Uncle Sam: Now, boys, let us see just what we have settled during the four nights we have been talking this matter over.
The first night we learned that gold was the standard of value, the whole world around.
The second night we agreed that gold coin was the only money we had.
The third night we agreed that the only currency that we had and ought to have was gold coin, the foundation and redeemer of all other currency and our token or subsidiary coins. We came to the conclusion and unanimously agreed that neither the United States Notes nor bond-secured bank notes were fit for currency, because not related to business transactions in their origin, that they were unresponsive to the demands of trade, and were five times as expensive as the right kind of currency.
The fourth night we agreed that the only true or correct currency was a credit bank note, currently redeemed in gold coin.
In other words, we agreed that gold was our standard of value, gold coin our money, and that our currency should consist of gold coin, the subsidiary coins and bank credit currency.
Tonight we want to find out, if we can, what Exchange is. This is a mighty important question for probably 90 per cent or nine-tenths of all our business is transacted in some form of Exchange. Mr. Lawyer, I want to put it up to you first. What is Exchange?
Mr. Lawyer: Well, Uncle Sam, the best definition I can give, is to take one thing for or in the place of another. It is illustrated in a way by the old saw, "a fair exchange is no robbery." That describes the act of exchange, but I imagine that what you have in mind is the system or practice of exchange, as carried on today. That practice or system is only a multiplication of transactions where one man takes one thing in place of another. In this connection it means to take one credit in place of another credit; to take one debt in place of another debt. As now developed and applied to the commerce of the world, I would say that the science of exchange is to substitute one credit for another credit, or to make one debt pay another debt.
A debt is what is due from one person to another person. I have a deposit with Mr. Banker there, and I owe Mr. Farmer $20 for a load of potatoes; if I draw a check upon Mr. Banker for $20 in favor of Mr. Farmer, and hand it to him, I have paid my debt to Mr. Farmer with Mr. Banker's debt to me.
Mr. Merchant: Now, Mr. Lawyer, just hold on a minute until I find out a thing or two before we go any further. In fact, I am sure everyone here would like in the outset to find out the same things, except possibly Uncle Sam, who ought to know everything, and is probably omniscient, Mr. Banker, who deals in these things, and you, Mr. Lawyer, who are presumed to know about them, and must know them, as a matter of necessity in your practice. What I want to know is: