PRESENT MONETARY PROBLEMS 163 



much difficulty to classify and define. The expressions " substi- 

 tutes for money," or " surrogates," or " representative money " 

 have arisen which depend for exactness upon the primary meaning 

 assigned to the money on which they depend. The very functions 

 of money need careful limitation. 



Among writers as late as John Stuart Mill there is practically no 

 separation of these functions. The term " money" was applied 

 indifferently to an instrument which served only as a medium of 

 exchange, or only as a standard, as the case might be. Obviously, 

 it would not be possible here to summarize all the different ways 

 in which the functions of money have been viewed; they vary with 

 each writer. In the main, there is a discussion upon the merits of 

 the following separate functions: 



1. A medium of exchange. 



2. A standard, or measure of value. 



3. A standard of deferred payments. 



4. A legal means of payment. 



5. A store of value. 



6. A means of transferring value, or capital. 



The most recent German writer, the distinguished scholar Helf- 

 ferich, in an epoch-making treatise, 1 holds that there are only two 

 primary functions of money, neither being secondary to the other: 

 (1) Medium of exchange; (2) means of payment. He does not 

 regard the standard function as essential to the conception of 

 money, believing that any such service as may be included under 

 a measure of value has been derived from the two primary func- 

 tions given above. With several other writers, he finds that the 

 medium of exchange was the thing which first developed, and then 

 came into general use as a standard or measure of value. He 

 practically defines money as everything serving to facilitate exchange 

 between economic factors. Thus Helfferich would hold that the 

 state, by giving legal-tender power to things worthless in them- 

 selves, such as irredeemable paper, has created a means of payment 

 for debts, and therefore he would include even such instruments as 

 these under money, because they fall under one of his primary 

 divisions. 



Whatever conclusions may be reached in regard to the functions 

 of money, the application to the system of any one country would 

 raise difficult questions as to the classification of money. If one of 

 the necessary functions is lacking to any one form of money, it is 

 not true money; for instance, in the United States no one would 

 hesitate to say that gold coin is true money, and yet it is very little 

 used as an actual medium of exchange. Therefore, we may easily 

 call that true money which does not serve principally as a medium 

 1 Das Geld, von Karl Helfferich, Leipzig, 1903, 8, pp. x + 590. 



