New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1879-09-05
THE A b c. OF FINANCE.
XIV.
XIV.
COMMERCE. MAKES ITS OWN CURRENCY.

- than there are families as there are in New
y,oland. and every depositof could make his own
money By drawing checks whenever he wished to
INV or paw anything. would there be any lack OF
,po,eyf But Thomas has put all his money into
land buildings. other property. Rich
ard has spent his IN pleasures. ana
Henry his in speculation. They all lack
money. not because there is not enough in the
country but because they have spent all that be-
,oncea 10 them One cannot " eat his cake and have
II toov Men who will have speculations or pleas
ures cannot have the money which they cost. Men
who Will get more land than they can well hold
have no night to any part of the which others
have earned but not spent. This is a common diff
entity at the West and South. Hopeful men have
spent 80 much III getting lands. buildings and rail
roads that they have not enough left to take care
of what fixed property they have bought.
Mon who have not spent their earnings IN buy
ing fixed property or otherwise. can get money
when they need it. Farmer Jones sells HIS wheat
for $4,000, pays So, 600 elsewhere and 5000 at
tho store. aud takes for the rest check on good
bank. That is buying power which he has earned
and not vet spent In time he goes to bank deposits
bis check. and gives to Smith for $1,000 to pay
for more land. Now he has left only 5000 OF un-
spent buving power. hut has bought land and paid
debts without handling dollar OF money. VIII
Smith prefer a cart-load of silver dollars to
but it costs too much TO cart them away. The
check transfers the same capital just well. and
with less risk and trouble. Less than onc-twentieth
of all payments in this city. and less than one-tonh
of all payments in the whole country, are made by
the use of money Buying power, OF capital. Is
transferred ia every case But less tnan one-tenth
of il Is transferred by all tire money That Govern
inent prints OF coins.
The Vest and the South buy in a year goods
worth 80 900 600 900 from the East They send
rs no money. hut products. Merchants ship wheat.
cation or hogs and make drafts on Eastern men for
The price. Then the East sends back goods. and
draws on Western men for the price. The two sets
of drafts meet in banks and clcaring-houses. and
pay each other What money is neededf Not q
cent except settle the small excess of drafts on
one side or the other. As the value which is
equal in both purchases, few lines IN the books OF
banks settle il forever Yet il is said that - more
money Is needed for the wants Of trade" As we'll
say that more two-h0rse wagons needed 10 move
The crops from Chicago 10 New-York. when the
grain really goes by rail or water.
Trade makes Its own carriages for the transfer
of buying power. These do ten times ms much pay
ing now as all the Government money. but could
rs easily do ten thousand times n much II there
were need There i absolutely no limit % the pay
ments that can thus be made. without any use Of
money, as long as the value bought al one end Of
Money is used only 10 settle the small excess
Of payments 20 section or city over pay
ments from that section or city. Within
each section aud ely. too, the settlements
are made IN the same way by exchange oi
drafts notes, bills and checks In the banks. The
little differences only call for money. This won
derful machinery Of modern commerce expands OF
contracts trade requires. II There Is much 10 do,
payments without ANY money will rise in New-York
a. . u Ill. gIaaa..
md drafts amounting to less than t5O.O0o,OoO
daily are exchanged. Yet, whether trade is duh
OF active, only small part OF the S6O0OO,OOO
in money which lies the banks is moved OF
touched. What need can there be- of " more money
10 meet the wants of trade"i Whom Farmer Jones
has great crop Of hay does he send of IN hot haste
for more steelyards To weigh II withi lie knows
that the one set OF scales in the village Will weigh
all the loads of hay he drive over them. 30
enough money to give the banks a safe reserve and
to pay small differences is all that trade wants or
can use.
But il il SAID France has Sl,O0O,OO0oO0 OF
currency. and therefore we need a. muca." IL
would be quite as sensible for Smith to dig up his
corn because he saw Jones digging his potatoes
The two countries differ essentially in their methods
of trade and finance Here banks and savings
banks hold the savings of the people, and do nine
tenths of their paving But in France boarding is
The habit more than in any other civilized nation
There the vast mechanism by which we make pay
ments without the use of money j. hardly known.
Must We abolish railroads because IA sOme
other country people still stages Banks
ana clearing houses are The railroads OF
modern fnarce 4 little difference In the deycl-
opment and use of that system makes vast differ
euce in the amount Of money required Only these
who have but half walked from a Rip Van Wrinkle
sleep can fancy thar more stage-cOaches or moro
paper dollars are needed. What amount OF money
France really uses is not known. Its coins 20 freely
through other countries how can one discover how
snuch coin there is within the borders of Ohio
French coins are both boarded and melted down,
wherever they CO. no man can say 10 what extent
But the exact truth, II known. would be no guide
tOr this country. We might AS well insist on haY-
INK large standing army. because France does
Itisavery common but very absurd notion that
currency should be proportional to popu alton In
some countries money moves very fast in Others
each piece of money does less than one-tenth as
much buyng in a year. because money moves very
plowly The KIND Of business done and the habits
of the people. make a vast difference in the amount
of money needed. thousand farmers scattered on
their farms have hardly Use for money; athou-
sand wor<men in "A busy village will use a thousand
dollars a dly Official records prove that in Massa-
thusetts each dollar in use does seven times as
much work in "a year the dollar i'll Southern or
Western States Such differences exist between
different countries. In some 81 for each person
cannot be used IN any way in Others 80 ~ not
enough Some thcorist might well propose a
law that in every town there shall be ten ish-bOoks
per capita whether any water or fish can be found
in the neighborhood or not.
The Greenback Convention in Nsw-iork declares
that the currency should be at least $50 per cap
ffa That is - 900, 100000, and no other country