The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1896-10-22
JOHN LOCKE ON NATIONAL
FINANCE,

he defines money 10 De necessary 20 al,
SORTS o. men in trade both for counters
ana for pledges" This IS his cGain. and
ol1-fssaioned Nay OF saying that il is both
a measure or standard OF value ana A me-
dun OF exchange Money. he tells US.
carries with II as counters what he
calls even reckoning" and as pledges
Il carries security that he that receives
Il shall have t.e same value for 1t again.
O. other things tha; he wants. whenever
ne pieasss The one OF these X does by
lis stamp and ienoInina ton; the other by
lis intrinsic value. which is It's quantity"
The standard money OF Locke's day was
silver. given quantity OF silver. wheth-
er Stamped or uns.ampe3, has certain
intrinsic value. and this intrinsic value
constitutes the security that he that re-
ceises IL shall have the same value for i;
again. The only purpose OF the stamp
and denomination is to make given
quantity or silver serve as counter.
IN order that there may be an even
reckoning in all business transactions.
The stamp he correctly declares 10 be
nothing more than "a nublic voucher OF
its weight and fneness." and 50 little inn
Portance does he attach 10 the denomina-
ton that he observes that here in En-
gland there might as we'll have been y
sliiiings in d penny. as II pence IN a Snll-
ling"
Basing his argument, as he does, upon
ths fundamental truth thai there Is ana
can be no difference in value between bull
lion coined ana uncoined, and upon the
supplemental truth tha, the value OF bull
lion is measured by its weight, he ex-
pains 10 his readers that the necessity
OF proportion of money 10 trade depends
on money. not as counters. for the reek-
onlng may be kept or transferred by writ
ing; but on money as pledge. wnicn
writing cannot supply the place OF, be-
cause a law cannot give to bills that IN
trinSic value which the universal consent
OF mankind has annexed 10 silver and
gold This is the very essence Of the
fatal objection to our modern American
''greenback'' heresy. The greenbacker re-
CARDS money merely as counters ana
very truly argues that there is no need
that money. from this point OF view, shall
have intrinsic value. But he overlooks the
fact that money is also "a pledge, and
that a pledge or security must have in
trinsic value. II IL has no intrinsic value,
il Will DE accepted in trade only on trust,
as a memorandum of Indebtedness 10 be
discharged at some future time and, the
moment that confidence is shaken in It's
ultimate redemption. lis nominal value be-
gins 10 decline until. when confidence in
its redemption is destroyed, it no longer
passes current
Concerning the veXed question OF the
amount Of money required, Locke remarks
that ii is hard 20 determine the neces-
sary proportion of money to trade, be
cause it depends not barely on the guam
tity of money, but the quickness of its
circulation. The very same shilling may
at one time pay twenty men in twenty
days at another. rest in the same hands
q hundred days together" He anticipates
the argument OF Mr.. Bryan and others
who advocate the cheapening OF American
dollar. and even Mr.. Bryans quaint Illus
tration taken from the "teeter board" in
the following words: There is another
seeming consequence OF the reducing of
money TO a low price. which at first sight
has such an appearance OF truth in 1t,
that l have known II TO impose upon very
able men; and that is, that the lowering
of interest against which he was writing)
VII raise the value OF all other things
IN proportion. For money being the coun-
ter balance TO all other things purchasable
by 1t. and lying as II were. in the oppo-
site scale of commerce, ii looks like a nat
ural consequence, that as much as you
take off from the value OF money, so much
you add TO the price of other things that
are exchanged for IT, The mistake
OF this plausible way OF reasoning will be
easily discovered. when we consider that
the measure of the value of money, in
proportion 10 anything purchasable by it.
is the quantity CT the ready money we
have in comparison with the quantity OF
that thing and its vent tby vent he
means demand in its relation to supply:
or, which amounts to the same thing. the
price of any commodity rises or falls by
the proportion of the number of buyers and
sellers" In other words, the ratio which
determines prices is not the ratio between
money and property. but the ratio be-
tween the number of producers and that
OF consumers of any article in the market
This ratio is not affected directly or in
directly. by the volume OF the currency.
Money he says. serves us commonly
by its exchange. never almost. by its con-
sumption: and he adds. in direct contra
diction 20 the theory held and promulgated
by Mr.. Bryan Chat the only honest dollar
is stable do.lar): Though the use men
make of money be not in its consurp-
ton. yet ii has not at al more standing.
settled value, in exchange with any other
thing. than any other commodity has"
The idea that legislation has power to
alter the value of money moves him to
m!rth. These men," he says. have
found out by a cunning project how. by
the restraint of law. 10 make the price
OF money one-thsrd cheaper, and then they
tell John a-Nokes that he shall have
Eloeo of II to employ in merchandise or
clothing: and John a-Stiles shall have
s2o0o0 more TO pay his debts: and so dis
his legacies, whici. they are to have even
where they can get them. But till these
men can instruct the forward borrowers
where they shall be furnished, they have
perhaps done something 10 increase mems
desire. but not made money one jot easier
TO come by: and. till they do that, all this
sweet Jingling of money in their dlscourses
just goes 10 the tune of IF all the world
were oatmeal"
This is all very entertaining and in
structive: but the interest for us here and
now Of Locke's teachings on the subject
of money eliminates in his d discussion OF
the nature and effect OF Clipping or
raising" coin. Money is raised in the
sense which he attaches 10 the word when
its nominal value exceeds its actual value
What he means by raised coin is what we
mean by deprecated coin. Whenever coin
has two values. one actual and one nomi-
nal. we may Of course fix our minds upon
either: the nominal value Is raised when
the actual value falls. Clipping was an
unauthorized method OF raising com
closely allied TO counterfeiting. Every stu
dent of English history knows that Il was
once so common and serious evil as 10
demand the seyerest measures for its re-
preston. so that X was treated as a capl-
tai orense, being such an encroachment
upon the prerogative OF the crown as to
smack Of verigahle treason. ANY altera-
ton IN the legal standard OF value which
has The effect 70 depreciate the mint vaIu-
alton OF the coin OF the realm IS. on the
part OF the crown. the equivalent OF clip
ping BY private persons. Against this
folly Locke invelghs with a restrained
power OF logic almost amounting TO intel
lectual passion. Nearly all that he says
a bout K is susceptible OF direct appliea-
ton 10 existing conditions in the United
States and 10 the financial controversy
which viii decide the presidential election