Martinsburg herald. [volume] (Martinsburg, W. Va.) 1881-1920, 1896-04-25
CURRENCY PRIMER.
WHAT is MONEY AND WHY 1T IS
MONEY.

The Function of Government Is 20 Certify.
by It's stamp. to the Purity and Weight
Of coln--It should Not Attempt to
Make Money From Nothing.
One of the recent publications Of the
sound Currency Committee of so Will
i liam street, New York, is entitled a
"Currency Primer 1t discusses the
fundamental principles underlying mon
ey in plain language. We quote the fol-
lowing:
The whole matter of money. meas
ure of value, a means Of exchange, a cir
culating medium, is one Of necessity,
convenience, adaptation to the end. 1t is
a question Of the fitness and effective
ness of the material substance of which
the instrument is made.
Manifestly that fitness, the conven-
ience and effectiveness of the thing, must
be determined by the Judgment of those
who use the instrument, those who do
the business, the labor and exchange of
the world.
Law should attempt to follow that
Judgment and not attempt to form it,
force it or control it. Experience has
determined several points as TO fitness,
convenience and efficiency. Silver is
found too precious, too concentrated, to
be conveniently used TO represent very
small values Something more bulky
that is, of less value by weights need
ed. Hence for smallest values copper
coins, for slightly larger nickel or some
equivalent. and for still larger silver.
But silver is TOO bulky-that is, Of
too little value by weight-to represent
very large values. Hence gold is used
for these. But even gold is too heavy
and bulky to be used by actual count or
by actual weighing, and passing from
hand to hand at every turn in large
transactions. especially between dealers
at a distance.
Hence come into use bank notes, and
far more largely still checks and bills
of exchange BY means of these a given
quantity of money will rapidly, though
only in a legal sense, pass from hand to
hand, from owner to owner, by mere
entries on books Of account, no money
being actually counted nor even seen
by the banker who keeps it locked up in
his vaults. Checks and bills Of exchange
are simply additional facilities, con-
veniences, multiplying the rapidity Of
circulation-more rapidly changing
ownership. But the money they repre-
sent must be behind them.
We now see the reason why govern
ment cannot make anything money
which it chooses to call money, nor
make it money, "eurrent with the mer-
chant" nor current with the laborer,
by simply calling it legal tender.
Government can no more do this than it
can say what your days wages shall be
or what shall be the price of a bushel of
WHEAT government assuming to
do these things would SOON beEefoFmed,
or if need be revolutionized by force.
Having seen the function Of money,
and the materials Of which it should be
composed, and seeing that government
cannot make money of iron or leather or
pasteboard, simply because intelligent,
free people of great commercial inter-
ests and activities viii not use these
substances as money, the question arises,
What is the function of government in
regard to money? Here again the answer
is, simply to increase the convenience
and effectiveness of the substances or
materials which the people have already
found most convenient and effective as
standards of value. Increase it how?
The old time method of use was to
weigh the metal That is slow and
eumbrous, aud inexact, unless a part at
least Of the amount be divided into very
small pieces-in case Of gold, too small
for either safety or convenience. Hence
the art Of coinage, each piece of copper,
silver or gold being composed of given
weight. But if coinage be left to indi-
viduals fraud viii creep in. Alloys,
mixtures, debasement would be prac-
ticed. Hence the convenience, the effect
/ iyeness, the fitness of metal coined into
money are immensely increased by conf
dence in its purity and in the fullness of
its weight. Therefore the only duty and
province Of government in regard to
coin IS by its stamp, to certify that a
( given piece of metal is Of a given weight
and Of given fneness or purity. There
the interference Of government should
stop, unless to declare what is legal ten
der, and il what sums, as to each metal.
1t Is now doubted by some whether
! government should 60 further and make
anything a legal tender for debts, and
whether it would not be better to leave
every man to make his contract to be
paid in the money Of his choice. If this
were done, and the minis Of the whole
world were thrown open for free and
unlimited coinage of all metals now
used as money, the owners Of the coin
would soon find which would circulate
and which would not. But I pass no
opinion whether government should de-
fine or establish legal tenders.