Conspiracy Nation -- Vol. 11  Num. 05
                     ("Quid coniuratio est?")


Synopsis by Conspiracy Nation

(Based on Coin's Financial School by William Harvey (1895))

The science of money is an exact science. As much so as mathematics.

The primary value of all property is its exchange value. If we had no money, one kind of property would be exchanged for another. Money is a medium of exchange to facilitate this exchanging of property.

If there were no money, and we had to depend on exchanging property for property, we could find a subsistence, but there would be no such thing as our present civilization or anything like it.

As stagnation and depression to business would result from having no money, then a part of these evils can be brought about by having money insufficient in either QUALITY or QUANTITY.

It was best to select something for money which was valuable within itself. By stamping it as money, and making it legal tender in the payment of all debts, it then became money and possessed two qualities:

(1) It had value of itself. If the government went to pieces, it was still valuable property and would have an exchange value;

(2) The stamp of the government upon it became a certificate of its QUALITY and QUANTITY.

It was considered that silver and gold were sufficient in quantity for use as primary money, but if at any time their combined quantity should become too small, then some other metal would have to be adopted and added to these two.

After a nation has fixed what its money shall be, it then issues different forms of credit money all of which are directly or indirectly redeemable in the commodity (silver and/or gold) to which a fixed and stable value has been given.

All money may be a medium of exchange, but primary money only is the measure of values. Credit money is not a measure of values; it is a medium of exchange only.

There are two kinds of credit money, as to the material out of which they are made. One is made on paper and embraces all forms of government and bank notes. The other is token money. Token money is made from some metal that does not enjoy free coinage.

Credit money of all kinds circulates by reason of its being redeemable directly or indirectly in primary money. A piece of paper money, or token money, is a promise of the government to pay so much primary money. Hence it is called credit money. It circulates on the credit of the government, on the confidence of the people that the government will be able to redeem it if it is presented.

In issuing dollar for dollar of credit money to redemption money (primary money), it is not necessary that the government should keep the redemption money (gold and/or silver) at all times in its treasury in full amount ready to redeem all the credit money. So long as sufficient redemption money is in the country, the credit of the government can be depended upon to get it. But it cannot strain the proportion beyond such amount without making the danger imminent, and the lack of confidence great.

If there is one thousand million dollars of redemption money in the United States -- in its treasury, its banks, and among its people -- then one thousand millions of credit money can be safely used and not more.

If the plan is to weaken the currency, then (a) credit money is increased beyond the supply of primary money; or, (b) the foundation is dug out from under the credit money by lessening the supply of primary money.

The currency was weakened in 1873, when Congress snuck in a law demonetizing silver and President Grant unwittingly signed the law. (See previous issue, CN 11.04.) If the plan is to weaken the currency, the foundation (silver) is dug out from under the credit money by lessening the supply of primary money.

By making gold the unit and closing the mints to silver, it lessened the demand for silver, and its commercial value at once began to depreciate. The moment a new standard of money was set up -- only one-half in quantity to what had previously existed -- silver began to fluctuate. It was then measured for its value in this new standard for measuring values and no longer possessed that fixed value which free coinage had given it. Silver had been changed from primary money to token money. With the demonetization of silver, the balance between credit money and primary money went out of whack: two-thirds of the money became credit money; one-third was primary money.

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