The Breckenridge news. (Cloverport, Ky.) 1876-1955, 1895-07-03
The 0uantltive Theory Of Money
Value of Dollars as Compared
to the Number Issued.
n Money Were Of Unlimited QUAINT
ty, It would Have No Value.

bra oh of it, IL men are to endeavor to
for, , conclusions to fit some precon-
col ID theory without reference to prin-
dip g, is that which relates to money.
Tn persistent determination to make
the whole science subordinate to the alb
sur tiles Of the gold standard has oper-
ate like Westinghouse brake on the
pre- .ress Of the civilized world.
Bat there is one principle Of monetary
science that, if held steadfastly in view,
wi constitute an unerring guide
TIN Ugh what would otherwise be path
Of lextricable difficulty.
nat principle is that the value Of the
uni Of money in any country is deter
mi ID by the number Of units in circu-
lat N. In other words, the value Of ev-
cry dollar depends on the number Of
dollars out.
Tho greater the number Of dollars out,
other things being equal, the less will
be The value Of each dollar; the fewer
the number out, other things remaining
the same, the greater the value of each,
and this without any regard whatever
to the material Of which the dollars are
COui COoCu- 1ulb 40 tllo htg W lH0 luuu-
ola situation in the United States.
Much more, it is the key to tho financial
situation in every land. Without this
key it is in vain that the student at
tempts to unlock the door leading to the
rcnuum Of monetary knowledge. Un-
like many of the locks made by man,
the leck ON that door is unpickable.
The household Of science is ono that
thieves cannot break through and steal
He who would enter must first find tho
key. With this key in hand, the most
secret recesses may be explored with
confidence. Without it, the student trav
els in q circle, returning after much Ia
Dor to the point from which he started
upon his journey. Like one in q maze,
when most confidently expecting to find
his way out he but sees himself coming
mp against impossible barriers.
II money were unlimited in quantity,
1t would have no value whatever. Moth
ing has value that is unlimited in guam
tity. II instead of sand the ocean beach
were strewn with gold dust, it would
have no value whatever as a commodity.
Yet il that gold dust were taken up and
coined into pieces Of money, the number
Of such pieces being limited they would
have value precisely as goldpieces have
value today. And, ON the other hand, as
Adam Smith says, if gold should reach
C tain degree of scarcity, the slightest
bit 4 it might become as valuable as
dia rond.
s. absolutely clear are the leading
VIZ rers that the value Of money unit is
in Jery case, other things being equal,
DEF -mined by the number of units out
an' does not depend ON the material Of
VIII n the money may be composed that
the have not the slightest hesitation in
as ting that the rule applies even to
I'M vered paper money, so that the value
Of ;ery dollar Of gold and silver in cir
cul ion Is diminished or increased ac-
cor ing rs the quantity Of paper money
is creased or diminished, and, recipro-
cal us TO all of these, the increase in
thC lumber Of dollars Of either kind di-
mi ishing the value of each dollar Of
tho others, while the decrease in the
nu Der Of either increases the value Of
eaC Of the others, without the slightest
rel I'd whatever TO the material Of which
cit n Of the dollars is composed.
}. this be so, il the value Of the unit
Of loney depends not on tho material Of
tn, dollars, but ON their quantity, what
be, mes Of the gold standard? II this be
80, nasmuch as silver has been utilized
as 1oney since the dawn of creation,
VII abandon IL now, unless senators are
pre- AIRED to abandon the automatic sys-
ten. altogether II we must by legisla-
tion compel a change in the value Of
money, why legislate so that it can
change in ono direction only, and that
the direction which is always favorable
TO the classes that lend money and live
idly on their incomes, the direction most
injurious to society, most fatal to indus
try, most narcotizing TO energy?
Tho idea that the value Of a treasury
note issued by a government such as
ours is not based on the number issued,
but on something behind the note, or
upon the credit Of the government, de-
foI AIS the whole idea Of money. 1t is
cit q TO because people have been accus-
toned TO look upon money rs something
Of intrinsic" value, and ON that theory
tufl haNo Dtcu NJ u iOnS W tcCOuub AOt
the fact that uncovered paper dollars,
when sufficiently restricted in number,
have precisely the same purchasing
power a. gold money, quantity for guam
tity. There is no question Of credit
about 1t. No man takes a piece Of money
Of any kind, whether gold or silver or
paper, as a piece Of credit II il is not
legal tender, II is not, in the true and
full sense, money at all; II full legal
tender, II needs nothing behind it but
the law which makes il legal tender
for all debts and demands, and regu-
lation OF its quantity, 10 maintain the
monetary unit at any desired level Of
value
1t Is not the credit, but the power Of
the government that Is behind IL in the
law Of legal tender and in the right to
increase or diminish the issues Taxes
are payable In money, and debts are
payable In money, and the only way
that people can get money with which
10 pay debts or taxes is by competing
with one another for II In all the occu-
pations Of life. It Is this universal COM
pet ton 10 get Il that fixes the value Of
all kinds Of money, as IL Is competition
that Axes the value Of all other thingA
In this work OF competition the number