Middlebury register. (Middlebury, Vt.) 1886-1937, 1895-06-07
THE MONEY QUESTION.
AKEY TO THE FINANCIAL SITUATION BY
SENATOR JOHN p JONES.
THE oUANTIT1vE THEORY OF MONEY.

ulsnal science. Inc most dismal !
branch of it, If men are to endeavor to
force conclusions to fit some precon-
ceived theory without reference to prin-
cples, is that which relates to money.
The persistent determination to make
the whole science subordinate to the
absurdities of the gold standard has
operated like a Westinghouse brake on
the progress of the civilized world.
But there is one principle of monetary
science that, If held steadfastlv in view,
will constitute an unerring guide through
what would otherwise be path Of in
extricable difficulty.
That principle is that the value of the
unit of money in any country Is detey-
mined by the number of units in cIrcu-
lation. In other words the value of
every dollar depends on the number of
dollars out.
The greater the number Of dollars out,
other things being equal, the less will be
the value of each dollar; the fewer the
number out. other things remaining the
same, the greater the value of each, and
this without any regard whatever to the
material of which the dollars are com
posed. This is the key to the financial
situation in the United States. Much
more. it is the key to the financial situa-
ton in every land. Without this key it
is in vain that the student attempts to
unlock the door leading to the arcanuEn
lac
of the locks made by man, the lock on
that door is unpickable The household
of science is one that thieves cannot
break through and steal. He who would
enter must first find the key. With this
key in hand, the most secret recesses
may be explored with confidence. With
out it, the student travels in a circle,
returning after much labor TO the point
from which he started upon his journey.
Like one in a maze when most confiden-
tly expecting to find his way out, he but
sees himself coming up against impassa-
BILE barriers.
If money were unlimited in quantity,
it would have no value whatever. Moth
ing has value that is Unlimited in guam
tity. If instead of sand the ocean beach
were strewn with gold dust, it would
: have no value whate yer as commodity.
Yet if that gold dust were taken up and
coined into pieces of money, the number
of such pieces being limited, they would
have value precisely as gold pieces have
value today. And, on the other hand as
Adam Smith says, if gold should reach
a certain degree of scarcity, the slight
} est bit of it might become as valuable as
a diamond.
So absolutely clear are the leading
writers that the value of money unit is
in every case, other things being equal,
determined by the number OF units out
! and does not depend on the material of
/ which the money may be composed that
they have not the slightest hesitation in
asserting that the rule applies even to
y uncovered paper money, 50 that the
value of every dollar of gold and silver
e in circulation Is diminished or increased
according as the Quantity of paper
: money is increased or diminished, and.
! recinTOcaly as to all of these, the in
5 crease in the number of dollars of either
= kinG diminishing the value of each dol
n lar of the others. while tbs decrease in
the number of either increases the, value
p of each of the others, without the slight
. est regard Whateveg to the material o:
=. which either of the dollars is composed.
o IF this be so, if the valae of the uni
y of money depends not on the material o
# the dollars, but on their quantity, VIVA
J. becomes Of the gold standard? If thu
Is be so, inasmuch as silver has been util
lzed as money since the dawn of erea
.r ton, why abandon it row, unless sena
e, tors are prepared to abandon the auto
"a matte system altogether? LIE we mus
- by legislation compel a change in tn
value of money. why legislate so that
q, can change Ia one direction only, an
&c that the direetion which * always ia
-. vora0le to the classes that lend none
III and five idly on their incomes, the d
I'd rection most injurious to society, mos
'ee fatal to Industry, most narcOtizing [
energy!
I'd The idea that the valse of \ treasur
it. note ISSUED by government such 4
Il ours is not based on the number issueC
TX but on something behind the note, c
Ia upon the credit of the government, d
1u forms the whole idea of money. Ii
e@ chung to because people have been a
cushioned to look upon money as sea.
as thing of "intrinscN value, and on Thu
iy, theory they have been at loss to a
at count for the facE that uncovered pap,
I'd dollars, when sufficiently res tricted
in. number, have precisely the same pu
all chasing power as gold money, QuantlI
DE pe for quantity. There is no question
credit about it, No man takes pie,
ed of money of any kind, whether gold
lie silver or paper, as piece of credit.