6
A TREATISE ON MONEY
BK. I
used in this way, we may call them Bank-Money —■not forgetting, however, that they are not Money-Proper. Bank-Money is simply an acknowledgment of a private debt, expressed in the money-of-account,which is used by passing from one hand to another,alternatively with Mon'ey-Proper, to settle a trans-action. We thus have side by side State-Money orMoney-Proper and Bank-Monev or Acknowledgments-of-Debt.
(iii.) Representative Money
This, in its turn, leads the way to a further evolu-tion of State-Money itself. The Bank-Money mayrepresent no longer a private debt, as in the abovedefinition, but a debt owing by the State ; and theState may then use its chartalist prerogative todeclare that the debt itself is an acceptable dischargeof a liability. A particular kind of Bank-Money isthen transformed into Money-Proper—a species ofMoney-Proper which we may call RepresentativeMoney. When, however, what was merely a debthas become money-proper, it has changed its char-acter and should no longer be reckoned as a debt,since it is of the essence of a debt to be enforceablein terms of something other than itself. To regardRepresentative Money, even when it conforms to anobjective standard, as being still a debt will suggestfalse analogies.
At the cost of not conforming entirely with cur-rent usage, I propose to include as State-Money notonly money which is itself compulsory legal-tenderbut also money which the State or the Central Bankundertakes to accept in payments to itself or toexchange for compulsory legal-tender money . 1 Thus