10. In the primitive ages of the world we have abundant evidence that there was no such thing as Money. When persons traded, they exchanged the products directly with one another. Thus we have in Iliad, vii. 468 : "From Lemnos' Isle a numerous fleet had come

Freighted with wine...

All the other Greeks Hastened to purchase, some with brass, and some With gleaming iron: some with hides, Cattle, or slaves."

This exchange of products against products is termed Barter, and the inconveniences of this mode of trading are palpable. What haggling and bargaining it would require to determine how much leather should be given for how much wine, how many oxen, or how many slaves I Some ingenious person would then discover that it would greatly facilitate traffic, if the things to be exchanged were referred to some common measure. There are several passages in the Iliad and Odyssey which show that even while traffic had not advanced beyond barter, such a standard of reference was used. We find that various things were frequently estimated as being worth so many oxen. Thus in Iliad, ii. 448, Pallas's shield, the Ægis, had 100 tassels, each of the value of 100 oxen. In Iliad vi. 234, Homer laughs at the folly of Glaucus, who exchanged his golden armour, worth 100 oxen, for the bronze armour of Diomede, worth nine oxen. In Iliad, xxiii. 703, Achilles offers as a prize to the conqueror in the funeral games in honour of Patroclus, a large tripod, which the Greeks valued among themselves at twelve oxen, and to the loser a female slave, which they valued at four oxen. But it must be observed that these oxen did not pass from hand to hand like Money. The state of barter still continued, as it is quite common at the present day when the precious metals are used as Money, to exchange goods according to their Value in

Money. Such a state of things in no way implied Money, or Currency, or Circulating Medium.

The necessity for Money arises from a somewhat different cause. So long as the things exchanged were equal in value there would be no need for Money. If it happened that the exchanges of products or services among persons were equal, there would he an end of the matter. But it would often happen that when one person required some product or service from his neighbour, that neighbour would not require an equal amount of product or service at the same time, or, perhaps, even none at all. If then a transaction took place with such an unequal result, there would remain a certain amount or difference of product due from the one to the other, and this would constitute a Debt - that is to say, a Right or Property would be created in the person of the creditor to demand this balance of product at some future time, and at the same time a Duty is created in the person of the debtor to pay the product, or perform the service, when required.

Now among all nations who exchange, this result must inevitably happen: persons want something from others when those other persons want nothing from them. And it is easy to imagine the inconveniences which would arise if persons never could get anything they wanted, unless the persons who could supply these things wanted something in return at the same time.

II. In process of time all nations hit upon this plan; they fixed on some material substance which they agreed to make always exchangeable among themselves to represent the amount of Debt.

That is, that if an unequal exchange took place among persons with a balance due from one to the other, then an amount of this universally exchangeable merchandise was given to make up the balance, so that the person to whom the balance was due might get an equivalent from some other person.

Suppose a wine-dealer wants a quantity of bread from a baker; but the baker wants only one half the equivalent quantity of wine from the wine-dealer, or, perhaps, even none at all.

The wine-dealer takes the bread from the baker and gives him in exchange as much wine as he wants, and makes up the balance by giving an amount of this generally exchangeable merchandise; or if he wants no wine at all the wine-dealer gives him the full Value or equivalent of the bread in this merchandise.

The baker perhaps wants shoes and meat but not wine. Having received this merchandise from the wine-dealer, he goes to the shoemaker and butcher, and obtains the equivalent of the product he sold to the wine-dealer in the form of shoes and meat.

Thus is seen the fundamental nature of Money, as this universally exchangeable merchandise is called: its especial and particular purpose is to represent the Debts that arise from unequal exchanges among men, and to enable persons to obtain the equivalent of the service they have done to one person from some one else.

12. Many species of merchandise have been used by different nations, but however different in their form, this is the universal want which they supplied. And the true nature of Money is to be a Right, or Title, to demand something from others.

That this is the true nature of Money, has been seen by many writers; thus Aristotle says : "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 demands 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, one of the most eminent of the Physiocrates, or first school of Economists, 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.