The times. [volume] (Richmond, Va.) 1890-1903, 1895-02-06

that 81 the necessity arose business wouid
provide the means. Business ~ never 90
ing TO allow Itself to be stined anu
afrothered Tor want Of signs and en-
bler.s. Mr. PurkIns may rest periecuV
assured OF that. These VIII be forthcoh-
ing when the necessity for them arises
Mr.. Purklns viii never understand TINS
matter until ne ribs his mind OF the run
danentat error. shared with him By about
pIno-tenths Of the people OF virginia, that
business and traffic CONSIST OF purchases
and sales for money. Business Is noth-
ing of the sort Business Is exchanges
OF conn cd.tes. which. for convenience
sake, arc put through the forms OF pur-
chase and sale. but this is only formal.
At bottom the transactions are swaps OF
commodities. These formal sales are I'M
menseiy facilitated by transfers Of cred
iig. the great bulk OF which are at bottom
secured by the commodities to be snapped
as collateral security. and We divide THESE
credits up according TO the standard dol
lar. and assign so much Of the credit as
- Ut-iiN-dlF ~ flfNt a A4Hh"n"'f'N''' 49,
only part played by the dollar in such a
transaction IS to cut the credit up into the
parts 70 be assigned
We VII illustrate this: \ commission
merchant in Richmond. who has no capt.
tai. learns that a tobacco buyer in New
York will give $1,000 for certain guam
tty Of Il certain kind Of tobacco. lie
knows four farmers who together have
that quantity Of that tobacco that he
can buy for $500 He goes TO his bank in
Richmond about IT, and the bank agrees
that it will enter a credit TO his account
on it's books for $1,000 u he will draw on
the New York man for that amount, at
taching to his draft bin OF ldding Tor
the tobacco. In this way he gets the use
OF a thousand dollars to work the trans
action. and the bank gets the security
Of the tobacco. He then gives each farm
er a check for 800. the transaction is
completed. ne has made $500, and not
dollar Of actual money has been used.
Put what do the farmers DO with their
checks? They deposit them in bank, and
then go to merchants who have for sale
what they want. One. peraps. goes to a
representative in Richmond Of a Chicago
meat firm, and buys 500 worth Of bacon
for his hands He pays for this bacon
By giving to the agent Of the Chicago
firm check on the bank. Now 1t is
plain that, with all these purchases and
sales, the only real thing done was to
swap some tobacco for some bacon. But
let Us follow the transaction still further.
The meat merchant deposits the check
in his Richmond bank and sends TO the
Chicago meat merchant a check on his
Richmond bank in payment for the meat.
The Chicago merchant deposits that
check In his Chicago bank for collection.
But another Chicago merchant has bought
some tobacco from another Richmond
seller, and has given him check in pay
ment on his Chicago bank. The Rich.
mond merchants check on the Richmond
bank meets the Chicago merchants check
on the Chicago bank. the two are ex-
changed and the Richmond tobacco mer-
chant has the credit in the Richmond
bank transferred TO his account in pay
ment for the tobacco, and the Chicago
man has the credit In the Chicago bank
transferred TO his account In payment
for his meat. But not dollar Of money
haa been used.
Let us now follow the other end Of the
transaction. The New York merchant
who purchased the 81. 900 worth Of tobacco
paid for it by giving the Richmond bank
a check on the Ednk of New York. when
gave the Richmond bank credit in the
Bank Of New York for that amount. Now
at tLat time one of Richmonds dry
goods merchants owed a New York i'm
porter $1,000 for dry goods he had pur-
chased. This dry goods merchant had no
money, but he had four notes of good
customers Of his for $50 each. lie took
them 10 the Richmond banl; and got a
discount ON them Of 81 900, less the inter-
est. The Richmond bank gave him for
this a draft on the New York bank
against what the tobacco merchant had
deposited, and this was sent to the New
York importer. and the credit which had
been to the Richmond bank was trans
ferred to the dry goods importer. Mean
while, when the Richmond dry goods
merchants four notes were paid. the
Richmond bank got back the money
which 1t had originally advanced TO the
commission merchant. and the substance
of the matter was that the tobacco sent
from Richmond to New York had been
snapped for some dry goods.
Now Mr.. Purkins must see that in all
Of these varied transactions the part
played by money was nominal and formal
only. The transactions we're purchases
and sales i'm name only. The real tranSac-
tions were swaps Of credits. The only
part played by money was in operating
as a standard Of value, to furnish
basis upon which commodities could be
exchanged. Mr.. Purkins ought to see,
therefore, that the important thing in
business is not quantity of money, bat
money that has a fixed and unvarying
value, so that ii may be a standard tor
exchanging commodities that never
varies He ought TO see therefore. that
free silver, with its fifty-cent standard
for money. utterly destroys business ana
makes exchanges impossible.
If Mr.. Purkins will only reflect httle
he will see that by applying these prin-
ciples he can exchange his inch planks
and hay fof The Times. He can make
them the basis OF a credit in bank. ana
assign TO The Times Company. by
check. a part Of that credit. which The