The independent., 1903-05-28
SCIENTIFIC MONEY
Mr.. Paton's Address Before the Single Tax
League Of Auckland, New Zealand


money question or treat 1t OF no par
ticular moment; as something OF
private nature, with which govern
ment ought not to concern itself. But
some of them realize that taxes are
paid in legal tender coined money
and in nothing else; and they give the
money question the attention 1t de-
serves.
The following is an address deliy-
cred by James s. Patton. now OF River
side. Cal, before the Single Tax
league Of Auckland, New Zealand, III
October, 1901; and 1t is now being
circulated by the Financial reform
league of Inglewood, N. (which goes
TO show that the money question is
live one even In progressive New Lea-
land, the country without strikes. MI.
Patton said:
Mr.. Chairman, Ladies and Gentle
men: My subject tonight is "A Per-
feet Money System" Ricardo said:
"a perfect money will always have
the same value" He held that per-
feet system Of money was impossible,
and his reason was: "That as all
commodities fluctuate In value, sys-
tenn of money based upon commodity
must also fiuctuate In value"
His reason is good as far as 1t goes:
but it only proves that system OF
money based on commodity must be
imperfect, and in that | agree with
him.
The ideal system that students OF
the money question are looking for
must be based upon natural law that
will force it to expand and contract
automatically with the expansion or
contraction Of commerce For, as tho
value of money depends upon supply
and demand, and as perfect money
must always have the same value, an
increased demand must be accompa-
MED by an increased supply in exact
ratio to the increased demand; other
wise, the value of money must fluc-
tuate and the money be imperfect.
Cne function of money is to measure
values, consequently it should always
be Of the same value. just as meas
ure of length, such as yard must
possess the quality of length, and to
be an honest measure must always be
Of the same length. AS it is duty OF
government to regulate weights and
measures, it is the duty OF govern
ment to regulate the value of money
tle measure Of values
Del Mar says: ''Value is not a
thing, nor an attribute OF things; 1t
is relation, a numerical relation,
which appears in exchange" Now, II
that is true, and also that the value of
money depends upon the relation of
the whole volume of money, to the
whole amount of goods and services
it is required to exchange; 1t fol-
lows that the value of a perfect money
must be regulated, not by regulating
i the quantity of the material in
piece of money, nor by arbitrarily linn
iting the quantity issued; but by reg
ulating it's relation to the wealth it is
required to exchange.
The rate of interest indicates the
relation of the volume of money %
the volume of trade When more
goods than usual have been produced,
1t requires more money than usual to
exchange them at the usual prices,
and if more money is not fortheom-
ing, interest will rise until the fall in
prices makes it possible for the
amount of money in circulation to ex-
change the goods offered for sale and
demanded by buyers.
If the increased production of goods
were accompanied by an increased
supply of money, the increase in the
currency being il exact ratio to the
increase in production, interest would
not vary nor prices fall.
Now, suppose that the government,
instead of trying to regulate the value
of money by simply fixing the weight
and fineness of the metal contained in
the coins, or by limiting the amount
of notes issued, Was to issue as much
money as was demanded at a fixed
rate of interest, in that case the in
creased demand would be accompanied
by an increased supply.
propose that
/. The government issue paper
money and loan it to the people.
2. Loans on real estate not to ex-
ceed the value of permanent improve
ments.
3. The rate of interest to be the
lowest rate current at the time the
system is adopted.
A. The rate of interest so estab
lished to be permanent.