each piece issued evidence of the weight of pure metal it contains, to be ready alike for present or future use. It is a duty akin to that of providing standards of extension or weight. The action of a government no more affects the value of the metal subject to it than does the provision of weights and measures affect the value of articles measured thereby. When a metal used as money is to be used in the arts, it is usually in the form of coin or stamped bars, the amount used being thereby easily determined. Coinage established, all contracts are assumed to be payable in the unit, or its multiples, which, by agreement of the parties thereto, as well as by the action of the government, become legal tender between them.

METALLIC MONEY OF THE UNITED STATES.

Gold Coins. The coinage of the eagle, having a value of $10, was authorized by the act of April 2, 1792. Its weight was 270 grains; its fineness, 91623 grains. The weight was changed by the act of June 28, 1834, to 258 grains; the fineness to 899.225 grains. By the act of January 18, 1837, the fineness was changed to 900 grains. The act of April 2, 1792, also authorized the coinage of the half and quarter eagles of proportional weight and fineness. Double eagles and coins of one dollar were authorized by the act of March 3, 1849; the three-dollar piece by the act of February 21, 1853. All the coins were to be of the standard weight and fineness.

Silver Coins. The silver dollar was authorized by the act of April 2, 1792. Its weight was 416 grains; fineness, 892.4. The weight was changed by the act of January 18, 1837, to 4121⁄2 grains; its fineness to 900 grains. By the act of 1792 the ratio was I of gold to 15 of silver. By the act of 1837 the ratio established was 1 to 16. By the ratio of 1792 gold was undervalued, and was not used as money. The object of the act of 1834 changing the ratio was to bring gold into use. As by it silver was undervalued the small amount coined went out of use, being more valuable for export as merchandise than as money. By the act of February 12, 1873, the coinage of silver was discontinued, to be restored by the act of February 28, 1878, at the ratio of 1 to 16. By the act of November 1, 1893, the coinage of silver dollars was discontinued.

SYMBOLIC MONEY. BANKS OF ISSUE.

Metallic money being the equivalent, in value, of articles sought in exchange, so far as it can be dispensed with a corresponding amount of capital is discharged from use. It is to-day almost wholly so discharged by means of what may be termed "symbolic money," consisting of bankers' bills drawn against merchandise moving between different countries and widely separated sections of the same country, such bills entitling their holder to that which they represent; of merchants' bills drawn against merchandise moving from producer to consumer in the same country, and of the notes and credits of banks and bankers issued in the discount of the same. An importer of merchandise into the United States, for example, remits in the payment thereof a banker's bill drawn ordinarily upon his correspondent in London, the Clearing House of the world. To provide the means for its payment the banker purchases bills drawn against exports of merchandise equal in value to his own. So far as that exported equals in value that imported no metallic money interposes in the foreign commerce of a country, imports and exports offsetting one another. If the imports exceed the exports in value, both alike being the ordinary subjects of consumption, the banker himself becomes an exporter of merchandise in the form of coin, of the universal equivalent, now gold, equal in value to such excess, all commerce between solvent nations and communities being reciprocal in amount or value. If the exports

exceed the imports in value, the excess comes back in merchandise in the form of the universal equivalent, which, in international commerce, interposes as a rule only in discharge of balances, the transfers of merchandise being almost wholly effected by symbols. These are always payable, whether so expressed or not, in metallic money, in case the holder prefers this to the merchandise they represent, and as a guarantee that such merchandise has a value in gold equal to its nominal amount.

In the exchanges of merchandise between widely separated parts or sections of the same country, as in the exchanges between different nations, metallic money ordinarily interposes only in the payment of balances. The merchandise, for example, moving from Chicago to New York is accompanied by a bill or bills representing its value, the proceeds of which are to serve for the payment of

merchandise of equal value moving from New York to Chicago. Remittances on either side are made by bills of bankers who, to provide the means for their payment, purchase, as in the foreign trade of the country, merchants' bills equal in amount to their own. If the amount, in value, of merchandise moving from one city equals that moving to it from the other, the proceeds on either side serve for the payment of the bills drawn, no metallic money interposing. Bills representing merchandise moving in gross are ordinarily drawn on such time as experience has shown to be required for the distribution to consumers of that which they represent. As they serve for the transfer of the title of their constituent, they perform, as instruments of exchange, all the functions of metallic money.

The instruments for the distribution of merchandise represented by bills from merchants to consumers are the notes, and credits in the form of deposits to be drawn by cheques, of banks and bankers, issued in the discount of such bills. The. two differ only in the manner in which the proceeds of discounts are taken. They are accepted by the holders of merchandise, the makers of the bills discounted, as they will pay their bills at bank equally with coin. As they are convertible into merchandise they are accepted as money by those who have occasion to purchase the same, the use of metallic money, as such, being to reach some other article of merchandise. They are consequently paid out by producers, in whose favor the bills given were discounted, in the purchase of labor and material to be used in new creations of merchandise to take the place, as fast as it is consumed, of that upon the market. By their use by consumers, in the purchase of merchandise, they fall into the hands of the makers of the bills discounted and are returned to the issuers in the payment of the same. As the process of discount at bank consists of a mutual exchange of obligations, so the process of payment consists of the mutual cancellation of the same, but not until they have been instrumental in the distribution of merchandise represented thereby equal in value to their nominal amount. Such illustrations cannot be too often repeated, as they serve to show why metallic money is no longer used, and that it is impossible it ever should be used in considerable amounts except in the discharge of balances, unless indeed a return be made to barbarism in which all methods by which the operations of society are now carried on are forgotten. They also serve to show what an elastic currency is

If

one that measures the means of the people to consume. merchandise be plenty, its symbol, money, will be plenty. If scarce, money will be scarce, the remedy being an increase of merchandise, always to have its symbol, the possession of which entitles the holder to that which it represents.

In the sale of merchandise, the holders of the same, the makers of the bills discounted, receive alike the notes and credits of all banks of good standing, as these will be received at all equally with their own in the payment of their bills. A bank, in fact, prefers to receive in payment of its bills the notes and credits of other banks rather than its own, as, in ratio to the amount so received, specie can be demanded, its own issues remaining in circulation.

The exchanges taking place in the United States afford a striking illustration, the best probably that could be produced, of the degree of the substitution of symbolic for metallic money-capital — and of the advantages resulting therefrom. In 1892 the railroads of the country moved, say, 750,000,000 tons of merchandise, the value of which, at $20 the ton, equalled $15,000,000,000. A portion of this, say one-half, was duplicated, but the value of the net tonnage equalled fully $40 the ton. The value of the tonnage of the Erie Canal, of which a careful record is kept, little or no portion of which is duplicated, and which consists of freight having the lowest relative value, averages $30 the ton. If it be assumed that the waterborne tonnage of the country and that over ordinary highways equals one-quarter the whole, the aggregate for the year equalled 1,000,000,000 tons, having a value of $20,000,000,000. For the transfer of the title of such tonnage two sets of instruments, as has been shown, were used: one of bills for its movement, in gross, from the producer to the merchant; and one of notes and credits issued in the discount of such bills for its distribution, piece by piece, from merchant to consumer. The amount of symbolic money, merchants' bills for distribution in gross, and the notes and credits issued by banks and bankers for distribution, piece by piece, employed in the movement of merchandise from producers to consumers for the year, in the United States, and performing so far all the functions of metallic money, equalled $40,000,000,000, no metallic money directly interposing except in the form of subsidiary coins.

The provision of symbolic money by banks and bankers in the United States, September 30, 1892, according to the Comptroller

of the Currency, equalled $3,100,943,227, as follows: Deposits with National banks, $1,775,251,128; with State banks, $648,513,809; with Trust companies, $411,654,996; with private banks and bankers, $93,091,148; notes of National banks, October 31, 1892, $172,432,146. The whole arose out of the discount of bills to the amount of $3,217,738,732, as follows: Discounts by National banks, $2,153,498,826; by State banks, $654,654,490; by Loan and Trust companies, $330,174,726; by private bankers, $79,310,684. If it be assumed that the bills discounted were drawn for periods averaging fifty days, the total amount under discount for the year was very nearly $20,000,000,000, a sum equalling very nearly the value of the merchandise moving, in gross, during the year, from producer to consumer. Interest, at the rate of 4 per cent., upon a sum of metallic money equal to the provision of the symbolic money, the notes and credits of banks and bankers, would amount to $124,000,000 annually. The saving effected in the matter of interest, whatever it may be, is by no means the chief advantage resulting from the substitution of symbolic for metallic money. Were metallic money to interpose in all transactions, the expense, inconvenience, and risk attending its care and movement would be so great as to reduce transactions in all commercial countries to one-tenth their present volume. Symbolic money is so much more convenient in use that no one, not even the warmest advocate of silver money in the United States, would, if he could get the former, touch a dollar of the latter, or of gold even, if there were piles of it as high as Pike's Peak at every station on every line of railroad between the mining districts of the continent and the Atlantic coast. He would greatly prefer to have his money in the form of bits of paper which he could carry securely on his person, no matter the amount or value, these being convertible into metallic money at his pleasure, or into any other form of merchandise, to be held and cared for by others without cost or annoyance to himself till he had occasion for their use. Metallic has given place to symbolic money for the same reason that cowries or wampum gave place to copper, copper to silver, and silver to gold, as instruments of exchange. It is hardly too much to say that should a merchant in New York accompany an order for 10,000 barrels of flour upon a manufacturer in Minneapolis with gold, an inquest de lunatico inquirendo would soon be held to determine his sanity.