4 13he Conservative.
MONEY HISTORICALLY CONSIDKllKI ) .
[ Written for THK CoNHKiiVATiVK by Jennie
Johnson , ariulunte of tins Nebraska IiiHtituto
for the Blind. 1
* Only when wo contrast the condition
of primitive man with the civilization of
today , do we realize how great is the
progress which has been made. That
without which such progress would
have been impossible , and upon which
rests our industrial system , is the me
dium of exchange. This medium of
exchange , or money , which is one
of man's greatest inventions , may
also be classed as one of the chief instru
ments which has promoted and now
makes possible the civilization of the
present century. The money question ,
much as it has been discussed , is yet
- , - scarcely less perplexing than important.
However , as we bhall now briefly con-
r aider the question let us view it merely
from a historical standpoint.
To get a clear conception of money ,
let us note carefully the conditions
which made its use a necessity. In the
very early history of the race , men not
only did not have a monetary system ,
but they needed none. The reason for
this is obvious. The wants of primitive
man were very few ; so few , in fact ,
that each supplied his own. Each made
his own bow and arrow , caught his own
game , and found his own wild fruits
and berries. As there was no exchange
of commodities , it was not necessary
that there should be a medium.
During this early period , men were
governed solely by selfishness , and had
no sense of honor. If one man possessed
that which was wanted by another , the
latter , provided he were the stronger of
the two , seized the desired commodity
and appropriated it to his own use ; but
as we pass from uncivilized to semi-
civilized man , we observe a marked
change in men's relations to each other ,
the feelings of bitter hostility give place
to more amicable ones , and man now
begins to see the advantage of exchang
ing commodities. Thus man's desire for
that which he did not possess made him
willing to give in exchange something
which he did possess. Such were
the conditions which gave rise to barter.
Exchanges were now made not only be
tween different individuals , but also be
tween different tribes , who met on neu
tral ground called the mark.
The Evolution of Money.
One can readily see how at this stage
of development , exchanges , being
neither many nor complex , could easily
be effected by means of barter ; but as
civilization advanced , man's wants became -
came more numerous. There waa con
sequently an increase of exchange.
This further development of exchange
led to the division of labor. Under
these new conditions , barter , though for
a time well adapted as a mode of ex
change , now proved inadequate. A
single illustration will serve to show to
the imperative need of facilitating ex
change. If for example , there were no
other mode of transferring commodities
save by barter , the farmer wishing to
exchange his corn for some other eco
nomic good , as perhaps clothing , must
first find a tailor who wanted the corn.
Plainly such an inconvenient and cum
bersome mode of distributing goods
would have checked the progress of man.
Civilization was , however , not thus to
be retarded ; for as a natural outgrowth
of the conditions then existing , there
arose the monetary system , and by em
ploying a medium , the difficult problem
as to how exchange could bo extensively
carried on , was solved.
It is interesting to observe how great
a variety of commodities has served as
money. Among other things which
men have , at different times and in dif
ferent countries , used as a medium of
exchange , are , cattle , leather , oil , furs ,
tin , iron , zinc , copper , and the two prec
ious metals , gold and silver. With the
exception of gold and silver , it is quite
probable that the commodities just
enumerated were employed as money
because of their /convenience merely ,
and not because they possessed those
other qualities which make a thing de
sirable for money purposes.
Gold and Silver.
It has now become apparent that of
the many commodities which have per
formed the money function , those best
adapted to perform this function are
gold and silver. These two metals are
at the present day used as a medium of
exchange in all civilized countries.
There are in the metals themselves cer
tain qualities which make gold and sil
ver desirable for money purposes. These
metals are best adapted to perform the
money function because of their malle
ability and iudestructability. In addi
tion to the qualities just mentioned ,
there ore yet others ; one of which must
not , because of its great importance ,
be overlooked. This is uniformity.
Whether gold be mined in Europe or
American , it requires the same bulk to
make an ounce.
Aside from the valuable qualities in
the metals themselves , still other reasons
may be given why gold and silver are
especially suitable as a medium of ex
change. In the first place , there already
exists an immense quantity of both
metals. "It is estimated "
, says an eco
nomist , "that the gold in bars and coin
and the silver in coin is six thousand
millions of dollars ; while the yearly
production ranges in commercial value
from two hundred and forty to two
hundred and seventy millions. " Even
though there be an annual increase
of gold it does not follow that
because of this increase prices ore
greatly affected. On the contrary ,
a simple comparison of the yearly
production with the enormous quantity
already existing will show that the
principal effect on price is one much to
be desired ; namely , stability. The de
mand for gold and silver to be employed
in the arts , as well as for ornaments ,
prevents their value from falling as low
as does the value of other metals. That
silver is less valuable than gold is due to
the greater abundance of the former.
What Is Money ?
Before proceeding farther , let us ex
amine carefully the various conceptions
of money as viewed from different
standpoints. As regarded by the vast
majority of people , when does a thing
become money ? Just so soon as a com
modity is employed as a medium of
exchange and is generally accepted in
final discharge of debts , then it is that
such a commodity is recognized as
money. This is the popular conception
of money , and we shall see later in
what respects it differs from the legal.
Nothing is money in the legal sense un
less declared as such by the govern
ment , and that which has been declared
a legal tender must be accepted in pay
ment of all debts , both public and pri
vate. There is yet one other conception
of money , which for lack of a better
word , has been termed the economic.
There are in the economic conception of
money the following ideas :
1. That which is money must per
form the primary money function ; that
is , must serve as a medium of exchange.
2. It must be a full legal tender.
8. A definite amount determined by
the government must be taken as a
standard , e. g. , there are in our gold
dollar twenty-three and a fraction
grains of gold.
4. That which is money in the eco
nomic sense must be a receptacle of
value ; or in other words , must have a
commodity value. What then is it that
mokes a thing valuable ? It is human
desire. Thus if our federal government
were to collapse and disappear from the
earth , metallic money would still not be
valueless ; for it would be worth at least
its bullion value. Whereas under the
same conditions , paper money would no
longer be desired , and would therefore
have no value.
Bearing in mind the ideas contained
in each of the three conceptions , the
popular , the legal and the economic , it
will be seen that the idea which is com
mon to all is the idea of a medium of
exchange , e. g. , a bonk note , which is
money in the popular sense , a national
treasury note , which is money viewed
from the legal standpoint , and our gold
dollar , which is money in the economic
conception , all serve as a medium of
exchange. The treasury note differs
from the bank note in this respect : it
is accepted in payment of all debts , both
public and private , not by common con
sent , but by force of law. The same is
true of our gold dollar , which , unlike
paper money , is both a standard of
