thousands of intelligent slaves appear in all parts of the world to do his bidding. He wishes to be transported both rapidly and comfortably to the uttermost corners of the earth. It is done. He desires a palace to be built in London and another in South Africa. It is done. Canals are cut, railways constructed, steamers built, telegraph lines laid, rivers deflected, and even mountains removed, all as he commands. In short, there is no scheme which the ingenuity of man can devise, and which the natural resources of the world render feasible, that the financier of to-day cannot bring to pass, provided he possess sufficient money.

Here, then, we have a Power which knows no equal, a Power which can be directed towards any end, but which in the present age is generally used for constructive purposes. Should Europe ever again be plunged into the horrors of a great war, this Power will undoubtedly materially influence the result. In such an event the force that can cause cities to arise in a few years, could bring about their destruction in as many weeks. That money should be able to produce such vast results is a matter for the deepest consideration. But Mill one of the "Fathers of Political Economy"-tells us, "There cannot be intrinsically a more insignificant thing in the economy of society than money, except in the character of a contrivance for sparing time and labour;"*

*

Principles of Political Economy, Book iii., chap. vii.

F

and around this idea he throws the ramparts of his logic so effectively, that to this day the "medium of exchange" theory continues to hold ground in the public mind.

Sufficient has been said, however, to show that although it is quite correct to describe the cocoa beans employed by the early Mexicans to overcome the difficulties of barter, and all other similarly used go-between commodities, as "media of exchange," such language is utterly inadequate to convey an accurate impression of the part played by the money of to-day in the economy of society. It will be necessary, therefore, if we wish to understand the injurious after-effects of the legislation by which our present system of currency was established, to cast aside the antiquated and misleading term "medium," and find another more in accordance with the powers and influence of the mighty engine that moves all mankind.

CHAPTER VI.

The difference between modern and primitive money-Money the Great Purchasing Power-A practical theory of money.

HOW can money be best described? We

know it to be (1) the Common Measure

We

of Value, (2) the Common Store of Value, and (3) the GREAT STIMULUS TO INDUSTRY. have still to recognise its most important function.

Bastiat arrives at what he considers to be the true nature of money in this way: "You have a crown piece. What does it mean in your hands? It is, as it were, the witness and proof that you have at some time done work which instead of profiting by, you have allowed society, in the person of your client, to enjoy. This crown piece witnesses that you have rendered a service to society, and moreover states the value of it. It witnesses besides that you have not received back from society a real equivalent service as was your right. To put it in your power to exercise this right when and how you please, society, by the hands of your client, has given

you an

ACKNOWLEDGMENT,

a TITLE, an ORDER OF THE STATE, a crown piece, in short, which does not differ from other TITLES OF CREDIT, except that it carries its value in itself; and 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 is on me!'"

Here we have the essential feature that distinguishes modern from primitive money. Modern money is, with certain limitations, a "right or title to demand something from others." (McCleod.) The laws by which its use is regulated, and the customs upon which these laws are founded, have made it now impossible to effectively demand what we require except by the offer of money. In primitive ages no man could compel others to give him what he required in exchange for the cocoa beans, shells, or other go-between commodities then employed to lessen the inconveniences of barter. Primitive man bartered as he pleased, and if he found it convenient to accept beans or shells he did so. But as soon as the manufacture and regulation of money became a State monopoly, the freedom of action on both sides, which was characteristic of a system of barter, ceased to exist. By the institution of the law of legal tender each member of the State was compelled

to accept money in discharge of debts due to him; and further, he was practically enabled to compel others to supply him with what he required in exchange for money. Money thus became an ORDER OF THE STATE, which every member of the State was obliged by law and custom to acknowledge.

In rude ages it was only possible for the State to enforce its MONETARY ORDERS by manufacturing them of metals such as silver and gold, which were of great value apart from their use as money. By so doing the people willingly accepted and recognised the force of the ORDERS; for even if the authority of the State were liable to subversion, the money issued by the State would still be of a value that those who possessed a store of it could readily turn to account. With the advance of civilisation, and the increase of confidence in the power, permanence, and honesty of the governing authority, it became possible for the State to put forth MONETARY ORDERS of PAPER, which served as "titles of credit," Measures of Value, Stimuli to Industry, and Stores of Value almost as effectively as ORDERS of gold and silver had formerly done. But inasmuch as the majority of the world's inhabitants are still without confidence in the permanence of modern governments and the innate honesty of the human race, it has not yet become possible to create that ideal currency of certain celebrated