The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1900-01-28

ent century to impair confidence in the
stability even of the automatic system.
The de mOnetiZatiOn 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 1901, when the
annual output Of gold was some four
times greater than that of silver, and the
change back 10 gold again by Germany
IL 1873 preceded by the covert passage
through the congress Of the United States
of the bill denying access to the minis TO
silve and followed by the suspension Of
silver coinage by France and other ma
tons, all these different nations seeming
~ being impe.led 20 this action by the po-
tent influence of a class which could alone
profit by the policy of monetary contrac-
tiOn-all this has led to the unsettlement
Of values. great disturbances Of com
merce and distTust as to the stability OF
any system Of monetary supply
Undl recently there was but little dis
agreement among writers upon finance
and money as 10 the influence which the
supply Of money has upon prices, indus
The general rule is that. other things
being equal the value of money is in pro-
portion to its quantity.
By value Of money is meant It's pur-
chasing power, or the rate at which it
VIII exchange for other commodities or
property.
Otherwise stated. as the number of
uAlAlo VI AAADAlUN II Eo1E-As DAAlEA Al-tle9
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 com
mOditieS becomes less. Any particular
commodity viii thus require more money
units to represent or measure its value
than before; a proportona,e rise in the
prices of other commodities thar money
takes place. When the supply of money
IS increased, prices rise; when the supply
of money is diminished, prices fail.
This law has been considered so well
established as TO be called automatic.
However, il has recently been denied.
Value of Money,
It is contended that the value Of money
does not depend upon the number of its
units IN circulation. but upon what is
called its intrinsic value or the de-
mana for the material Of which the unit
is composed for other uses than that Of
money. Il Is insisted that The value or
purchasing power Of gold OF silver is
precisely what those metals viii bring
for use as ornaments and in the indus
t-ial arts.
A moments reflection ought to con-
vince any reasonable mind that this is
no. true.
These metals. without the money priv
ilege. and regarded simply as c0mmOd-
iues, would nave values depending upon
the demand for them, the estimation in
which they might be held fer the various
known uses to which they could be ap-
piled.
If some new and beneficial use should
then be discovered which would exhaust
d large portion Of the supply Of these
metals, is il not clear that their value
would COrreSDOndingly riSe2 Again. If this
new demand should be taken away. the
value Of thes5 metals would as certainly
suffer a decline.
The demand for these metals for coin
age and for use as money operates Ike
nTnRr 0nTna nd 1Tn0n Tnef1. value 4
commodities.
If there is uncertainty as to the con-
tiEued 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 viii still pos
sess value. although demOnetized
Il should be borne in mind that a ma
teTIal which Is IN greater demand Tor
other uses than for money is thereby I'M
suited for coinage or use as money.
II given quantity or IL Is coined or
used a. money. IL will not circulate as
such. but viii Immediately be converted
10 its more valuable use. Say an ounce of
platinum is worth more than dollar for
the uses to which now as a commodity
it may be applied. Then suppose it should
be provided that an ounce OF that metal
should be issued as money and stand for
81. It is clear that u would not circulate
as money, but would be 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 perform
that Is, as a medium of exchange. Such
material VIII not perform the principal
duty Of money, While high intrinsic value
may thus destroy its efficiency as money.
it otherwise exerts no influence upon its
circulation or purchasing power The lat
ter must always depend upon the demand
for money and the quantity of IL in cir
cuiation.
No Credit Value.
It is also insisted in some quarters that
if the value of money does not depend
upon the intrinsic or commercial value Of
the material Of which 1t is composed.
then its value rests upon the credit Of
the government which authorizes lis is
sue This contention leads 20 absurdity.
Money liz the government treasury OF eX-
acted under the taxing power from the
people, or at least obtained in some man
ner Is the only means by which the gov
eminent can meet Ihe pecuniary de-
mands upon It. The credit Of the gov
eminent is good or BAD according to its
ability and readiness promptly to meet
its Obligations and pay its debts
Credit thus does not give value to
money. On the other hand, without
money. credit could not exist. Credit is
not the basis OF money. but money is the
basis of credit. Credit in government
without money OF the means Of obtaining
il Is iucOnce.vable. This idea that credit
gives value 10 money is OF very recent
origin. II is put forth as one Of the sup
ports of tho POhCy Of contraction and 10
give il popularity. If the people can be
mad0 70 believe that every dollar which
Is issued IS a debt and burden which they
must ultimately discharge, they viii be
the more easily convinced that the num-
Der Of doEars issued should be as small
as possible. The present efforts fn con-
States treasury notes for cancellation and
for funding them IN interest-bearing