Evening star. [volume] (Washington, D.C.) 1854-1972, 1895-05-08
Mr.. MORTON on FINANCE
The Secretary Writes Letter to a Critic
on His Recent Interview.
The Two Men Differ on Historical and
Logical Points-HOw the Bulk
of Business is Done.

Secretary Morton of the Department Of
Agriculture has written a letter to Mr..
James Cherry of Denver, Col, replying to
some criticisms from Mr.. Cherry on Secre-
tary Morton's recent interview on the
financial question. MIR. Morton says:
From your letter of April %, 1895, it ap-
pears that you and l perfectly agree in the
fundamental point namely, that demand
and supply incxorably regulate all valua-
bles whatsoever, at all times and in all
places AT what points do we begin to sep
arate from each other and then go on to
conclusions utterly diverse? These
points are only two-the first historical and
the second logical.
j. You assume certain propositions to be
true of silver, which are not historically
true at all. but quite the reverse of true.
You say, for instance, Until 1878 the chief
use of silver was for coinage. 1t had other
uses, but the demand for it for coming
purposes was steady and constant" On
this point you have been monstrously mis-
informed
Demand and Use.
Mr.. Morton then reviews at length the
history of silver money and says:
You employ over and over again in your
letter the two most common logical falla-
cies that enter into the speech of argu-
mentative men everywhere, namely, put
ting cause into the place of effect, and as
suming that because one thing happened
after another in point of time, therefore 1t
was the result of that other.
Let us look candidly together at the two
or three instances of this, taken almost at
random. You ask, What creates demand?"
and answer Use" 1 ask, in my turn,
What creates use? and answer, Demand.
Why is it that there is so little use of
silver dollars in this country today, while
there are millions upon millions of them
lying idle? I answer. confidently. because
there is no adequate demand for them.
Have you not innocently, but badly, mixed
up cause" and effect" in this case? De-
mand in the commercial sense is nothing
but desire fer something on the part of one
man, coupled with his willingness to pay
something for it satisfactory to another
who owns it. Use of that thing, no matter
what it is, only follows the demand for it.
You have helplesSly put the cart before the
horse. What is it that binders the unlm-
tied circulation among the people of silver
dollars here and now? There are such dol
lars enough already minted to pu. four or
five of them into the pocket of every man,
woman and child in the United States.
What is the matter with them that they
do not get there? What is the sense of
clamoring still for unlimited coinage"
when the treasury cannot get rid by hook
or by crook of a 1.-THE of those already
coined and lying in useless heaps? They
are well minted, of just weight, nine-tenths
legend, In God We Trust" What ails
them? l answer. and so must you on re-
Election, there is no demand" for them,
and therefore no use of them. What
more can the law do for them?
Essential Service OF Money.
at may be, my dear sir that in your
study of finance you have overlooked, in
whole or in part the momentous fact that
all but mere fraction of the worlds COM
merce is mediated by instruments of credit,
and not by metallic money at all, whether
Of gold or of silver, and that by far the
most essential service of money in this age
of the world is to furnish a steady meas
ure (as steady as possible) of other val
uables, and so help TO exchange them to
the profit of both parties without any act
u3l use of a meGifting mcney. BY the sale
of international bills of exchange at all
great ports of entry, payments in foreign
trade are practically accomplished without
the use of any money at all. In the whole
sale business of this country by means of
checks drawn on well-known banks and
settled through the clearing houses. not far
from % per cent of all payments are eff
fected without any actual use of coin. Mr..
Eckels the present controller of the cur
rency, has made it probable by careful in
quiries instituted through his department
that about 80 per cent of the retail business
also of this country is achieved by means
of checks drawn on local banks and cleared
by the banks with very little use CT coin.
The relative employment of these instru-
ments of credit is constantly Increasing
through the multiplication of banks and
otherwise; and. of course, also, the guam
tty of coin money required to do the bust
ness of the world, or of any advanced coun-
try in the world, is steadily decreasing rel
atively to the business done.