The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1935-03-02

1ubri cant. or Lewis Haney
air enables us to breathe.
The essential characteristic of
money is its service-not as a
medium of exchange, but as a
measure of value.
Money serves as a common de-
nominator which enables a group
of people to compare the values
of many different things-from
a loaf of bread to a concert.
Think how difficult it would be
to say how much things are
"worth" if we could not talk in
terms of money!
So money enables us to
''quOte prices" This means that
many buyers and sellers can
agree that "the market" is so
and sO-which is what is meant
by an objective value. At a
given time, values in money
can be recognized and accepted
by two or more persons.
In much the same way, we
recognize and accept a foot"
or a quart" as measures of
length or capacity.
In order that exchange (busi-
ness) may be extensive, it is
necessary to have a medium of
exchange that is an effective
common denomination and a
good measure of values.
But measurement must be pre-
else and have a generally &C.
cepted basis if it is to be very
effective. So, just as we deter
mine a standard yard, gallon or
pound, for measuring physical
quantities, We also must deter
mine standard for use in meas
uring values. Some definite guam
tity of value must be fixed upon
and be generally adopted as the
''unit."
In order to do this we take two
steps: Cd We select some
STANDARD SUBSTANCE which
is generally recognized as having
the quality of value. This is the
standard material. 1t may be gold
or silver or something else. 90
We adopt a definite quantity of
this standard material-a certain
number of grains of it-and make
that our STANDARD UNIT"
The value of this standard unit
then determines the value of our
standard money (dollar), and we
can proceed to measure values in
a precise way.
Thus a standard money unit
puts our exchange of values on
a definite basis, which can be
generally recognized, and is en-
tirely objective-not subject to
arbitrary change and the indi-
vidual whims of any person.
Next, we must remember that
many exchanges involve a lapse
of time. Weeks or months may
lie between order, shipment,
delivery and payment.
Therefore, our standard ma
terial must be one which will
be subject to as little change
in value as pOssible-and, of
course, the quantity in the
standard unit must remain con-
slant.
This, as we we'll see, is one rea-
son for selecting gold rather than
silver.
Once we have a definite and
stable standard of value, it can
be used to store values over a
period of time. Then we can
adopt it as a standard of de-
ferred payments
Then, too, we can save money
with reasonable confidence, and
can invest it with some certainty
that the principal will not lose
its value.
Thus standard money becomes
the tool of credit. Borrowing and
lending involve promises to pay
money, and unless money is
good standard, credit is greatly
limited.
Money being a circulating me-
dunn of exchange, its job is to
measure values, and that requires
a standard for money-for both
current and deferred payments.
In doing it's job, money is SUP
PLEMENTED by other currency,
such as checks and drafts; which
are convertible into standard
money. But when we "go off" a
standard. we SUBSTITUTE in
convertible credit currency (noteS)
for money. Then exchange is re-
tarded, credit hampered, and saw
ing and investment restricted.
Since 1888 we have had no stand
ard money, and the results are
obvious.
Next WedneSday-What Is