Real (currency)

“ And now, sir, when I have demonstrated by fact and reason, so that every child might understand them, propositions like these, that capital and currency are two very different things; that the wealth of a country is not augmented by printing more paper money; that when popular confidence in the issuer of irredeemable paper money is unimpaired, the constant depreciation of that paper money demonstrates its excess in quantity over and above the real requirements of legitimate business ”

“ This depreciation of the circulating currency was so much, of course, added to the nominal prices of commodities, and these prices, thus unnaturally high, seemed, to those who looked only at the appearance, to indicate great prosperity. But such prosperity is more specious than real. ”

“ It appears, therefore, that the value of money is liable to more frequent fluctuations when both metals are a legal tender at a fixed valuation, than when the exclusive standard of the currency is either gold or silver. ”

“ Under cognisability we may properly include what has been aptly called impressibility, namely, the capability of a substance to receive such an impression, seal, or design, as shall establish its character as current money of certain value. We might more simply say, that the material of money should be coinable, so that a portion, being once issued according to proper regulations with the impress of the state, may be known to all as good and legal currency, equal in weight, size, and value to all similarly marked currency.... ”

“ When, however, new money, composed of some substance of supposed intrinsic value (as of gold) , is brought into the market, or when new notes are issued which are supposed to be deserving of credit, the desire to obtain money will, under certain circumstances, stimulate industry; an additional quantity of wealth is immediately produced, and if this be in proportion to the new claims advanced, the value of the existing currency is undepreciated. ”

“ Just as the exchange value of commodities is crystallized by their process of exchange into gold money, so is gold money sublimated in its currency into its own symbol first in the form of worn coin, then in the form of subsidiary metal currency, and finally in the form of a worthless token, paper, mere sign of value. ”

“ That as money is a defence as well as wisdom, a circulating medium ought to be established, consisting of gold, silver, copper, and bills of exchange. Its credit should be kept up, and but one currency established in a kingdom. ”

“ I will tell you what I would and would not do for a currency, if I were business manager of a country. I would not coin silver money, because the low intrinsic value of such currency would make it a cumbrous one. I would not coin both silver and gold, because of the impossibility of maintaining an equality of values between the two coins. I would coin gold and nothing but gold, because it offers those qualities, important above others in a money metal, of high value and high durability. ”

“ Their defects are their weight, their intrinsic value as commodities.”—Social Science and National Economy, by R. E. Thompson, Philadelphia, 1875.
“The moment it is perceived that money is nothing but a token, it becomes evident that any token currently accepted in exchange of useful services and products of labor will perform the proper functions of money without regard to the material of which it is made; and that the less costly the material out of which money is made, the better for the community that uses it.”—Money, Currency, and Banking, by Charles Moran, New York, 1875, p. ”

“ Every dollar's worth of vendible property in the world is equal in value to a dollar in gold. And if it were possible that every dollar's worth of such property, in the world, could be represented, in the market, by a contract on paper, promising to deliver it on demand; and if every dollar's worth could be delivered on demand, in redemption of the paper that represented it, the world could then have an amount of currency equal to the entire property of the world. ”

“ This can only mean 26that impressions of his signet on clay, or some other substance, were put into circulation as representatives of value, and so received by the sellers. It is in the impression of a seal or stamp upon a piece of gold or other metal that we have the origin of coined money.
The study of the early history of coined money is a most curious one. Rude peoples pass from barter to the use of metallic currency; and the most general article of wealth is taken as the standard to which, either as a multiple or a fraction, all other possessions are adjusted. ”

“ Nevertheless, as an instrumentality for transferring commodities used for money, and avoiding the loss and waste unavoidable in handling and transporting such commodities, the currency thus devised was a great invention, and being always represented by, or, as we may express it, covered with, the commodity—gold—which, of all things, fluctuates least in value, it perfectly answered the purpose of money, without actually being so. ”

“ Speaking on the same theme, paper money, Governor Johnston said: "Every man of property - every man of considerable transactions, whether a merchant, planter, mechanic, or of any other condition - must have felt the baneful influence of that currency." ”

“ Now I have shown that an irredeemable currency, producing by its fluctuations high prices for what the farmer has to buy, and low prices for what he has to sell, turns the scale in every case against him. ”

“ True or perfect currency flows freely, like a pure stream; it becomes sluggish or stagnant in proportion to the quantity of less transferable matter which mixes with it, adding to its bulk, but diminishing its purity. [Articles of commercial value, on which bills are drawn, increase the currency indefinitely; and substances of intrinsic value, if stamped or signed without restriction so as to become acknowledgments of debt, increase it indefinitely also.] ”

“ In speaking of coinage hitherto, the standard of value has been assumed to be the most important, but in fact a large proportion of our coin serves simply as currency without materially affecting the standard of value. ”

“ It is easy, however, to see by further examination that the two functions of money are quite easily separable, and that, while it is difficult to substitute for the standard of value, a variety of substitutes can serve as currency. ”

“ The value of money in any country is determined by the amount existing.... The commodities would rise or fall in price in proportion to the increase or diminution of money. I assume that as a fact that is incontrovertible. However debased a coinage may become, it will preserve its mint value.... A well-regulated paper currency is so great an improvement in commerce that I should greatly regret if prejudice should induce us to return to a system of less utility.... ”

“ Currency by tale refers only to the legal standard, as currency by weight doth to the coins themselves? (Essay upon money, Part 2d, p. 79.) Will a person who considers his light shilling as a standard coin, buy more with it than if he considered it by its weight? Will any man in England sell cheaper to a porter, who never considered his shilling farther than to look at the King’s head, than he would to a Jew, who has had his shilling in a scale, and who knows to the fraction of a grain what it weighs? Which way, therefore, (in a trading nation) can money possibly be worth more than its weight? ”

“ Currency is a word much more comprehensive than the word money, as it may include bank bills and even bills of exchange as well as coins of gold and silver, but the word money, as employed in the grant of power under consideration, means the coins of gold and silver, fabricated and stamped as required by law, which, by virtue of their intrinsic value, as universally acknowledged, and their official origin, become the medium of exchange and the standard by which all other values are expressed and discharged. ”

“ The notion of a cheap money would, of course, have been a pure fallacy. No money can be cheap except to the issuer. If he gets it at the cost of manufacturing bits of paper, and can exchange these for commodities, in as large amounts as he could get for the coins whose names and denominations the paper bears, the currency would be cheap to him ”

“ Since the expression of the value of commodities in gold is a merely ideal act, we may use for this purpose imaginary or ideal money. Every trader knows, that he is far from having turned his goods into money, when he has expressed their value in a price or in imaginary money, and that it does not require the least bit of real gold, to estimate in that metal millions of pounds' worth of goods. When, therefore, money serves as a measure of value, it is employed only as imaginary or ideal money. ”

“ To measure prices by a currency that is called by the same names as gold, but that is really inferior in value to gold, and then—because those prices are nominally higher than gold prices—to say that they are inflated, relatively to gold, is a perfect absurdity. ”

“ So that, not only, for his penny, florin, ducat, or hundred-ducat note, a man may always be certain of having his pound, or ton, or pint, or cask, of the thing he chooses to ask for, from the government storehouses, but if the holders of the million of currency came in one day to ask for their money’s worth, it would be found ready for them in one or other form of those substantial articles. ”

“ It is not disputed that the value, the purchasing power of an irredeemable paper currency is affected by the quantity in circulation, and that other circumstances, such as the confidence of the people and solvency of the Government, remaining the same, an appreciable expansion of the currency will result in its depreciation, and vice versa. ”

“ A currency is in its most perfect state when it consists wholly of paper money, but of paper money of an equal value with the gold which it professes to represent. The use of paper instead of gold substitutes the cheapest in place of the most expensive medium, and enables the country, without loss to any individual, to exchange all the gold which it before used for this purpose, for raw materials, utensils, and food, by the use of which both its wealth and its enjoyments are increased. ”

“ But when A desires from B some of his products, himself not having on hand any of his products which B desires, he receives from B his value and gives him his representative of value—his note—promising that at a future time he will deliver B the actual value which he desires.
9Currency is only a form of money, the same as gold is only a form of wealth; and in the same manner that gold is wealth, is currency money. ”

“ The elements of currency are value, a commercial relation derived from persons, and quantity, a property of things derived heretofore from the precious metals or their representatives. But this quantity is inconstant, and to use an inconstant quantity as a measure, is absurd. ”

“ The general principles of currency, if you have fairly grasped them, will soon enable you to understand what occurs. You have seen that the public has a certain definite want for notes to use in the daily operations of buying and selling; there is a specific work to be done, and for that work it needs and will buy tools, precisely as a carpenter procures a basket of tools for the house that he is employed to build. ”

“ The Sources of Currency Supply.—It is, then, clear that the larger part of the circulating medium of society is not money; that not all of the money that there is is bullion money; and that not even all of the bullion money need be ultimate money—redemption money of the highest rank. The sources of currency in society are various—some of it bullion, with a cost of production limit upon its supply, some of it government paper, substantially free of cost, some of it banking credit with certain peculiar and appropriate costs attending its issue. ”

“ The first and most obvious method of attaining the object is to issue a paper currency which shall be redeemable, not in gold dollars of fixed weight, but in such quantities of gold and silver bullion as shall suffice to make the required purchases. ”

“ Do you not see that our coin is discredited already among strangers, which evermore desired to serve us before all other nations at all our needs for the goodness of our coins; and now they let us have nothing from them, but only for our commodities, as wool, felt, tallow, butter, cheese, tin, and lead. And whereas before time they were wont to bring us for the same either good gold or silver, or else equally necessary commodities again, now they send us other trifles as I spake of before, as glasses, gelly pots, tennis balls, papers, girdles, brooches, etc.... ”

“ If the cheaper coin is forced into circulation, it will, if coined without limit, soon become the sole standard of value, and thus defeat the desired object, which is a currency of both gold and silver which shall be of equivalent value, dollar for dollar, with the universally recognized money of the world. ”

“ Nor let it be feared that erroneous deductions may be made from such recorded facts: the errors which arise from the absence of facts are far more numerous and more durable than those which result from unsound reasoning respecting true data.
(204.) The great diminution in price of the articles here enumerated may have arisen from several causes: 1. The alteration in the value of the currency. 2. The increased value of gold in consequence of the increased demand for coin. ”