Importance of Notes 221 



safer form, because the guarantor becomes im- 

 mediately liable upon default, whereas, if he 

 guarantees collection only, the owner must ex- 

 haust every other legal remedy before he can pro- 

 ceed against the guarantor. In other words, he 

 must bring an action and proceed by execution 

 after judgment to try to collect. 



A large part of the commercial business of 

 the world is done by negotiable bills and notes. 

 In fact, some of our national currency is but 

 a higher type of secured note, having behind 

 it not only the credit of the government, but 

 actual coin as collateral. We often hear the 

 expression that the government can make money 

 by simply printing its notes. So, in a sense, 

 can the reader, but the notes will be worthless 

 if issued beyond the limit of assets and actual 

 resources. For example, A may give his note for 

 $100. He may, in fact, give a second or a third; 

 but the time is sure to come when the limit is 

 reached, and if A has gone beyond his actual as- 

 sets in the giving of notes, then the merest hint 

 or bit of gossip, the slightest calamity or loss may 

 pull down the whole structure of inflated credit 

 upon his head. We regard a treasury note as 

 good. It is only absolutely so when there is a 

 like amount of gold or silver behind it in the 

 treasury. We should not endanger ourselves by 

 advocating that the collateral which backs our 



