THE GREAT POWER. CHAPTER I. What is money?-Diversity of opinion on the subject-Consequent necessity for investigation-The origin of the value of the precious metals-The influence of gold and silver on the actions of mankind before and after the adoption of the metals as money. HAT is money? The question appears WHAT too simple to require a moment's thought. We all know what money is. We are handling it every minute of the day either in the form of coins of bronze, silver or gold; or if not actually in coins, then in bank notes, cheques, bills, or some other substitute for coins. Money is simply the means whereby we get what we want or to be perhaps more accurate, money is the only means whereby we can get practically everything we want. This is a matter of such common experience that it hardly appears open to question. And yet if we turn for a moment to the conclusions of some of the most eminent B writers on the subject, we shall find a diversity of opinion so marvellous as to almost shake our belief in the evidence of Our senses. Although nearly every philosopher from Aristotle to Herbert Spencer tacitly admits that money is the means whereby we get what we want, hardly any two agree exactly as to the nature and functions of the invention. Some say that it is simply a medium of exchange; others that it is a device created by the State to measure values. Locke and his followers considered money to be the most substantial and desirable form of wealth. Adam Smith and the modern school of economists, on the other hand, considering money to be simply a contrivance for facilitating the operation of barter, argued that it was the least desirable form of wealth, even if it could be considered wealth at all. Whence money derives its value currency writers even to this day are unable to agree. John Stuart Mill, with Bastiat, McCulloch, Ricardo, and other eminent economists, maintained that it was a commodity: and that its value, like that of all other commodities, depended temporarily upon demand and supply, and permanently, and on the average, upon cost of production.) Others contended that money was simply a counter representative of commodities and services, and that its value was determined by the number of counters in circulation-a matter, the regula tion of which was in the hands of the State. This last opinion is very generally supported by American writers and by others who have experienced the conveniences of a paper currency. Mr. Alexander del Mar, for instance, argues that value is given to money solely by the law which makes it legal tender, and claiming that most of the authorities, ancient and modern, recognise this fact, calls upon the world to discontinue the use of the precious metals and to henceforth adopt paper.* Amidst this sea of contention the ordinary reader is very apt to lose sight of the familiar landmarks of common experience, and in consequence, to be stranded amongst the absurdities to which modern economists have reduced the theory of money. Forgetting the old dramatist's description of it as "... the strength, the sinews of the world, The health, the soul, the beauty most divine, Heaven's physic, life's restorative,”—† ... a description to the accuracy of which men's actions to this day fully testify,-some modern writers have been so far seduced by the delusive logic of the economists of the first half of the present century as to treat money solely as a device that enables the unequal exchanges of services, merchandise, &c., between man and man, to be conveniently and expeditiously * Vide The Science of Money, London, 1896. adjusted. * If money plays no more important part in the economy of life than of a "machine for doing quickly and commodiously what would be done, though less quickly and commodiously, without it," why then have poets in all ages and in all countries sung in praise of its almost illimitable power? Why do many earnest men call it a blessing: and others equally earnest, a curse? The truth is, the subject has not yet been popularly and practically investigated. Those philosophical writers who have set themselves to elucidate the mystery, have very obviously lost sight of some of the facts of which men of business have every-day experience. Men of business, on the other hand, perceiving that 'Money makes the mare go," have rested content in the endeavour to accumulate such gold, silver, or paper wealth as would enable them to obtain all they required. The result has been that the great economists, in tracing money to its origin and in finding the motives that first led to its adoption, have argued that those same motives explain the laws of the complicated invention we are using to-day; whilst whilst men of business, occupied mainly with their efforts to accumulate money, have lost sight of the fact that money is considerably more than "an instrument of purchase." The * Vide Mr. DUNNING MCLEOD's Elements of Banking. † J. S. MILL. |