69. The currency of any country consists of every document acknowledging debt, which is transferable in the country.[33]
This transferableness depends upon its intelligibility and credit. Its intelligibility depends chiefly on the difficulty of forging anything like it;—its credit much on national character, but ultimately always on the existence of substantial means of meeting its demand.[34]
As the degrees of transferableness are variable, (some documents passing only in certain places, and others passing, if at all, for less than their inscribed value), both the mass, and, so to speak, fluidity, of the currency, are variable. True or perfect currency flows freely, like a pure stream; it becomes sluggish or stagnant in proportion to the quantity of less transferable matter which mixes with it, adding to its bulk, but diminishing its purity. [Articles of commercial value, on which bills are drawn, increase the currency indefinitely; and substances of intrinsic value if stamped or signed without restriction so as to become acknowledgments of debt, increase it indefinitely also.] Every bit of gold found in Australia, so long as it remains uncoined, is an article offered for sale like any other; but as soon as it is coined into pounds, it diminishes the value of every pound we have now in our pockets.
70. Legally authorized or national currency, in its perfect condition, is a form of public acknowledgment of debt, so regulated and divided that any person presenting a commodity of tried worth in the public market, shall, if he please, receive in exchange for it a document giving him claim to the return of its equivalent, (1) in any place, (2) at any time, and (3) in any kind.
When currency is quite healthy and vital, the persons entrusted with its management are always able to give on demand either,
A. The assigning document for the assigned quantity of goods. Or,
B. The assigned quantity of goods for the assigning document.
If they cannot give document for goods, the national exchange is at fault.
If they cannot give goods for document, the national credit is at fault.
The nature and power of the document are therefore to be examined under the three relations it bears to Place, Time, and Kind.