Oxford Democrat. [volume] (Paris, Me.) 1833-1933, 1878-07-23
chicago Tribune.
Money.
Prof. Kent on the Uses OF Money--Asnount
and Kind Needed.


principles upon the subject Of money.
This may excuse a reinstatement OF some
Of these principles;
l. Money is simply medium OF ex-
change. It's sole object is to avoid the
Inconvenience of barter-trade. When
there is money enough in any community
to make barter-trade unnecessary the
supply is sufficient.
2. The amount OF money in pcrma-
neut circulation in any country, or in the
whole world, is matter Of almost no
consequence. A small amount does the
work of a medium Of exchange just as
we'll as large one, because prices CORE
spond with the amount. If wheat were
10 cents bushel and other things in the
same proportion, the exchanges could be
made lust as well with wheat at 81 a
bushel and other prices corresponding;
and the amount Of money required
would be on the first supposition but one
tenth of that required by the last.
8. An increase in the amount OF
money in circulation does not increase iIs
effectiveness as a medium of exchange
In the proper sense money is made no
more plenty by the increase of quantity
The effect Of an increase of the quantity
in circulation, the business remaining the
same, is to increase prices; and the new
prices as completely absorb all the money
as did the old. Ii is said that money
WAS scarce in Richmond when wheat was
$40 bushel. Nor does the increase Of
money tend permanently to lower the
rates of interest Rather, if the volume
of money in circulation is on the increase,
this will increase the rates Of interest,
since it will seem to make business more
profitable. Money is borrowed in order
that the borrower may purchase some
thing-labor or property-out Of which
he hopes to make profit, and the ex-
pected profit usually determines the rate
paid. Now, all business seems more
profitable when prices are increasing.
And 4 man who buys is sure to be able
TO sell at an advance The rates OF IN
terest can only DO lowered by an increase
Of capital in proportion 10 the demand.
Capital is not money, but property which
can be put to a profitable use. Money
represents capital, but anincrease OF the
amount of money does not increase the
amount OF capital any more than doubling
the members of Congress would double
the number Of people whom they repre-
sent.
4. The increase Of the money IN CIR
culation in proportion to the business
does injuriously affect all those who
have money IN their possession at the
time of the increase and al who have
made contracts by which they are to re-
ceiye money in the future-that Is TO
say, all creditors and all who work for
wages. An increase of money by IN
creasing prices diminishes the purchasing
power of money, and hence takes GER
tain amount from all wages and from
creditors. The effect Of this upon any
man who sells his labor for fixed period
at a fixed money rate is very disastrous.
He may not get in real value half Of
what he has 4 right to expect. An In
creasing, and therefore depreciAting, cur
rency, always affects a laboring man in
proportion 10 his means more than any
one else. His wages never increase as
fast as the depreciation. He has not
time, or perhaps knowledge sufficient to
look forward to the probable depreciation
of money, and make his contracts on
this basis.
5. The first essential in q currency
is that it be stable that it does not rap
idly change in value. Society finds it
necessary to make contracts which must
be fulfilled in money perhaps many years
after they arc made 1t is of the great
est consequence that both parties to all
contracts involving the payment Of money
st some future time should be able to
calculate with some certainty the probable
value Of the money when it is to be paid.
4 currency rapidly decreasing or increas-
Ing in amount makes such calculations
impossible, and hence tends to make sue
cess in business an affair of chance rather
than of skillful calculation.
.. The great objection to irredeema-
Bile paper money is, that there is no way
of properly limiting the amount issued
As it costs nothing, and at first
passes almost like coin, there is
great temptation TO issue so much
as to produce an immediate deprccia-
ton. This depreciation makes rise
in prices, which seems TO make BUSH
ness good. The rise in prices absorbs
the money ami makes it as scarce a
before. This leads 10 a new demand for
more money. 1t must be left 10 Govern.
ment to determine the amount TO be issued
The debtor class and many business men
who think prosperous times are made by
a constant increase in prices, and so APP
parent profit, are likely TO constantly
demand new issues The necessities of
the Government may lead to the same
result 1t seems pity to burden the
people with taxation when money enough
for the wants Of the Government may be
had for the expense Of printing it. The
working OF these causes is sure to bring
about further and further issues, and
greater and greater depreciation. IF an
attempt is made to check this tendency,
to stop further issues, and TO diminish
the amount In circulation there is sure
to be great cry of hard times, which
few Governments are strong enough to re-
sist But either q nnlinY OF contraction