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.] Page THE LAWS OF MONEY. The desire to possess gold and silver an original instinct stronger than 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. From their durability they become the reserves of society . 22223 Errors in monetary science have arisen chiefly from overlooking their universal attractiveness. 3 Demanded in exchange for all other articles, and in discharge of all That of all other articles RELATIVE; depending upon cost and demand Necessity to social and material progress of some article or articles for which a supreme preference is felt The importance of the precious metals vastly increased by interest, paid in kind, on loans of them 8 Such loans transfer the actual possession of capital from the owner to the borrower .. 8 They become in this way the highest guarantees for the peace and order of society... 8 Provision for the future to be made only by contracts payable in them, with interest payable in kind .. 9 Without them, there could have been neither civilization nor continuity of history.. 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 actual intervention of the precious metals 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 Based upon or symbolize merchandise, and retired by its use The holders of bills entitled to the specific thing drawn against 14 14 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 14 14 15 15 Description of the mode of their issue. 16 Banks do not pay out capital in making their loans 16 These are made by an exchange of their notes, presently due, for the bills of their customers, due at a future day.. 16 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 discount.. 17 All these operations based upon merchandise The instruments by which they are conducted paper money-CURRENCY. Banks discharge obligations arising between themselves by mutual offset 18 18 18 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 20 Profit of Banks. . 21 Advantages of a currency issued by them in reducing prices No difference but in form between notes, and checks drawn against deposits 29 |