MONEY.
Demand and supply being common to all commodities, in exchange by barter, there are four variable relations to be adjusted, and, as these adjustments can be made only by compromise, each party endeavors to bar or defend himself against the other by assertions, sometimes loud, frequently false, and generally reiterated. To avoid, in some degree, a practice so detrimental to morals, and so destructive to commerce, money was invented. In other words, gold of uniform quality was divided into pieces adapted to commerce, and issued under Government seal.
As money of gold is an object of highly concentrated demand, and as it does not denote the supply of the commodity of which it consists, it is assumed to be an object of demand only; and correlatively the commodity offered in exchange is assumed to be an object of supply only. Thus the variable relations of exchange are apparently reduced to two. Yet as money is known only by name, and as that is invariable, it is assumed that the demand which it represents is invariable. Thus these relations are apparently reduced to one—the supply of the commodity. Nevertheless, as money of gold consists of a commodity, and as the relations of demand and supply are common to all commodities, and as these are necessarily variable, such money evidently does not represent invariable demand, but, in regard to those relations, varies with every variation of its material.
Money valued for its material, as that of gold, is well suited to the want of confidence that characterizes a semibarbarous state of society; but when knowledge and civilization take the place of ignorance and barbarity, mutual respect and confidence take the place of rudeness and distrust, and, correspondingly,
