The star. (Reynoldsville, Pa.) 1892-1946, 1893-08-23
SOME FACTS ABOUT MONEY,
A TIMELY EXPLANATION OF
What MoneyIs,and the Relation y Between
Gold and Silver and their Use for
Coinage Purposes.

| dlleI tUel1 immaculate necessities OF ll1t
had been supplied, they would find them
selves possessed of a surplus amount OF
food, clothes and other personal property.
Those who occupied this position would
naturally seek some profit from their sur
plus and would attain It by an exchange
of their property for the surplus of some.
one else having different variety of food
| or clothes or other property In
| each case the possession of
| these articles represented certain
/ amount of labor and time spent in their
| acquisition ana eventually the amount of
the articles exchanged was regulated by
theo,lrs the time and a werT expeHl9td y the re-
stances continually REQUIRED whereby the
| most industi ious or the most fortunate
| persons accumulated by their original
| work and subsequent exchange all the
| food and clothing they had need for at
the time, and :hey did not care to accu-
mulate them further. As they still were
| producing both in excess of their current
| needs, prudence suggested that provision
| for future periods of scarcity, fitness or
old age should be made. This could not
be done by piling up perishable food and
clothing, which articles would. however
be needed later on.
Then II was that a common medium o'
exchange was thought of which. as far
as possible, should be imperishable and
should represent the value of certain
amount of labor expended at some time
which could be exchanged at a more or
less remote date for other articles of a
perishable nature produced by an equiv
alent amount of labor. This common
medium varied in different countries
Its essential qualities were pcrmanency
portability and representation of labor
or time expended. AS a consequence 1t
was some commodity so difficult To obtain
that small amount required consider
able expenditure of time and labor
Pieces,it TIN, iron. lead, gold. copper and
silver we're accordingly used IN different
Countries as the medium of exchange
The value of the pieces in time was regu-
lated by their size or weight. For pub
lie convenience and to save the trouble
OF using scale in each transaction the
common medium of value was taken to
some agreed-upon authority which
marked on 1t its weight. Later on these
marked bars were by the aid of an es-
tablished government melted into the
form of coin upon which certain value
was marked according to their weight.
Silver and gold seem by common con.
sent of mankind to have eventually been
fixed upon as the preferable mediums of
exchange. 1t is claimed that the use OF
silver considerably antedates that of
gold Grote and other Greek historians
silver several centuries before gold was
similarly utilized In the early DAYS
when metals were the medium of eN.
change, when there was little intercourse
between distinct tribes and nations and
that mostly hostile, when the art of paper
making was unknown the bills and crafts
and checks and notes by which the chief
business and commercial transactions of
the world Is now carried on were, of
course, unknown. When they first came
into use they were simply the agreements
or promises to pay a certain amount OF
the common medium Of exchange which,
as we have seen, derived its value
originally from the labor and time 1t rep.
resented. These paper promises to pay
were long confined to individuals-later
on they were issued by banks and by gov
ernmcnts. Bank notes aud government
notes arc commonly called money, but
they are in reality only agreements to
pay money in the sense we have origin
ally used the word. Money. or the me
dunn OF exchange, did not originally pro-
ceed from governments. II proceeded
from the individuals who made It's material
valuable by their abor and who brought
II to the government eventually. not to
give II value, but to put on it a public
declaration that the value was in accord
ance with the general individual agree
ment on the subject Eventually the
money 50 coined not only repre- scnted the
value itself orthe time and work cx-
pended thereon, but 1t became a measure
of the value of other commodities for
which il was exchanged
Originally a coin or the value of our
dollar represented 100 cents worth of
time and labor expended in its production,
and had not governments inte-vened. this
would still be the case. Some of the
money coined for the people by the Gov
ernment was paid to the latter for taxes.
IVNN NtNsNng Of HNa. anI
ment often resorted to the expedient of
recolning the money in It's treasury and
making, say five million of new dollars
out of four million of old ones. This was
called debasing the coinage and IL has
resulted in many evils. Ii is evident that
the extra million of dollars represented
no labor and time beyond that required
for the recoinage. The credit OF the Gov.
ernment was relied upon, however, to keep
the value OF the new CONS up to that of
the old. This might prove the case where
the amount OF the recoinagc was limited
but when carried to excess evil
effects were sure to follow. There
are those. however, who claim the
credit of the Government is suf-
fcient to take piece of paper
representing practically no expenditure
of time and money, and stamp upon it
the declaration that IL is 81 and that it
will possess that value. They claim
that II the Government can take piece
of silver worth so cents in time and
labor expended and declare II Is full
dollar, 1t can take another step of equal
length and issue fiat paper money as
above. The limit of the Governments
power to issue debased money is the gen.
eral belief in its ability to redeem such
money in dollars of full value, and there
is obviously point beyond which il can
not go without impairing this belief and
consequently discredting the money so
issued.
While silver preceded gold in general
use as money, yet the latter metal has
steadily grown in favor az the formers
expense This was due to its greater
value and general adaptability for use.
Much less of IL was required to make
coins of equal value with those of silver,
and it was consequently more valuable
and more easily handled. Its ratio
of value to silver has varied greatly.
Herodotus estimated the ratio as 13 to
! that is, pound of gold was worth ID
pounds of silver. Plato's estimate was
to 12, Menander's to 10 and in Cesar's
time II was TO 9, The ratio in recent
times has averaged about to 10. When