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MONEY AND INTEREST.

While not hesitating for a moment to accept the News's explanation that, when hinting that a standard of value is not indispensable, it was speaking of barter only, I may point out nevertheless that there was a slip of the pen, and that the words actually used conveyed the idea that something more than barter was in view. Let me quote from the original article:

It is manifest that a medium of exchange is absolutely necessary to all trade beyond barter. A standard of value is highly desirable, but perhaps this is as much as can be safely asserted on that question.

It seems to me a fair interpretation of this language to claim the meaning that in trade beyond barter it is not sure that a standard of value is absolutely necessary. And this interpretation receives additional justification when it is remembered that the words were used in answer to the Evening Post's contention that, in comparing the two functions of money, its office of medium of exchange must be held inferior to its office of measuring values.

However, the News now makes it sufficiently clear that a standard of value is absolutely essential to money, thereby taking common ground with me against the position of Comrade Westrup. Still I cannot quite agree to all that it says in comment upon the Westrup view.

First, I question its admission that a measure of value differs from a measure of length in that the former is empirical. True, value is a relation; but then, what is extension? Is not that a relation also,—the relation of an object to space? If so, then the yardstick does not possess the quality of extension in itself, being as dependent for it upon space as gold is dependent for its value upon other commodities. But this is metaphysical and may lead us far; therefore I do not insist, and pass on to a more important consideration.

Second, I question whether the News's "countervailing difference between a standard of length and a standard of value" establishes all that it claims. In the supposed case of a bank loan secured by mortgage, the margin between the valuation and the obligation practically secures the note-holder against loss from a decline in the value of the security, but it does not secure him against loss from a decline in the value of the standard, or make it impossible for him to profit by a rise in the value of the standard. Suppose that a farmer, having a farm worth $5000 in gold, mortgages it to a bank as security for a loan of $2500 in notes newly issued by the bank

against this farm. With these notes he purchases implements