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without imports there can be no exports. It may be pleasant to take our pay in gold, but it is certainly more economical to import goods on which there is a profit. The cloth which was $6,000 in Liverpool, but changed to $7,000 in New York, was a better bargain than the gold which remained worth only $6,000 after its costly transportation across the Atlantic.

If it still be urged that a man who buys more than he sells is getting poorer, the reply must be, it depends upon the use he makes of his purchases. If he sells them to his neighbors at a profit, or uses them to improve his property, then it is not true that his purchases are making him poorer. The case supposed is this, that it is only his foreign purchases and sales that are in question, his sales to his neighbors not belonging to foreign trade.

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244. Peculiar character and power of money. Money is the puzzle both of people and of economists. Economic science has no topic more difficult or important than this. Whether as a species of property, or as an instrument of trade, or as a potential factor in modern life, the roles played by money are as dazzling and bewildering as the splendid and coveted metals of which it is commonly made.

Many volumes have been written, in almost every language, to give its history and to explain its functions, and still both statesmanship and public opinion seem alike divided and unable to solve its practical problems. For a second time, this past summer (1881), an international congress of eminent publicists was convened to settle one of its questions, and adjourned without reaching any conclusion. Kings and cabinets have juggled with it for their own profit, and demagogues

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have used it as a battle cry for electoral campaigns. the jumping-jack of values; the trick card of speculation; the king of the market; and the most watched and feared of all the factors of trade and business. Its power is enormous beyond calculation; its great holders, the "money kings," control trade as monarchs rule kingdoms; and its great fluctuations shake the whole fabric of industry. Modern governments jealously reserve to themselves the right to coin money, and the most difficult and most anxious legislation is that which is devoted to the guarding and controlling its issues and uses.

245. Origin of money.—In its simplest notion, money is an instrument of exchange or trade. It is something to buy and sell with. As such, its invention was easy and natural. The first man who failed to find some one to give him the thing he wanted for the thing he wished to give in exchange, and who thereupon bethought himself to sell his commodity for some third thing with which he might buy the article he needed, invented money. The third something, which he used simply as a means of effecting his desired exchange, was to him money.

Any commodity may be used to effect an exchange, and to that extent may become money. If I can not barter my corn for a coat, I may sell it for butter, and with the butter buy the coat. The butter, in this case, serves me as money. The more general the desire for any commodity, the better it will serve as a medium. Butter is better than corn, in this respect, because more people want butter than want corn.

246. History of money.-In earlier ages, many different articles were used as money. Cattle, slaves, skins, shells, pieces of leather, feathers, strings of beads, grain, sugar, oil, nuts, tobacco, gold-dust, nails, postage stamps, and many other things, have all been used and counted as money.

Gradually, as civilization advanced, and as exchanges increased in number and variety, the commodities most convenient for the purpose were naturally selected and retained

for this use. These commodities were such as were found to fulfill most perfectly all the conditions required, to serve all the uses, and perform all the functions, of true money.

Gold and silver won their place as money, in ancient times, from their brilliancy, their scarcity, their consequent high value, and their adaptability to coinage, and to general use as a portable medium of exchange.

Money having been invented, and having speedily shown its immense power as the one commodity of universal desirability, its coinage was assumed among the prerogatives of sovereignty, and the legal quality became attached. To trace its whole history would be to review much of the economic history of the world. The invention of coinage has been credited to the Corinthians, the Lydians, and to the people of India. It is certain that coins were in use in the sixth cen

tury before Christ. The use of paper money dates from the fourteenth century in Europe, but it was employed in Asia, it is claimed, much earlier.

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247. The natural functions of money. What is money? What does it do? To find the true nature and functions of money, let us examine a single act of exchange. Since money, when used, always takes the place of one of the commodities in the act of exchange, it must, evidently, fill all the essential conditions filled by the commodity whose place it takes.

1. In every act of barter or exchange, each of the articles offered in exchange must have value, must be an object of desire a real commodity. No one will, knowingly, give a valuable for a worthless thing. To fulfill this condition, money must also be a commodity, and have a recognized value.

2. In barter, the values exchanged are counted as equal. Each one is measured against the other. Each measures the other. Money must also fulfill this condition-must equal in value the article for which it is given, and must, therefore, measure it. And as money is so commonly exchanged for

all kinds of goods, it comes naturally to serve as a common measure of values. Thus, the values of all articles are expressed by the money for which these values would exchange. This incidental use of money has come to be one of its most important functions. It is the universal measure of values.

In millions of daily exchanges and bargains in which no money is actually used, the prices of goods to be bought or sold are fixed at so many dollars, or marks, or francs, or pounds sterling. The money value named, at once gives definiteness, in all minds, to the estimate of the values traded. Daily traffic would be paralyzed if this function of money should be destroyed or suspended.

3. In exchanges it is also commonly required that each article shall have further exchangeability-that it may, if desired, be traded for other goods. This is the especial condition required in any commodity to fit it to become a medium of exchange. The wider the exchangeability, the better it will serve as such a medium. Money, by reason of its universal exchangeability, is the universal medium of exchanges. This condition of exchangeability is simply the extension of the first two conditions to successive acts of barter or trade. It is value and mensurability carried forward to successive exchanges.

These three seem to be all the essential conditions of commodities in exchange, and hence the essential natural functions of money may be stated as including these three:

1. It is a commodity,-having a value of its own.

2.

It is a common measure of values.

3. It has general exchangeability, and is, hence, a general medium of exchange.

248. The legal function.-Legal tender.-To the three natural functions of money must be added the function given it by law, which authorizes the debtor to tender it in payment of his debt, and compells the creditor to accept it. This is its so-called legal-tender quality. Without this legal quality,

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