The weekly clarion. [volume] (Jackson, Miss.) 1863-1882, 1880-10-27
PAPER MONEY.


But what shall We say of paper mon
ey? The hank of England note does
completely the work of money; in what
does its. force as a tool reside Not,
certainly, IN its cost of production
that Is but a triile The note works
by means of the sovereigns which it
promises TO pay. But promise is not
a reality, it does not place metal in the
hands of a seller The explanation of
the difficulty is found in the fact that
the metal gold does not work as money
by means of any of its physical proper
ties, but solely by means of its value
in its own market 1t IS the assurance
that this value will command an equal
value of other articles in exchange
which induces a seller to give away his
goods for it. He relies on the metal
| but does not use it. If there be need
he can melt the sovereign into gold
i metal and sell it at its full value, at
home or abroad. The power of melt
ing suffices it enables paper ticket to
procure a sovereign either for melting
or money use, so as to do the work as
well as-indeed, in many markets, bet
ter than-the coin it promises. If the
mand, then the money is bad, and NAV
be even worthless; but so long as the
ticket is believed in, it buys as effectu-
ally as the check or bill, or even the
sovereign itself. Full trust in the con-
vertibility of the note is the vital, but
also the only quality to establish it as
money. The convertibility of the note
is the counterpart of the melting of the
sovereign. But inconvertible notes,
which confer no right ofFclaiming the
coin specified on their fade, are a very
common institution in then world how
shall we be able to explain their power
as money? The material point here is
the quality of the issue. If its solven-
cy is thoroughly trusted the quality of
such note is as great as that of the con-
vertible note, but upon one condition
that the numbers of such notes actually
issued shall not exceed the quantity re-
quired for work as money. An excess
of convertible notes is easily remedied
the tickets are presented, sovereigns are
obtained in their place, and these, if
need be, can be melted and sold as gold
to foreign countries. Equally incon-
vertible notes, not in excess, suffer no
as the inconvertible issues
of the Bank of England showed at the
beginning of the century; then the
limit of sufficient supply was passed,
and at last gold guinea became worth |
BIS. in notes. How these inconverti- |
bic issues perform their work is harder
question. The great point is, that they |
profess to be debt due by the State or /
a bank of unquestionable solvency
The American greenback carried an ac-
acknowledgement on its face that the Uni !
ted States owned dollar, So it was
with the bank Of England note. The
idea of such debt was firmly implanted
in the minds Of the two nations PEG
pie know. that all money is liable to
of value, and, under this
feeling, they reconciled themselves to
depreciation. The issuers took advan-
-age of this feeling and obtained in
,reasing quantities Of the national
wealth with pieces of paper The note
.hus became bad at its very core, and,
he evil being unendurahle, convertible
ty was restored at last-Prof. Bonamy
Price in the international Review.