Part 10 (1/2)

[31] Compare _Unto this Last_, p. 115, _et seq._

[32] [That is to say, the love of money is founded first on the intenseness of desire for given things; a youth will rob the till, now-a-days, for pantomime tickets and cigars; the ”strength” of the currency being irresistible to him, in consequence of his desire for those luxuries.]

CHAPTER III.

COIN-KEEPING.

68. It will be seen by reference to the last chapter that our present task is to examine the relation of holders of store to holders of currency; and of both to those who hold neither. In order to do this, we must determine on which side we are to place substances such as gold, commonly known as bases of currency. By aid of previous definitions the reader will now be able to understand closer statements than have yet been possible.

69. _The currency of any country consists of every doc.u.ment acknowledging debt, which is transferable in the country._[33]

This transferableness depends upon its intelligibility and credit. Its intelligibility depends chiefly on the difficulty of forging anything like it;--its credit much on national character, but ultimately _always on the existence of substantial means of meeting its demand_.[34]

As the degrees of transferableness are variable, (some doc.u.ments pa.s.sing only in certain places, and others pa.s.sing, if at all, for less than their inscribed value), both the ma.s.s, and, so to speak, fluidity, of the currency, are variable. True or perfect currency flows freely, like a pure stream; it becomes sluggish or stagnant in proportion to the quant.i.ty of less transferable matter which mixes with it, adding to its bulk, but diminis.h.i.+ng its purity. [Articles of commercial value, on which bills are drawn, increase the currency indefinitely; and substances of intrinsic value if stamped or signed without restriction so as to become acknowledgments of debt, increase it indefinitely also.]

Every bit of gold found in Australia, so long as it remains uncoined, is an article offered for sale like any other; but as soon as it is coined into pounds, it diminishes the value of every pound we have now in our pockets.

70. Legally authorized or national currency, in its perfect condition, is a form of public acknowledgment of debt, so regulated and divided that any person presenting a commodity of tried worth in the public market, shall, if he please, receive in exchange for it a doc.u.ment giving him claim to the return of its equivalent, (1) in any place, (2) at any time, and (3) in any kind.

When currency is quite healthy and vital, the persons entrusted with its management are always able to give on demand either,

A. The a.s.signing doc.u.ment for the a.s.signed quant.i.ty of goods. Or,

B. The a.s.signed quant.i.ty of goods for the a.s.signing doc.u.ment.

If they cannot give doc.u.ment for goods, the national exchange is at fault.

If they cannot give goods for doc.u.ment, the national credit is at fault.

The nature and power of the doc.u.ment are therefore to be examined under the three relations it bears to Place, Time, and Kind.

71. (1.) It gives claim to the return of equivalent wealth in any _Place_. Its use in this function is to save carriage, so that parting with a bushel of corn in London, we may receive an order for a bushel of corn at the Antipodes, or elsewhere. To be perfect in this use, the substance of currency must be to the maximum portable, credible, and intelligible. Its non-acceptance or discredit results always from some form of ignorance or dishonour: so far as such interruptions rise out of differences in denomination, there is no ground for their continuance among civilized nations. It may be convenient in one country to use chiefly copper for coinage, in another silver, and in another gold,--reckoning accordingly in centimes, francs, or zecchins: but that a franc should be different in weight and value from a s.h.i.+lling, and a zwanziger vary from both, is wanton loss of commercial power.

72. (2.) It gives claim to the return of equivalent wealth at any _Time_. In this second use, currency is the exponent of acc.u.mulation: it renders the laying-up of store at the command of individuals unlimitedly possible;--whereas, but for its intervention, all gathering would be confined within certain limits by the bulk of property, or by its decay, or the difficulty of its guardians.h.i.+p. ”I will pull down my barns and build greater,” cannot be a daily saying; and all material investment is enlargement of care. The national currency transfers the guardians.h.i.+p of the store to many; and preserves to the original producer the right of re-entering on its possession at any future period.

73. (3.) It gives claim (practical, though not legal) to the return of equivalent wealth in any _Kind_. It is a transferable right, not merely to this or that, but to anything; and its power in this function is proportioned to the range of choice. If you give a child an apple or a toy, you give him a determinate pleasure, but if you give him a penny, an indeterminate one, proportioned to the range of selection offered by the shops in the village. The power of the world's currency is similarly in proportion to the openness of the world's fair, and, commonly, enhanced by the brilliancy of external aspect, rather than solidity of its wares.

74. We have said that the currency consists of orders for equivalent goods. If equivalent, their quality must be guaranteed. The kinds of goods chosen for specific claim must, therefore, be capable of test, while, also, that a store may be kept in hand to meet the call of the currency, smallness of bulk, with great relative value, is desirable; and indestructibility, over at least a certain period, essential.

Such indestructibility, and facility of being tested, are united in gold; its intrinsic value is great, and its imaginary value greater; so that, partly through indolence, partly through necessity and want of organization, most nations have agreed to take gold for the only basis of their currencies;--with this grave disadvantage, that its portability enabling the metal to become an active part of the medium of exchange, the stream of the currency itself becomes opaque with gold--half currency and half commodity, in unison of functions which partly neutralize, partly enhance each other's force.

75. They partly neutralize, since in so far as the gold is commodity, it is bad currency, because liable to sale; and in so far as it is currency, it is bad commodity, because its exchange value interferes with its practical use. Especially its employment in the higher branches of the arts becomes unsafe on account of its liability to be melted down for exchange.

Again. They partly enhance, since in so far as the gold has acknowledged intrinsic value, it is good currency, because everywhere acceptable; and in so far as it has legal exchangeable value, its worth as a commodity is increased. We want no gold in the form of dust or crystal; but we seek for it coined, because in that form it will pay baker and butcher.

And this worth in exchange not only absorbs a large quant.i.ty in that use,[35] but greatly increases the effect on the imagination of the quant.i.ty used in the arts. Thus, in brief, the force of the functions is increased, but their precision blunted, by their unison.

76. These inconveniences, however, attach to gold as a basis of currency on account of its portability and preciousness. But a far greater inconvenience attaches to it as the only legal basis of currency.

Imagine gold to be only attainable in ma.s.ses weighing several pounds each, and its value, like that of malachite or marble, proportioned to its largeness of bulk;--it could not then get itself confused with the currency in daily use, but it might still remain as its basis; and this second inconvenience would still affect it, namely, that its significance as an expression of debt varies, as that of every other article would, with the popular estimate of its desirableness, and with the quant.i.ty offered in the market. My power of obtaining other goods for gold depends always on the strength of public pa.s.sion for gold, and on the limitation of its quant.i.ty, so that when either of two things happen--that the world esteems gold less, or finds it more easily--_my right of claim is in that degree effaced_; and it has been even gravely maintained that a discovery of a mountain of gold would cancel the National Debt; in other words, that men may be paid for what costs much in what costs nothing. Now, it is true that there is little chance of sudden convulsion in this respect; the world will not so rapidly increase in wisdom as to despise gold on a sudden; and perhaps may [for a little time] desire it more eagerly the more easily it is obtained; nevertheless, the right of debt ought not to rest on a basis of imagination; nor should the frame of a national currency vibrate with every miser's panic, and every merchant's imprudence.

77. There are two methods of avoiding this insecurity, which would have been fallen upon long ago, if, instead of calculating the conditions of the supply of gold, men had only considered how the world might live and manage its affairs without gold at all.[36] One is, to base the currency on substances of truer intrinsic value; the other, to base it on several substances instead of one. If I can only claim gold, the discovery of a golden mountain starves me; but if I can claim bread, the discovery of a continent of corn-fields need not trouble me. If, however, I wish to exchange my bread for other things, a good harvest will for the time limit my power in this respect; but if I can claim either bread, iron, or silk at pleasure, the standard of value has three feet instead of one, and will be proportionately firm. Thus, ultimately, the steadiness of currency depends upon the breadth of its base; but the difficulty of organization increasing with this breadth, the discovery of the condition at once safest and most convenient[37] can only be by long a.n.a.lysis, which must for the present be deferred. Gold or silver[38] may always be retained in limited use, as a luxury of coinage and questionless standard, of one weight and alloy among all nations, varying only in the die. The purity of coinage, when metallic, is closely indicative of the honesty of the system of revenue, and even of the general dignity of the State.[39]