An Acceptable Form of Payment

April 15, 2015 10:19 pm Published by

A farmer, whose land holdings grew ever closer to the boundaries of an expanding metropolis, patiently waited for the right time to sell his land. When that day came, he and his family became instant millionaires. Set for life, he placed his money securely in the bank, and, true to his disciplined demeanor, did not touch it. Within five years through the wonders of inflation (in this case, hyperinflation), the sum he had received for his lands and which he still retained safely in the bank, was an insufficient sum with which to purchase a bicycle. From the moment I first heard this anecdote over 30 years ago – purported to be a true account of an Argentine farmer – I have maintained a fascination with money. What is money? Why is a piece of otherwise worthless paper valuable? Why is the brown one more valuable than the green one? Why does it increase or decrease in value?

Suffice to say, that the 500 words allotted to me here, (combined with my limited understanding of the subject), make this article an unlikely place for an in depth analysis of currency. For the purpose of this story, let’s accept that money has value simply because the issuer of the note says it has value. Think of the $20 bill in your pocket, as a cheque drawn on the bank account of the Government of Canada. We trust the issuer, and therefore proceed to carry on our lives accordingly and trade the money in our pockets, for the goods on the shelves on a daily basis. All this, is but a preamble to a sign I saw posted as I waited in line to renew my passport. The sign, was entitled “Method’s of Payment”, and underneath the acceptable methods were bulleted. The last sentence on the sign read in bold: Cash is not an acceptable form of payment.Notwithstanding that I understand there is a convenience aspect behind the decision to decline a cash payment, if ever there was a place that ought to honour currency, it is the place of business of the issuer of that currency. That they do not, is akin to me giving you a signed IOU for $100, then telling you sorry, I do not accept that form of payment when you try to collect at a later date!

Money, is a complex universal interest. We all need it. Most of us complain we don’t have enough of it. Most of us would give all of ours away to buy one more day with a loved one. Yet most of us leave our loved ones behind every day to make more of it. There is an appropriate balance there to be achieved, one that many, myself included, probably fail to strike. Nonetheless, considering how we will manage to sustain ourselves for the balance of our life is a necessary exercise – particularly for those of us without an indexed pension! Understanding how money works, why the government ought to honour it, and why it might not be the wisest means of storing wealth is also useful. Our Argentine farmer friend would surely agree.

Thanks for reading,

Jeff

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