to the working of the social machine. The growth of confidence in the precious metals and of coins, until the assurance became practically universal that good money could be trusted to have its purchasing power anywhere, must have been a gradual one in human history. And being fairly established, this assurance was subjected to very considerable strains and perplexities by the action of governments in debasing currency and in substituting paper promises to pay for the actual metallic coins. Every age produced a number of clever people intelligent enough to realize the opportunities for smart operations afforded by the complex of faiths and fictions upon which the money system rested, and sufficiently unsound morally to give their best energies to growing rich and so getting people to work for them, through tricks and tampering with gold, coinage, and credit. So soon as serious political and social dislocation occurred, the money mechanism began to work stiffly and inaccurately. The United States and the French Republic both started their careers in a phase of financial difficulty. Everywhere governments had been borrowing and issuing paper promises to pay interest, more interest than they could conveniently raise. Both revolutions led to much desperate public spending and borrowing, and at the same time to an interruption of cultivation and production that further diminished real taxable wealth. Both governments, being unable to pay their way in gold, resorted to the issue of paper money, promising to pay upon the security of undeveloped land (in America) or recently confiscated church lands (France). In both cases the amount of issue went far beyond the confidence of men in the new security. Gold was called in, hidden by the cunning ones, or went abroad to pay for imports; and people found themselves with various sorts of bills and notes in the place of coins, all of uncertain and diminishing value.
However complicated the origins of currency, its practical effect and the end it has to serve in the community may be stated roughly in simple terms. The money a man receives for his work (mental or bodily) or for relinquishing his property in some consumable good, must ultimately be able to purchase for him for his use a fairly equivalent amount of consumable goods. ("Consumable goods" is a phrase we would have understood in
