PAPERS ON FINANCE AND COMMERCE.
PAPERS ON FINANCE AND COMMERCE.
PAPERS ON FINANCE AND COMMERCE.
PAPERS ON FINANCE AND COMMERCE.
Money was invented as a method to facilitate the exchanges of the products of the industry of the world. If this is a true definition of money, the only legitimate money it is possible to have is something that naturally grows out of the uses it is required for. A national currency, then, should be a representative of that which it is its sphere to exchange; that is to say: a currency dollar should stand for a certain amount of the different products, which have been producedat the expense of a certain amount of labor. It will be perceived that this representation is upon an entirely different hypothesis from that of a currency which is supposed to represent gold.
To begin with something which everybody can understand: It may be supposed that a farmer, occupying a given quantity of land, can, in a series of ten years, produce an average amount of ten thousand dollars per year to dispose of commercially. During the process of production he is obliged to have, say, eight thousand dollars’ worth of means to enable him to continue the process. Now, instead of his being obliged to obtain credit based upon his prospective crop, he is supplied with a representative currency based upon it; this enables him to purchase from time to time that which he requires. When his crop is harvested, it is disposed of, and his currency isredeemedby it.
Now, make this application general to all kinds of production in the country—which is the only basis of value a country can have—and make the government the appraiser of the value thereof, and the maker and utterer of its representative, and a currency will be obtained that will possess all the requirements and characteristics of money; because it will be used to exchange that upon which it is based and of which it is representative, and which is substantially redeemed every time it exchanges any products of the country.
Now, how shall this system be instituted? In the census now being taken, the value of the total products of the country can be arrived at, which sum total should be used as the basis of issue, and continue as such during the nextten years, at the end of which time the increased products would require another valuation to amend the bases for an increased issue for the next ten years.
A currency thus obtained would possess all the substantial value that could be required of money. It is really the basis of value when gold is used; for how are a people to obtain gold unless they have produce to exchange for it?—which operation is, in reality, nothing more than the exchange of one commodity for another, of which it is not and cannot be representative, while in the case of the proposed currency an exchange is effected for that of which it is representative.
In this view of currency for a country, our system of greenbacks come nearer being money than anything that has ever been in use in this or in any other country. They were based upon the capacity of the country to produce, and had the government confined itself to their use, and had not been obliged to invent some further means to predicate securities, we should now have had a real money currency. Whois there to find fault with “greenbacks” as a national currency, provided there are enough of them to transact the business of the country with,and no more than just enough? But they lack one essential quality of real money—they are not receivable for all things that people need money for, and which the government demands of the people. They should have been made receivable for all government demands,even for duties on imports. But the necessities of the government, which was then struggling with all its might for existence, made it a “military necessity” to exact gold for duties on imports, as an indirect way of taxing the people who could afford to indulge in the luxuries of foreign products.
Though not available for duties there never has been in the history of the world so stable and invariable a measure of value as the greenbacks, since government ceased issuing any more than the amount already out. There has been no great financial panic and no considerable unsettling of commercial values. They require that one thing more should be done—they should be given afixed measure of value. Then nothing more could be required of a currency than would be found in the greenbacks.
The reason, and the only reason, why the people can feel that such a currency may be unstable is the fear that the government may be induced to issue it in greater amount than primarily authorized, and consequently that it would depreciate; but this could not be until the nation should issue more than the value of its property. But for this deficiency there is a good and sufficient remedy, which can be provided and used in connection with the proposed new currency, which is to be based upon the capacity of the country for production, and which will also provide for different seasons or parts of seasons when more or less circulating medium is demanded to fulfill the business indications of the country; and with this it is believed all the objections are covered that can possibly be raised by the most strenuous stickler for a currency with a gold basis, though the government may issue never so great a volume of the currency proposed.
New York, Oct. 3, 1870.
New York, Oct. 3, 1870.
New York, Oct. 3, 1870.
New York, Oct. 3, 1870.