HARDWOOD RECORD 



23 



(.-atechism on money iiriuted, which is reproduced below, because 

 of its pertinence: 



What is money V 



lloaoy is a convenient tolion of exchange which has heen invented by 

 civilized man to facilitate commerce. 



\Vliat is commerce? 



Commerce is the exchange of life's commodities and necessities and 

 of labor by individuals with individuals, communities with communities, 

 and natons with nations. 



Wliat are the things which are exchanged in modern commerce? 



The six essential things which are bought and sold, as we say. in 

 modern commerce are food, water, clothing, shelter from inclemency of 

 weather and climate, human intelligence or skill, and human strength 

 or labor. 



What is the tise of money? 



Money is of use onlj- as it enables a man to exchange his labor or his 

 intelligence for food, raiment, and shelter, or to exchange the food, 

 raiment, or shelter which he has stored up and saved for the labor and 

 intelligence of others, or to exchange his commodities for the commodities 

 of others. 



To perform this use properly, what qualities must money possess? 



It must possess, first, the quality of being universally recognized as 

 a good tolfcn of exchange, that is to say, a promise, which will not be 

 repudiated, to pay some of the above-mentioned essentials of commerce ; 

 and, second, the quality of being as stable a standard of measure as 

 possible. 



Must money possess what is called intrinsic value? 



Not necessarily. A piece of money is a token of a promise to pay 

 useful commodities, useful labor, or 



Gentlemen: 



useful skill. It is the promise to 

 pay which must possess intrinsic 

 value, not the token. The only 

 service which "intrinsic value" in 

 the piece of money itself can render 

 is that sometimes it makes the 

 promise to pay more universally 

 recognized, and thus more binding. 



Were the "greenbackers" of 

 thirty .years ago right, then, in 

 their contention that the most sci- 

 entific money is paper Money? 



Philosophically, yes ; practically, 

 no, because they could not, or did 

 not, devise means to make the 

 paper money token universally 

 recognizable and reasonably stable 

 as a measure of value. 



What do you mean by "measure 

 of value" as applied to money? 



The measuring quality of money 

 is the quality which enables men to 

 determine, in commerce, how many 

 loaves of bread one will give for a 

 pair of shoes, or how many hours 

 of labor one will give to a dentist 

 for pulling a tooth. All com- 

 modities fluctuate in value in ac- 

 cordance with the needs or the de- 

 sires of men, or with the variation 

 in the action of forces of nature. 

 A favorable season produces a great 

 wheat crop, and the price of bread 



goes down ; a coal strike comes, and the price of coal goes up. The 

 dollar as a measure of value must therefore be based upon the commodity 

 which fluctuates the least. In modern times gold is this commodity, and 

 for this reason the most highly civilized nations use gold as the measure 

 of the value of money. But gold itself constitutes only .a fraction of the 

 money used in the world, and its chief usefulness as money is because it 

 is a measure and not because it makes surer the promise to pay. 



Are the words currency and money interchangeable? 



For all practical purposes, yes. The money tokens used in the United 

 States consist of gold, silver, copper, and nickel coins ; of national bank 

 notes ; of "greenbacks" or United States government notes ; and of all 

 checks and negotiable i)ersonal notes. In a system of finance that works 

 properly all these tokens are interchangeable, and are therefore all prac- 

 tically money ; and all money that is current is currency. 



Is there any other quality of money, or of currency that represents 

 money in practical life, which has not been mentioned above? 



Yes. Perhaps the most important quality of commercial money, the 

 money which serves as a token of buying and selling, is that it should 

 not only be stable in character or in its measure value, but that it should 

 fluctuate in its volume. When all the farmers of the country are selling 

 their wheat, they must receive money tokens which will enable them the 

 next spring to obtain new seed and fertilizer. It is manifest that in an 

 agricultural country like the United States there will be a great quantity 

 of money tokens needed in the fall and spring, when there are great num- 

 bers of commercial transactions taking place, and a less quantity of 

 money tokens needed in midwinter and midsummer. 



Why do we not, then, put our money away in drawers and safes in 

 the winter and summer, and simply take it out when it is needed in the 

 fall and spring? 



Because idle money brings in no returns, while money which is at work 

 increases itself. Under the present national banking system, through which 

 the greatest part of our current money is supplied to the people, the banks, 

 as a guarantee of their good faith have to pay the government for the 

 right of issuing the currency. As they have to pay by the year, whether 

 or not they use their currency in commercial loans to farmers and mer- 

 chants, the natural tendency is to make speculative and undesirable loans 

 at times when the legitimate commerce of the country does not need 

 the money. This speculative use of money is one of the chief causes of 

 financial panics. 



How large can the volume of paper currency safely be made? 



We can safely have in circulation at any one time paper currency equal 

 in amount to the volume of the legitimate commecial transactions of the 

 time. A promise to pay is said to be "as good as gold" when we know 

 that the man who makes the promise is both determined and able to keep 

 it. -V paper dollar (which is simply a promise to pay) is "as good as 

 gold" when the bank that issues it is determined and able (or is com- 

 pelled and enabled by the government) to pay it. The volume of paper 

 dollars issued by a bank should be governed by two factors : first, the 

 legitimate need of the merchants, farmers, and business men of the com- 

 munity for these paper dollars, and, second, the ability of the bank to 

 make them worth a dollar in commodities or in labor. 



Can the plan of the Monetary Commission be defined in a few words? 



Briefly, the plan is to provide machinery by which a national bank 

 can at any given time provide the community in which it does business 



with the currency or money which 



UNSOLICITED TESTIMONIAL: 



SIIlP JarkHflit ICumbrr (to. 



flDanufacturcts of 



2j u m b f r 



Jackson, Tenn.. Dec. 13, 1911. 



At the time we made the contract for the page we have 

 been using in Hardwood Record, it was explained to you 

 that we would probably only want to use this sized space 

 until we secured a trade Introduction. Thanks to your 

 good journal we have achieved the desired results, and 

 replies have not only been from all sections of the United 

 States, but from England and Germany as well. 



Between the high quality of your advertising service and 

 the high quality of our lumber, we closed the year with a 

 smaller stock than usual, 



JACKSON LUMBER CO., 

 G, O. Worland, Manager, 



that community legitimately needs, 

 coupled with a sy.stem of govern- 

 ment supervision so effective that 

 the bank will be enabled to keep 

 its promise to make the paper dol- 

 lars good when presented for pay- 

 ment. 



Is the plan of the Monetary 

 Commission designed for the bene- 

 fit of bankers? 



Its chief and fundamental effect 

 will be to benefit the farmers, mer- 

 chants, and manufacturers, and so, 

 of Course, the consumers and house- 

 holders, of the country. It will 

 give more liberty and efficiency to 

 the smaller banks, and loss despotic 

 power to the large banks of the 

 great financial centers. The great 

 banks of Wall street are support- 

 ing It, however, because they know 

 that the prosperity of the indi- 

 vidual banker depends upon the 

 general prosperity. Merchants and 

 farmers and householders ought to 

 support it for the same reason. 



Changes in Lumber 

 Requirements 



Hardwood Hecord 's lumber 

 advertisers, who are familiar with 

 its Information Service, involving a list of the wholesale manufac- 

 turing consumers throughout the United States and Canada, and 

 reciting their annual specific requirements in lumber, dimension stock, 

 veneers and panels, know that in addition to the regularly issued 

 bulletins involving additions and corrections during the year, a general 

 campaign is instituted at the first of each year to correct the infor- 

 mation up-to-date for the following year. 



Just at this time there is being handled in this office an average 

 of a thousand letters a day covering corrections to this information. 

 These involve changes in name of house, name of buyers, and change 

 in lists of requirements. In all Haedwood Eecord 's past experience 

 in handling this service, there never has been a modicum of the 

 changes in requirements that is manifested by the corrected proof 

 sheets being returned by these thousands of lumber buyers. Many 

 changes in requirements are almost unexplainable, as in the case of 

 two corresponding factories in the same town, one man cancels his 

 Cottonwood requirements and substitutes poplar, and his neighbor 

 cancels poplar and substitutes Cottonwood. In a general way, how- 

 ever, there seems to be a manifest increase in the prospective demand 

 for sap gum and soft maple, with a moderate increase in requisitions 

 for red gum, red birch, hard maple, cottonwood, gray elm and bass- 



