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MONEY AND INTEREST.

that all plates shall be made of tin, would not the value of tin rise and the value of china fall? Unquestionably. Well, a precisely parallel thing occurs when government decrees that all money shall be made of or issued against gold or silver; these metals immediately take on an artificial, government-created value, because of the new use which arbitrary power enables them to monopolize, and all other commodities, which are at the same time forbidden to be put to this use, correspondingly lose value. How absurd, then, in view of these indisputable facts, to assert that government can affect values only in the ratio of its consumption! And yet Mr. Fisher makes this assertion the starting-point of a lecture to the editor of the Herald of Anarchy delivered in that dogmatic, know-it-all style which only those are justified in assuming who can sustain their statements by facts and logic.

 

 

THE POWER OF GOVERNMENT OVER VALUES.

[Liberty, June 27, 1891.]

To the Editor of Liberty:

In reference to your remarks upon my recent contribution to the London Herald of Anarchy, dogmatism of manner must often be adopted to avoid verbosity; it is not necessarily an assumption of infallibility.

The action of governments with regard to gold is not truly analogous in its economic effects to the prohibition of theatrical performances on Sunday. In the last-named case, or in any similar case which we may suppose, the effect is to diminish demand and to prolong or retard consumption. Thus, if we were prohibited from wearing shoes, boots, etc., on Sunday, or if every seventh person were prevented from using them, then boots which now wear out in six months would last seven months, and we may suppose theatres which now last seven years or seventy would then be worn out in six or sixty. The immediate effect of opening theatres on Sunday would probably be to increase their value very greatly; but eventually others would be built, and competition would reduce the previously enhanced value. The residual enhancement of value would be that resulting from the increased expense of producing the last increment in the number of theatres which the market in its altered circumstances could support. There is good reason to doubt whether this would be appreciable in the cases taken of articles of considerable durability. If the government could reduce the consumption of food-stuffs, such as wheat, and simultaneously of all substitutes, by one-seventh, it would be a very different matter.

But in the case of gold the interference of governments in the present day has little effect in increasing consumption. They do not collect it to consume it, but simply to sell it. In this country, beyond specifying this metal as the vehicle of value in contributing to the revenue, the interference

appears to be limited to a restriction of the liberty of citizens to ex-