Now if redeemable literally means redeemable (as in the case of a baggage-check, or a pawn-broker’s pledge), and not normally redeemable (as in the case of a sale of “futures” in Chicago), then what is implied by “redeemable” currency is that it has behind it a stored-up portable commodity available for handing over upon demand to the holder of the paper. It is quite as absurd to qualify the word redeemable as it would be to qualify the word chaste. “Reasonably chaste” and “normally chaste” imply only one thing, that is, lack of chastity. In just the same way “normally redeemable” means “occasionally irredeemable.” If “irredeemable” is a valid reproach, the first obvious comment is that those who insist upon integrity should themselves be honest. The protagonists of our present so-called gold money, leaning upon each other instead of upon facts, do not hesitate to cast stones at all types of money but their own, though most of them know that our so-called “gold” money is not redeemable in gold upon demand. This is shown by the record,[1] and it was demonstrated by bitter experience during the panic of 1893 in the United States, when gold could not be imported quickly enough to avert disaster, and in the panic of 1907, when the importation of gold was only effected in time to revivify our gold-standard myth, but not in time to prevent incalculable damage to the great mass of our citizens.[2]
At the back of this insistence upon “redeemable” money, there is, quite properly and commendably, the idea of value—but it is unfortunately only an idea—not a guarantee; and, more than this, it is at the best, if technically scrutinized, a very childish and erroneous idea of value, as is shown more fully elsewhere.[3]
Our currency is not even redeemable in gold with its painfully varying value as measured by goods and services. The question then naturally arises whether any token of economic value can be made redeemable in value. If old delusions are escapable the answer is scientifically very simple. By utilizing
