The Democratic advocate. [volume] (Westminster, Md.) 1865-1972, 1896-08-29
Financial oateohism.
BY JAS. W. WILSON,
In Farm, Field and Fireside.
MONEY AND ITS FUNCTIONS

MONEY AND ITS FUNCTIONS.
Question. What is money?
Answer. A medium of exchange and the
standard by which the prices of labor, prod
ucts and property are measured and CONNER
cial exchanges made.
Q. For what purposes is money used?
A. As measure of value and the medium
Of exchange.
0. In fulfilling its functions in these two
uses what is money called?
A. As a measure of value it is called
standard money. As a medium of exchange,
| currency.
Q. How many kinds of money are there
A. Two, standard or redemption money
and credit or redeemabe money.
Q. What are the powers of money?
A. Two in number; its debt-paying power
and its purchasing power or exchange value.
Q. How are these powers fixed?
A. Its debt-paying power is fixed by stat
ute law and its exchange value by the eco
nOmic law of supply and demand.
O. How do honest men get money?
A. They buy it with their labor, products
or property.
| A. They use it to pay their debts, taxes
and other fixed charges, and to buy labor,
products, property and transportation.
! Q. Does money possess intrinsic value?
| A. No; its value is impaired TO it by the
fat aud selection of statute law.
! Q. Why do gold and silver possess value
A. Because by the fat of the law of ma
tions they have been selected for use as money
metals.
| Q. Why have they been thus selected?
A. Because by nature and the cost of pro-
duction they are best adapted for that pur
pose, and evidently by the forethought of n
wise Creator were designed for such use.
| Q. If gold and silver were not used for
money wdhld they possess value?
A. Very little. A bushel of wheat pos:
sesses the same intrinsic value under any and
all conditions because it will sustain human
life; but aside from its use as money metal
gold is not factor in the sum of human
necessities and silver is only small one.
Q. What may be said to be the price of
money?
A. The amount of labor, labor products
or property necessary to buy it.
q. Does the price of money vary?
A. Yes, under the economic law of sup
ply and demand
q. Give an example.
A. When real or redemption money is
plentiful each piece becomes relatively less
valuable because there is less demand for it,
consequently it takes less of labor, labor 5
products or property to buy it. Under such
a condition in speaking of labor, products,
ETC., we say wages are high and prices are
good, likewise when money is scarce there is
more use or demand for each piece, conse-
quently it takes more of labor, products, etc,
to buy it. We then say wages are low and
products are cheap.
Q. Can you give authorities in support OF
this law?
A. John Stuart Mills says: THAT an
increase of the quantity of money raises
prices and diminution lowers them, is the
most elementary proposition in the theory of
currency"
In other words, the price of money huctu-
ates under the law of supply and demand the
same as any commodity, only its fluctuations
are seen in the rise and fall of the average
price of commodities.
"That prices will rise or fall as the volume
of money be increased or diminished, p" SAYS
I Prof Walker, sis law as unalterable as any
law of nature
Ricardo says, "That commodities would
rise and fall in price in proportion to the in
crease or diminution of money assume as
a fact that is ineontroyertible. That such
would be the case the most celebrated writers
on political economy are agreed.
Many others might be quoted but as all are
agreed on this elementary principle of politi-
cal economy it would be useless
Q. Of what kind of money were these au-
thorities writing?
A. Of standard money. That by which
prices are measured.
Q. Does the volume of credit money, that
is. money which is redeemable in other money,
materially affect the relative price of labor
and commodities?
A. Very little, if any. 1t is the volume of
redemption money or the quantity of the
metal or metals out of which redemption
money under the law of free coinage is made,
and in which the unit of value by law is
fixed, which regulates the average price of
labor and commodities.