4. Although any commodity, in principle, may serve as the tool of exchange, practically, every nation that could obtain the precious metals has employed them as money. They had excellent reasons for the choice. Gold and silver are very portable, that is, they are light compared with their great value, clean to handle, beautiful to look at, go into small compass, hard and therefore enduring in use, retain the marking stamp easily and long, and extremely divisible. They bear being cut into coins of different size, with proportionate value to their weights. When much worn, they still possess a perfectly real value up to what remains of metal in the coins. The bullocks of Diomed and America must have been very awkward money, most hard to dispose of till the time came for making purchases with them; they required stables and food. The precious metals do not deteriorate in their physical qualities by being handled and used. Cattle-money is very perishable; equally so lumps of rock-salt. Nor can cattle be divided; an ox could be dealt with only as a whole; a piece could not be cut oil from him to serve as small change. Then again coins, especially gold ones, if no longer wanted for money, are readily convertible into pure metals, retaining their full value as commodities for use. The demonetisation of gold would not injure holders of full weighted sovereigns or dollars; they would be converted into jewels and ornaments at once. Lastly, the precious metals possess in an eminent degree the first requisite of good money, steadiness of value. The essence of the action of money lies in the guarantee it gives for purchasing other goods of equal value with those given for it; a changeable guarantee breaks down in its most vital quality. Every contract, every debt, supposes that the value understood at the time shall be paid when due. Absolute certainty on this point is not obtainable; because value is expressed in a commodity, and there is not a single commodity which is not liable to some fluctuation of value. But the money which is made of the steadiest commodity is incomparably the best. Professor Sumner humorously points out the unsoundness of the guarantee furnished by several forms of money, or rather of the tool of exchange. "If a cow will pay taxes, as it did in America, the leanest cow will be given. If corn will pay a debt, the com which is of poorest quality, or is damaged, will be paid" No doubt, gold and silver, on the discovery of America, sustained a heavy change of permanent value, to the great disturbance of all contracts and debts stipulating payment in these metals. They may subsequently have undergone some further depreciation, although this by no means must be taken as proved; nevertheless they are less open to the charge of changeableness than any other commodities.
These weighty considerations combined have prevailed in establishing metallic coin as the universal money; and this money is a collection of small portions of a precious metal, called coins, whose weight and purity are attested by the State.
The right of attesting the public money, of coining, is usually claimed as a prerogative inherent in the State; but this doctrine belongs to a political philosophy which is fast passing away. Thomas Aquinas saw the truth long before it dawned on the mass of mankind - "Rex datur propter regnum, non regnum propter regem" Whatever authority or right is possessed by rulers had its origin in the interest of the whole people; but mediaeval kings, who reaped large profits from the adulteration of the coin, were slow to perceive the application of this principle to currency. That coining should be exclusively vested in the State rests on a vastly stronger foundation than prerogative; the State can do the work best, and that reason is sufficient and decisive. That the public money should be honest and be what it professes to be, deeply concerns the public welfare; and no attestation furnished by private persons can compete in authority with the stamp imposed by the Government Mint. Private persons are capable of putting as good coin into circulation as the State, just as they circulate ingots; still no authentication can give a warranty as good as that of the State.
5. Our analysis lastly teaches us the origin of the expression Currency. It is derived from the Latin curro, I run; and our description shows that money runs. It circulates. Its office is to place certain goods in a buyer's hands: that done, it leaves him in order to repeat the same operation for the seller who took it. He has no motive - save occasionally for a spare stock - for keeping the money; he accepted it for his goods only to buy with it in turn. The sooner he calls upon it to fulfil its office, and to run away from him, and to transfer itself to the pocket of some other seller, the better. The faster money circulates, the greater is the quantity of work got out of it. The longer it lies in a pocket or a till, the more it assumes the character of a cart or a plough lying unused under a shed.
We now reach the second great benefit conferred by money. It was invented in order to escape the insuperable difficulty presented by single barter to the exchanging of the products of industry, which, by the law. of human life, no man can make entirely for himself. So they are all first bartered for money, and the money re-exchanged for other goods. Thus, as a necessary consequence, every commodity is compared with money; the quantity of money to be given for a particular quantity of the article is determined; in other words, every article acquires its price. But, by the fact that each article is compared with money, and its exchangeable value with money affirmed, all commodities can be compared in value with one another. Price is the value of an article calculated in money; and as every article has its price, the prices of all can be compared with another. Money becomes a standard of measurement, precisely as the yard is the standard of length. Lengths and distances can be stated as longer or shorter than each other by each being expressed in yards; so the relative worth of saleable goods is measured by the worth of each singly being expressed in money. Thus money is the common measure of value. Money, however, I conceive, was not invented for effecting this great service of providing a common measure of value; the service was the result of the fact that money, by its very nature, was measured in barter against every commodity, all being sold for money. To get over the difficulty that a seller of goods might not want the other goods offered by the buyer was alone the true origin of money.