CH. I

THE CLASSIFICATION OF MONEY

5

of Barter as soon as men had adopted a money-of-account. And the Age of Chartalist or State Moneywas reached when the State claimed the right todeclare what thing should answer as money to thecurrent money-of-account—when it claimed the rightnot only to enforce the dictionary but also to writethe dictionary. To-day all civilised money is, beyondthe possibility of dispute, chartalist.

It will be noticed that the money-of-account mustbe continuous. When the name is changed—whichmay or may not be coincident with a change in themoney which answers to it—the new unit must beara definite relation to the old. The State will, as arule, promulgate a formula which defines the newmoney-of-account in terms of the old. If, however,failing a decree by the State, all contracts prior to acertain date are worked out in the old currency, andall contracts subsequent to that date are made in thenew, even so the market cannot help establishing foritself a parity between the two. Thus there can beno real breach in the continuity of descent in thepedigree of the money-of-account, except by a cata-strophe in which all existing contracts are simul-taneously wiped out.

(ii.) Money-Proper and Bank-Money

We have seen that the introduction of a Money -of-Account gives rise to two derived categories—Offers of Contracts, Contracts and Acknowledg-ments-of-Debt, which are in terms of it, and Money-Proper, answering to it, delivery of which willdischarge the Contract or the Debt. The first ofthese prepares the way for the next development,namely the discovery that for many purposes theacknowledgments of debt are themselves a service-able substitute for Money-Proper in the settlement oftransactions. When acknowledgments of debt are