To be of the fullest service to civilization whatever medium is used to
do the work of money should have full money power; that is to say, it
should be a legal tender. It is not sufficient that it will satisfy the
demands of the Government for taxes.
Whatever is given out by the Government in payment for services rendered
(and there is no other way by which payments can be made from the
Treasury) should carry with it to him who has rendered the service and
receives the payment, the absolute assurance that in any need, or in any
contingency, it will serve him as money. There is no other means by
which society can be saved from the effects of panics and monetary
crises.
With a watchful and intelligent regulation of the money volume, and with
the legal tender function attached to everything that is in use as
money, and doing the money work, so that it will serve as a universal
solvent, panics will be impossible. Under present conditions when panics
come, credit money--money not endowed with the legal-tender function,
which, under ordinary circumstances, has always been accepted, is
refused, and thousands of millions of dollars' worth of property have
been confiscated by creditors, because of the scarcity of legal-tender
money. As time advances and the method of doing business on credit
becomes more and more extended, the more palpable it becomes that
society can preserve itself from these periodical convulsions only by
broadening, under proper regulation, the legal-tender basis on which, in
the ultimate analysis, all business rests.