Future Paper Money of This Country [pp. 1-25]

FUTURE PAPER MOAREY OF THIS COUNTRY.
with the delicate function of supplying the paper money of the
country; and all the more so, as this would open an easy way
to supply means for the innumerable claimants and jobbers who
are always trying to enrich themselves and their constituents
from the national Treasury. The present silver-dollar policy is
a constant menace to a sound currency.
We are somewhat encouraged, as we see that Mr. Burchard,
Director of the U. S. Mint, hitherto an earnest advocate of continued coinage of the standard silver dollar, advises its discontinuance, on the ground that, so far from promoting the union among
the nations to fix a ratio of valuation between silver and gold by
which I 5~ grains of the former shall be equal to one of the latter,
it rather retards that consummation. We warmly second his
proposal, if we cannot second his reasons for it. (For we do not
believe it in the power of the legislation of one or many nations
to establish a fixed ratio of value between silver and gold, any
more than between iron and lead, wheat and maize. Their relative value must in the long-run be determined by their intrinsic value, and this in turn by the cost of production interworking with the law of supply and demand.' Such value cannot
long, in any normal state of things, exceed the cost of its reproduction. On the other hand, it will cease to be reproduced
at existing prices unless they afford a profit. Since, therefore,
silver continues to be largely produced at present market rates,
and, even so, makes fortunes for many of its producers, it is idle
to claim that it has, or by legislation can permanently be made
to have, more than its market value. The rate, too, at which
gold bullion sells, exceptional disturbing influences aside, fairly
represents the cost of producing it as compared with silver. If
it did not, if at present market rates mining gold were decidedly
more profitable than mining silver, gold-mining would increase
until the equilibration of the relative cost and price of the two
metals would be effected.
Let it be noted, however, that, whatever tendency exists in
the national government to vitiate its own paper currency by
making its own Treasury notes legal tender, whether redeemable
or irredeemable, and however this may be a reason for resorting to other methods of supplying the needed paper currency
of the country, the evil and the danger cannot be wholly
I 3