They deny that there is any other basis for the value of money than the cost of the material that is in it.

Money made of paper, on a printing press, has a cost almost negligibly small, and, therefore, they say it can have no value.

The facts that it does circulate and that it is treated as if it had value are explained by the cost-of-production theorists as follows: while the paper note is a mere promise to pay, with no value in itself, it is accepted because of the hope of its redemption, just as any private note.

Depreciation, according to this view, is due to loss of confidence; the rise toward par measures the hope of repayment.
Taking a very different view, the extreme fiat-theorists assert that the government has unlimited power to maintain the value of paper money by conferring upon it the legal-tender quality.

The meaning of _fiat_ is "let there be," and the fiat-money advocates believe that the government has but to say, "Let there be money," to impart value to a piece of paper.