Soon after primitive man began to produce he found himself in possession of a surplus of goods for which he had no immediate need. Naturally he sought for a neighbor who desired to possess his goods and who in turn had goods of his own to exchange. Here-was the basis for an exchange, provided each desired the other's goods and provided further that they could mutually agree as to exchange value. This method of exchange is known as barter, and in newer countries it persists to the present day. Barter, however, as we shall presently see, gradually gave way to buying and selling in the terms of those few commodities, like gold and silver, which practically everybody desired to possess. Then the phenomenon of price appeared. Men began to see the advantage of exchanging their surplus goods for go d or silver, which soon came to be known as money, supplying their own needs by purchases with the same money. Later banks arose to supply credit to take the place of money, which, with the paper money of the various governments, has finally come to occupy the most important place in exchange. Accordingly, under exchange, which is one of the four large groups into which economics is divided, we shall study the various functions of money; the principles underlying the science of banking, together with the banking history of the United States; domestic and foreign commerce; the tariff; and causes and effects of price fluctuation. All these subjects, we shall see when we take up the detailed study of exchange, are closely related aspects of the same thing - the exchange of goods.