Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1898-11-01

This simple Illustration shows the fallacy
Of Of, The Oft repeated argument that the the
cause 1t always contains so much gold
and because 1t is always worth one nun.
drea cents" 1t must contain the amount
Of gold which the law requires to be put
Into it and it must therefore necessarily
be worth one hundred cents. because the
law In like manner provides that one nun
lation 10 other things, however, the value
of gold Is all the time changing Just the
same as the value OF ything else Is
all the time changing. Whether the SUP
corn its value is determined by the great
law of supply and demand. and as tnese
fsctors vary in quantity, so VIII the value
Of any given article or thing vary. there
fore, / repeat, that it is not accurate TO
speak of money as a measure or STANDARD
5f value because it is only nomlnaiiy 50,
but with this explanation l think that the
terms vii be sufficiently understood SO
that if happen to use them occasloniiy
N the course of my remarks, there VII! pc
no misapprehension as to my meaning.
But however difficult it may be to give
strictly accurate definition OF money.
we all of us have sufficiently clear idea
of it for general purposes.
The use of money originally grew out
of the difficulties attending the transac-
ton of business by means of barter or
the direct exchange Of one commodity tor
another For example, to borrow a Ia
miliar illustration, one man may have
more boots than he needs and be sadly in
want of a coat. Another man may have
more coats than he requires but he may
also be well supplied with boots, conse-
quently between those two men no trade
can take place, and naturally unGer
general system of barter for people to
supply their various needs, a great deal
OF roundabout, inconvenient tracing would
be required, and frequently they could not
Go it q all. This inconvenience led to the
invention and adoption of money. Either
by law. or custom, some one or more
commodities were agreed upon as accept.
able for everything which the indivlouaI
had to sell. Consequently he could ex-
Change his commodities for this pafslcu-
lar one and then exchange that Tor Such
things as he might happen TO need. Under
the barter system there was also mucn
difficulty in ascertaining the rates or the
ratio at which different things Would ex-
change for each other; as, for example,
how many sheep We're equal TO an OK, or
and so on. Frhis difficulty was to a great
extent removed when some paftc-
ular thing or things were agreed upon ana
all values rated to them. But it is not
necessary for me to go any further into
this phase of the matter. AT different
times and in different places, all sorts OF
substances have been thus used as money.
iron, copper, tin, hides, tobacco, coGiish,
SoiG, silver and many other things nave
been employed. But finally silver and sold
came to be regarded as the two sub
stances which were the most convenient
and the best fitted for monetary use, and
for at least three thousand years in all
civilized communities. these have been re-
gardedi as the two great money metals OF
the world.
But, my friends, money does more than
to simply facilitate the immediate pur-
act business upon a large scale without
the creation of obligations to be met in
the future. That is to say, a person
makes ID purchase of something for which
he is not able to mmediately pay. he
therefore promises to 60 so at some SUBJ
sequent Date. Money being the medium
OF exchange, the custom grew up easily
an6 naturally Of promising to make the
subsequent payments in money, except,
in those particular cases where special
contracts are made. In other words,
termed deots. Money is primarily me-
dunn of exchange and secondarily 1T is
an instrumentality for the payment of
debts In modern business this latter
culeble importance. 1t is Yariousiy eSLi-
mated that from 80 to 50 per cent of the
worlds business IS done on credit. Every
credit means a debt and every debt,
except so far as they are used to offset
each other. must generally be paid in
money. Having thus arrived at reas-
ey is and the functions that it performs,
let US now proceed little further.
THE QUANITATIVE THEORY.
l have already suggested that value is
a term of exchange and that The value of
anything depends upon the Jaw Of supply
mand applies to money just ne S1:16 as
it applies to anything else, no matter OF
what particular substance II may be
made. In early colonial times when to-
bacco was used as currency here in then
Virginia, 1t needs no argument from me
to enable you to understand that II to-
bacco was very scarce ii was Correspond
ingly dear. = abundant, Of course it was
cheap. such is the case now, and if we
were to once more use tobacco as
money, that principle would not be
G. = Oto+,I Z his iS Of gHli and silver
although, as | have indicated, many peo-
pie obtain the absurd ldea that the value
of gold, for some inscrutabie reason, is
independent of the law OF supply and de-
m6nd, and is fixed, Interchangeable as the
yard stick or the bushel Measure. If god
We're exceedingly scarce, gold would be
can all see that at a glance. If the I<lon-
dixie region should turn out gold in such
quantities hat it should become as plen-
tiful as anthracite coal, it is perfectly
manifest that gold would be very mucn
cheaper in proportion to other things than
it is now. No argument is required to
demonstrate the correctness of this view.
At this time, we have the most concius-
i've evidence presented in the conditions
which obtain in the Klondke gold fields.
An ordinary day laborer receives for his
services about So per day in gold. This
is simply because gold is relatively abun-
dant and day laborerS are relatively
scarce. The statement recently appeared
in print. and | see no reason TO doubt it,
that flour in that region was worth $40
per hundred 1t is a well known fact
that -four was sometimes worth a dollar
a pound in California during the early
days of the gold excitement there, and
that the miners were paid for their SER
vices at the rate of an ouce of gold dust
per day, which was rated at about SIG to
the ounce. Both in the klondike and in
California the reason for these eXtraor-
binary prices was and is the same the
relative scarcity of flour and laborers and
the abundance of gold. And this princi-
pie holds good everywhere money is used.
When it is plentiful It will be relatively
cheap. When it is scarce it will be rela-
lively dear. In other words, when money
is scar rec, prices will be low; a little mon
ey will exchange for much of other
things. When money is abundant, prices
will be high; more money will be required
in exchange for a given quantity of other
things unless the other things have in
creased in like ratio. This principle con-
stitutes what is known as the 'Quantitive
theory of money, namely, that the pur-
chasing power of money depends upon
the quantity in circulation in proportion
to the total quantity of salable commodi-
ties. Many people are mislead by the
terms purchase. buying" and price"
etc. Therefore, when prices change, they
are apt to inlbibe the notion that the
commodities have either gone up or down
while the money has stood still. This,
however, is impossible, because when we
buy property with money, although we
call il a purchase, it is nevertheless SIM
ply an exchange. We give the one for
the other. The man with the money buys
the property. but the man with the prop
erty also substantially buys the money
1t is nothing but an exchange on both
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