Mexico weekly ledger., 1895-03-21
Money. Currency and Banking.
From Hsrper Weekly.

DUsIiltEB. A1SihCd Az ~ l4AN ~ SNN
by weight, as coffee, tea or sugar is
sold. Men collect coins, it is true.
Some coins are artistic, while others
have historical or antiquarian interest;
but a sovereign or a dollar, considered
as money, has merely the power Of
purchasing articles which men need or
enjoy. a nan might possess a bank
full of money, but he would go hungry
or naked for all that if there were no
food or raiment for him to buy with
his store.
Money was invented for mems con-
yenience. All great economic truth is
essentially the same wherever it Is
applied. The same laws govern the
small trading of the simplest com
munity and the large and complicated
transactions of countries like the
United States, Great Britain, France
and Germany. The great fundamental
truth about money is that it must not
be doubted. A coin piece should have
| definite value, a universally recognized
significance. When it does not mean
the same thing to the man who sells as
to the man who buys, it ceases TO be
| able TO perform its functions perfectly.
In a small community there is a man
| who grows wheat, another who raises
| sheep and clips them for their wool,
one who is a butcher, n who makes
cloth, one who is a tailor. If barter
prevailed, the farmer, when he wanted
a coat, would be obliged to carry his
| wheat, after it was grown, to the tailor
and exchange it for a coat. \ good
| deal of time and labor would be wasted
in this process. But if the tailor hap
pened to be supplied with all the
wheat that he wanted, the farmer
would be in a still more uncomfortable
plight. He would be obliged to carry
| his wheat from one neighbor to an
other, until he found one who wanted
| his wheat, and who had something to
| give in exchange which the tailor
wanted. Then he could procure his
coat. Money does away with all this
trouble. 1t facilitates exchange With
money in his purse, the farmer would
| give the tailor the price that he de-
manded, and the tailor would accept
the money because he would know
that at any time it would procure for
him, in whatever products he might
| desire, the worth of the coat which he
had sold to the farmer. This is the
first essential of money, that the man
who receives it for what he has to sell
| shall know that it will always and any
where procure for him just as much
value as that with which he has parted.
In a community where all the people
know and trust another almost
anything might pass for money. But
when any member of the community
wanted to buy something in a neigh
boring village where he was not known
he would be obliged to offer his pro-
| ducts in exchange, or money in which
the person of whom he wished to buy
had confidence.
This is why money must have in
trinsic value. There are various kinds
of money or currency, money and cur
rency being confused along with other
things that go to make up the mystery
of finance. Money itself is real. Cur
rency may be merely a representative
of money. We are coming to the con-
| sideration of that point in another ar
ticie. Money is coined metal, ana it is
necessary that it shall be composed of
material that is valuable in itself; that
lis, which can be melted down and sold
for osher coin or products for very
nearly the sum which is expressed on
its face, and that its value shall be
| stable. AS it is the instrument with
which exchanges are carried on, it is
| standard of value. 1t is that in which
| the farmer expresses the worth of his
wheat, and the tailor expresses the
worth of his coat. Some modern writ
| ers on finance, whose books are circu-
lating Just % in various parts of this
Ecountry, are denying this attribute to
money. But this is n of the paths by
which men wander away from clear
reasoning into the haze of the "cur-
rency question" 1t is sufficient for the
mind that is trying to get at the truth
to remember that we say in u COM
mon speech that a bushel of wheat is
worth a certain part of a dollar; that
it used to be worth a full dollar; that
| a house or a horse is worth so many
dollars; and that we can crafty our
desire for any article of merchandise
only by giving for it as many dollars
as its owner believes will enable him,
in turn, to procure something of equal
value that he desires. Therefore it IS
essential that the significance of adol-
lar should be definite and certain.
Moreover, there cannot be dollars or
sovereigns made from two metals that
not only differ in value, but one of
which is frequently changing in value,
so that no fixed relationship can be
established between the two.
Suppose, for example, in the simple
community which we have imagined,
that a dollar in gold "a intrinsically
worth 100 cents, and that the dollar in
silver vas worth 80 cents, both being
legal tenders, would the farmer like to
sell a gold dollars worth of wheat for
a silver dollar? Would he not know
that his wheat would thereby be worth
less in coats or groceries, or any other
commodities that he might need? But
the tailor would pay him in silver, and
he, in turn, would pay the person
whom he owed in the cheap metal.
The gold would be boarded and sent to
the neighboring village where it vas
respected, while the people of this
n~eighboring village would scrap to-
gether all the silver they could find in
order to pay their debts with it to
those who accepted silver as current
money. The consequence is that silver
would grow cheaper and cheaper; it
would buy less and less; finally the
neighbors of those who employ ii as
money would cease to trust them, the