352 THE QUESTIONS OF THE DAY. 



who have that use for it. If we could conceive that the time 

 would come when there were no debts outstanding, tlie fiat 

 money might lose all value, since no law can compel any one 

 to part with property in Ijand except in excliange for what he 

 desires. In former ages this has sometimes been tried and the 

 severest penalties imposed for refusal to accept whatever the 

 law called money in payment for goods. It has never suc- 

 ceeded, except as for a sliort time the terror of the law coerced 

 some individuals. In modern times no such attempt would 

 be made, and if it were would simply result in a return to 

 barter. 



As, under any conceivable modern legislation or condition, 

 there will always be debts to pay, it is the belief of many 

 excellent persons that the demand for any legal tender money 

 for debt-paying purposes will always be sufficient to keep it at 

 its full face value for other purposes. As a matter of fact, it 

 will not, if issued in excess, and for this reason that, vast as 

 the volume of pending transactions may be in any nation, 

 they are but a trifle in comparison with the aggregate volume 

 of all future transactions, and when men part with property, 

 and have no debts to pay, they will value the money they 

 receive for it solely with regard to the use they can make of it 

 in the future; they will therefore accept money having no 

 ijitrinsic value of its own, solely with reference to what they 

 conceive its value may be in the future; and if they part 

 with property to be paid for at some future time, knowing 

 that tliey may be paid in money which they do not like, they 

 will set their price sufficiently high to make themselves good.* 

 It is in this way, also, that we most readily see the operation 

 of increased volumes of money in raising prices, a raise in the 

 level of general prices being precisely equivalent in meaning 

 to a depreciation of money, although from force of habit we 

 seldom think of the occurrence except as an advance of price. 



* The alternative, when the law permits it, is to contract to be paid in some 

 money satisfactory to the creditor. This is what is now taking place in the 

 United States with regard to loans, and other long credits, which are generally 

 made payable in U. S. gold coin. 



