The “grave, enlightened, and patriotic Senators,” to whom Mr. White alludes, are those who, with Mr. Smith, at their head, made a report, in the year 1830, in which they represented certain kinds of Bank paper as being as good as gold, and even better. If their opinion is correct, it ought to be confirmed. If it is not correct, its onerousness ought to be exposed; for error in such a subject as this, maybe productive of incalculable mischief.
Paper money is the foundation of the American Banking System. But, as, without a knowledge of what is genuine, it is impossible to have a clear conception of what is spurious, it will be necessary to give a statement of the qualities and functions of real money. Money is not, as was asserted by a late Secretary of the Treasury, (Mr. I.) “merely the representative of property. The money of gold and silver is property is wealth. A hundred dollars in silver can no more be considered as the representative of a hundred dollars’ worth of flour, than a hundred dollars’ worth of flour can be considered as the representative of a hundred dollars’ worth of iron. Each is the equivalent of the other, but each is real wealth, not a mere symbol or representative. But money is not, as is supposed by some others, superior in its nature to all other kinds of wealth. The precious metals do not differ essentially from other items of wealth. This is distinctly seen when they are in the form of bullion. Converting them into a coin does not change their nature.
It only adapts them to a particular use-fits them for passing from hand to hand, without the trouble of weighing and assaying each piece at each transfer. An increase in the stock of gold and silver in our country is very desirable; Lut it is for precisely the same reasons that an increase of other kinds of wealth is desirable. Some fancy that it is the authority of Government that gives money its value. But the true value of money, as measured by the amount of goods for which it will honestly exchange, cannot be affected by edicts of Princes or acts of Parliament. Monarchs and Ministers may alter the weight of coins, or lessen their purity; but they cannot make a coin containing half of an ounce of pure silver, worth as much as a coin containing an ounce.
The stamp of the State is a mere certificate of the weight and fineness of the pieces Others suppose that the precious metals owe their value entirely to their scarcity. But if gold and silver were not useful in the arts, they would have no value in commerce. ‘their utility is so great, that even if they were not the material of money, they would exchange for great quantities of corn and other commodities.
If they were as plentiful as copper and tin, they would be more valuable than these base metals; because they are applicable to more various uses. The market value of the precious metals is, like that of all other things, in the compound ratio of their utility and of their scarcity. It does not depend on their scarcity alone. Money is, simply, that valuable by reference to which the value of other things is estimated, and by the instrumentality of which the interchange of other things is effected. There is nothing mystical in its nature; nor is it likely that its character Would ever have been misunderstood in the United States, the avoirdupois ounce of silver had been made the unit of reference, and if coins had been struck off the weight of an ounce, and of aliquote parts of the ounce.
Men would then have had as clear conceptions of the nature of the transactions into which money enters, as they now have of those in which iron is exchanged for wheat. ‘they would then have seen that there is no essential difference in these transactions-that trade by barter, is exchanging wheat for one meta], and that trade with money, is only exchanging wheat for another metal. It has been by taking for the unit of reference a fractional part of the Troy ounce, which is a weight with which the people are not familiar, and by giving to this unit the arbitrarily name of “a dollar,” that the subject has been rendered obscure to many minuses.
As whatever is extended may be made the standard of length, in like manner, whatever is valuable may be made the standard of value. Instead, of Ayung, this tract of land, or this bale of cloth, is worth so many ounces, or so many pieces of silver, men might say, it is worth so many horsed or cows, or so many pounds of lead or of iron. The principle of valuation would be identical with that which is adhered to in countries where only solid money is used. But he who had a small article to sell would find it difficult to calculate its exact value in the fractional parts of a horse or a cow, and pounds of lead or of iron would be a very inconvenient circulating medium.
Corn, cattle, iron, leather, cocoa, tobacco, and other commodities, have all, in point of fact, been used as money, in different ages and different countries, but they have long ceased to be so used, by commercial nations, for reason, similar to those which have induced men to choose for their standard of length, some object less liable to variation than the foot of a Chancellor, or the forearm of a King. the high estimation in which the precious metals have been held, in nearly all ages and all regions, is evidence that they must possess something more than the merely ideal value.
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