136 BANKING THEORIES IN UNITED STATES
the depreciation of the specie with which it has been tied up by
the legal-tender law fixing the latter’s value.
Money is an important agency of exchange, but by no means
essential to it. ‘“When a man sells an hundred bushels of wheat
for $150, and with that money purchases three tons of iron, the
transaction is an exchange of the wheat for the iron.” Money
may be employed as a convenient agent, just as a wagon is used
to transport the goods. But even when it is so employed, “its
real value as an equivalent is not an essential ingredient of the
exchange.” !
And, in reality, the precious metals enter, whether directly or
indirectly, into but a small fraction of all payments. It is through
the credit system that most payments are now made, without
resort to coin, bullion, or any similar equivalent. Commodities
and services pay for commodities and services; men apply their
credits to the extinguishment of their debts.> Money does not
merely yield here to a substitute; it is dispensed with altogether.
“It is dispensed with at the time a purchase is made, by stating
the amount in money of account, and postponing the day of payment;
 it is dispensed with at the day of payment, because the
debt is adjusted or paid by a process which does not require the
aid of gold or silver.” 3
All this argument in support of the notion of an abstract money
of account without tangible representative and in disparagement
of the part played by the precious metals is preliminary to a proposal
 for the complete dissociation of the monetary standard from
coins. Credits, through the cancellation of which payments are
made, whatever be the shape they take, whether bank notes, bank
deposits, or less important representatives of private credit,
“become a general instrument of purchase, not because they are
money, or representatives of money, but because they are the
chief medium of paying debts.” * As such they are in great demand
 by debtors, and it is from this demand that they derive
their value. “It would require all the bank notes thus issued to
purchase the goods, the sale of which created the paper in ex-1
 Colwell, Ways and Means of Payment, pp. 27, 28.
2 Jbid., pp. 188-103. 2 7bid., P-'103- 4 Jbid., p- 195-