St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1891-01-05
THE MONEY

retirement or the government DOnuS Is
daily lessening the basis of the national
bank note issue; and, while the news
papers talk of substituting new forms
of securities like municipal and state
paper for them, there has been no serl-
Gus action III that direction. 1t looks
as though we should wake up some
morning, and find that there were no
more bank notes IN circulation. The
minds of the American people seem to
be bent towards a currency OF some
kind or another directly under the con-
troll of the government, and underlying
which there shall be gold and silver and
the governments credit in some CON-
bination not yet exactly determined.
This money question is exceedingly
intricate, and the man who can solve it
ought to get a pretty big prize. Paper
currency is by all odds the most on
venient form, and we can assume that it
Will be maintained, no matter now its
basis alters. But it has got to be.issued
by some one in some regular quantities,
and stand on some sort OF a foundation.
Money is nothing except a device TO
render barter possible. The man who
makes boots and wants bread might
starve to death before he could find a
baker who was willing to trade him
food for his wares. But he can sell his
boots for money, perhaps to the doctor,
who needs them, and find the bakery
glad to empty its counters in exchange
for it because It's proprietor CABIN turn
use the money with the tailor, to whom
he owes a bill. This money, however,
must be something so universally recOg-
niZed as a medium of exchange that the
shoemaker. after accepting it, will not
find it refused by the tradesman
to whom he offers it. 1t must be of so
steady a value that the shoemaker will
not find its purchasing power dimin-
ished if he keeps it a day Or two before
turning it into food or something else
which he needs. And it must be SO
plentiful that no legitimate transaction
in business shall be blocked because
the money required cannot be found.
That is to say, whatever is used
as money must be uniformly rec
ognized as valuable, and must increase
in quantity as does the number of oc-
casions for its use.
If the shoemaker exchanges his wares
for gold money, and finds after awhile
that, because the demand for gold has
increased beyond the supply, his gold
is more valuable Than it was before, and
that he can exchange it for more COM
moditieS than he could, he has made so
much. If. OH the other hand, he
has exchanged his wares for silver
money, and finds that the price of silver
has declined before he has had
an opportunity to exchange it for other
things which he wants, and on this ac-
count he can get fewer hats and coats
for his boots in the shape of silver
money than he could if he had kept his
boots and actually traded them, he has
lost something. If he lives in a COM
munity where currency is used which is
based on confidence in the government,
and a revolution comes and wipes the
government out of existence, he may
find that he has let his goods go for a
money which has no value and for
which he a get neither food nor
clothing.
An inadequate currency is a bad thing
because it blocks exchanges and loads
men up with goods which may perish
and for which the owner has no use. A
variable currency is a bad thing for two
reasons. 1t turns business into gam
bling and speculation. Men cannot tell
whether they are going to make II los
by taking money for their commodities,
and they get into the habit of plunging
and balancing unexpected gains against
unexpected losses. Besides this. it de-
Men hesitate to embark OH enterprises
and incur obligations because they can
not tell but that they may be ruined by
a change in the values of the circulat-
ing medium which they have to use. 1t
is possible to conceive of a mans hav-
ing to pay tao dollars in value for every
one he had agreed to, because money
had fiuctuated. This would meal bank
ruptcy to him and a fortune TO his
creditor.
All this suggests the dangers which
attend an improper solution of the
money problem. Under our constitu-
ton the coinage OF money is a govern
mental function. An automatic varia-
ton of the amount available, according
to the needs of business, is absolutely
essential to commercial security. in
general, it would appear dangerous to
delegate its issue to private institutions
who might regulate the circulation for
their own advantage. Again, a circu-
lating medium whose intrinsic value is
constantly diminishing is a bad one;
but not the least bit worse than one
whose intrinsic value is constantly in
creasing. The error of the advocates of
an exclusively gold basis is that they
assume gold to remain stationary in
value while everything is varying. But
this is not true. Gold f~1uctuates as does
everything else, and if its value grows
greater day by day, to maintain it as the
only standard will increase the burden
of every man who owes a dollar. On the
other hand, if the free coinage of silver
means a declining value, it will favor
the poor at the expense of the rich, I'M
less the rich take care of themselves as
they have heretofore. The good judy
ment and honesty of the American peo-
pie will save us from either of these re-
suits. The general spirit which per-
vadeS proposed legislation on the sub
Jeet proves this. The outcome will be a
currency based on the coinage of gold
and silver alike under governmental
regulation, and maintained at uniform
ity by national confidence in the
strength and s~olveDcy of the national
treasury.
HOW THEY GROW.