The daily Argus. (Rock Island, Ill.) 1873-1877, 1875-09-27
Value not a Creature Of Law.


Of cheap money theories and projects. Ed
ward Kellogg, the originator of the bond
greenback scheme, starts out with the as
sumption that one kind of value results
from union Of utility with human effort.
and another kind from mere statutory
enactment. Conceding this postulate, all
his deductions are logical, and the position
Of those who maintain that governments
can create money by mere legislative fiat
is impregnable. In an interesting Wash:
ington letter to the Times money is defined
as "a small article Of fixed value-a value
arbitrarily assigned to it by the ruler"
Similar definitions are given by Kellogg,
Carey, and all their disciples, including
Kelley, Campbell and Peter Cooper. This
definition derives some support from the
constitution of the United States, which
declares that congress shall have power to
''coin money and regulate the value
thereof" And great IS the number Of
those who assume that the word of the
constitution settles the whole matter; that
because the constitution says that congress
shall have this power, therefore it must
have it, and ought to exercise it-as though
the mere dictum of a body of statute
makers could confer the attribute of in
finite power upon another body of like kind.
The notion that there are two kinds of
value, one Of which is the creature flaw, evil
IDENTIFY arises from the fact that promises,
or evidences Of debt, seem to pass as equiv
alents IN exchange A banker gives his
note, promising to pay ten dollars, The
note passes from hand to hand in purchas-
ing commodities as though it was an equiv
alent for ten dollars worth of commodities.
The same is true with respect to government
notes, bonds,et Observing this fact super
fcially, and without penetratingt to the real
nature of the transaction, the cheap money
theorists leap to the conclusion that prom
ises to pay, or evidences of debt, have a
value OF their own, which is created by
law. A ten-dollar note will exchange for
eight bushels of wheat, therefore the note
is equal in value to the wheat, is the short
syllogism by which they reach the con-
clusion that value is the creature of law.
Now if this is true, it is not easy to I'M
derstand why anybody should work. Ii
value can be created by an act of the legis-
lative body, it can be created to an unlimit-
ed extent, and everybody can be supplied
with an abundance of power to command
services and utilities without more effort
than is required to print postal cards
But in fact it is not true. No congress
and no ruler can create value, or arbitrary
assign value to anything under the sun
The value of gold and silver does not de-
pend upon the arbitrary acts of rulers, any
more than the height of the tides, or thu
changes of the seasons, or the spots on TIT
sun are regulated by papal bulls. Wher
the constitution declares that congress
shall have power to regulate the value O
money it attempts to decree an impossible
ty 1t might as well decree that congress
shall have power to fix the orbits of tn
plants, or create q new world out of moth
ing. 1t is barely possible that the fran
ers of the constitution meant to decree tli
impossibility. but the probability is tina
they simply meant to say that congress
should have power to fix the ratio of ex
change between foreign and domesti
coins, so far as mint operations were con
cerned. Congress may say that the min
shall allow so many cents, and no more, TO
franc or a thaler, or a guinea, but beyon
that it cannot go. Ii congress says that
pound sterling shall be worth only $45C
its dictum will affect no one but the direc
tor of the mint. The pound sterling wi
still be worth about "a SO in American gol
coin, and its value cannot be changed by
mountain of acts of congress-
Value is one thing, and nothing else.
is the ratio Of exchange, or purchasin
power. 1t arises FROM two things, an
nothing else; namely, utility and difficult
Of attainment. That which is useless hs
no value, no matter how much effort
spent in producing it. That which ca
be had without effort has no value, mo ma
ter how useful it may be. Paper none
costs next to nothing, and in itself it hf
no utility, For these two reasons it has I
value, and no congress and no rule
can ever give it value. When congress ca
create utility by statute it can create valu
but not before.
But some one may ask, why does So
bond or greenback exchange for whea
and iron, and other valuable commoditi'
if it has no value? The answer is thi
the bond and the greenback do not pass
equivalents for commodities, but as mel
Promises to pay equivalents at futu
time. In themselves they have no mo
value than book account. They are goo
for nothing except as claims against som
body for something. To say that thu
have value, and to call that assumed vall
intrinsic, is to confound two things tn
are essentially and radically different.
is to confound the promise with the THU
promised. The value always inheres
the thing promised, and not to the smalle
extent in the promise A gives his no
for thousand dollars to B. The value
in the dollars promised and not in the not
1t tue dollars are not Forthcoming, the no
will not exchange for anything. No ma
ter whether A stands for an individual,
banking corporation or q government. III
truth is exactly the same in any case.
is always the thing promised, and never Il
promise that is valuable.
The terms intrinsic, extrinsic, inherer
and market, as applied to value, are real
meaningless, but exceedingly deceptiy
Value is relation; the relation of e
changeability. 1t is nonsense to say til
the relation of one thing to other things
intrinsic, or extrinsic, or inherent, or m;
ketable. The relation of A to B, or Of
to 20 doesen't inhere in either A. or B,
in 5 or 20, because if either of the terms
emitted the relation or ratio ceases to G
list. When one thing is compared wi
another the comparison dosen't inhere
either of them. 1t is not intrinsic. 1t
not extrinsic. 1t is not marketable.
All this seems too plain to be assert
and maintained by elaborate argumel
And yet il is not understood or accept
by one economic writer in twenty. L
notion that promise is equivalent in V
ne to the thing promised, and that the v
ne Of the promise is created by be.
enacted, is vaguely entertained by nil
-. teen out ct every twenty who set up
teachers OF political economy. and it
produced a foul brood of absurdities
legislation and statistics, and rank I'M,
tice in taxation. Bonds, mortgages, not
and nfhar auidancea of daht orc oorn,