Money and Prices
BY E. L. SMITH
MONEY is a creation of law.
Money is a measure of valuable things or services.
Money is a measure of constant and ever-varying capacity.
Money is not value in itself.
The divisor measures the dividend by division.
Money measures property by division.
If the divisor increases as fast proportionately as the dividend, the quotient will remain the same.
When the amount of money increases as fast proportionately as the property to be measured or divided, the average of prices will remain on a level; and, although there will be constant fluctuations in price among the different articles to be measured or divided, the average purchasing or measuring power of the measure or the unit of value will remain the same.
When the divisor increases faster proportionately than the dividend, the quotient will become smaller.
When the quantity of money increases faster than the property or things to be measured or divided, the average of prices will rise.
When the average of prices rises, the measuring or purchasing power of the unit of value becomes less.
When the average of prices rises, there is inflation of the money or currency.
When the quantity of property increases faster proportionately than the amount of money, the average of prices will fall.
When the average of prices falls, the money or currency is contracted.
All business interests are either produce interests or moneyed interests.
A produce interest is an interest in which the owner receives his pay for his labor and the use of his capital in produce.
A moneyed interest is an interest in which the owners of the business receive their pay for their labor and the use of their capital in money.
A farm is a produce interest.
A railroad is a moneyed interest.
If the owners of a produce interest wish any money, they sell their produce and buy money.
If the owners of a moneyed interest wish any produce, they sell their money and buy produce.
When prices rise produce interests gain.
When produce interests gain, moneyed interests lose.
When prices fall, moneyed interests gain.
When moneyed interests gain, produce interests lose.
Moneyed interests and produce interests cannot both gain or both lose at the same time.
When prices are falling, money can be hoarded without loss.
When prices are rising, money cannot be hoarded without loss.
A hoarded dollar has never yet paid for a single day’s work.
If produce interests had not first existed, moneyed interests never could have existed.
An honest dollar is a dollar that is willing to help produce something.