St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1894-02-19
THOUGHTS ON CURRENCY.
Written for the Globe.
CHAPTER VIII.
AN HONEST DOLLAR.


AN HONEST DOLLAR.
What is an honest dollar
1t will take longer to answer this
question than to ask it.
We all sell things for dollars in order
that we may sell the dollars for such
other things as we need. Where the
dollar is taken in and paid out again in
few hours or days it IS plain that any
gradual changes in Its value would be
of little consequence.
If, however, the dollar were subject
to great or sudden changes Of value, so
that one received today would be worth
half as much, or twice as much, tomor-
row, it is equally plain that such dol
lar would he very poor medium of ex-
change.
So far, then. as so-called cash trans
actions are concerned, the important
thing is that the dollar maintain COM
paratively steady value. Many trans
actions, however, are not of this char
acter. Everybody buys more or less on
time. People buy land and give a
mortgage to be paid some years IN the
future. The merchant, the manufact-
urer, the wholesaler, the jObber and
all the different classes of business men
make time contracts. So all grades of
workmen enter into agreements to give
their services for longer or shorter
periods at definite wages. The nation,
the states, the counties, the cities, the
towns and even the villages are all more
or less in debt. Private individuals
everywhere are also heavily incum-
bered. r
Bearing all these facts in mind. it Is
very plain that dollar to be really
honest dollar must not only retain its
value for short periods. but for long
ones. The debt that has been running
for ten years should not become greater
or less because the dollar had become
more or less valuable during that time.
Suppose you borrow thousand dol
lars today. Suppose at the end OF six
years you go to pay that debt, but in
the meantime each dollar has become
twice as hard to get. isn't it plain that
you are really obliged to pay back twice
as much as you got? Isn't it plain that
you have been injured and your cred
itor benefited by the change in the
value of the dollar? Isn't it plain that
you have been robbed by dishonest
dollar?
Suppose it were just the other way
that when you went to pay your debt
at the end of ten years, you found each
dollar only half as hard to get. Now
you must give back only half as much
as you got. Now your are benefited at
the expense of your creditor. Now he
is robbed by dishonest dollar.
An honest dollar, then. is one that
neither goes up nor down in value dur
ing series of years. but whose value
remains the same.
The only way to tell whether the
dollar is going up or down in value is by
study of prices.
If prices of all products of labor Ego
down." for series OF years. that shows
that the value of your dollar is rela-
lively increasing. If prices generally
rise for series of years, then the value
OF your dollar is decreasing.
This is the test accepted by most
writers on currency, and think it is
correct.
Since 1884 our dollar, or measure of
value, has been 25.S grains of standard
gold. Has this gold dollar been an
honest dollar? Is it a good measure Of
value?
If its purchasing power has remained
regular and steady, it is good measure
of value; if not, then it is poor meas
ure.
Let US see.
Adam Smith, in his "Wealth of Ma
tions," page 40, shows that the value Of
gold and silver money was greatly
diminished by the discovery of the
American mines. He says: Gold and
silver, however, like every other com
modify, vary in their value, are some
times cheaper and sometimes dearer,
sometimes of easier and sometimes of
more difficult purchase"
Prof. Bonamy Price, of Oxford uni
versity,in his Currency and Banking"
shows how great are the fluctuations in
the value OF gold and silver, aud says:
mo doubt gold and silver, on the dis
covery of America, sustained a heavy
change of permanent value, to the great
Aiotul vi XII anu uGDIS. :"
Prof. JevonS says: I'VE are too much
accustomed to look upon the value of
gold as fixed datum line in commerce;
but ,,I in realty, it Is very
the Mechanism of Exchaug e.. y
page 3l5; and again. page 325: "But
there is abundance Of evidence to prove
that the value of gold has undergone
extensive changes. Between 1889 and
1909 it fell In the ratio of 100 to 81, or 46
per cent, as L nave shown in a paper on
the variation of prices since 17S2, read
to the London Statistical society in
June, 1865. From 1909 to 1S49 1t rose
again i'll the extraordinary ratio of 100
to PAS, or by AS per cent. rendering
government annuitIes and all fixed paw
ments, extending over this period,
almost two and one half times as vaua-
BILE as they were in 1909. Since 1S49 the
value of gold has fallen to the extent of
at least 20 per cent"
AS Prof. Jevons wrote sometime in
the 70's he had no means OF recording