The times. [volume] (Richmond, Va.) 1890-1903, 1896-08-23

1
| But let the make another ana a iurther
Illustration OF the idea IomJones ~ Co.
or Richmond sell ten cases or Hcorlce 10
| Podsnap a. Co. Of Wilmington. ~ -, lor
] 1900, which they ship at once 10 VII
| mington. Podsnap * Co, send 'hem theil
check on the First National Bank OF
| Wilmington for 1000. which Ionjones *
| Co. deposit t. their credit IN the rs.
| National Bank OF Richmond. Inc l"s'
| Naf.Snal Bank Of Richmond sehds ,hei'
| check to Wilmington Tor coi'cc,'o''
aud money must be sent back 10 !. u'',eSs
something intervenes TO prevent H. but
about that time Tinpan e. Co, OF Rich
mond, bought ten bales OF cotton rom
Jackknife * CO.. Of Wilmington. \. c.
! for $1,000. which was at once shipped 10
them, and sent them their check on the
First National Bank OF Richmond IN pay
ment. on the day POdsnap ~ 90 cnccA
reached the First Naional Bank OF WI
mington. Jackknife & co. deposited there
the check Of Tinpan & Co, on the First
National Bank of Richmond. consequent
~. instead OF sending the FIRST Nauona'
Bank Of Richmond $1,000 IN money 'he
First National Bank OF wilmington senl
them Tinpan e COS check on the -
National Bank OF Richmond lot f,'Vvu,
and thereupon the First National Bank or
WILMINGTON nut n the credit OF Jack
knife & Co the credit which Podsnap
Co had had with them. and the FIRST
National Rank Of Richmond put 70 the
credi, ~ ,rornionas & 60. the credit which
Tinpan & Co. had had with II. and lico-
rice and cotton were paid for the "hoie
Transaction was closed. and never yet
a dollar OF money was usep'
Now, the whole substance or thls trans
action was that wilmington. when want
ed icorice and had cotton 10 spars' s"ap
ned il with Richmond. which wanted cot
ton. and had llcorice To spare. IL was
done in this way. Tomjones ~ 20,
thought over the matter and concluded
that their ten cases Of licorice embodied
as much labor as one thousand go'd uo'-
lars embodied. and they SAID they W'le'
therefore, worth $1,000. .Jack-khlle ~ ~
did the same about their ten Dales o. w
ton. and came 10 the conclusion tIat ''ey
omhodied the same labor as Sl,VOr. ana
therefore. declared that they weHe "oi,"
81 O00 The purchasers OF each arucle
came tn the same conclusion, each drew
hts check for $1,000 the two checks met
IN the channels of exchange, the trans
actions were cancelled. and all that was
dons was that some licohce and cotton
had been evvapued between two localities
We see this principle illustrated upon
a large scale IN our dealings Win bnE
land. our merchants buy great gudh,'' 'tS
Of dry goods and other merchandise nun
ENGLAND. and her merchants Duy sre'.
quantities Of cotton. wheat ana corn anu
oil from us. Rills Of exchange are draw
upon each side 70 pay WIN lhcSe "'''.
az. broucht together and snapped. ana
the balance. whichever way IL IS 10 so'
is sent in gold.
This Is business. II is all done by eK-
changing commodities through the forms
OF sales. but there are no safes anu ~
actual money Is used. Money pays no
part In IL except TO make chahse anu
settle balances. 49,,
These credits. then, are TOT prao''C''
,nrnoscs the money with which the
business Of a country Is done. me cum
and circulating notes are only ior chahse
s,d notify transactions Now. confidence
il IN. basis on which credit rests. "hen
confidence is complete. credit VIII swe"
out 70 any proportion whatever. Nilen
confidence is impaired. credit contracts
as a bladder when the air goes OUT Oh IL.
TO put out great quantity OF SILVER uol-
lars worth less than 100 cents each u 10
introduce into business doubt ABOUT the
sense I'm which the word dollar Is useu
to raise a question as 20 when doildt -
,,,,nt- confusion enters a domain that
reo,,ires certainty above all else. Credit
hoai,s IN contract. and the financial sys-
TOM 10 at once deprived Of more practical
money bv this contraction OF credits than
all the minis in the world could replace
with deprecated dollars IN huhuree
wears OF hard work. Instead then' u.
free silver increasing the quantly Oh
money, Il would M once diminish 'ia'
nractical money with which the business
Of the country IS actually done 10 an -
tent that no human imagihallo" "a"
form any conception OF. At.
In Illustration of the soundness OF 'hs
ro,eoninr II is as we'll TO mention mere
mt banl, records prove that more than
n rer cent. Of the transactions OF Dusln'S
GRO affected through the transfer or cred-
us without the use Of n dollar OF money,
DETERMINING THE BASIS fON Ia
CHANGE.
now advance another step III otuei
N make these exchanges or commoui'ies
bv exchanging their credit values we nave
90. 10 cot some basis for determining
%. ,t, crcdft value Of each commodi-
g., &c We can't swap cotton for hard-
ware bv the pound. or saw logs LOT MooC
L., cloth bv the ward. We must swap 10y
values and we must have some Iheasui'
or standard FOR the value. HOW 90 we
This measure or standard OF values We
cot IL thus: We know that @.2 grains OF
oold what we call a dollar, requires. we
,,u eunnose the labor Of one man all OF
ono dav IN dig Il out Of the earth We
,ben fnd that il required the latnr or one
nan a whole DAY 10 raise bushel OF
vLoat We say consequently that
huebol ~ wheat Is worth one dollar TOT
tho rurnoses OF exchange. because IL
took the same labor 10 produce IT as me
dollar took We then find that the labor
of one man one day produced two ousheS
~ corr. We will suppose, and we cOnse-
cuentlv saw that a bushel OF corn IS worm
only dftv cents or that II requires TWO
bushels Of corn TO be Of an exchanseaDie
,.aiua for one bushel Of wheat. We nave
,bre made the 23.22 grains OF gold serve as
= r,eosrrer Of the value OF the corn ana
the wheat by making il compare the labor
~. a. renresents with the labor that
,.,,-bol 81 corn and a bushel OF wheat each
,.-,o.,r,s and IL the dollar. has then
s,atsd tho terms mon which they are 10
-, oxcbo,cod for each other. Business,
az far as wheat and corn are coh'etheu'
will he from that time forward, eH-
cbanoin, ono bushoi OF wheat for two
bushels Of corn. through processes oil
nominal sales for money, which are no
sales for money AT all The processes are
ners statements Of the money Ndiue ol
zach thus ascertained and exchanges or
the commodities by their respective val
nos Now. the alimportant thins IN
making these exchanges Is that the meas
urer-the standard Of the value or each
ehau be fixed permanent and unchsnge-