The independent., 1903-05-28


not supply the demand in coin, 1t
would have to issue enough notes to
make up the deficiency. But If the
value Of money depends upon the
number and denomination of the
pieces in circulation, and their rela-
tion to the volume Of trade-which
believe; and most writer's on the SUBJ
ject admit-why not use the cheapest
and most convenient material? AL
though consider paper the best ma
terial for making all money, except
small change, no kind of money can
be good unless people have confidence
in it, and are willing to accept it.
Gold and silver coins are inconvenient
on account OF their weight, and the
expense Of buying gold and silver to
make money is very great; still
sound and honest money may be made
of gold and silver; but not on the
free coinage" plan. A perfect sys-
tenn OF money must be limited, and it
is absolutely necessary for the gov
ernment to have the power to issue
more money when more money is re-
quired, and to stop its issue when
there is enough money in circulation;
because it is the whole amount of
money in circulation that measures
value. 1t is just as necessary for the
government to regulate the value Of
money as the size of bushels or the
length of yards; and It is just as i'm
possible to have perfect system of
money based on the free coinage plan
as 1t is to have perfect system of
weights and measures where weights
and measures are not regulated Free
coinage of gold gives to the owners
OF gold the same power that a law
allowing dealers in all kinds of goods
to change the size of their weights
and measures, whenever it suited their
convenience, would give to tradesmen.
Even If paper were issued exclusively
in place of large coins, it is not so
convenient as coin for small change,
and the use of small coins should be
continued.
| would limit the amount loaned or
real estate to somewhat less than the
value of the permanent improvements
because lending on the value of i'm
provements would encourage industry;
and | would not favor lending upon
land values, because it would encour-
age speculation in land.
Under prevailing systems the rate
Ct interest depends upon the supply
and demand for money-rising as
money becomes scarce, and falling as
the supply increases or the demand
diminishes. An imperfect currency
fluctuates in value, and the fluctua
tions are accompanied by fluctuations
in th. rates Of interest. AS a perfect
currency must always be of the same
value-that is supply and demand
must always remain equal-a perfect
currency must be accompanied by a
tyal rate Cf interest. The rate of in
terest and the amount of money in
circulation are interdependent. Limit
the amount of money in circulation
arbitrarily, an increased. demand for
money in that case cannot be accom-
panied by an increased supply, the
value of money increases, and the
rate of interest rises. But fix the rate
OF interest arbitrarily and leave the
a1aount of money free to adapt itself
to the rate of interest, by issuing as
much money as is demanded at that
rate-and maintaining the same fixed
rate-money will fluctuate in quan-
tity with the requirements of COM
merce but will not fuctuate in value.
The rate of interest adopted should
be as near as possible the current rate
because every change in the value Of
money does an injustice. Every in
crease in the volume of the currency.
without corresponding increase in
the amount of business, depreciates
the value of money and does an inius-
tice to creditors, and a contraction Of
the currency does an injustice to debt
ors. For that reason the value OF
the currency should never be
changed and as changing the rate Of
interest would change the value of
money, the rate of interest should new
er be changed. | don't mean that a
law should be passed to prevent the
legislature from changing the rate of
interest, for such law would be i'm
possible; for any law enacted by one
set OF men may be repealed by another
set of men. One set of lawmakers
sometimes make promises and throw
the responsibility of fulfilling them or
succeeding generations; but when
people realize that the dead have not
the power to govern this world. such