[Footnote 9:  See Vol.  I, p. 227.]

PART II

MONEY AND PRICES

CHAPTER 3

NATURE, USE, AND COINAGE OF MONEY

Sec. 1.  Origin of money.  Sec. 2.  Qualities of the original money-goods.  Sec. 3.  Industrial changes and the forms of money.  Sec. 4.  The precious metals as money.  Sec. 5.  Gold-using countries.  Sec. 6.  Varying extent of the use of money.  Sec. 7.  Money defined and reviewed.  Sec. 8.  Metal money without or with coinage.  Sec. 9.  Technical features of coinage.  Sec. 10.  Seigniorage defined.

Sec. 1. #Origin of money#.  Everywhere in the world where the beginnings of regular trade have appeared, some one of the articles of trade soon has come to be taken by many traders who did not expect to keep or use it themselves, but to pass it along in another trade.[1] This made it money, for money is whatever comes to be used as a general price-good.  The character of a general price good clearly distinguishes money from goods bought and sold by a particular class of merchants, such as grain, cattle, etc., to be sold again.  It is only in so far as a particular good comes to be taken by persons not specially dealing in it, taken for the purpose of using it as a price-good to get something else which they desire, that a thing has the character of money.  The thing called money thus is a durative good passing from hand to hand in a community, and completing its use in turn to each possessor of it only as he parts with it.

The use of money is of such social importance, that it would be impossible for modern industrial society to exist without it.  The discussion of money touches many interests, it raises many questions of a political and of an ethical nature.  There are perhaps more popular errors on this than on any other one subject in economics, but the general principles of money are as fully understood and as firmly established as are any parts of economics.

Sec. 2. #Qualities of the original money-good#.  The selection of any money-commodity has not been mere chance, but has been the result of that object being better fitted than others to serve as a medium of exchange.  The main qualities that affected the selection of primitive form of money were as follows:  1.  Marketability (or saleability); that is, it must be easy to sell.  The first forms of money had to be things which every one desired at some time and many people desired at any time.  That was the essential quality that made any one ready to take it even when he did not wish to use it himself.  Many kinds of food and of clothing are very generally desired goods.  But few of these classes of goods have in a high measure certain other important qualities, now to be named.