The sun. [volume] (New York [N.Y.]) 1833-1916, 1903-04-12
SOME NEW BOOKS.
Money.

professor OF political economy In the UNI
vorsity Of Chicago. has undertaken TO de-
fine and expound the general principles OF
money. This book. however. 10 only the
first In . series OF six volumes which will
aim to cover the whole Reld Of the literature
relating TO money, the subjects subsequently
examined being metallic money, including
predminently gold and silver; the history
Of metallic money In the United States;
the history Of paper money In the United
States; the history Of paper money In foreign
countries, and, finally, a history and sx-
position Of banking. The author warns
the reader In a preface that on many OF
the points considered he finds himself at
variance with some Of the teachings current.
and especially with body OF doctrine asso-
dated with the name OF Ricardo. Whether
hs has succeeded In establishing for all
money. metallic or paper, deposit our
rcncy or what not general principles opera
tive in all countries al all times In ques-
ton TO be answered by professions econo-
mists. The book. however, is not writ
ten for professional economists alone, for
an effort has been made TO free the writ
Ing from technicalities so as TO make II
clear to the ordinary reader. The book
before us stops abruptly with an account
Of the Russian paper money. and we must
await the publication OF other volumes
- the contemplated series before we can
undertake to say to what extent the author
has succeeded in formulating body OF
general principles. The noteworthy feat
ures OF this new volume are the emphasis
laid on the distinction between the standard
and the medium OF exchange the rejection
81 the old assumption that credit is based
pn money and the proposal Of. a new analysis
OF credit and It's effect on prices; . collec-
ton OF noteworthy tables Of prices; de-
structive and constructive study OF the
theory OF prices; a reinstatement OF the re-
lations Of prices to foreign trade: . con-
dsnsed history Of the origin Of legal tender
In Great Britain. and an investigation OF
the economic effects Of legal tender on the
value Of money, and, finally, an examina-
ton of the laws regulating tho value OF
token coinage and paper money. especially
% regards redemption.
II In 70 be noted that the author OF this
book does not begin with formal defini-
ion OF money. He holds that when Q
clear understanding Is reached with re-
gard to the Offices performed by money.
the meaning OF the word will follow as q
matter of course. A confusion OF mind
the separate functions OF money
has led to the use Of the word In many DIFF
fsrent senses. For instance. some discussion
has arisen as to whether checks should
he included In the definition OF money.
Our authors view U.s. If efficiency as a
medium Of exchange gives the right to
be called money, then checks certainly
have that right; but 1t would be nonsense
TO speak Of checks as a Standard Yet
the idea Of a standard, or common de-
nominator, to whose value all other articles
are referred for compar ison, is funda-
mental to the meaning OF money. In q
word, II La possible that some form OF what
every one recognizes as money may serve
only one function, and not other funo-
tions OF money; whereas another form
may perform all OF these functions. What
ever be the definition, II the work actually
done by money In any Of It's forms be first
1t should DO possible to avoid all
hair splitting dialectics. To this end. our
author examines the following three func-
to wit, those Of q common denom-
inator, or standard; OF q medium OF ex-
change; and Of q standard OF deferred
payments. Some authoritative writers
have added fourth function which they
have called q store Of value. 1t u not
clear, however, that In this capacity money
eerves a purpose different from that OF
any other commodity which may be more
or less imperishabIe. So far as the pro-
posed fourth function IL concerned dia-
monds and precious stones might be de-
scribed as money. Indestructibility, Of
course. Is a desirable quality in the article
chosen as money, but the quality In quite
apart from the nature and the essential
function Of money.
Before proceeding to an examination OF
money, considered az q standard or COM
mon denomination OF values, Prof. Laugh
IN deems 1t advisable to state the primary
dement's OF value and price. II COM
modify has qualities which satisfy some
need, II effort and sacrifice are required
70 obtain 1t, and il II is transferable. We
ere ready to give for 1t other things which
re prize, and we say that such q thing
has value. The exchange value OF an
article 10 expressed by the quantity Of
other goods which can be obtained for 1t.
Value In this sense Is not intrinsic In any
thing, because 1t can be expressed only
N comparison with something else. For
instance, one beaver skin Is exchangeable
Tor a pound Of powder: the value Of one
ekin. then, Is a pound Of powder, or, vice
versa, the value Of a pound Of powder
10 one beaver skin. II skins become rare
and q beaver pelt 10 exchangeable for two
pounds of powder, then the value Of skins
has risen relatively to powder, or-which
= the same thing-powder has fallen rela-
lively to beaver skins. That 10 to say,
exchange value Is not intrinsic: 1t Is a re-
i1tion.
The qualities Of commodity are no
doubt intrinsic; but It's utility or power
70 satisfy human need arises from q re-
latiouship established between men In differ
ine circumstances and these qualities Of
IN article. The exchange value Of thing
= it's purchasing power. or it's command
over other things. quite irrespective Of the
reasons for the existence OF that power
The intrinsic qualities Of goods may not
change, but their exchange values may
often change.
For practical purposes We get accurate
heas Of the exchange value Of . particu-
lar article In present times by comparing
Il with quantity Of a given precious metal,
edther gold or silver. The quantity Of the
money material for which an article will