The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1896-09-04
Anew THOUGHTS ON MONEY
fFirst letter..

To the Editor of The Jersey City News.
There is probably no subject on which
so many misconceptions exist, nor from
which have been derived so many errors
confusing other relations of production
and exchange, as that of money. Aris-
totle. at a time when political economy
was in its first nebulous beginning. found
himself apparently perplexed in formu-
lating a definition of money, and seems.
partially, at least, to have misconceived
its functions and operations in the in
Quiry: May not money be an imaginary
wealth? What value has it from ma
ture? Should public confidence or opinion
that gives it circulation, experience a
change, what would be its real price2
What real want of humanity could it
supply?''
In this hesitating inquiry addressed to
the almost universal economic super
stition respecting money, there is just
enough of such superstition to rob it of
its value as a protest. When we reflect
that the nature of money is the nature
of a yard stick, a pound weight, or a
bushel basket-in other words, that it is
q measure accepted by common consent
and only by common consent made cur
r-ent-inquiries as to what would be its
value when other individuals refuse to ac-
cept it, are idle, since it can be neither
worn nor eaten, any more than a pound
weight, or a bushel basket.
Adam Smith defined money as ssthe in
strument of commerce. A great deal of
fault has been found with this definition
on the ground that it ignores the value
of money as a commodity, though that
kind of money used in the settlement
of balances in international exchange
bullion-is most truly a commodity. But
this is the smallest part of the service
performed by money. and international
exchange is effected through ways among
which this is the least important one.
1t is clear. therefore. that money is
rather an instrument than a commodity.
that is, that it is used rather as a medium
to effect exchange thar a part of ex-
change itself; and thus it may be seen
that no quarrel can be had with Adam
Smiths definition
The battle waged on the money ques-
ton is chiefly around definitions; and
these definitions recall the fable of the
two knights and the shield. For ex-
ample, it may be said that the einstru-
ment' of money must be a commodity ac-
ceptable to other n~ations; that. therefore.
money is not an instrument, but a COM
modify, and that Adam Smiths definition
is defective. But as the greater amount
of exchanges are effected through the
transfer Of goods by means of paper
based upon ~gold-which is a measure of
value, a yard stick of commerce-there-
fore money is not a commodity, but an
instrument. In the attempt to clearly
understand the nature of money II is well
to grant all the truth there may be in
partial definitions. while insisting upon
the larger and truer ones.
Now, if money is in the nature of 4
yard stick, is it important of what such
yard stick shall be composed? we Some
times hear 1t said, thoughtlessiy. thai
gold. or silver. or wood, or iron. is email
" available, precisely as nobody cares
whether the yard of cloth he buys il
measured with an iron or a tape r,,le
The two cases are evidently not the same
A dollar is IN imaginary unit unless Sem
resented by something else. It is not it.
self a yard, ror IN the nature OF a ward
1t is itself the yard stick the ward Is
really the dollars worth Of goods. But
II a dollar measurement shall be an elias
tic measurement; If it does not at all
| times stand for a dollars worth, what
do we have? Why, a ~fiuctuating measure
| ment.
Now, what are the evils Of a huctuating
measurement-of a dollar that shall rep
resent a dollars worth today, and some
thing more or less tomorrow? Does il
need to be pointed out that such a meas
urement would be a constant source OF