oney, both immediate and deferred. This, however, has
no effect on the demand for money or on its value.

The people are accustomed to regard money as of constant value, and an
honest money must necessarily conform to this belief. If money varies
in value, the people are deluded, and many are wronged if they are
unaware of the fluctuation. If they become aware of it,--as they
generally do by a bitter experience,--they are confronted with an
uncertainty that is most detrimental to any business or enterprise.
Imagine what our business would be with our measures of weight,
length, and capacity all variable! Yet such a condition would be less
disastrous than a fluctuating money value when it became fully known
that it was so.

The _demand_ for money varies from many causes, chief among which are
changes in the quantity of goods exchanged, the extent to which other
credit instruments take the place of money in such exchanges, and the
activity of money, or the extent to which it is hoarded, all of which
are entirely beyond control. The _supply_ of money, however, can be
controlled, and to maintain money at a constant value the supply must
be constantly adjusted to the ever-varying demand, so that its
general purchasing power may remain the same. The test of a constant
money must be a constant general level of prices; and this must be
judged by the prices in the open market of those principal commodities
which would be selected to constitute the standard of value, the
quantity of each being proportioned to its importance in trade.

The only function of gold and silver in a monetary system is to _limit
the volume of the money_, either by their scarcity when freely coined,
or by the laws limiting their coinage. And as this limitation of the
supply bears no definite relation to the demand for money, the value
of the money necessarily fluctuates. Our industrial system is
constantly growing more sensitive to even slight changes in money
value, owing to the greater diversification of industries and the
greater division of labor, and the need for preventing such changes is
constantly growing more imperative.

When the people arrive at a clearer perception of these facts and
principles they will understand that the chance production of gold and
silver is too clumsy a contrivance to properly control so delicate a
matter as the value of money under modern industrial conditions, and I
believe they will substitute for the present syst