The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1895-06-07
GOLDITE SOPHISTRY.

The discussion of the financial ques
ton occasioned by the silver move
ment. and directly attributed to the
agitating influence of Coins Financial
School," has brought out many singu-
lar assertions and put the gold mono
metallists to straits in the defence OF
their theories. Among the so-calleC
arguments they advance is that of the
non-necessity Of a large volume OF
most of the business of the world is
done with checks.
The st. Paul Pioneer Press publishes
a table of the various kinds of money.
or substitutes for money, actually used
| in payments by the national banks of
this country. It shows that from 81
per cent. to 90 per cent. varying in diff
ferent months, of the banking business
was done by checks drafts ETC., as
against gold and silver coin, which
with paper currency made up the
other percentage. And it adds:
In all this vast amount of exchange
! hardly any money of any kind was
used. From 80 to 50 per cent. of them
were transacted by means of checks.
Redemption money or money of any
kind cuts so insignificant a figure in
the enormous commercial transactions
of this country, as demonstrated by
the above table. as to make it evident
that this volume Of money is much
less important than most people sup
pose. 1t completely demolishes the no
ton that the quantity of money need
ed for business bears any relation
whatever to population.
1t has never been disputed by advo-
Gates Of free silver coinage that the
business of banks and of the world
generally is largely transacted with
something else than coin. But is there
anybody who will assert that the pa
per used. whether as checks. drafts,
bills of exchange or in any other form,
is of any value whatever except as
representing actual money? Is there
any difference in the value of a check
and of d greenback or treasury note?
And what worth would there be on
either if it was not redeemable in
coin?
1t is conceded that there need not be
the full amount of coin in reserve to
meet the obligations of the paper in
circulation in the place of cash. The
credit of country and of individuals
maintains the value of paper used as
money, to a large extent. But sup
pose there was no coin behind the
checks and drafts which pass from
hand to hand to facilitate business. ;
Would they be accepted in lieu of
money? 1t is the guaranty of their re-
demption, when necessary, in the /
actual coin which keeps them afloat.
When the volume of paper in the
form of money is inflated beyond the /
possibility or likelihood of its coin re-
demption, how long will it remain at /
par? And if there is a great amount 7
of redemption money at command, will
not the issue of a large amount of
credit money be rendered safe? Then.
is not the amount of business which
can be legitimately transacted by
means of paper, regulated by the
of actual money in which it
can be redeemed?
That being the case, it must be clear
that population has something to do
with the necessary amount of real
money for the safe transaction OF
business AS the population increases
he need of more actual money in
,reases, as a basis for the amount of
paper or credit money put in circula-
ion. If not, there is no need for any
money of ultimate redemption at all,
Ind greenbacksm, or the issue of
PAPER money entirely on government
.redit is sound financial doctrine.
The sophistry in the Pioneer Press !
is apparent in this: That
While stating the relative amounts of
lctual money and the checks and
traits used in banking transactions, it j
.voids the question of the basis of the
-alue of those checks and drafts. And !
makes it appear as though the gold
nd silver coin handled in those trans
ctfons was all the redemption money ,
involved. While the truth is that the {
ctuaI coin handled had little or moth
ng to do with the actual cash on de- !.
osit which was represented by the /,
aper in circulation. The amount of /
redit money thus reported as in use
ives no proof of the amount of actual (
honey behind it and which it simply :
49, =