The times. [volume] (Richmond, Va.) 1890-1903, 1895-03-05


that soundness even more apparent.
pouRKE .ocKRAS's ILLUSTRATION.
Editor Times: / was very much inter
ested In the Hon. Bourke Cochran mus,
tration regarding the Office OF money ana
| tho comments OF The Times upon the
same II is the purpose OF this note %
suggest that the knockout illustration
| Goes not prove what each OF you assumes
q rtoyes. Undoubtedly the illustration or
| example demonstrates that the functioh Oh
the dollar was to facilitate exchanges
OF value in itself. There was commence
on the part OF each person receiving the
dollar that IL was an honest dollar. Now
I do not deny that the law OF supply ana
demand regulated the quantity or quality
of the several purchases OF TINS particular
dollar. But the point made by those VINO
insist that the volume of money Is not
Sufficient for popular needs | Understand
TO be this: That restriction OF volume
necessarily restricts the facility or these
exchanges and with a greater volume
the individual transactions of the dollar
I'm question would be multiplied. Let us
take two extreme views I'm this connec-
ton. Suppose that with property wealth
all around the market place and along the
thoroughfare this dollar travelled to the
bltcher's there was no other dollar In
that locality. The medium for facili-
tating exchanges would be wanting. The
great bulk OF transh ctions between men
Of means Is done without "A cent Of actual
money passing. II is transfer of credits.
But IL Is equally true that the bulk OF
transactions by people in moderate means
and especially those who work by the day
is done with actual money. Now let me
suggest subject in this connection for
your very able PEN THE relation the
volume of currency sustains TO the ques-
ton Of facility of exchanges and to val
ues." w. NJ. ~
Richmond, Va, Feb. q. 1895.
The point made in this letter especially
worthy of consideration is the suggestion
that as the volume of money is abridged
the opportunities for effectng exchanges
of commodities are limited.
The point made by Mr. Cochran which
calls forth this suggestion was his Illus
tration Of how one man bought a beef
steak from a butcher for dollar, how
the butcher bought a knife with that
dollar from cutler, how the cutler
bought something else with It, and how
II bought and paid for ten different ar
ticles In one day. Now. said Mr.. Cochran,
if the activity Of that dollar had been
multiplied five times it could just as well
have effected fifty exchanges. and he
asked how those exchanges could have
been facilitated If there had been five,
ten, or twenty dollars instead of one?
They certainly could not have been, since
one dollar did the business and that was
all that was desired
The deduction from the illustration,
therefore, is that when there is enough
standard money to answer the needs
for standard money, any more standard
money is simply waste of the raw mate
rial (and it can easily be shown TO be
most harmful waste by encouraging rasn
speculation rather than legitimate bust
ness. 1t is a misappropriation of capital.
This ought to take rank as demonstra-
ton.
Now what is enough standard money
is a question that depends upon number
Of conditions, because there are number
of sui stitutes for money that perform the
part OF its handmaiden. and they perform
that part far more satisfactorily than
money itself can. They piece out the
standard money. therefore, and all that
we want is an amount Of standard money
which, when added to the substitutes,
make the two together equal 10 the de-
mand for a medium of exchange.
In a state of nature "A great deal of
standard money is wanted If there is
much trading, because there are no sub
stitutes for money then. But as civiliza-
ton progresses methods for making ex-
changes of commodities without using
money develop, and these proportionately
decrease the necessity for money. The
chief amongst these are the rapid trans
portatiCn of freights and passengers by
railways and steamboats,. the quick
transmission of intelligence by the mails.
the telegraph and the telephone, bank
promises to pay money on demand (what
we call bank-notes), transfers of credits
on bank ledgers dhe credits being usually
secured by collateral pledge of the COM
modties to be exchanged as when drafts |
are drawn with bills of lading attached. |
notes of merchants, and other negotiable |
securities.
The result is that where all these meth |
DDS exist in abundance. very little, if any, |
money is wanted. Commodities are eX- /
changed through the instrumentallity of |
these, which ii is more convenient TO use |
than money. The quantity of standard |
money which a country needs depends
then absolutely, first, upon the amount of |
trading that II does. and, second, upon its |
quantity of modern substitutes for money.
And this becomes perfectly evident upon |
considering the nature of business. Bust
ness is not, as so many men suppose,
a purchase and sale OF commodities for
money. Business is at bottom an eX-
change of commodities against commodi-
ties which we put through the forms of
purchases and sales for convenience.
Since these exchanges can be made far
more satisfactorily by transfers of credits
han by delivery of money, it follows
hat as the money substitutes are abund-
ant the need for money diminishes. But
n society destitute of these substitutes
for money actual money is very necessary
10 business. That we admit
This would lead our correspondent to
argue that as the people who live in the
are sadly destitute of the facili-
ties we have spoken of. much money is
necessary for the transaction of their al
fairs. But if anything can be said to be
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