CHAPTER IV. 



IF I have sheep to spare and need wheat I do not have to 

 find one who has wheat to sell and needs sheep; whoever 

 needs sheep will give me money and with the money I 

 can buy wheat. One of the functions of money in this trans- 

 action is that of a "medium of exchange." In common lan- 

 guage I am said to turn my sheep into money and my money 

 into wheat. 



In regard to money as a medium of exchange there are 

 always questions of convenience arising, as, for example, with 

 reference to its form, denominations, and the like, and with 

 respect to paper money, the question of responsibility — that 

 is whether it shall be issued by banks or government — seems 

 to me connected mainly with this function; with this excep- 

 tion, however, which has been discussed in another cliapter, 

 there is no "Question of the Day" in regard to money as a 

 medium of exchange; such questions as arise are settled by 

 the authority whose duty it is to deal with them, with little or 

 no concern on the part of the public. 



The usefulness of money as a medium of exchange, how- 

 ever, involves one characteristic which all good money pos- 

 sesses, and without which it is not good money ; it must be 

 something which every one is willing to take in exchange for 

 whatever he has to part with. I do not mean something 

 which some are willing to take, or all are willing to take for 

 some things, or which all ought to be willing to take, but some- 

 thing which as a matter of fact all are willing to take at all 

 times. 



The only substances which all men are willing at all times 



also Book Fourth, Chapter I and Appendix G. 

 (342) 



