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HONEST MONEY




  HONEST MONEY

  BY
  ARTHUR I. FONDA

  New York
  MACMILLAN AND CO.
  AND LONDON
  1895

  _All rights reserved_




  COPYRIGHT, 1895,
  BY MACMILLAN AND CO.

  Norwood Press:
  J. S. Cushing & Co.--Berwick & Smith.
  Norwood, Mass., U.S.A.




PREFACE.


In an article in the "American Journal of Politics" for July, 1893, I
gave a brief statement of the conclusions I had reached in an attempt
to analyze the requirements of a perfect money.

The limits of a magazine article prevented a full discussion of the
subject; many points were left untouched, and all quotations from the
works of other writers, in support of the brief arguments given, were
of necessity omitted.

As the course of events since the article referred to was written has
more fully confirmed the conclusions stated therein, a desire to give
the subject ampler treatment, which its importance seems to demand, has
led to the writing of this little work.

If apology is needed for a further contribution to the mass of
literature on the subject of money, with which the country has of late
been flooded, it must be found in the above explanation of the reasons
which have led to the production of the present volume, coupled with
the fact that the questions involved are far from being settled, and
that the loud complaints, and the many financial schemes and plans,
that have appeared all over the country make it probable that further
legislation on the subject will be attempted in the near future.

It must be conceded that there is something radically wrong in a
country like the United States, rich in all of the necessaries and
most of the luxuries of life, where nature has been most bounteous,
and where the not excessive population is exceptionally enterprising
and industrious, when a large part of the people cannot at times find
employment. When, with an abundance of unoccupied land, and a great
diversity of undeveloped resources, capital and labor--both anxious
for profitable employment--cannot find it; and when men suffer for the
necessaries of life, not in one section only, but universally and in
large numbers, while our warehouses are filled with manufactured goods,
and our barns and granaries are bursting with food products. This is a
condition that is certainly as wrong as it is unnecessary.

Such a condition occurring once or twice in the history of a
country might be attributed to accident, but recurring, as it does,
periodically, it argues a fault in our economic system. So wide a
disturbance, extended also to other countries, betokens a general
cause. What that cause is, it is not difficult to perceive--all
indications point to our monetary system as the chief source of the
trouble. There are doubtless other causes that contribute in some
degree to create variations in prosperity, but no other single cause,
or combination of causes, seems to us competent to account for the
great fluctuations; while the one we have cited alone may easily do so.

This work may have little direct effect in bringing about an
improvement in our money system, but it is the hope of the writer that
it may have at least an indirect effect by helping to spread a better
knowledge of the requirements of such a system and of the principles
involved.

Much of the current discussion of the subject of money betrays
ignorance of those fundamental principles of the science which are
agreed upon by all economists, if it does not wholly disregard them.
I have endeavoured in this work to avoid such errors by a painstaking
analysis of the subject, and by a careful comparison of the opinions of
authorities on the principles involved. Starting from this foundation I
have deduced the requirements for an honest money, shown the faults of
our present system in the light of these requirements, as well as the
merits and defects of various changes that have been proposed for its
betterment, and, in conclusion, have outlined a system that seems to
meet the requirements and to correct existing faults.

I desire to acknowledge my indebtedness, not only to the many works
mentioned and quoted from herein, but to others, neither mentioned nor
quoted, which have been of material assistance in corroborating the
opinions I have ventured to advance.

          A. I. F.

  DENVER, COLO.




CONTENTS.


  CHAPTER I.
                                                      PAGE
  VALUE AND THE STANDARD OF VALUE                        1
      Definition of Value                                1
      Supply and Demand                                  8
      The Standard of Value                             12


  CHAPTER II.

  MONEY                                                 21
      Definition of Money                               21
      The Functions and Requirements of Money           25
      Money Value                                       29
      Money Demand and Supply                           36
      Necessity for Invariable Money Value              40


  CHAPTER III.

  EXISTING MONETARY SYSTEMS                             51
      The Gold Standard                                 54
      Gresham's Law                                     57
      The Silver Standard                               65
      Bi-metallism                                      67
      Paper Money                                       71


  CHAPTER IV.

 