The times. [volume] (Richmond, Va.) 1890-1903, 1894-04-11
WHY THE FARMER DOES NOT NEED

MONEY.
We are asked to explain what we mean
in our Sundays article by the following
language: 1T is not money or currency
that the people in the country need
| Though they think it Isl, so much as II
is convenient money exchanges" We take
pleasure in complying. There must be a
starting point for everything. 1t requires
a certain amount of labor to dig from
the earth, smeit, refine, and coin 70 ZZ-lVJ
grains Of gold, and we arbitrarily deter
mine that we will call that number OF
grains q dollar. We might have deter
mined 10 call il Il pequod or semnestre'
or anything else that suited US, but we
chose to take that number Of grains as
the unit-the starting point-and to call
/ il by the name OF dollar, and everything
/ else in the nomenclature of values has
referred back, from the time we named
| the unit to it. Very well; what has this
dollar the power 10 accomplish after we
determine what shall be the dollar ana
give il that name? 1t has power to ac-
complish two things. The first is TO de-
termine. how much cotton a given pile OF
wheat will exchange for, and the second
is to effect swaps and exchanges of COM
modities when one person has one, but
10 one near him has the other that he
wishes to swap for. But this "determin-
ing how much cotton~a given pile or
wheat will exchange for" calls for some
rff 1u non
and other cost necessary to produce Owe
will saw a bushel Of wheat. with the
labor and other cost necessary TO produc-
ing a gold dollar. we find them to be the
same, and on comparing them with cot
ton we find that 1t takes the same labor
and other cost to produce ten pounds OF
cotton We, therefore, say that bushel
Of wheat is worth one dollar and that
ten pounds of cotton are worth one dol
lar. Very well. When we come TO a pile
Of wheat that we ascertain TO contain
one hundred bushels of wheat we say that
pile is worth one hundred dollars ana
when we come to a pile of one Thousand
pounds Of cotton we say II is worth one
hundred dollars. Now, the only part
which the dollar" has played in TINS
affair up to this point is to measure the
value of the pile Of wheat ana the PIE
of cotton, and to determine that one %
a good swap for the other. This is the
first function which money performs. The
second is just as important.
When a farmer has devoted his whole
,,oor 70 = crop Of wheat. he finds HIM
Golf ot the end of it with one hundred
bushels of wheat. but without many other
things that he needs. He needs bacon
ora shoes. and other articles for
h,s wife and children. But the men
who have bacon and clothes to part
NTH do not want wheat. He finds a
man. however, who wants one hundred
bushels of wheat and has one hundred
gold dollars that he is willing to give for
them. He exchanges the wheat for the
money and then exchanges the money
for the bacon and clothes. OF course
the transaction was nothing but a swap
Of wheat for bacon and clothes, and the
only part that money played in it was
first to determine the basis on which the
swap should be made. and second TO
make the swap for parties who were not
face to face with each other and could
not have effected the exchange without
the aid of money. Now these two are
the functions of money and they contain
all the useful functions that money can
perform. Now for our propositions that
1t is not money which the people in the
country want so much as il is convenient
money exchanges. We can dispense with
money, except as a reference for deter
mining the values OF commodities. IIav-
ing once determined definitely what the
dollar shall be IT. is purely a mental
operation to say what the values Of two
commodities are. and this operation is
only necessary for the purpose OF ascer-
tanning basis upon which they may be
exchanged. Money is no more than a
dictionary FOR the purpose Of performing
this function.
And but little of it is really needed
for performing its second function, that
is an agency for effecting exchanges Of
commodities. and for this reason: substi-
tutes for money will preform its work
just as well as money itself Anything
will do as a substitute for money If the |
people who are called on to handle il |
have absolute confidence that they can |
convert the substitute into actual money |
whenever they desire 10 do so. The alb
solute proof of this exists in the fact that
every bank officer viii tell you it is a fact
that 50 per cent. OF the business trans
actions gong through banks are by
checks and notes, and not per cent. of
them are by cash.
Very well. A farmer In Wythe county
owns thousand acres of blue grass land
on which he grazes 800 head OF beer
cattle. He goes to the State bank M
Wytheville az the law permitted one). and
asks for a loan Of $1,000. The managers
OF the bank know him and know It is
perfectly safe to LEND him the money.