Norton, Seymour; Cowdrey, Robert. The Men of Money Island; or, The Primer of Finance . Chicago: F.J. Schulte & Company, 1891. [format: book], [genre: advice literature; guidebook; narrative]. Permission: Public domain
Persistent link to this document: http://lincoln.lib.niu.edu/file.php?file=norton.html

THE bridge having been completed, the apportionment of work adjusted and the tax levied, Donothing requested the people to come up and settle.

On a given day, therefore, the several members of the community — each one having previously managed to acquire the exact number of certificates necessary to settle his account — presented themselves at Donothing's office and surrendered their certificates, taking their receipts in full for taxes assessed and paid.

As a matter of fact, one man (Grindem) was short just one certificate, and as its loss occurred in a manner that will illustrate an important though generally unnoticed item in the affairs of finance, it is worth while to relate it. One day as Grindem was at work at his grist mill he accidentally dropped one of his certificates into the fire, and in an instant it was burned to ashes. He looked upon it of course as a day's work absolutely lost, for it had cost him a day's work. Being able to produce but nine certificates, he found himself indebted to the government for the amount of one day's work, which he at once paid in making some

needed changes in the bridge. The government therefore gained one day's work — just the amount which Grindem lost. Being a patriotic man, the thought that his loss was the government's gain consoled him so thoroughly that he did not murmur at all. Right here it may be suggested by some hard money advocate that, had Grindem's money been made of coin, he would not have lost anything. If the fact that his loss was the government's gain is not sufficient answer to this hard money plea, read along carefully and it will be seen in a subsequent chapter that a day's labor can be lost even when embodied in coin.

In this manner, the distribution of the burden of building the bridge had been equalized through the process of using the certificates as a medium of exchange. It mattered not that Pickaxe did twenty days' work while Dressem did only two, for Dressem was compelled to pay over just as many certificates as Pickaxe.

And who shall say that when Donothing, as agent for the government, received the certificates in payment of taxes, he did not "redeem" them just as completely and absolutely as though he had paid or "redeemed" them in gold, silver or any other commodity?

And who can candidly and truthfully say that, whenever the United States Government has received its greenback certificates of indebtedness

for taxes, it has not just as completely and absolutely "redeemed " them as though it had exchanged gold and silver for them? Has it not, in fact, "redeemed" every dollar of greenbacks many times over by receiving them for taxes? And what better redemption is required?

The people of Money Island had become so accustomed to the use of the little certificates as a medium of exchange that they hardly knew how to get along without them. There being no alternative, however, they were compelled to return to the old system of barter, each one exchanging the surplus products of his own labor for such of the surplus products of his neighbor's labor as he most needed.

The inconvenience of the barter system became so great, however, that they resolved to invent something that should serve as a substitute for the certificates.

In groping around after some sort of a substitute, many different schemes were suggested. For instance, it was proposed to write upon some kind of substance the words: "Good for a Day's Work, " or "Good for the Product of a Day's Work," to be accompanied with an agreement upon tha. part of every member of the community that whenever such substance, containing said formula of words,

should lie presented, it should le duly honored and received at its face value.

In other words, they said: "By our agreement here and now entered into, we give that material or substance exchangeable value" — the only real value, save a legal-tender value, which money possesses.

The next question which arose was, out of what material should the money be made? Some proposed wood; others proposed shells. Finally they concluded to use little blocks of wood, with the words, "Good for the Product of a Day's Labor," written upon them. There was to be no signature of the government, no promise to pay, no acknowledgment of an indebtedness upon them. Their only value was to depend upon their mutual agreement to receive them in exchange for the products of their labor! This fact should be kept in mind, as it has an important bearing on the future discussion of coin money.

"Well," said Donothing (who was already beginning to develop quite remarkable abilities as a "shrewd financier " — equal in fact to those exhibited by the ordinary bankers of the United States), "I like that kind of money, because when I want a bushel of wheat of Plowem, I will simply write upon a block of wood, ‘Good for the Product of a Day's Labor,’ and present it to him, and, according to the agreement here made, he is bound to

accept it. When I want a coat I will take five pieces of wood and write upon each the same words and give them to the tailor, and he will be obliged to give me a coat for them."

The suggestion of Donothing exposed the error of the scheme to use blocks of wood. And probably nowhere else, save in the disordered imaginations of those critics who falsely accuse paper-money advocates of "wanting to start a printing-press and issue an unlimited quantity of irredeemable money," was ever another such a scheme proposed.

After further discussion of the subject, one of the members said: "Down in the bottom of the river, I discovered, while at work upon the bridge, a fine yellow dust; and, while cutting logs on the side of the mountain, I noticed in the crevices of the rocks a peculiarly bright white metal; let us make our money out of that yellow dust, or out of that white metal, because it is so scarce and so hard to get that it will take as much, and probably even more labor to get the material, out of which to make this money, than it will to work and earn, or produce, that which can be obtained with the money. Of course, upon the quantity of metal which each article contains will depend its exchangeable value; therefore we must regulate the size accordingly."

For reasons given above the yellow dust (gold)

and the white metal (silver) were chosen as a material out of which to make the future money of Money Island.

But what value did the yellow dust have? What value did the white metal have? Had the bed of the river been fairly paved with the yellow dust, it would not have sustained the life of a single member for a day. Had the rocks themselves been composed of solid white metal, all of it combined would not have kept even a child from starving. It could not be eaten; it could not be used for clothing; it was no better than sand and lime, and not half as useful as iron, in the construction of dwellings.

What, then, imparted value to them? It was the agreement among the producers of articles of use to recognize and receive them as a medium of exchange!

They agreed, in other words, to redeem that money with the products of their labor.

In the ages past, in this great Money World of ours, this agreement, through custom, has become an almost universal law. Upon that law does the value of gold and silver depend. If the law should be repealed or ignored, gold and silver would become comparatively valueless.. Gold might have a slight value; as, for instance, for filling teeth. Its value for ornaments and jewels

even would disappear — for its value for such purposes depends upon the value given to it through its use as money.

Previous section

Next section