The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1895-02-02
RATIONAL FINANCIERING.

| HERALD by correspondents and EDITORIAL.
under the above heading. The discussion was
purposey provoked in the hope that it would
secure the consideration of the subject by
practical business men, who, as Presiden
| Cleveland says in his last message are as free
as possible from the Tyranny o
| preconceved opinions and who look
| at the financial question mainly
| from business standpoint The result is
| what was expected. business men have offered
ideas and suggestions on the subject that in the
main were sensible and worthy of place in
| the great consensus of views OF the Americ an
people that the press is new taking.
All believe that present complicated
financial system is radically wrong; that it is
founded on and is pervaded by some principle
that makes it d constant worriment foe fear it
will collapse in a panic witch it actually does
altogether too often. The fatal defect is con-
nected with paper money and especially with
its redemption in coin.
For years we have believed that just as soon
as our people suffered enough from this false
money system to induce them to give the SUBJ
ject their serious attention they would, after
a few years of thought on the subject, devise
true syste m and that this would be not done
by the wise few nor all at once, but by the piece
meal suggestions of the co mmon people; grad
ually wrought into far better system, whose
main characteristic will be its simplicity. The
discussion already had snd the stage it has al
ready reached in the public mind, tend TO con-
firm this view.
Two CORE pondents have made a suggestion
that we dean worthy of further consideration
because it is in line with what is said above
1t is this: That the volume of paper money be
kept at that amount that will remain at par
without any other redemption than being the
only money receivable for public and private
4.
legal tender quality and left to take their
chances for va ue as the universal money OF
the world.
One of these CORRESPONDENTS 1t appears has
elaborated financial system based on this
idea and supports it by an argument to show
that it is the true principle on which all money
should be made and the same on which gold
and silver have been made to serve mankind
as money so well since the infancy OF the race.
His argument in brief is that there is in every
nation use for some amount of money; that
use alone gives value to money as to every
thing else. and that that amount OF use for
money will itself keep that amount of money
at par that gold and silver being the univer-
sal money of the world supply this demand for
money as far as they will go. but If any nation
has use for more money than their coin will
supply they may use paper to the extent of the
use remaining unsupplied by coin and that
use will give value to the paper
as money, the same as like uses gave value to
their col The only things necessary to give
this paper value as money equal to coin are to
make it available for these remaining unused
uses and limit the quantity of pape, to their
supply. This it Is proposed to do MS follows:
The government to issue paper as money, and
while it makes no provision for its redemption
in coin yet to pledge itself to keep its volume
so adjusted to the needs OF business that it
shall always be al par with gold; make it the
study OF the administration to see that this is
done by lessening the amount in circulation,
in case paper goes below par, by issues of
bonds for paper only, at such rates OF interest
and on such terms as shall be found necessary
to call in the surplus paper and bring what re-
mains outstanding to par.
To prevent this paper from ever going below
par, give it all possible uses; make it the only
legal tender between private parties and the
only money received or paid out by the gov
eminent for any purpose whatever.
As for gold and silver. give each free and un-
limited coinage but take away from both all
legal tender quality.
This whole plan rests on the idea that use
alone gives value to money-gold, silver and
paper alike. 1t follows, OF couse. that paper is
tself then real money as coin, and there
fore needs no redemption any more than coin.
The reason is, that 1t has in itself the intrinsic
value of the uses that can be made OF it, the
same Us gold and silver each has in itself the
intrinsic value of its uses. And there is no
other intrinsic value in money. The intrinsic
value of gold and silver, as metals, adds moth
ing to their value as money. Such value is
given to them by their natural uses as metals,
and not by their artificial uses as money.
This plan OF making paper money seems to
be the application to paper by statute law of
the same process that was applied to gold and
silver by the use of mankind so universal as to
amount to a law. That is, business requiring
money for its convenient transaction, these
substances are designated to supply them and
Immediately these business uses tand of course
their values) become attached to those sub
stances, giving them their money value.
We would be glad to see this plan further
discussed G.
Los Angeles, January 3oth.