National Republican. (Washington City (D.C.)) 1872-1888, 1875-10-11
The QUANTITY OF MONEY NEEDED.

Our observations of last Saturday had
reference to what constituted money and its
uses as circulating medium. Coin, or its
equivalent, is the medium of intrinsic value
by which products of labor may be honestly
measured. Fruits of labor preserved and
accumulated in this kind of money will not
materially depreciate, as the intrinsic value
of coin does not materially fluctuate. As
we have frequently had occasion to say,
coin is cash; sight paper convertible into
coin is cash. All paper, whether of bank
notes, Treasury notes, bonds or business
paper, promissory notes of individuals or
corporations, that will not produce coin
without the addition of premium, but
must be shaved at a discount, is credit.
and credit is always attended by risk.
This risk is what causes the discount. 1t is
an excess of this risk which results in
''panics." When an overstrained credit
snaps by the failure of man or firm to
meettheir engagements panic follows just
in proportion to the Importance of that man
or firm in the community in which he or it
traded. If tic failure involves others, and
NluSNS Il lIGSSutG W LlCl lCsullS III ElOEC
failures, the panic increases. Ii the broken
people happen 70 be largely indebted
30 The bank, and cannot pay or secure
ticir debts. the suspension Of the
tank may follow and general distrust pre-
vail. Only those who either give or receive
credit are direct sufferers through this panic.
1t will be seen that it Is purely a child OF
the credit system, and is in no sense caused
by too much or too little real money. 1t
owes IFS birth, in the first place, to an Gx-
cess of credit, to the fact that men who
have little or no money wish and attempt
10 do large business upon that amount of
captsl. This is speculation. But who
takes the risk? 1t is not the Spectator, be-
cause he has little or nothing to risk. Ifhe
wins-if he sells everything he buys at
fair profit and gets the money for it and
then pays his indebtedness-all goes we'll,
provided he is economical and does not pay
too much interest for the credit he enjoys
But when he sells on credit and his custom
ers fail TO pay him and he fails to pay his
creditors, then the latter have to stand the
losses. The statistics of the country show
that only about four per centum of our
credit merchants escape bankruptcy. And
why? Because they get to looking upon
credit as cash. They fancy when they
give their notes that it will be the easiest
matter in the worldsto meet them at matu-
rity. And if by any unforeseen circumstance
they should be unable to do so, they think
fhpu n rOrfinn opd
time upon the balance. This induces that
recklessness which is the parent of the adage,
Nothing ventured, nothing gained" The
trouble is that what they venture is not
their own; that they are venturing the
means Of others periling property which
is not theirs 10 hazard.
1t is true that men rarely take this view
of the credit system. If they did view it
in this light honorable men would not &C.
cept credits for more than their actual pos
sessions were sufficient to cover all proba-
bic margins of loss upon IN the event of
disaster. They would not plunge into
meek or nothing" speculations upon other
peoples money. AS it is, credit is their
money, the only capital they have, and
when it fails them they complain that there
is scarcity of money-that is, credit-to
carry out their plans. They say: IF we
" only had little more credit now-that
sis, money-we could get through and
"realize immensely"
Now, this is all there is in the present
cry of 'tmore money" This is 'the long
and the short of this doctrine Of. imitation.
Its foundation and its superstructure are
credit. 1t is plan by which men of no
means, no economy, no thrift and little
nice sense of honor attempt to get rich
upon the industry and thrift of other peo-
pie. As a rule, no man is fitted to have
custody of the funds or property of others
who has not earned and saved money from
those earnings himself 1t is by such ex-
perience alone that he acquires knowl-
edge of the practical value of money.
1t is an early experience of this character
laboring for subsistence and restricting his
expenses within his earnings-which con.
stitutes thrift. With it comes the desire to
add something to his savings each succeed
ing week and year. Caution in the man
agement of his own earnings and the in
vestment of his own savings induces like
care in the management of the savings and
earnings of others when they are placed in
his custody. II, added TO these qualifca-
tions, he is endowed with nice sense of
honor, he is not only sure in the end to &C
cumulate riches himself, but also to become