And again he says:

But with regard to a future exchange (if we want nothing at present) money is, as it were, our security that it may take place when we do want something.

John Locke, in "Considerations," etc., regarding money, published in 1691, says:

Mankind, having covenanted to put an imaginary value upon gold and silver, by reason of their durableness scarcity, and not being very liable to be counterfeited, have made them, by general consent, the common pledges, whereby men are a.s.sured, in exchange for them, to receive equally valuable things to those they parted with, for any quant.i.ty of those metals; by which means it comes to pa.s.s that the intrinsic value regard in those metals, made the common barter, is nothing but the quant.i.ty which men give or receive of them; they having, as money, no other value but as pledges to procure what one wants or desires.

Baudeau, reputed one of the most eminent of an early school of French economists, says:

Coined money in circulation is nothing, as I have said elsewhere, but effective t.i.tles on the general ma.s.s of useful and agreeable enjoyment which cause the well-being and propagation of the human race.

It is a kind of a bill of exchange, or order payable at the will of the bearer.

Adam Smith says:

A guinea may be considered as a bill for a certain quant.i.ty of necessaries and conveniences upon all the tradesmen in the neighborhood.

Jevons's "Money and Exchanges," chapter 8, says:

Those who use coins in ordinary business need never inquire how much metal they contain. Probably not one person in two thousand in this kingdom knows, or need know, that a sovereign should contain 123.27447 grains of standard gold.

Money is made to go. People want coin, not to keep in their own pockets, but to pa.s.s it off into their neighbors' pockets.

Henry Thornton, in his work on Paper Credit, says:

Money of every kind is an order for goods. It is so considered by the laborer, when he receives it, and it is almost instantly turned into money's worth. It is merely in instrument by which the purchasable stock of the country is distributed with convenience and advantage among the several members of the community.

John Stuart Mill says:

The pounds or shillings which a person receives are a sort of ticket or order which he can present for payment at any shop he pleases, and which ent.i.tle him to receive a certain value of any commodity that he makes choice.

McLeod, Elements of Banking, Chapter I, says:

When persons take a piece of money in exchange for services, or products, they can neither eat it, nor drink it, nor clothe themselves with it. The only reason why they take it is, because they believe they can exchange it away whenever they please for other things which they require.

On that view of money McLeod feels justified in styling it credit, and he quotes in support of such a use of the term credit, Burke's description of gold and silver as "the two great recognized species that represent the lasting conventional credit of mankind."

Prof. Francis A. Walker, Money, Trade, etc., page 25, speaking of carved pebbles, gla.s.s beads, sh.e.l.ls and red feathers, used as money in certain countries at certain times, says:

They were good money, though serving no purpose but ornament and decoration. They were desired by the community in general; men would give for them the fruits of their labor, knowing that with them they could obtain most conveniently in time, in form, and in amount, the fruits of the labor of others.

On page 30 he says:

Men take money with the expectation of parting with it; this is the use to which they mean to put it.

Again, Mr. Walker says:

Money is that which pa.s.ses freely from hand to hand throughout the community, in final discharge of debts and full payment for commodities, being accepted equally without reference to the character or credit of the person who offers it, and without the intention of the person who receives it to consume it, or enjoy it, or apply it to any other use than, in turn, to tender it to others in discharge of debts or payment for commodities.

Even Bonamy Price, who is wedded to the gold standard, in his Principles of Currency, says:

Gold, in the form of money or coin, is not sought for its own sake, as an article of consumption. It must never be regarded as valuable except for the work it performs, so long as it remains in the state of coin. It can be converted at pleasure into an end, into an article of consumption, by being sold; till then it is a mere tool.

How many people ever so "convert" it that earn it?

The great philosopher, Bishop Berkeley, one of the most acute reasoners, in my judgment, that modern times have produced, in the "Querist,"

published in 1710, propounds the following pertinent and suggestive questions:

Whether the terms "crown," "livre," "pound sterling," etc., are not to be considered as exponents, or denominations? And whether gold, silver, and paper are not tickets or counters for reckoning, recording, or transferring such denominations?

Whether, the denominations being retained, although the bullion were gone, things might not nevertheless be rated, bought, and sold, industry promoted and a circulation of commerce obtained?

Dugald Stewart, professor of moral philosophy in the University of Edinburgh, in his Lectures on Political Economy (Part I, Book II), said:

When gold is converted into coin, its possessor never thinks of anything but its exchangeable value, or supposes a coffer of guineas to be more valuable because they are capable of being transferred into a service of plate for his own use. Why then should we suppose that, if the intrinsic value of gold and silver were completely annihilated, they might not still perform, as well as now, all the functions of money, supposing them to retain all those recommendations (durability, divisibility, etc.) formerly stated, which give them so decided a superiority over everything else which could be employed for the same purpose.

Supposing the supply of the precious metals at present afforded by the mines to fail entirely the world over, there can be little doubt that all the plate now in existence would be gradually converted into money, and gold and silver would soon cease to be employed in the ornamental arts. In this case a few years would obliterate entirely all trace of the intrinsic value of these metals, while their value would be understood to arise from those characteristical qualities (divisibility, durability, etc.) which recommend them as media of exchange. I see no reason why gold and silver should not have maintained their value as money, if they had been applicable to no other purposes than to serve as money.

I am therefore disposed to think, with Bishop Berkeley, whether the true idea of money, as such, be not altogether that of a ticket or counter.

Appleton's Cyclopedia, defining money, says:

Anything which freely circulates from hand to hand, as a common acceptable medium of exchange in any country, is in such country money, even though it ceases to be such, or to possess any value in pa.s.sing into another country. In a word, an article is determined to be money by reason of the performance by it of certain functions, without regard to its form or substance.

BASTIAT'S DESCRIPTION OF THE CROWN PIECE.

Bastiat, in his "Harmonies Economiques," describing money, used the following ill.u.s.tration:

You have a crown piece. What does it mean in your hands? If you can read with the eye of the mind the inscription it bears, you can distinctly see these words: Pay to the bearer a service equivalent to that which he has rendered to society. Value received and stated, proved and measured by that which in on me.

No words could more correctly describe the unit in a properly regulated system of money. And notwithstanding the attempt to discredit silver coinage, no piece of money, as I have already shown, would better answer, by its steadiness of value, this description of Bastiat's than would the American silver dollar if silver were remonetized.

So far as it applied to gold Bastiat's description was much nearer accuracy in his day than it is in ours. In his life-time the mints of France and of the Continent were open for the coinage of silver equally with gold, and the money supply of the world was not constantly narrowing by being limited to the yield of a single metal whose annual output would hardly more than meet the demand for the arts.

Were Bastiat alive at this time he would reform his description so as to make it read as follows: "You have an American gold piece. You have had it h.o.a.rded in a bank vault for fifteen years. What does it mean in your hands? If you can read with the eye of the mind the inscription it bears, you can distinctly see these words: 'Pay to the bearer 50 per cent. more service than he has rendered to society; value not received or stated on me, but resulting from a cunning manipulation of the law of legal tender, through the influence of the holders of gold and of obligations payable therein, and as a reward to the bearer for having had this money hid away and for depriving society of its use for seventeen years.'"

When people are found everywhere working for money and not for the things which they really need, it is clear that they are working for money, not because of the material of which it is composed, but because it is an order for property which they can at any time obtain by parting with the money. To modify and elaborate Bastiat's description of the crown piece, it might be said of the Money Unit of the United States under a properly regulated system:

"You have a dollar. What does it mean in your hands? If you can read with the eye of the mind the inscription it bears, you can distinctly see these words: To all to whom this may come: Greeting. This is a dollar--a unit of money--part of the great instrumentality created by society to effect the mult.i.tudinous exchanges of property and services among men. The amount of its command is constant, because the increase in the volume of money is regulated by the sovereign authority of the nation, with strict regard to the increase of population and demand--hence the value of this unit remains unchanging through time. It is an order for all property on sale, and all services for hire; the proportionate amount of such property and service to which its possessor is ent.i.tled being fixed by the universal compet.i.tion to get it."

GRESHAM'S LAW.

Many persons fear an outflow of gold from the operation of what is known as "Gresham's law," namely, that "bad money will expel good." Sir Thomas Gresham, a financier of Elizabeth's time, stated that if a number of the gold or silver coins of any given denomination were deprived of part of their pure metal, and so made cheaper than the remainder, a successful circulation of the coins thus deprived would result in the melting up or exportation of the coins of standard weight. Writing of this, Mr. Jevons ("Money and the Mechanism of Exchange," American edition, page 84) says:

Gresham's remarks concerning the inability of good money to drive out bad only referred to moneys of one kind of metal. * * * The people, as a general rule, do not reject the better, but pa.s.s from hand to hand indifferently the heavy and the light coins, because their only use for the coin is as a medium of exchange. It is those who are going to melt, export, h.o.a.rd, or dissolve the coins of the realm, or convert them into jewelry and gold leaf, who carefully select for their purposes the new heavy coins--

and avoid the light or abraded coins.