National Republican., 1880-10-11
pnper Money.


But what shall wo say Of paper money!
The bank Of England note does completely
the work Of money; in what does Its force as
tool resdcp Not, certainly, In Its cost of pro.
duction; that is but a trihe. The note works
by means of the soveroigns which 1t promises
to pay. But a promise is not a reality, II does
not place metal in the hands of a seller. The
explanation of the difficulty is found In the
fact that tho metal gold does not work as
money by mcaus of any Of its physical
properties, but solely by means Of its value
in it's own market. IL Is the assurance
that this value will command an equal value
of other articles IN exchange which induces
q seller TO give away his goods for it.
He relies on the metal but does not use 1t.
If there be need, he can melt the sovereign into
gold metal and sell IL nj its full value, ut home
or abroad. The power of melting sufiiccs; 1t
enables paper ticket TO procure sovereign
either for melting or money use, so as to do the
work rs well as-indeed, In many markets,
better than-the coin It promises. IL tho
ticket is not sure to get the coin on demand,
then the money is bad, aud may be even
worthless but so long MS the ticket Is believed
in, II buys as enectually rs the check or bill,
or even the sovereign itself Full trust in the
convertibility of the note is the vital, bnt also
the only quality to establish 1t as money. The
convortibility of the note is the counterpart
of the melting Of the sovereign But incon-
vertible notes, which confer 10 right OF claim
ing tho coin specified OH their fncc. are very
common institution In the world; how shall we
be able to explain their power rs money! Tho
material point bcrc Is the quality Of the Issue.
If its solvency Is thoroughly trusted the quail
ity Of such note is as great us that Of tho con-
vertiblc note, but upon one conditon-that the
numbers of such notes actually issued shall not
| exceed the quantity required for work as
money. An excess OF convertible notes Is
| easily remedied; the tickets are presented
| sovercigus arc obtained In their place, and
| these, If need be, can be melted aud sold rs
| gold to foreign countries. Equally incon-
vertible notes, not In excess, suffer no depro-
| citation, as the inconvcrtible issues of the Bank
Of England showed at tho beginning Of the
| century; then the limit of sufficient supply
was passed, aud ut last q gold guinea became
worth 27s. in notes. How tbese inconvertible
| Issues perform their work is harder ques.
tion. The great point Is. that they profess
TO be a debt due by the state or bank OF un-
questionable sovcncy. The American green
back carried an acknowledgment on its face
| that the United States owned dollar. So ii
was with the bank of England note. Tho idea
of such debt was firmly implanted in the
| minds of tho two nations. People know that
all money Is liable to oscillations of value, and,
| under this feeling, they reconciled themselves
| to depreciation. The issuers took advantage
| of this feeling aud obtained increasing quan.
| titles of the national wealth with pieces OF
paper The note thus became bad at its very
core. and the evil being uncomfortable, conver-
| tibility was restored Mt last.-Pr0t BOnany
| Price iH The International Reuiep.