Individual Liberty - Evernote

them a year before in payment for the implements sold to the farmer. Now, can the
manufacturer buy back his implements with $2500 in gold? Manifestly not, for by the
hypothesis gold has gone down. Why, then, is not this manufacturer a sufferer from
the variation in the standard of value, precisely as the man who buys cloth with a
short yardstick and sells it with a long one is a sufferer from the variation in the
standard of length? The claim that a standard of value varies, and inflicts damage by
its variations, is perfectly sound; but the same is true, not only of the standard of
value, but of every valuable commodity as well. Even if there were no standard of
value and therefore no money, still nothing could prevent a partial failure of the wheat
crop from enhancing the value of every bushel of wheat. Such evils, so far as they
arise from natural causes, are in the nature of inevitable disasters and must be borne.
But they are of no force whatever as an argument against the adoption of a standard of
value. If every yardstick in existence, instead of constantly remaining thirty-six inches
long, were to vary from day to day within the limits of thirty-five and thirty-seven
inches, we should still be better off than with no yardstick at all. But it would be no
more foolish to abolish the yardstick because of such a defect than it would be to
abolish the standard of value, and therefore money, simply because no commodity can
be found for a standard which is not subject to the law of supply and demand.
At this point Mr. Alfred B. Westrup, who believed that to talk of a standard of value
was not only a delusion but a misuse of language and whose ideas had been referred
to in the controversy, took a hand in the discussion. Mr. Tucker then turned his
attention to him:
Mr. Westrup's article sustains in the clearest manner my contention that money is
impossible without a standard of value. Starting out to show that such a standard is a
delusion, he does not succeed in writing four sentences descriptive of his proposed
bank before he adopts that "delusion." He tells us that "one of the conditions in
obtaining the notes (paper money) of the Mutual Bank is that they will be taken in
lieu of current money." What does this mean? Why, simply that the patrons of the
bank agree to take its notes as the equivalent of gold coin of the same face value. In
other words, they agree to adopt gold as a standard of value. They will part with as
much property in return for the notes as they would part with in return for gold. And if
there were no such standard, the notes would not pass at all, because nobody would
have any idea of the amount of property that he ought to exchange for them. The
naivete with which Mr. Westrup gives away his case shows triumphantly the puerility
of his raillery at the idea of a standard of value.
Indeed, Comrade Westrup, I ask nothing better than to discuss the practicability of
mutual banks. All the work that I have been doing for liberty these nineteen years has
been directed steadily to the establishment of the conditions that alone will make them
practicable. I have no occasion to show the necessity for a standard of value. Such
necessity is already recognized by the people whom we are trying to convince of the
truth of mutual banking. It is for you, who deny this necessity, to give your reasons.
And in the very moment in which you undertake to tell us why you deny it, you admit
it without knowing it. It would never have occurred to me to discuss the abstract
theory of a standard of value. I regard it as too well settled. But when you, one of the
most conspicuous and faithful apostles of mutual banking, begin to bring the theory
into discredit and ridicule by basing your arguments in its favor on a childish attack
against one of the simplest of financial truths, I am as much bound to repudiate your