The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1896-10-10
John Locke on
National Finance


most acute and logical reasoner that any
nation or any age has given TO the world.
he defines money to be necessary to all
sorts of men in trade both for counters
and for pledges This in his quaint and
old fashioned way Of saying that 1t Is
both II measure or standard of value and
"a medium of exchange. Money, he tells
us, carries with 1t as counters" what lie
calls ''evcn reckoning" ana as pledges
it carries, security that he that receives
1t shall have the same value for II again,
of other things that he wants. whenever
he pleases. The one of these 1t does by
its stamp and denominations: the other by
its intrinsic value, which is it's quantity
The standard money of Locke's day was
silver. given quantity of silver. wheth-
er stamped or unstamped, has certain
intrinsic value, and this intrinsic value
constitutes the security that he that re-
ceives it shall have the same value for it
again. The only purpose of the stamp
and denomination Is TO make given
quantity of silver serve as counter In
order that there may be "even reckoning"
in all business transactions The stamp he
correctly declares to be nothing more
than "a public voucher of its weight and
fineness;' and so little importance does
he attach to the denomination, that he
observes that here in England there
might as well have been twelve shillngs
in Il penny, as twelve pence in shilling.
Basing his argument. as he does, upon
the fundamental truth that there is and
can be no difference in value between bull
ion coined and uncoined, and upon the
supplemental truth that the value of bull
ion Is measured by its weight, he explains
TO his readers that 'the necessity of pro-
portion of money to trade depends on
money, not as counters, for the reckoning
may be kept or transferred by writing;
but on money as y pledge. which writing
cannot supply the place of, because a law
cannot give to bills that intrinsic value
which the universal consent of mankind
has annexed to silver and gold" This is
the very essence of the fatal objection
to our modern American "greenback'
heresy. The greenbacker regards money
merely as counters and very truly ar
CUES that there is no need that money,
from this point of view, shall have intrin-
money is also "a pledge and that
pledge or security must have intrinsic
value. II it has no intrinsic value, it will
be accepted in trade only on trust as n
memorandum of Indebtedness to be dis
charged at some future time: and. the mo-
ment that confidence is shaken in its III
innate redemption, its nominal value be-
gins to 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 re-
marks that IL Is hard to determine the nee
cssary proportion of money to trade, be
cause it depends not barely on the guam
circulation. ire The very same shilling may,
at one time. pay twenty men in twenty
days; at another, rest in the same hands
a hundred days together" He anticipates
the argument of Mr.. Bryan and others
who advocate the cheapenins of the
American dollar. and even Mr.. Bryan's
quaint illustration taken from the ''teet-
cr-board," in the following words: "There
is another seeming consequence of the re-
ducing of money to II low price, which at
first sight has such an appearance of
truth in it. that | have known it to i'm
pose upon very able men: and that is that
the lowering of interest" against which
ne was writing) will raise the value of
all other things In proportion. For money
being the countcr-balance to all other
things .purchasable by it, and lying. as it
were. in the opposite scale of commerce,
ii looks like natural 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 il.
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 to anything
purchasable by it. is the quantity of the
ready money we have in comparison with
the quantity of that thing and its vent"
tby vent he means demand in its rpla-
tion to supply: "Or. which amounts to the
same thing, the price of any commodity
rises or falls. by the proportion of the
words, the ratio which determines prices
Is not the ratio between money and prom
crty, but the ratio between the number of
producers and that of consumers of any
article IN the market This ratio is not az.
fected,, directly or indirectly, by the vol
tine Of the currency. Money" he says,
serves. us commonly by its exchange,
never almost by its consumption" and he
adds in direct contradiction to the theory
held and promulgated by Mr. Bryan Chat
the only honest dollar is Il stable dollar:
Though the use men make of money be
not in It's consumption, Yet it has not at
all Il more standing, settled value I'm .x-
change with any other thing, than any
other commodity has
O.
The idea that legislation has power 10
alter me me value or money moves him to
mirth. "Thesc men," he says, "have found
out by cunning project how, by the re-
straint of a law, to make the price of
money one-third cheaper, and then they
tell John NOkes that he shall have 10
900 of II to employ in merchandise or
clothing; and John Il Stiles shall have %
| 0CO more to pay his debts; and SO lis
tribute this money as freely as Diego did
his legacies. which 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 havt.
| perhaps done something TO increase mems
| desire. but not made money one jot easier
| to come by: and. till they do that. all this
| sweet jinsling OF money In their discoiirses
just goes to 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 subjact
| of money eliminates in his discussion of
| the nature and effect of Clipping or
raising" coin. Money is raised In the
| sense which he attaches to the word.
| when its nominal value exceeds Its actual
| value What he means by raised coin Is
| what we mean by deprecated coin. When.
| ever coin has two values, one actual and
| one nominal, we may of course fix our
| minds upon either; the nominal value Is
| raised. when the actual value falls. Clip
| ping was an unauthorized method of rails
| Ing coin, closely allied to counterfe.ting.
| Every student of English ,'i1tory knows
| that It was once so common and serious
| an evil as to demand the Sc ;erest meas
| ures for its repression. NO that 1t was
| treated as a capital offence. being such an