PAPERS ON FINANCE AND COMMERCE.
PAPERS ON FINANCE AND COMMERCE.
PAPERS ON FINANCE AND COMMERCE.
PAPERS ON FINANCE AND COMMERCE.
Finance and commerce are so intimately connected that one cannot be treated without the other being, at least, indirectly alluded to. If these terms are analyzed, their relations will be perfectly understood. Commerce is the simple exchange of something one individual possesses for something another individual is possessed of. This exchange may be between neighbors, or between nations; it is all commerce. In ancient times, articles of merchandise were exchanged for articles of merchandise, but as commerce increased in amount, and its limits became extended, it became necessary to make use of something that should represent value, so that there need not, in all cases, be an actual transfer of property for property. The medium used to facilitate these exchanges was money in its first phases, and out of this necessity have grown all the different monetary devices made use of, at various times, in the history of civilization.
To demonstrate that money is only a convenience and not an absolute necessity, any one has only to observe that frequent purchases, sales and payments are made without the use of money or any other representative of value, but by the direct transfer of value for value. It is plain, then, that money, be it gold, silver or what else it may, if not intrinsically of the value set upon it, but that it represents something that has intrinsic value. If this is questioned, let any one who doubts it procure some gold in its original state and endeavor to make exchanges with it. He will find that no one will receive it, even at its value by weight. Were he to apply to a dozen places where gold,in mass, is dealt in, he would be offered a dozen different prices for his article. It is only after gold has passed through the hands of the government, and has received its impress as an indorsement, that it becomes current as money.
It is further to be observed that the time came when even coin became too burdensome to be directly transferred in making exchanges, and something representing it was brought into use. This consisted of bits of paper, containing upon them promises to pay so much in coin, &c., &c.; and under this practice banks of issue sprung into existence, their issues being supposed to represent a gold or coin basis of value. But a full representation alone of coin deposited was found not to supply a sufficient circulating medium to accommodate the movement of produce, and for other uses, and it became customary for the banks to expand their issues beyond the amount of coin on hand, upon the supposition that these promises to pay would never be presented in sufficient quantities to consume their actual specie. But suppositions are only truegenerally, and hence it came that promises to pay often exhausted the ability to pay, and here began the ills that must necessarily attend a false standard of values.
In all seasons of financial distress, gold, as a standard, has failed. The necessities of our late war demonstrated and represented the fallacy of an absolute standard in gold, and happily suggested a better standard. No sooner did the supply of gold at the command of the government fail, than the latter was compelled to resort to its credit, or to a direct representation of the true value and wealth of the country. The credit of the government was the ability and intention of the country to meet the promises of its government, and this ability determined its currency. It was not the amount of gold, absolutely, that the country was supposed capable of acquiring that thus entered into consideration, but the ability of the country to produce certain quantities of merchandise, which should, in time, be sufficient, above consumption, to balance these promises to pay. It was the productive capacity of this country that gave value to its currency and bonds irrespective of gold. The productive capacity of a country is then the virtual standard of the value of its currency, and as gold can only be obtained by the products of the country, its necessity as a medium may be dispensed with. It is now predicted that the sooner gold, as the money god, is dethroned in the hearts and customs of the people, the sooner a sound and perfect system of finance will be inaugurated.
That there is a true standard of value, and one that can never fail in time of need, nor be made use of for speculative purposes as gold is, must be apparent to every thinking mind. How many of the people of this country, during the last eight years, have received gold or silver for what they have disposed of, or have used it to purchase their necessities? And yet the talk of a return to specie payment is everywhere heard. When will the idol worship of the god of gold be completely abolished?
New York, August 31, 1870.
New York, August 31, 1870.
New York, August 31, 1870.
New York, August 31, 1870.