The times. [volume] (Richmond, Va.) 1890-1903, 1896-08-23
BUSINESS EXCHANGE OF COMMODI-
TIES. NOT SALES.

p. 20. .
BUSINESS EXCHANGE OF COMMODl-
TIES. NOT SALES.
7 now advance another step In the dis
cussion. and ] take up branch Of 1t
about which % men out Of every 100 have
wrong ideas. but If you would understand
the matter YOU must get correct ideas
about that branch.
II is the common error OF the day "a
think that business is done with
coin or circulating notes, and That
a great quantity of these IS, therefore,
necessary for the successful conduct or
business. This IS the common and the
fatal error OF the day. and we have a
standing Illustration always before our
ewes that IT is an error. Great Britain u
the greatest commercial nation that the
world ever saw or that dreamers ever
conceived Of. The tonnage of the world 3
shipping IS 24q63.l99 OF tons. or this
Great Britain owns j.. 959 POS. or more than
one-haf. We may, therefore, safely as
sumo that she does more than one-half
OF all the business Of the world. Yet
Great Britain has less than $OO,O0OO)O or
money and currency Of all kind, while
we have about 81, 500 600 coo, or nearly three
times as much And Great Britain Is To-
day enjoying a full tide OF prosperity such
as was never known IN any country. Her
export trade is spreading into every quar-
Ter Of the globe: her import trade Is SIM
plv marvellous, her banks ana trust COM
panies are overfowing with money, seek
ing investment, and the common rate OF
interest there is one-half OF one per cent.
n year. She. therefore. furnishes a stand
ing contradiction TO the proposition that
g.eat quantities Of money are necessary
to business.
Put il we would give attention 10 the
nature OF business, We should see that II
does not consist Of the purchase and sale
Of commodities. as Is generally supposed
but Of the exchange Of commodities be-
tween separated localities, which eN-
changes are effected for convenience
through the forms OF purchase and sale.
If business were in fact purchase and
sale for money. each locality would need
to have n gold mine 10 draw on. or 1t
vould have TO go out Of business Let me
illustrate to YOU how business Is really
done. The South raises cotton. but II
needs the hardware Of the North and the
bacon OF the West. a country store
keeper in Alabama collects up all the
cotton raised near him and sells II 10 a
New York exporter OF cotton for 5000
This New York exporter sends him a
check on a New York bank for 5000.
which the store-keeper deposits in that
bank 10 his own credit and the credit
for 5000 is transferred from the exporter
to the storekeeper. The people in this
sforekeeper's neighborhOod need nails
and shovels and plows and trace-chains.
and he buys these articles I'm New York.
and gives a check upon the New York
bank in payment. and the credit that the
cotton exporter had had Is transferred
from the storekeeper 10 the hardware
merchant Now. is there anything In this
transaction. at bottom, but swap OF
some cotton for some hardware? The
parties 10 the transaction were all the
time talking of selling cotton and buy
my hardware. but there were no real sales
M all Not a dollar OF money was used.
they simply valued the cotton In dollars
md tho hardware in dollars and swap
ned cotton for hardware through the
process Of exchanging the credit values
~ each. And this is all business when II
Is resolved into its original elements.
They talk Of sales for money, but these
are only swaps OF the money values OF
things When the Alabama storekeeper
cot his cotton into the form or credit
ri bank. he could handle that credit with
FAR great ease and convenience than he
could handle the bulky cotton. He did
not have 10 swap two pounds OF cotton
for three pounds OF nails, but he snapped
the credit value OF two pounds OF cotton
for the credit value Of two pounds OF
nails. The substance OF the business was
that re paid the bank commission to
rot his cotton into that form for him
Which enabled him to exchange Gotten for