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8 The Conservative.
THE FUNCTIONS OF MONEY ANA
LYZED.
The first step in an inquiry regarding
the functions of money is to ascertain
what is meant by money and what is its
functions.
I think that all must agree that the
word money involves two attributes.
First , it is a standard of exchangeable
value. Second , it is a medium of ex
change. By standard of exchangeable
value is meant that in the exchange of
commodities or services their compara
tive values are expressed in terms of the
standard and not in terms of the com
modities or services themselves. Mer
chants instead of saying that they will
give so many bales of cotton for so many
tons of iron say that they will give BO
much of the standard for so much ironer
or sell so many bales of cotton for so
much of the standard. This use of a
standard of value is the difference be
tween the barter of the savage peoples
and the trade of commerce of the civil
ized world. Some object which men de
sire and which can be obtained only by
labor has always been used as this stan
dard of value and its excellence as such
standard has always been proportioned
tioned to its comparative uniformity
of value.
By medium of exchange is meant the
use of the standard in effecting the de
sired barter and to pay differences in ex
change. To conveniently serve this pur
pose the standard must be put in such
shape that the weight and fineness can
be readily known. At first this object
was attained by the stamp of well-
known private persons ; later by coinage
by the government. Coined metal thus
becomes money and this quite irrespec
tive of the question whether it is made a
legal tender.
Now as to the functions of money.
The exchangeable value of gold and sil
ver , like the exchangeable value of
everything else , depends upon the cost
of its production and the degree to
which for purposes of use it excites the
desires or demand of mankind.
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If not needed for money , coins can be
melted and used in the arts and thus
supply a demand. Because of that value
they can be used and passed from per
son to person in effecting exchanges.
No one wants money for any other pur
pose than to get something else. As a
thing to keep it is without value there
is no demand for it ; as a thing to spend
it is in the greatest demand. Its sole
real function is to facilitate exchanges
by saving the labor and complications
of barter.
Where money exists if a man has
more cotton and less iron than he needs
he exchanges the cotton for money and
the money for iron. The process is an
immense saving ; but the thing accom
plished is the same as in barter , i. e. ,
cotton is exchanged for iron. No one
wants or keeps money.
Thus the sole function of money is to
facilitate exchanges and but for the fact
the use of money decreases the cost of
exchanges its existence would be pure
waste of so much merchandise.
For What Ills Is Free Silver Prescribed ?
Now what are the ills which it is sup
posed would be remedied by the change
of the metal of money from gold to sil
ver ?
The ills are the existence of what are
called hard times or business depression.
It is not pretended that any other ills of
humanity can be so remedied at least
dir < ctly.
What then are hard times or business
depression ?
I venture to say that hard times or
business depression is always the result
of overproduction or over accumulation
of commodities to a point where they
cannot be sold at a price exceeding or
equal to their cost. In the word com
modities in this connection I include all
things which are bought and sold by
mankind.
If the overproduction is confined to a
single or but few commodities , wherein
but a small proportion of the population
is engaged , the effects will be compara
tively small.
If the overproduction be general or if
as in the western land speculation of
1857 a very large proportion of the pop
ulation is engaged in it , the effect will
be comparatively great and even may
enlarge into a panic so great as to pros
trate the country.
True , at such times there is a great
demand for money ; because of many
people suddenly realizing that the bub
ble has burst and desiring to sell
the overproduced commodity , but the
difficulty in selling arises not so much
from any lack of money to effect ex
changes as from lack of persons having
other commodities being willing to ex
change them for the panic commodities
at the price.
The trouble is not a money trouble
but a barter trouble. Gauged by what
standard you will the panic commodity
cannot be exchanged.
Free Coinage No Remedy.
The commerce of the world consists
in the exchange of commodities. Money
has no function in respect to such com
merce other than as the standard by
which to compare and express exchange
able values and as the medium or inter
mediate through or by which the ex
change of the commodities is effect
ed.
How can a change of that medium re
lieve a situation caused by a change in
the exchangeable value of the commodi
ties themselves and not by any change in
the exchangeable value of the medium ?
It would seem that there can be but one
answer. It cannot.
So long as the attributes of gold re-
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main as they are it would be quite as
sensible , say , for the farmer to think
that he can improve his condition by
selling his wheat by the peck instead of
by the bushel as by measuring its value
in silver instead of in gold. Everything
else as well as wheat would be meas
ured in silver and what could any one
gain ?
I imagine that no one will differ with
me as to this.
In order , however , to effect a result
the advocates of a silver coinage , like
all weaklings , appeal to government to
enact the free coinage of silver at 16 to 1
while the commercial exchangeable
value is that of , say , 32 to 1.
That law , I admit , would have one ef
fect. It would enable every debtor to
cheat his creditor out of one half his
debt. As to all future transactions it
would have no effect at all other than
that belonging to the use of any metal
or other commodity not so well fitted for
nse as a standard and medium of ex
change.
No government can enact the proportionate
tionate rate at which men shall exchange
commodities ; or if it does , it is always
brutum fulmcn. Any government can
enact a law by which a fraud or wrong
shall be perpetrated on certain classed of
the people.
Is it worth while to delude ourselves
with the idea that because a way for
debtors to cheat creditors has been
found , the philosopher's stone or per
petual motion or , to use the homely
phrase , a way to lift one's self up by
his boot straps , has also been discover
ed ?
To me it seems that the smallest
amount of reflection ought to teach any
man that a change in the standard and
medium of exchange cannot give relief
to one whosa trouble is that the commo
dity of which he has too much has fal
len in exchangeable value.
WHEELEU H. PECKHAM.
NORTH CHINA WOMEN.
It has often been said that the woman
of northern China , that portion of the
empire invaded by Russia , reigns su
preme in her own household. Though
this is an exaggeration , she is undoubt
edly of greater consequence than the
woman farther south. The Manchu
woman , farther north than Pekin , is cer
tainly far more emancipated than her
Hun sister , and she at least is allowed
her natural feet to walk upon.
Another curious fact observed in
China is that the women of the lower
classes have much more freedom than
those of rank , and are more on an
equality with their husbands. The expla
nation of this is a matter of Chinese
social economics. The poorer a man is
the fewer spouses can he afford to keep ,
so that the average man of the lower
not the middle classes has but one
wife. In this alone she holds an ad van-
