PRESENT MONETARY PROBLEMS. 221 



community, and no more; and these notes will remain at par only if 

 there is a recognized system — not of ultimate, but of immediate re- 

 demption. ]STo matter what quantity of notes may be put out, if there 

 is no system of immediate redemption, the notes will depreciate. But, 

 if there is an effective system of immediate redemption in operation, 

 then no matter what the amount issued, none of it can depreciate, and 

 only that quantity which is needed by the convenience of the business 

 public will remain outstanding. In this way it may be realized that 

 the element of quantity is incidental to the more dominant factor 

 of redemption. 



The connection of the value of the standard money with the paper 

 promises to pay in that standard coin is the one important considera- 

 tion in determining the value of paper money. Eedemption is the 

 only sure means of ascertaining automatically what quantity of paper 

 is needed by the public. Redemption determines both the quantity 

 and the value of the paper. 



In the case of irredeemable paper, however, it is often assumed 

 that, in the absence of redemption, the .value of the paper is determined 

 directly by the amount outstanding as compared with the uses to 

 which such money can be put. There is believed to be an imperative 

 demand for money, as a medium of exchange, which must be satisfied 

 in some way; and in default of anything better, irredeemable paper 

 will be required, and a value will be given to it by this imperative 

 demand. Then, only if issued in excess of this demand, will even 

 irredeemable paper depreciate. This is the usual explanation of the 

 fact that irredeemable paper, worthless in itself, bears any value at 

 all. 



