Belmont chronicle. [volume] (St. Clairsville, Ohio) 1855-1973, 1878-02-21
Coin and Credit.

In every phase the money question turns at
last, excepting so far rs 1t is one of morals
and honor, upon this issue: Does an increase
in the amount of coin used in the Western
World tend to lessen the weight of debts-in
other words, to make money easier to get,
and thus to advance pricesf No student of
economy will deny that, of all pending ques-
tions, this is one of the most urgent and i'm
portant. Unhappily, it has seemed very
easy and has been answered as if it were very
easy, by mahy able men whose studies have
led them to attend wholly or mainly to an
ideal condition of trade, in which coin only is
supposed to be used as a medium of payment
and purchase, or to an ancient condition of
trade, in which coin was mainly used and
credit-mOney bore a comparatively insignifi-
cant part. But the present condition is very
different. Coin is nowhere used wholly or
mainly, in the Western World. The United
States, France, Italy, ond other countries,
have in use great quantities of paper currency.
Russia alone having in circulation at the end
of the year Sl ,03S, ,622, ,Os5 roubles, and Tur-
key hsving also emitted paper money during
the year to an amount unknown. This paper,
employed in nearly all transactions, displaces
and throws out of use an immense amount of
coin, which, expelled from the countries
which use paper, gathers in other countries
and affects their markets. The coin thus dis
placed, and sent to find employment else
where, within few years, has probably ex-
ceeded the entire yield of gold. What econ
omist will venture to say that these issues
have not had an important effect upon the
purchasing power of gold throughout the
Western World2
This, however, is but the beginning. Cred
it-currency of other forms has grea tly multi
piled in amount, and-a fact generally over
looked even by able writers-increased great
ly in efficiency and acceptability. Within
twenty years, the arrangements for exchange
and cancellation of commercial Indebtedness,
without actual transfer of money of any sort,
have been enormously enlarged and improved.
The Clearing House system, which is of re-
cent application to general use, diminishes to
an incalculsble extent the amount of money
required, by enabling various forms of credit
paper to serve all the purposes of money in
the larger transactions of commerce. The
rapid increase in number or depositors of
banks, both in the country and, as we recent
ly showed, in France, has had a similar ef.
feet; for, within certain radius as to terri
tory, and limit as to mode Of use, checks of
depositors serve the purposes of money, and,
being exchanged against each other, lessen
the need Of money.
A still larger change, perhaps, not fully ap-
precisted by any writer 'on economic CUES
tions, results from the vast increase of public
debts 1t has been sagaciously remarked that
Government bonds were rapidly becoming
sort of international money. One week lately
there was shipped from England only one
million in coin; and it is well known that the
shipments would have been much larger had
not United States bonds been shipped to
large amount, answering the same purpose as
money In the adjustment of international bal
snces. 1t is not possible to say how much
this use of public securities diminishes the
need of coin. But it is known that enormous
debts have been created within few years by
the leading nations of the civilized world, and
that not inconsiderable proportion of the
bonds thus issued is passing from one country
to another, ss prices fuctuate here or there,
having nearly the same effect upon general
trade and international exchanges as an issue