The Washington times., 1935-02-23

money"
The truth is S$
that it is very
impor tant to Lewis Haney
have good money, and the kind of
money does make a difference.
But money is not the cause OF
business conditions, and we can
not cure all business ills by merely
doing things to money. Let us
examine the facts.
There is nothing mysterious
about the nature of money, or
what it does. You can under
stand it. In fact, you may be
sure that any money which you
cannot understand is bad money!
Everybody knows what "bar-
ter" is-trading one commodity
for another without using
money. In very early times,
men found that such barter
trades were often difficult to
arrange. The man with a
hog who wanted three yards
of cloth could not find a man
with three yards of cloth who
wanted pOrk-Of if he did, the
problem of dividing up the
hog arose.
So men resorted to some "me-
dunn of exchange" - something
which all men would accept, and
which would serve as a conven-
lent measure of value. Then the
man with the hog could sell it to
someone for money and trade
part Of the money for cloth.
Note that the money does not
cause the desire to sell hogs or
the desire to buy cloth. It is
merely the medium of exchange.
But also note that it has to be
good medium" The hog man,
the cloth man, and the men to
whom the hog may be sold, all
have to know that the money
is "good'-that it has a certain
and stable value. Otherwise, the
money will not work as a medium.
Many things have been tried
out as money-shellS, tobacco,
salt, iron, cattle, copper, silver,
gold, etc. But few of these things
have worked well, or held their
place as medium of exchange.
From early times the tend
ency has been to use some
metal as money. Soon silver
and gold became the chief
money metals. Finally, gold
won out in most parts of the
world. Why was this?
One sure thing is that it has
been natural" evolution. 1t
has not been the result of any
political "crime," nor has it
been put Over' by bankers, in
ternational or others. 1t merely
came to pass that gold seemed
to most men to be so beauti-
full, durable, and convenient
that they would readily accept
1t in payment for goods and
services. Furthermore, it is so
scarce that its value IS en-
hanced and made secure.
Thus, more than any other
substance, gold came to be gen.
orally acceptable as a medium of
exchange. It's value has proved
to be less dependent upon the
ideas or wishes of any one man,
or small group of men, than
other things.
Finally, in order to save the
loss of gold through abrasion,
etc., and for convenience, paper
notes and certificates based on
gold, came into use.
We may define money as being
anything commonly used as a
medium of exchange by a group
of people which circulateS freely,
or passes current as a means
of payment.
In order to be money" a
thing must pass current, or "c1r-
culate" freely, from hand to
hand as a means Of payment for
commodities and services. This
means that it must be generally
acceptable, without doubt as to
its value.
Thus, money must consist Of, or
be convertible into, a substance
which is easily recognizable. Ac-
cordingly, it must have a uniform
or readily ascertainable value,
which is not affected by dividing
it up into convenient parts or
units.
OF course, too, it must not be
so bulky as to be inconvenient.
It must have as steady a value
as is possible, so that the inevitable
changes which occur in all human
values will be reduced to a mini
mum. Otherwise, people will hest
tate to accept it in payment and
its use as a medium of exchange
will be limited.
Next WedneSday-"MOney" VS..
Currency" and the different
kinds of currency.