The group policy usually covers only the risk of death, but may include other risks. Premiums on group insurance are lower than in other kinds of insurance, and medical examination is not required if the protection is only against the risk of death. All the great life-insurance companies will insure on the group plan. Many bankers, college trustees, and manufacturers have taken out group insurance for their employees.

Summary. Insurance is protection against risks. The insured receives what he purchases, whether or not misfortune comes to him. Fire insurance is the oldest kind of insurance. It is now regarded as a part of the necessary expense of business. Life insurance has become prominent since the middle of the last century. The contract between insurer and insured is called a policy. In life insurance these policies are ordinarily straight life, limited-payment life, or endowment. Life insurance has a scientific basis in the mortality experience tables. Insurance against old age, accidents, and sickness are among the more recent kinds of insurance. Insurance of certain classes of working men is compulsory in Germany and England. Some American states require employers to insure their employees against such accidents as may happen while actually engaged in their duties.

TOPICS FOR DISCUSSION, DEBATE, AND SPECIAL REPORTS I. Some of the great railroad systems insure themselves against fire. Why might it not be a wise policy for a grocer to place the same amount in his bank each year that insurance would cost him and thus insure himself? Is there any difference between his risk and that of a railroad company?

2.

Make a list of varieties of insurance not mentioned in the text. What are the advantages of these kinds of insurance? What are the disadvantages, if any?

3. Should a man twenty-five years of age insure his life on the straight life, the limited payment, or the endowment plan? What are the advantages of each? Which plan would be better for a man fifty-five years old?

4.

5.

What fraternal organizations having lodges in your city insure their members? What kinds of insurance do they provide? Is any insurance of workmen required in your state? Give the principal requirements of the law. What do the employers think of it? The employees?

6. How does insurance differ from gambling?

7.

Some people have said that in life insurance a person has to die to win. Show the fallacy of this argument against life insurance.

CHAPTER XVI

MONEY

What is Money? Whatever passes freely from hand to hand in the purchase of goods, or services, or in payment of debt is money. In colonial days wampum and tobacco were so used. They were money, because they did the work of money. Now coins or notes issued by the government are money; so are bank-notes issued by banks under authority given by the government. Checks and drafts are not money, because they do not pass freely. A dollar bill will be accepted anywhere without regard to the character of the person who offers it. A check or draft ordinarily will not be accepted for the purchase of a railroad ticket or for postage stamps, and an unknown person always has difficulty in using checks or drafts.

What Money Does.-Money performs three services:

I.

2.

It serves as a medium of exchange.

Money is a measure of value.

Exchanges may
Barter was em-

3. It is a standard for deferred payments. Money as a Medium of Exchange. take place without the use of money. ployed long before money was known. Barter, or the direct exchange of one thing for another, is even now frequently employed. In the rural districts eggs and butter are taken to the store and exchanged for coffee and sugar. Even in the city some newspapers have an "exchange" column, where those who have articles they do not need

may advertise to exchange them for goods which they desire. Barter is inconvenient because the person who wishes an article frequently cannot find another person who both desires the article to be bartered and has something acceptable to offer in exchange. For example, you may have a bicycle which you wish to exchange for a cornet. There may be difficulty. in finding a person who wants a bicycle and has a cornet. Then there is lack of uniformity in the values of articles. The cornet may be worth two bicycles and something has to be paid "to boot."

Money overcomes all these difficulties. It is in universal demand and can be offered in such units as may be desired. Every one, except a miser, wants money for what it will purchase. It may be spent for present wants or kept to supply future wants.

Money as a Measure of Value.-To-day values of goods and services are commonly measured in terms of money. When we say that a horse is worth $200, a cow worth $85, and a dog worth $1, we measure all these by a common standard. Values may be measured in terms of a standard which is not used as a medium of exchange. In colonial times values were expressed in terms of English money, but exchanges were effected by many varieties of foreign coins. In some parts of the United States values are still expressed in terms of shillings, though there are no shillings now in circulation in the United States.

Money as a Standard for Deferred Payments.-Goods or services may be bought now and payment made at some time in the future. Justice to both debtor and creditor demands that the purchasing value of money should change as little as possible. A debt for $100, contracted in 1900

and paid in 1920, would not have returned to the creditor the purchasing power which he delivered in 1900. A debt for $100, contracted during the World War and paid now, would require the debtor to return more purchasing power than he received. Changes in the value of money always injure either debtor or creditor.

Qualities Necessary. for Good Metallic Money.-A metal to be used as money should possess large value in small compass. It should exist in quantities sufficient to furnish the necessary amount of money. In the second place it should have stability of value. Absolute stability of value is impossible, but it should be a metal which differs in value as little as possible from time to time. Another necessary quality is durability. A good metal for monetary purposes must be one which is easily recognized and difficult to counterfeit. This quality is known as cognizability. Other desirable qualities are homogeneity, meaning that each unit of a certain weight and fineness must be like any other unit of equal weight and fineness, and divisibility, which means the ability to be divided easily into units without loss of value.

The qualities mentioned above attach especially to gold and silver, though more particularly to gold. Gold has become the recognized standard of all the great commercial nations of the world, silver being retained as "token money," or change.

Coinage. When metals were first used as money, they passed by weight. The names of such coins as the English pound, the Jewish shekel, and the Greek talent show that they were originally measures of weight. Coinage became an official guarantee of fineness and weight and did away