Webster City freeman. [volume] (Webster City, Hamilton County, Iowa) 1884-1946, 1922-04-03
MEDIUM OF EXCHANGE.

THE fundamental principle OF money
which seems to be misunderstood, or
not clearly understood, is that money
is but a medium of exchange. 1t is
not money which is exchanged, but
goods, and money represents goods.
1t is not money that fixes prices, but
commercial volume and activity. Yet,
there must, be Il money base, which
lnust be both stable and liquid"
Falls Record.
That is the Freeman-Journal's idea
well expressed. OF course the size of
| the medium must be maintained. 1t
makes a difference when fiat deprc-
ciated money is used. Then all COM
modities rise together compared with
! the fall OF the value of the exchange
unit. If the size of the yardstick were
| seduced to IS inches the value of
ward of cloth would be cut i'll two
| IN the middle. But the number OF
yarlsticks would make no material
difference if they were all the same
| length Ii a bushel measure contained
only half as much as at present a
| bushel of corn or oats would be worth
only half their present value. But
the number of bushel baskets would
make little on no difference. There
| would have to be enough to do the
I measuring. of course.
If it II the dollar that appreciates or
appreciates, as SO many insist, why
| do some commodities fall in price
while others increase? Why~1id corn
90 down to 20 cents last fall when the
| per capital circulation was larger than
| it is now with corn worth 45 cents and
why did some other commodities i'll
crease in price while the products Of
the farm We're decreasing? If the dol
lar were approaching why didn't all
commodities fall in value!
! 1t is the goods and commodities that
are exchanged that appreciate and de-
l preciate and money merely represents
Ithe medium through which ex.
changes are more easily made. The
products Of the farm decreased because
in comparison with other articles the
value of which is fixed by supply and
demand the supply of farm products
appeared more excessive than the sup
ply of the commodities that remained
comparatively high in value.
There is not SO much fluctuation in
til value of the gold dollar as some
would have us believe. The fluctua.
ton is in the value of commodities.
During war the demand for commol.
tiles Is so great that all increase in
value and the inflationists get in their
work and insist it is the money stan
dard that mas deprecated.
True. there is without doubt slight
fluctuations in the value of gold, but
gold did not depreciate in value over
night when wages were increased by
the government in the shipyards to
from So to $40 per day The demand
L
for labor had increased and it had to
be secured regardless of cost. How.
ever, the soldier still secured his little
$50 per month, because that was the
price fixed by the government. The
government should have enforced the
same rule all along the line and con.
.crintp1 avpcvfhinu II nno.lnl TN carry
on the war. fixing the price to CORES.
pond with the price paid the soldier
Such policy would have prevented the
initiation Of values of commodities and
| there would have been no talk about
| he depreciation of the medium of eX-
| change. There would have been no
| millionaircs created and at the end