The Colfax chronicle., 1896-05-16


to Make Money from Nothing.
One Of the recent publications Of the
sound currency committee of SO Will
liam street, New York, is entitled q
Currency Primer" 1t discusses the
fundamental principles underlying
money in plain language. We quote the
following:
Vre of value, q means of exchange, cir
culating medium, is one of necessity.
convenience, adaptation to the end. 1t is
. question Of the fitness and effective
ness Of the material substance of which
the instrument is made.
Manifestly that fitness, the convent
enceand 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
Mt distance.
Hence come into use bank notes, and
far more largely still checks and bills
of exchange. by means of these given
quantity of money will rapidly, though
only in 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 valuts. 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, current with the mer-
chant" nor current with the laborer,
by simply calling it a legal tender. Gov
ernment can no more do this than it
can say what your days wages shall be
or what shall be the price of bushel of
wheat. Any government assuming to
do these things would soon be reformed,
or il 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 vii. not use these
substances as money, the question
arises: What is the function of govern
ment in regard to money? Here again
the answer is, simply to increase the
convenience and effectiveness of the
substances or materials which the peo-
pie have already found most convenient
and effective as standards Of value. In
crease it how2
The old time method of use was to
weigh the metal. That is slow and
cumbrous, and inexact, unless 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 a given
weight. But II coinage be left to indi-
viduals fraud will creep in. Alloys,
mixtures, debasement would be prac-
ticed. Hence the convenience, the eff
fectiveness, the fitness of metal coined
into money are immensely increased by
confidence in its purity and in the full
ness of it's weight. Therefore the only
duty and province of government in re-
gard to coin is by its stamp, to certify
that given piece of metal is of a given
weight and of given fDeness or purity.
There the interference of government
should stop, unless to declare what is
legal tender, and in what sums. as to
each metal.
It Is now doubted by some whether
government should go further and make
anything a legal tender for debts, and
whether it would not be better to leave
every man to make ihis contract to be
mid in the rnonev If his choice Tftb;s
were done, and the mints 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
md which would not. But pass no
opinion whether government should de-
dne or establish legal tenders.
why Abuse Goldf
The less courageous of the free coin.