Money as a Medium Exchange Barter Trading is too Clumsy Large-Scale Production requires a Medium of Exchange Recognition and measurement of changes in the value of money. Classification of Money Stabilization of the Price Level The Value of Money or General Level of Prices Where The Unit of Account is a Fixed Quantity of Bullion, Uncoined or Coined. The value of money or general level of prices where the unit of account is a coin of which the issue is limited. The value of money or general level of prices where the unit of account is a bank-note or currency note. Causes of Change in the General Price Level Possible Occasions of Inflation Ways of Dealing with Risk: Transfer To Specialists Choice Criteria Under Risk Hedging The origin and the functions of money Money, when its use has grown habitual The early history of money Currency in the hunting state Currency in the pastoral state Articles of ornament as currency Currency in the agriculture state Manufactured and miscellaneous articles as currency The invention of coining Qualities of the material of money Utility and value Protability Indestructibility Homogeneity Divisibility Stability of value Cognisability Legal Tender The Greenbacks - The Fluctuating Premium on Gold The Greenbacks - The Effects of Greenbacks Upon Wages Rent - Urban Rents Rent - Farm Rents Interest and Loan Capital Purchasing Power of the Principal of Loans The Rate of Interest Profits Profits in Agriculture Statistical Evidence Regarding Profits The Production and Consumption of Wealth Production Consumption Cost of the Civil War Greenbacks and Expenditures The Greenbacks and Receipts Contraction and Inflation of the Legal Tenders Passage of the Resumption Act The Struggle for Resumption The Purchasing Power of the Dollar Measurement of Changes in the Purchasing Power of Dollar Results of Changes in the General Price Level Buying Problems of the Consumer What is Good Buying? The Principles of Foreign Exchange The General Price Level Price Policies Price Flexibility Price Leadership Price Discrimination Special Pricing Practices Postage Stamp System Policy Implications

From the functions of money we may derive its classifications. All money serves as a common medium of exchange, possesses value, and, in serving as a common medium of exchange, becomes a common measure of value. In every monetary system there exists a monetary unit, be it a pound of tobacco, an ornamental shell, the dollar, the mark or the franc; and the kind of money which independently embodies this unit and to which the values of the other kinds of money are assimilated or adjusted is called the standard money. All other kinds of money are non-standard money. Most non-standard money has its value determined, at least in part, by the fact that it is convertible either directly or indirectly on demand into standard money. Broadly speaking, there are two important classes of standard money: (1) commodity money (sometimes called primary money), and (2) standard fiduciary money. Commodity money is any kind of money of which the money value and the commodity value are practically the same. Standard fiduciary money is standard money whose value as money is appreciably greater than its value as a commodity. COMMODITY MONEY While commodity money may consist of articles of merchandise which have not been given any special form to mark them as money, like the previously described tobacco money of colonial Virginia, the cattle money of Greece in Homeric times, the gold dust money used in many newly opened gold fields, or the sycee silver "shoes" that circulate by weight in China, most of the world's commodity money in recent years has been in the form of coin. When two kinds of commodity money circulate side by side with essentially equal privileges before the law and are tied together by a fixed legal ratio of equivalence, the monetary system is called bimetallism--a subject to be considered later. When there is only one kind of standard commodity money, the system is called monometallism. If two valuable metals like gold and silver, each in substantial proportion, were combined in the standard money unit, the system would be called symmetallism--a type of money of interest in monetary theory, but one which has never been used in practice. Occasionally there are instances where two or more kinds of commodity money circulate side by side without being tied together by any legal ratio of equivalence,each kind of money circulating at varying market values in terms of the others. When there are only two kinds of money of this type, the system is called a dual standard, and, when there are more than two, we shall call it a multiple standard. Historically speaking, many different metals have been used as standard money: iron in ancient Sparta, tin in ancient Syracuse and probably also in early Egypt, copper in early Palestine and in early Rome, and brass until recently in many parts of China. In modern times, however, monometallism has been based mostly on the so-called precious metals, silver and gold, with an increasing preponderance of gold since the latter part of the last century. The legal restrictions on the exportation of silver from China imposed by the Government in 1934 removed China, strictly speaking, from the silver standard. The gold standard is the only monometallic standard of importance in the world today. There is, however, no essential difference (so far as fundamental economic principles are concerned) between the gold standard and the silver standard or any other monometallic commodity standard. STANDARD FIDUCIARY MONEY The nature of standard fiduciary money is somewhat more difficult to explain. A fiduciary money standard is one in which the money value of the monetary unit is substantially greater than the value of the material of which the monetary unit is made. India, for example, was on a fiduciary money standard from 1893 to 1898; for the monetary unit during that time, namely, the silver rupee, in which India's prices were expressed, had a money value substantially greater than the value of the silver it contained, while its value was not tied to the value of gold at a fixed rate. During that time the value of the rupee did not change with changes in the value of silver or with changes in the value of gold, but it responded, independently of the value of gold and silver, to variations in the demand for rupees and the supply of rupees. The greenback period of the United States currency from 1862 to 1879 was a period of a fiduciary money standard, and, during the World War, when all gold standard countries gave up the gold standard, fiduciary money standards were in operation nearly everywhere. In September, 1931, when the Bank of England suspended gold payments, England went on a fiduciary money standard, and, at this writing ( 1935), fiduciary paper money standards exist in the great majority of the countries of the world. The nature of these different kinds of standard money will be considered later. NON-STANDARD MONEY Non-standard money is comprised of various kinds of fiduciary money, the value of which reflects the value of the standard money. The supply of non-standard money in circulation is limited. This money, which consists chiefly of bank notes, government notes, fractional coins and unitary fiduciary coins like the American silver dollar, is usually convertible on demand into standard money, or its gold or silver bullion equivalent, and is accepted the equivalent of standard money in payment of taxes and other government dues. In these ways its value is maintained at a par with standard money. In recent years gold coins have practically disappeared from circulation throughout the world and the great bulk of the money in active circulation now consists of non-standard money.