What Is Money? (1947)

[Music] $2.98 that's how much money it will take to buy a gallon of paint it's Friday morning and Tom Havens is to buy the paint after school today to make the purchase his father gives him a $5 bill a crisp new $5 bill that he received at the bank yesterday this particular piece of money is just starting in circulation what will happen to it what will it be used for what can money be used for what is money anyway after school the $5 bill goes to a hardware store where Tom uses it to buy the paint this is one of the most common ways in which we all use money as a medium of exchange for goods Tom exchanges a certain amount of money for a gallon of paint the clerk naturally accepts the money and he gives Tom a smaller amount of money in change and so the $5 bill has found its way into this cash register but it doesn't stay long it's going to be used to pay Mr Kelly an electrician for work he has just done in the store the store is not paying for wire or fixtures but for the electrician special services this is another use for money as a medium of exchange for services as well as for good the $5 bill is moving fast that's because it's so convenient to use in business transactions in fact it's hard to imagine doing business without money yet for thousands of years people did get along without money in primitive days living was simple and each family produced whatever it needed the first kind of business was barter a good stone cutter for instance might make a few extra tools and simply trade them for Furs and other things he wanted it was easy there was no need for money even today barter has its place not long ago Tom Havens got a spotlight for his bike by trading a catcher mitt for it swapping like this works well between friends but what would you trade in a hardware store for a gallon of paint and how would the store owner get the paint and the other Goods he sells what could he trade with all the people who had a hand in transporting the goods to his store what could he possibly swap with all the stockholders of the hundreds of factories that produced the goods how could he barter with every individual Workman who played a part in the manufacturer of each article no life today is too complex people are too dependent upon each other jobs are too highly specialized for us to do business by barter that's why we depend on money as a quick and easy medium of exchange thus instead of doing a certain amount of electrical work in exchange for gasoline Mr Kelly pays for the gas with yes the same $5 bill he received at the hardware store this convenience of modern money has evolved from an age-old search for a satisfactory medium of exchange out of the simple barter of primitive people spearheads became one of the first articles used as money shells have also served as money wam was used by the American Indians and hundreds of other articles have been money to various people at various times but none of these met all the requirements of good money money should be something of value yet who but a huntsman has any use for spearheads the value should be obvious and uniform who but an expert knows what this fur Pelt is worth money should be easy to carry about Metal rods certainly are aren't money should be divisible how do you make change when the price is half a cow money should be durable too much salt money got caught in the rain out of such trying experiences gold and silver emerged as the most durable most convenient most satisfactory money for greater convenience men started silver coins with values imprinted on them later governments took over the exclusive function of coin money because unscrupulous men began to cover cheap metal discs with gold and silver plating so today in the United States any money is counterfeit and so worthless unless issued by the federal government and anyone who knowingly tries to spend counterfeit money may be fin a large amount and sent to Jail the coins we use are made in one of the three mints of the United States Treasury located in San Franc Francisco Denver and Philadelphia and from the Bureau of Engraving and printing in Washington comes our paper money including of course the $5 bill of this story this represents the final stage in the evolution of modern money for while metal coins are handy for dealing in small amounts of money when transactions require larger amounts paper money is far more practical a $5 bill for example is much easier to handle than say $5 in dimes and just imagine buying something that costs $100 and paying for it with 10,000 so the values of the money we use every day are the values fixed by the government the paper bills and even the coins are not in themselves actually worth the amounts they represent their face values however are guaranteed not only by huge reserves of gold and silver but by the stability of the government which fixed those values as long as people remain confident that our government is strong and secure they will continue freely to accept and spend its money without questioning the value as they have done with our $5 bill which is now about to move again because Mrs Moore has come a check a check is not money it is one kind of substitute for money it's value is guaranteed not by the government but by the person who signs it since the man at The Filling Station knows Mrs Moore he is willing to take her word that she has enough money in the bank to make the check good so he cashes it for her Saturday morning finds the $5 bill still in Mrs Moore's purse how will she use it good morning may I help you yes can you tell me the price of those bookends in the window yes that pair is 875 and most attractive I'm afraid that's more than I care to spend do do you have a cheaper pair I do have one pair left that's an exceptional value it's really worth 650 but it's on sale at just $5 I'll take them please they're very goodlook and certainly worth $5 worth $5 yeah since the value of our money is fixed by the government we use it as a standard for measuring other values so money is not only a medium of exchange but also a standard of value at 1:00 Saturday afternoon the $5 bill is transferred from the cash register in the gift shop to the pay envelope of Virginia height the clerk Who Sold Mrs Moore the book ends and when Miss height goes to spend the bill she learns how money serves still another purpose hello do you want to make another payment on your radio well yes but I see the price has gone up since I bought it well don't worry about that you have to pay only the original price of $30 oh I'm glad to hear that your balance is just $15 I was so sure the price when I bought it was only $30 so we see how money serves as a standard for future payments a yard stick by which we measure the value of anything bought or sold to be paid for in the future but what of the $5 bill soon its Adventures take a strange turn this radio shop is where Tom Havens Works after school and on Saturdays when he's finished his work for the week he gets a $5 bill as we have seen it could be the same $5 bill his father gave him to buy the paint and where did his father get it from the bank and it's going back there Tom deposits the $5 bill in his savings account he deposits his money every week storing it up for his future needs s this way he's using money as a storehouse of value thus our $5 bill has completed one round trip from the bank and back Tom first used it as a medium of exchange for goods Mr Kelly received it as a medium of exchange for services it was convenient for him to carry around and use for any business transaction and no one ever questioned that it was worth $5 because its value has been fixed and guarant guaranteed by the government when Mrs Moore made her purchase she used money as a standard of value and Miss height found that money is also a standard of future payments when the bill returned to Tom he used it as a storehouse of value now it's back in the bank but it will pass through many many more hands before it is worn out and withdrawn from circulation it may even go along with some World traveler who will soon exchange it for an equal value of money of some other Nation for modern money convenient to use Easy to recognize and universally accepted for the value fixed by a stable government it is money which makes possible our complex International Society of business trade and [Music] travel [Music]