The Elk County advocate. [volume] (Ridgway, Pa.) 1868-1883, 1875-07-29
From Foyney's Press.
A Theory of Money.

A Theory Of Money.
The current definition of money de-
clares is to be an instrument OF ex-
change. But as this definition needs
explanation, an historical sketch of its
subject will afford us the bliefest ac-
count of what money really is. The
history Of exchange is in general this:
First, simple barter; then, barter With
values computed in terms Of cattlej then
an extensive use of the valuable metals
computed in values of cattle as means
of effecting exchanges. That is guam
titles OF iron or gold estimated as worth
so many oxen or sheep were used in ex-
change on account of the universal de-
mand for the metal, and the facility of
transferring them. Certain weights OF
these metals are next stamped, and thus
guaranteed by some authority, and de-
voted exclusively to the purposes OF ex-
change. Money in this form is known
as coin. The next great step begins by
employing simple representatives. of coin,
or promises to pay coin kept On deposit
But it was found that more promises to
pay than there was coin to pay with
might be safely emitted by banks so long
as the coin on hard was sufficient to
meet any demand likely 10 be made tor
the redemption OF the promises to pay.
This was initiation of the metal currency
by credit, and this is the system now in
general use throug ghout the civilized
world.
The estimation of security, date Of
payment, and interest are the elements
determining the value of promises to
pay. When the date Of payment is al
pleasure aud security good a promise to
pay is at par without interest. When
security is good, date distant, and no in
terest, mere promise to pay is dlscoun-
ted at the ruling rates Of mouey.
The value Of credit currency to the
world can only be conceived when We
comprehend the enormous extent 10
which it is employed. 1t has innum-
cradle DISCUSSES, but the principle upon
which all its forms are founded is the
same. a small amount of coin aud the
securities received for the loan Of its ex-
panded representatives arc made to fur
nish large credit currency. The pro.
cess ot hypothecation and expansion may
&C on several times upon the same origi.
nal values. This 1t must be understood
is iphation by credit and is the accepted
system of modern busibess. The dan
gers TO which it exposes the business
world are very great, because the secur.
tiles which form the greater part of the
basis are not always sound, and the pro
portion of standard values or OF coin i>
not always sufficient to meet the current
demands for payment. An altogether
new stage in the development of money
seems to ee porteuded by certain cir
cumstaIces OF modern business. A
promise to pay gold, bearing no iutei est
and having no date, Acquires value ia,
above that at which it would be dis
counted by being made legal tender
for certain debts, and received by the
State in lieu OF gold. i is plain tha
lis use here as money lends it at lcas
part Of the value which it possesses.
The question now is. Can a cunenc,
derive Its value from lis use alone! a
money which is not a promise to pay
but receipt for any Indebtedness, vii
be dependent for its value unon the ex
tent Of the credit which it is competen
to liquidate. If the Government accept
it tor all dues 1t will have a certain
value. If 1t is made legal tender fol
private debts its value will be increased
because its uses will be increased. Th
g:eater the nse to which it is put tn
higher its value as compared with tha
OF the old standard which it suppants
If the Government which receives it ex
tends its control Of the business of tn
county Tor instance, so as TO monopoliz
transportation, or the manufacture an,
retail Of liquors or cigars, the note
which ii would receive for these sci
vices or commodities would acquire ad
ditional value by reason of their ad
ditional use. Thus we can conceive G
ii money based wholly upon its use a
money, being in the nature of receip
rather than promise. The pIesen
greenback is not such a currency, a
though deriving great part of its valu
from its character as legal tender an
Government note. 1t is also a proniis
to pay dollar III gold and must be +,
deemed, but in that it shows its tran
sitonal character. The issue betwee
an inflated credit currency, represente
as hard money, and pure and simpI
legal-tender currency cannot be tough
out over the greeuback, tor it is by
brid, sired, however, by hard money
and therefore tilularly a hard none
note. 1t is promise to- pay gold, tru'
at what some would have the Gree
Kalauds, but what is to be done at a
must be done at some time, and it wi
be to the interest of currency reformel
to get rid Of the green,back by redeem
ing it; then they can bring on the
thoroughbred legal tender.