Watertown republican. [volume] (Watertown, Wis.) 1860-1906, 1896-07-29

supercede iron for a multitude of pur-
poses, particularly for those uses
where it is desirable to have metal
which will not rust. The notion
which mary people have that gold
and silver owe their value to their
use as money is utterly erroneous. 1t
has in it only this much of truth, that
any increase in the use of an article,
increasing the demand for it, tends
to increase it's exchange value. Prob
ably the extensive use of gold and
silver as money causes them to bear
higher value than they otherwise
would. But it should be distinctly
understood that these metals find
their value in the markets of the
world just as all other commodities
do, in accordance with the great law
of supply aud demand, and the cost of
production. Coming these metals is
simply stamping them by the author
ity of the government in accordance
with the coinage laws and certifying
that these coins have q certain weight
and fineness The government does
neither can it take away their value.
But value is not the only quality
necessary to fit money to perform its
functions as measure of value and
standard of deferred payments. Stead
mess of value is highly important. An
article may be so fluctuating in value
as 10 be totally unfit for use as money.
6 10
ty whose value is subject to no varia
tons, it would make an ideally per-
feet standard in this respect. But no
such commodity is in existence, and
therefore money perfect in this respect
is an impossibility. Our only re-
course, then, is to employ as money
such articles as, having the Other
requisites, have comparative steadi-
ness of value. Steadiness of value il
money is especially important in the
! case of debts contracted for a long
term of years, in order that neither
debtor nor creditor shall suffer great
wrong. As money will fuctuate in
value, it must ever perform this func-
ton imperfectly and all we can hope
! to do is to reduce this imperfectiOn to
the smallest possible, by using only
those commodities as money which
fuctuate least n value.
In order to perform it's function as
a medium of exchange, money must
be convenient in form, economical in
use, and it must afford the receiver a
guarantee that he can at all times
exchange it for any commodity in the
market at will. In the case of metal
lie money this guar Rntee is in the
metals Of which the money is made.
If one takes coin in exchange for
goods he receives value for value
given. He receives a commodity
which has value for precisely the
same reasons that other commodities
have value, and subject to the same
laws governing its value. In the case.
of convertible paper money, the re-
! ceiver is guaranteed, not by the in
trinsic value of the paper, for that is
practically nothing, but by the legal
promise of convertibility on demand
into coin which has intrinsic value.
If inconvertible paper money circu-
lates in community it must be
either because there is ground for be-
lief in its ultimate redemption, or be-
cause it IS made to circulate by com
pulsory legal process, or because there
is a conventional agreement to re
ceive it in exchange for goods, in the
absence of better medium.
Other qualities essential to fit an
article for use as money are PORTABLE
ity, divisability and homogeneity, dur
ability and cogEizability. The pre-
cious metals contain large value in
small bulk and hence are easily car
ried. This is true of precious stones,
but they have not the other qualities.
1t is true to a much greater degree of
gold than it is of silver, the value Of
gold at the present time as a commod-
ity being about 81 times as great as
that of silver for equal weights. Pa
per money excels metallic money in
this respect, and that is one of the
reasons for the substitution of the
former for the latter The precious
metals are homogeneous and easily
Invisible. Precious stones are not.
They can be divided, but the parts
are not equal in value to the whole.
These metals can be readily distin-
guished from baSer metals by their
appearance and by easy tests. They
are not subject to decay or deteriora-
ton, they can be made very hard and
durable by being mixed with a small
percentage of copper alloy, and hence
are economical in use.
The subject of the next article will
be, the quantity of money which a
nation needs. S. NJ