ured by it, greater, as was illustrated by the discovery of gold in California, when, owing to the vast supply of gold and the comparatively small output of labor required to secure it, the relation between it and other commodities was disturbed, and its exchangeable value became very much less, and the relative value of the other commodities to it very much greater. Should the ratio of increase of money be less than the ratio of increase of other commodities, then the relative value of money becomes greater and the value of all other commodities, compared with this particular commodity (money), less; but should the other commodities maintain their relative value to each other, the holders of other commodities are not sufferers thereby, as their relative value to each other is not disturbed, and the holder of money is certainly just as much entitled to receive the benefit of its enhancement in value as he is liable to suffer the loss of its depreciation.

Paper money, or promises to pay, secured by a mortgage of either the income of a government or a compulsory deposit or retention by an individual or corporation of a certain percentage of bullion, is not and cannot in any sense be considered true money, but should be designated as currency, as it passes current in lieu of money, and as it lacks the universality of value and exchangeable quality which all true money does possess. Its usfulness as a means of facilitating exchange or barter is measured by the knowledge of the acceptor of such currency of the ability of the issuer to redeem it in coin; thus gold and silver, possessing as they do a universally known intrinsic value, are receivable in every portion of the world, civilized and uncivilized; but a legal-tender note of the United States, or a Bank of England note, would not be received in exchange for values by people ignorant of the ability of the respective issuers or obligors to redeem such promises, or to give for such notes an exchangeable value proportionate to the value of the commodity transferred.

Paper money is nothing more than a promisory note payable on demand in a particular commodity (money). Should either the government or the individual promising to pay fail so to do the note would simply be a piece of writing, obligating the issuer to the payment of that value, and nothing more, and its value is therefore dependent upon the ability of the issuer to pay.

One of the chief uses of money is as the measure of value, and in the treatment of this aspect of the question it is impossible to avoid some discussion of whether there should be one or more measures of value, and whether it be necessary that all money should be a measure of value, rather than some particular kind of money. It does not deprive a particular kind of money of its utility that it is not the universally accepted measure of value, but only deprives it of one function and makes it subsidiary in one respect, as a measure of value, to the money which is such measure; nor does it deprive it of its intrinsic value, which still remains, and is recognized in different proportions by different peoples; but for the convenience of commerce it is not only best, but absolutely necessary, that some particular form of money should be the accepted measure; and that form which possesses in itself the greatest intrinsic value, maintains the most uniform relative value, and is the most convenient for use, will of necessity become the standard of value, and other moneys will have their value regulated by it, exactly the same as every other commodity.

There can be but one standard of value, and that standard is fixed not by the laws of a particular country or even a number of countries acting together, but by the general consensus of opinion of sellers and buyers. Values are fixed not in the districts where commodities are produced, but in the large distributing centres, cities, where they are fetched for exchange, and the values there agreed upon are everywhere accepted. The value of a commodity is

fixed not by its entire mass, the larger portion of which is consumed by its producers, but rather by the surplus which is exchanged. Thus the value of wheat and cotton in the United States is fixed by the price of the surplus sold abroad. In other words, that portion of a commodity or product which seeks exchange in the markets of the world for other commodities fixes the value of that larger portion which does not. Practically all of the great consuming countries, England, France, and Germany, employ the gold standard as the measure of value. In fact, over 80 per cent. of international commerce is directly figured on a gold standard of value, hence gold may be said to be the practically universal standard; and even in countries on a silver basis, domestic prices being fixed and regulated by the export prices, the silver coin is accepted as representing so much gold value. To repeat,-values are fixed by the exchangeable worth of the surplus of products in the markets of the world. Gold is the standard employed in those markets, consequently the universal measure of value; and while silver, some other metal, currency, or other forms of credit may be used as gold's representative, still gold is the standard of value in all countries having any foreign trade, even though that metal may be practically unknown to its citizens.

Before discussing true money more in detail it is necessary to say a few words about bullion, of which all true money is composed. The definition usually given "gold or silver in the bar or lump, coined or uncoined," while inexact, and not one which could be accepted without considerable limitation, is perhaps sufficiently near the correct definition for our present purpose.

Bullion is bought and sold the same as any other commodity, the price thereof being governed by: I, the demand; 2, the supply; 3, weight; and 4, fineness. The price of gold being always stationary, as it is the measure of value, its actual value is determined by its purchasing

power of other commodities, while the price of silver, and other less valuable metals used for coin, is determined by their relative value to gold. In the case of every metal it is bought where it commands the least value and sold where it commands the greatest.

The close relation between the shipment of bullion, and a high rate of exchange on the point to which the bullion is sent leads many to suppose that it is sent to such points to pay a balance of trade against the country from which it is shipped. This is not necessarily the case; but when, for any reason, the rate of exchange to the point of destination reaches the cost of the shipment of bullion, obviously there is no object in purchasing exchange, and as bullion may be sent at such times more advantageously, and as most foreign houses at that time buy, it is then shipped in greater quantities than when exchange is simply at par, or in favor of the country shipping; and while this condition of exchange is looked upon as favorable to its shipment, bullion may be shipped at any time.

From the above it is evident that under ordinary conditions the rate of exchange can never be greater than the cost of the actual transportation of bullion, as it would be shipped in such event.

The business in bullion is almost entirely carried on in this country by private bankers, who are known as dealers in bullion. Most of the houses engaged in this business have agents in Europe, to whom they ship from here, or who ship to them from Europe.

The scope of this work does not warrant us in treating money from an historical standpoint further than is necessary to emphasize certain fundamental principles. Consequently, without any attempt to trace its gradual evolution into its present forms, we will consider the subject as it presents itself to us at the present day and shall therefore confine our observations almost exclusively to the money of the United States.

Our money, like that of many civilized nations, is now divided into metal money (coins) and paper money (promissory notes payable on demand). Both metal money and paper money may be partly or practically wholly fiat money.

Metal Money or Coins.-It is not necessary here to repeat the observations previously made as to the peculiar adaptability of certain metals for use as money, and the advantages of some metals over others for this purpose, so we will proceed directly to the general consideration of this subject. In order to consider which intelligently we must understand the laws governing the coining of metals.

Previous to the art of coinage, metals were used by weight and fineness for money, which made it necessary for the merchant to have at his command scales and often crucibles to ascertain the same. The inconvenience of this system was such as to demand some change, and the rational solution was the division of metals into small pieces of convenient size and uniform value, with such value attested by some well known and responsible power, and no power so fully met these requirements as the government. Hence, the early history of coins clearly establishes the fact that coinage was invariably regarded as a prerogative belonging solely to and exercised only by the sovereign power or government.

The art of coinage certainly does not date back farther than the ninth century B.C., and the Lydians are supposed to have been the first people to have used coin money.

For various reasons the power to coin money should only be reposed in the person or body of most widely known power, solvency, and integrity, and this is necessarily the state. There never has been any attempt at lawful individual issue of coin. It required the government to properly regulate the weight and fineness and vouch for the integrity of the coins put in circulation.