Imagine, Mr. President, the unhappiness, discontent, and even despair implied in the mere statement that 2,000,000 men are constantly out of employment; (or, what amounts to the same thing, that three times that number are idle for four months in the year!) Imagine, what it means to the working people of this country to be deprived of the enormous sum of $1,400,000,000 a year.
But, aside from the effect on the individual, what benumbing consequences are entailed upon the nation by the idleness of so large a number of its people. The loss of the wealth which the labor of those men might have created is a loss never to be retrieved. When the money volume of a country is sufficient to keep prices from falling, and thus to encourage capital to seek productive enterprises, in which labor is employed, every willing man is kept at work, and no country can enjoy any higher degree of prosperity than when all its people are employed, and the products of their labor equitably distributed.
Much, I believe, of the prejudice against silver money arises from an idea, conscientiously entertained, by many, that gold money has the greater "intrinsic value." I shall, therefore, Mr. President, at the risk of being a little abstruse, discuss that point.
THE MEANING OF VALUE.
No discussion of the subject of money can be intelligently conducted without a correct conception of the meanings attaching to the terms employed. For a misconception of those meanings is the root of much of the confusion and difficulty by which the subject is surrounded.
"Value" is a word which, of necessity, is more frequently used—and, I will add, more frequently misused and misunderstood—than any other employed in the discussion of economic science. Volumes have been written upon it, and yet, from the daily misapplication of the word in leading magazines and newspapers, it is evident that its meaning is very imperfectly understood.
The idea involved in the word "Value" is so broad and pervasive that within the limits of a speech it would be impossible to discuss it in all its bearings. I shall not, therefore, at this time, do more than present what I conceive to be a basic definition of it.
Value is human estimation placed upon desirable objects whose quantity is limited, and whose acquisition involves sacrifice. In order that an object may have value it must not only be the subject of human desire, but there must be a limitation of its quantity, and its acquisition must demand a sacrifice from him who would obtain it. The term "intrinsic value" is used by many writers with a total disregard of the idea involved in the word value. An article may have estimable qualities that are intrinsic, but no article whatever can have intrinsic value. Its "value" is the mental estimation of its qualities, as modified by the limitations of its quantity and the amount of sacrifice necessary to obtain it. In other words, value is subjective, not objective. In economic discussion, however, value is treated as though it resided in the object, rather than in the mind, and while, for convenience, I may occasionally use it in that sense, it is important to bear in mind the distinction.
In that acceptation, value is usually divided into value-in-use, and value-in-exchange. Certain esteemed qualities of an object may make it of great value-in-use; but unless its acquisition demand sacrifice, it can have no value-in-exchange. It is only with this class of value that economists deal. No matter how important the intrinsic qualities of any article may be, if there be no limitation of its quantity and its acquisition requires no sacrifice, it can have no value in the sense in which the word "value" is used in political economy. The air has qualities inestimable to mankind; it must be regarded as incomparably the most useful of all the objects of human desire; yet it has no value because there is no limitation of its quantity. By reason of its universality and accessibility, air requires no sacrifice to get it. If, however, circumstances should render air limited in quantity it is conceivable that it might become of surpassing value. A man confined in the "Black Hole" of Calcutta would give a fortune for free access to air. So water, where freely obtainable, without sacrifice, although indispensable to life, has no value in the economic sense—no value in exchange. But when not so obtainable, as in populous cities, where sacrifice of time and labor would be necessary to obtain it from river, lake, or spring, people pay for the convenience of having it in their homes. The indispensable prerequisites of value in all objects are utility—either actual or attributed—combined with limitation of quantity and the sacrifice necessary to be made in order to obtain it.
But value is not a property inhering in any article itself. It is not intrinsic. If the value were inherent or intrinsic it could not be taken away.