IF MONEY is but an accounting instrument between buyers and sellers, and has no intrinsic value, why has there ever been a scarcity of it? The answer is that the producer of wealth has not been also the producer of money. He has made the mistake of leaving that to government monopoly.

If you wish to trade one thing for another thing, even Steven, you need only the consent of the other party, do you not? This shows that trading is essentially a private affair. Now if you wish to acquire something from another and give a receipt therefore, it is still solely up to you both, is it not? A receipt, of course, is not money, but we are getting warm. Keep thinking about yourself and the other fellow and don't bother about any outside power.

Suppose the other fellow says, "I'll accept your receipt if I can give it to someone else in exchange for something I need." What would you do? Take your time. It took our ancestors several centuries to figure that one out.

Our ancestors hit upon the scheme of depositing gold and silver and other valuable things with goldsmiths and silversmiths, who in their turn gave the depositors warehouse receipts, which they could sign over to someone else, who could assign it to another, and so on. Later they got to making the receipts out to bearer, and that obviated the need for signatures. Thus the receipts circulated without coming back to the warehouse. Most holders were not interested in the metal in the warehouse, but everyone wanted a medium of exchange. This was the birth of currency money.

Now the warehouseman had some inside dope. Said he to himself, "Since most of the receipts never come back, why can't I issue some without deposits?" He tried it, and, by golly, it worked. That was the beginning of "phony" money. The tradesmen were giving actual values in exchange for the receipts, and this kept them sound. But the warehouseman put them out with nothing back of them, and, thus, invented inflation.

That initial dishonesty was but the first of an unbroken chain of perfidies that have been perpetrated down to the present day in the record of money, both while money was a private affair and after it became a political monopoly. But this history of deception demonstrates that anything that people believe is money serves as money as long as it is believed. Thus were men intrigued out of barter into money exchange by illusions, and even today a monetary system need not be sound to cause it to be used.

After these side remarks, we come back to the unanswered question—what would you do if the other fellow wanted a receipt that he could pass along? Of course we want an honest solution this time, not a tricky one. You must write your receipt so that it will be acceptable to a third party whom you don't know and who wants to pass it to another, and so on. Obviously, you cannot write the receipt in terms of things, because the other fellows might not want those things. What's that? You say you'll have to talk it over with the other fellows? That's just what the valun plan proposes. The valun proposal is merely a plan for a convention wherein a sizable number of traders get together and agree among themselves how to write receipts for goods and services to be exchanged among them and then set up the machinery for bookkeeping and clearing those receipts. It merely means carrying out private agreements and understandings without bothering about politics or any power outside the traders themselves.

If, now, you are disposed to get together with other persons to build a personal enterprise monetary system, you may have concluded already that the basis of a true monetary issue is not a promise to pay, but a promise to accept. The purpose of money is to permit buying. Therefore it can spring only from a buyer and, to be consummated, must be accepted by a seller. Obviously, there must be some agreement involved. The only pledge the buyer can make, and therefore the only one a monetary transaction can imply, is that the buyer will accept the money in exchange for his goods or services at the best price he is able to get when, as a seller, it is tendered to him. No price for such goods and services can be agreed upon, since the buyer does not know the condition of the market for his goods when he shall be called upon to sell, nor does he know who the buyer may be. The buyer merely pledges, when he issues money, that he will in turn accept it in exchange for his goods or services at the best price he can get when it is tendered to him. This common pact among all traders in a monetary system is the only pact underlying money. Nothing further is needed and nothing can be added.