Chapter XIII
The Volume of Currency
(E)&mnsp;Consideration of the amount of currency necessary to adequately meet the requirements of our internal exchanges.
In international trade the employment of gold is still logical because under international conditions, as they exist, it is best suited to serve as an approximate measure of momentary values, a convenient medium of exchange and the most acceptable basis for deferred payment—not because of any divinely appointed functions of gold other than its scarcity, density and general desirability. It is a logical transformer of human effort exerted under varying political conditions, because, internationally, we lack a common code of freedom and order. We still trade guardedly, supported by hovering convoys, and land our goods in harbors dominated by artillery. If such an assertion seems extravagant it is only because we have grown so used to economic barriers that we wait for them to be raised or lowered as uncomprehendingly as cattle. We have recently been shut out of New Guinea, Samoa, the Marshalls and the Carolines, and only at the eleventh hour, in cleaning up the desk of his predecessor, has a protest been made by a less impressionable Secretary of State. This situation is also discussed elsewhere.[1]
Nevertheless, while gold is a logical transformer of human effort, whether free or hampered by deplorable political conditions, we must realize that like other transformers it entails an unavoidable loss of energy.
But within national boundaries, the use of such a costly transformer is not only illogical: it is pernicious, since the normal flow of service arising from just valuation is interfered with by the intervention of an arbitrary international measure of value, subject to alien hazards.
- ↑ See pages 3 and 114.
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