, 1875-06-23
CHEAP MONEY


CHEAP MONEY.
Thero IL no moro common expression en-
ployel By those who demand m inflation Of
tho currency than that there should bo m
abundance Of cheap money; and they argue
that when money is cheap thers is always IN
abundance Of 1t.
What is cheapncss ? The value Of MI
things is measured by SONG standard The
universal standard is coin that is subject to
tho least variation. Values OF commodities
arc estimatcd by their relative value In c1-
change for coin. When $40 in money
will buy 600 pounds of irnn, and $40
in money will bhy two pairs of boots,
then the iron and the boots have equiv
alent vnlucsi when $40 in money will
buy but ono pair Of boots, then but
ono rair Of boots will be exchanged for
tie iron. When commodity ia sold for less
than its ordinary or real valuc, then it is
cheap; and nothing is cheap-that Is to soy,
nothing is sold for less than its ordinary or
standard valuo--exceps for somc special
cAuEe.
Thus an article may bo produced In excess
Of the demand, and in such case may bo sold
for less than Its ordinary price, thoroby 1esaen-
ing its standard value temporarily. Nh
chinery or other process Of manufacturing
may be employed, thereby so reducing tho
cost OF production rs to permit It to DO sole
much less than formerly, and in auoh cass
tie standard value Of such article may be-
considered as reduced permanently. There
ia, however, nothing to change tho rule TINT
no commodity can ba caliod cheap un-
less It DO obtainablo at less cost than the
ordinary prico for tho standard article,
inferior goods, Of whatever kind, sold at less
price than standard goods, arc not cheap
merely because they cost less. Thus the
same dealer may havo boots for aale at prices
ranging from s& to SIG pair; the difference
in price Is no evidence Of cheapneBs; it is
merely evidence Of difference In yalue,-e
difference In the exchange valus for other
articles.
Whom We come to consider what cheap
money IL, the rule is the same. A dollar has
standard value, recognized and known by
all, because it means certain weight Of gold.
Dank-notes are put in circulation Is aubsti-
tuto for money, and, when exchaugeablo for
coin, they have IN equivalent value. When
they ara not exchaugeablo for coin, then they
depreoiate-that is, they become choap. In
1889 VIC had sample Of cheap money In this
State. There wore some SIXTY banks In ILL.,
nois, and their notea ranged from Is to
co oenta on tho dollar. They wore cheap
money. A man who had goods which
lie could exchange for 800 in coin, could
with his goods purchase from twico to six
timas that number Of dollars in bank-notes.
Tho latter were cheap, as compared with
coin, just a. pair Of boots at 81 is chem
when compared with another pair Of boots at
$40.
There is another form Of eheapness: The
law establishes l0 ounces q pound, and 8
feet as yard Sugar, wo will say, is worth
12 cents pound mud cotton goods II centa
yard. The grocer may soll Lie sugar at the
cheap rate Of ceuta d pound, and nuke in-
creased profit, II ho put but 8 ounces In his
pound, and the dry-goods nun can In the
same way increase his profits by selling his
cloth At 10 cents a yard, his ysrd.atIck being
only "a iuches long. The sugnr and thu cot
ton cloth can DO even sold cheaper still il the
number OF ounces In tho pound and tho
number OF inches IN tho yard he lesscned.
When paper dollars are worth So cents,
they ass, considered as dollars, cheap. aud
are 30, because a bslshol Of grain which
will bring only 81 In coin will bring S1.l7 in
paper dollars. When paper dollars full still
lover, say to 76, and co, and 90 conts, their
| choapness continues juat A. does that Of the
sugar when sold on falling soAlo Of ounces
to tbs pound, and as docs tho cotton c]oth
| so!d Oh falling number Of inches to the
yard. The variety and degree OF this cheap
ness are rendered still more interesting when
the ounces to the pound and inches to tho
yard arc constantly changing-Eising aud
falling from day to day, and often several
times day; and tho cheapnsss Of paper dol.
lars auetuasoa in precisely the same fashion
aud with the l!ke frequency.
| But It Is said that when money ia cheap
there IL an abundance Of 1t, and that men
aro willing to spend It freely and to lend It,
This IL true. The men who sell groceries At
ounces to the pound, and dry gooda At 2+
inches to the yard, receive mora money for
tho aama quantity Of cheap goods than those
who sell by the standard weight and measure.
SO Tho man Who, instead Of exchanging hia
=! property for 10000 coin dollars, receives
lo'ooo papor dollars therefor, has In one ssu1e
surplus stock Of money, which, however, he
Knows u subject to shrinth8s and huctuation.
. lhs man with 10, 200 coin dollars ia under no
! such apprehension. He hoids his money fos
: Investment 1t such sate, And upon such g.
cudty, ~ he can gss and, Il this rsts and thi,
: / Renrr3fv mr. Nh hs- ~.