The Daily state journal. [volume] (Alexandria, Va.) 1868-1874, 1873-11-13
THE FUNCTION OF MONEY.


we find tho source of endless mistakes,
both in the popular mind and in legisla.
ton. Money must be classed with the
tools and implements of production. Any
other view of it leads to certain confusion.
Its use or function is to promote the ex-
change of valuable commodities. A very
large portion of the products of industry
in a civilized community cannot be con-
sumed by the producers. They desire to
exchange their surplus for other valuable
commodities. Unless this exchange can
be effected, the labor Of production is lost.
In savagry productions are few and limited,
and may be exchanged by barter. Civil
lied peoples find themselves compelled to
use some article Of general value, and this
is called money.
The precise function ofmoney will beseen
by familiar illustration. A farmer raises
a crop Of corn. He has used various inn
plemepts, as hoes, plows, cutiyators and
harrows. He has more corn than he needs
to feed upon his farm, and he desires to
exchange this excess for groceries and
clothing. He loads it on his wagon and
carries it to the nearest town. He finds
man who wants corn, but he has no gro
ceries or anything that the farmer wants
to exchange for it. He finds man who
has groceries and clothing, and all he needs,
but this man does not want his corn.
After canvassing the whole town he
is compelled to throw his corn out by the
road side or haul it home. Now what is
wanting to give value to this load of corn
Here are the implements of production to
grow it; the team and wagon to haul it
but One thing more is needed to make it Of
any value to its producer. 1t is the tool
or instrument whereby the corn may be er-
changed for such articles as the farmer
needs. Without this all other tools are
useless, except to produce for private con-
sumption. Exchangeable value can only
be given in any large degree by the tool of
exchange, which is money. Here we see
the true function Of money, and we cannot
fail to distinguish Its nature to be similar
to that of any other implement Of produc
ton.
The nature Of money thus settled,
what law should control it Clearly the
SINE as applies to all other implements.
Government should secure us good money
by appropriate legislation, and then leave
its amount to the law of supply and de-
mand. 70 be good it must be of general
value in the country; and it must be as
nearly stable in value as it can be. Nothing
is more stable in value than fixed rent
guaranteed by a competent party. The
promises to pay of the United States have
this quality. If, therefore. its notes are
given secured by its bonds, and converti-
bio into them at the option of the holder,
and again recoverable into legal tenders,
we have the most stable basis pos
sibe for a sound currency. That
was the old legal tender system
which was expected to give place to
the national banks. To that we must
at once return or go further away from
prosperity every day. Our trouble is, that
the lac Of supply and demand IN money
has been checked By arbitrary legislation.
The government perpetrated upon the peo-
pie the menstrous wrong of farming out the
production and circulation Of money and
limiting the amount of money very far
below the pressing needs of the country.
This has enabled the gambling and specu.
lating classes to rob Production and Trade.
A billion Of dollars would not measure the
loss which industry has suffered since the
war.
Another simple illustration will show the
true character ofour financial legislation and
indicate at least one wrong to be remedied.
Suppose the government of the United
States should forbid the manufacture and
sale of poughs, wagons, steam engines,
and all implements of industry, except by
the first thousand men who should apply
for the privilege, and pay for'it certain
sum Of money. Suppose, further, that
the government should declare that only
certain number of these implements and
machines should be made and sold, and ap-
portion this number to each state. accord
ing TO population. Would not the people
rise in their wrath and demand the instant
repeal of such law. Would not a special
session be called and all speed made to re.
lieve the country? And why Because
every stupldest man among US would see,
that his most sacred rights were violated
by such law. Every farmer, manulactu-
rer and tradesman, would instinctively feel
that this monopoly of implements carried
with it the power to raise their price. until
the entire gains Of production should be
absorbed by the monopolists. Yet for
eight years the country has submitted to
this very wrong and outrage, of monopo-
lY of its most important instrument of
production and exchange--the money of
the cOunirv