3. Coining Does Not Add To Their Value

The transformation of metals into coins does not affect their value. This truth can not be too firmly grasped. Drop a ten-dollar gold piece accidentally into the fire and the finder can take the lump to the mint, and after it has been ascertained that none has been lost, he will receive another piece therefor. In like manner if the finder should take the lump to a merchant who possessed his confidence, he would be willing to give him as much of any commodity for it as he would for a ten-dollar gold piece. We do not mean to say that a merchant would be thus accommodating to all his customers, but simply that, in thus accommodating one of them, he would not exercise any charity, for by sending the lump to the mint he could get the full equivalent in weight of coined metal.

The same truth might be shown with respect to silver, but as the explanation is different and less simple it will be delayed.

4. The Advantage Of Using Representatives Of, Or Substitutes For, Money

Besides coins made of gold and silver, which every one calls money, business transactions are facilitated by issuing representatives or substitutes in the form of notes.1 Suppose a man is to receive $5,000 for his farm. The buyer comes with his gold pieces which question, what is money either concretely or abstractly? But endless confusion has arisen from adopting a definition of money and then attempting to becloud or ignore the distinctions between gold, silver, and notes, checks, and other forms of credit.

1 Some writers classify the notes issued by the government and banks as money ; others go still farther and put checks in the same category. It is of the utmost Importance to understand the distinctions between coin and notes; and when these arc clearly understood, we need not be troubled with the weigh about twenty pounds. The seller does not know what to do with so much gold. He has no safe, nor is one belonging to another very near. The buyer, perceiving the seller's difficulty, says to him, "I have five notes issued by the government for the amount, would you prefer these?" - "What are they?" asks the seller, "I do not know what you mean." The buyer then reads one to him. In effect, the government promises to pay the bearer, holder, or possessor, $1,000 at a specified place, the treasury,- at Washington, or a subtreasury, whenever he shall present the note. The buyer further explains that if he prefers to take five of these notes, instead of the gold, he need not actually go to Washington or a subtreasury to receive payment; he can exchange them for anything he wishes to buy, for the person with whom he deals will be just as willing, perhaps more so, to receive them than coin. The farmer, having confidence in what is told him, readily takes the five notes, for these he car. put in his pocketbook and carry around without the slightest difficulty. Thus the convenience in using substitutes or representatives for coin is very great, especially in large transactions.

The notes thus described therefore represent coin; are promises to pay it on demand; and it is kept in one or more places at which noteholders can obtain it by asking or demanding it and giving up their notes when it is presented. In other words, they are orders for the amount of coin specified on them.