The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1874-07-14

tions. Ii exists only in such quanti-
ties snd under such conditions
that It costs a great amount of labor
to produce it, Therefore small quantities.
of it are exchangeable for large quantities Of
other products. It is thus constant in value
and convenient in making extensive trades.
1t is likewise easily divisible, not readily
worn and indestructible in fire. The duties
of governments toward this medium Of ex-
change, which has been adopted by the COM
mon sense of mankind, are very limited.
They consist in simply moulding it into
proper shapes for convenience in handling
and resistance to abrasion, and stamping ii
to guarantee by the national faith the
weight of the coin and the purity OF
the metal AS to the relative values Of gold
and other commodities, they merely follow
the law of trade. When VIII eat is plenty
dollar in gold will buy more of it than when
the harvest has yielded a moderate crop, for
the labor that produced the gold still remains
equal to the labor thss produced the wheat,
and labor is the test sf value. WHEN from
any cause god has been partially withdrawn
from the country, specie increases in pur-
chasing power. and vice versa The discov-
cries of the California end Australian mines
inflated gold currency and lessened, to an
appreciate extent, the market value of every
dollar.
This tact of the increase or 'aiminution of
the purchasing pow or of gold in relation to
other commodities AIKEN in connection with
its use IS circui att ng medium throughout
the world, gives i; peculiar adaptability.
There is no means of calculating exactly the
amount of gold necessary to effect the ex
changes of any co untry, as the quantity de-
ponds on the ehsI :acter of the industries car
ried on and on o Their modifying ycontingen-
cies. There is, however, this popularity
about coin, I hat since its relative
value increase with its scarcity, and
vice versa, a nstion ISOLATED from all
intercourse will ind the amount of gold
within its bord' BIS suitable to the work of
conducting its exchanges under all circuna
stances. The commerce. ofdfferent nations,
however, sllo, rs the chaogesin each TO affect
the money m; irket of the world, and when
gold is dear, s the phrase RUS, in one spot,
tide OF the precious mettl Immediately
tends toward That locality until eeui-
cheap in any country, on the
contrary, II 10 tendency is to EXPORT it untiI
the home demand checks the outflow, When
gold is at heavy premium in this country.
England prefers to skiplt here, rather than
send goods, as its purchasing power is IL
creased b eyond that of her manufactures.
Whe1 tn shipment affects her own mar
ket Is il did last fall, the bank of England
raises he rates of interest setting prize .on
the best market This is &ccora-
ing to the law of trade that
causes he peopieto export whatever Sss the
most purchasing power.
1t will be seen from these considerations
that go Id is a safe, natural and universal
medium OF exchange, subject to little ffuctu-
alton, apable OF any amount of work aEd
obedlerlt only to the highest knC wn laws
those which control the nature OF things. &c
is comrnonly Supposed that paper money has
supPlanted it to great extent because there
is not enough ofthe precious metal in -exis-
tenoa to conduct the business of modern ma
lions. This is doubtless misapprehension.
The employment OF paper money is due 30 its
own peculiar advantages. and its use has
allowe ed great qusntity Of gold, which the
mines of Australia and California has in
creased to such an extent, to be turned to
other purposes, or to find its way eastward,
where it is said to disappear from active
cmpie yment in the boards of Indian mer-
chants and princes. Economists have eslcu-
lated that there is no less than
seven Thousand million dollars worth of
t he precious metal now in the
E ossession of mankznd, which sum as
egual to about i've dollars per head to each
in .hAbitant of the globe-a sum probably
ample for all business purposes.
II will require another article to discuss
tn pecaliarities of mixed circulation of
pa per and gold, and circulation consisting
OF ioapersnoney alone.