enabling them to avail themselves of a greater number of the conveniences of life; and also, that a division of labor in effecting exchanges, is necessary to render them most beneficial to all classes of the community. Upon farther examination of the subject, we shall find important difficulties in making exchanges; and unless these could be removed, the benefits of exchange would, after all, be very limited.

§892. A man may have no commodity to give in exchange for what he wants. His only means of getting any thing is his labor. But he may not find employ in any occupation at which he could earn the highest wages.

In this case, he would be obliged to work at all the different trades. To obtain clothes, he must labor for the tailor; if he wanted shoes, he must labor for the shoemaker; and so for all other necessaries. But it may so happen, that, when some particular article is most wanted, the person having it to dispose of does not want the man's labor, nor any thing which he is able to get for his labor. Thus the poor la borer may remain for a long time in a state of suffering, before any means of relief shall have been devised.

§893. If every person were obliged to make an exchange of a part of his surplus products for every article he wants, he would be little better off than if he should attempt to make every thing for himself. The greater part of his time would be spent in making exchanges, if indeed they could be made at all.

§ 894. If a farmer wants a hat, he can easily exchange for it its value in wheat; but the hatter may not want wheat; he may however want a coat; and the farmer must first exchange his wheat for the coat, and then the coat for a hat. But perhaps the tailor does not want wheat, but shoes; and it may be that the shoemaker too wants something else which the farmer is equally unable to procure for his wheat. But suppose the tailor wants wheat, and the hatter a coat;

§ 891. How does exchange conduce to the happiness of mankind? § 892. What might a man be compelled to do who had nothing but labor to give in exchange for what he wanted? §893. What would be the disadvantage of every man's being obliged to exchange directly product for product? § 894. Illustrate, by example, the difficulty of making

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and suppose that the farmer procures the coat for the hatter. Here another difficulty arises: the coat is worth more than a hat. In this case, the hatter, having nothing but hats to give for the difference, the farmer must take more hats than he wants, and which he may find it equally difficult to exchange for something else that he needs.

§895. Now it is evident, that, if there were some commodity which a person could obtain for what he has to dis pose of, and which commodity every other person would be willing to receive in exchange for his products, all this difficulty would be avoided. Hence, among nations in any degree civilized, there is something which, by common consent, has been adopted as a medium of exchange. In old times, things were in some countries valued according to the number of oxen which were given in exchange for them; in others, salt, leather, shells, and other things, have been used for the same purpose.

§ 896. Metals also, of various kinds, were, at an early period, adopted by different nations for the purpose of exchange. Iron was used by the Spartans, copper by the Romans, and, by other nations, gold and silver. Iron must have been very inconvenient, on account of its great bulk and weight. But all of them possessed this one advantage: they were capable of being divided into parts proportioned to the amount of value bought or sold, whether great or small. But as they were originally used in bars, without stamp or coinage, their use was attended with the inconve nience of weighing at every purchase. The fine metals, though much preferable for containing greater value in the same weight, were especially liable to this objection. So much value being contained in a very small particle of the metal, great accuracy in the division was necessary.

§897. Custom has decided in favor of gold and silver, called the precious metals, as the medium of exchange. Silver was used at a very early period, in the country of

exchanges of article for article. $895. How might these difficulties be avoided? What different articles have been used by nations as a circulating medium? § 896. What different metals have been used by different nations for the purpose of exchange? What conveniences and inconveniences attended the use of these metals, uncoined? §897

Canaan. Abraham purchased the field of Machpelah for a burying place, with silver. It then passed by weight, as appears from Gen. 23: 16. In later times, it became the practice among nations that used the metal currency, to fix upon it a stamp or inscription. The stamp answers two important purposes: First, it expresses the value of the piece, thereby saving the trouble of weighing it; secondly, persons are less liable to be imposed on by adulterated and counterfeit coins. Before money was coined, the pieces of metal had to be assayed in order to ascertain the quality. The stamp of the government now placed upon the pieces, is evidence of the purity of the metal, as well as of its value. And though counterfeit stamps are sometimes put upon base coin, the cases are comparatively uncommon; and the counterfeit coins may generally be detected by careful observation.

§ 898. The advantages of gold and silver as a circulating medium, are numerous. (1.) They may be divided into parts so minute as to admit of being exchanged for articles of very small value. (2.) They are uniform in quality in all parts of the world; any quantity of the silver and gold of one country being of the same value as an equal quantity of the same metals of another country. And the quality is not altered by time or weather. (3.) They are not subject to the same degree of loss by wear as other metals. (4.) Their dearness renders a very small amount of weight sufficient to buy commodities of great value: it is therefore of easy transportation. (5.) They are capable of receiving the impression, by which their weight and purity are certified.

§ 899. But it may be asked, Wherein consists the necessity of employing both gold and silver in the use of money? Why may not either the one or the other be dispensed with? If silver only were used, the quantity necessary to repre. sent a large amount of value, would contain too much weight

What metals are now in general use as money? Wherein consists the convenience of having the metals stamped or coined? § 898. State the several advantages of gold and silver as a circulating medium. § 899. Why is not one of these kinds of metal sufficient? Why is copper necessary?

and bulk to be convenient in extensive commercial transactions. On the other hand, if gold alone were used in the capacity of money, being sixteen times as dear as silver, a piece of gold equal in value to the smallest silver coin, would be too small for ordinary use, For the same reason, a cheaper metal than even silver is necessary. The smallest silver coin in the United States, is a half dime, or five cent piece. A smaller piece of money in bulk would be inconvenient. Hence, to represent smaller value, copper is used.

CHAPTER XV.

Sundry Facts concerning Money.

§ 900. ALTHOUGH in making exchanges value is given for value, it will be readily seen, that the value of the money employed in effecting the necessary exchanges in a community, is much less than the total value of the property to be exchanged. One reason is, that all exchanges are not made at the same time. A small sum, therefore, may answer as the medium of exchanging a large amount of property. This may be illustrated thus:

The

901. A farmer sells to his neighbor wheat to the value of five dollars, and pays the money to the merchant for goods. The merchant buys a hat for the same money. The hatter pays it to the tailor for making a coat. tailor pays it to his journeyman for labor; and the journeyman again pays the same money for merchant's goods. Thus we see, that commodities and labor to the value of thirty dollars have been exchanged with five dollars; and the same five dollars, if kept in steady circulation a whole year, may be used to exchange values to the amount of a thousand dollars,

§ 900. Why is not so great a value of money required to make the necessary exchanges in a community, as the value of property to be exchanged? § 901. Illustrate this by an example. Another. § 902.

§ 902. Another reason why a small amount of money is sufficient for the purposes of exchange, is, that a large proportion, sometimes much the greater proportion, of the ex changes of property, is made in kind; that is, one kind of property is exchanged for another. One man may wish to dispose of his horse, and buy a pair of oxen; and if the owner of the oxen wants a horse, an exchange may be made without the use of money, except what may be necessary to pay the difference, in case the property exchanged should not be of equal value. Thus also a country merchant may exchange the greater part of his stock of goods for the pro. ductions of the country; and these he may again exchange with the city wholesale merchant for a new supply of goods, with a small amount of money.

§ 903. As in exchange value is always given for value, the whole business of the exchange of a community re quires a quantity of money of a certain amount of value. For, if it requires ten dollars' worth of money to pay for ten dollars' worth of wheat, the greater the number and amount of exchanges there are to be made within a given period, the greater must be the value of the circulating medium to ac. complish these exchanges.

§ 904. But the quantity of money and the value of money, are not the same thing: the quantity may be either greater or less at one time than another, when the value is neither increased nor diminished. The value of the money required for the purpose of conducting exchanges, be the quantity great or small, must always be in proportion to the total business of the national exchange. Suppose the cir culation of the United States to be 60 millions of dollars at the present time; and that, by some circumstance or other, 20 millions should leave the country, or be otherwise withdrawn from circulation: if the business of national exchange should not be diminished, the 40 millions remaining in cir culation, must possess the same value as the 60. millions do

What other reason can you give, why a small amount of money an swers the purpose of exchange? Explain this by two examples. 903. When the value of the property to be exchanged is increased, is a greater value of money also required? § 904. Explain the difference between the quantity and the value of money. Give an example.