The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1896-10-03

L. make his purchases. lie went by
stage coach and sailing vessel. and III"
gold IN his heather bel, lay idle weeks
OF months while thu tedious journey
was being made. Now he deposits his
money in bank. the banker loans II
given proportion of his deposits to
those who desire it's immediate use,
and it is kept in active circulation
meantime. The owner Of the gold
takes in its stead slip of paper, a
draft or bill of>eXchange. good where
ever he may present it, and If he
wants more. 1t is transferred half way
around the world on his demand by
telegraph. i'm the twinkling of an eye.
The banking facilities of the world
have increased ten-fold in the past tif-
ty years, and instead of most of the
business being done by hand-to-
hand exchange of money for property.
% per cent of the business is per-
formed with that comparatively new
medium of exchange. banking paper.
whose elasticity, convenience and
power of instant transfer, has revolu-
tionzed business and reduced enor-
n.ously the propOrtionate demand for
gold or other metallic money in the
great business transactions of the
world.
LARGER USE or CHECKS.
The use OF this new medium of en-
change grows nearer 10 the masses ev-
cry day. A recent investiga ton by the
comptroller of the currency showed
that nearly go per cent of the pay
ments made to retailers such as butch
erS, grOcers, clothierS. and general
dealers, are now made i'm checks in
stead of the Use of money itself. The
money which these checks represented
had been deposited in tn banks by the
owners, but only a given proportion of
1t was kept in stock by the bankers
who know by experience tht only a GER
tain percentage of their deposits will
be called for at one time, and are thus
able to loan out "A large share of the
money deposited. and SO keep it in ac-
tive circulation.
Thus the stock of money. which has
itself enormously increased. Is multi
piled many times by the fact that it Is
used over and over again. with ten or
twenty times the frequency that il was
a half century ago.
This system which has grown up dur
ing the period in which business has
so greatly increased. changes radical
ly the relations of ready cash to the
volume of business. 1t was a premoni-
ton of this change in business customs
Political Economy" Vol. H.. Book ILL.,,
to say:
The proposition respecting the de-
pendcnce of general prices upon the
quantity of money in circulation must.
for the present. be understood as ap-
plying to a state of things in which
money that is gold or silver, is the cX-
elusive instrument of exchange and ac-
tually passes from hand to hand at
every purchase, credit in any of its
shapes being unknown. When credit
comes into play as means of pur-
chase. distinct from money IN hand
the connection between prices and the
amount Of circulating medium is much
less direct and intimate, and such con-
nection as does exist, no longer admits
of So simple mode of expression
Under this system. the commodities
whose value is expressed in terms of
the standard Of value are exchanged
for other commodities whose values are
also expressed in the same terms. while
actual money, apart from its use as a
common denoninator of value, does not
enter into the transactions. AS this
great medium of exchange increases
the need Of coin decreases.
TRl'E MEASURE OF VALUE.
Eut there is one more test of the ac-
tual value Of the gold, a test which
does not depend upon theories or tedi-
Gus inquiry as to quantities of money
or methods Of business transaction
This test is a simple one. bu, The most
important. the most accurate and far
reaching of all those which have been
applied.
This most important of all tests is.
the amount of gold which Il given
quantity Of labor will buy.
The real standard Of value in the