St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1895-05-18
AN ORATORICAL GIANT DE-
FENDs THE DOCTRINE OF
SOUND MONEY.
L&uGHLIN REPLIES TO COIN.
MEASURE OF VALUE is THAT IN
WHICH PRICES ARE STATED
AND DEBTS PAID.
MONEY IN TRADE EXCHANGE
NOT NECESSARY TO HAVE COIN
ENOUGH TO REPRESENT
ALL DEALINGS.
EXCHANGE is BASED ON GOODS,
Not Money, Therefore Trade Il
Limited Only by Trans
actions.
THE FREE COINAGE OF SILVER
Would Not Increase the Quantity
of Money in General
Use.
NOT NECESSARY TO HAVE COIN
ENOUGH TO REPRESENT
ALL DEALINGS.
EXCHANGE IS BASED ON GOODS
Not Money, Therefore Trade Ii
Limited Only by Trans
actions.
THE FREE COINAGE OF SILVER
Would Not Increase the Quantity
of Money in General
Use.

Prof. Laughlin, rising to reply In the
negative, spoke as follows: Apart
from the well understood use of money
as a medium of exchange, money is
used as g. common denominator of
value, with which other articles are
compared. AS q measure of value it
serves in a similar way as a quart
cup may serve as measure OF ca
pacity; and as there is not needed a
separate cup for every quart of milk
in ex,jtence, so one can measure
hundreds of thousands of goods by
comparing with the same standard of
measure. There is no need of an
amount of money equal to all the
goods in existence. The measure of
value is that in which prices are stated
and debts are paid, provided the meas
ure raf value is also made a legal
tender in any country. 1t is evident
then that the quantity of measures is
not so ma.arial as the unvarying sta
bility of the standard of measure.
There is no more essential need of an
Increased amount of measure with
which to compare goods than there is
or should be a number of yardsticks
equal to the number of yards of cloth
in a store The absurdity Of suppos-
ing that much money Is required in
order to have something with which
to measure goods is as absurd as to
suppose that a community must have
hearses in number equal to the popula-
ti6n. One or two weell regulated
hearses may do the work of burying
all the community, because they may
not ineonveniently all die at the same
time. So with gold. All goods are
neither exchanged at the same time
nor are they offered in comparison
with the standard at the same time.
What is important to point out is that
goods when expressed in terms of q
common denominator of value are to-
day exchanged in enormous quantities
mainly without the use of any money
For the exchange of these goods
therefore,
- MONEY IS NOT NEEDED
in proportion to the transactions. It's
function is that of the medium of
exchange. The necessity of an in
crease in quantity of money is growing
lessl important with the development
of this system of exchange. From so
per cent to 95 per cent of transactions
are performed by this machinery with
out the use Of money, and recent
Investigations by the comptroller of
the currency show that 81 per cent
of retail transactions are similarly per-
formed without the use of money. But
some might say, 1.-THE vast system of
currency must be liquidated in actual
coin and money, and so our business
system rests like an inverted pyramid
on the apex of a small reserve of
coin." This is wholly untrue. We ex-
press the value of goods in terms of
money, but then we really exchange
them almost entirely by means of the
deposit currency. The transactions ex-
pressed in terms of money are based
not upon coin, but upon the goods
bought and sold. No business man
waits until checks and money reach a
certain level before he thinks the cir
cuiating medium of the country is
large enough for the needs of trade,
before he sells his carload of wheat or
bale of cotton. He first sells his
grainasor cotton and draws his check
afterwards. This new currency prod
ucF is the consequence and result OF
transactions. The system, therefore
is as broad as the transactions, and
is ultimately resolved into goods, and is
= = BASED ON GOODS.
1t. is not true, therefore, that this
system is unstable, like an inverted
pyramid. The transactions in goods
are the reason for the existence of the
checks and deposits. The checks and
deposit are not the reason for the ex-
( istence of the transaction. The re-
demption is ultimately in goods and
not in coin. Coin only is a means of
going from one set of goods to another.
/ Prices since 1873 have not fallen be-
cause of the lack of money. Silver
has fallen about so per cent, as COM
pared with very modest fall in the
price of commodities Silver does not
have the same purchasing price in 1894
as in 1873. Hence, free coinage cannot
be urged as just means of paying
kdebts. More so-called redemption
money. by sthe amount. of $1,O92, 900, 00O
lis in existence today as compared with
| 1878, and yet prices have fallen, and sill
It-ver has fallen still more. Prices un-
, mistakably have fallen because of the
Iseheapened cost of production. Since
We undertook the purchase of silver
| in. 1878 it has fallen about one-half in
value, although we have purchased
about 5000, 100000. It is perfectly evil
lsdent that there is no use in the United
States acting alone to bolster up the
I price of silver, when we have failed
even in concert with the Latin union.
| Free coinage of silver at 16 to means
the single silver standard or silver
/ monometallism. Today the market
ratio between gold and silver is nearly