The times. [volume] (Richmond, Va.) 1890-1903, 1895-12-07
HOW TO sECUn A SOUND CChhINoi
SECOND ARTICLE.

NOW TO sFCUnE A SOUND W
SECOND ARTICLE.
II must be borne in mind that IN con.
s,dering this subject we have 'houe"' ="
nscessary TO explain It's elementary pm
80 ord we must therefore ask par
anr for dwelling a moment yet upon 'ho
fret and leading one that business ~ eA
change of commodities erected thfo"e"
IN exchange of credits, ana hot Pun
chascs and sales for money anu ',iiS
&c viii now illustrate. Richmond cry
coils a great deal of tobacco ana enc
huvs many dry goods. tooaccoh's'
s.nas a carload of tobacco 10 New forh
and sells IL TO an exporter for slVV' VINO
NAYS for IT with a check on the bahA
- Nsw York. which the tobacccnist oe-
,os,,s in his Richmond bank for coliec-
ton Richmond dry goods merchant
has bought a thousand dollars Wort"
A., Goods from New York i'm
ne,tcr. He goes to his Richmond bank
-, ,a, exchange on New York 10 pay
with. The bank sells him the TOBACCO
nist's New York draft, puts the pro-
ceeds. less charges to the credit OF ,he
tobacconist. who has thus cohec'eu me
ar.f, the dry-goods man sends the draft
to the New York importer, ana the circuit
which the tobacco exporter hau hau 10
transferred to the dry-goods importer
Now Il is plain that all that mas D"on
done I'm this case is TO exchange some
tobacco for some dry goods, through inc
nomenclature OF money, but there was
M money used I'm the case. really. We
wish to illustrate this further. a man
has a valuable dwelling on frahkhh
street, and HIS character is OF the Dest
with his bank president lie porro"s
81 600 on the credit OF his house. puss
tobacco with 1t. sells the tobacco Tor VI
100. reinvests in tobacco, sells again. anu
after five or six transactions, he has
made $1,000 clear, with which he pays the
hank what he borrowed, has his house
free. and a business capital OF Sl,ow also
Now there has not been dollar oil
money used IN any of these transactions
The bank entered a credit for nm on
its books, he paid for all the tobacco
he bought with checks, and received pay
ments for his sales by checks, and his
entire business was transacted by as
signments Of credits, and yet he made
clear Sl,Oco. These transactions repre-
sent all large business in miniature ana
they show that ability to raise and trans
fer credits based upon property created
10y labor Is the all-important thing in
finance and this is proved in another
way by the banks. from which we learn
that more than 80 per cent of the trans
actions that take place through them
are transfers OF credits and not trans
actions with money.
In laying out these broad lines for this
subject, we must not overlook some OF the
finer ones. however. While business In
its large sense is undoubtedly exchange
OF commodities that can get on very well
with little or no morey, yet money IS
needed for change everywhere. II is need
cd for the retail transactions Of the cities
ard towns and for wages and # is need
ed for almost all the local affairs OF
the country people. These three items.
though footing up what is no great sum
In the aggregate. by comparison with tho
whole. yet embrace myriads OF small
separate transactions. and there must be
financial facilities adequate Tor their de-
nands. although each one is small In
itself A certain quantity OF real money
Is therefore indispensable. yet the amount
of real money need be nothing ike the
whole sum OF financial agencies required.
The blessed uses of credit come 10 the
rescue here also.
The experience OF man has taught him
that a paper promise 10 pay dollars Will
work all the exchcrgcs Of commodities
and perform all the functions of money
generally that money itself will. so long
A. the people who are called on 20 handle
them have entire confidence that the
maker OF the promises win give real
money for them whenever II Is demand
I'd. When, therefore. people are iefi
entirely un;rammellcd IN their right 10
make and put out these paper promises
(which are not and cannot be money.
whether put out by Government or by
individually. enough Of them viii always
he forthcoming. when asded TO the real
money POSSESSED 10y that people. TO give
every individual all OF the money or the
effective paper substitutes COR money
that his affairs reqairs Tho case comes
Gown then TO this. The great affairs Of
The business world are transacted by ex-
changes of credits. ana they want little
Dr. no money. Steam and electricity are
.heir money. The petty affairs OF life,
md especially amongst the country peo-
Die. require money or what VIII reform
he functions OF money. and, vhep credit
> unhampered, a locality w.ii issue oil
he substitutes Tor money, capable OF
performing all tho functions Of money IN
hat locality that IL has any need for
4 must be obvious. then. IL our argument
d TO this point v sound, that the popu-
az idea that the country requires great
iusntities Of money y an erroneous one.
4 naA1 - obvious that the ereat de-