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224 promises of delivery of gold to bearer on demand. Bank-notes (or bills, as they seem to be called in your country) may only be issued by certain bankers, and by them only in a certain complex relation to the amount of gold they hold. But this is only a restriction in form, and not in quantity, because checks, drafts, and promissory notes other than to bearer on demand are issuable in unlimited quantity, subject to certain taxes—from which the other notes are not wholly exempt—and are transferable without further tax. What has this to do with the consumption of gold? Next to nothing!

Now there is no legal obstacle, nothing, in fact, whatever except the inconveniences of bulk, fluctuation of value, and other inherent defects, to prevent the introduction and circulation of promises of wheat, cotton, oil, iron, or other commodity. This would not have any material effect upon the consumption, production, cost, or value of these commodities. Speculative sales of "futures" tend on the whole to steady values and to diminish the frequency and the intensity of gluts and famines.

Gold and silver are not used (in the sense of being consumed) by their circulation. They are merely conveyed, transferred, and exchanged more frequently. The fact that they are so often bought by people who do not themselves require to use them is not unique. Every merchant does the same with the commodity to which he devotes his attention.

The peculiarity is that the trade in gold is familiar to every one. The portability, divisibility, and recognizability of this substance force it upon the attention of every one who avails himself of the services of others. The production and circulation of contracts for its future delivery are not unique. This is also done in the case of many other commodities. In both cases there is a very great convenience and economy; and in both there is a very appreciable danger. Any such writings of individualists as may in any way give the impression that the free circulation of mutual indebtedness, miscalled "mutual money," will be free from this element of danger are pernicious. Freedom to incur and to exchange debts is exceedingly desirable, but rather because they will encourage, purify, and chasten the spirit of enterprise than that they will in themselves bring very noticeable economic gain.

Apart from the wear and tear involved, neither the government nor any one else consumes one ha'penny worth more of gold by reason of its adoption in taxation and commerce as the most usual vehicle of value. Its use for this purpose may cause the world to hold a larger stock than it otherwise would; but this is in every way a benefit, because it steadies its value. If the metal were neglected, as platinum was until recently, then famine and glut might be observed. This would greatly lower the utility of gold as an intermediate exchange commodity, and would not help us to devise a substitute. It would throw upon every trade, including those who sell their own labor, a burden of doubt and uncertainty in estimating its fluctuations. The evil that government does by collecting needless millions is immeasurably greater than by its so-called maintenance of the gold standard.

Yours respectfully,

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