The herald., 1895-07-08

Editor Herald Mr.. widney, in reply &c
my communication, says: ..In discuss
ing my subject did not care to use col
umns OF your paper in discussing techni.
cal distinctions that educated peoplt
always understand. l used the word.
intrinsic or com inercial value to show
that there was no intrinsic yaIu. differ.
ent from commercial value, and havine
thus briefly defined the subject left il %
the intelligence of the reader to correctly
abstract the intended meaning of my
words"
1t may be that an educated" man
would understand that one thing is
meant when another thing is said. II
may be that AN educated man would
understand that intrinsic value, if there
Is any such thing, means extrinsic value
or commercial value. When man saws
the honest silver dollar is likewise a hum
bug and myth for the above reason. II
is not intrinsically of the same value as
the gold dollar or the hundred copper
cents. An educated man might possibly
understand that the word intrinsically.
as here used. means extrinsic or CONNER
cial. but l think that even Mr.. Widney
must admit that an uneducated man
might not be able to catch on to that
occult meaning.
Again, after having used the phrases
eral times. and then saying, OF course
supply and demand and corners make a
variable element, for without demand
there would be no commercial value, an
educated man might understand that the
word commercial, as here used, also
meant intrinsic. and that an intrinsic
property of thing might be as variable
as an extrinsic accident of thing. but
an uneducated man might not be able to
understand it,
When person in an article less than a
column and one-5alf in length makes use
of the word intrinsic repeatedly. an ed
ucated man might understand that the
writer did not mean anything by it, but
that he was just dropping in the word
to fill out line, but an uneducated man
would very naturally suppose that he
meant to convey some idea by it.
Mr.. Widney must certainly be aware of
the fact that the chief argument made
use of by the single gold standard men is
that it is necessary that money should
have an intrinsic value equal to the mon
possesses this property and that silver
does not, and for that reason they favor
the single gold standard. In articles
written by them the phrase intrinsic
value hasa meaning. With my limited
education I could not understand that
Mr.. Widney used this term in any other
sense than that in which it is used by
other writers on economic questions.
Mr.. Widney seems to be utterly obliv-
ious to the fact thar legislation may IN
crease the demand fer thing. and by so
doing enhance its value. Suppose con-
gress should pass law making white
pigeons a legal tender in the payment of
debt at the rate Of $40 each. would not
the value of white pigeons advance in
tho n, rkoto Of courea would
When the law was passed by congress
in 1862 levying tax on every gallon CT
whisky manufactured after that date, did
not all the whisky in bond and all in
stock or on hand at that time advance in
value to an amount exactly equal to the
tax to be levied on the whisky afterward
to be produced, and was not this advance
occasioned solely by legislation? While it
is true that legislative enactment cannot
give thing absolutely unvarylng value
it is also true that legislative enactment
may establish between two metals used
for the same purpose an unvarying ratio.
l have very good authority for saying that
from legislation. Mr.. Widney in his
pamphlet entitled A Proposed National
Money System. page 10. says: "There is.
therefore, no money but nat money. and
there never can be any kind Of money
but fiat money. The fiat OF a nation ex
pressed in its statute 10 VS.. This shall be
received in satisfaction of all debts. pub
lie or private, within the jurisdiction of
this nation, and evidenced on gold sill
yer, paperSor any other material. by law,
is money. Nothing else, however great
its commercial value, is money. if the fiat
is wanting If the above definition of
money is correct. and there can be no
doubt that it is substantially correct, as
far as it goes. then SO long as the law or
tiat oip n in fnrpo and ia annaIIy a n
plicable to all money issued by the nation.
there can be no fiuctuation in any part of
the money with reference to any other
part OF the money arising from the fact
that portion of the money may be evil
denced by u stamp on one kind OF mate
rial and another portion by a stamp on
some other kind of material. If money
is purely fiat then the material upon
which the stamp is placed has nothing
q do with the money function. Ii, how
ever, the law which makes the thing
money is repealed. if the fiat is lost, and
the money thing goes out OF circulation
as money. then the material on which
one dollar was stamped may be more val
uable than the material upon which an
other dollar was stamped; but so long as
the money function is preserved, any one
dollar is Just as valuable as any other
dollar. 1t is conceded that the value of
money is increased or diminished in in
verse ratio to the amount of money in
crcuation. but such increase or diminu-
ton IN value is in the money and not in
the materia upon which the money stamp
is placed. and it necessarily follows that
such increase or diminution in value
would operate in the same manner on
money that had the same legal protection
without any regard whatever to the ma
terial on which the money stamp was
placed. While the value of the money
might be affected by reason OF the in
creased or reduced supply. the ratio be-
tween the metals bearing the money
stamp would remain the same.
While it is true that the value of a
thing is controlled by the law of supply
and demand it is also true that anything
which tends to increase the demand (the
supply remaining the same) must neces-
sarily enhance its value; and If ieglsla-
tive demand is for the total supply. and
if the legislative demand fixes price at
which the total supply will be received,
does it not necessarily follow that the
value of the commodity SO fixed cannot
fall below the price fixed? There may be
posi- JiIity that the value might tenn
porarily rise slightly above the legisla
tive limit, but it could not by any possi-
bility fall below it.
In order to have this effect the legisla-
tive demand must be for the total avail
able supply. The reason why the Bland
bill or the Sherman act did not restore
silver to its ancient place as money
metal was because the demand was not
for the total available supply, and an act
to coin the American product OF silver. II
such an act should be passed, would fail
for the same reason.
That legislation does influence values is
not only self-evident, 1t is historic.
When the Bland bill was passed in 1873.
which