Of all the commodities known to mankind gold possesses in the highest degree the characteristics of good money. Since the earliest time it has been desired for its own use as a commodity. Primitive man prized gold above all other metals. From it he made rings, chains, and other ornaments that appealed to his vanity. His descendants regard gold in much the same way. Gold is also scarce enough to make it highly valuable compared to its bulk, and yet it exists in large enough quantities to permit of its use in making exchanges. Finally, the value of gold is stable, though we must not get the mistaken idea, which some have, that it does not vary. The reason for its stability is that the supply of the metal coming from the mines, in any year let us say, is extremely small compared with the total supply in the possession of society.

Gold possesses also to a high degree the physical characteristics of a good money. It is made durable by combining with the fine metal a small part of alloy. Gold wears well in coins, though it is best preserved by molding it in the form of bars. Also since it combines a relatively high value with small bulk, gold may be easily carried about. The homogeneity of gold is well known to every student of chemistry, who learns early in his course that it is a chemical element. All fine gold, therefore, is exactly alike, whether it be mined in South Africa or in Alaska. Gold is also divisible. No change in its shape or form affects its value. Two one-ounce pieces of gold are worth exactly as much as one two-ounce piece. Melting, rolling, or pounding has no effect whatever on the value of fine gold. Fifth, gold is the most difficult of all the metals to counterfeit. Any one accustomed to handle gold money can detect a spurious gold coin at a glance.

From the foregoing discussion of the qualities of a good money we can easily see why society has, by a long process of selection, chosen gold as a standard. It could not have done otherwise. Whether or not gold will continue down to the end of time as the money standard, no one can say. We are reasonably sure, however, that a change to some other commodity will come only when that commodity shows its superiority to gold.