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HH 2705 03 miCE, IS CElSiT'S. OTTAWA. I'lUMKI' HV r. W. MITCllKl.L, 1:, s AM. 10 !:i,(;l.\ .STIfKKT. t'^ r 1 # % !♦ National Library Bibliotheque nationale of Canada du Canada ON MONEY AND OTHER TRADE QUESTIONS BEINU A REVIEW OP MR. WALLACE'S SPEECH ON AN INCONVEUTJBLE Cl'llKENOY. uv J. L. ^. O'HAJ^LY, Civil Engineer. I>IIICE:. is OEISTTS. OTTAWA; PRINTED DY C. W. MITCHUM., tl, S AND 10 ELGIN STREET. 03 IDS- ^^^^^^^^i^J^^l^^^^^^ PREFACE. e thonwnd ne office of TO THE READER : The writer of the following pages feels, from his own ex- perience, that it is impossible to understand triule questions without a complete mastery of the functio?^s of money. Did the masses once thoroughly understand these, political jugglers RKMMINAKY KKMARKH. Before entering on a review of Mr. Wallace's argnnientHin favor of an |inconvertible currency, it is jMUtinent to define houio expressions of frequent [occurrence in tlie diHcussion of economic questions. Value is one of thess. I There are two kinds of value — ralne in huh and Wf/in- in err/iaiKjC It is in tlie latter s(miso the expression is used hy economists. A thing to havo valui' must have cost laltor, either in appropiiating it, or in producing it, and sometimes in prcsjTving it. A thing whicli can l»e got without lalior, even though :imoiigst the mo.st useful of sub.stances, ccnimands no value, Iteciiiise a peison will not give anything useful or agreeal)le, which lie possesses, and wliicl. has eost him lalior for that which he can get without. Tne value of a coi iiuodity is its purchasing power, or the quantity of any one thing or of things in general, f«ir which it will exchange. lfal>arrelof llour will excliange for a jiair of hoots, then one value of a harnd of Hour is a piir of Itoots. The /)rice of a comiuolity is Us value in money, oi tiie amount of mouev foi which it will excliau<»e. If a hiishel of wheat is st»l(l for a dollar, then the price or money value of the liushel of wheat is one dollar. 1 hav(' not in this paper attempted to cla.ssify Mr. Wallace's argu- ments, as, from their iii(;olierence and inconsistency with one another, they are not susct'ptil>le of an intclIigiMc classilication. Morcovei-. their crU'lities and fallacies are murli more ellectually exposed by talcing them Hinintiui than l)y any |»ossilile groupings. FAPTS WHICH ARE NOT FACTS. Says Mr. Wallace {lI,i„Hf luvad { or an nxv t or a ploiigii I or a Hheet (»f {wpcr . Vrrv few natural pi'o- (luctH are tit for thn use of huiuuii heingH without undergoing many changes, oftitu a c'()tnpl(H(> trau8formation. If men cannot make money, pray, who does '( M«'U earn commodities not mom^y. The farm laborer, for example, earns farm proinatioii of labor and capital is necessary to production. The farmer and the work- man share the product among them on the teims implitMl in the deed of partnei-ship. In the same way the factory hand shares with the capitalist the manufactured article, which is th«' product of the labor of the one combined with the capital of the other. The mint^r in the precious metals similarly Hhares with the capitalist the jiroiluct of their united labor and capital, which is gold or silver. 'I'he min(*r, it is seen, is the only person wlio can earn money, for he earns the commodity from which money is uiiule. Tlu^ farmer aiul the manufacturer insteail of giving their workmen their share of the profluct, whether wheat or cloth, in these commodities, sell the ar- ticles for them, and hand them their share in the form of monc^y. This i.s not only a great convenience, l)ut a great gaiii to the laborers, for it saves them the time which they would ncicessariiy lose in dis;)osing of th«'ir shaie, while entailing no additional lo.ss on the farmer and manufacturer, who ari! sellers anyhow. COININC; .V Pl'HLir (iUAUANTEE OF WEIGHT AND KIXKNK.SS. " If ft man makes money and nuts more gold or silver into it than .shouM be in the coin he in making, it is called a ctime, and he is liable to punishment." Can anything bo more absurd ? Gold and silver became a medium of exchange long before coining was thought of. Coining necessarily grew out of their a ioption as money, being a contrivance to save weighing and assaying at each succe.ssivs exchange. The stamp is simply a public guarantee, often the only guarantee, which the receiver of the coin can have of its genuineness, or that it is of the standard weight and fineness. It is well known that if a gold coin is worn or clipped, its value is depre- ciated in exact proi)ortion to its loss of weight, the stamp to the con- trary notwitlistanding. An ounce ot gold, whether as coin or bullion, is precisely of the same value, at least, it is so where the state coins without a seignorage. Coining is prohibited and made penal, not because the uu- itttbo^ iard, ipuric (poveri jmistal fevevyl citiz«i ,it woi 'ceiveil to i)r< |)roUil % \ aUi«| J tweel ' deter nor l| •ard< I iniUi appv crct nioi wh tin wi lio if d •tlitiiephenoM,. "'noDK the pro •Mn earn it." "'•'•'w a loaf of '**' "Htui-ul i,ro- "•anv clian^rHs ♦ |o'- oxainpjp '"•"« a inuiiu. "k ^ '''''' ^ne roniit»r cp'nl)iu«tiou "d the wojj^.. ' the flwU of '"/>itHlist thr ""'coinl)ii„.cJ "'« siniihi,.]^, ^/"■faJ, which ''<> oftn onvn "i.ulo. Th,, t''"''- sJi.tiH «<'!! the „,• J'- 'fiii.sis ^0«" it SHVes '»,!,' of th.Mr lufactuici- i»ent." 6g element. If a bushel of wheut will excluint." tur neither more ; nor less liian tive yards of cotton, then the buslie' f wheat ami the five •ards of cotton are at that partculai time and piico of the same valuo. I SOMK KKKKCTS OF I-KCJAL TEXDER ISSl'K. " If the Parliament of this country were to start ,1 printing jiross and create millions of lej^nl tender U')tes, and yive a gram of them to any iudividual, 1 apprehend tha» grant would make liim rich." There in not the least doubt of it, b\it it would be by robbing every creditor, every (contractor, every annuitant, and every receiver of a Hxed money payment. There is not a mortgaijor or othf.'r d(d»tor in tlu country who would not purchase such notes for the express purpose of defrauiling their creditors, and they would be willing to share their ill-gotten gains with the privileged inlividual. J'mt for any other purpose they (the mil- lions of lei^al tender notes) would be utterly worthless. IJONDS AND DKHKNTUUKS A I.IKX OX J'ROI'KHTV. "And if you were to start a |>rinting iiress and make bonds and debentures. if they are wealth you can make men rich by giving them these bonds and debentures." Bonds and debentures, no more than any other pieces of pa|)er, can nmke no one rich, except in so far as they constitute a lieu or mort^jago on some property. How much richer is the man who has got a hundred, thousand doUais of the bonds and debentures of a railroad company whose road has no existence ? Just al)out as much as is the man who has got the mortgage of a property to wliich the mortgagor has no title. VALUE OF XIOXEV IS WHAT IT WILL EXCHANGE FOR. "What i8 the value of money ? It is not valuable because it is made of a commodity uf value ; its usefulness Is its value." 8 The value of money, like all othei useful or agreeable things pi-ocured bj labor, is the quantity of any one commodity or of commodities in gene- ral for which it will exchange. If a $20 gold cciii wil' exchange for a certain kind of stove, then one of the values of that coin is that stove. There is not in nature a thing more useful than air It is absolutely indisi)ensubie to animal and vegetable life. Without it the earth would l)e a chaotic waste. Yet it has no value ; no one would give anything for a quantity of it, because he can have as much as he wants of it for nothing. WHAT CONSTITITES VALUE. In order that a thing may have value it is necessary that it must Lave some use, satisfy some desire, answer some purpose, and that labor Las been exp mded on it, either in its appropriation or production. For no one would part with that which answers some purpose and which has cost hiui labor in acquiring it for what he can get for nothing. HUMAN" LAW CAN' CKKATK NO COMMODITY. '■Then money is a commodity created by the law." Huniiiu l;iw, no doubt, is nu^aut. Everyone knows that human law cin create no commodity. You niiii;ht h^islate till Dooiiisday, and if no- boily ploui;lH'(l or sowed, rea})e(l or tlimshed, ground or baked, you would have no bread. "A barrt'l of Hour that costs $10 is nu more valuable as an article of food thai; it' it only cost 81." The b.u Tcl of llour would, in the one case as in the other, be just as useful foi- the suppoi't of lit\', ami so would it be to one who got a gift ot it, but celt liiily noo as valualiU'. .Suppose the barrel of tlour wa.s only worth a dollar, and that a miller had to exchange flour foi- a coat worth .*S!in. In this cas'! one coat would be worth ten ))arivls of tlour. Suppose ac:ain that the barrel of tlour was worth .*1U, then one barrel of Hour would be woi ill one coat. It is needless to ask the miller which barrel of Hour he considers tlie most valuable. The iiiauua ot the Israelites was just as useful as if they labored to pioihict! it ; and would in their tluni circuinstaiices be exceedingly valuabh' if a few of them could monopoli,.e it. NKKDS KXr'LAINI.Nc;. Who will explain this ? "The ((iiantity of money rej^ulates its selling price, its marketable value, th« same as any otlier roiuinudity ; but it dues not regulate its money price ?" What is the selling price of a thing but its money price ? (/.''.,) the amount of inouey for which it will exchange. If an ounce of gold in bul- lion was worth more than an ounce in c )in-', the t-oins would be melted int(i bullion. If, on the contrary, an ounce of gold in coins was worth more than an ounce in bullion, the holders of bullion would soon present it at the mint to be coined. « 9 {■ocured n gene- je for a t stove, solutely li would nything f it for it must at labor n. For lich has (iian law d if ne- ed, you of food THE CAUSE OF CHANGE IN THE PRICE OF COMMODITIES. ** A dollar of monev that would buy twenty pounds of butter is no more val- uable than a dollar that would buy ten pounds of outter." No dollar can perform this function at one and the same time and place, unless that one kind of butter is of very inferior quality, and the other a very superior, or that the owner of the butter is a fool. The tem- porary fluctuations of the market depend on the demand and supply of commodities in that mark