THK FARMKK AND TIIK ('rRKKNCY. 



343 



to take in exchange for all commodities are the precious 

 metals — gold and silver. These constitute what is called 

 international money because they are recognized as money 

 by all civilized nations. Considered merely as instruments of 

 exchange these metals constitute the best money. 



Instead of the metals themselves, promises to pay the 

 metals, in the form of notes issued by responsible governments 

 or banks, are more convenient when large sums are involved, 

 and are preferred by some for use even in small amounts ; 

 these constitute good money so long as they can as a matter 

 of fact be exchanged at any time for the metals which they 

 represent, and so long as everybody believes they can be so 

 exchanged. Such notes constitute what is called "represent- 

 ative money." If, as a matter of fact, they can not be 

 exchanged, on demand, for what they represent, these notes 

 are not really good money, even though they are believed to 

 be, and perform the office. of good money until their true 

 character is discovered. A counterfeit note does the work 

 of good money until it is found to be counterfeit, when it 

 immediately loses its value. 



A note that can really be exchanged for the metal it repre- 

 sents is not good money if any one to whom it is offered 

 doubts whether he can get coin for it on demand or fears that 

 he might not be able to make the demand. No farmer in the 

 United States doubts that if he should present a note of the 

 Bank of England at the counter of the bank he would get 

 gold for it, but he can not go to the Bank of England, and 

 he may not find any one who can conveniently send it there, 

 and, not being familiar with its appearance, he might fear that 

 it might be counterfeit, and so might be unwilling to receive 

 it, even although actually good ; a United States "greenback" 

 would be in a similar .situation in England, while each will 

 circulate freely in its own country. No merely representative 

 money is therefore " international money," although the notes 

 of contiguous nations often circulate readily among them- 

 selves, as those of France and Belgium and the United States 

 and Canada do to-day. Circumstances, however, are at any 

 time liable to arise to prevent the convenient return of repre- 



