ABSTRACT
It is the payment of debts to both private parties and the government that is said to have prompted the state to initiate money. The emphasis here is mainly on the payment of debts as in tax levies. The state, by accepting the tax payments in a form of money, will sanction its use in the payment of debts among private individuals as well. By this action, that form of money will be accepted as a medium of exchange by all economic agents. It is the state that takes the first step. By accepting its own liabilities in the payments of tax levies the state turns them into legal tenders that will be accepted generally by everyone.
