MEDIA OF EXCHANGE.
The advantage which an established medium of exchange has proved to the development of nations has been fully recognized by those who have given their attention to historical questions. Money, using the word in its widest sense, has been called by one writer " the instrument of human association " (Lea), and as such has been stated by another to have been " the means to which modern life has been indebted for its civiliza tion " (Storch).
Earliest ruder forms of commerce can be and arc carried on by a system of trading or barter, the surplus of one locality being exchanged for the surplus in some other line of production of another. The first approach toward a currency was when such products, valuable in themselves, but not those desired by the purchaser, were accepted as an equivalent of the value of other goods, or were taken for a standard of comparison, as when the Newfoundlander, trading skins for powder, estimates each as worth so many codfish, the article which he generally has to sell. Our word pecuniary refers in its derivation to such a condition of commerce, as it is from paws, cattle, which in ancient Italian days must have been accepted as the standard of value and the general representative of wealth in a pastoral people.
Tradition says that later, instead of sending the cattle bodily, which would at times have been inconvenient, merely a piece of a hide was sent, upon it being painted or stamped the number of head agreed upon ; and hence the Latin name for money, pcnunia. By presenting this voucher the purchaser could obtain the cattle themselves.
This was a wonderful step in advance, and established a medium of exchange fulfilling its essential condition—that its value must not be intrinsic, but merely a matter of agreement between the contracting parties. The less its real value, the more perfect a currency does it become. This was long ago noted by Aristotle, who defined money as " that which derives its value through law and custom, and not by nature "—a distinc tion not unfrequently overlooked by later philosophers.
When the ancient Italian drover accepted the strip of painted leather for his fat bullocks, he exhibited a confidence in the uprightness of the purchaser, or a faith in the laws of the state to protect its citizens, in the highest degree creditable to the moral and social condition of his day.
Such transactions can take place, such purely conventional values can be assigned to media in themselves of little worth, only when men and nations recognize and respect the rights of others ; and the more frequent these transactions, the higher becomes the cultivation of the sentiments of justice and fair dealing, the respect for law, and the desire for uniform and established systems of government. To the extent that such a repre sentative of value is accepted as good the intercourse of mankind is facil itated, and those crossings of blood, language, and culture are encouraged upon which, as we have previously said, the intellectual evolution of the species depends. Hence it is that in ethnology a study of the media of exchange current in a nation must always claim a prominent position.
These media have been, and are, very various. We have spoken of the leather money of ancient Italy, whence it extended to the Carthagin ian provinces of Africa or else was borrowed from the latter.
Probably the substance which first furnished a currency in the proper sense of the word was shell. It had no intrinsic value, but came into notice as a means of personal decoration, and from this passed to a widely recognized medium of exchange. The primitive Chinese coins, dating back perhaps four thousand years before our era, were pieces of tortoise shell, which was cut into slips or disks, perforated, and strung on strings. Shells of other species of marine animals were cut into pieces of uniform size, polished, and employed in the same manner by the inhabitants of the Micronesian Archipelago in the North Pacific, by their southern neighbors the Melanesians, by the Indians of California, New Mexico, and Yucatan, and by those of the eastern coast of North America. Among the Algonkin tribes of the latter stock this native money was known as wampum, and in the early days of the colonies it became the accepted currency of the white settlers of New England. In it they made their bargains and paid their taxes to the government (1b1. 36).