Morning journal and courier., 1880-06-07
Paper Money.

t0N~--AAJ AAASS
 How comes it to be money at all We have seen what is the force which enables money
 to act as the tool of exchange. A seller parts
 with his goods in exchange for 8 sovereign. because the gold of the sovereign, is metal, is
 worth as much as the goods it buys This force is wanting in the bank note: it is a piece of paper with words written upon it.
 and nothing more. Now, words are not val
 uable in themselves, man who takes words
 does not receive the thing they speak about.
 promise to give gold is a very different
 thing indeed from the gold itself The promise may not be kept; the value promis-
 ed may never come into the sellers hands
 Think of chisel, which we spoke of in com
 parison with a sovereign. A chisel does it's
 work by means of the sharp edge with which
 1t cuts; chisel made of paper could only be
 treated as joke. But if this is so and if
 paper money generally does the work as well
 as money made of gold, is not our explanation
 of money and it's manner of working ruined?
 Not so; we are saved by the peculiarity in the manner in which the metal gold works as money. The secret of it's force lies not in it's physical qualities as metal, but in it's
 worth as a marketable commodity. A seller of goods does not take it for use as a ieweler might do who bought it for the purpose of making ornaments with it he takes it as an article worth POS. and nothing else. It is the ownership of the sovereign which passes in a purchase, not its use. What the seller relies on IS that he acquires piece of gold which, if 50 obliged, he can melt and then sell it in the gold market; but unless he goes tora for elgn country there will be no need for melt
 ing Hence, in most transactions of business 1t is a matter of indifference whether the sov-= ereign IS handled at all it is sufficient that possession of 1t can be had whenever desired. The sovereign may remain deposited in safe place, and the ticket which gives title to de- mand It will circulate through the town as money; it is an article of cloak-room to be had on producing the ticket. The use of paper money-of the ticket or bank note in stead of coin-brings many advantages to a country. In the first place, for the same work 1t IS tool immensely cheaper. A sov-z erelgn costs 2Os. to make, bank note less than Cd. yet they render the same identical service in enabling the exchange of commo- dltles to proceed. The nation saves 19s Sd
 upon every bank note in circulation; that is it retains capital for the increase of wealth the goods which would have been sent abroad to purchase the gold required for currency This IS saving amounting to millions of pounds, clear addition to the working capi-s tai of the country. Further, bank note is much easier to carry, and far more capable of being kept in safe custody. It is easy to con ceive the embarrassments which would arise if heavy sovereigns had to be produced where payment is now made with notes, sometimes of one thousand pounds each How many thieves would be lurking about how many clerks to count, how much ringing on the counter to make sure that the coins were made of gold. Then the bank note by the help of the number it bears, affords great security against accidents and theft; it can be stopped at the bank, and upon security being given, will be paid as if it had been presented. It can be no wonder if bank notes circulate largely in civilized countries
 It follows that sound bank note is one which can obtain the gold promised by it when it is asked for the metal lodged in the cloak-room ought to be there, and be given on the presentation of the ticket Such notes in banking language are called convert