ing, is the dealing between individuals of the same community, a local measure of value was sufficient; but the moment it grew into commerce-or the dealing between communities or countries, or the individuals of different countries or tribes,—that moment another and more generally accepted standard became absolutely necessary.

We have now come to the consideration of one of the functions of money which will be treated more in detail under the head of money. We have neither the time nor the inclination to trace the different standards of value, nor do we believe that it could be here done to advantage.

Metals, being the first commodities of general use by all peoples by natural selection, became the measure of value.

In this connection we naturally inquire why metals should have been selected, as we know there must have been good reasons, first why they were selected, and secondly why their use should have continued.

We answer: First, because of their value-the large amount of value compressed into a small compass. Second, their portability—the ease with which they can be taken from place to place. Third, their comparative indestructibility, metals being the least destructible of all substances capable of receiving an impress marking their value. Fourth, their homogeneity—a given weight of a particular metal being, or capable of being, made of equal value. Fifth, divisibility-the quality of being divided into larger or smaller proportions without disproportionate accretion or loss. Sixth, their stability of value-i. e., the ratio in which they exchange for other values; and seventh, cognizibility, impressibility, or coinability—meaning not only a general recognition of their commodity value, but also the ability to impress or stamp letters or characters.

These conditions are essential, and the metal possessing

most of these characteristics will by a law as certain as that of gravitation, be chosen as the measure of value. Mankind has found that gold possesses in a larger degree than any other metal these essentials, hence its almost universal choice among civilized nations as the measure of value.

Barter necessitates immediate exchange, but it is not always either possible or desirable to immediately deliver or receive the article or articles, service or advantage given or sought. Hence we naturally seek to convert the product of our labor into some commodity of stable, indestructible, and well recognized value, with which we may at our convenience secure what portion we desire of other commodities or services. This brings us to the consideration of the divisibility of value, and on this question it is well to be somewhat explicit.

It is often erroneously asserted that money is necessary for the purpose of divisibility, especially where the division is effected at a time remote from that of the original transaction. The following illustration will show that such is not the case:

A farmer takes to market say a thousand bushels of wheat. This he desires to exchange for other commodities. Should he receive in exchange for his wheat, at the time of delivery, one particular commodity of equal value, the barter would be completed then and there; but the probabilities are that he would not need only one thing, but many, some of which would not be possessed by the person with whom he dealt, hence he would have to act as his own distributing agent, making many transactions in order to secure the different commodities for which he was desirous of exchanging his wheat, and probably not getting what he wanted at once or when he wanted it.

To avoid these numerous exchanges, and to economize not only the farmer's time, but the time of those with whom he deals, the merchant or distributing agent has

arisen. To the merchant the farmer sells his wheat, and from him receives either money-an intermediate value, exchangeable at any time for any of the many values. which he desires in exchange for such wheat-or a credit -improperly called, in reality an obligation of the merchant,-which he can use as his necessities or wishes dictate in the purchase of those commodities which he desires. Or credit may have been extended to the farmer in anticipation, or the value of the wheat may have been advanced him in various other values before the wheat was delivered.

This certainly is the method by which a large majority of the country stores throughout the States are conducted; and while the intervention of credit or money as a medium of exchange and divisibility would technically destroy the character of the transaction as one in simple barter, as a matter of fact it only facilitates the disposal of values and avoids the necessity of the immediate consummation of the final exchange, rendering it possible for the parties thereto to receive such commodities at such times as they desire.

Inasmuch as the agricultural products of the world, while produced during different months in various countries, are still, generally speaking, only produced in each country during about six months of the year, and as all men must subsist upon that which has been produced, it follows that man must make provision during those six months for his subsistence and maintenance during the other six months, and the surplus then produced must be so exchanged as to provide him with a credit from the ending of such season till the produce of the next season is marketable. Hence credits occupy so important a position in commercial life. It may be said, broadly speaking, that, the world over, man lives twelve months on the product of six months' labor, and that in these six months he must provide for the twelve months which are to fol

low. This, perhaps, is not true to the same extent of the peoples engaged in manufactures and distribution, which after all are but auxiliary industries dependent for their life upon those creative industries, of which agriculture, fisheries, and mining are the principal,these industries creating values, whereas manufactures and distribution simply change the form of, and add to, the value of the raw material. Although what has just been said belongs more particularly to credit than to barter, still, as credit is but the outcome of barter and dependent upon barter, it has been thought best to here

insert it.

The business of the world is done strictly on the basis of barter, and the vast credits which are extended are but the representatives of the enormous transactions in barter; money, on account of its insignificant proportion to the exchanges consummated annually, forming but a relatively small item to credit in the commercial transactions of the globe.

While a comparatively small percentage of the business of the world is done by direct and immediate exchange of one or more commodities or values for one or more other commodities or values, money or credits nearly always intervening as a medium for the purposes stated, yet inasmuch as all commerce is regulated by barter, money, which does not and cannot in any broad sense either diminish or increase values, and is but a temporary medium in their exchange, must adjust itself to the conditions of barter.

Having heretofore shown rather incidentally the relation of money to barter, we now proceed to a more specific consideration of the subject.

Money.-Webster defines money as :

First " A piece of metal, as gold, silver, copper, etc., coined or stamped, and issued by the sovereign authority as a medium

of exchange in financial transactions between citizens and with. the government; also, any number of such pieces; coin."

Second—“ Any general or stamped promise, certificate, or order, as a government note, bank note, a certificate of deposit, etc., which is payable in standard coined money, and is lawfully current in lieu thereof; in a comprehensive sense, any currency usually and lawfully employed in buying and selling."

Money is, first, a thing possessing a universally recognized intrinsic value, but not necessarily of a universally exchangeable power; and, secondly, money based upon credit, i. e., promises to redeem in some commodity, usually gold or silver. For the purposes of convenience, gold and silver and other metals, all possessing universally recognized values, have been accepted as the money of civilization, and all paper money (credits) or promises to pay are payable in some one or more of these metals. It may be well to remark parenthetically that while money is currency, currency is not necessarily money.

All true money being itself a commodity, possessed of an intrinsic value, used as a means to facilitate barter or the exchange of one value for another, and being always of a smaller aggregate value than the combined value of the numerous commodities or values, the exchange of which it is called upon to facilitate, must adjust itself to this greater combined value, rather than that the greater value of all other commodities should adjust itself to money; although money, being the standard of value, the price of other commodities, as measured by money, changes, and not the price of money. The purchasing power of money in the markets of the world is governed by its commodity value.

Hence it follows, should the ratio of increase of money be greater than the ratio of increase of other values, or should a given amount of labor produce a larger quantity of bullion, then the purchasing or exchangeable power of money becomes less, and other values, which are meas