The Ketchum keystone. [volume] (Ketchum, Idaho) 1885-1899, 1893-02-18
THE GOLD BASIS.

The basis of anything is that
upon which it rests. The United
States is upon gold basis, finan.
cially; it's monetary system rests
upon gold alone. Every dollar ol
money in the United States is the
equal of gold dollar in purchas.
ing power, and may be exchanged
for gold dollar if the holder so wills
and takes the necessary trouble.
This is true, however, only 50 long
as there is no general desire to ex.
change other dollars for gold. A
monetary system may be based
upon gold, or upon silver, or upon
both the precious metals, or upon
paper. Which is the better basis
depends upon the point Of view
and the interest of the viewer.
Each man calls that good which
serves his private interest. There
are two great interests to be affected
by the basing of a monetary sys-
tem-those of the debtor and the
creditor classes. The one class is
very small and includes all the
wealthy; the other. class is very
large and includes, all. the poor.
Judged by their relative capaci-
ties for suffering and enjoyment,
the debtor class is by far the supe-
rior; it also produces most of the
wealth upon which civilization de-
pends for its existence. The sole
use of the money is to pay debts.
It passes. in q steady stream from
the debtor to the creditor class.
It is bought back again by the
debtor class, who give bonds and
mortgages for it; that is, it is bor-
rowed back to be paid to the cred
tor again.
The act of trading does not neces.
sarily require the use of money, fol-
trading was in vogue long before
there was money; and men trade
nov when they have no money,
and enormous transactions in trade
are made daily without the use Of
money.
The act of trading is the passing
of title to property from one per-
son to another. In this transac.
ton money has no part. When
the trade ia concluded. If one party
is found to be in debt to the other,
then there is legal extinguishment
of the debt only by the use o1
money. Ill stop at a fruit stand
and buy an apple for one cent, | be-
come possessed of an apple and am
the fruiterer's debtor to the amount
of one cent, and nothing but one
cent will give me legal freedom.
The principle is the same in all
larger transactions. When we buy
anything, therefore, We become in
debted to some one, and this debt
we discharge with money. Even
when we give money to beggar it
is because our superior fortune
makes him our creditor.
It is essential to an understand
ing of the subject of finance that
we know what is the solitary func-
ton of the thing called money ;
that instrument for the discharge
of debt.
If there were no such thing as
debt, then there would be no such
thing as money. It is evident that
were the whole world upon a gold
basis, all of the worlds debts would
be payable in gold; in what gold
there is-about three and one-half
billions of dollars. Upon a metal
lie basis the sum of money availa-
BILE for debt-paying would be about
doubled. Upon paper basis there
is no other limit than that imposed
by law to the amount Of money
that may be made available for use
in debt paying.
That law in the realm of money
which corresponds to the law of
gravitation in nature is, that the
value Of money has relation solely
to the quantity of it. The making
of more money, other things being
equal, is q dilution of the whole
mass Of money, just as one adds
water to wine-he has greater bulk
and less strength, but neither more
nor less of wine. And it is imma-
terial whether the added money is
made of gold, silver, or of irre-
deemable paper, go long as it has
the full money power to discharge
debt.
The reverse of this is also true.
To make the quantity of money
less is to strengthen it. Money
gradually becomes less through
wear and loss. Metallic money
can only be replenished from the
mines.
The quantity of money in any
case has relation to the number of
users and the amount of their debts.
What is enough for one million
users is but half enough for two
millions, other things being equal.
And if the users and the uses-the
demand-for money doubles with
out increase of money. the value
of money doubles; and it costs
twice as much to pay . debt as be-