162 ECONOMIC PRINCIPLES

need, the total needed to purchase the coat can be secured
without inconvenience. The mere introduction of a medium
of exchange of general acceptance, then, removes in large
degree the hindrances to an extension of exchange which
exist in a system of simple direct barter.
In elementary stages of society, no medium of exchange
could come into general use which did not itself embody
value, This provided a guarantee that what was thus
received as a payment could be used to effect payments to
others. In modern developed societies this assurance is
provided without the need for actually embodying value
in the exchange-medium. The growth of mutual confidence,
between the members of modern communities, enables the
exchanges of such communities to proceed with greater ease,
through the employment of forms of acknowledgment of
obligation to pay large quantities of the general medium
of exchange in place of handling that medium itself. The
selection of a medium of exchange by a primitive people
depends on the circumstances of that people. A hunting
people used skins, a pastoral people used cattle, some
agricultural communities employed grain, cowrie shells
and wampum have performed this function, tobacco served
the purpose for generations in Maryland and Virginia, and
the variety of commodities which, at different times and
places, has been used in this way, is very great. With
advance in trade, the metals have generally secured a
preference, especially gold and silver, which form the basis
of the bulk of modern exchange transactions. By their
beauty and comparative rarity, these metals have acquired
value in the eyes of most peoples, and custom and law
have enabled the holder of them to be confident that
they will be accepted in payment by others, and thus
provided an adequate inducement to every one to accept
them from others.
The metals are peculiarly fitted to take the place of the
various other media of exchange just named. They can be
readily conveyed from place to place, and have but small
liability to injury in use, or loss of value by mere lapse of
time. The rarer metals possess these characteristics in a