The times. [volume] (Richmond, Va.) 1890-1903, 1899-05-25

! We call attention TO ine iacl ihat t"'
/ United states government has paid TO
7 the Spanish government the immense SUM
+ az s2c.0ln 900 without the necessity Of ship
ping abroad one ounce OF gold. There
was no handling Of money in this transac-
ton The whole affair was arranged by
/ bills of exchange This g. one of the best
Illustrations that we have ever seen of the
} contention OF The Times that in this day
/ there is less and less need Of actual money
| 900 The great transactions of hic-kich-
/ mond Times.
/ PsnaN, THE s1o000o. however ar this
was an honest deal had 10 De actually
( in hand u gold. or SPANS representa-
! tvcs would never have givcn receipt
tor the money And so % always is. The
money is oscnual s0mcwhere-w whether
here OPP there may Doc of no consequence
N0rOk Nilginian-Plot.
now. we say we win convince tho Nir-
siuian-Puot that there need never have
been ono dollar ia hand anywhere. and
SIN Spain would have given receipt for
ne amount due. We viii first put COM
mercill transactions " This sort On their
most elementary form. and chen work
up from that TO thc., more complex forms.
Smith q Co.. Of Richmond. buy % care
load OF cotton from Jones g. CO.. of Will
mngton. n. C.. for $1,000. Smith d Go.
have @ credit in the First National Bank
OF Richmond Tor S.o0. but they had put
Ho money there The credit was given
them because they put drafts and checks
thcre Jones d Co.. of Wilmington. buy
carload Of hardware from Smith & co..
OF Richmond for 81 00s Jones 81 GO. have
IL credit m the First National Bank OF
Wilmington. raised in the same way. The
hardware is shipped to Wilmington and
the cotton TO Richmond. Smith d Go.
send Jones & Co. check on the First
National Bank of Richmond for Sl0r.
and Jones O. co. send Smith d Go.
check ON the First National Bank of VIII
miugton for N.00. The two banks exc
change the checks. Smith e Co. get the
cotton and keep their own Slo0l instead
OF getting Jones * Co.'s $1,000 Jones *
CO. get the hardware and keep their
Nol instead Of getting Smith d co.'s
81 0o'. and although their has been great
deal OF talk about buying and selling
hardware and cotton. an that has really
been done was TO swap q carload of cot-
ton for carload of hardware through
tho form OF purchase and sale operated
by the banks by swapping drafts that
represented the credit values OF each.
and not dollar of money has been used
at al.
Let AS now vary the FORM but not the
substance Of the transaction: Smith 6. co..
OF Richmond. buy the same carload OF
cotton from Jones & CO.. o. Wilmington
and Tompkns d. Co.. Of Wilmington. buy
a carload OF fertilizers from Street q
Co. Of Richmond. FOR $1,000 The goods
are shipped. In this way # has come 20
pass that there are 81 Ool I'm Wilmington
due to Richmond. and $1,000 I'm Richmond
due to Wilmington. Smith d co. send
their check on The First National Bank OF
Richmond for $1,000 TO Jones q Co.. OF
Wilmington. and Tompkins q Co.. of
Wilmington. send their check on the First
National Bank OF Wilmington 20 Street
* CO.. OF Richmond The Wilmington
check is deposited i'm the Richmond bank
ana the Richmond check SIS deposited in
the Wilmington bank The banks look
into the transaction and conclude that 81
they transfer Tompkins' S1Oo TO Jones
account Jones will De satisfied and If
they transfer Smiths 1900 TO Streets
account Street win be satisfied This is
done. the transaction is completed. all
that has taken place is q swap of some
cotton for some fertilizers under The form
of purchase and sale. yet there has never
been one dollar of money used.
The first case was one of direct ana
simple transaction between parties The
second was "a case OF indirect uauaac-
tons which contain the elements OF what
IS called payment By exchange" 10 BE-
case Of purchase in one locality OF
debt due I'm another with which to pay
by assignment of the debt a debt the
purchaser owes I'm that othcf locality.
1t contains an the clements Of what is
known I'm America and finances as Eek
change"
Now. I'm case OF our payment TO Spain.
these facts existed: We wanted to place
s2eoosOO in Madrid. The merchants Of
London owed the merchants Of New York
S2o00ooo for wheat and cotton sent there.
our government bought their claims i'm
London from the New York merchants
and assigned them TO Spain. That was
NOT the naked form OF the transaction.
bu. that was it's substance. But the Pilot
viii say our government paid gold dollars
for these claims. and it was. therefore. q
money transaction at last This may be
true. because The government requires
an Of its transactions 10 DEE operated with
actual cash. 10 viii not permit any trad
ing in what it pays out or receives. But
II 10 allowed such as happens in an the
transactions of commerce and business
New York importers could have paid their
duties in assignments to the United States
OF debts due them 10y London merchants
and then the payment would have been
mado 20 Spain without tho aid OF one
dollar OF actual money If the transac-
ton had been between private parties
instead of between governments that s.
tho way 10 would have been effected. ana
that is the way an business IS transacted
under modern conditions. which admit
~ ninety-nine hundredths OF transac-
lions being settled by exchange credits !