The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1898-10-09
GHE SALT LAKE HERALD: SUNDAY, OCTOBER Q. 1898

Inese two classes of money were to
De treated as a public debt, payable
on demand, for which deferred pay
ments in the form of bonds were to be
substituted.
n Were this accomplished a great con-
traction in our money supply would
| result, With the consequent decline in
prices and the corresponding rise in
the purchasing power of gold and the
value of credits, including the bonds by
which the notes and silver had been
funded
Instead of this relieving the govern
ment Cor the people, who in reality
constitute it, from any burden, its
debt would actually be greatly in
creased, and its credit impaired be-
cause of the greater sacrifice which the
government or its people would have
to make to obtain money thus made
scarce.
Money holders cannot profitably in
vest in commodities or property, or
use their money in productive industry
upon falling market. So long as the
decline in prices continues they may
profit by boarding the money or stor-
ing it away and holding it.
However. it is under precisely such
conditions that money may most prof
itably be invested in government Sc
curities, which, in addition to drawing
interest, appreciate with gold proper
tionately with the decline in the values
of other kinds of property.
By treating a portion of the money
supply as a debt and funding it in this
class of securities, their own apprecia-
| ton in value is greatly accelerated,
| and the correlative conditions of de-
Ginning values and stagnant industries
enSue.
DEMAND FOR MONEY.
1t is true that there are other things
which may affect the value or puTehas-
| ing power of money besides quantity.
The demand for money must always be
| taken into the account.
In one sense it may be truly said
| that the demand for money is always
at a maximum. Whoever wants any
| thing-any desirable object, first wants
money-demands money.
Obtaining money he at once trans
| forms it into the object of his desire.
So the demand for money equals the
sum of the demand of all the people
1 for all other things.
| The demand for money has been con-
sidered as commensurate with the
necessities, wants and desires of the
| human race.
| However. it must not be supposed
! that this demand which connection
with supply fixes the value of
money or the prices of com
modities or property is the equivalent
of Necessity, want or desire. The wants
and desires of people are inSatiate, il
| limitable. The supply of money neces-
sarily being limited, if its value were
| fixed by demand in this sense, it would
logically follow that such value would
fast approach the infinite.
Many a tramp is consumed with a
| desire to possess the mansion of the
millions dpCira docs no
add penny to its exchangeable value.
The necessity, the want, the desire,
before ii can have any influence upon
values or prices, must itself be cap
italized, must be possessed of desirable
objects, things of utility TO others, and
to obtain which others are willing TO
make a sacrifice. One person being the
owner of an object of utility will not
part with it except in exchange for an
other object of still greater utility to
him.
No trade will take place when the
sacrifice to be made would exceed the
benefit to be derived.
The demand for money, while great,
is always counterbalanced by the de-
mand for other things; and there are
some things which are even more nee
essary 10 human existence than money.
In the days of Job, skins seem to
have constituted the money of tie peU-
pie. Still it was then said skin for
skin; yea, all that man hath he
will give for his life" In all climates
food is a necessity; in most, food,
clothing and shelter are indispensable.
Before being deprived of these in the
degree necessary to preserve life, al
most any sacrifice of other things, in
Guiding money, will be made. Every
source of supply is itself accompanied
with a demand which must be salts
tory before the supply is surrendered.
A man presenting a horse and ask
ing for it a hundred dollars in money
creates such a demand as tends to fix
the value of money, just as a man with
a hundred dollars, willing to purchase
a horse, presents a demand which af-
fects the price of horses.
Thus qualified and explained the |
value or purchasing power of money |
depends upon its quantity, and the de-
mand for it.
INFLUENCE UPON PRICES.
In considering the question of the in
fluence of money upon prices it is nee |
essary to keep in mind the different |
uses to which money is applied.
only that portion of the money sup |
ply which for the time being is seeking |
exchange for commodities or other |
property, and so performing its func- |
ton as a medium of exchange, OPP I
crates, in fact. as a measure of value |
and to fix the general level of prices.
Money boarded or used simply as a |
store of value, while possessing po- |
tential influence, a latent energy, can |
have but little effect upon values Or |
productive industry. While prices are
on decline such money has no induce
ment to leave its hiding place. Because
in the hands of it's holder its command |
of commodities and other property in
creases day by day as long as such de-
cline in values continues. Such sit
uation is an announcement to the
withdrawal of money from active cir
dulation
Thus the proportion of money en-
ployed simply as a store of value is
augmented.
That which seeks exchange for other
and helps to sustain the level
of prices is diminished. So the speed
OF falling prices is accelerated as the
and boarding of money pro-
ceeds.
Finally the necessities of the people
holding the money for food, for cloth
ing and shelter. or the cravings of pride
and ambition force money from its hid
ing place to seek exchange for the
things with which such necessity or
desire may be gratified. This affords
an impetus to higher level of prices.
As values of property. other than
proceed in an ascending and
that of money in a downward scale it
becomes more profitable to store wealth
in property than in money; and so the
money is put into circulation, stimu-
Iating trade and vivifying industry.
1t has been noticed and remarked by
some of the ablest writer's on finance