In view of these facts, the necessity for a money that shall vary in its amount in accordance with the demands of business is evident. Not only must it respond to the long-continued, slow, and almost imperceptible increase of demand due to growing trade and population, but it should also respond, quickly and surely, to those sudden demands, known as panics, when credit fails for any reason to do its usual work. This need is recognized by bankers in their demand for a flexible or elastic currency.
Quotations are hardly necessary in support of the foregoing statements, but a few may be given. David Ricardo, in "Proposals for an Economic and Secure Currency," observes that:--
"All writers on the subject of money have agreed that uniformity in the value of the circulating medium is an object greatly to be desired."
"A currency may be considered as perfect of which the standard is invariable, which always conforms to that standard, and in the use of which the utmost economy is practised."
"During the late discussions on the bullion question, it was most justly contended, that a currency to be perfect should be absolutely invariable in value."
Prof. J. L. Laughlin, in "The History of Bi-metallism in the United States," remarks, p. 70:--
"The highest justice is rendered by the state when it exacts from the debtor at the end of a contract the _same purchasing power_ which the creditor gave him at the beginning of the contract, no less, no more."
Prof. R. T. Ely says, in his "Political Economy," p. 191:--
"It is not the 'much or little,' but it is the 'more or less' that is of vital concern. Nothing produces more intense suffering than a decrease in the amount of money, and this is on account of the connection between past, present, and future in our economic life."
This refers to a decrease relative to the demand, evidently, and he says, further:--
"If the amount of money is arbitrarily increased, so that the value of all debts may fall, it amounts to virtual robbery of the creditors. When arbitrarily the amount of money is decreased, it amounts to virtual robbery of the debtor class."
"It may also be urged that with the progress of improvements in industry, prices tend to fall, and that unless money increases in amount, those who take no active part in these improvements, nevertheless gain the benefit of them."