To the Editor of the "NowrH-CHINA Datty News."
SmI again take the liberty to ask for the hospitality of your columns in an endeavour to assist in solving the mysterium -surrounding the problem: what economic fow is) applicable to our chaotic dium of exchange, since in some instances good coins hold their own in. the market, whereas in other chased coins take their place. It is naturally very important that there should be no doubt on this point once a currency for Shanghai is ready to be consumed.
Te is obvious that an economic law must. operate automatically without the assistance of any organized human agency. Therefore, if good coins disappear from the market through the systematic operations of an organized body it iz evident that neither Gresham's Law nor any other economic responsible for this. Gresha Law is the sequel of the lawful freedom of action of the individual, and for this reason it is economic law, and, as one we Known economist puts it, one of the most strange laws in' Political Economy. From a theoretical point of view the Mints must be responsible for the disappearance of the good coins, and T am convinced that it can be proved that also s0 in practice, Should this not be possible, it can be proved that it is in the interest of the Mints to obtain their raw-material from, not only the coins in cireula~ tion, but from the best obtainable coins. Where there is an economical interest it is soon made use of. lcperations of an organized body it is evident that neither Gresham's Law nor any other economic Law is likely to carry out extensive systematic operations' unless at a. profit; if there is a profit, economic law can be found to show how the profit arises. The discovery of Gresham's Law resulted from the examination of exactly such operations.
"Whenever the mints are success-fol in re-purchasing the good coins, they will naturally disappear." They will do this only, Hto the extent to which they can persuade banks or merchants to accept coins of less value in ex. change at face value for good coins. Tt seems doubtful if this process actually takes place.
"Gresham's Law is the sequel the lawful freedom of action of the individual,.. Actually it has usually been the unlawful action of the individual in melting down the joom of the state.
'The economic' law which it applicable to our "chaotic medium of exchange" is that transactions are carried through by barter against silver; the silver, although coined in some cases, being valued at its intrinsic worth. The fact that: it some cases good coins go out of circulation while in others bad Jcoins disappear, is probably due to quite local conditions at a particular moment, In a country such as China it would, in fact, be impossible to say with any certainty that coins go out of circulation, merely Eecause they are not ' current Tam, ete, CA. Asmtey
Text read from the printed page and cleaned; old type leaves the occasional error.