of integrity, we shall have mastered all its concomiOne may say that the ecocentre in exchange coalesce tant methods of expression. nomic centre and the moral in a firm standard of values. Capital is never so abundant as when securities are good; securities are never good except in connection with a firm expression of values. No policy which neglects the primary consideration can cover its failure by adroitness in secondary things. Distrust will ruin all its measures. The chief social truth which exchange teaches us is the startling coincidence of all interests in honesty - the speedy disaster which is sure to follow in all directions any loss of a standard of values. Exchange rests on that integrity which is the heart of all life. The inequalities of distribution are far greater, far more distressful, in connection with a fluctuating than with a fixed medium of exchange. The unreasonable growth of private fortunes with us was much accelerated by the war and the hideand-seek of an unsound currency. § 3. The second consideration in a favorable medium of exchange is quantity. The two, quality and quantity, cannot be separated from each other. Quantity goes far to determine quality, and quality is a chief regulating force in quantity. The notion of a creation of values. without labor has had great fascination for men. It has been an economic millennium which they have been forever promising themselves. The bill of credit has the purchasing power of a corresponding amount of gold, and this sensuous fact expresses for many the entire fact. This illusion is the more complete, because the bill at once greatly extends and improves the service of gold. The law that labor is the universal condition of produc tion seems to be partially set aside, and the visionary mind seizes with avidity upon the suggestion. To break with the universe over some scheme of perpetual motion is very fascinating. All expansions of currency are forms of credit resting back on financial strength and moral integrity. They no more create values than they create goods. The number and form of cars are determined in reference to the amount of traffic, and have no value aside from this service. The number and form of loans depend on the activity of trade, and are wholly defined in their usefulness by the interchange they promote. Bills of credit have, as means of transfer, the same direct and exclusive dependence on the function they are fulfilling. Times of inflation have frequently been active, productive periods, and hence, in spite of the disasters which have followed them, have been associated in men's minds with prosperity. One might as well identify large and rapid transportation with an increase of cars, and suppose that a multiplication of this kind could at any time command business. The inebriate retains a clear impression of the pleasures which go before intoxication, and but a faint image of the penalties which follow it. Men are not completely wrong in supposing that an inflated currency may make the borrowing of money somewhat easier; they are completely wrong in supposing that it will alter the relation of debts to production, or in any way increase the sum of values. Superfluous cars may, for the moment, tend to cheapen freight, but cannot be a condition of permanent prosperity. The public must act in reference to its collective and permanent welfare in establishing currency; and this turns exclusively on the fitness and adequacy of currency as a medium of exchange, and not on its immediate adaptation to the wants of persons. It belongs to a sound currency to guide and restrain, as well as fulfil, personal impulses. Nowhere do the voluntary and the involuntary, the wise choice and the conditions which set it limits, more freely mingle than in currency. It is impossible to define the amount of currency needed. It is a changeable amount, which declares itself only in the actual presence of commerce, never fully anticipated. We can determine what constitutes a sound, flexible currency; and we can safely trust a sound, flexible currency to commercial forces. Soundness is the fundamental idea. It limits flexibility and defines quantity. No quantity is dangerous which does not reduce the central strength. Nowhere do we see more clearly than in exchange the interlacing of all social activities, and nowhere else does retribution follow so quickly and so severely on the unsound mind and the shuffling method. |