THE MONETARY PROBLEM. 



215 



case in all pursuits. And does the application hold good with 

 the United States bonds, whose holders in many cases have ac- 

 quired them by inheritance and have throughout their lives 

 made no contribution to that totality of effort from which is 

 poured into their purses an annual interest that constantly in- 

 creases in purchasing power ? And the original holders of these 

 bonds may have procured them by means of the revenue obtained 

 from land that has aj^preciated in value through no possible effort 

 or foresight of theirs. Do not all these considerations point to 

 the fact that a standard of value which may measure justice to 

 all and injustice to none must be based directly upon the results 

 of human effort ? It is not for an instant to be intimated that 

 existing obligations shall be repudiated, nor can it be conceived 

 that such an ideal standard will be attained save through slow 

 and painful development. But the theoretical demonstration of 

 such an ideal may even at this time not be beyond the bounds of 

 possibility. And there may be all the more need for such demon- 

 stration because of the increase, both present and prospective, in 

 the production of gold, which may at some future time cause the 

 fluctuations in the value of that commodity to be no less than 

 they have been in the value of silver. 



But even the adoption of an ideal monetary system would not 

 entirely deprive the precious metals of a positive monetary func- 

 tion. Until one such system were adopted by all of civilization, 

 gold would be needed in international exchange ; and for various 

 reasons, perhaps, whether the basis for circulating notes were the 

 assurance of the result of human effort as given in promissory 

 notes, or whether it were stocks, bonds, or other securities depend- 

 ing for their value upon the result of human effort, it might now 

 and then happen that the holders of the notes might want to 

 make an immediate test of their value. The issuing source to 

 preserve confidence in the notes emitted by it must be able to sat- 

 isfy this test. As the medium of exchange that antedated notes 

 and that has not been entirely superseded by the issue of notes is 

 coin ; as coin has a definite intrinsic value, which notes have not ; 

 as coin is durable, portable, and readily exchangeable — it follows 

 that a natural and practical immediate test of a note's security is 

 the readiness with which it may be exchanged for coin. To this 

 end, when authority to issue notes has been given, it has usually 

 been required that specie in a certain minimum ratio to the value 

 of the note circulation be held by the issuing source for the re- 

 demption of notes presented for that purpose. The facility for 

 the exchange of notes for coin may be not only a test of their 

 security, but, as in the Dominion of Canada, a means whereby 

 through the competition of various banks the note circulation 

 may be contracted as need for it is lessened, each of the Canadian 



