The times. [volume] (Richmond, Va.) 1890-1903, 1895-05-29
HOW TO SECURE SOUND FINANCE
IIKsT Ar lIlLE.

United States the fullest and freest OPP
portunities 10 make use of their property
energies. ard intelligence in the way that
VIII be most profitable 10 them, and we
begin the subject this morning With this
article.
We must say al the beginning. that
IT IS useless for any one to attempt to
follow us unless he gets this prime fact
in his mind-to-wit., That business is
not sales for money, but exchanges Of
articles put through the forms Of sales,
hut none The less exchange Of articles
at bottom. That the use Of money Is 10
measure the value of one article against
the value of another. so as TO determine
the basis upon which they are to be
exchanged. and that the ali-important
! fact in that connection is that that money
shall be kept in a position as nearly
fixed as human Institutions can make
il.
When that idea is clearly fixed in the
readers mind. he will be in condition
to follow and appreciate what we have
to say. But all we shall say is thrown
away upon the man who fails 10 catch
and fully appreciate that great founda-
ton fact. II is Of no consequence whe-
Their that standard Of value is silver or
gold. or silver and gold provided it Is
kept always as one standard so that
a man shall know that the word dollar
means exactly the same thing as a pro-
duct of labor. whether a silver dollar is
meant or a gold dollar Is meant The all
important thing is that dollar shall
have fixed meaning. expressing always
the idea of a certain amount Of labor
performed
With this accepted as a base fact we
shall examine the laws which govern the
possibility Of paper currency aiding men
in emecting exchanges of commodities and
transacting business generally. and we
shall commence that examination by fun
and complete history of the subject.
In doing this we shall only concern our
selves with the worlds financial system
since it emerged from the dark ages. And
II must be understood that until compare
lively recent times the world (and we
include in the world for this discussion
only Europe and the United States, used
coin almost exclusively for money, and
made no use of paper in its money sys-
TEN, except bills of exchange. Prior TO
100 there had been the Bank Of Genoa
the Bank of Venice. the Bank of Am
sterdam. and the Bank of Hamburg. But
these institutions had done very little
cipal business had been receiving and
keeping deposits Of money and transfer
ring credits on their books in obedience
to the commands of foreign and inland
| bills of exchange
We will be asked if we mean to say
that governments had made no issues of
paper money prior to 1900. and we reply
that is practically the fact. Prior to that
time .he circulating notes Of both
governments and banks were prac-
tically unknown. The French gov
eminent had made the disastrous
experiment about IT'S that John
Law induced it to embark in. but the
thing went on for only few years. and
collapsed utterly to the complete disgust
Of France and all the civilized world
The experiment is. therefore TO be class
ed with those exceptions that proved the
rule.
The actual fact IS that paper currcncies
have grown up since 100. This was true
OF continental Europe, but much more
emphatically so Of our own ancestors
in Great Britain Indeed. one of the
cardinal principals of English instiiu-
tons was an emphatic condemnation Of
the idea Of a paper currency. The COM
mon law of England thought the trans
ference of paper promise TO pay money,
what il called a chose in action, a most
reprehensible thing. as it tended to pro-
mote litigation and feuds amongst neigh
bors. and it made the thing impossible.
| The English courts. in Difference to the
demands of merchants and traders. con-
sented TO allow a custom of assigning
| bills OF exchange from one person to
another 10 grow up but the custom
was winked at only. and was always said
10 be in derogaton Of the law of the
land. 1t was not until the reign Of Queen
Anne that a promissory note could be en-
dorsed over from one person TO another.
and then II required an act OF Parliament
TO authorize it 10 be done.
The Bank of England was established in
1921 II at once began to issue its cir
culating notes payable to the bearer. and
then men began TO see the i'm
mense service TO mankind OF which
paper currency redeemable on
demand IN coin-in the unvarying
standard OF yalue-was capable. They
had already learned that one dollar 1--WE
use The word dollar for convenience
could do what was apparently the work
of many dollars by being transferred
| from hand 10 hand. and they were now
TO learn that ptomisc to pay dollar
would do that dollars work just as eff
| ciently and as satisfactorily as the dollar
Itself. u perfect confidence were always
maintained that person could get an ac-
tual dollar from the issuer Of the promise
whenever he chose to demand II.
! Modern paper ucrrency. then. may be