The true northerner. [volume] (Paw Paw, Mich.) 1855-1920, 1895-05-10
The Function Of Money.

The function of money is, primarily,
its use rs an instrument of barter-its
purchasing power. Out of the system
of credit purchases and the consequent
debts grows the secondary function of
money-its debt paying power.
Now in order To be sound currency,
our money must possess both the prin-
AIRY and secondary function. The prlm-
AIRY use cannot be wholly delegated to
money by legislation. True, the fiat of
the government has limited power.
National credit is sufficient To give ire
deemable paper money, issued in llmi-
ted quantities, IA purchasing power equal
to gold and silver with their intrinsic
worth But the national credit can be
exceeded, just as an individual can
issue more checks and notes than his
credit will maintain. Indeed in the
very inception of the greenback the
government credit was SO strained that
it took So 80 of the greenbacks To equal
S1.OO of gold in purchasing power.
The secondary function of money, the
debt paying power, is wholly matter
of legislation. No creditor is obliged to
take money in settlement Of "a debt ex-
cept that which the law makes legal
tender for debt. If the United States
government so dictates, 1t is doubtless
powerful enough to force the creditor
classes to accept that in payment of
debts which would be absolutely worth
less in purchasing power except as
those who were themselves in debt
were willing to barter for the stuff to
use in balancing with their own credit
ors. There is a class of iinancers(O
who lose sight entirely of the primary
function of money-its purchasing pow
er, and work upon the minds of debtor
classes with plausible talk concerning
the easy payment of debts.
In the time of deprecated greenbacks
during the war, the creditors suffered
would pay as much Indebtedness as the
as the dollar of gold, while it would
purchase less than half as much of any
commodities. In the last few years the
debtor classes have suffered severely
because all monetary legislation has
tended to enhance the purchasing pow
er of the dollar, which of course has
been detrimental to the debt paying
ability of the masses.
There is not the slightest doubt AS To
the power of the government to open
the minis to the free coinage Of the silver
of the world ratio of Is to and to com.
pei the creditors to take the dollars thus
made. There is, however, room for
very grave doubt as to whether the
credit of the United States is sufficient
to legislate 80 per cent of purchasing
power to this amount of silver. The
American debtor is, as a rule, an hon.
est man aud desires to repay fully all he
owes, and does not ask IA deprecated
dollar with which to pay AS we
have said i'm former articles on the
financial question, the only thing
to be determined is whether
opening the minis to free coinage at IL
to l would or would not drive gold to a
premium, then To Europe and put us on
practical monometallc basis of sill
yer. The NoRTHERNER fears such
would be the case. A ratio of 20 or "a
to l would doubtless make the venture
safe; limiting of the free coinage tc
the product of American mines would
perhaps, be II wise restriction and a
measure of protection to an American
industry at the same time. An in
ternational agreement between several
OF the great powers as to the ratio of sill
YER coinage, free at the minis of all, is q
thing that now looks probable, anC
would be the most stable and satisfac
DRY of all.
Silver is bound to be remonetzed in tn,
United States. Silver as "a basic money
metal is needed in all Europe and tn,
people there feel the need and demand
the money The basis of the ret urn oil
silver is alone to be determined in thi:
country, and the NoRTHERNER only de
sires that the return may be mai,
in such way AS to aid the debtor
protect the creditor and maintain the
financial honor of the United States.
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The administration is worried owe
the prospect of another bond issue il