A universal money for the whole world has been the dream of some writers. This in many respects would be a convenience, as would a general uniformity of weights and measures; but its benefits would be confined mainly to a saving of clerical work, and even this would not be as great an advantage as might be supposed, since differences in value of bills of exchange would continue to exist, even as they now exist between countries using the same money, or even between different cities of the same country.
Unless the universal money were stable in value, it would be as dishonest as the existing systems, and to make it stable would involve its absolute control in volume by some central power to which the various nations would delegate their authority. Such a thing is most unlikely to happen. The obstacles of national prejudice and habit are too strong to be overcome,—as will be evident from a perusal of Mr. Walter Bagehot's work, "Universal Money,"—and the advantage to be gained by it is not worth the trouble. A universal money, then, must be considered as a Utopian dream; and a plan that provides for our own country an honest money seems to be the highest success to which we can at present aspire in the settlement of this vital and all-important question.
Whether future legislation be based on some such plan as the one here outlined, or whether another can be devised that will more closely meet the requirements, the fundamental principles we have considered should be kept in mind in any change that is made.
It should also be clearly understood that no monetary legislation, by this or any other country, can alter the relative values of all, or any, of the commodities, including gold and silver, which enter into human use and consumption, except in so far as such legislation shall affect their relative supply and demand. All that legislation can really beneficially do, is to provide a stable standard of value, as it now provides stable standards of length and weight, and to provide a medium of exchange that shall always conform in value to that standard, and shall be at once convenient and economical.
Opinions may honestly differ as to the best means of providing such a money, but, when fully understood, no difference of opinion can exist as to the benefit it would be to all classes of society, without exception.
The labourer gains by employment being more certain and constant; by the knowledge that open competition with capital will determine the shares of the joint product which each shall receive,—that he will not be the victim of an insidious change in money value or, while receiving nominally higher wages, be perhaps getting lower real wages. With an honest money, real and nominal wages coincide, and a rise or fall of wages is known at once as a benefit or an injury. The effect on wages would be toward an increase, by stimulating production and enhancing the demand for labour; while the labourer's ability to purchase more would absorb such increased production and improve his condition.
The employer of labour would gain by the certainty that his success will depend more largely on his own ability and endeavour, and less on causes which are not only beyond his control, but on which he cannot even calculate with certainty; while the greatest risks to which he is now subject will be removed.
This applies not only to manufacturers, but to industrial enterprises of all kinds.
Railroad stockholders would be especially benefited. No other business, perhaps, carries so large a fixed indebtedness, in proportion to its value, as railroads, and the stockholders suffer more from an advance in the value of money than most other owners. The fact that they are to some extent monopolies and can keep their rates the same, or even increase them, with money value rising, does not alter the case; for the amount of traffic will, under such conditions, be lessened, and it is impossible for most railroads to reduce expenses in anything like a proportion to the reduction of income from diminished business, because of the large fixed charges.
Merchants would be benefited by the greater general stability of prices, and would be relieved of many of the risks of business. They would, if solvent, have assurance that they could get money when needed, and the failures would be fewer.
Money loaners would also be benefited. It might seem, at first sight, as if they would not, since they profit directly by an increase of money value; but this is a narrow view. While the money loaner, as before shown, gets an undue and unjust share of the products of labour and capital when prices are falling, yet the secondary effects of such a fall,—the increased competition for loans, and diminished demand for capital for business enterprises,—by lowering interest rates, tends to offset this gain; and the doubt and uncertainty as to security keep capital idle as well as labour. The lender gets a larger share of the total product than he is entitled to, under such conditions; but the total product is so much lessened as a whole, that his larger share is less in actual amount than a just share of the larger product would be, were money honest and prices constant. Moreover, one of the most important considerations to a lender is security, and this is much lessened with falling prices, and the loaner is frequently obliged to take the property which is security for his loan. He does not want the care and management of it, as it is generally far less valuable in his hands than in those of the original owner; the latter thereby loses something which he could use, and the former gains something he has no use for, and no one is really benefited. It cannot be considered, therefore, that loaners, as a class, either profit by or desire such a condition of business depression and panic as is largely produced by dishonest money.
A few individuals there may be—the leeches or wreckers of society—who rejoice at and profit by the general misfortune of all; but they are not, it is believed, sufficiently numerous to make their desires important or consideration for them a matter of anxiety.
In view of these considerations, the attempt—so often made in discussing the question of money—to set class against class, to lead labour to consider capital as its enemy, to embitter the relations between borrower and lender, and between the banks and the public, is greatly to be deplored. Competitors in a sense these different classes doubtless are, but so far as an honest money is concerned all are partners; all would be gainers by it and none losers. Past experience does not lead us to expect that men will generally become unselfish and altruistic in their motives in the near future. Business will continue to be, as it always has been, a struggle for the greatest amount of commodities with the least labour; and the plea for an honest money rests not upon altruism, but upon the enlightened selfishness which teaches that honesty is the best policy, in a money system as in other things, and that it is not profitable to kill the goose that lays the golden eggs.
