The representative. [volume] (St. Paul, Minn.) 1893-1901, 1893-07-12
STANDARD OF VALUE.

STANDARD OF VALUE.
1Asre Il NO such Thing . . Measure, :.
standard Of valuo-A Dollar II the None.
tsry Unit, or Conventional Monetary De-
nominant.
During the year 1891, there was pub
Hshed by the Mutual Bank Propaganda
. pamphlet entitled 1.-THE Financial
Problem" by Alfred B. Westrup. Tho
author, while scholarly, erudite gem
tleman, is Of the intensely individual
istic school and wrote from the stand
point of non-governmental interior
ence, or anarchy. He advocated the
establishment of purely mutual banks
which should issue, upon strictly first
class commodity collateral paper bills,
or money, which should not and, Of
course, would not possess the legal ten
der quality and would be enforced ten
der to none but the members of the mu-
tual banking institutions which issued
them. But by striking out the phrase
Mutual Bank wherever it appears and
the statement that the bills were to be
non-legal tender, portion of his argu-
ment is very strong and excellent
plea for United States full legal tender,
inconvertible paper money.
Concerning the term standard Of
value" he says:
''There is a fatal misunderstanding
in regard to this term, and almost all
writer's on the subject of finance ap-
pear to have fallen into an error.
There is no such thing as measure
or standard of value Instead of say
ing, the gold dollar is the measure Of
value, we should say, the dollar is the
monetary unit or conventional none
tary denominant The fact that we
cannot express the value of an article,
except by stating a quantity of some
commodity, is proof that there is no
for the (market) value of all commodi-
ties change with supply and demand,
and the object measured is as much
the 'measurer' as the commodity by which
it is measured Value not being
substance nor occupying space, can
not be reached by mathematics. The
absurdity of this popular view of the
measure of value is graphically illus
trated in the constitution of the United
States in comforting the power upon
congress to regulate the value of
money for neither congress nor any
other legislative body have any more
power to regulate the value of money
than they have to regulate the velocity
of the wind, Or the degrees of solar
heat So long as competition supply
and demand regulate the market
value of labor and products, it, and not
legislation, controls the purchasing
power of money.
"a monetary unit "a conventional
denominator or denominant) to facili-
tate the expressing of amounts in the
realm Of value is, apparently, so SINH
lar'in it's function to that of the units
employed in physics, such as the inch,
the pound, etc., especially as certain
coin is made legal tender, that the no.
ton has become well nigh universal
that this monetary unit must be def
mite quantity of some commodity just
as the inch is definite and unvarying
length, or the pound is definite and
un varying weight; but this notion is
utterly devoid of reason.
Gas there is nothing definite or per-
manent in value a unit of value is a
physical impossibility The monetary
unit is as near a unit or measure of
value as the x in an algebraic equa-
ton is a known quantity. You can as
certain the exchangeable value of a
gold dollar in any commodity by in
quiring the price of that commodity; so
also you can find the quantity x by
cinharinU ont tho an11a fiOn
''The value of the gold dollar varies
with every change in market price, just
as the quantity * differs with every
change in the equation. This gold dol
lar is a certain quantity of gold. It is
not the gold, however, but the value of
the gold that is supposed to do the
mea surfing and it is the value of the
gold that is the uncertain quantity.
''How can an uncertain quantity be a
unit of measure? And if it is not a
measure, what is the object of coin
basis? If it is answered that it is not a
measure, but standard of value, if
by standard is meant denominant,
then the use of the term standard is
equivocal, and therefore sophistical or
dishonest. If it is claimed that it is
more than a denominant, there is no
escaping the dilemma that confronts
the paragram measure
"When paper money is issued as pro-
posed by the populists, full legal tender,
but not redeemable in any special COM
modify, the monetary unit dollar will
simply be denominant. It's purchasing
power will not be affected by a rise
or fall in the price of any commodity
any more than an order for pound of
butter commands more than pound at
one time and less at another. The pa
per dollar will buy more butter at one
time than an other, but this will take
place in consequence of the operation
of supply and demand in regard to but
ter only; and SO with regard to all
other commodities; the paper money
will have no more effect on the price of
commodities than the order for the
butter will affect the price Of butter,
whereas when the monetary unit
is a legal tender commodity dollar, va
riations in the price of any commodity
are affected, not only by supply and
demand in that particular commodity,
but also by supply and demand in
the arbitrarily limited legal-tender-
commodity dollar, which limit enables