Metal As Money

!±8± Metal As Money

The use of metal as money stems from a number of advantages. First, metals, particularly gold, are virtually indestructible. Second, such metals can be melted and cast into certifiable weights. Third, metals possess the attribute of portability. Fourth, such metals are valuable in their own right. Copper, silver and gold coins can be melted down and used for industrial purposes. Compared to paper currencies which have no intrinsic value and, as such, become subject to value manipulation by governments, metallic money of known purity posses a purchasing power that cannot fall below the value of the metal itself. Fifth, metals cannot be created at will. Finally, metals are not only scare but, at the same time, require massive exertion of labor to extract them from the bowels of the earth and refine, and therefore have a floor value.

The first step toward the system of coinage took place when the practice of cutting the metal into pieces of a fixed weight developed. Be it recalled that when metals were used as money at a time prior to the birth of a system of coinage, it was not uncommon to observe the cumbersome practice on the part of merchants weighing the metals before they are able to consummate their exchange transactions so much so that a pair of scales was an essential tool to them in their trade.

Doubtlessly, the coming of a system of coinage marked a very important period in the history and development of money. When made in the form of a coin, money becomes not only a convenient commodity for comparing and storing values but, moreover, it becomes a symbol of the State. A coin is merely "an ingot of metal, of which the weight and fineness are certified by the integrity of the designs upon its surface."