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240 circulation—is effectual in altering its price (wear and tear excepted)? Every time gold is bought in or gathered in taxes the tendency is to put up the price, and every time it is thrown into market or spent by government in outlay it tends to lower its value. These operations do not constitute a monopoly. Any one can buy and any one can sell gold coin. There is no monopoly in the matter. The monetary privilege is not a monopoly, and it grows in the open market, not in the fancied forcing-house of government. Greene alleges (in small caps) that mutual money would neither raise nor lower the price of specie. You hold that it would be tangibly reduced by mutual banking. Which is correct? (10) Comparing the reduction in value you anticipate with one which might arise in the price of whiskey if there were unrestricted competition in the sale of it, you overlook the fact that there is unrestricted competition in the sale of gold bullion and specie. Moreover, though we cannot tell by what amount the price of whiskey would be reduced by unrestricted competition, we can tell of what the fall would consist. It would be limited to such relinquishment of profit as would be forced upon the dealers by competition. If consumption increased, it might raise the price by its effect upon marginal or residual production yielding a diminished return, or it might be lowered by cheapening production by remunerating economic employment of capital. This is a false and inapplicable analogy.

It is no more correct to say that gold is in the process of being consumed when it is in use as currency than to say that the inevitable waste or deterioration of commodities on the road from producer to consumer is economically an act of consumption. (11) Production is not complete until the commodity reaches the hands of a person who applies it to the direct gratification of some personal craving. The waste of gold in the function of currency is part of the cost which the consumer has to repay when that coin has been converted into a consumable product which he purchases. The only exception is that this cost may fall upon some other product when the less waste of gold is voluntarily substituted for the waste of any other commodity if one seeks to transport to a distant market mere value irrespective of its embodiment. It is as if one temporarily needed a certain weight to steady a machine, but was indifferent as to whether it was embodied in stone, iron, or gold, all of which he happens to have in stock, but which he can subsequently consume or sell unimpaired, and whose employment for this purpose only infinitesimally deteriorates the ponderable and does not impoverish his trade stock because it does not withdraw the ponderous article from inspection or sale.

It is not correct to reply to a monetary question by pointing out that government might keep gold as dear as it now is even if it were as cheaply produced as copper, by decreeing that we should drink only from gold goblets. If this could have such effect it would be inapplicable to this discussion, because it would be decreeing consumption while currency is not consumption, but only marketing. But it would fail, because of the durability of substance. Only by buying up the metal at the desired value could the value be maintained. No purchases of gold with gold would alter its value. Silver, copper, wheat would have to be used to buy up gold at the value it was desired to maintain, and of course no government would have the strength for this. (12) It must be remembered that miners would be sellers at cost. The United States government raises the price of silver now while it is a buyer. If it tipped it in mid-ocean it would then consume it in an economic sense. When it becomes a seller the price must fall. The fact that there is a possibility the law may change at any moment even now keeps the price from rising as it