MONEY (OF. moneic, monoie, Fr. 711onnaie, from Lat. inonctit, money, mint, from Moneta, an epithet of Juno. in whose temple at Rome money was coined, from moncre, to warn, connected with nientinisse, to remember. Gk. ,dpiaeos, merimnos, anxious, Skt. since, to re member). The medium of exchange and measure of value. Whatever fills these functions, however crudely, is money. Of all the substances which have been used as money, gold and silver take the first place, and the discussion of money usually has these in view. It is well to remem ber, however, that some of the humbler functions of money are to-day performed by nickel and copper, and that in times past not only other metals. tin, lead, iron, and platinum, have been used as money, but also, especially among primi tive peoples. a wide variety of other objects. Jevons enumerates among other things, furs, skins, leather, sheep, cattle, wampum, eowries, grains. olive oil, tobacco, and salt, as being in use at one time or another for this purpose. Primi tive as these may be. the enumeration seems to emphasize the fact that it is not a substance per se that we designate as money, but a sub stance invested with a certain utility.
So important is this function in modern life that we cannot readily conceive of a society with mit some mechanism to perform it. And indeed from the earliest days of recorded history we find references to money, and there are few among the primitive peoples of our own time which do not possess it hi rudimentary form. The dif ference between the highly civilized nations of modern Europe and America and their early progenitors or the savage tribes of Africa does not consist so much in the fact that we use money and they do not, as in the extent to which it is used. Even though money is re corded as known among the most primitive peo ples, it is then of only occasional use, it does not penetrate into every relation of social life. Peoples whose social organization is based upon slavery and patriarchal conditions have little need for money, nor is the need great among a pastoral or agricultural people when there is little differentiation of occupation. On the other hand, among highly organized industrial peoples where nearly all produce not for individual needs.
but for sale in the market, money is in constant and universal demand.
The primary function of money is that of a medium of exchange; and, if in the theory of money to-day this characteristic receives scant notice. it is not because it is not fundamentally important, but rather because it is comprehended with comparative ease. Other functions are all derived from the primary function, medium of exchange.
Whatever the substance used as money may be it becomes an object of universal desire. In primi tive society the most widely desired object came to be used as money. The fact that an object is universally desired fits it in the first instance for use as money, but after it acquires that func tion it is desired not chiefly for its own sake, but for its command over other things. At an early date the desire for personal adornment singled out the precious metals as money par excellence, but at the present time it is not because gold is beautiful that we desire it. but because as money it procures for us whatever we may desire.
In the second place, money is the measure of value. The acts of buying and selling fix upon the objects bought and sold relative values, and it was only a slight step to extend the conception of value to things not sold or bought, or which are not intended for sale. All things capable of sale can be valued in terms of money. All credit opera tions depend upon this fact. Since the value of the money in use in any society is insignificant as compared with its total wealth valued in terms of money, it has been argued that the func tion of money as a measure of value is far more important than its function as a medium of exchange. And in fact the further we get away from primitive conditions of trailing, the more important does this derivative function become. When all wealth is valued in terms of money barter of a higher order becomes possible. In the new form of barter, however, the exchange of commodities is indirect. Modern commerce is largely based upon it. and while it is most apparent in international trade, where balanees only are settled by the transfer of money, it is no less widespread and fundamental in domestic trade. See CREDIT; BANK, BANKING.