Money and Its Laws

PREFACE.

In the following pages the subject of Money has been treated as coming within the range of the exact sciences; the conclusions being assumed to be in the nature of demonstrations. That they wholly contradict those laid down in the books, which have been accepted as fundamental truths for more than two thousand years, is due to the fact that a subject which could only be made to yield to rigid analysis has been treated after the manner of Aristotle and the Schools. Although the laws of Money are assumed to be sufficiently laid down in the first part of the work, the writer, from the universal prevalence of erroneous opinions, has lost no opportunity of illustrating them in the discussions which follow. If he have not in all cases clearly established the connection between his conclusions and premises, the reason will, he believes, be found in the fact that he has not, with all his efforts, yet been able entirely to emancipate himself from the methods of the Economists and Schoolmen.

BROOKLINE, Mass., 1877.

TABLE OF CONTENTS.

[The indented lines have reference to the views or opinions of other writers.]

THE LAWS OF MONEY.

The desire to possess gold and silver an original instinct stronger than
that felt for any other kind of property. . .

This universal desire renders them the universal equivalent - -MONEY

The grounds of this preference, their beauty and the uses to which they

can be applied. . . .

Other qualities fitting them to serve as money.

Illustration of the uniformity of their value (note)

From their durability they become the reserves of society

Illustrations of their value as reserves (note)

universal attractiveness . . .

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Errors in monetary science have arisen chiefly from overlooking their

Necessity to social and material progress of some article or articles for
which a supreme preference is felt

Demanded in exchange for all other articles, and in discharge of all

That of all other articles RELATIVE; depending upon cost and demand

Their value being absolute, they are the STANDARDS of all other values

Standards of value and media of exchange the same things

Misleading influence of the term "medium of exchange" (note)

Prime factors in the creation of wealth and in social progress

Always in demand at INTEREST as the basis of reproduction

The demand for capital increases as natural laws are unfolded

The importance of the precious metals vastly increased by interest, paid in

kind, on loans of them

They become in this way the highest guarantees for the peace and order

of society.

Such loans transfer the actual possession of capital from the owner to the

borrower

Provision for the future to be made only by contracts payable in them, with
interest payable in kind

Without them, there could have been neither civilization nor continuity of

history

actual intervention of the precious metals

Contracts in them authenticated by written instruments

Hence the origin of paper money

Exchanges must be made at the standard, but may be made without the

Their use always barter

Their use as money double barter

Importance of avoiding their actual intervention in exchanges

The manner in which this is effected

Sketch of history of coinage (note)

Bills of exchange .

Their use in commerce between distant communities dispenses with that of

a corresponding amount of coin

Not presently due. .

Currencies between communities widely separated

The mode in which they serve as such

Based upon or symbolize merchandise, and retired by its use

Producers of merchandise the drawers of bills.

The holders of bills entitled to the specific thing drawn against

Bills not adapted to serve as local currencies

Such currencies required to be of every denomination, and payable presently,
as they do not secure to their holder specific articles of merchandise.

Cannot, like bills of exchange, be issued by producers.

To be issued by parties possessing capital, and not subject to the risks of

production and trade

Issued in great part by BANKS

Description of the mode of their issue.

Banks do not pay out capital in making their loans

These are made by an exchange of their notes, presently due, for the bills of
their customers, due at a future day. . .

Retired in the payment of the bills in the discount of which they are issued

Makers of bills virtually undertake to retire the notes issued in their dis-

count . .

All these operations based upon merchandise

The instruments by which they are conducted paper money - -CURRENCY
So long as they represent merchandise their movement regular and au-
tomatic, and they are retired without the intervention of coin.

No distinction made by the public between currencies where there are

several issuers