The commodity which is to be money should have the quality of divisibility
so that the goods in smaller quantities could be purchased. The cows and
goats were not good money because they could not be subdivided into smaller
The good money is one which could easily be cognized. If it does not happen
the counterfeit currency will come into circulation. As a result, so many
problems will rise.
Being a good money a commodity should have the quality of transportability.
The boats, goats and other metallic coins did not prove to be the good moneys
because it was difficult to transport them. On the other hand, the credit money
issued by banks, central bank or by govt. has the quality of transportability.
It is something necessary for good money that it must be durable. If any
commodity gets stale; or it is perishable; or it gets infected such commodity
would not be called as money. In ancient days in Rome the soldiers were given
the salt as their payment. But during rain etc., it would get wet. Accordingly, it
was not good money. On the other hand, the coins and paper currency are the good
money because they are durable.
Good money is one whose all units are alike with respect to their size,
quality and design etc. While the commodity which lacks such all can not be
accorded as good money. As in American colonies the tobacco was used as money.
But it differed in quality. Accordingly, it did not serve as good money. On the
other hand the gold coins were the good money because their size and weight was
same. Again, the paper currency is good money because of standardization.
The good money is one which could easily be melted and stamped. The gold and
silver coins proved to be good money as compared with iron coins because they
were easy to melt.
(8) Stability in
The good money is one whose value is stable. The money whose value goes on to
change will not be considered as good money. As after world war I, German Mark observed a greater fall in its value, people lost confidence in
it. Accordingly it did not prove to be good money.