Gold Hill daily news. [volume] (Gold Hill, N.T. [Nev.]) 1863-1882, 1870-04-12
A F1NANcIAlRaoaLRM.

~
money-paR5f or specie TO the circu-
lation in adjustment of Balances, was
amusinEyexhtbited in acounting-room
in Buffalo a few days since. The En-
press records it as II singular trstisac-
tion." But it is not singular or I'M
usual, being only an illustration of the
natural current Of trade and exchange.
Ordinarily the business agents are not
all known to each other directly, and
do not so consciously play into each
others hands, But the little piece Of
fun which we are about to state, is a
very neat illustration Of the relations
of debt, credit and currency. 1t Is, in
deed, better than manya long, unin-
telligible treaties OH finance. Here is
the story The office boy owed n Of
the CLERKS three cents. The clerk owed
the cashier two cents. The cashier
owed the boy two cents. One day the
boy. having a cent In his pocket, was
disposed to diminish his indebtedness,
aud paid the clerk, to whom he was in
debted three cents, n cent OH account.
The clerk, animated by so laudable an
example, paid one cent to the cashier,
to whom he was indebted two cents.
The cashier, who owed the boy two
cents, paid him one. And now the boy,
having again his cent in hand, paid an
other third of his debt to the clerk.
The clerk, with the said really cur
Ereutr cent, squared with the cashier.
The cashier instantly paid the boy in
full. And now the lad, with the cent
again in hand, paid oil the third and
last instalment of his debt of three
cents. Thus were the parties square all
round, and all their accounts adjusted.
This, as already stated. is \ clear Illus
tration Of part of the curious ramifica-
tons of debt and payment. And it
illustrates also the wisdom rs we'll as
the wit Of the impecunlous debtor,
who replied to his troublesome creditor
go pay your own debts and not be
teasing ME about mine!" If the Buff
falo boy had kept hold Of his penny,
and said to the creditor clerk: II
will pay as Dol as the cashier pays
me-" the great financial problem
would probably have remained till
this day unsolved, and nobody can
tell what effect the delay would have
had upon the Buffalo Exchange"
and the balence of trade with the
Western country generally. But the
boy paid In part his own debt, and in
round Of circulation the money came
homo again, to start OH a new tour OF
liquidation. For one penny read dol
lars-from one to two thousands
and for the three persons in II office
substitute hundreds-aye thousands of
regotiators in a wide community. and
you have before you the problem Of
:. circulation" One cent in the story
| paid seven cents of debt. 1t might
just Us well paid seventy for seven hun
bred, IF the circuit had been larger.
The amount Of money or of tokens re-
presenting money, actually used and
transferred from hand to hand in trade,
bears . proportion to the business done
less than even the II cent in seven.
And much oftener than people know
or even suspect, the Identical none!
they pay out, for the debt or a new
purchase, finds its way back to fill the
void In their pockets or purses. Cash
payments in small transactions are the
life of trade. He who conscientiously
DAYS cash or takes short crdit, for the
articles he buys FOR consumption and
use. does more in his sphere to keep up
the wholesome current of trade than
the man who writes on trade volumes
which few persons read While arti-
Giles Of commerce remain mere articles
OF commerce they are fit subjects of
credit. But when they reach their Ill
innate purpose and cease to be produc-
tive in trade or in exchange, they
must be paid for, otherwise they be-
come capital sunk, dropped out
of the business Of this country,
unavailable "assets in bankruptcy"
The Buffalo story illustrates also the
theory of banking, and shows how in
prosperous times the comparatively
| small coin basis answers all the pur-
poses of "spccie payments" II bank
notes represented only the actual
specie in bank, they would not pay
the expense of printing, signing and
issuing. They would be ut a premium,
and specie would be ut = discount.
The public pay for their bank notes
on account Of their convenience, their
only recommendation on the same
principle that they pay 4 draymah for
transporting q key OF specie, or pay
freight to any common carrier. Bank
notes in their capacity as representa-
tives of money also represent other
property of all kinds, and credit also,
as we'll as specie. But, If the boy in
the story had owed four cents instead
of three, his penny in cash and his two
cents in assets would not have squared
his accounts. The fourth cent, still
unpaid, without either cash or assets
behind it. would have left him bank
-. s.sll NIo,o.