a time at par appears a reason why it always should. They do not
recognize that there is a saturation point in the use of money, and
that its use is still further limited by the fear of larger issues.

The almost universally accepted opinion among economists rejects both
of these views, tho recognizing in each a certain limited aspect of
the truth. The cost-of-production view quite overlooks the features
in which paper money differs from ordinary credit paper. The value of
one's promises to pay depends on his reputation and his resources; the
resources constitute the basis of value. Bonds have value because they
yield interest and are payable at a definite time in standard money.
But paper money, lacking this basis for its value, has another basis
in its money use, in its power to buy goods.

The theory of paper money here outlined makes the value of paper money
a special case of monopoly value. As the power of any private monopoly
over price is relative, not absolute, so is that of the government
over the value of political money. The money use is the source
of value of the paper notes. It is this which gives the economic
condition for value in paper money and strictly limits the power of
the government--a fact overlooked by the fiat-theorists. Business
conditions remaining unchanged, the limit of possible issue without
depreciation is the number of units in circulation before the paper
money was issued, the saturation point of full-weight and full-value
coins. Whenever governments have failed to stop at that point,
paper money has depreciated. But under wise and honest control and
regulation political paper money might serve the monetary function
very effectively.