TABLE OF CONTENTS.

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

THE LAWS OF MONEY.

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The desire to possess gold and silver an original instinct stronger than

that felt for any other kind of property. . . .

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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)

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Errors in monetary science have arisen chiefly from overlooking their

universal attractiveness

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Necessity to social and material progress of some article or articles for

which a supreme preference is felt

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Their value ABSOLUTE; depending upon cost alone

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

contracts

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)

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Prime factors in the creation of wealth and in social progress

Always in demand at INTEREST as the basis of reproduction

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The demand for capital increases as natural laws are unfolded.

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

kind, on loans of them

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

borrower...

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

of society.

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

interest payable in kind...

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

history....

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

actual intervention of the precious metals

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Their use always barter

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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

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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

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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

Banks discharge obligations arising between themselves by mutual offset

Only balances arising between them payable in coin

Bills and notes of Banks differ chiefly in time of payment.

Interest paid by the borrower on all issues of currency.

Hence a change in their amount followed by a far greater one in the amount

of currency

Profit of Banks.

Advantages of a currency issued by them in reducing prices

All merchandise entering into consumption should be symbolized

Amount of symbolic currency in Great Britain

Reserves, their proper amount, and how maintained

Deposits, how they arise

No difference but in form between notes, and checks drawn against deposits 29

Necessity of division of labor in distribution as in production

Cumulative symbols representing the same merchandise

Currencies, like bills of exchange, only instruments arising in production

and distribution.

Distinction between capitalists and Banks

The manner in which banking capital may be provided

This always in the hands of the public till Banks go into liquidation
Bills proper to be discounted..

Disastrous consequences

Of the discount of bills given in the purchase of real property

Of the discount of bills given in the purchase of securities

Cause of the failure of Banks based upon real estate or securities

No bills to be discounted but those given for merchandise entering into con-

sumption ..

That a currency may be convertible, the means therefor must be provided

previous to its issue

Of the discount of bills given in the purchase of merchandise not in demand

for consumption.

Short bills only to be discounted.

Banks by discounting bills not properly based responsible for all the great

fluctuations in production and trade.

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Disastrous moral effects of fictitious currencies

Limited functions of governments in the matter of symbolic currencies .

Should forbid the discount of bills not based upon merchandise and having

more than four months to run . . . .

Or such as will not mature within the time required for the distribution to

consumers of the merchandise they represent

Governments can never issue a convertible currency, nor one that is not at a

discount from the standard of coin . .

Wide difference between currencies issued by governments and by Banks.

The former never issued in the discount of bills.

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All government currencies the representatives of debt, not of capital

Governments the only parties to retire the currencies issued by them

They are made legal tender as the only means by which they can be got

into circulation

Symbolic currencies measure the means of consumption of a people

Disastrous effects of a currency that does not symbolize capital

Further difference between government and Bank currencies

Interest always paid Banks on loans of their currencies

Never paid on the issue of currencies by governments.

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All government currencies in their depreciation involve a loss greater than

interest on their amount ..

Why governments cannot issue convertible currencies

Constant and excessive fluctuations the law of all government currencies 52

They reduce all business operations to the hazards of chance.
The great problem of society distribution, not production

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A government currency never flexible, as it bears no relation to the means

of consumption..

The value of all currencies depends upon their quality, not quantity.

Unlike measures of weight and extension, money, as the measure of value,

passes in every exchange

A currency of government notes never issued for the purpose of facilitating

exchanges

Always a forced loan.

Always superfluous

Their price their real or estimated value.

Their value never affected by the number of exchanges taking place.

Wholly dependent upon the credit of the issuer

The propriety of its issue shown by its return in the payment of the bills in

the discount of which it was issued . .

Every possessor of merchandise competent to issue a convertible currency

The greater part of the currencies to be issued locally . .

Convertible currencies will never circulate far from the place of their

issue . .

Erroneous assumptions in reference to money

Methods followed in the investigation of its laws those of the Schoolmen

Their exposure and refutation the necessary condition of progress in mone-

tary science

The great obstacle in the way of all progress

Complete failure of the Aristotelian method (Whewell)

Bacon in reference to (note)

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Emancipation from either could come only from the new races

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Bacon the first to teach the proper method of scientific investigation

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