Washington standard. [volume] (Olympia, Wash. Territory) 1860-1921, 1896-05-01
INTRINSIC VALUE.
CERTAIN MONEY FALLIClES RE.
FUTEO.
The Matter of Intrinsic Value OF
Metal, So Often Affirmed, Re.
viewed By Mr.. Warner, Presi-
dent of the American BimetaIIIc
Leagnc.

y, " Nothing can have an intrinsic value -
Barton, in 1896.
There is no such thing as intrinsic value"-
"It fintrinsic valueT Is The curse and the
hane OF economic science to this very hour
Macleod.
Although for two hundred years
writer's on political economy have
secuted the notion that value is ain.
trinsic" in anything, still this notion
continues to be "the bane and the
curse of economic science" 1t holds
much the same relation to the science
of economics that the idea that the
world is fiat holds in geography and
astronomy: only the Jaspers in eco
nomics are far more numerous than
their kindred in astronomy.
If value were intrinsic, that is, in
herent in thing. then, of course, it
could not change; it would be the
same everywhere and at all times. If
value were intrinsic in anything, it
would be in commodities like iron.
wheat and cotton. But if the value OF
these things we're intrinsic, it would of
necessity be the same in all places
the same in New York, Chicago or
LondOn-which is never the case. II
the value OF gold, as is 80 often as
sumed, were intrinsic, like its color or
its quality OF ductility or malleability,
it could not change, but would be the
same from age TO age; it would be the
same whether there were little or
much OF it in the world. No increase
in the supply of gold, no matter how
great, and no reduction, even to half
the gold in the world, could affect its
value. 1t must in that case be the
same in all countries and at all per.
iods OF time, regardless OF supply or of
demand for it, and regardless OF
whether it is used for money or not.
The same is true of silver. II its
value is intrinsic, it cannot change,
nor could the relative value of silver
or gold, or OF gold or silver, change.
But we know they have changed in
value relatively to each other, and
relatively to other things, and are
changing all the time. We know his
torically and experimentally that these
metals. like everything else. vary ac-
cording to the law of supply and de-
mand. If the quantity of gold or of
silver were suddenly doubled, its value
would be reduced in proportion to the
change in the relation of supply and
demand. On the other hand, should d
the supply of these metals, or OF either
OF them, fall off, while the demand for
them kept up, their value would pro-
portionately increase. The same
would be the case if the demand for
either metal should increase while
supply remained unchanged.
When. however, either gold or sill
yer can be used without limit in the
payment of debts at the option of the
one having payments to make, then
the lack of supply of one may be
made up by an increase in the supply
of the other. In this way the two
metals act as one, and the value of the
two metals combined will vary as their
mass varies in relation to the demand
for the whole. This is bimetallism.
The rate At which one thing will ex-
change for another expresses the value
OF one thing in terms of another.
Hence the value of one thing is any
thing else for which it will exchange
even. The value OF anything ex-
pressed in money is called price. The
price of thing, therefore, is the guam
tity of money it will exchange for.
Hence, whatever cause affects sup
ply in relation to demand, affects
value; whatever cause affects the cup.
ply OF money, as compared to demand
for it, or a. compared with things to
be bought and sold, affects the price
level generally.
Legislation cannot change the in
trinsic value of anything. but law
may, and often does, affect the supply
OF, or demand for, a thing; and when
the law took away the demand for
silver for money and increased the de.
mand for gold by making it the only
money of final redemption, it did most
seriously affect the value of these
metals.
The truth, then, is that the value OF
gold and silver, like that of anything
else, depends entirely on the relation
OF supply to demand, or OF quantity to
use. Or as John Locke said two hun.
dred years ago, intrinsic value in
money is therefore nothing but its
quantity"
This law applies also to money OF
any kind, and therefore, in general.
the value of money depends on the
quantity Of money as compared with
things to be bought and sold, or the
work to be done by it. Prices, there
fore, depend on the volume of money,
or, as Professor Nicholson states the
law, The general level of prices de-
pends on the quantity of money com.
pared with the work of circulation to