Chapter 1: Reason for the Use of Money

Peoples who have few products for commerce, like the savages, and civilized peoples who only have two or three types, trade by means of barter. Thus, the caravans of Moors who go to Timbuktu in the heart of Africa to barter salt for gold do not need money. The Moor places his salt in a heap; the Negro, his powder in another. If there is not gold enough, the Moor takes back some of his salt or the Negro adds to his gold until the two parties agree.

But, when a people deal in a very great number of products, a money is necessarily required. For an easy to transport metal spares many expenses which one would be obliged to encounter, if he always proceeded by means of barter.

All nations having reciprocal needs, it often occurs that one may have a very great number of products for another and the latter very few for it. While, with respect to some other nation, it is in the opposite situation. But, when the nations have a money [currency] and operate by means of selling and buying, those which take more products would balance accounts or pay the excess with money. And there is this difference, that, in the case of buying, commerce is conducted in proportion to the needs of the nation which demands most; while, with barter, commerce is conducted solely within the extent of the needs of the nation which demands least. Otherwise, this last would be under the impossibility of balancing his account.

Chapter 2: About the Nature of Money

Money is a sign which represents the value of all commodities. Folk adopt some metal in order that the sign should be durable (a); that it should be worn out slightly by use; and that, without perishing, it might be capable of many divisions. They selected a precious metal so that the sign should be easily able to be borne about. A metal is most fit for being a common measure, because folk can easily reduce it to the same measure. Each state places its own imprint on it, so that the form would agree with the measure and weight, and so that one may know the one and the other by mere inspection.