The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1898-10-09

| the rlght to issue copper tokens without
restriction. led to similar evils in that
| country.
If the number of money units in the
fat system were justly limited, so that
their purchasing power would remain
uniform and thereby the general level
OF prices be maintained, that system
would be free from serious objection.
Still experience has shown that fiat
money has, as rule been resorted TO
as a temporary device in times of
emergency or (by some nation inn dis
tress, and has had no recognition be-
yond the limits of the state or nation
adopting it.
Even within the limits of such state
the people may have little confidence
IN the permanency or durability of the
system. The overthrow OF the govern
ment destroys the value of such money
enectually Confederate notes utterly
| collapsed in value with the termination
of the civil war.
| So far all fiat systems have proved
as fleeing and uncertain as the gov
eminent which adopted them or the
exlgencies which brought them forth.
Such systems LACK soundneSs in that
the people have no confidence in their
permanency, or at least, in their con-
| tinuance under uniform and reasonable
regulations and limitations.
Under the automatic system with
gold and silver as the basis by which
the supply of money for all time and in
all nations was to be determined until
the nineteenth century at least, the
question of soundness or permanency
was never raised.
SCHEMES OF AVARICE.
The sordid promptings of avarice and
| chicane have done much during the
present century to impair confidence in
1 the sta hiIitU the automatic
| tenn.
The demonetization of silver by Great
| Britain in 1916, at a time when the an
nual product of that metal was about
| three times greater than that of gold;
| the like action in respect to gold by
! Prussia and the German states in 1887,
| when the annual output of gold was
some four times greater than that of
! silver, and the change back to gold
again by Germany in 1873, preceded by
! the covert passage through the con-
| gress of the United States of the bill
| denying access to the minis to silver,
and followed by the suspension of sill
Yer coinage by France and other ma
| tons, all these different nations SEEM
! ingIy being impelled to this action by
| the potent influence of a class which
could alone profit by the policy of mon
etary contraction-aH this has led to
| the unsettlement of values, great dis
|
| to the stability of any system of none
| tary supply.
Until recently there was but little
! disagreement among writer's upon
| finance and money as to the influence
which the supply of money has upon
prices, Industry and business.
The general rule is that other things
| being equal, the value of money is in
| proportion to its quantity.
BY value of money is meant its pur-
chasing power, or the rate at which it
viii exchange for other commodities or
property.
Otherwise stated, as the number of
units OF money is increased, other
things being equal, the purchasing
power of each unit will diminish.
Augment the number of money units,
and each unit as a standard for the
measurement OF the value of other
commodities becomes less Any partic-
ular commodity will thus require more
money units to represent or measure its
value than before. a proportionate rise
in the prices of other commodities than
money takes place. When the supply
of money is increased prices rise. When
the supply of money is diminished
prices fall.
This law has been considered so well
established as to be called automatic.
However, it has recently been de-
MED.
VALUE OF MONEY.
1t IS contended that the value of
money does not depend upon the num-
Der Of its units in circulation, but upon
what is called its Intrinsic" value, or
the demand for the material of which
the unit is composed for other uses
than that of money. 1t is insisted that
the value or purchasing power of gold |
or silver is precisely what those metals |
will bring for use as ornaments and in |
the industrial arts.
a moments reflection ought to con- |
vince any reasonable mind that this is i
not true.
These metals. without the money |
privilege, and regarded simply as COM |
moditieS, would have values depending |
upon the demand for them, the estima- |
ton in which they might be held for /
the various known uses TO which they |
could be applied.
If some new and beneficial use should |
then he discovered which would ex-
haust a large portion of the supply of |
these metals. is it not clear that their |
value would corresDondingly rise? |
Again, if this new demand should be
taken away the value of these metals
would as certainly suffer a decline.
The demand for these metals for
coinage and for use as money operates
like any other demand upon their value
as commodities.
If there is uncertainty as to the con-
tinued use of a given metal or material
as money the people among whom it
circulates may have greater confidence
in it, from the fact that it will still
possess value. although demonetized.
1t should be borne in mind that a
material which is in greater demand
for other Uses than for money is there
by unsuited for coinage or use as
money.
IF a given quantity of it is coined or
used as money, it will not circulate as
such. but will Immediately be convert
ed TO its more valuable use. Say an
ounce of platinum is worth more than
a dollar for the uses to which now as
a commodity il may be applied. Then
suppose ii should be provided that an
ounce oe that metal 5hould be issued
as money and stand for one dollar 1t
is clear that = would not circulate as
money, but withdrawn from circulation
to be converted TO its more valuable
use.
The intrinsic value of a material
which equals or exceeds its monetary
value is inconsistent with the essential
service which money is designed to
Derfornl-that is. as medium of ex-
change. Such a material will not per
form the principal duty OF money.
While high intrinsic value may thus
destroy It's efficiency as money, it 9TH
cruise exerts no influence upon its cir
culation or purchasing power The
latter must always depend upon the
demand for money and the quantity of
it in circulation.
NO CREDIT VALUE.
It is also insisted in some quarters