Different nations have used different substances for this purpose. The Hebrews we know used silver; although no money was used at the period of the Homeric poems, copper skewers were sometimes afterwards employed as money in Greece, which were superseded by the silver coinage of Pheidon. The Ethiopians used carved pebbles, and the Carthaginians leather discs, with some mysterious substance sewed up in them. Throughout the islands of the Eastern Ocean, and many parts of Africa and India, shells are still used. In Thibet, and in some parts of China, little blocks of compressed tea serve as money. Salt is used in Abyssinia; and in the oasis of Africa a certain measure of dates, called a hatia, serves as a currency. In the last century dried cod was used in Newfoundland; sugar in the West Indies; and tobacco in Virginia served as money. Adam Smith says that in his day a village in Scotland used nails. In some of the American colonies powder and shot; in Campeachy logwood; and among the Indians of the North American continent belts of wampum served the purpose of a currency. It is said that in 1867 the proprietors in Virginia were reduced to such necessity as to use dried squirrel skins as currency. And no doubt many other things have been used by other nations.

But when we consider the purposes for which money is intended, it is easily seen that no substance possesses so many advantages as metal. The use of money being to preserve the record of services being due to the owner of it for any future time, it is clear that it should not be liable to alter by time. A money of dried cod would not be likely to keep very long, nor would it be easily divisible. One of the first requisites of money is that it should be divisible into very small fragments, so that its owner should be able to get any amount of services at any time he pleases. Taking these requisites into consideration, it is manifest that there is no substance which combines these qualifications so well as metal. It is uniform in its texture, and it can be divided into any number of fragments, each of which shall be equal in value to another fragment of equal weight; and if required, these fragments can always be reunited and form a whole again of the aggregate value of all its parts. By this means, if we can establish a relation between the quantity of the metal and the amount of the debt,

then whatever that relation be, or whatever quantity of metal be taken to represent any amount of debt, then any fragment of such metal will always represent a proportionate amount of the debt. That this is the true nature of money has been seen by many writers, thus Aristotle says, Nicomac. Ethics, B. v. c. 5.

Ὑπὲρ δὲ τῆς μελλούσης ἀλλαγῆς (εἰ νῦν μηδὲν δεῖται, ὅτι ἔσται, ἐὰν δεηθῇ), τὸ νόμισμα οἷον ΕΓΓΥΗΤΗΣ ἐστιν ἡμῖν δεῖ γὰρ τοῦτο φέροντι εἶναι λαβεῖν.

"But with regard to a future exchange (if we want nothing at present, that it may take place when we do want something) money is as it were our SECURITY. For it is necessary that he who brings it should be able to get what he wants."

So an old pamphleteer in 1710 saw the same truth. He says Trade found itself unsufferably straightened and perplexed for want of a general specie of a complete intrinsic worth as the medium to supply the defect of exchanging, and to make good the balance, where a nation, or a market, or a merchant demanded of another a greater quantity of goods than either the buyer had goods to answer, or the seller had occasion to take back."

So Baudeau, the Economist, whom we have already quoted says "This coined money in circulation is nothing, as I have said elsewhere, but effective titles on the general mass of useful and agreeable enjoyments which cause the well-being and propagation of the human race.

"It is a kind of a Bill of Exchange, or Order, payable at the will of the bearer.

"Instead of taking his share in kind of all matters of subsistence, and all raw produce annually growing, the sovereign demands it in money, the effective title, the Order, the Bill of Exchange."

So Smith says "A guinea may be considered as a bill for a certain quantity of necessaries and conveniences upon all the tradesmen in the neighbourhood."

So Mr. Henry Thornton says "Money of every kind is an order for goods. It is so considered by the labourer when he receives it, and is almost instantly turned into money's worth. 1 An Essay on Public Credit, p. 25.

• Introduction à la Philosophie Economique. 3 Wealth of Nations, B. II., c. 2. An Inquiry into the Nature and Effects of the Paper Credit of Great

Britain, p. 260.

It is merely the instrument by which the purchasable stock of the country is distributed with convenience and advantage among the several members of the community."

This great fundamental truth was also very clearly seen by Bastiat. He says'-"This is now the time to analyse the true function of money, leaving out of consideration the miners and importation.

"You have a crown piece. What does it mean in your hands? It is, as it were, the witness and the proof, that you have at some time done some work, which instead of profiting by, you have allowed society to enjoy, in the person of your client. This crown piece witnesses that you have rendered a service to society, and moreover it 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 Token, a Crown piece, in short, which does not differ from 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.'

Either it

"After that you cede your crown piece to me. is a present, or it is in exchange for something else. If you give it to me as the price of a service, see what follows: your account as regards the real satisfaction with society is satisfied, balanced, closed. You rendered it a service in exchange for a crown piece, you now restore it the crown piece in exchange for a service: so far as regards you the account is settled. But I am now just in the position you were before. It is I now who have done a service to society in your person. It is I who have become its creditor for the value of the work which I have done for you, and which I could devote to myself. It is into my hands therefore that this title of credit should pass, the witness and the proof of this social debt. You cannot say that I am richer, because if I have to receive something, it is because I have given something."

1 Euvres, Vol. V., Maudit Argent, p. 80.

So again he says '—"It is enough for a man to have rendered services, and so to have the right to draw upon society, by the means of exchange, for equivalent services. That which I call the means of exchange is money, bills of exchange, bank notes, and also bankers. Whoever has rendered a service, and has not received an equal satisfaction is the bearer of a warrant either possessed of value, like money, or of credit, like bank notes, which gives him the right to draw from society, when he likes, where he likes, and under what form he will, an equivalent service."

2

So again he says "I take the case of a private student. What is he doing at Paris? How does he live there? It cannot be denied that Society places at his disposal food, clothing, lodging, amusements, books, means of instruction, a multitude of things in short, of which the production would demand a long time to be explained, and still more to be effected. And in return for all these things which have required so much labour, toil, fatigue, physical and intellectual efforts, so many transports, inventions, commercial operations, what services has this student rendered to society? None: he is only preparing to render some. Why then have these millions of men who have performed actual services, effectual and productive, abandoned to him their fruits? This is the explanation:-The father of this student who was an advocate, a physician, or a merchant had formerly rendered services-it may be to the people of China and had received not direct services, but RIGHTS to demand services, at the time, in the place and under the form which might suit him the best. It is for these distant and anterior services that society is paying to-day; and, wonderful it is! if we follow in thought the infinite course of operations which must have taken place to attain this result, we shall see that every one has been remunerated for his pains: and that these RIGHTS have passed from hand to hand, sometimes in small portions, sometimes combined, until in the consumption of this student the whole has been balanced. Is not this a strange phenomenon?

"We should shut our eyes to the light if we refused to acknowledge that society cannot present such complicated 1 Harmonies Economiques. Capital, p. 209.

Harmonies Economiques. Organisation Naturelle, p. 25.

transactions in which the civil and penal laws have so little part without obeying a wonderfully ingenious mechanism. This mechanism is the object of Political Economy.

"Another thing worthy of remark is that in this incalculable number of operations, which have combined to allow the student to live for a day, there is not, perhaps, the millionth part which have done so directly. The numberless things which he enjoys to-day are the work of men who long ago disappeared from the earth. And yet they were remunerated as they expected to be, although he who now profits by their labour has done nothing for them. He did not know them— he never will know them. He who reads this page, at the very moment he is reading it has the power, although perhaps he does not know it, to put in motion men of every country, and, I had almost said, of every time-white, black, red, and yellow. He makes generations already extinct contribute to his satisfaction, as well as generations yet unborn; and he owes this extraordinary power to the services his father had formerly rendered to other men, who, to all appearance, have nothing in common with those whose labour is now made use of to-day. Nevertheless, such a balance has been struck in time and space that each one has been paid, and received what he calculates he ought to receive."

It will be seen that these ideas of the nature of money are absolutely identical with the fundamental conception given by us. Now, let us ask, - Why do people take a piece of money in exchange for services or products? They can neither eat it, Inor drink it, nor clothe themselves with it. They can make no direct use of it. The only use they can make of it is to exchange it away again for something else they want. And the only reason why they take it is that they believe, or have confidence, that they can do so whenever they please. It is, therefore, what is called CREDIT. As Edmund Burke says of gold and silver', "The two great recognized species that represent the lasting conventional CREDIT of mankind."

Hence we obtain the fundamental definition or conception of Creit:

CREDIT is anything which is of no direct use, but which is

Reflections on the Revolution in France.