BANKING
IMAGINE that you are a druggist in a small town. Suppose that a woman
comes in to buy two ounces of camphor and in exchange gives you three
eggs. In a few moments, perhaps, a man enters to buy a safety razor and
brings with him wheat enough to pay the bill. Another, again, wishes to
trade a turkey for a fountain pen. You can readily see the inconvenience
to which you would be put in such exchange of actual commodities; yet
this was the method used in primitive times, a method called _barter_.
To overcome the inconvenience of barter, as civilization advanced, it
became necessary to establish a common medium of exchange, which could
be accepted for anything one had to sell and with which one could buy
anything he wished. This is what we call _money_. To meet the
requirements, money must not be bulky, must be durable, and must not
readily change in value. In civilized countries gold and silver are the
bases of exchange.
But gold and silver are heavy and inconvenient to carry about in large,
or for that matter in small, quantities, and for convenience the
following kinds of paper money have been established: