NO. XII.

PAPERS ON FINANCE AND COMMERCE.

In the treatment of these subjects in the general sense in which they become important to all the people the range is very much extended beyond that commonly compassed by those whose interest compels them to temporary considerations for the promoting of immediate interests under the systems in vogue. All such kind of treatment deals with effects, and would never remedy an existing want, nor correct illegitimate practices. If there are wants in existing systems, and if there are illegitimate practices which are possible under them, there is but one way to supply the one or to correct the other, and that is to go to the root of the matter where the causes exist which make these possible.

In this series of articles it has been the endeavor to point out some of the most prominent evidences that our financial system was unsound, and also to show, by as strict an analysis as was possible in the space allotted, what the true basis for a sound financial system was, and whereit was to be found, and, having done this, such methods of administration were hinted at as would reduce the system, when put into operation, to a permanent and fixed measure of all values, which it was argued was equally as necessary when value is to be measured as the same fixedness is when any other quantity is to be measured.

It has been suggested by some that, in presenting our statements in the terse, undiluted manner we have, that those who have not been habitual thinkers upon this subject might fail to catch the full application of the propositions, and by so failing consider the system impracticable. To obviate such objections we shall, by further treatment of obscure points, attempt to make them plain to all who can understand the English language.

First, a brief re-statement and condensation of the entire outline: Money, being an invention to facilitate the exchanges of the products of labor, it should be formulated with direct reference to the conditions which made the invention necessary, out of which it should naturally grow; and also with direct regard as to how the invention should best meet the required case—that is, the invention should be adapted to the conditions, instead of making an invention without regard to the conditions, and then attempting to force the conditions to comply with the capacity of the invention.

This is a point which should be thoroughly comprehended, for in it lies the whole fault of making gold a measure of value, and we therefore shall attempt to offer a common illustration directly in point.

Let it be supposed that there is a stream which, to accommodate travel, requires to be bridged, and that the bridge has to be constructed and moved to the stream. The first procedure would be to determine just how long the bridge must be to span the stream. It would then be constructed and moved to the stream, which it of course would span. But suppose persons knowing there was a stream to be crossed, but not knowing its breadth, had gone to work and constructed the bridge and then had attempted to compel it, when too short, to extend across the stream. This would have been a case of attempting to compel the conditions for which the invention was made to accommodate themselves to the invention. And this has been just what the world has been all this time doing in attempting to compel the conditions for which money was invented to accommodate themselves to the possibilities of gold, which was invented as money without any reference being had to the functions it was to perform, or to the conditions it was required to meet.

It would be just as reasonable and just as sensible to attempt to compel a house to perform the functions of a bridge as it is to attempt to compel gold to perform the functions of money, for gold is not nor cannot ever be made to meet the requirements for which money is demanded; whereas, money should be of such character as to fully meet the requirements for which it is used, but should not be possessed ofany qualities that would render it useful for any other purpose whatever, so that there could be no possibility of its ever being used for any other purposes, which impossibility would forever make speculation impossible.

It is believed that we have made clear the purposes for which money is required and also clear that it is utterly futile to attempt to compel any invention to meet those requirements where it is not formulated for the express purpose. We have heretofore shown that gold is a purely arbitrary standard which has no scientific relations whatever to the product of labor which it is required to measure, but that it is itself a product, and as such requires to be measured. A gallon of molasses would never be thought of as a measure of distance, but it would be just as reasonable to expect it to measure it as it is to expect a certain quantity of gold to measure the value of a horse. A horse may be exchanged for a certain amount of gold. So, too, may a horse be exchanged for a certain amount of wheat, but that process does not make either the horse or the wheat money. Money is that which can equally represent the wheat, the horse and the gold; and anything that cannot do this is not money.

Hence it is seen that every step we take in examining the true bearings of the money question brings us nearer and clearer to the proposition already made—that the capacity for production is the true basis of value.

New York, Nov. 11, 1870

Back to Index Next