Inasmuch as the principles of money and banking are closely related, it seems logical in a study of banking to inquire first into the history of exchange and the functions of money. The first exchanges were probably in kind. This method, known as "barter," is very primitive, restrictive, and wasteful. Few exchanges can take place, for several reasons: the coincidence of mutual wants in amounts, time, and place is unlikely; certain commodities which A may wish to exchange for articles belonging to B may not exist in such units as B may wish or be willing to take; A's surplus goods may exist at a time when B has no exchangeable commodities, although it may be a time when B desires A's goods, and if A's goods are perishable, exchange by barter would result in great waste; similar waste and restriction would exist where the surplus products of a producer or community were in demand in another locality whose surplus products did not coincide with the demand in the former.