discount; and
when the debts Of both countries are equal,
the bills Of exchange win be at. par"
Cheques and orders given by merchants,
and others, in payment for
or labor furnished TO them,
the cheQue directing the banker they deposit
with to pay the amount. TO indemnify him.
self for the trouble Of thus paying bills
Of bis customers, the banker lends out, or
uses portion Of the sums deposited with
him, sach a. he has reason to believe be will
not be called upon to pay out to bis custom
ers in the interval. All the cheques thus
taken by the bankers Of London in the course
Of the day are taken by their clerk, to q
place called the Clearing House, and there
BY an interchange Of each others cheques,
accounts Of several millions are balanced
daily, with comparatively little money passing
between them.
Credit also supersedes the use of money
10 great extent; chiefly in the purchase
and sale Of commodities, when merchants,
and dealers, book their trans
actions, instead Of giving and receiving mo-
10Y |, and settle for them ~ mated periods |
he price being generally increased according
70 the length Of credit required, aud bills |
generally given by the buyers payable stl
'ertsin periods, or ut the expiration Of the |
erm. Perssns also possessing o larger |
amount Of cApitsl than they need in their |
BUSINESS, or for their owB expenditure, are
'ften induced to lend, or transfer portion |
4 il 70 others for stipulated sum OF inter-
st for Its use.
Credit, however, In whatsyer way it may I
y gwen, ~ not . efeasion ef capital. but
MY . transfer Of IL from one person tc an
'ther aud II tbs transfer, or permission soj
lse Il, II passed into the hand 9 Of honest (
deserving persons, who will use ii III produc-
ion lnofs successfully than 10 the bands or
10 owneTs society viii be benefited BIZ thsI
zasrdon ~ tbs extent q Tie nsR wealth
roduced.
Bul though veil deserved credit u thus
eneficiAl 70 socse, v, - well ~ 10 tie indi-
iduals recsivS & e credit given 70 the IN
SERVING, inc pstsnt, and reckless 10 be-
sess, - ssn = 10 idle unpfod ~ 6on- II
nnerh i oftsn hixhl5 lnisobisvous: y BE |
lequendy Iesds y The Ioss q cupiGai ukichj
lIElis h4xsbeen 1ro1tably smpls q tksI
eneflt 81 sosssh .,4nd oflen injaro6 ~ II /,
|ri1oq1o = vhpm y q ri1eo ~ ~ 1nine !
- tianlpaeieo. =.