Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1907-12-18

as rapidly as the exchange can be
made without deranging business. The
issues should be large enough to sup
ply all regular and legitimate demands
for currency. The outstanding silver
certificates may also be exchanged for
the new currency and the silver repre-
scented by the certificates become the
property of the government, so that
all the currency may be of one uni
form issue.
An elastic currency so very import
ant as we are often told. can be secur-
ed by making these treasury notes in
Interchangeable for United States bonds.
Provide that any holder of bonds may
present them at the treasury or any
authorized agent, and receive for them
at par the new treasury notes. Also
any noteholder may exchange notes
| for bonds on the same terms. A spec
| ial bond issue, if needed, may be auth
orized for that purpose.
| The legal tenderri quality of these
notes will keep them in circulation.
Although they are not a government
promise to pay. yet redemption takes
place, SO far as the noteholder is con-
cerned, when the note is used TO as
charge a financial obligation. They will
not be boarded because any artificial
scarcity in the supply OF money will
be promptly met by an increased issue
| They cannot be used to deplete the
treasury of its specie They will not
be exported because they have no val
ne in foreign countries. They are con-
venient TO handle, can have every pos
sible safeguard against comterfeiting
are easily replaced when worn or NUT
Hated and are in every respect an ideal
circulating medium for domestic bust
mess.
There remains the question of guam
tity The plan herein outlined does
not contemplate a limited issue. limi-
ted either as to the aggregate amount,
or the per capita amount An unlim-
tied issue We shall be reminded. is a
standing temptation to an over-issue
causing depreciation of the currency,
inflated prices and reckless specula-
ton
We must tligress a little and consid-
er the function of money so far as it
has to do with price.
Money is a commodity. a fact not
always remembered, and has an ex-
lchange value like the others. corn,
wheat, cotton. This exchange value
is determined by supply and demand,
and must be carefully distinguished
from its legal value. To illustrate, a
dollar will buy a bushel of wheat, at
another time the bushel of wheat costs
"a dollar and half, or even two dol
lars. Plainly the ratio of values has
changed. We think of the change as
taking place in the value of the wheat
but we do this because the law has fix
ed the standard, so many grains of
gold calling it a dollar. But the law
cannot override natural conditions, and
the change in value may be in the dol
lar as well as in the wheat, when the
supply of money exceeds the demand
for money the exchange value of mon
ey will decline, though the legal value
is fixed, and dollar will buy less
wheat-the supply of wheat remaining
constant-because the transaction is
an exchange OF equivalent values; and
so we say, wheat is high. When the
demand for money exceeds the sup
ply, the exchange value of the money
will advance and the dollar will buy
more wheat; and We say. wheat is
cheap. Just now we are having an OBJ
ject lesson along this line. Therefore
the range of prices of the staple farm
products determines quite accurately
the abundance or the scarcity of mon
icy. Tables can be constructed show
ing the prices of these products for g
long. term of years. The average o.
these prices may be assumed as the
normal value and any material devia
ton from this average is sufficient evi
dence of the condition of the money
supply; and the government can act
laccordingly. OF coures, these provis
ions must be incorporated into the