George Lang

“ Yet as money is known only by name, and as that is invariable, it is assumed that the demand which it represents is invariable. Thus these relations are apparently reduced to one—the supply of the commodity. Nevertheless, as money of gold consists of a commodity, and as the relations of demand and supply are common to all commodities, and as these are necessarily variable, such money evidently does not represent invariable demand, but, in regard to those relations, varies with every variation of its material. ”

“ Money is chiefly appropriate to the retail trade—the great trade of every country—all being parties to it. The wholesale trade, which, though it has an imposing appearance, is much inferior to the retail in regard to the number of the parties to it, makes little use of money. Yet it is only the wholesale trade, and that only in its foreign department, that asks for redemption—that asks to be allowed to undermine the credit of the country, by withdrawing the base on which the credit of the currency immediately rests, that it may export it. ”

“ Nevertheless there is evidence of a tendency towards a single rate, which, for want of a better term, is called the gold rate—as though gold or money of gold is or has a rate—as though money of credit has a rate at which alone it is equivalent to gold—an attempt at a definition, which, however unsuccessful, is evidence of the tendency. ”

“ That the credit dollar is ever at par is simply because payment is not demanded, and it is not demanded partly because money of credit is more convenient than that of gold, and partly because it serves to increase the rate of the dollar per capita, and thus the nominal value of wealth. ”

“ Money valued for its material, as that of gold, is well suited to the want of confidence that characterizes a semibarbarous state of society; but when knowledge and civilization take the place of ignorance and barbarity, mutual respect and confidence take the place of rudeness and distrust, and, correspondingly, money of credit takes the place of money of gold. Yet money of credit is accepted chiefly because of its convenience, with the understanding that its redemption is properly secured, and its issue properly regulated. ”

“ Being of no use for any other purpose, and without foreign demand, it has only one function, and that the only one proper to money—the representation of given value.
In view of the universal and exclusive use of money consisting of gold or of credit, it may well be supposed that no other is possible. Happily, however, true money is not only possible but probable. Much time elapsed before money was invented, and much intervened between money of gold and money of credit, and much must intervene between the latter and true money ”

“ Truly gold is a product of the country, and imports should be paid with surplus produce; but while the credit of the currency, and thus credit generally, is based on gold, that metal cannot be a surplus product, be the aggregate supply what it may. What the people desire of money is not redemption, but constancy of value. Government has declared that the dollar shall be the legal means of payment. ”

“ Thus it seems to be felt, if not understood, that the rate of the dollar does not affect the rate of the supply of commodities—that when commodities are abundant they will be proportionately cheap, however high prices may be, and when they are scarce they will be proportionately dear, however low prices may be. ”

“ The only true encouragement for industry is freedom. Stimulus is not encouragement. When the currency was increased from six or seven dollars per capita to twenty or more a great increase of the nominal value of wealth took place, and if it be reduced to its former rate a proportionate decrease of the same will follow ”

“ Then, the dollar will represent constant value, and will thus become the true medium of exchange—domestic exchange. The difference between exchange and redemption is, in exchange gold is supplied at the market price, and in redemption it is supplied at a given price. When, however, the given price equals the market price, there is little redemption, because there is little demand ”

“ Demand and supply being common to all commodities, in exchange by barter, there are four variable relations to be adjusted, and, as these adjustments can be made only by compromise, each party endeavors to bar or defend himself against the other by assertions, sometimes loud, frequently false, and generally reiterated. To avoid, in some degree, a practice so detrimental to morals, and so destructive to commerce, money was invented. ”

“ The truth of money is based in nature, consequently it exerts more or less influence, whether distinctly recognized or not. To its influence may be attributed the question, What is the proper quantity of money? a question that has not hitherto been Intelligently answered, and which cannot be so answered until the truth of money has been admittted. To its influence, also, may be attributed that clause of the Constitution which, like a bow drawn at a venture, requires the value of money to be regulated and fixed, though there is no money in existence to which the rule is applicable ”

“ With this rule, banks are tempted to increase their issues and extend their loans until both they and their customers have more credit than they can redeem in proper time. It is then that the foreign trade, finding the surplus produce not sufficient, take for export a product that is appropriated to an important home use—take money of gold—that upon which money of credit is immediately based, and the money of the country being thus debased, the result is suspension and general failure. ”

“ As this is the only way in which the means of payment can be obtained, and as therefore much more time will be required for the payment of the debt than was occupied in its creation, it becomes the Government to encourage the industry of the country to the utmost, by freeing it from restrictions. ”

“ To the individual the currency will then be of no more importance than now, but the aggregate interest involved will be vastly greater. Thus the importance of understanding the nature of money, in view of the possibilities of the country, is very great. ”

“ True money will be a present economy so far as it takes the place of the national debt, and it will be a future revenue to the extent of the increase of population. The rate of increase has been more than three and a half per cent. per annum, but taking it at three per cent. there are persons living who will be living when the population will be two hundred and fifty millions, and the currency proportionate. ”