The morning call., 1892-07-08
THE INTRINSIC VALUE OF MONEY.

In certain sense it may be difficult to
determine what il the intrinsic value Of
either gold or silver. Their commercial
value is the sum Of their intrinsic value
for industrial purposes. and of the value
which arises from the use OF the TWO
metals as money. What the intrinsic value
of gold would be if it were not used as
money cannot be closely estimated. If gold
and silver were not used in the arts their
commercial value would be less than it now
IS when used both ia the arts and as money.
1t is the demand for thing compared with
the supply which determines its commercial
value. Concerning the intrinsic value OF
gold, correspondent writes:
Gold is now the only thing that Is OF free coin.
age in this country. Other tbiGgs remaining in
present condition, If, In pursuance OF laws to be
passed, The United States minis should stamp
the present $50 gold piece 500. would such
piece OF money buy any different amount OF
anything than 1t now does, or than it would If
stamped $40?
Our correspondent seems under the i'm
preston that Congress, when establishing
the weight and ineness of gold and silver
dollars did so without any consideration Of
the cost Of production. But such is not the
fact. The purpose of the law was TO put
dollars worth of gold into a gold dollar and
dollars worth of silver into a silver dol
lar. To accomplish this purpose as near as
may be, IL has been found necessary at
times to change the weight and ineness OF
the two dollars. When we say dollars
worth Of gold in a gold dollar and dollars
worth of silver IN a silver dollar we mean
an amount of either metal which would
cost at current rates Of wages and commod-
tiles dollar to produce. This state
ment IS an answer to the question if the
purchasing power of a gold dollar would
be effected If what is now a twenty-dollar
gold piece should be stamped one hundred
dollars or ten dollars. The purchasing
power of gold dollar is determined, not
by the stamp. but by the cost of producing
the bullion in that dollar.
Again our CORES pondent asks: eff any
person owning piece of paper could take
it TO Government Office and have it
stamped Gree of CHARGE into a fYe-dolar
greenback. what would be the difference in
purchasing power between such greenback
and piece of blank paper?"
Apparently our CORES pondent does not
bear In mind that greenbacks are simply
paper representatives Of money The Gov
eminent promises to pay coin in sums CORE
spending TO its face value for each green
JAIN plrSeHteu loT redemption. i re holder
Keeps the greenbaek knowing that he can
get the coin for it when he wants it be-
cause the paper Is more convenient. The
lact that the greenback passes on the PROM
lse to pay coin for it is demonstrated by the
fact that during the war and for years after
ward the greenbAck was at discount. II
rose to par with coin when the Government
became prepared to keep its promises and
pay coin for it. As an example Of the con-
fusion Of ideas which prevails in some quar-
ters con- erning the effect OF free coinage
our correspondent calls attention 10 the fol-
lowing from contemporary:
III the Tree coinage bill becomes law II will
De amusing to see how readily people will ac.
cept IL. Ihey VIII be wondering within six
months how they ever questioned its wisdom
lie agents OF foreign manufacturers and Tho
holders OF bonds may squlrm a little. bnt they
are not The people for whom Congress eeisiates.
III the free-coinage bill becomes a law
bonds will most probably be paid in geld
13e agents of foreign manufacturers will
stlpulate for payment in gold or in silver at
Its gold value. The United States may es-
taDIish the single silver standard at home.
out abroad its silver dollar will only be
taken Tor what it is worth in gold