The subject of money and the laws which govern its distribution have been made to appear so complicated that not only persons of ordinary intelligence, but experts on other subjects, shrink from an article or a book on money on account of its presumed incomprehensibility.
A strange mystery has grown up in connection with a subject that concerns every civilized human being, and this mystery has been detrimental to the interests of commerce in goods and services. The ills that come to merchants, manufacturers, and working men — to all who have anything to sell or any desire to buy — have been increased and complicated by the money question as it has been presented in different phases at different periods by theorists, speculators, and the unthrifty. It has served the purpose of some persons at crucial periods to practice deception concerning the nature of money.
It has been in the past and still is believed that money could be made out of anything by the fiat of the government. Some people have professed to think that much money in a country means general prosperity, and they point to the time of the war of secession and to the greenbacks of our own country, to the period when the nation was piling up an enormous war debt, which the people have since been paying off through burdensome taxes. They think that because some manufacturers of shoddy, some sutlers, and some contractors made their fortunes in those days, the whole country grew rich, and that it was the cheap greenbacks that blessed us. Many persons who are ready to permit others to do their thinking for them accept this as the truth; and yet if they stop to think for themselves, their reason will tell them that a country cannot grow rich by maintaining great armies. Riches are not gained in this way by those who stay at home and pay out of their earnings for the food, the shelter, the clothing, the weapons, the powder and bullets, the medical care, and for the transportation of the thousands of soldiers in the field. It will tell them also that the wealth of a country consists in what it produces; and therefore if a 100,000 citizens are taken from the fields and the shops to fight their neighbors, the aggregate production for the time during which they are engaged in international or domestic murder will be less than it is when they are employed in the less glorious arts of peace, and therefore the wealth of the nation will be less.
A nation cannot grow rich by fighting unless it conquers the enemy, and compels him to pay not only the expenses of the war, but a handsome profit on them. But up to this time no nation that ever succeeded in a war has received back anything like its awful cost. There is no reason to believe that any conqueror will ever be repaid in wealth or its representative, money, for the expenditure which he is forced to incur to win his triumph. Reason will also tell our easy-going friends that no country can get rich by printing pieces of paper and calling them dollars.
From The Money We Need: A Short Primer on Money and Currency by Henry Loomis Nelson, © 1895. Published by Harper & Brothers, New York.
This article originally appeared in Issue 29, December 2008 / January 2009.