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 central idea of the American money system is the "dollar." What is a dollar? This question has been the The "dollar" 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" 100% 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 avoids all controversy about how much a dollar is worth; it simply says that the dollar (the printed piece of gold containing 25.8 grains of gold 1900 fine) "shall be the unit of value" in our money system.

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, 24, 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.

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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.

Minor coins are also a part of our metallic money equipment. "Nickels," "three-cent" pieces, "pennies," etc., add to convenience in making exchange. "What is a nickel?" or "What is a penny?" 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

to exchange for gold coins at the rate stamped on their faces.

Paper money in circulation.

Besides the gold, silver, nickel, and bronze metallic moneys there are nine classes of paper moneys in circulation, each of which has a definite provision for form and design. Paper money is issued in denominations of $1, $2, $5, $10, $20, and higher multiples. Each is in the nature of a promise of the Government, directly or indirectly, to deliver the number of dollars (gold) for which it is issued. The United States notes (greenbacks) are promises of the Government States notes to pay to the holder a definite number of gold or greenbacks. or silver dollars "on demand." For example, a "two-dollar greenback" is one which has written upon it the promise of the United States to pay to the bearer on demand two gold or silver dollars. Silver dollars, however, are exchangeable for gold whenever gold is desired. Therefore it is entirely optional with the holder as to which will be received.

1. United

2. National bank-notes.

A national bank-note is a promise of a national bank to pay to the holder, or bearer, on presentation, the amount named in the bill in legal-tender money of the United States-i. e., in gold, silver coins, or greenbacks. This makes the bank-note indirectly convertible into gold at the option of the one owning or holding it.

The Government, recognizing the inconvenience of carrying about a large fund of gold, has made provision for the deposit of gold funds in the Treasury, either as coin or bullion, in any amount in which they may be accumulated, against which an equal amount of gold certificates, or certificates of gold deposit, is issued. Thus one holding the certificates may, "on demand," have the gold "dollars" or the money value of bullion deposited.

3. Gold certificates.

The silver certificate is issued for a similar purpose.

4. Silver certificates.

Silver money is about sixteen times as heavy as gold money. The carrying about of large funds becomes impossible; even small sums are very inconvenient to handle. By allowing a deposit to be made and certificates of deposit to circulate as money in their stead, the public is served in every manner the same as by the use of the coin. At the same time, if gold is preferred, they may be exchanged for gold when presented for payment.

5. Treasury notes of 1890.

Similar privileges were formerly given to owners of silver bullion. Instead of requiring the owner to have his metal coined before putting it into circulation, the Government allows him to deposit the bullion at the coinage value and receive certificates which entitle him to withdraw silver coin. Thus the Government has the metal for coinage if occasion requires, but is not put to the necessity of coining it. The certificate is indirectly exchangeable for gold "dollars" in the same manner as "silver certificates." The process is only one step farther

removed.

certificates.

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The holders of small denominations of "greenbacks find that it takes a long time to count out large sums with accuracy. As a means of avoiding this, small 6. Currency bills may be deposited to the amount of $10,000 or multiples thereof, and one or more bills or currency certificates" may be issued to represent the amount deposited. Thus, for the transfer of $1,000,000 it would require only one hundred bills of the lowest denomination. These, as may readily be seen, are indirectly exchangeable for gold.

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Fractional currency notes were issued for small change during the civil war when gold and silver were scarce. 7. Fractional They were issued in fractions of a dollar, and were derisively called "shinplasters." They have been canceled as fast as presented at the Treasury, but there are still about $15,000,000 outstanding.

currency notes.

8. Old demand notes.

Old demand notes and coupon interest notes are forms of currency similar in character to the greenback, except that the latter were made to bear 9. Coupon in interest; the interest obligation is represented by a coupon attached to the bill itself. They are in the nature of promises of the Government to pay gold or silver in exchange on demand.

terest notes.

With none of these forms of money does the Government attempt to say how much it is worth. It simply determines what a "dollar" is-i. e., it presents that a The uniformity of value dollar is 23.22 grains of fine gold with one-tenth in our system. of alloy added to prevent abrasion. It then agrees to exchange all forms of money, other than gold, for coins of that metal, and supplies itself with a reserve fund of gold to this end. The public are left to place their own value on the gold "dollar" as well as on all other coins and bills in the system. The process of redemption operates to make the estimates or valuations of all kinds of dollars alike. The value of a "dollar" of any kind is therefore the value of 23.22 grains of pure gold.