THE FARMER AND THE CURRENCY. 349 



No money is " non-exportable " except for the reason that 

 nobody outside the country will take it. It is never desirable 

 to have money that other people do not want and will not 

 have. 



Another fallacy is that the po[)ulation of a country affords 

 any means of determining the amount of money required to 

 " transact its business." There is a great deal of futile com- 

 parison of the "per capita circulation " of one country with 

 that of another. Such comparisons have no value in the 

 discussion of any question of much interest to the people. 

 When a statesman observes that any country has a very large 

 per capita circulation he knows that either business is very 

 lively there or that there is a large irredeemable circulation. 

 Without further inquiry he can not tell which. As an item 

 of popular information it has much less value than the 

 amount of annual rainfall. 



Money is used for effecting small exchanges and paying 

 balances. In the majority of exchanges which enter into the 

 record of the business transactions of the country it is not 

 used at all. Payments are made by the balancing of credits 

 based on the ownership of commodities, by means of bank 

 checks. Some economists have estimated the actual money 

 used in effecting exchanges as low as three per cent of the 

 total volume; a more common estimate is five percent. I am 

 certain that this is far too low, as the aggregate of small trans- 

 actions in which money actually passes is enormous, but the 

 estimate may be quite correct with regard to those transac- 

 tions which we think of when we use the term "commerce." 

 As what we call " civilization" advances, the ratio of money to 

 the business transacted grows smaller. It will be within the 

 know^ledge of all my farming readers that the number of those 

 who have bank accounts increases year by year. Every man 

 who opens an account in a bank by so much diminishes the 

 demand for actual money. 



But subject to this modification, that a scattered rural 

 community needs more money to transact a given amount of 

 business than a city community where money circulates more 

 rapidly, and more use is made of banks, that community 



