The develop

standard.

the ox to 20 raccoon skins; a third may use the fur of the mink as his basis of comparison; a fourth, having an assortment of skins, might offer 2 bearskins, 6 raccoon skins, 10 mink skins, and 15 skunk skins. With such ment of a a money it is difficult to come to a conclusion in trade. Commercial transactions become involved; the bickering necessary to a sale is a long process. Exchange with such a money would be little better than barter. Metallic money may quite as much encumber a transaction. Before the development of a system of exact coinage the money metals often had stamped upon them marks of private houses or of government which guaranteed their fineness. They were then clipped up or cut into pieces to serve the purposes of the transaction in which they were used. The illustration on the next page is a copy, slightly reduced, of a Japanese sheet of silver bearing such marks of guarantee; in whatever way it might be cut, each piece would still carry with it a stamp. After a system of exact coinage was introduced, the problem of the different values placed upon each metal had still to be solved. A gold coin and a silver coin might each bear the stamp of "one pound sterling," yet each would pass at a different valuation. Each metal added to the currency increased the confusion. Attempts have been made to avoid this trouble by using a fixed legal ratio between coins of different materials. Such devices, however, have often proved futile, for traders were constantly passing judgment on the comparative values of the coins used, and when the values of these did not correspond with the ratios intended, each stipulated the metal he would receive in exchange. After many failures, an expedient was hit upon which allowed several kinds of money to be used at the same time and all of the estimates of value to be compared with one metal. This was done by what is known as "the establishment of a standard." In a complex system of money, the standard is a coin composed of a certain amount of metal of a particular kind, having

prescribed weight and fineness, for which all other coins may be exchanged at a fixed ratio. The weight and fine

ness of the other coins are also prescribed, but it is by a process known as redemption that their relative values and ratios of exchange are maintained. It is this device that lies at the foundation of modern graduated systems of

money.

system.

As before observed, the evolution of the modern money system is a long and involved process, one dependent upon the development of higher intelligence, broader The decimal association, and improved methods of social, political, and industrial cooperation. With modern methods even barter would not be as cumbersome as money exchange under more primitive systems. In fact, modern facilities for comparison of wants and of goods by advertisement and other means of intelligence, allow of many things being exchanged by a system of barter in preference to sale and purchase. Some newspapers and circular publications are devoted to this, and their support is the best testimonial to their success. With all our improved processes, however, with all our modern adaptations, there are still many of the old difficulties that persist. A comparison of the complex, lumbering English system of money with our own will serve to illustrate the economies introduced by later experience and better adaptations. Exchanges and accounts in pounds and shillings and pence necessarily burden English commerce with an enormous expense of time and energy. It is a burden similar to a tax

on trade. If the amount of time that is saved to our nation by the decimal system of money were to be computed, the result would be startling. Let us assume that, by means of the decimal system, twenty minutes per day were saved to those engaged in commercial transactions and accounts; with 5,000,000 people employed in this manner, there would be an economy of over $100,000,000 per annum. In the United States, however, we are still encumbered by older systems of weights and measures. It is to be hoped in the interest of economy that a decimal system

may ultimately be adopted for these calculations. Another economy in exchange that has been worked out by Americans comes through our broader social, political, and industrial organization. Throughout the United States and Canada we have practically one standard and one system of money. The business of this Continent is freed from the multiplicity of computations necessary to deals in Europe and other parts of the world. Gradually the world is working toward uniformity in standards and uniformity in monetary systems. The result is a higher economy-increased facility in making commercial judgments, and increased advantage in commercial exchange.

THE MONEY SYSTEM OF THE UNITED STATES

The "dollar"

The central idea of the American money system is the "dollar." What is a dollar? This question has been the subject of volumes of discussion. The answer -The central to the question has become involved in a wilderfact in our ness of theory-lost in a maze of abstractionssystem. as a result of which the reader is led to believe that there is great difficulty in understanding just what a dollar is. Fortunately we do not have to read all this literature and wrestle with all the hypothetical problems propounded. The whole matter is settled by one section of the United States statutes. The Act of February 12, 1873 (Sec. 14), establishes "25.8 grains of gold" fine (or 23.22 grains of fine gold), which bears the required stamp and impress. The statute says that this is a dollar-not that it resembles a dollar, or that, for the purposes of discussion, it may be considered a dollar, but that it is a dollar. Furthermore, the statute again cuts off all controversy regarding the worth of a dollar; for it says that the dollar (the printed piece of gold containing 25.8 grains of gold fine) "shall be the unit of value" in our money

900

1000

system.

1000

the United States.

But what about the other forms of money in our complex system? In the first place, there are six kinds of gold Gold coins of coin, viz., the "dollar," the "quarter-eagle," the "three-dollar" piece, the "half-eagle," the "eagle," and the "double-eagle." What about these? They must contain exactly the proportions of 1, 2, 3, 5, 10, and 20 in weight of gold of uniform fineness (100%) The statute does not provide how much the several pieces enumerated shall be worth. But the weight and fineness of metal being established for each, they pass in the community and are "valued" by business men at $2.50, $3, $5, $10, or $20, as the case may be. That is, a piece of gold which has 51.6 grains of gold is valued at just twice as much as a piece containing 25.8 grains. If, therefore, the latter is one dollar, the former would be valued at $2. They all pass "at par" by virtue of this exact proportion of gold having the same quality and fineness, and thus the "three-dollar" gold piece will pass interchangeably for three "one-dollar " pieces.

1000

We also have in our system "silver dollars," "halfdollars," "quarters," "dimes," etc. The statute prescribes Silver coins just how much silver there shall be in each, of of the United fine, and what stamp and impress shall be States. put on them. The law does not attempt to prescribe how much these coins shall be worth; it simply makes provision for their form, weight, and fineness. The Government also holds itself ready to exchange a silver "dollar" for a gold "dollar," and with this lets each man decide for himself how much it is worth.

Minor coins are also a part of our metallic money equipment. The five-cent pieces, "nickels," and "cents" add to convenience in making exchange. "What is a nickel'?" or "What is a cent?"

Minor coins.

may be determined in the same manner as "What is a silver dollar?" They are pieces of metal, of definite form, weight, and quality, which the Government agrees