The Breckenridge news. (Cloverport, Ky.) 1876-1955, 1895-06-05
Senator Jones on Foreign Trade.
The Ratio of Exchange Is In Pro-
portion to the Purchasing Power
of the Units of the Money In
Each Country.
THE OBJECT OF MONEY.

The advocates of the gold standard
lay great stress upon the necessity of
our money being as good as the money
Of any other country
Yet we know that with given
amount of gold we can buy twice as
much labor in England and three times
as much ON the continent of Europe as
we can in this country. How, then, can
any comparison whatever be made be-
tween the moneys Of the respective
countries, and is it not absurd to talk
about the money of this country being
kept as good" as the money Of any
other country?
The value of money in any country is
based on its purchasing power in the
country of its coinage or issue. Any
person in one country who wants the
money of another country can buy and
must buy that money with such goods
as he may have and at such rates as it
can be got for, measured by the prod
ucts of that country.
If man abroad wants to buy some
particular product in the United States,
he will purchase the money Of the Unit
ed States with that of his own country,
and with our money he or his agent
will buy and pay for the product of
which he is in need In other words, he
will buy bill of exchange on the Unit
ed States. The very purpose Of bill Of
exchange is, as it were, to transmute the
money of one country into that of an
other. AS to any two countries, the
money of either will, to the full extent
of the export trade of that country, buy
ON absolutely equitable terms the
money of the other country, of no mat
ter what material the money of either
may be composed. The ratio of the two
moneys in exchange will, of course, be
proportioned to the purchasing power of
the units of the two in their respective
countries
This rule holds good no matter how
poor country may be. Even i'll the case
of bankrupt governments it holds per-
fectly good.
For instance the money of Turkey,
whose bonds are worth little or nothing,
is as good in London as in Turkey, up
to the limit at which English merchants
have to pay for goods which they have
bought from Turkey, minus, of course,
small percentage for exchange and
charges, as in the case of the money of
any other country.
Or, again, suppose there were in Lon
don sum in japanese yens equivalent
to 10000, 900, and that 10000, 900
yards Of japanese silk were imported at
shillings a yard. That money would
pay for them, and after deducting a
small charge for exchange would, al
though not legal tender in England,
have in London all the value it had in
japan.
The money of this country will like
wise, on terms absolutely equitable, buy
the money of any other country to the
extant of our exports Should there be
an excess of importations from gold us
ing countries over expectations to such
countries, there would be a small pre-
MUM ON exchange.
These are matters for adjustment be-
tween exchange dealers and those who,
without foresight, send goods here from
abroad to DO sold in our market, OF who,
living here, buy abroad more than can
be paid for by the exports of our own
country. Losses of exchange should not
be made TO fan ON all our people, but
only ON those who are responsible for
them. Any country that has balance
of trade in its favor can always to adj
vantage get so much Of the money of any
other country rs it may need.
Want Of Parity No Obstacle TO Foreign
Trade.
The absence Of parity between the
moneys of nations does not affect their
foreign trade, as some would have us
believe. / challenge any gold standard
person to point to an authority of re-
pute ON political economy who anywhere
pretends to assert that any nation hav-
ing money other than gold is or can be
injuriously affected in its business or
other relations by any variance in what
is called the parity of moneys. The
money of this country, whether gold,
silver or paper, will always command
will always purchase-upon equitable
terms, the money Of any other country
with which we have commercial rela-
tions, whether those relations DO direct
lywith itself or through other countries.
Bank Of England notes will at any
time and at equitable rates of exchange
buy the money of any other country
with which England has commercial re-
lations, direct or indirect Whyl Not
because they are payable in gold, but
3 because they will command commodities
Kin Great Britain The ultimate object
OF money Is 20 command goods--to pur-
chase commodities Money is an order
for goods in the country of its coinage
or issue, guinea, as Adam Smith says,
being nothing more than IAN order for
goods ON all tradesmen in the neighbor-
hood. " Any form Of money that viii
command commodities in Great Britain
can, therefore. in any country OF the
world be exchanged ut equitable rates
for the money Of other countries. be-
cause almost all countries have com
mercial relations with Great Britain