The Somerset press. [volume] (Somerset, Ohio) 1873-1977, 1874-04-24
FINANCIAL.
HON. s. F. CARY ON FINANCE.
An Ineligible and Interesting
Address.

many original suggestions 1t contains, we
take pleasure in laying before our read
ers:
WHAT Is MONEY?
In discussing the subject of finance,
the first inquiry is: What is. money?
The answer generally given to this ques-
ton is, "gold and silver coin" The
popular mistake grows out of the fact
that gold and silver are the materials
used by most Governments out OF which
TO coin money. Whatever is endowed by
a Government having authority to Gre
ate a circulating medium with the func-
tions of ~ representing value; ~ ex-
changing value; (3) measuring value; "a
accumulating value by interests mon
ev. without reference to its material.
Gold and sslver without these legal en-
dowments by the sovereign power is not
money. The right to coin money and
regulate its value is by the Constitution
of the United States vested solely in
Congress. 1t is competent for Congress
to make money out of gold, silver, cop
per, lead, iron, leather, paper, or any 9TH
er substance. Among savages, wampum
and beads are money. Iron nails were
once money in Scotland, dried Goldfish in
Newfoundland, tobacco in Maryland and
Virginia, and musket balls in Massa-
chusetts In highly civilized. and COM
mercial nations where there is an infin-
ite division of labor, great variety of
occupations, and consequently endless
exchanges, money should be made of ma
terial easily obtainable, cheap, portable
and difficult to counterfeit. Gold and
silver. on account Of their uniform in
trinsic value as com malodlties, or articles
of commerce, are, and probably always
will be most useful in the settlement of
balances Of trade between the inhabit-
ants of various countries. For the pur-
poses of international exchange these
metals are, and possibly always will be
Indispensable On this account, if on no
other, they are unfit as a medium of do
mestic traffic or exchange.
DANGERS OF GOLD AND SILVER
STANDARD.
If, from financial, political, or other
oauses, the gold and silver of a country
are suddenly withdrawn, and these met
ais are the money of that country, em-
barrassment, distress, bankruptcy and
ruin will pervade all branches of its in
dustry. If, however, they are not the
materials out Of which the domestic cur
rency is coined, and are mere commodit-
les like cotton, beef, and breadstuffs, their
value will depend, like those articles,
upon the law of supply and demand, and
their sudden expectation from any cause
will not seriously affect domestic trade,
or derange the values of real and per-
sonal property,
With gold and silver coin as money,
debtor country is always at the mercy of
the creditor. To produce universal
bankruptcy and ruin in the former it is
only necessary that the latter should ex-
port its coin.
The oft repeated remark that "geld
and silver is the money of the world"
and we cannot change it, is suggestive of
the folly and danger of relying upon
them as a domestic circulating medium.
They are unstable and unreliable, and
all kinds of business and every species
of investment are as uncertain as game
II. Tf fho haV ,lxc rNf Ennlar1h and
France raise the rate Of interest and
withdraw from this country consider
able amount of its gold and silver, every
farmer, mechanic, day laborer, manufac-
turer and merchant to the remotest corn
er of the Republic feels the pressure.
This has been illustrated in numerous
instances, and tens of thousands of good
business men have been utterly ruined in
this way. Any circulating medium
should be stable, uniform, reliable and
equable, and this cannot be when it is
exportable. One of the essential requi-
sites of domestic currency, therefore,
is that it should be inexportable.
Making gold and silver in law what
they have been for the last ten years in
fact, would result in the precious met
als'' being subject to the law of supply
and demand, like other articles of COM
merce.
If those engaged in foreign traffic can
not settle their balances with cotton and
breadstuffs, let them furnish the pro-
duets of the mine. Their reckless over
trading would not seriously affect any
body but themselves. As these metals
are no longer used for a domestic cur
rency, their abundance or scarcity could
have no greater effect upon the whole
country than an abundant or short crop
Of cotton or -four.
BANK NOTES &C.
If it be true that gold and silver are
insufficient and unreliable as domestic
medium of exchange, it follows that pa
per issues, whether made by corpora
tions or governments based upon gold
and silver, are still more unreliable. i
was always considered safe banking tC
have in the vaults one dollar in coin fol
every three dollars of paper money is
sued This kind of currency will an
swer so long as it is not presented for re
demption. 1t answers a good purpos'
while it will pass from hand to hanC
without suspicion of its baseless charac
ter. If redemption is called for, two
thirds of the notes are worthless; or
the gold is withdrawn by foreign de
mand, no matter from what cause, tn
bank promises cannot be redeemed.
Our legal-tenders, called greenbackf
being simply promises to pay coin, ar
safer than bank-notes, because they ar
legal-tender for certain purposes, an,
because the credit of the Government
better than that of a corporation. Faitl
in its ultimate redemption will keep
afloat as circulating medium. Their
are two serious objections to the green
back currency, either of which condemn
it.