Representative money or receipt money is any

medium of exchange In economics, a medium of exchange is any item that is widely acceptable in exchange for goods and services. In modern economies, the most commonly used medium of exchange is currency. The origin of "mediums of exchange" in human societies is ass ...

, printed or digital, that represents something of

value Value or values may refer to: Ethics and social * Value (ethics) wherein said concept may be construed as treating actions themselves as abstract objects, associating value to them ** Values (Western philosophy) expands the notion of value beyo ...

, but has little or no value of its own (intrinsic value). Unlike some forms of

fiat money Fiat money (from la, fiat, "let it be done") is a type of currency that is not backed by any commodity such as gold or silver. It is typically designated by the issuing government to be legal tender. Throughout history, fiat money was sometime ...

(which may have no

commodity In economics, a commodity is an economic good, usually a resource, that has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. The price of a comm ...

backing), genuine representative money must have something of intrinsic value supporting the

face value The face value, sometimes called nominal value, is the value of a coin, bond, stamp or paper money as printed on the coin, stamp or bill itself by the issuing authority. The face value of coins, stamps, or bill is usually its legal value. Howe ...

. More specifically, the term ''representative money'' has been used variously to mean: * A claim on a commodity, for example

gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile met ...

and silver certificates.Robert A. Mundell
The Birth of Coinage
Discussion Paper #:0102-08, Department of Economics,

Columbia University Columbia University (also known as Columbia, and officially as Columbia University in the City of New York) is a private research university in New York City. Established in 1754 as King's College on the grounds of Trinity Church in Manhatt ...

, February 2002.William Howard Steiner, ''Money and banking''
p. 30
H. Holt and company, 1941. In this sense it may be called " commodity-backed money". * Any type of

money Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money are as ...

that has face value greater than its value as material substance. Used in this sense, most types of

are a type of representative money. There is no concrete evidence that the clay tokens used as an accounting tool to keep track of warehouse stores in ancient Mesopotamia were also used as representative money, Denise Schmandt-BesseratTokens: their Significance for the Origin of Counting and Writing
/ref> however the idea has been suggested. In 1895 economist

Joseph Shield Nicholson Joseph Shield Nicholson, FBA, FRSE (9 November 1850 – 12 May 1927) was an English economist. Life He was born in Wrawby in Lincolnshire on 9 November 1850 the only son of Rev Thomas Nicholson, minister of Banbury, and his wife, Mary Anne Gr ...

wrote that credit expansion and contraction was in fact the expansion and contraction of representative money.

, ''A treatise on money and essays on monetary problems''], Chapter VI, Effects of Credit or "Representative Money" on prices
pp. 72–74"> pp. 72–74
A. and C. Black, 1895. In 1934 economist William Howard Steiner wrote that the term was used "at one time to signify that a certain amount of bullion was stored in the Treasury while the equivalent paper in circulation" represented the bullion.

References

{{DEFAULTSORT:Representative Money or Receipt Money Currency Metallism

See also

References