400 PAPEB MONEY AND A PROTECTIVE TARIFF. 



quently there was no excess; and I mean by &quot;use,&quot; notes actually 

 wanted to pass from hand to hand for the purpose of buying and 

 selling. Precisely as in a purely gold currency, if there are more 

 dollars issued than the public can use, they are sure to be locked up 

 in some storehouse or other. The public won t keep them and won t 

 have them. Just the same if you have fifty hats. You can t use 

 more than two or three of them, and the rest must be locked up. 

 It is the same with sovereigns and notes. If I give you one thou 

 sand metallic sovereigns, you cannot use them. By you, I am 

 speaking of the public generally. You must send them into the 

 cellar. 



Q. Is it true that this California gold has had the effect to raise 

 prices ? 



A. I do not believe it, although it is generally assumed by most 

 economists. My answer to the claim is simply this not proven. I 

 don t see a single sign of the value of gold having declined in conse 

 quence of the Australian and California discoveries. 



Q, Who should issue the currency, the Government or banks ? 



A. Who the issuer is, is of no consequence as to the action of cur 

 rency. If it is inconvertible and a legal tender, then the deprecia 

 tion is great. The only object of currency is to exchange goods, 

 precisely as the only object of the Batavia steamboat was to bring 

 me and fellow-passengers from England, and the goods on board 

 also. They are both tools one to carry us across the water, the 

 other to enable one man to get his goods into another man s hands, 

 and that, I say, is the only object of currency. 



Q. You consider, as an essential part of that object, that there 

 should be some consistency in the value of the currency ? 



A. The constancy of the value comes in in this way: There is a 

 transaction between A. and B. A. has got ten bales of cotton to 

 sell, and B. has nothing to give you for it but pieces of metal. A. 

 knows what his cotton costs him, and between them both they know 

 the value of those pieces of metal in the world, because they know 

 what they can get for them in the shops so many pounds of tea in 

 one shop, so many hats from the hatter, so many boats from the 

 boat builder. A. says, &quot; Give me your metal and I will give you 

 my cotton for it.&quot; That is the action of currency. It is a tool; and 

 why is it wanted? Here is the secret of all currency: I am a 

 grower of sugar in Louisiana, and you are a grower of cotton. I 

 want to buy your cotton. I say to you, &quot;Take my sugar and 

 get rid of your cotton.&quot; You say, &quot;I have no use for your sugar. 

 Have you not got some yellow metal ? Give me that metal and I 

 will give you my cotton. Then I can go with that metal and buy 

 what I want.&quot; This is the function of currency. Money was devised 

 entirely for that and nothing else. The hatter might starve before he 

 would find a butcher or a baker that wanted a hat. If it was not for 

 currency he might starve before he got his bread. The fact is, a 

 nation could not exist without currency. The vice of inconvertible 

 currency is, that it has other ends and objects. 



Q. How as to debts, mortgages, etc.? 



A. The nature of these things is not altered by debts and mort 

 gages. Every operation of credit is only this : that I have not got a 

 dollar to-day and will give it to-morrow. Whether the debt is for a 



