18. When commodities are interchanged directly for one another it is called Barter or Exchange. When commodities are interchanged for Money, that Money is only taken in order that it may be interchanged again for something else. Hence Say aptly said that when Money is used the transaction is half-an-exchange, which is true. It is also called a Sale. A Sale always denotes a transaction in which one of the quantities exchanged is Money or Credit; that is when one quantity is a useful commodity, and the other only the Right to demand one: that is when the interchange is of things of an unlike nature. An Exchange is always an interchange of things of a like nature. Thus we speak of the Foreign Exchanges, or the Value of the Money of one country in terms of the Money of another; or we ask for the change (i.e. the 'change or exchange) of a 5l. Note, a Cheque, or a Sovereign. So we speak of exchanging a picture for a statue, or one book for another. When the interchange is of commodities for Money or Credit, the one who gives Money, or Credit, is said to Buy the commodity; and the one who gives the commodity is said to Sell it. Thus we buy a horse or a house with Money. Formerly an officer bought a commission in the army, but he exchanged from one regiment to another. So in Lear when Albany throws down his glove to the traitor Edmund, the latter, throwing down his own says - "There's my exchange" - meaning like for like. So in Hamlet Laertes says "Exchange forgiveness with me, noble Hamlet."

A transaction in which Money or Credit is given for commodities is, as just said, termed a Sale. The sum total of these Sales is properly termed the Circulation. Hence a single piece of Money may add considerably to the Circulation, for every time it is transferred it adds to the Circulation. It is to be observed that the word Circulation is very often used in a very corrupt sense to mean Money and Bank Notes, more particularly the latter. But to call the Notes which circulate, the Circulation, is as great a confusion of ideas as to call a wheel a rotation. We shall accordingly never use the word Circulation to mean the issues of a bank; the correct expression evidently is to say the Notes in Circulation.