MONEY AND THE MECHANISM OF EXCHANGE 177

presents obvious advantages over other valuables, since its
availability for monetary purposes ‘is more direct when
occasion calls for its use, It has, however, been argued that,
so long as it remains hoarded, it is not more properly to be
regarded as money than gold nuggets lying in the bed of
a stream, though there is an obvious difference in the
availability for monetary uses in the two cases. It is
necessary to distinguish between private hoards, and the
stores of money held by bankers and merchants which
serve as a basis for their operations and a guarantee of their
solvency. These reserves are not idle, for they are effectively
promoting the circulation of goods, the more effectively the
less they are disturbed. Adequate reserves are an essential
to the safe conduct of modern business, and money in a
bank-vault, without which the organisation of credit, which,
in so many ways, enables money to be dispensed with,
could not be maintained, is certainly doing money work,
even when lying undisturbed. It has been well said that
substitutes for money, in its work as a medium of exchange,
can be devised and are used in constantly increasing degree ;
but no substitute can be found to do the work which a
banker's reserve does, so that this is an even more
essential function of money than that of serving as a
Convenient intermediary in exchanges in our modern
business life.
The private hoard is more characteristic of primitive
Peoples than of modern civilised communities. It has,
certainly, much of the appearance, and some of the reality, of
a simple abstraction of part of the existing money supply,
demonetising it as effectively as if it were made into plate or
Srnaments, though the restoration to monetary uses is easier.
In serving to effect a transfer of wealth from one place to
another, or to carry over wealth from one period of time to
another, it does not perform characteristically monetary
work, The addition to the three important functions of
Money, namely those of medium of exchange, common
denominator of values, and standard of deferred payments,
of this fourth function of a store of value seems un-Necessary.
