2. Commerce is not the exchange of goods for goods, which would be barter; but of goods for money, which is not barter. It will not, we think, be difficult to show that the exchange of goods for money is virtually as much barter as though the goods were directly exchanged for other goods.

The only possible value of money consists in its purchasing power. Money is only worth what it can buy. Just consider. Of what possible use can money be if it be not used to purchase something with? Whether that "something" be commodities, or land, or labour, &c., matters not; the only worth of money is in its power to purchase such page 11 things. True that it may be melted down and applied to manufacturing purposes, but then it ceases to be money, and becomes only a metal. A dollar may be converted into a pencil-case. In its latter shape it is useful, but has no purchasing power; in the former shape, it is utterly useless except by reason of its purchasing power. Now in all commercial transactions, if the money which the seller of the goods receives for them is ever utilised at all, it can only be by the purchase with it of some other commodities. Hence it follows that, virtually, an interchange takes place between the commodities which that seller has sold for money and the other commodities which he has used that money in acquiring. All trade dealings are inevitably attended by the same process. No sale is made by any person without his making, sooner or later, a corresponding purchase. The goods so sold are, virtually and substantially, bartered for the goods so purchased, and the money merely serves as the medium of interchange. In most cases the barter is not effected either directly or at once, and is only completed when the money received for the goods is made use of for some definite purpose. It may for a time be deposited in a bank, but it will not long remain idle. It may for a time be transferred from one person to another as a loan; but, soon or late (in most cases, soon), it is used as a payment in exchange for something, and that something is the "thing" for which the goods originally sold are ultimately bartered.

Occasionally a long time elapses before the barter is completed; as, for instance, when the receiver of the money, instead of using it at once, puts it in an old stocking and hoards it. The completion of the barter is suspended until the owner takes the money out of the old stocking and utilises it. He may use it, let us say, to pay the wages of labour j in which case the interchange is perfected, and the goods originally sold are bartered for labour. In point of fact, the money paid by the buyer to the seller is equivalent to a ticket authorising the holder to receive, in exchange for the goods which he has sold, other commodities to the same amount, of any kind which he may choose, and at any time that he may think fit. The page 12 moment he utilises that ticket the barter is complete, and the commodities which he receives form the counterpart to the goods which he has sold.

The money which the seller receives for his goods would be little more than so many pieces of broken slate were it not for its purchasing power. The consideration for which his goods have been given is not the mere coins, it really is the commodities which those coins will purchase. The mere money itself is utterly valueless, unless it be, sooner or later, turned into commodities, whatever those commodities may be, whether land or labour, raw materials, or manufactured products. If you purchase wheat, and pay for it in money, that money may perchance be used for purchasing a horse, in which case the horse has been, indirectly but no less truly, bartered for wheat. To put it into a more general form, every sale or purchase is a barter of the commodities so sold or purchased with the commodities on which the seller may expend the money received. If money, as money, had any other value beyond its purchasing power, it might be said that every sale or purchase is a barter between goods and money. But money, as money, has no real but only a representative value. The barter really is between the definite goods given for the money, and the undefined goods which that money represents, and which it may at any moment realise. Just as when you buy a ticket for a concert, the consideration given for your money is not the piece of paste-board of which the ticket itself consists, but the musical performance which the ticket represents.

Let us conclude by an illustration. You buy, we will say, a cargo of wheat from New York. Against the bill of lading, &c., of this shipment you accept a bill drawn on you by the seller, payable in England, and probably you pay for this bill in money before you get possession of the wheat. Now, pray observe. The money which you pay for that bill is not sent over in specie to America. It remains in England, to the credit of the banker in New York to whom the bills drawn on you were endorsed. The usual and natural use which he makes of this credit is to draw bills from New York against it, which bills he will sell in America, for a given page 13 number of dollars, to anyone who wishes to make a remittance to England—perhaps to a man who has ordered some Manchester goods, for which he pays by remitting those bills to Manchester. In such case, it is evident that the specie does not leave England, and that, substantially, the American wheat has been bartered for Manchester goods.

Frequently the process is more indirect and circuitous; but, if analysed, it comes to the same thing. For instance, the bills referred to above, instead of being sent direct to England may be sent to Rio Janeiro to pay for coffee; and sent from Rio Janeiro to England to pay for Sheffield steel-ware bought for Brazil. In this case England gets the American wheat, America the Brazilian coffee, and Brazil the English steel. And thus a double barter—something like Capt. Marryat's triangular duel—has taken place without the slightest displacement of specie. Note, moreover, that this is the regular, normal, and nearly universal practice in mercantile operations. Hardly once in a thousand cases are foreign goods paid for by direct export of specie.

To sum up, the truth is that All Commerce is Barter; for it is an Interchange between the Commodities Sold for Money and the Commodities which that Money will be used in Purchasing.