The progressive farmer. [volume] (Winston, N.C.) 1886-1904, 1890-09-30

| GueIF consent; AM, OF course, only at
or above par with gold and silver,
which would be it's habitual state; for,
so far as the government is concerned,
it wonld be equal in every respect to
gold and silver, aud superior in many
particularly in regulating the distant
exchanges of the country"
TIVE MERCHANDISE.
An important fact that is frequent
ly overlooked is that paper currency,
when sound and stable, must in it's
final analysis represent the distribu
1 tion of merchandise. Mr.. Poor, in
his work, " M oney, it's Laws and His
tory" states this proposition most ad
mirably. The fact is so important
and Poor is so clear and forcible on
the point, that I quote from him at
some length, even at the risk of being
tedious. In discussing the operation
of bank in the conduct of its busi
ness and the issuance of it's notes, he
says: The pivot upon which all
these operations turn is merchandise.
That provided, the instruments which
represent it, and which entitle their
holder to a corresponding amount of
the same value, or to the proceeds of
the same, and which, by their
transfer, that which they repre-
sent, are paper money currency. AS
soon as they are issued their move
ment commences automatically in their
appropriate spheres, and CONTINUES un
til they have accomplished their cir
cult and work. 1t is merchandise
that calls them into being; it is mer
chandise that gives them their value;
it is merchandise that gives them their
impulse, and it is merchandise that,
by it's purchase for consumption, re
turns those who issue them, not to be
re issued, but in making new loans.
So far as merchandise is provided,
they proceed noiselessly and benef
Gently in their proper orbits. So far
as it is not provided, their course is
as erratic and destructive as would be
that of the planets without the guild
ance and control of that central mass
around which they now so harmlessly
move.
All local currencies, therefore, are
based, not on gold and silver coin, but
on merchandise, for which they serve
in the place of coin, instruments of
distribution. Coin is itself money,
and needs no symbol for its transfer
or distribution Except small quan-
tity by way of change, the precious
metals are no longer used as currency.
They are held and used chiefly as re-
serves for the discharge of such paper
currencies as are not discharged by
merchandise in the manner described. :"
AS long as the notes issued by the
bank represented merchandise, he
shows that they would pass on a parity
with specie: "The holders of mer
chandise, therefore, would receive
them equally with coin in its sale, as
they would pay their bills equally with
coin. AS they would be accepted, in
the sale of merchandise equally with
coin, they would be taken by the pub
lie, the consumers of merchandise,
equally with coin. AS the object of
all currencies, no matter the form or
material of which they may be com
posed, is to reach by their exchange
some other article or articles, the
holders of the notes and credits of a
bank would have no adequate motive
to exchange, nor would they exchange
them for the coin to be used as cur
rency, so long as they would perform,
as currency, all the functions of coin.
Producers consequently, in whose
favor the bills were discounted, would,
from the greater convenience of their
use, prefer to receive in their dis
cunt, notes and credits to coin, as
they would pay them out equally with
coin in the purchase Of labor and ma
terial, in the prosecution of their in
dustries, to the very parties who
would be the consumers of the mer
chandise which they had produced
and put upon the market"
Again, after djscu ,sing the causes
of the failure of all banks which have
issued currency based on real estate,
he says: From what has preceded
the reason of the failure of all banks,
the capital or reserves of which have
constituted of real estate or securities,
will have been made sufficiently evi-
dent. All currencies, to be accepted
as such, must be instruments for rep
resentiny and serving for the distri-
button of merchand Sc. If they will
not secure to their owner merchandise,
their equivalent in value to coin, they
will always be Immediately drawn, or
attempted to be drawn, in coin. The
holder of a note issued by real estate
bank does not want that which it rep
resents, but merchandise, or the ab-
sence of merchandise, coin. Such a
bank has neither. Should it seek to
discount nothing but business paper,