The Philipsburg mail. [volume] (Philipsburg, Mont.) 1887-current, 1896-07-23
FUNCTIONS OF MONEY
Valuable Article on the Financial
Question of the Day.
HON. VIM. H. CLAGETT, OF IDAHO
Tells Why Plethora of Money Makes
Good Times, Plenty of Work and
General Prosperity.
ION. VIM. H. CLAGETT, OF IDAHO

oase, our circulating medium can be
increased to any desired amount. 1t!
remains to show why the circulation
should be speedily and greatly in
creased, says q recent article by Hon.
W. H. Clagett, of Idaho.
Productive industry expands or
shrinks as it brings profit or loss.
Steady profit means hope, indopen-
denca, mental and physical activity,
and freedom of expenditure. Steady !
loss means doubt, debt physical and |
mental apathy, and at last despair.
The question Of profit or loss depends
upon price, and, other things being |
equal, price depends upon the quantity
of money III circulation among the peo-
pie, while the steady maintenance of
price depends upon the non -fiuctuating
character of this money.
No question seems so hard to under
stand az 'what is money and its func
ito ls?' Men Of fine Intelligence labor
with il aud at last give it over in de-
spair All atmosphere of mystery
seems TO surround it. The people leave
it to the political doctors, The doc
TORS look wise, talk in technical terms
and phrases which the plain people do
not understand, and SO deepen the mys-
terry Those who do understand it tell
40 secrets, but turn their knowledge
into gain
Tho student Of history knows that
while the ancient nations used cop
pnT tin ana other base metals for mi
nor coins, their standard money con-
sisted Of gold and silver only. They
did not learn the use of paper money
TO enlarge or maintain their volume of
circulation. Therefore, as the yield Of
the precious metals increased Or dimin-
ished. civilization rose or fell with ad-
vauring OF falling prices.
The dark ages fell upon Europe
through the destruction of the prices
of labor aud it's products, caused by
the gradual exhaustion Of the mines
VIE zee the supply Of gold and silver
had been drawn. For thousand years
barbarism fiourished. The cloud was
not lifted until the mines Of the new
world poured their treasures into the
depleted veins of commerce. Prices at
once advanced; intellect and enter
prise ouickcned and our own present
civiliz .tion began.
In the early part of the present CEN
tury the diminished yield Of the pre-
cious metals, the result of the revolt of
the Spanish colonies in the new
world, caused prices to fall all over the
world until arrested by the discovery
OF. gold in California and Australia
They then again advanced. When the
gold yield diminished, they We're still
maintained by the later yield of sill
yer. Under all vicissitudes of trade
and changes ct industrial systems they
steadily advanced until twenty-one
years ago, when the bondholders and
money changers of Europe and Amer
ica precipitated a rapidly advancing
ruin upon the world by the destruction
of one-half of it's money metals
These are historical facts yet in the
congressional debate on the free coin
age bill in March, 1892, goldbug demo-
cratic statesmen denied that the
GOLD supply from California and Aus
tralia had anything to do with the ad-
vance in prices after 1850, and attrib-
uted the advance to the low tariff of
1916, which enlarged our foreign trade.
Goldbug republican statesmen made
the same denial and attributed it to
the Crimean war and the great demand
caused for our breadstuifs Both denied
that the quantity of money in circula-
tion had any effect upon price. They
both agreed that the price of any given
article of exchange depends solely upon
the law of supply and demand. His
tory teaches no lesson to the bigot Or
the fool.
The law of supply and demand is
the ten commandments OF the monOpo-
list. It has rOundness of sound
which catches the ear, and is a con-
venient cover to hide ignorance or
greed. 1t is seldom heard except to
still conscience or excuse extortion
AS applied to money it utterly fails to
supporC the above contention.
No matter of what material it is
made, money is primarily an article of
exchange. it is Something which can
be exchanged for any of the products
of labor, and for which any of those
products can be exchanged It thus
becomes an article of universal ey-
change. This makes it medium of
exchange. and at it's rated value by
custom or law it becomes a measurer
of the values of all other articles of ex-
change. To maintain this rated value
as free from fuctuation as possible the
government stamps a nominal value
upon its money and by making it
legal tender forces it upon the creditor
at such value.
Thus money being primarily an ar
ticle of exchange, it is itself, like all
other articles of exchange, subject to
the law of supply and demand When
it is plentiful and easy to get, it takes
more of it to buy other articles and
the prices of those articles rise. When it
is scarce and hard to get, it takes less
of it to buy other articles and their
prices fall.
Since the present panic began the
people have an object lesson that tran
scends in conclusive force all the efforts
of reason. The bankers of New York
and other eastern cities, for their own
I e ]