The representative. [volume] (St. Paul, Minn.) 1893-1901, 1896-03-25
STRONG POINTS WELL PUT.
E. Gerry Browns Discussion of
Money at a New England
Town Meeting.
A REMARKABLE LITTLE BOOK.
CHAPTER III.

CdAFIEH Ill.
CONTINUED from last week.
Congress" said the banker, has no
right to do anything with money except
to coin gold and regulate the value of the
coin N gold.''.
But the legal money-function or Office
Of the gold coin is it's debt-paying power,
or its purchasing power" replied the ed
itor; land congress cannot regulate that
purchasing power over other commod:-
ties, unless it can also regulate the num-
Der OF gold units and units which do the
money work that a gold unit can do. You
cannot ignore the economic truth that the
value of each unit in the volume S regil-
lated by the number of units in the vol
ume. 1t needs demonstration no more
than the proposition that and 2 make
f."
"If it be true" said the banker, that
the volume of money fixes the prices,
other conditions remaining the same,
then there should be a great diversity of
prices between different countries, occa-
stoned by the difference in the volume of
money in those countries. For instance,
England has an issue, per capita, of about
$40, say: the United States, about $24;
France, about $40. These figures are near
enough to make my point clear, which is,
that prices Of commodities IN France
should be double the price of the same
commodities in England; and, as matter
of fact, they are not. What becomes of
your theory in the light of that fact?"
"You are speaking said the editor, "of
standard money-primary money, money
OF ultimate redemption, as the phrases
60, meaning one and the same thing
money issued by the government, which
is legal tender, full or limited; but you ig-
more promises to pay this kind of money.
or the currency created by bankers, which
is current by common consent, by neces-
sity, or by privilege, under the law. In
England the percentage of bankers Cur
rency to primary money IS little larger
than in the United States and very much
larger than in France, where the transac-
lions approach cash basis-exchange
effected by money, and not by promise to
pay money. 1t is the total of money and
currency constituting the volume of units
that do the work which affects prices; and
that total, in its relation to population
and business methods, is about the same
In the countries you cite"
A merchant here asked, Then it is rot
the supply of metal, either gold or silver
primary money-as related to The de-
udllu lUI IL, Uudl ducClS Iuc pIICc VI luc
worlds products? or as Professor Coin
teaches, Primary money only is the meas
ure of values?'"
"Only in the sense that all substitutes
for metal units, that to do the work of
metal units, or the work of primary
money are proportioned and based upon
this supply of metal money or priin"ry
money. The supertsructure Of 'redeema-
h in n n
deemer,' which is the base. While it pre-
tends to represent money, it is N reality
a substitute for money. Even bankers,
however, recognize that there is limit
to the number of promises to pay metal
unit which can safely be based upon one
actual metal unit. Each country has DE-
ferent customs anil laws regulating issues
by bankers; and some countries, like some
bankers, are more conservative than 9TH
arrs in placing the safe limit. John Sher-
man, al secretary Of the treasury. thought
that one gold dollar couldn't redeem more
than four promises to pay gold dollar,
# he had Wall street to deal with: and so
he established $500 100000 in gold as the
requisite for $346000,000 in Uncle SANS
greenbacks. There is no law as to the
amount of the reserve; but the clamor Of
the bankers that the reserve must be
maintained would lead you to suppose
that some law would be violated if it re-
NAMED below the one hundred million
mark
"You would not compare money with
yardstick, in the sense that it is meas
ure?" asked the merchant
NO" answered the editor; "for we must
admit that the money unit is an unccr-
tain and varying quantity If used as
measure; it's length in cloth, or its weight
in cotton or it's size in wheat. is mental
estimate, determined by calculation Of
all the conditions that attend the trade
in which the money is used. The yard
stick, ON the contrary, is always an exact
three feet, always of the same length. re-
CARELESS of the number of yardstick in ex
istence. The dollar IS exact only in fact
that it is always one hundred cents in
scribed on certain quantity of gold. sill
YER, nickel, copper, or paper You buy a
yard of cloth with dollar; and the dollar
values, or measures (expresses) the value
of the yard ofcloth for the time beng but
the value is mental estimate by the two
parties to the trade, and the dollar ok
presses it. You exchange your dollar for
the cloth; the yardstick, as a measure, re-
mains in the possession of the one who
sold the cloth. A system that would en-
able few men to lengthen or shorten the
yardstick at their pleasure. would be rs
sensible as financial system that enables
few men to lengtheN or shorten the pur-
chasing power of your dollar"
docs each unit which serves as money.
and does the money work that gold unit
would do, affect the value of each gold
unit? ?" asked the merchant.
Just as additional gold units would
affect the value of gold units already in
exstence?" continued the merchant.
Yes" said the editor.
GIN speaking of unit which does the
money work, mean the national banl,
note and the credit of national banks as
evidenced in deposit books
81 50 understood you when I answered
yes" replied the editor.
do you hold that the credit of the ma
tional banks, evidenced by deposit socks,
can be considered as money units doing
money work when the custom IS 10 trans
fer that credit by checks ?-checks are Tot
money" was question here asked.
"a check" replied the editor, takes the
place of the bank-note as it was issued
under the state bank system. In the days
of state banks, the bank issued piece Of
paper which read
THE WILDWOOD STATE BANK
will pay on demand TEN DOLLARS
Under the present system the ;ner-
chant writes:
WILDWOOD NATIONAL BANK
Pay to John Smith or order