HG5 0/ ' ■'i'< ^p^ ^M>^«35^ €iS«i f v^^it-' r ■' " T3aKr;-;-;S^4.?*««3^^ i^A""^ iS&v, ^W ?^-:^!^^s^: '•'.^;".5i?§qf"''« 'Mirf"% S^ 1 ai ^^^!^> ?CfJi^ r^ ^'j^!y^f> ^' ^■•'r''* m ;^-^ when 900 thousandths fine. The coinage of gold for the periods named and to the end of the fiscal year i8g^ has been as follows : Denominations, 1793-1848. 1849-1393, Total. Double-eagles $1,145,463,340 192,031,850 154,268,280 1,619,376 23,181,752 19,499,377 $1,145,463,340 217,694,120 I99.S33.635 1,619,376 28,595.567 19.499.377 $25,662,270 45.265,355 5,413.815 Half-eaeles Total $76,341,440 $1,536,063,975 $1,612,405,415 The diameter and thickness of the gold coins now issued by the mints are as follows, in thousandths of an inch : Denominations. Double-eagle Eagle Half-eagle Quarter-eagle Diameter. 1,350 1,050 850 750 Thickness. 77 60 46 34 THE MONEY OF THE UNITED STATES. II. SII^VKR DOIvIvARS. The silver dollar was also authorized by the original mint act of April 2, 1792, which provided for the coinage of pieces of the value of the Spanish milled dollar, to contain 371 4-16 grains of pure, or 416 grains of standard sil- ver, thus establishing a fineness of 892.4 per thousand (1,485 parts silver and 179 parts copper), and the ratio to gold of 15 to 1; the coinage was free and unlimited, and the dollars were made a legal tender for all purposes. The act of June 28, 1834, changed the weight of the gold coins, but not that of the silver dollar ; the ratio was thereby changed, however, to 16.002 to I. The act of January 18, 1837, changed the weight to 412^ grains and the fineness to 900 thousandths, leaving the weight of pure silver the same. The ratio to gold thus became about 16 (15.988) to i, and the coining value of an ounce of silver Jji. 29. 29. By the act of February 12, 1873, the coinage of the silver dollar was dis- continued by the omission of this coin from the list of those authorized to be coined. The act of February 28, 1878 (passed over the veto of President Hayes) again authorized its coinage at the same weight and fineness as provided in the act of 1837, continuing its legal tender character, unless otherwise stip- ulated in the contract ; and gold certificates were not to be payable in such dollars ; but the amount to be coined was limited to that which could be pro- duced from purchases of not less than $2,000,000 nor more than jS4,ooo,ooo worth of silver bullion monthly, the seigniorage to accrue to the Government. (The minimum amount was invariably purchased.) The act of July 14, 1890, discontinued the coinage after July i, 1891, limit- ing it thereafter to the amount required to redeem the Treasury notes, provided for by that act, in such dollars. (See/oj/, Treasury Notes of 1890.) Under the act of March 3, 1887, the " trade dollars " redeemed at that time were recoined in part into dollars. (Seeposi. ) The coinage of dollars to the end of the fiscal year 1893 has been as follows : Prior to 1873 $8,045,838 Under act of 1878 $378,165,793 From trade dollars redeemed 5,078,472 Under act of 1890* 29,408,461 From seigniorage on last item * 6,678,724 Total since 1873 419,332,450 Afrgregate . . . , $427,378,288 * See Treasury notes of 1890, >tfj^. 10 THE MONEY OF THE UNITED STATES. Of these there were in actual circulation on June 30, 1893, |57,o29,7?t3 ; the remainder were in the Treasury, all but a small amount being held for silver certificates issued. The statutes provide for the free transportation of dollars throughout the country, the expense being chargeable to the profit fund arising from the seign- iorage. The diameter of the silver dollar is lyi inches, and the thickness 8-100 of an inch. The term "free coinage," as herein used, signifies that any holder of bullion may bring the same to any of the mints and have returned to him the number of coins which can be produced from such bullion, without any charge excepting the actual cost, which is trifling in amount. III. SUBSIDIARY SIIvVER COIN. The original mint act of 1792 authorized the coinage of fractional coins rep- resenting X, X) i~i° '^"d 1-20 of a dollar, each to be an exact division of the principal silver coin, and legal tender to any amount. The respective weights of these coins were therefore as follows : Denominations. Half-dollars . . . Quarter- dollars JDimes Half-dimes Grains, Standard. Grains, Fine. 185 10-16 92 13-16 37 2 16 18 9-16 The fineness was the same as that of the dollars (892.4 thousandths) ; the ratio to gold was therefore 15 to i. The act of January, 1837, changed the weights of the fractional coin to cor- respond with the change in weight of the dollar as follows : Half-dollars 206 1-4 grains standard, 900 fine. Quarter-dollars 103 18 " " " " Dimes 411-4 " " " " Half-dimes 205-8 " " " " The weight of pure silver in each remained the same as under the act of 1792. The ratio to gold was therefore the same as that of the dollar: 15.988 to I. The act of March 3, 1851, provided for the coinage of a three-cent piece, THE MONEY OF THE UNITED STATES. 11 weighing 12^ grains, three-fourths silver and one-fourth copper, therefore 750 thousandths fine, to be a legal tender for not exceeding thirty cents. The act of February 21, 1853, changed the weight of the fractional coins as follows : Denominations, Grains, Standard. Grains, Fine. Half-dollars 192 96 38.4 19.2 172.8 86.4 34-56 17.28 Quarter dollars Dimes The fineness was continued at 900 thousandths, but the ratio to gold was by the change reduced to 14.884 to i; and it was provided that these coins be legal tender to the amount of five dollars only. The seigniorage arising from the coinage was charged with the expense of distributing the coin free of transportation, and any balance accrued to the Treasury. By the act of March 3, 1853, the three-cent piece was increased in value to correspond with the other fractional coins, viz., weight 11.52 grains standard, 900 thousandths fine, containing therefore 10.368 grains pure silver. The act of March 3, 1863, provided for a nickel three-cent piece, and that of May 16, 1866, for a nickel five-cent piece (see Minor Coin, post) without dis- continuing the coinage of the silver pieces of these denominations; small amounts were therefore coined until 1873, the act of February 12 of that year omitting them from the silver coinage . Under the provisions of this act the subsidiary pieces now coined are as follows, the fineness remaining at 900 thou- sandths. Denominations. Grammes. Grains, Standard. Grains, Fine. Half-dollars Quarter- dollars 12'^ 2« 192.9 96-45 38.58 173 61 86.805 34.725 The ratio to gold was thus changed to 14.953 to 1. The diameters and thicknesses of the pieces are : Half-dollars, i^ inches and -^\^ inch, quarter- dollars, ^ inch and -^^^-^ inch, and dimes, -^-^ inch and -^^ inch respectively. The act of 1873 also provided that these coins be a legal tender to the amount of five dollars; the act of June 9, 1879, changed this, making them legal tenders for not exceeding ten dollars. The free distribution was continued. 12 THE MONEY OF THE UNITED STATES. A twenty-cent piece, weighing five grammes, was provided for by the act of March 3, 1875, but the coinage was discontinued by the act of May 2, 1878. The amount of subsidiary silver coin authorized to be issued was not fixed except as follows : The acts of January 14, 1875, and April 17, 1876, provided for its issue for the redemption of fractional paper currency then in circulation to the amount of about 142,000,000. The act of July 22, 1876, apparently limited the aggregate issue to $50,000,000; but this was without considering the amount of such coin as had been withheld from circulation, until after the resumption of specie payments ; when this reappeared there was evidently a redundancy of this class of coin, and the act of June 9, 1879, provided for its redemption (if not mutilated) at the Treasury or any sub-treasury in "lawful money, "in sums or multiples of f 20, and for its reissue in like sums. Annual appropriations are made for the recoinage of worn subsidiary coin, the loss from wear and use being thus provided for. Subsidiary Coinage. Denominations. 1793-1852. 1853-1873. 1874-1893. Total. Half-dollars $66,249,153.00 3,999,040.50 $33,596,082.50 18,002,178.00 $27,303,821.00 22,900,231.00 271,000.00 19,055,102.90 $127,140,056,50 Quarter- dollars 44,901,449.50 271,000.00 28,115,898.40 3,890,062.50 1,825,126.40 744,927.00 5,170,733.00 3,055,093,00 537,160.20 4,880,219.40 1,282.087.20 Total $76,708,309.40 $60,361,246.70 $69,530,154.90 $206,599,711.00 The act of Augusts, 1892, authorized the coinage of $2,500,000 in half-dol- lars of a special design, commemorative of the World's Columbian Exposition ; and the act of March 3, 1893, provided for the coinage of |io,ooo in quarter-dol- lars for the same purpose. These pieces were made legal tender the same as other subsidiary coin, and were coined from other subsidiary pieces; therefore the amount in the country was not increased by this coinage. The act of September 26, 1890, authorized the adoption of new designs for the subsidiary pieces, and accordingly a reissue is now in progress. THE MONEY OF THE UNITED STATES. 13 IV. MINOR COIN. Minor coin was first issued under the act of April 2, 1792, in the denomina- tion of one cent and one-half cent ; the former was composed of 11 penny- weights (264 grains) and the latter of 5^ pennyweights of copper. The act of May 8th, of the same year, provided that after {50,000 of such coins had been coined, no other copper coins (of the previous Colonial issues) should pass current as money. Before any pieces of the weight above specified were struck at the mint, the act of January 14, 1793, provided that the weight of the cent should be changed to 208 grains and that of the half-cent to 104 grains, entirely of copper. The act of March 3, 1795, authorized the President whenever he should " think it for the benefit of the United States to reduce the weight of the copper coins ; " and accordmgly by a proclamation under date of January 26, 1796, the weight of the cent was reduced to 16S grains and that of the half-cent to 84 grains. The act of April 24, 1800, provided that from the proceeds of the minor coins exchanged by the Treasury, additional copper be purchased for the increase of this coinage. The act of January iS, 1837, fixed by law the weights determined by the above mentioned proclamation of the President. The act of February 21, 1857, changed the weight of the cent to 72 grains, 88 per cent, of which was to be copper and 12 per cent, nickel ; the same act discontinued the coinage of the half-cent. The act of April 22, 1864, further reduced the weight of the one-cent piece to 48 grains, and changed the composition to copper 95 per cent., tin and zinc 5 per cent., the pieces to be legal tender to the amount of ten cents. This is the present one-cent piece, its coinage having been continued by the act of February 12, 1873. The same act of 1864 provided for the coinage of a two-cent piece, com- posed of 95 per cent, copper and 5 per cent, tin and zinc, to be legal tender to the amount of twenty cents. The act of March 3, 1865, provided for the coinage of a three-cent piece, to weigh 30 grains, not more than 25 per cent, to be nickel and the remainder copper. It was made legal tender to the extent of sixty cents. The same act reduced the legal tender power of one-cent and two-cent pieces to four cents. The act of May 16, i856, authorized the issue of a five-cent piece, composed of 75 per cent, copper and 25 per cent, nickel, to weigh 77. 16 grains, to be legal tender to the amount of one dollar ; and it provided for the redemption of this coin in sums of not less than jSioo. 14 THE MONEY OF THE UNITED STATES. The act of March 3, 1871, directed the redemption of a// minor coins in sums of not less than j!2o in lawful money, and authorized the discontinuance of the coinage when the volume appeared redundant. The act of February 12, 1873, omitted from the coinage the two-cent piece, providing only for the five-cent, three-cent and one-cent piece ; it also pro- vided that these shall be a legal tender to the amount of twenty-five cents. The act of September 26, 1890, discontinued the coinage of the three-cent piece. The present coins are therefore as follows : Denominations. Weigllt. Five cents 77.16 grains. One cent 48 " Composition. 75% copper, 25% nickel. 95% copper, 5% tin and zinc. These pieces are legal tender to the extent of twenty-five cents; the issue is limited to the apparent demands of business, furnished free of expense for transportation from the mint at Philadelphia or at any sub-treasury, redeem- able in " lawful money " at any sub-treasury in sums of not less than j!2o. The coinage has been as follows : Denominations. Periods. Amount. Half cents 1793-1857 1793-1857 1857-1864 1864-1893 1864-1873 1865-1889 1866-1893 $39,926.11 1,562,887.44 2,007.72000 7,096,167.99 912,020 00 941,349.48 12,971,217.15 Copper cents Niclcel cents Bronze cents Three-cent nickels Totals $25,531,288.17 The diameter of the five-cent piece is % inch, and that of the one-cent piece ^ inch; the thickness of the former is yfl^ inch, and of the latter ^^^ inch. V. TRADE DOLLARS. The act of February 12, 1873, provided for a trade dollar of 420 grains, ■900-thousandths fine. Any owner of bullion might deposit the same and have it coined into these dollars, which were intended for trade with China and Japan, to compete with the Mexican silver dollar which was a trifle less valua- ble. The same act made all silver coins legal tender to the amount of I5, and this was construed also to include the trade dollar although it was never con- templated that this coin should circulate in the United States ; accordingly by THE MONEY OF THE UNITED STATES. 15 joint resolution of July 22, 1876, its legal-tender quality was abrogated and the Secretary of the Treasury was authorized to limit the coinage to such an amount as he might deem necessary to meet the export demands. In Octo- ber, 1877, the Secretary discontinued the receipts of bullion for this purpose, excepting in the Western mints ; as it was found, however, that the trade dol- lars which were coined there, were put into circulation in the United States, the coinage was entirely discontinued February 22, 1878, except for "proof pieces." The act of March 3, 1877, provided that for the period of six months there- after trade dollars, not defaced, mutilated or stamped, be redeemed at their nominal value in standard silver dollars or subsidiary coin, and that the dollars so redeemed be recoined into standard dollars or subsidiary coin ; the same act repealed all authority to coin trade dollars, and those not redeemed within the time specified have now only a bullion value. The coinage of these pieces was as follows : While they were a legal tender for $5 $15,631,450 From July 22, 1876, to February 22, 1878 20,327,910 Subsequently coined ("proof pieces " only) 6,564 Total coined $35,965,924 The records of exports and imports show that from 1874 to 1887 $28,778,- 862 of these dollars were exported and |i, 706,020 imported; of the latter amount 1830,561 were imported subsequent to the redemption act of 1887; $919,459 were melted up at the mints prior to the redemption act, and 17,689,- 036 were redeemed ; of the latter amount $5,078,472 were recoined into standard dollars, and the remainder into subsidiary coin. VI. FOREIGN COIN. Early in the history of the Government, foreign coins were by acts of Con- gress made legal tender for all purposes, at certain rates. The act of Febru- ary 9, 1793, was the first of these laws and included such provisions in regard to the gold coins of Great Britain, France, Spain and Portugal, and the silver coins of Spain and France. This act was limited in its operation to three years, at the expiration of which it was expected the mints would be in con- dition to coin all the money that was needed ; but the act was revived by that of February i, 1798, and again by the acts of April 10, 1806, of April 29, 1816, of March 3, 1819, of March 3, 1821, of March 3, 1823, of June 25, 1834, and of June 28, 1834 (the two latter including in the provision the silver coins of South American countries) and was continued in a modified form by the act of March 3, 1843. 16 THE MONEY OF THE UNITED STATES. S (U J3 J) O ■"-' >. „, lii tn 1 1: -2 S nJ S ^ OJ rj n! .S rA n! 3 a O a J3 CO ^ •M CO S c rt to J. « •S .2 "S 42 -§ O C >3 O .a (U ri « 8 o £! 3 he 1 1 1 11) J= n1 *j :S uu m- U. s ^ "rt •a n j-i p ^, -0 ■a CO & o t/1 ri JH M 8 n n r^ D o 00 M ■S O u C ■2 ^H n) B 1 o .S2 J3 o a o ^ H Wl m a V n ^ 1) t3 ^ 8 t.5 (d O ■•3U oosocca •3il3iaAV OCOl— u? ta laiataia laiaiainiQtaima oo 3H^ •JII3I3AV OOOOOQQ^-0 OOOOOOOt-iO ss 03 •ssauaui^ 5R ^ CO oo o ij a; "5 eo «3 -13 tt) WMMCOJOCOt-CL- T-lTHrHi-HWT— lOSOlT^. «t-10S^tH CD •i^«a ppo JO 3"FA 2 o &C! CO ^' CO eo biLtt' CD CO CD CO CO OS O: C3 OS C3 U3 03 i«U3^COGO ^ o o no O.S.S o § a •IS o o O -, S o ^- n ^-j y 22 1 'o'oj COS • ^l/l ^ ^ h u ) U ^, O U V u •,>,^2>;>> ao- U o rt .s|8 B S'ii o u « B "J* o o u HJD --lis! el i i "sills Oi£b THE MONEY OF THE UNITED STATES. 17 5R Soto .-as iS JR lii 'S B&^HS" at- 'oioim 'oj S :iS : : : : :Si lOOO 'OOO 5^»« Sj goooeooo -OOtO OOOtmOO lOCi-l S Oft en C9 0> C3 03 03 Q9030i <0 jO |«5 [ 60COD3COt^3!l*~'^ T^tH'^T-H*<».T-;rt "-^rt 'rH lototnio inioiio s ;* "9 U U lU _ u 0.0 J3 3 3 3 £ « ^ 3 « g r 1 M ■"^^ K at WU-iO • . , , ^ 1. 00 Resumption of Specie Payments. — On January i, 1879, the Treasury with over |n4,ooo,ooo of gold in its vaults in excess of outstanding gold cer- tificates, began the redemption of these notes at the sub-treasury in New Yorlc as rapidly as they were presented. The redemption for that month amounted to only $1,571,725 ; and the entire amount redeemed (afterward reissued) to June 30, 1893, was 194,856,421. As the notes were, after January 1, 1879, equivalent to gold, the Treasury accepted them for duties on imports without compelling the holders to obtain the coin for that purpose. The act of March 3, 1887, provided that thereafter the notes might be redeemed at the sub-treasury in San Francisco also. The act of July 12, 1882, as already mentioned {ante, " Gold Certificates "), in a sense fixed the fund for redemption purposes at $100,000,000 ; and from THE MONEY OF THE UNITED STATES. 23 May, 1885, this amount has always been considered and reported in the official statements of the Treasury as a separate and distinct fund, held for this specific purpose. Under the construction by the Treasury of the "parity " clause of the act of July 14, 1890 (see posi, "Treasury Notes") the fund was also used to redeem in gold, when demanded, the notes issued under this act and the fund consequently diminished rapidly, until in April, 1893, it fell below the jSioo,ooo,ooo specified, and during June, 1893, fell below $91,000,000 ; since that date it has fallen as low as jS8i, 500,000, but subsequently again increased. It was also held that under the act of January 14, 1875, the Treasury had power to sell "at not less than par in coin " any of the bonds authorized to be issued by the refunding act of July 14, 1870, viz., 4 per cent. 30-year bonds, 4)4 per cent. 15-year bonds, or 5 per cent. 10-year bonds. The amount of gold in the Treasury in excess of the sum required to redeem gold certificates fluctuated as follows since resumption : Amounts of Net Gold {Coin and Bullion) in the Treasury. (In millions of dollars.) Years. 1879 1880 1881 1882 1883 1884 188S 1886 1887 1888 1889 1890 1891 1892 1893 to Nov. I At the End of Oct. Dec. Nov. Feb. Oct. Tan. Dec. Dec. Dec. March. March. May. Feb. March. Jan. Highest. 1571 150.2 173 168.S IS7-3 1443 147.9 170.9 208.6 218.8 197.8 190S 149-7 125.8 108. 1 At the End of Jan. July. Jan. Dec. Jan. July- May. Jan. Jan. Oct. Aug. Sept. June July Oct. Lowest. I16.6 115. 2 148 I3I-9 1256 119 I IS- 8 136 168.4 191 180.6 147.9 17.76 no. 4 84-3 Legal Tender and Taxation. — Early in the history of the United States notes the power given by the law of 1862, making them legal tender, was contested in the courts ; at first (Hepburn vs. Griswold, 8 Wall, 603) the constitutionality of this portion of the law was denied by the Supreme Court ; subsequently, however (legal-tender cases, 12 Wall, 457), this decision was reversed, and the latter decision has since then been construed as the law of the land. 24 THE MONEY OF THE UNITED STATES. The power of Congress to authorize the reissue of these notes, as pro- vided in the act of May 31, 1878, after redemption under the resumption act, was questioned. The Supreme Court in Juillard vs. Greenman (no U. S., 404) held that Congress had the power. A further question arose as to the power to tax-United States notes under State and municipal laws, the act of 1862 having declared all bonds and other securities of the United States exempt from such taxation ; the Supreme Court held that the notes were "obligations" and to be classed as "securi- ties," hence not subject to such taxation. (Bank vs. Supervisors, 7 Wall, 26.) The issues of United States notes and the amount outstanding June 30, 1893, are shown below : United States Notes {1862-1893). Denominations. Issues and Reissues. Outstanding June 30, 1893. *i $185,796,160 183 427,048 450,901,760 448,851,240 419,722,400 128,715,200 158,704,000 198,176,000 326,008,000 20,000,000 40,000,000 $3,396,163.20* 2,852,443.80 62,202,254.00 91.053.575.00 101,477,630.00 14,439,300.00 23,405.150.00 16,245,500.00 ■32,584,000.00 I5,OOO.OD 10,000.00 coo 1,000 5,000* ^ 10,000* * Total $2,560,301,808 $347,681,016.00 1,000,000.00 Loss destroyed at Chicago fire, denom- $346,681,016.00 ''' The fractional parts of notes in this and other denominations indicate fractional redemptions^ as explained in note (page 19). * * Issued temporarily, 1880-1882, during the suspension of the issue of gold certificates. X. CURRENCY CERTIFICATES. The act of June 8, 1872, authorized the issue of certificates of deposit, not to bear interest, in denominations not less than |5,ooo, to national banks for United States notes ; the notes to be specially held for the redemption on demand of such certificates which might be counted as part of the reserve of a national bank, and might be used to settle clearing-house balances. Such cer- tificates have therefore been issued, payable to the order of the depositing THE MONEY OF THE UNITED STATES. 25 bank, in denominations of |s,ooo and jSio.ooo ; of late years, however, only the latter denomination has been in use. The issues of currency certificates have been as follows : Currency Certificates (^iS^2-iSpj). Denominations. Issues and Reissues. Oiitstandinsr June 30, 1S93. $102,440,000 952.730,000 $245,000 11,450,000 Total $1,055,170,000 $11,695,000 The preceding table indicates an extensive use of this medium by which banks are relieved of the burden of caring for a redundancy of small United States notes. The highest amount outstanding at the end of any one year (June 30) was 159,045,000 (in 1875), and the lowest $9,020,000 (in 1887). XI. NATIONAL-BANK NOTES. The act of February 25, 1863, authorized the formation of national banking associations under federal supervision, with power to issue notes. Proving defective it was repealed, and an amended act was passed June 3, 1864. The life of each association was limited to twenty years. The minimum capital was fixed at $50,000 ; circulating notes could be issued only upon a deposit of United States bonds to the amount of not less than $30,000, and not less than one-third of the capital stock must be paid in, whereupon notes to an amount not exceeding 90 per cent, of the par value of the bonds, in blank, but duly countersigned by the Treasury officers (certifying that the bonds are deposited in the Treasury) were to be furnished the banks for signature and issue. No bank could receive and issue notes in excess of its capital stock. The aggregate issue was limited to $300,000,000. The denominations of notes authorized were $1, $2, $5, |io, $20, $50, $100, $500 and $1,000 ; but only one- sixth of the issue could be in denominations under $5, and after the resump- tion of specie payments no such small notes were to be issued. The notes were not made legal tender, but receivable at par in payment of dues to the United States, except duties on imports, and tor payments by the United States except interest on public debt or redemption of national cur- rency ; and they were receivable by any national bank at par for debts owing to it. The bonds were provided as security for the ultimate redemption of the 26 THE MONEY OF THE UNITED STATES. notes, but each bank was obliged to redeem its own notes at its counter on demand in " lawful money," i. e., legal tender, but it might, in addition, desig- nate another national bank in any of the cities specified by the act as its redemption agent. To provide for such redemptions, an amount of lawful money equal to 15 per cent, of the notes in circulation and of deposits was to be held either in the bank, or to the extent of 60 per cent, with its reserve or redemption agent; and the national banks in the specified cities were to have as much as 25 per cent, of their circulation and deposits in lawful money, half of which might be in New York city national banks acting as the redemption or reserve agents of banks in other " reserve cities." Notes of failed banks were redeemed by the Treasurer from proceeds of the sales of bonds. Worn or mutilated notes were replaced by the Treasury, the cost of the notes and replacing them to be paid by the banks. The act imposed a tax of one per cent, per annum on the average amount of circulation, determined semi-annually, and of one-half per cent, per annum on both deposits and capital stock beyond that invested in bonds of the United States. The tax on deposits and capital was repealed by act of March 3, 1883, but that on circulation remains. Provision was also made for protesting notes when redemption was refused, and for the placing of the bank in a receiver's hands for such refusal to redeem. The act of March 3, 1865, limited the amount of the note issue of banks with a capital in excess of $500,000 to 80 per cent, of the capital ; in excess of jSi,ooo,ooo to 75 per cent., and over |3,ooo,ooo to 60 per cent.; it also provided that the aggregate amount authorized to be issued be apportioned to the banks in States and territories, |i5o,ooo,ooo according to population, and the remain- der according to existing banking capital, resources and business. The act of July 12, 1870, increased the authorized issue by 154,000,000, to be apportioned, by preference, to States or territories having less than their quota, according to the census ; no banks, organized after that date, could issue more than 1500,000 in notes ; and the Treasury was directed to equalize the circula- tion by apportionment after (but not before) the issue of the above additional amount ; reductions might from time to time be made in the amount issued by banks in States having an excess. Under the act of June 20, 1874, this equalization was to take place before the issue of the additional $54,000,000, and banks were authorized to deposit lawful money with the Treasury (withdrawing their bonds) at any time to reduce circulation, not to exceed in all f 55,000,000, pro- vided that the bonds on deposit for any one bank were not reduced below f 50,000. The additional issue was increased to $55,000, 000, to be apportioned as before provided. The act of January 14, 1875 (resumption act) repealed all THE MONEY OF THE UNITED STATES. 27 provisions limiting the increase or decrease of national-bank circulation, apportionment, etc. The act of June 20, 1874, also abolished the requirement of a lawful- money reserve for the redemption of notes and the provision for redemption agents. It continued the requirement of reserve on account of deposits, and compelled the banks to keep on hand in the Treasury lawful money for the redemption of notes, equal to 5 per cent, of their circulation, such amount to be counted as part of the reserve for deposits ; the Treasury became thus the redeeming agent, the expense being borne by the banks. They were not, however, relieved of the duty of redeeming their own notes upon demand. The charter limit of many of the banks would have expired in 1883 and 1884; accordingly the act of July 12, 1882, provided for the extension of the charters for another period of twenty years. It also provided that banks hav- ing a capital of jjSi5o,ooo or less need not have more than one-fourth of the amount of such capital on deposit in bonds to secure circulation, thus reduc- ing the minimum to $12,500, the minimum capital remaining at Iso.ooo as theretofore ; the reduction of circulation consequent upon this provision and for other reasons was limited to $3,000,000 per month ; and a bank reducing its circulation was prohibited from again increasing it within six months. There are a few national banks having bonds on deposit but no circula- tion outstanding. The national-bank note issues and the amounts outstanding on June 30, 1893, are exhibited below. National- Ba7ik Notes {^i86^—i8gj'). Denominations ¥i 2 5 •■•■ 10 20 SO 100 500 1,000 Total Issues and Reissues, $23. IS. S92i 506, 318. 104, 161, 169,677 495.038 217,700 637,610 684,220 516,100 115,100 289,500 454,000 $1,741,578,945 Outstanding June 30, 1893 $359,590 176,102 51,354.355 56,998,170 42,550,380 9,318,700 17,414,100 146,000 33,000 $178,350,397 The highest amount of notes outstanding at the close of any fiscal year was $358,742,034 (in 1882), and the lowest amount $167,550,906 (in 1891). The tax on circulation, paid since the organization of the system, has amounted to $74,113,902, and that on capital and deposits to $68,750,000. 28 THE MONEY OF THE UNITED STATES. The decrease in the national-bank circulation is largely due to the decrease in the amount of the bonded debt of the United States and to the relatively high premium on the existing bonds. This latter feature compels the investment of so large an amount of money to obtain the required bonds, upon which only go per cent, of the par can be issued in notes and loaned, that the money if loaned out in ihe first instance would produce a larger income when the tax and other expenses on circulation are considered. This is especially the case when rates for money are in excess of 6 per cent., as is illustrated by the followmg calculation, based upon a 6 per cent, rate for money, with 4 per cent, bonds at 116^: $100,000 fours at ii65i interest $4,000.00 Circulation, 90 per cent, on par value $90,000.00 Deduct S per cent, redemption fund 4.500.00 Loanable circulation at 6 per cent $85,500.00 5.130.00 Gross receipts $9.'3° "» Deduct : One per cent, tax on circulation 900 00 Annual cost of redemption 137-4^ Express charges 3.00 Cost of plates for circulation 75° Agents' fees 7-5° Examinatiors 43-Oo Sinking fund reinvested quarterly to liquidate premium 696.36 1,794 84 Net receipts $7.335-i& $116,750 loaned at 6 per cent 7,005.00 Profit on circulation $33°- 1^ If the interest rate were 7 per cent., instead of 6, the profit would be only $18. In other words, if the funds of a bank having ;Jii6,ooo to invest were loaned out originally at 7 per cent., instead of being used in organizing a bank under the national system, the loss would, on the face of the transaction, be only |i8, and the institution would have been free from the additional restric- tions of the national-bank act. With relatively cheap bonds, the profits are larger, but since the retire- ment of the 3 per cent, bonds issued under the act of July 12, 1882, all Govern- ment bonds have been relatively high in price, and limited in volume. From 1865 to 1877, the Government issued only 5 and 6 per cent, bonds, and the volume was in excess of f 1,750,000,000 ; the market price of these issues ranged from I89 to I125 in currency. THE MONEY OF THE UNITED STATES. 2SI From 1877 to 1881, 4^ and 4 per cent, bonds took the place of most of the 6 per cents., and a portion was continued at 3X per cent., as were also the- remaining 5 per cents. Bonds were always obtainable at par. From 1882 to 1886, 3 per cents, replaced those bearing 3^ per cent., and' during the greater part of this period such bonds could be purchased at par, or at a slight premium ; while the 4 per cents, were quoted at a premium of from 17 to 29 per cent., which placed them beyond the reach of banks- There were in 1882 still over ^^1,500,000,000 of bonds in the aggregate ; but by 1886, the amount had fallen below |i, 200,000,000. Between 1886 and 1891, nearly one-third of the 4 per cents, were retired, and all but $25,000,000 of the 4% per cents, were redeemed, this small amount being continued at 2 per cent. ; leaving available, beside these, only 1560,000,- 000 of 4 per cents., and $64,000,000 of Pacific Railroad 6 per cents., a total of about $650,000,000, bringing, at their usual market price, an income of less. than 3 per cent. The changes of the bonded debt have been as follows, at the end of eacfr fiscal year (June 30), from 1866 (in millions of dollars). 1866. 1867. 1868. , 1869., 1870. 1871., 1872. 1873,. 1874. 1875- 1876 , 1877.. 1878. . 1879. . I.2I3 1880 1.634 1881 2,092 1882 2,166 188:? 2,051 1884 i.g.'Js i88s 1.84s 1886 1887 1.789 1888 1.773 1889 1,761 1890 1,761 1891 1.84s 1892 I.9S2 1893 I.77S 1,690 1.S14 1.389 1,277 1,246 1,196 1,072 i,oor 88t> 776. 67s 649. 649 These figuies include the $64,000,000 of honds issued in aid of Pacific railroads. Notwithstanding the untoward conditions tending to discourage the organization of national banks, the number of banks has been increasing, although, as will be seen in the tables presented in Part II., the circulation has diminished very rapidly since 1883. The number of national banks in existence at the dates named, with their capital stock, were as follows : October, 1863, 66 banks $7,188,393 capital paid up. October, 1873, 1,976 " 491,072,616 " October, 1883, 2,501 " 509,699,787 " October, 1893, 3,781 " 678,540,328 " 30 THE MONEY OF THE UNITED STATES. During the entire period to November i, 1893, there were organized 4,930 banks with an original capital stock (not including increase of capital which frequently occurs) of ^709,978, 182 ; 890 banks with a capital stock of ^120,623,500 went into voluntary liquidation ; 246 banks with capital stock amounting to $43,915, 900 failed. Of the failed banks, which represent 5 per cent, of the entire number organized, 131 have practically settled their accounts, 62 having fully paid all creditors, some of them with interest. Of the remain- ing 115 more than one-half failed during the year 1893. The circulating notes of all of the banks which failed have, of course, been fully provided for. National gold banks were authorized by the bank act of 1864 (for the Pacific slope) ; their notes were to be payable in gold, none to be issued in denominations less than f 5 ; limited in each case to 80 per cent, of the par value of the bonds deposited, and the capital of no bank to exceed |i, 000,000. The restriction as to capital was repealed January 10, 1875 ; the act of February 14, 1880, authorized the conversion of these banks into ordinary national banks, the need for distinct organizations having passed when resumption became assured. National-Bank Redemption Fund. — The fund of moneys deposited to retire the notes of banks reducing circulation, or of such banks as went into voluntary or involuntary liquidation, grew to considerable proportions as will be seen by the following table. In order not to have such an amount of money kept out of circulation. Congress, by the act of July 14, 1890, provided that the amount be used by the Treasury, and the notes be redeemed, when presented, out of the general fund of the Treasury against which it should appear as a charge and be reported monthly in the statement of the debt. The balances of " lawful money " deposits of national banks failed, liquidating or reducing circulation, to redeem their notes, were as follows : 1867 1868 $126,849 1869 434.160 1870 1,017,565 1871 2,727,108 1872 2,826,059 1873 1,917,602 Z874 3,827,612 1875 18,203,667 1876 25.972,360 1877 12,991,361 1878 9.797.S13 1879 11,596,061 1880 19,337.621 1S81 $33,146,858 1882 37,056,729 1883 36,157,910 1884 39,368.121 18S5 38.596,332 1886 60,248,705 1887 97,992,918 18S8 91,952,843 1889 78,051,136 1890 55. 619.359 1891 40,018,392 1892 26,763,509 1893 20,663,437 THE MONEY OF THE UNITED STATES. 31 The aggregate deposits and redemptions of notes to June 30, 1892, were : Deposits. Redemptions. $14,700,548 158,471,899 318,546,206 $13,726,466 I3S. 199,74s 295,181,716 Reducing banks, 1875-1892 Transfers from one to another account $491,718,653 20,847,217 $444,107,927 $470,871,436 $26,763,509 XII. STATE-BANK NOTES. Prior to the act of June 3, 1864, establishing national banks, the prin- cipal part of the paper circulation of the country consisted of notes issued by banks organized under more or less liberal State charters. Such notes were in fact used before the adoption of the federal constitution and continued to circulate with the notes of the Bank of the United States (1791-1840). The first of these banks was the Bank of North America in Philadelphia, Pa., which still exists. Organized as a private corporation, it subsequently {December 31, 1781) received a perpetual charter from the Continental Con- gress ; in March, 1782, Massachusetts also granted it a charter, and Pennsyl- vania followed in April of that year. Massachusetts incorporated the " Massa- chusetts Bank " in 1784 and New York gave the " Bank of New York " (organ- ized in 1784) a charter in 1791. Bank charters were also given by other States, among the early ones being : Kentucky, 1B04; Tennessee, 1807; Ohio, 1808: Illinois, 1816. The number of banks and the amount of reported circulation will appear below. In some of the States, particularly New York and Massachusetts, adequate provision was made for the redemption of the notes ; but a very large proportion of the circulation was subjected to discounts, at every pay- ment made, of from Yz to 25 per cent., and was consequently more or less dis- credited. The national-banking law provided for the conversion of the existing State banks into national banks, and Congress endeavored to encourage this movement by increasing the tax on State-bank circulation, levied by the internal-revenue laws, to 10 per cent, (act of March 3, 1865, amended by act July 13, 1866), thus practically prohibiting the further issue. Many of the State banks were converted into national banks, but a large number continued under State charters without note issues ; and in late years quite a number have given 32 THE MONEY OF THE UNITED STATES. up national, for new State, charters. The gradual decrease in national-bank cir- culation has brought the subject of reintroducing State banks of issue, with proper security for the redemption of notes, before the people. Statistics of State Banks at Various Dates. (Amounts in millions of dollars.) Years. 1784 1790 1800, 1811 1820, 1830. 1840, 1850, i860, 1863 No. of Banks. Capital 3 4 28 89 308 330 901 824 1,562 1,466 2.1 2-S ZI.3 S2-7 137.2 I4S-I 358.4 217.3 421.8 405. Circulation. 2.0 2-S lo-S 28.1 44.8 61.3 106.9 131-3 207 I 238.6 Specie. 10.0 90 17.5 15.4 19.8 22 I 33-1 45-3 83-5 101.2 The national banks now show a liability for State-bank circulation out- standing of about f75,ooo, and State banks still in existence a liability of jf 137,000. The amount of unredeemed notes of failed banks or of banks not now in existence is not known. XIII. TREASURY NOTES OF 1890. The act of July 14, 1890 (sometimes designated as the " Sherman Act "> directed the Secretary of the Treasury to purchase monthly 4,500,000 ounces of fine silver bullion or so much thereof as might be offered, at the market rate, not to exceed $1 for 37 iX grains of fine silver. (This, it will be recalled, is the. weight of the pure silver in the standard dollar.) To pay for the bullion so purchased, Treasury notes, in denominations of not less than jSi nor more than |i,ooo, were to be issued. These notes were made redeemable in coin at the Treasury or any sub- treasury, and might be reissued ; were also made a legal tender for all debts except when otherwise expressly stipulated, and to be counted as part of the reserve of any national bank holding them. The redemption provided for might be in gold or silver coin at the dis- cretion of the Secretary of the Treasury, and, to provide silver for the pur- pose, 2,000,000 ounces were to be coined monthly until July i, 1891, into dol- lars authorized by the act of February 28, 1878 ; thereafter such dollars to be coined when necessary to provide for such redemptions ; the seigniorage arising from the coinage to accrue to the general fund of the Treasury. THE MONEY OF THE UNITED STATES. 33 So much of the act of 1878 requiring the purchase and coinage of silver •was repealed. A specific limitation of the amount of notes to be issued under the act was as follows : " No greater nor less amount . . . shall be outstanding at any time than the cost of the silver bullion, and the standard silver dollars coined therefrom, then held in the Treasury, purchased by such notes." Thus if the bullion purchased cost f 10,000,000 and jSs.ooo.ooo worth thereof were coined into dollars, producing, owing to the low price of silver, jJ6, 500,000 of such dollars, ^(5,000,000 of the coin and the remaining j!5,ooo,ooo worth of bullion must be held for the notes issued, the balance of $1,500,000 being the profit or seigniorage accruing to the Treasury ; and on such dollars, when in the Treasury, silver certificates were issued as provided by the act of 1878. An important clause of the act of 1890 was the one declaring it to be "the established policy of the United States to maintain the two metals (gold and silver) on a parity with each other, upon the present legal ratio (15.988 to i) or such ratio as may be provided by law." In order to accomplish this, it became necessary, when Treasury notes were presented for redemption, to pay on demand either gold or silver as the holder might prefer ; a refusal to do so would have made the notes silver notes. Con- gress having provided no special gold fund for this purpose, the available gold in the Treasury was used for this purpose ; occasion having soon thereafter arisen for large exportation of gold, this fund was drawn upon very heavily and seriously decreased, as has been shown before. {Page 2j.) Treasury notes were redeemed in gold to June 30, 1893, to the amount of about 158,750,000. The notes so redeemed, as well as considerable amounts, aggregating prob- ably |s,ooo,ooo, which were redeemed in silver dollars, were afterward reissued. Subsequently notes redeemed in silver dollars were canceled. For a short period currency certificates were issued to national banks on deposit of these notes. By the act of November i, 1893, the portion of the law of 1890, directing the purchase of silver and the issue of Treasury notes, was repealed. The following statement shows the purchases, coinage and issues of notes tinder the operation of the law of 1890, which went into effect August 13, 1890, and continued until November, 1893: Silver bullion purchased, 168,674,682 fine ounces; cost, $155,931,002 Bullion coined into dollars, .i7, 974, 857 ounces; " 29,172,722 Leaving uncoined 140,699,825 ounces; " $126,758,280 The bullion produced $36,087,285 Of which deposited in the Treasury to secure the Treasury notes and as profit to the Treasury (seigniorage) 6,837,801 29,172,722 The Treasury-note issue aggregated $155,931,002 34 THE MONEY OF THE UNITED STATES. There have been redeemed in silver dollars and canceled jS2,5oo,oooof these notes ; this operation began August 3, 1893, and continues. The bullion now in the Treasury is sufficient to coin about 182,000,000 standard dollars ; to provide for the redemption of the Treasury notes in silver, only 126,758,280 standard dollars are required, so that when the bullion shall have been coined the seigniorage or profit to the Treasury will amount to about jS55,ooo,ooo. It would take probably five years to coin the bullion into dollars. The notes issued and outstanding by denominations were as follows : Treasury Notes of 1 8 go. (^i8go-i8gj.) Denominations, Issues and Reissues. Outstanding June 30, 1S93. $1 $17,930,106 17,752,000 44,940,000 52,280,000 22,800,000 800,000 12,070,000 $13,298,993 12,359.654 36,936,070 43,968,670 20,337.740 793,700 7,681,400 CO coo 1,000 29,800 000 11,814.000 Total $198,372,106 $147,190,227 XIV. OTHER TREASURY NOTES AND CERTIFICATES. Treasury notes were issued during several extraordinary periods in the financial history of the country ; but never before 1861 were such notes issued without bearing interest. The first period was 1812-1815, during, and for the purpose of carying on, the "war of 1812." The general form adopted for this first issue of notes was continued in the later ones ; they were usually in denominations of f loo, pay- able to order, receivable for all payments to the Government and payable to public creditors. The acts of June 30, 1812, February 25, 1813, March 4 and December 26, 1814, authorized the issue in the aggregate of |35,5oo,ooo one- year notes, the issues of each year providing for the redemption of those of the previous year. The actual issues amounted to 128,318,400, bearing interest at the rate of 5 2-5 per cent, (or i^ cents per day on |ioo). The act of February 24, 1815, providedfor the issue of 125,000,000 of notes, redeemable within nine years, and convertible into bonds, a portion to be issued in small denominations ; the latter were payable to bearer and bore THE MONEY OF THE UNITED STATES. 35 no interest until converted into bonds. Authority was given to reissue notes received or converted. The total issue amounted to 188,362,394, and the reis- sues to $7,182,740. These "war of 1812 notes " were very soon retired, either by redemption or conversion into bonds. The second period, 1837-1843, followed the financial panic of 1837 ; the Treasury had up to 1836 accumulated a large surplus ; the United States had no outstanding debt not provided for ; and accordingly Congress by act of June 23, 1836, directed the distribution of the surplus to the States, according to popula- tion, in four installments ; three of these installments were paid, the sum being somewhat in excess of f 28,000,000. The fourth installment has never been paid. The disaster of 1837 left the Treasury poor, and further issues of notes were resorted to. The amounts authorized by the acts passed each year aggregated |3i,ooo,- 000, payable in one or two years, with interest at not more than 6 per cent, nor less than i mill (jSo.ooi) per cent. Two millions were actually issued at this latter rate. The authority to reissue notes received for public dues brought the entire issue to over 147,000,000 ; more than j!46,ooo,ooo were retired by 1845 ; but very few of these notes are now unredeemed. The third period, 1846-1847, was during the Mexican war. The rates of interest were the same as during the preceding period ; $33,000,000 were authorized, and only $809,900 of notes were reissued ; all but $200,000 were retired prior to 1851. The fourth period, 1857-1861, followed the panic of 1857. The authorizing acts were passed December 23, 1857, December 17, i860, and March 2, 1861 . Under these $98,154,250 in notes were issued (including reissues) at rates of interest from 3 to 12 per cent. Almost all these notes were redeemed or con- verted into bonds within two years from the date of issue. The issue of interest-bearing notes during the period of the civil war amounted to nearly $1,450,000,000. First, under the act of July 17, 1861, three- year notes, bearing 7 3-10 per cent. {2 cents per day on $100) were issued to the amount of $140,094, 750; following this, under the act of March 3, 1863, $44,- 520,000 one-year, 5 per cent, notes, and $166,480,000 of two-year, 5 per cent, notes were issued in denominations of from $10 to $1,000 ; these notes were legal tender, the same as the United States notes still in circulation. Under an extension of the last-mentioned act by that of June 30, 1864, $266,675,440 of three-year notes, bearing 6 per cent, compound interest, also a legal tender, and in about the same denominations, were issued. The act of 1864, amended by that of March 3, 1865, gave authority for the issue of $829,992,500 of three-year notes, bearing 7 3-10 per cent, interest, but without the legal-tender power. Subsequent laws permitted the conversion of these last-mentioned notes into bonds. 36 THE MONEY OF THE UNITED STATES. Of this vast issue of notes all but about $360,000 have been redeemed or converted. During the civil-war period, many forms of certificates were issued, not to serve the purpose of circulation, but in some cases available for reserves of national banks, thus in a measure supplementing " lawful money " issues. Temporary loan certificates were issued for thirty-day periods, on deposits of money or to public creditors, at 4, sand 6 per cent. The act of February 25, 1862, limited the amount to $25,000,000 (outstanding at any one time); that of March 17, 1862, increased it to $50,000,000, that of July 11, 1862, to $100,000,- 000, and finally that of June 30, 1864 to $150,000,000. Altogether the issues and reissues amounted to $716,099,247 ; all but about $3,000 have been retired. The act of March i, 1862, authorized the issue of 6 per cent, certificates of indebtedness, to run one year, to be paid to public creditors. The amount authorized was not fixed. The issue ceased in 1866, after $561, 753,241 had been issued. About $4,000 remain unpaid on this account. Certificates of deposit bearing 3 per cent, were issued to redeem compound- interest notes, under the act of March 2, 1867, not to exceed $50,000,000 ; the act of July 25, 1868, authorized the issue of $25,000,000 additional. Including reissues, $88,155,000 were placed, of which $5,000 remain unredeemed. Certificates amounting to $678,000, payable in five years, and bearing 4 per cent., were issued under the act of July 8, 1870, to pay the State of Massachu- setts for certain war expenditures in 1815. All have been retired. Refunding certificates were issued under the act of February 26, 1879, in the denomination of $10 only, to aid in refunding the bonded debt, giving small investors an opportunity to obtain bonds. They bear interest at the rate of 4 per cent, payable only on conversion into 4 per cent, bonds ; they are convertible, principal and interest, into such bonds, in sums of $50 or any mul- tiple; $40,012,750 was the limit of the issue ; $64,690 remained unconverted November i, 1893. XV. FRACTlONAIv CURRENCY. The suspension of specie payments caused not only gold, but silver as well, to be hoarded and exported ; and soon thereafter the subsidiary silver coin, required for ' ' small change, ' ' disappeared from circulation. Private insti- tutions and firms began to provide small paper change of various forms, and postage stamps were also resorted to. Congress by act of July 17, 1862, pro- hibited the further issue of such currency by individuals, and provided for the issue of stamps ; this was followed by an issue of ' ' postal currency, "on which the fac-similes of stamps appeared ; it began August 21, 1862, and notes of the denomination of 5, 10, 25 and 50 cents were circulated, and made receivable for all public dues less than five dollars, and reedeemable in notes in like sums. THE MONEY OF THE UNITED STATES. 37 The act of March 3, 1863, which first gave this currency the designation •'fractional," also provided that it be received for all public dues as before, «xcept duties on imports, and the act limited the issue to $50,000,000, made the notes redeemable in sums of three dollars, and permitted reissues to replace worn pieces. The act of June 30, 1864, extended the authority somewhat, and under it notes of 3 cents (the then existing single letter postage rate) and of 15 •cents were issued . The act of March 3, 1865, directed the issue of a 3-cent nickel coin, and the further issue of this denomination of notes ceased ; under the act of May 16, 1866, a 5-cent nickel coin superseded the 5-cent note. In 1874 the Treasury discontinued the issue of the 1 5-cent notes. The act of January 14, 1875 (repeated in the act of April 17, 1876) provided for the coinage of subsidiary silver to replace all the fractional currency ; and the issue ceased February 15, 1876. But the fractional notes were popular, and the redemption was slow. Con- gress therefore by joint resolution of July 22, 1876, directed the issue of JSio,- 000,000 of subsidiary coin in lieu of United States notes, which notes were to be held as a fund for the redemption of the fractional currency. This latter proviso was repealed by the act of June 21, 1879. On June 30 of that year the amount of fractional currency unredeemed was 1(15,842,610.11; on June 30, 1893, it was still over 115,250,000, of which amount it was estimated over 458,000,000 had been destroyed, and would never be presented ; the remainder is still carried as a liability of the Treasury. Statistics relating to this currency are given below : Fractional Currency, 1862-1876, By Denomination. Denominations. Amounts Issued. Outstanding June 30, 1892. $601,923.90 5,694.717-85 82,198,456.80 5,305,568.40 139,031,482.00 I35.89I.930-SO $90,246.97 * 1,858,955.90 5,063,642.27 240,503.64 4,284,724.12 3.773i32S.oS Total $368,724,079.45 $15,311,400.95 Less destroyed at Chicago fire, de- $15,279,400.95 * The general rule as to redemption of mutilated pieces for the fractional value also applied to these notes. 38 THE MONEY OF THE UNITED STATES. By Issues. Issues. 1st 2d 3d 4th Sth Total 1862-1863 1863-1867 1864-1869 1869-187S 1874-1876 Amounts Issued. $20,215,635.00 23,164,483.65 86,115,028.80 176,567,032.00 62,661,900.00 $368,724,079.45 Outstanding June 30, 1892. $4,280,281.25 3,105,374.93 2,978,233.17 3,670,345.01 1,245,166.59 $15,279,400.95 The number of pieces issued was 1,819,223.300. THE CIvEARING-HOUSE SYSTEM. The proportion of money actually used in settlement of commercial and financial transactions is estimated to be less than 10 per cent, of the aggregate of such transactions, the use of cash being avoided by the substitution of bank checks and drafts. Moreover, to save the risk and expense incurred in hand- ling the actual cash by collecting the checks from the bank or institution where they are payable, a system is established of mutually exchanging these obliga- tions, and settling in cash the resulting balances only. The system was adopted in London, prior to 1840, and in New York in 1853. Other cities in. the United States followed later. In some cases the settlements are made in. checks issued by the manager of the "Clearing House," and not in actual cash, which causes a further saving. In England the system has been extended so as to include provision for the "clearing" in the London institution, of checks upon banks throughout the country. Such an extension of the system in New York is a possible, if not probable, improvement of the mechanism of financial transactions. The economy of this system can be best illustrated by the statement that in New York city, the exchange of $125,000,000 in checks can be made with less than $5,000,000 of cash. The annual exchanges of all clearing houses in the United States now aggregate more than JS62, 000,000,000. For the past 15 years they have been as follows (in millions of dollars) : 1878 27,814 1879 38,526 49.990 63,471 60,878 S1.731 44,200 41.474 1880. 1881... J.,,-. ' i882?.», * . 4. 1883. 1884. 1885. 1886. , 1887. 1888.. 1889. , 1890. , 1891. 1892, 49.294 51.147 49.S41 56,175 60,829 56,947 62,109 THE MONEY OF THE UNITED STATES. 39 XVI. ci.e;aring-house certificates. Associations of banks in the larger cities, forming clearing houses, have at various times, during periods of stringency, issued and used among themselves, to settle balances at their clearing houses, certificates upon securities deposited with a constituted authority, usually a "loan committee." The securities so used are generally of a character such as makes them immediately available in the market, if need should arise, and the certificates are issued only to the extent of 75 per cent, of the value of the securities. In New York, such certificates were used during the stringency following the panic of 1873, the issue amounting to 126,565,000, between September 20, 1873, and January 14, 1874. The highest amount in use at any one date was 122,410,000. In 1884, from May 15 to October 3, ;j24,9i5,x3oo were issued, the highest amount outstanding having been $21,885,000. During the stringency in 1890, certificates were first issued on November 11, continuing to February 7, 1891, the maximum outstanding having been jSi5,205,ooo in December. Again in 1893, an issue began in June ; the last certificates were retired by November i. The aggregate issue was $41,490,000, but the largest amount outstanding at any time was $38,280,000 from August 29 to September 6. Philadelphia banks used nearly $10,000,000 of such certificates in 1890, another issue was made in 1893, when Boston and other cities also made use of this device. While these certificates were, during the recent disturbances, used only for clearing-house purposes in the larger cities, they circulated more or less as money in the smaller ones, in some cases certificates in amounts as small as 25 cents having been issued and circulated. In many of the manufacturing centres certified checks and pay vouchers have been used more or less in lieu of currency which was not obtainable. Another form of clearing-house certificates has been used in the cities of New York and Philadelphia, representing gold coin actually deposited with a specified institution, to save the expense and abrasion incident to the handling of the actual coin. The issue of these certificates began during the period when the Treasury discontinued its issue of gold certificates (i 879-1882), and reached in New York a maximum of nearly $42,000,000; these were all retired by 1888; Philadelphia banks, however, continue to use about $10,000,000 of these issues. The suspension of the issue of gold certificates by the Treas- ury in 1893 imposed, considerable expense for transferring coin upon the banks, and in New York another issue of these certificates has been deter- mined upon. s J rj o /. r-^ The currency certificates issued by the Treasury and otlfer qblEtSc Ws atocW to this issue have sometimes (inaccurately) received the title " Clearing-House Certificates," because used in those institutions. 40 THE MONEY OF THE UNITED STATES. SU K.s is'> •«£■ - - t. rt 0.5.H u o a a u u •rt: '!> S "- P rt rt g o .; - O fli ij,^ " a o •§-3 Mo BBC V V V U U U ft) o rt fC '^ bl M oi>2S o a cs A B B . — uH SQiS = B-s£'*a 11 B" a-g l»^ E-ol 3 5 St) S ^O M c 4-^ ^ ff o ™ m y -5 fi.S l-^r" COiiiajiI'^"— • i—aX 1)^ P-C u-rt I 3 rt (!i HH f^*i 3 OOOQOOIO«r lOi-l .3 « ttj " o t: « t oi rt 3U " U S " '^ M cat: *; u s .0 >: O - •' V fe'ciSS "DW a "O J, K ►"•-^ n.JD ^S U3 2 ' B *3 ° OOOOQQiOWr- OOOmWrH OiOrH V ?; c ^ ::= Ea ^ cQ ^1 •a «2 uj S o o O U S ■» ' B.g!5§|Bs "g.S £; -: a c4 ^(B at Sis.; SSSgSS'="=' oSrH Z " B-S tnp ■1:82 4) BT3 S^ III I L, (A b U .• •"(C S t* c3 (x4 S g oH c *i o " 2 o "•0*5 I'll SSSSS"'^ J. . 3 ,0 ■sags o ** 3 B.2S w g-2 ^ bo . •■- rt « E.S S ;3 o**- "b Sill "Si" THE MONEY OF THE UNITED STATES. 41 PART II. THE VOI^UME OF THE CURRENCY. As stated in the introduction, the statistics relating to the volume of the currency of the United States are, for the purposes of such a comparison as is herein proposed, sufficiently accurate.excepting only the estimates of the gold in the country. In the following tables the amounts are given in the nearest million (thus $5,789,000 is stated as 6); slight inaccuracies in making up aggregates will therefore necessarily appear here and there; but as they are never in excess of one million dollars, these inaccuracies do not in any material sense affect the value of the comparative tables ; and the method employed is by far the most practicable. Whenever amounts or figures are given otherwise than in millions (or deci- mals thereof) the specific designation is stated. The period selected is from 1873, the year in which the coinage laws were revised, to 1893, a period of twenty years of most interesting and important monetary legislation. It includes the entire history of the struggle to use and maintain silver in the currency of the country. The estimates and reports of the Treasury department are used exclu- sively in these tables, excepting where it is specifically stated otherwise. The first of the tables (A.) gives the entire stock of money, the metallic distinguished from the paper, and the amounts in circulation, as well as the amounts held in the Treasury. Of the latter a large portion is, as was indicated in Part I, merely on deposit to represent certificates in circulation ; that portion belong- ing to the Treasury, and used in its daily disbursements, is properly a part of the effective stock, fluctuating with the daily revenue receipts and expenditures of the Government, and with the occasional investment of the surplus in the purchase and cancellation of bonds. The "Money in Circulation " includes that held by banks, which consti- tutes their reserves ; and the ' ' Entire Stock ' ' embraces the moneys on deposit in the Treasury, as well as the certificates issued upon such deposits. This sum is therefore duplicated in the figures showing the aggregate stock. Obviously, only the money in the Treasury owned by the Government, and that in circulation and in banks can be deemed effective circulation. The amount of this stock is shown in the last column of the table. 42 THE MONEY OF THE UNITED STATES. A. — Table Showing the Entire Monetary Stock, its General Character and Location. CIn millions of dollars.) Ifr_ The Entire Stock.' In Circulation. In the Treasury. 0) > •sS > 0) ikS W wi Metal. Paper. Total. Metal. Paper. Total. Metal. Paper. Total. .-on §3 3« u o»o ».H 1873 152 804 9S6 77 752 829 75 52 127 71 56 885 1874 161 847 1,008 89 761 850 72 86 158 82 76 926 1875 138 837 97S 75 735 810 63 102 165 80 85 89s 1876 15s 784 ■939 94 692 786 61 92 153 62 91 877 1877 207 778 98S i'3 677 790 94 lOI 19s 96 99 889 1878 301 763 1,064 151 656 807 150 107 257 93 164 971 IS79 363 72s 1,088 186 638 824 177 87 264 49 215 1,039 1880 500 725 1,225 300 678 978 200 47 247 35 214 1,190 I88I 653 770 1.423 397 722 1,119 256 48 304 69 235 1.354 1882 709 789 1,498 442 736 1,178 267 53 320 85 235 1. 413 '^^3 776 887 1,663 432 1,236 343 83 426 184 242 1,478 1884 799 917 1,716 426 816 1,242 373 101 474 231 243 1,483 '??i 872 973 1.84s 424 866 1,290 448 107 555 310 245 1.535 1886 903 920 1.823 457 792 1,249 446 128 574 26s 309 I.S58 1887 1,008 902 1,910 480 837 1.317 528 65 593 276 317 1.634 i883 1,092 98s 2,077 498 874 1.372 594 III 705 386 319 1,691 1889 1,100 992 2,092 482 898 1.380 618 94 712 434 278 1,658 1890 1,152 1,004 2,156 484 945 1,429 668 59 727 471 256 1,685 1891 1,162 1.054 2,216 524 975 1.499 638 79 717 540 177 1,676 1892 1,232 1.139 2,371 528 1.075 1,603 704 64 768 620 148 1.751 1893 1,207 1,110 2,317 526 1,068 1.594 681 42 723 584 139 1.733 * The fiscal year ends on June 30, It will be observed that the metallic stock has increased $1,055,000,000 — from |i52,ooo,oooto fi, 207, 000,000— due not onlytotheacquisition of silver, but in almost as important a degree to the gain in gold. The increase in paper money has been largely confined to the portion in circulation. The column showing Money on Deposit in the Treasury indicates that the principal increase has been in paper representatives or certificates, and not in notes. The increase in the effective stock has been nearly 100 per cent., a larger ratio than is shown by the money in circulation, indicating generally a much better condition of the Treasury. This latter statement must, however, be considered in connection with the fact that since 1879 the Treasury has held about )Jioo,ooo,ooo of gold as a reserve for the redemption of its notes ; but even if this be eliminated, the Treasury's net cash has, with the exception of the last two years, shown a decided improvement. The second table (B.) shows the kinds of money constituting the entire stock. Here the increase of the gold stock of the country is shown, having THE MONEY OF THE UNITED STATES. 43 risen from $135,000,000 in 1873 to over 1700,000,000 in 1888 ; diminishing under the influence of European demands in more recent years. (As to over- estimates, see table G.) B. — Table Showing by Kinds the Money Composing the Entire Stock. (In millions of dollars.) > S ^o B W Metallic Stock. Paper Stock. ^1 fA II ii H .A li ■3." o« ■h u Notes of 1890. National Bank Notes. US C u .2 c '3 I 1 1873 13s 17 152 39 356 ■ 347 32 30 804 956 1874 142 19 161 23 382 352 59 31 847 1,008 187s no 28 138 22 376 354 58 27 837 975 1876 113 42 155 29 370 ■ 333 33 19 784 939 1877 145 62 207 41 360 317 55 5 778 985 1878 213 "16 72 301 44 2 347 • 323 47 763 1,064 1879 246 41 76 363 15 3 347 329 31 72s 1,088 1880 352 69 79 500 8 12 347 344 14 72s 1,22s 188I 478 95 80 653 6 51 347 • 354 12 770 1.423 1882 507 122 80 709 5 67 347 • 357 13 789 1,498 1883 543 152 81 776 82 89 347 ■ 356 13 887 1,663 1884 545 179 75 799 98 121 347 339 12 917 1,716 1 885 589 208 75 872 140 140 347 317 30 974 1,846 1886 S91 237 75 903 131 116 347 308 18 920 1,823 1887 655 278 75 1,008 121 146 347 279 9 902 1,910 1888 706 310 76 1,092 142 229 347 . 252 15 98S 2,077 1889 680 344 76 1,100 154 263 347 211 17 992 2,092 1890 695 380 77 1,152 157 302 347 186 12 1,004 2,156 1891 647 437 78 1,162 152 314 347 ;o 167 24 1. 054 2,216 1892 664 491 77 1,232 157 332 347 IC )i 172 30 1.139 2,371 1893 S92 538 77 1,207 94 331 347 Ti 17 179 12 1,110 2,317 The increase in silver dollars and bullion has been continuous since 1878, when the acqusition began, as much as $538,000,000 having been added. Attention is directed to the fact that the reported gold stock of the country increased about in the same proportions as the silver stock during the period ; in 1893 the stock of silver was somewhat in excess of that of gold. The fractional currency disappears practically by 1876, subsidiary silver coin taking its place. The marked decrease in national bank notes after 1893, and the extent to ■which silver certificates have been substituted and have supplied the needs, is clearly illustrated. The third table (C.) exhibits the amounts of money of all kinds in circula- 44 THE MONEY OF THE UNITED STATES. tion (including banlc holdings). After the period of contraction following upon the passage of the law providing for the resumption of specie payments (1875} the amount of money outside of the Treasury increased steadily until 1886 ; the sharp contraction in that year marks a general period of scanty circulation (ta be analyzed hereafter) followed by six years of further increase of the volume, reaching its maximum in 1892. C. — Table Showing by Kinds the Money in Circulation. (Tn millions of dollars.) Metal. Paper. ■A 12 ri ti V &; ti '2 >• 1 u u •a c '0 "o 1" II 3" '0 3^ Si r, C ss 2 = 30 H c H 1873 63 14 77 34 317 339 32 752 82^ 1874 74 15 89 18 313 340 59 31 761 850- 1875 53 22 75 18 292 340 58 27 735 810 1876 58 36 94 25 299 . 316 33 19 692 786 1877 S6 57 113 32 284 301 5| 5 677 790 1878 8S 65 151 2S 275 310 46 fs^ 807 1B79 III 8 67 186 IS 272 321 30 ^A 824. 1880 226 19 55 300 8 'e 313 337 14 678 978 1881 315 29 S3 397 6 39 316 349 12 722 I 11^ 1882 358 32 52 442 S ss 312 351 13 736 1,178 1883 345 35 52 432 60 73 310 ■ 348 13 804 1,236- 1884 340 40 46 426 71 96 307 330 12 816 1,242 1885 342 38 44 424 127 101 302 307 30 867 1,291 1886 358 S3 46 457 76 88 306 304 18 792 1,249- 1887 376 55 49 480 91 142 318 277 9 837 1,317 1888 392 55 5° 498 120 200 294 24s IS 874 1.372- 1889 377 54 SI 482 117 257 300 207 17 898 1,380 1890 374 56 54 484 131 297 323 182 12 945 1.429- 1891 408 58 1^ 524 121 307 324 4 162 21 975 1.499 1892 409 57 62 528 141 327 312 ? 8 167 30 1.07s 1,603 1893 404 57 65 526 93 326 321 14 I 17s 12 1,068 1.594 An examination of the details shows that a very large part of the increase has been due to the addition to the gold stock, which even if the correctness of the estimates be not admitted, has been large ; this is all the more marked when the gold certificates in actual use are treated as gold. Silver dollars, notwithstanding the free transportation afforded by the Government when they are issued, have not been in great demand, not more than 58,000,000 of the entire coinage having been in use at the end of any fiscal year (although at other periods during several years, a maximum of 64,000,000 and even 67,000,000 has been reached). Silver certificates, however, have per- THE MONEY OF THE UNITED STATES. 45 formed a very large part of the work of money, having been issued in late years to the full extent of the capacity of the Treasury under the law. This was chiefly due to the issue, after 1886, of the smaller denominations of this medium. Subsidiary silver, the circulation of which was materially lessened by the displacing effect of the output of silver dollars, has since the issue of the pieces of new design gained considerably in popularity ; and its use appears- now almost as great as at the period (1879) when it was at its maximum. The reported metallic circulation appears to have increased fully seven-fold since 1873. The United States notes have, since the contraction in 1875-78, been fixed in volume ; and the amount in use, if considered together with the currency certificates, has been very near the limit fixed by law throughout the period.. National-bank notes haye decreased fully 50 per cent., showing only a slight reaction in the last two years from the steady decrease smce the maximum year, 1882, when the volume increased under the influence of the issue of cheap* government bonds, which were subsequently redeemed. The most important increase of money during the entire period was from 1891 to 1892, during which year the amount of the addition to the circulation was fully f 104,000,000, due largely to the issue of Treasury notes for silver pur- chases under the law of 1890. As will be shown more distinctly in subsequent pages, this redundant money supply caused the decrease in gold and its rep- resentative certificates during the following year, the amount of these forms of money having diminished from $550,000,000 in 1892 to $497,000,000 in 1893 ; the aggregate circulation was, however, maintained at very nearly the highest point by the further issue of Treasury notes. Table D., the fourth of the series, shows the money in the Treasury in detail. The first section is devoted to the money belonging to the Government,, representing practically the surplus in the Treasury at the end of each year. From 1879, however, this surplus includes the fioo,ooo,ooo gold reserve,, although this amount was not separately and specifically treated as such reserve in the financial statements until 1885. It will be observed that the year in which this surplus shows the greatest increase, corresponds with the year of the sharp contraction of the money in circulation (1886). The cause of this is. not difficult to discover after an examination of the tables. In the year 1885 the gold in the Treasury not held for certificates was only $6,000,000 above the reserve, and with the gold certificates held (|i4,ooo,ooo> made the entire stock of available gold only $20,000,000. On the other hand, the silver dollars which could not be put into circulation, had, notwithstanding all efforts to induce their being used, increased to $30,000,000, and the certificates, lying useless in the vaults aggregated $39,000,000 ; and this silver hoard was constantly increasing, threatening to deprive the Treasury of all its free gold ; in. 46 THE MONEY OF THE UNITED STATES. D. — Table Showing by Kinds the Money in the Treasury. (In millions of dollars.) Belonging to the Treasury. a Deposit Only. 6 1 Metal. Paper. « ■3 1 II i B ui ^^ en V TjO U 1. .- s e5 'o a 2(0 A E-.S 3 i 1" nited States Notes. Treasury 'o a c n «„• c 1 ■3 H u _c ■a H « .■3 en in en P ^ a P> 1873 33 3 36 s 7 ■ 8 20 56 39 32 71 127 1874 45 4 49 s 10 12 27 76 23 .. 59 82 158 187s 6 41 4 26 . 14 44 85 22 58 80 165 1876 26 6 32 4 38 . 17 59 91 29 33 62 153 1877 48 S S3 9 21 16 46 99 41 5S 95 19s 1878 84 13 7 104 19 z 26 . 13 60 164 44 2 47 93 257 1879 ■ 120 30 9 159 3 45 . 8 56 215 IS 3 31 49 204 1880 118 37 24 179 7 19 ■ 7 33 212 8 13 14 35 247 1881 IS7 IS 27 199 12 19 . >; 30 235 6 SI 12 69 304 1882 143 24 28 19s 12 22 6 40 235 S 67 13 85 320 i88j 116 28 28 172 22 16 24 - 8 70 242 82 89 13 184 426 1884 107 20 29 IS6 27 23 28 . 9 87 243 98 121 12 231 474 1885 ic6 12 31 167 14 39 15 • 10 78 245 140 140 30 310 SSS 1886 102 68 29 199 5S 28 23 • 4 no 3°9 131 116 18 265 574 1887 158 76 27 261 30 4 20 2 56 317 121 146 9 276 S93 1883 172 25 26 223 22 29 38 . 7 96 319 142 229 IS 386 70s 1889 150 26 2S 201 37 6 30 ■ 4 77 278 154 263 17 434 712 1890 164 23 23 210 26 4 12 4 46 256 157 302 12 471 727 1891 87 IS 20 122 31 7 I 1 6 55 177 152 364. 24 540 717 1892 99 15 114 IS 5 S 4 5 34 148 157 433 30 620 763 1893 94 3 12 109 I 5 14 6 4 30 139 94 47S 12 584 723 Note.— To ascertain the amount oi free g^old in the Treasury, add amounts in first and tilth columns. fact, as will be seen, the silver stock, dollars and certificates, increased to $96,- 000,000 by the end of 18S6. Accordingly bond redemptions, which had kept the surplus at lower figures, were for a time discontinued, and in iS86the Treasury had added to its gold holdings (including certificates) fey, 000,000 ; moreover, soon after the end of the fiscal year, the issue of |i , $2 and $5 silver certificates was authorized ; and after another year the silver stock gradually diminished, and the gold holdings grew larger. To give the small silver certificates a wider field, the United States notes of the same denominations were withdrawn to a considerable extent (see table 'E.,post). The silver purchase law of 1890 (which, as has been explained in Part I., placed the gold in the Treasury practically at the disposal of holders of the notes issued under authority of that law) enabled exporters of gold to obtain THE MONEY OF THE UNITED STATES. 47 readily the yellow metal to supply demands which arose at about the same time in several European countries. The gold stock of the Treasury, which at the end of the fiscal year 1890 stood at f 190,000,000, fell to f 118,000,000 in 1891, to jSii4,ooo,coo in 1892, and finally to $95,000,000 in 1893, a loss of $95,000,000, or 50 per cent, in three years. The remainder of the gold exported was provided by the banks, which during the same period surrendered $63,000,000 of gold certificates. (See imports and exports of gold. Table K.) The total metallic money in the Government's possession was highest in 1888, and this was likewise the period of its largest gold holdings. The sus- pension of the issue of gold certificates in 1879 apparently tended to reduce the gold holdings of the Treasury in the subsequent years, and the reissue of this form of money probably aided in the recovery of considerable gold. The columns showing Money on Deposit Only in the Treasury exhibit the gratifying tendency to limit the issue and use of ' ' uncovered " paper money. While most of the European nations showed a marked increase of this form of circulation, the United States has issued no paper, not protected by either gold or silver, since the resumption of specie payments in 1879. The increase of paper money of Government issue since that date has been 1554,000,000, the maximum in 1892 showing $572,000,000. All of this has been " covered." In this connection the following table showing the relation which the free gold in the Treasury bore to the paper issues, is of special interest. The Government notes in circulation are, strictly speaking, the only direct charge on the free gold ; but the other forms of paper, excluding the gold certificates, are, ultimately, indirectly dependent on the same stock. (Amounts in millions of dollars.) End of Fiscal Year. Free Gold in Treasury. Notes in Circulation.* Per Cent, of Gold to Notes. All Paper in Cir- culation.* * Per Cent, of Gold to Paper. 1878. 1879. 1880. i38i. 1882. 1883. 1884. 1885, 1886. 1887. 1888. 1889. 1890. 1891. 1892. 1893- 104 120 118 157 143 138 134 120 187 194 187 190 118 XI4 95 321 302 327 328 325 323 319 331 324 327 307 317 335 385 440 474 32-4 39-7 36.1 47-9 44 42.5 42 36.6 48,1 57-2 62.8 59 567 30-7 259 17.9 631 623 670 716 731 744 745 739 716 746 754 781 814 854 934 975 16.5 19.4 17.6 21.9 19 6 18.S 18 16.2 21.9 25.1 25-7 239 23 -3 13-8 12 2 9,3 * Includes Treasury notes after 1890. * * Includes United States notes, Treasury notes, national- bank notes and silver certificates, but not gold certificates, which are secured by gold in full. 48 THE MONEY OF THE UNITED STATES. The existence of a surplus of subsidiary silver, heretofore mentioned, is manifested by the very large amounts which the Treasury has been compelled to redeem under the act of 1879 > this form of money, not being available for anything but "change," unless specifically demanded, is idle cash in the vaults ; only in the last two years of the period has there been any extensive .utilization of this idle fund, which in 1885 only helped to increase the embarrassment of the Treasury, and to this day remains a troublesome incubus. The table marked E. and presented in two parts, shows the denominations of each kind of paper money outstanding at the end of each year, grouping the notes of $1 and $2 together, but separating the $s, |io and jSao notes ; again grouping the $50 and Jioo notes, as well as all the notes of $500 and upward. The smallest denominations of notes appear to have been issued in insuffi- cient quantities excepting perhaps during the first four years of the period and in 1893. The reduction of the volume of ones and twos in 1886, when the issue was confined to the United States notes, was partly due to the desire to enlarge the use of silver dollars ; failing in this, the issue of small silver certificates was authorized, and the total disappearance of the smallest issues of national-bank notes opened a large field for the certificates. The elimina- tion from the circulation of the United States notes of these denominations has been largely made up by the Treasury-note issue since 1891. The history of the five-dollar notes and, in a lesser degree, of the tens, is very much like that of the ones and twos; silver certificates and Treasury notes having replaced other forms and provided for the additional demand. On the other hand, the twenties are in a much larger proportion of the United States note issue, gold certificates (of which issue JS20 is the smallest denomination) never having been considerable in amount, and the other forms showing a diminution. The supply of this denomination of money has been quite sufficient during almost the entire period. The fifties and hundreds show the same changes (although in a lesser degree) as are perceptible in the twenties, but the large notes, JS500 and over, have been chiefly of the gold-certificate issue. Currency certificates are not included with the large paper issues, for the reason that they represent United States notes of all denominations on deposit in the Treasury ; these are included under their respective heads since it is not possible to determine accurately how much of each denomination was held on deposit for such certificates, no record having been published. But the amounts of the certificates are not sufficiently large to interfere seriously with the comparisons intended to be made. On other hand, the certificates, if considered as large denominations, would be offset by such denominations in use for purposes other than reserves. THE MONEY OF THE UNITED STATES. 49 I 'tj V) S ■a .8 ^ 'IBIOX mfnfnbsfnoi'-' hvo cno o hoovooo « w moo on ts O. t-sVO ^^OCNCTiM « COmCl H « -^ rJ-\0 Cn.00 o\ HMHI-tHMHH«tMWCl«M«ClM?: •saio^ S3JB5S pajJUQ R f; K>g~»i?^ tc e; R K R^-s-5 s <& a s^ §^ s. ■sajEa^ijM^ JaA|ig 'l^^ox •sajoN ^"^a iBuoij-B]!^ '0681 }° s33o^ XinsBSJX •saioi^ S3;Big pajiufl •SSlBOlJpJS;^) ■I3A[Ig "IBJOX •S350X ^lu^a puopE^ 'Oeai JO s3io^ itinsBajx •sajo^ sa;Eig paaiun. ■ssjEDgijia^ ■i3A[is •saiEDyijjao e^o<:^t>.^s(^^o^oc^.HOM^s on 00 ■^ lo lo looo 00 M M H o H H H )H INOO Cs lO ■* ^ "^O O ^0 vO C 10>0 00 O O H « CO -n- |_1HMMMHHHHHI-1HHHM««M««M 00 CO 10*0 m -^yo H Q 00 ■^ K H rooo N O N ^s o w MCOM O 0\0\Q^O O Q\ ONOO OOCO CniC-nIOLO-^uIUI H H H M IH H O COIN HClOO H 00 OO 00 « N VO VO \0 O iOt O^ 1?^ t^^ ^ tNCs-'i-COCM M H M 0) OO o >-i covo r^-Hooo -tmcnw coo io« o O\oo Cnoo ^s»o(^l *- OM-< u->^.t^o ^o o\csts(j,crioo\ ts Cs C^ Cs. Cn ts>0 C^ IN tNOO C\ On OiOO ON 0\ O^ O H Q •sajEDgiua^ Xonajjn^ ■jadEj ib;ox > Tt- cn cn Thoo roioi^o a^iNtN.coo nion -^--^j-ono O -^ COOO IN"0 0) PJ KOO 00 H IN« OOO ONOiOCOi-t 000000 CNtNCsC^tNt-s INOO ONOnQnONONOnO O h h P4 In t^ C^ t^ IN [*-. txoo oooooooooooooooooo (_-_.«-„. oooooooooooooooooooooooocooooooooooooooooo )HIHHHHHHMHHHtHHHh' 50 THE MONEY OF THE UNITED STATES. s -« ^ t*3 •*^ s o o f^ a Is *cs td t^ e ^ O s* >i IS V > O •^ i § 'I^'ox loooo Q c^o^« MOO eom ro"MnDo ts.ro"d- « lo <^o\o o o OMoco-^OM-i tvinm cnvo m lo cs m H MHH HIHHHMMMMIHH •saioj^ JluEa-I^uoijEj^ Tj-CO« eiHHMHHHMIHMHH - ■ ■ ■ '0681 J° S3j0f<[ AinsESJx \0 H "1 • H H •Sa^OJ^ S31BJS p31iu£i cnuoioOoo -^"^rs-tSiO oo too oa fnoo o « o\ ■saiEagijjgQ J3A[IS H«lOiiT^(Nwav^HMMtHiO«M M M •S3JB0gpi33 ppQ 00 w I-! 00 en moo lo m u^ tN.oo o 'd-iocn-^tv.OsCi 4 K d 9 c 1 'FlOX OMI-.HMHOtHMNT3--:l-TtT^M«H(iHHNH •SSJO^ ■HUEa-l^UOIlBj^ tsO -id-ioe) ooo oimrt- t^«o m o\ « oo « oo uro ^s T:^ln»olOl'^"T^•<*■LO""Jli^^-Oln•^■^cnenc^ m « « *068t i° s^io^ XjnsBBJX •saio^ ssjBig psjiufl ■*■ Tt N m »o Osoo oo cn. o\oo ir^vo lo w en o\ tmv. cnoo 10*0 ^covo u^lnli^lOlOu^LO"^LOlJ^lOlO"T^^cn ■S313Dgpi33 J3A]IS en tN ts o\ -(foo c>* OMN\o 00 N tN. m M M M M w cn •S35B0lJpJ33 ppO IHWMHHHIH ■ . -OOOOO 0*0 Tt- O W H 00 rn ■ ■ •HHNHHMMWWMM c H ■1^50X 'om'^oiooMMON o\o o o lo lo H H M •Ln\o « o CM en en mw rn en -^nO Csctvo a.oo OiO oo\ s r^ tn HHHHWMMMMMI-IOIHIHMCJMMOINM •S350^ 5IuEaieuoiiBj»I ON H vo -O looo 1-t in OMM -* H vo rn\o O H \o H M en lovo yD \o ^ ^o (N ^s inoo co oo cs t^o lo lo -^ ■* ■^ 'i- •068X P s^l°K -^JnsESJx :;::::::::::::::: :"S 8 S340N saiB^s paijun W H H H •s3iB0i)tpis3 JaA^ig MOO lomoo M too Ti-io'O ONTh«o ■ssiBDifiuao ptoo 1 1 ; ^* ; ; 1 • • 'O^enNMi-tmHNTl-c^ON •JE3A 11335!^ p pua R S: K-R fi-R R,S s Small Denominations ($1 to $80). Large Denominations ($50 to $10,000). ■A 2 £ s' £ &S a 'ci i S s J & U3 1% (3 U T3 p S5 E I it 23 6 'in t; II a 1-1 5 H s- e K D u 1873 239 296 535 72,1 39 117 51 207 279 32 1874 253 299 552 72.9 23 129 S3 20s 27.1 59 187s i 239 298 537 71-4 22 137 S6 215 28.6 58 1876 237 276 513 70.0 29 133 57 219 300 33 1877 227 264 491 68.4 41 133 S3 227 31-6 55 1878 22^ 273 497 69.4 44 I 123 SI 219 30.6 47 1879 215 280 495 71-3 16 2 132 49 199 28.7 31 1880 4 253 293 55° 77-4 8 8 95 50 161 22.6 14 I88I 38 264 301 603 79-S 5 12 84 54 iSS 20.S 12 1882 54 259 303 616 79-4 5 II 89 55 160 20 6 13 1883 9 72 260 298 639 731 73 16 88 58 23s 26.9 13 1884 13 96 254 282 645 71-3 85 25 93 57 260 28 7 12 1885 12 104 246 262 624 66.1 128 37 lOI 54 320 33-9 3» 1886 12 95 2+3 258 608 67.3 119 21 i°S 50 295 32.7 18 1887 II 135 257 236 640* 71.6 no 10 91 43 254 284 9 1888 13 221 262 214 710 73-2 129 8 85 38 260 26.8 15 1889 II 256 245 179 691 70.9 143 7 102 3? 284 29.1 17 1890 12 203 266 157 728 73-4 145 9 82 28 264 26.6 12 I89I 14 297 274 37 142 764 74-1 138 17 73 13 ^1 266 25-9 24 1892 12 302 274 79 146 813 73-3 145 29 75 21 26 296 26.7 30 1893 9 296 261 127 151 844 76.9 85- 35 87 20 27 254 23.1 12 * As to discrepancy see p. 41. The proportion of the entire paper issue in small denominations fluctu- ated between 79.5 per cent, and 66 i per cent., with an average of 72.5 per cent, for the entire period. In view of the fact that, even in 1893, when the proportion of small notes appears to have been nearly 77 per cent., the supply of the smallest denom- inations was not equal to the demand, it is not an, unreasonable conclusion that an average of fully 75 per cent, of our paper issues might be in denom- inations not exceeding |2o. An increase in the demand during the busier 52 THE MONEY OF THE UNITED STATES. seasons and a falling off during the inactive months, are usually to be expected, and the proportion stated would hardly prove excessive. The chief feature of interest in the portion of the table devoted to the large denominations is the extensive use of gold certificates after the resump- tion of the issue in 1883, causing a marked increase in the volume of "bank money. " The use of large silver certificates, as will be seen by referring to the preceding table, is almost entirely confined now to the denominations of $50 and jSioo, since it was found impracticable to keep any considerable amount of the larger issues in circulation. The same is true of national-bank notes. The amount of currency certificates in use is repeated in this table, but not included in the statistics of large denominations, since it may be fairly assumed that about fifty per cent, of the amount of the United States notes which they represent are in small denominations. In the table designated G., an estimate is presented of the net stock of effective money. The estimates of the amount of gold in the country are reduced annually by amounts which a still incomplete investigation of the subject has led the writer to believe should, for various reasons, be deducted. Briefly stated, the grounds for the belief are as follows : The mint bureau estimated the amount of gold in the country in 1873, at |i35,ooo,ooo ; this was predicated upon the existence of a supposed amount in the Treasury and in the national banks, and an estimate of $20,000,000 to $25,000,000 in use in the States of the Pacific slope ; f 10,000,000 was then deemed a sufficient sum for that in the hands of banks other than national, and of the people. The amount supposed to be in the Treasury at the time was, however, stated incorrectly, causing a reduction of 127,000,000 in the estimate, making this $108,000,000 instead of $135,000,000. The production of gold during this period of twenty years was about $707,000,000 ; the imports of gold have amounted to about 1588,000,000, mak- ing a total acquisition of $1,295,000,000; the exports of gold aggregated $665,- 000,000, leaving a net acquisition of $630,000,000." Adding this to $135,000,000, the original estimate, gives $765,000,000 as the supply of gold ; the mint esti- mates give the amount in the country at the end of the fiscal year 1893, as $592,000,000, which would leave but $173,000,000 consumed in the arts in twenty years ; or if the reduced estimate of $108,000,000 be used, the consump- tion in the arts would have been but $144,000,000 ; either of these amounts is far below the actual figure, and it is much more probable that twice the last mentioned sum has been so used ; but in the estimate herem presented a much smaller sum than this has been (tentatively) deducted, viz., about $258,000,- 000, leaving the amount of the total gold stock (coin and bullion) $480,000,000 at the end ot 1893. Certainly not more than this sum is in use. A revised estimate of the amount of gold outside of the Treasury is thus THE MONEY OF THE UNITED STATES. 53 arrived at, and the estimate of the amount of money in circulation is thereby changed. Adding this to the stock of money in the Treasury owned by it, a revised estimate of the effective stock is presented. G. — Table Showing Approximately the Net Effective Money and the Amounts per Capita. , 2 Revised Estimates. £■ Amount Per Capita of s i. % I .so sr 1 1 1 1^ IHiS MS i 1 o S in "3 .5 a 20 n 2.S ■4. 4) ■I 1 a •a K H a a u 1 1 a s a ^ "(3 H 1 Ot3 "1 H°" 1 8« 1 21 jz; M (In millions of dolh >rs.) 6.5 20.S7 1-34 $ 19.23 if 2.59 1873 135 27 108 3^, 802 5^ 858 417 1874 142 23 119 51* 827 Z^ 903 8.4 21.09 1-77 19.32 2.78 42.8 1S7S no 19 91 34 791 85 876 9-7 19-95 1-93 18 02 2.07 43 9 1876 "3 14 99 44 772 91 863 10.6 19.14 2.02 17 12 4.41 45- 1 1877 MS 10 135 46 780 99 879 "•3 18.98 2.14 16.84 2.91 46-3 1878 213 27 186 58 780 164 944 174 1983 3-44 1639 3-91 47-6 1879 246 3t 215 80 793 215 1,008 21.3 20 61 4-39 16 22 4-39 48-9 1880 352 35 317 191 943 212 1,15s 183 23.0s 4-23 18.82 6.21 SO- 1 1881 478 4i 437 274 1,078 23s 1,313 17.8 2S59 4-58 21.01 852 513 1882 S07 46 461 313 1.X32 23s 1.367 172 2604 4-48 21.56 8.78 52.5 1883 543 60 483 285 1,176 242 1,418 17.0 26.40 4.50 21.90 9.16 537 1884 545 64 481 276 1,178 243 1,421 17. 1 25.88 4.42 21.46 8,76 54-9 188S 589 70 519 272 1,220 24s 1,46s 16.7 26.11 4-36 21.75 9-25 56-1 1886 591 72 519 285 1. 177 309 1,486 20.8 25.88 S-38 20.50 9.04 57-4 1887 6SS 84 571 292 1,233 317 1,550 20.2 26.40 5-40 21.00 9-73 58.7 1888 706 91 61S 301 1,281 319 1,600 19.9 26.66 S-3I 21-35 10.25 60 1889 680 97 583 279 1,283 278 1.S61 17.8 25.46 4-53 20.93 9-51 61.3 1890 695 99 596 275 1,330 256 1,586 16.1 25 33 4-09 21.24 9-52 62.6 1891 647 105 542 3'53 1.394 177 1.571 "■3 24-55 2.77 21.78 8.47 64 1892 664 107 557 301 1,496 148 1,644 9 25.10 2.26 22,84 8.50 65-5 1893 592 112 480 292 1,482 139 1,621 8.6 24.19 2.07 22.12 7 16 67 * Tliis seems improbable, but is according to the statistics. The effective stock, it will be observed, shows no decrease after the con- traction in the earlier years, until 1889, when extensive gold exports began. These exports, however, were at first met almost entirely by the Treasury through the withdrawal of gold on notes. The amount of money outside of the Government vaults continued to increase, excepting during the last year, while the Treasury funds were reduced to a point lower than they were in 1878. The proportion of the effective stock in the Treasury rose from 6)4 per cent, in 1873 to over 21 per cent, when resumption occurred ; in 1886 it again nearly reached the maximum point, receding thereafter and sinking to the low point 54 THE MONEY OF THE UNITED STATES. of 8.6 per cent, in 1893. The eflfect of legislation, increasing or diminishing the revenues of the Government or its expenditures, is reflected in this column of proportions ; and the only means of speedily disposing of a large surplus, thus making the money available for general use at short notice, was the purchase of bonds. In another table (I.) are shown the decrease of the debt, and the years in which bonds were canceled in excess of the sinking fund requirements. These requirements have been from {40,000,000 to {50,000,000 annually. It now becomes practicable to present estimates of the amounts of money per capita of the effective stock, of the amount in the Treasury and of that in circulation, as well as of the gold outside of the Treasury. The estimated population is shown in the last column. The supply of money available for general use does not show violent fluctuations in the years subsequent to the period of contraction immediately preceding specie payments. The accretion of gold and the utilization of silver soon brought the amount /^>' capita up to and beyond that of 1874. The loss of gold, beginning in 1889, reduced the amount from the maximum of {26 60 in the previous year ; nor did the issue of Treasury notes in 1891 to 1893 suffice to replace the gold loss which it materially encouraged. The amount in the Treasury, including, from 1879, the gold reseive.was, for reasons heretofore given, increased in 18S6 beyond the normal require- ments, causing a sharp decline in the amount in use outside of the Treasury. When the Government's holdings were finally reduced, the current carried the amount in circulation beyond the needs of the banks and the people. After an examination of the column showing the circulation proper /^r capita, the fart impresses itself on the observer that the needs, including the reserve requirements of banks, are somewhat in excess of {21.50 per head of population. The amounts shown to have been in circulation in 1890 to 1893 were therefore excessive, and had it not been for the abnormal hoarding fol- lowing the disturbances of 1893, there would have been no necessity for the issue of auxiliary money in the shape of clearing-house certificates. The Treasury stock, which must include the gold necessary for the ulti- mate redemption fund, should be increased to not less than $3.50 per capita, which leads to the conclusion that at least $25 per head should be available for effective circulation in normal periods. A column is devoted to the gold stock /«?' capita according to the revised estimate, to show the fluctuations which have taken place. About {9, or somewhat more than one-third of the effective stock, should be in gold. The law which operates to displace a superior form of circulation when an inferior form is issued in such volume as to cause a redundancy in the aggre- gate, is illustrated on more than one occasion, after resumption finally placed all our issues upon an equal footing. In 1883 the amount of circulation /i^r THE MONEY OF THE UNITED STATES. 55 capita was very nearly |22, the increase over preceding years having been caused (as shown in the preceding tables) by the large issue of silver certifi- cates during the period when national-bank issues were at their highest ; ac- cordingly the gold stock was reduced by forty cents per capita by the end of 1884 ; and although the gold exported in excess of imports during 1884 (see table K.) was recovered in the following year, the continued attempt to force silver into use when no demand existed, caused another outflow of gold in 1886. The same process was repeated in 1888-9, aid only the unusually large demand for circulation in the autumn of 1891 prevented its recurrence during the fiscal year 1892, in which year the exports and imports balanced ; but in 1893 the full effect of the operation was felt, the loss of gold having been f88,ooo,ooo. Only the unusual hoarding of all kinds of money during the summer of that year caused a partial return of the vast sum sent abroad. The repeal, finally, of the silver law of 1890, under which this large increase of circulation took place, will for the present prevent the further increase of the money stock, and when the amount now provided shall have been absorbed, imports of gold may be expected to supply any deficiency which may result. The recent emission of notes by national banks are being retired, the bonds upon which they depend having now again risen to the prices which pre- vailed before the stringency during the summer. To what extent legislation may, by providing other means of increasing the circulation, defeat the natural tendency of gold to flow in this direction, it is of course impossible to foresee. Table H. presents estimates (made up in part from the Treasury state- ments and in part from the revised estimates) having in view the determination of the volume of Retail Money, including in this category the small notes, the silver coin actually in use, and the gold coin supposed to be in the hands of individuals, with the ^vaoyxais per capita of each as well as of the aggregates. For this purpose the amounts of small notes, as given in table F., are first shown, and the fluctuation is more distinctly exhibited by a comparison accor- ding to population. The accuracy of this comparison is somewhat affected by the quantity of small notes held in the Treasury, the amount of which cannot be stated; but since these notes are always obtainable for large ones, or for gold, the relative increase or decrease of the supply is fairly represented. The small note circulation, as has been previously stated, is not fully adequate as far as the lower three of the five denominations are concerned. The indicated requirement is about Ji2^i?^i:a/zVfl, and in some of the years when this amount was not provided, silver coin was apparently drawn in larger quantities. The prevailing objection to this form of circulation is^ however, manifested in the column relating thereto, which shows that it has never amounted to $2 per capita, and usually is considerably below that figure. 56 THE MONEY OF THE UNITED STATES. H. — Table Showing Approximately the Supply of Retail Money, and the Amounts Per Capita. Silver Dol- lars, ?"rac- s Small Notes. tional Cur- rency and Small Notes and Silver. Gold Coin. Small Notes. Silver and Gold Coin. v Subsidiary Silver. 1 o i 'p. S, I B 3 e < 2 P. u s 3 e < ■!-> 1) il a U 1 II i. % B u •ss vw ^ 4^ •4-1 -1-1 •*. . . . 11 .11 il 1% « S5 11 "*1i. 1.3 -T? S S ^'0 '■BTo =50 :=J x^To .F-'O vJ'O .-T3 .— •a "'O ^•a rr-O s % s $ % $ % s S $ % $ 1873 S3S 12.83 44 I-05 579 13-88 ^Z-5 36 6 30 0.72 609 14.60 709 1874 SS2 12.90 46 1.07 598 1397 66.3 51 8 43 I.OO 641 14-97 71.0 1875 S37 12.23 49 I. II 586 13-34 66.9 34 6 s8 0.64 6.4 13-98 70.0 1876 S13 "■37 |5 1.22 568 12-59 65.8 44 8 36 0.80 604 13-39 70.0 1877 491 10 60 62 1-34 553 11.94 62.9 46 9 37 0.80 S90 12.74 67.1 1878 497 10.44 66 1-39 563 "■^1 i;9.6 58 II 47 0.99 610 12.82 64.6 1879 49S 10.12 75 1-54 570 11.66 56-5 80 28 52 1.06 622 12.72 61.7 1880 550 10,98 74 1-47 624 12.45 54-0 191 92 99 1.98 723 14-43 62.6 i88i 11-75 82 1.60 685 13-35 52-2 274 120 154 3.00 839 16-35 63.8 1882 616 "•73 84 1.60 700 13-33 51-2 313 no 203 3-87 903 17.20 66.0 1883 639 11.90 87 1.62 726 13-52 51-2 28s 87 198 3-68 924 17.20 65.3 1884 64s 11-75 86 1.56 731 13 31 514 276 91 18S 3-37 916 i6.b8 64-s 188s 624 II. 12 82 1.46 706 12.58 48.2 272 116 156 2.78 862 15-36 58-8 1886 608 10.59 89 1-55 697 12.14 46.9 286 139 147 2.56 844 14.70 56.8 1887 640 10.90 94 1.60 734 12.50 47-3 292 143 149 2-54 883 IS-04 569 1888 710 11.83 106 1-77 8ib 13-60 51-0 301 146 155 2-58 971 16.18 60.7 1889 691 11.27 loS 1.71 796 12.98 51-0 279 13s 144 235 940 15-33 60.2 1890 728 11.63 no 1.76 838 13-39 52-9 275 120 155 2.47 993 15-86 62.6 1891 764 H.94 116 1. 81 880 13-75 56.0 303 144 IS9 2.48 1.039 16.23 66.1 -1892 813 12.41 119 1. 81 932 14-22 56.8 301 158 143 2.18 107s 16.40 65-4 1893 844 12-59 122 1.82 966 14-41 59-6 292 150 142 2.IJ: 1,108 16.53 68.3 The amount of small notes and silver required to perform the functions of retail money is therefore hardly in excess of $i\ per capita; but considerably more than 50 per cent., and probably 55 per cent., of the effective supply of money should be in these smaller forms. An estimate is here presented of the amount of gold coin in the banks for the purpose of determining approximately the amount which is in individual hands. The conclusion reached is that the amount per capita, since resump- tion, has fluctuated between 51.06 and $3-87, having been about $2.11 at the close of the fiscal year 1893. THE MONEY OF THE UNITED STATES. 57 Since gold does not, in fact, perform a perceptible portion of the retail- business transactions in the part of the country east of the Rocky Mountains- constituting, according to recent reports, less than one per cent, of the deposits received by banks— the figures of the column devoted to this form of money appear too large, unless private hoards are considered. Not more than one-third of the amount of gold coin here shown may be allowed for the circulation in States of the Pacific slope. Indications are not wanting, however, to show that when the supply of other money for retail purposes is insufficient, gold has been obtained from the Treasury for such use. Moreover, it would seem that the issue of gold certificates has perceptibly diminished the stock of gold in banks as well as that in circulation, to the advantage of the Treasury. Making due allowance for the service which gold does perform (including its use on the Pacific slope) it may be concluded that 60 per cent, of the entire effective money supply is required for retail trade. The amount of money therefore which is necessary to carry on the small transactions of daily life, in an effective circulation of say $1,600,000,000 (the average for the past six years), would be about $960,000,000. Of this amount $800,000,000, or an average per capita of nearly $12, would be in use practi- cally all the year round; and so long as facilities for the interchange of all forms of money are afforded, it is of no consequence what the form adopted for the retail money may be, provided it be convenient. The amount of silver certificates of the convenient denominations, now in use, is (according to Table F.) about $300,000,000; the silver dollars and sub- sidiary silver amount to $120,000,000, and the small national-bank notes to' $150,000,000, a total of $570,000,000. It is therefore entirely practicable to con- vert the $150,000,000 of Treasury notes into small denominations, withdrawing that amount of United States notes of $10 and under, and issuing larger ones. A further withdrawal of such notes would provide for the conversion of the remaining silver issues into convenient denominations, and thus distribute all of our silver money in such a manner as to remove almost entirely the element of danger with which this portion of our circulation is charged. In other words, the demand for the actual work of making small exchanges will keep the entire silver issue, in addition to the national-bank notes, circulating, just as the demand for convenient smaller denominations of money keeps afloat a very large amount of the minor or base coinage, the intrinsic value of which is vastly below its nominal value. Attention is here again directed to the issue of currency certificates. When the active work of the crop seasons is performed by the small notes, these return to the money centres, and finally to New York, in vast amounts, fre- quently at the rate of $35,000,000 in a single month. In the case of United 58 THE MONEY OF THE UNITED STATES. States notes the issue of these certificates provides for a convenient method for storing the small denominations in the Treasury offices, and substituting for them the certificates which are entirely in large denominations. Such of the notes as are unfit for circulation are replaced by the Treasury, and when the demand for small denominations returns, the certificates are surrendered. Such a form of certificate should be issued either by the Treasury or the clearing-house, for any of the smaller denominations of Government paper money. Since all of the issues are to be maintained at an equality as far as the Treasury is concerned (they are all receivable for Government dues), there is no valid reason why any discrimination in favor of one issue of such money should exist. Moreover, while aiding in the maintenance of the equality, these certificates would help to solve the problem of taking care of the plethora of small notes which is annually caused by the circumstances referred to, and for which the banks can hardly find storage space. In the table designated I. are presented the amounts of the deposits of the discount banks of the country, the amount of cash which would be required to provide a reserve of 20 percent, of these deposits, the amounts of cash held by these banks and the supply of large denominations of paper available for reserves (excluding national-bank notes), together with the gold-coin holdings of the banks. In this connection the portion of table F. showing the large denominations of paper (of which the bank reserves are 1 argely composed) is utilized ; a marked change took place during the years 1879-1882, when the issue of gold certificates was suspended, the coin itself being used for reserve purposes. The first portion of table I. shows the relative increase in the volume of the commercial circulation which constitutes fully 90 percent, of the aggregate of the "tools of exchange" utilized in our extensive internal commerce. Note- worthy points in this succinct review of our banking history are; (i) The increase in aggregate deposits from 1873 to 1879 was only $150,000,000 ; in the six years immediately after resumption the increase amounted to over 1450,000,000, and in the six succeeding years to f 1,078, 000,000. (2) The growth of deposits in State banks, while amounting to only 1537,000,000 in the entire period, was proportionately larger than that of deposits in national banks. (3) The several periods of financial disturbance are clearly marked, viz., 1877-8, 1883-4 and especially 1892-3. (4) In only two of the years enumerated did the cash reserveheld equal 20 per cent, of the deposits, viz., 1874 and 1885, years succeeding panics. (It should be borne in mind that most of the national banks are permitted by law to have a portion of their reserves on deposit with their correspondent banks in the so-called " reserve cities.") The supply of forms of money for reserve purposes has apparently been ample excepting in the years 1874, 1880, 1893. During these years smaller THE MONEY OF THE UNITED STATES. 59 /. — Table Showing the Deposits in Banks, Reserves, Bonded Debt, etc. (In millions of doUats.) Deposits in E anks. a u S3 Cash Held 1 H+- 1 'I '4 f Bonded Debt. > 11 m'iu 1! 1% •3 u PQ » •3 H 4+ a ■¥ ii s° 0" a < « A f; > 1873 673 III 784 157 133 II 144 162 802 1,710 >i 1874 717 144 861 172 144 27 171 160 86s 1.740 §§- 'o75 732 166 898 180 133 28 i6r 165 924 1,723 "iS-s 1876 706 158 864 r73 13s 29 164 170 941 1,7" °12 1877 668 227 89s 179 123 37 160 183 866 1,712 ■Db° 1878 e;7 143 820 164 128 31 159 179 880 1.795 ■=-do '??9 768 .167 935 187 138 39 177 178 802 1.798 fS " 1880 967 209 1,176 23s 174 55 229 203 819 1.724 74 1S81 1,112 261 1.373 27s 173 41 214 221 892 1,640 84 18B2 1,119 282 1,401 280 175 42 217 22s 957 1,464 176 ^f^ 1,168 335 1.503 301 188 43 231 264 I 02s 1.338 126 ^00+ 1,099 325 1,424 28s 220 54 274 294 1.073 1,227 III '!^l 1,248 344 1592 318 263 61 324 382 1.09s 1,196 31 i885 1.302 343 1.64s 329 22s 39 264 384 1,141 1,146 50 '^?Z 1,388 448 1,836 367 245 »50 *29'; 354 1.23s I 022 124 1888 1.344 410 1.954 391 268 *6o *328 368 1.364 951 71 1889 I.6S5 507 2,162 432 2-^4 *6o *324 387 1.465 830 121 1890 1.759 553 2,312 462 283 '66 "349 35^5 1.525 725 105 1891 1. 759 557 2.316 463 297 *70 '367 385 1,623 611 114 1892 2,022 643 2,670 534 327 *74 *40i 428 1. 712 585 26 1893 1.S7S- »Si8 »2,093 418 346 *78 '424 377 1.785 585 * Partly estimated, t Excluding national-bank notes, t Excluding Pacific Railroad Aid Bonds. notes were held to a larger extent, and in 1874, 1884, 1890 and 1893 clearing- house certificates were issued as auxiliaries. In each of the years named the insufficiency of reserve moneys was reflected in the gold movement (table K.) checking the tide of exports or causing imports. In this table are also given, for comparison, the deposits of savings banks for the period under consideration, and the amount and annual reduction of the bonded debt of the United States, exclusive of the $64,000,000 issued in aid of Pacific railroads. The final table of the series (K.) shows the product and commercial move- ment of gold and silver for the United States, the price of silver and the com- mercial ratio to gold each year, also the world's product and coinage of gold and silver. The production of gold and silver is given in the statistics of the Treasury by calendar years, but amounts are here estimated by fiscal years without 60 THE MONEY OF THE UNITED STATES. s? Vll s <4) -^ 1 V >ll •ij "^ •o is s e B >< ^ s r, ■*> -S' r, i^ E s: <1 ^ .5. '^ "ij "^ ^ ^ a a ^■33euio3 n ro CO -^oo H to 1000 w ov^o t-siornioOH\o en en « « iNvo 0000 H o\« wocnrniom ^ru •lonpojj O\a\CT»CTi00 0\C» 0^0•-«HW^-^tM« ■<*'VO t^OO Q-t^ 2 '0 ^.-aSeuio;) 00 vo i/i m ■^00 H t^ Lo O\*o IT) lo in ov 000 1 • Lo en H h..oo OMOTfo cno\0'. N m«D ■■^ m *o r^ C1H««IHH HHHW HMMHHM • ■lonpojj; S's'2 3sH'sSS'2°'§2g'Ss2 2'§H>5 : 1 . Looo otHvo OvOiH txcj enoo Tf -^ moo NNMHn HMH MriW Hi-1 f *)jodx3 §-s«"S'?>s-s ?E? Erg's s^^-s Siwa s!5- 'Ijodiuj en CTi Cnoo 100 ■^M Hoo "lotNoo tvuiovMoo m H MrtMHH MMMH«HI-i«W«Cl en *"S 'A '53npojd[ « c^'^iocMM COO M io\o ooOHIN■oN^scn^i^Lo m . ■»r o_ H •jjodxa voiocnen oo-«-0 -^oo • 00 COHION H-«--lO 'O-OO Is en ■qjoduii ■^H^stv.cl"0 -00 ■ cn\o T^ CnO\ •H-cnot vo ■Ijodxg; irj'^txHvO OMJT^enO « h OscnOoo Cn^O o ct> "-* Mr^ NM OOOenM«C)C1"i3-'^HMHlO« 00 ON *-S -a 'l^npoij voincniNenOMnrNUTd-M « en-^cnencnenenTi- encncncn'^j-T'^cnenencncnencncncnencnencncn en <4 cn^a-LoyD is"o o\0 w cj cn-t-xn''0 isoo o\ d h « en ^^. t^ tv. r-* rv, 1--* 1^=0 ooooooooco ooouoco OvOsj'Ox OOOOCOOOCOOOOOOOOO jOOOOOCOCOOOCOOOOOOOOOOO THE MONEY OF THE UNITED STATES. 61 changing the aggregate. In the twenty-one years the production of gold amounted to {743,000,000, the imports to $598,000,000, and the exports to f 711,000,000, involving a transfer of $1,309,000,000, equal to more than one-third of the world's entire stock, with a net result of a loss to the United States of |ii2,ooo,ooo, or but a trifle more than the exports of 1893. In other words, omitting the exports of 1893, the accounts of the United States with other nations, payable in gold during the period of 21 years, were practically balanced, and $1,200,000,000 of specie were sent back and forth at an expense of several millions of dollars to reach that end. Not until the clearing-house system is extended to international transactions, as has been proposed by several writers, will this apparently needless tax upon commerce be saved. The movement of silver has resulted in the net disposal of $269,000,000 to other nations. Of our product of $1,043,000,000 we have therefore kept for our own use (assuming all of our importations to have been re-exported) the sum of $774,000,000, of which, as was shown in table B., $598,000,000 has gone into circulation; the remainder (after allowing for depreciated valuation) has been consumed in the arts. The columns of the table showing the average price per fine ounce of silver bullion and the commercial ratio of that metal to gold, make manifest how little the acquisition of silver by the United States has affected the course of the market. A slight increase in price occurred in 1876-7, when the large purchases for subsidiary coinage were made; but the passage of the law of 1878 and the purchases under it served to enhance the average price by less than three cents, and only for a short period ; and the increased purchases under the law of 1890, added but 8 cents to the average price for one year alone, the rate for the white metal falling lower than everin 1892, -and in 1893, it was, for a short time, quoted at 62 cents, less than half its price in 1873 when it was almost at the United States parity ($1.29.29). The world's product of silver did not exceed that of gold until 1882, and this corresponds with the period of the more marked decline in the price of silver. The coinage of precious metals exceeds the production in almost every one of the years. This isduetothe recoinage (coin made from bullion derived from melting up other coins) accurate statistics of which are not available. The cost of recoinage, except in the case of abraded pieces, is another large expense which an inter- national clearing-house system would render unneces- sary. In fact, a large portion of the usual coinage would be dispensed with. The amount of paper currency used is so great that a very large force is con- tinually employed in counting and recounting the old aind worn notes and certificates, and another force fully as large is employed in preparing new ones. The volume may be approximately measured by the following table. 62 THE MONEY OF THE UNITED STATES. Redemptions of Paper Currency Each Year Since iS'/j. (In millions of dollars.) 1873- 1874, 1875. 1876. 1877, 1878, 1879. 1880. 1881. 1882, 1883. 1884. 1885. 18B6. 1887. 1888. 1889. l8go. 1891. 1892. 1893 United Gold Silver Treasury Notes, Currency National- States Certifi- Certifi- Certifi- Bank Notes. cates, cates, cates. Notes. 64 i^ 25 36 94 69 S3 SO no 71 81 138 97 84 108 99 82 45 .. 56 77 80 47 94 57 f4 41 8 107 41 81 7 62 35 54 2 2 20 55 79 I 9 IS 75 no 9 12 20 83 86 25 20 28 93 84 21 21 39 91 63 10 28 59 6d 74 10 22 37 48 64 ^S 22 24 59 S9 67 41 3° 52 78 45 56 28 44 71 69 72 2 28 46 66 66 93 9 64 44 91 77 III 42 6i 52 Total. 170 266 4C0 388 260 278 261 185 133 179 234 252 256 220 191 234 249 251 238 342 434 The redemption of fragments of notes or certificates, involving a discount equal to the portion missing, has caused a gain of about 1214,000, besides $142,000 on fractional paper currency. About one-half of this amount accrued prior to 1878, and on United States notes ; it is therefore not important in this connection, since it was allowed for in fixing the amount of notes outstanding under the law of May 31, 1878, by which it was limited to 1346,681,016, Reference was made, on a preceding page, to the loss of paper currency by total destruction. Undoubtedly large amounts of the smaller notes of the earlier issues, particularly those used to pay troops, have entirely disappeared. This is not, however, true of the larger denominations. Experience indicates that almost all of the large notes will eventually be presented, since these are naturally subjected to less use, and are held chiefly in reserves ; in some cases the same notes are so held for a long period. The first issue of gold certificates, of which there were very few of the denomina- tion of $20, may properly be considered a fair instance whereby to estimate the probable destruction of large notes. The issue amounted to $980,000,000, and continued from 1863 to 1878. At the close of 1892 only $262,000 were out- standing, of which $219,000 was in notes of $1,000 and over, represented by sixty-six pieces. THE MONEY OF THE UNITED STATES. 63 The following table shows the amount of United States notes of Ihe issues which preceded the one now in use, remaining unredeemed, and the proportion, to the total issue, of the large and small notes separately. The statement is brought down to the close of the fiscal year 1892. Small. Large. Total. Outstanding, Per Cent. Issue. Issued, Out- standing Issued. Out- standing Issued. Out- standing Small. Large. Total. 1st, 1862-1870. . , 2d, 1869-1877. . , 3d, 187S-1877.. 4th, 187S-1879 . . 5th, 1878-1884 . . 384 302 36 144 "3 979 6.7 4-9 0.2 2.6 3-2 28S 192 52 47 127 0.9 19 I.I 2.1 5-1 669 4=34 83 191 240 7.6 68 1-3 4-7 8.3 1-7 1.6 °-5 1.8 2.8 03 l.I 2.1 45 4 II 1-4 1-5 2.5 3-5 Total 17.6 703 ii.I I,68z 2B.7 1.8 1,6 1.7 The destruction of large United States notes can therefore not be regarded as important in amount. It is otherwise with respect to the small denominations, especially when the large amount of the earlier issues remaining unredeemed (over |ii, 500,000) is considered. The amount of the annual redemption of these is rapidly dimin- ■ ishing, so that only a fraction of one per cent, of the outstanding is presented each year. The eventual gain therefore from the total disappearance of the small notes may be placed at ;j!8,50o,oao, an amount somewhat less than one per cent, on the aggregate of these denominations issued prior to 1885. For the reasons given (the vicissitudes of war, etc. ) this cannot be regarded as an indication of the gain on all note issues; in fact, the statistics of redemp- tions of notes of national banks that have failed, lead to the belief that the average will barely reach one-half of one per cent. It is very difficult to estimate the volume of the minor coins in circulation. Reference to the coinage statistics in part I. will show that of the pieces now current about $20,000,000 have been coined, leaving about I5, '•00,000 of other pieces. The latter may be practically eliminated from consideration, very nearly all having been retired. Large amounts of the current issues have also been retired in a worn or defaced condition, and it is roughly estimated that not more than $17,500,000 are now in use. The Treasury held on October i, 1893, about $889,000, and on January i, 1893, about f355>ooo, showing a gain of $534,000. During the same pericd the coinage amounted to $844,000. A portion of the amount in the Treasury (probably 20 per cent.) consisted of retired pieces, so that virtually the Treasury was able to float only $410,000 during the nine months. 64 THE MONEY OF THE UNITED STATES. Supplementary Statement Showing Changes in the Circulation from June JO to September jo, i8gj. Eutirti Stock. In Circulation. In the Treasury. Aggregate Figures. Total. Metal. Paper. Total. Metal. Paper. Total. Metal. Paper i 132 139 U ■ 0* September 30 Tune ^0 2,404* 2.317 1,279 1,207 1,126 1,110 1,702 1.594 607 526 109s 702 723 671 681 31 42 570 584 Increase ( or Decrease (— ). + 87* + 72 + 16 + 108 + 81 + 27 —21 — 10 — II -7 -14 * As to discrepancy see page 41. Money in Circulation. Gold Coin. Silver Dol- lars. •11 •5« 6 h tfiS n ii !2i •s ^^ h H » bO 1— 1 September 30 484 404 + 80 S9 57 6s 80 93 32s 326 340 333 149 141 201 175 1.590 1,482 132 139 1,722 1,621 545 480 Increase ( + ) or Decrease (— ). + 2 -I -13 —I + 7 + 8 + z5 + 108 -7 + 101 + 65 * Includes currency certificates. Paper Money. Per Cent. of Small to AH Paper. Small Notes and Silver. Per Capita. n B "o 191 150 L -ES •a S S Details. Small. Large. Of Effect- ive. In Circu- lation Small Notes. Small Notes and Silver. September 30 June 30 88s 844 232 254 79.2 76.9 1,008 966 25-59 24.19 23.62 22.12 13.15 12.60 14-97 1442 173 188 181 142 Increase ( + ) or Decrease {— ). +41 — 22 + 2.3 + 42 + 1.40 + 1.50 + •55 + -S3 +41 -IS + 39 The total gain of money during this interesting quarter year was 187,000,000; but as the Treasury lost |2i,ooo,ooo, the amount in circulation was increased THE MONEY OF THE UNITED STATES. 65 $[08,000,000, $80,000,000 of which was in gold, |i,ooo,oooin silver and $27,000,- 000 in paper. An analysis of the increase in paper shows that while United States notes and Treasury notes of 1890 increased $15,000,000, gold and silver certificates decreased $14,000,000, resulting in a net increase of only $1,000,000 in Government issues ; but the low price of bonds induced national banlis to increase their issues by $26,000,000. The gain in gold was derived from im- ports in excess of exports ($52,000,000) from the Treasury ($15,000,000) and from the production. Of the increase the banks took $41,000,000, to make good in part their depleted reserves, and $39,000,000 went into active circulation. The small note issue was increased by $41,000,000, and the large note issue (exclusive of currency certificates) decreased $22,000,000, and the per- centage of small notes to all was 79.2, an increase of 2.3 per cent. The amount per capita of the effective stock increased $1.40 ; but the Treasury stock having decreased, the amount in circulation increased $1.50 per capita. The tendency to accumulate money in the banks of New York city at sea- sons when the inactivity of general business reduces the requirements of trade, is shown by the following statement, giving at various dates the amount of cash held by those banks, the amount required as legal reserve against depos- its (25.per cent.), and the excess or deficit of cash compared with the reserve required — all in millions of dollars and tenths. Date, 1 July I August 12 ... . September 2 . September 30 October 28 . . . November 25 . Cash Held. Reserve Required. Surplus (-}-) or Deficit (— ). 100 7 99 5 -I-I2 76.5 93 — I6.S 91.9 93-5 — 1.6 121. 8 97 7 -1-24.1 157- 1 108.3 -1-48.8 189.7 118 8 -I- 70-9 On August 12 the lowest point was reached, the full effects of the money stringency having been felt; and notwithstanding the heavy importations of gold in August, the cash was short at the beginning of September. A reaction set in, however, and money left its hiding places ; finding no immediate employment it took its way to New York, where the increase from September 2 to Novem- ber 25 amounted to over 198,000,000, or more than 100 per cent., and had not ceased at this latter date. This inflow of money occurred at a season when it is usually needed lor crop movements, and was therefore abnormal ; but the volume of this move- ment, which usually occurs from December tojune, is often fully ;is large. 66 THE MONEY OF THE UNITED STATES. PART III. ABSTRACTS OF PI,ANS PROPOSED FOR THE SOLUTION OF THE CURRENCY PROBLEM. During the period covered by the preceding section, which marks the contest for the rehabilitation of silver, a multitude of plans for the improve- ment of the currency system of the United States have been proposed. It would be of little value to attempt to rehearse all of them, but since it is cer- tain that in the near future the subject must receive further attention, some of the more recent propositions are here recapitulated. The subject is gener- ally divided under the heads of : I. Coins, 11. Government paper issues, and III. Bank issues of paper. I. Coins, i. — Gold and Silver, a. Repeal all legal-tender provisions relating to coin or paper issues ; coin gold and silver freely and in unlimited amounts ; retire Government notes and make the issue of bank notes free. b. Issue gold and silver notes of denominations as at present or larger, upon deposits of buUion, the value of silver bullion deposited to be determined by the Treasury periodically according to the market quotations ; the notes to be payable in bullion at the valuation at the time of payment ; the notes to be a legal tender for all payments ; the bullion to be held to redeem such notes ; depreciation of the silver bullion held to be made up by a tax upon the notes issued while such deficiency exists, the proceeds of the tax to be invested in bullion to make up for the deficiency ; no bullion to be received when and while the market price equals or exceeds ft. 35 per fine ounce ; redemption agencies to be established abroad ; power to impose an import duty on silver. Accompanying this, provision to coin sufficient gold of the present standard, in pieces of f2o and jSio, and silver subsidiary pieces only at the rate of 464.4 grains fine silver (516 grains standard ; ratio 20 to i) ; to provide coin for the redemption of tlie notes when preferred by the holder ; gold coins to be unlimited legal tender, and silver coins to the extent of |2o \ the present coins to be exchanged at par ; Treasury notes to be canceled and redeemed in silver notes ; the bullion held under the act of 1890 to be carried to the silver bullion fund ; coinage not to continue so long as silver is above the established par, j!i. 03.35 per ounce fine ; the law authorizing the issue of currency certificates to be repealed. c. Free coinage ; issue gold and silver certificates only ; retire all Govern- ment notes by means of a bond issue ; establish from the accrued seigniorage a safety fund to maintain the silver dollars at parity with gold (i. e., if the silver THE MONEY OF THE UNITED STATES. 67 in the dollars be worth in the market 80 per cent, of their face value, an amount equal to 20 per cent, of the issue shall be in the safety fund). If necessary, buy gold with bonds to maintain the fund ; bank issues to be eventually entirely discontinued. 2. Silver. A. Propositions looking to free coinage. — a. The free and unlimited coinage of legal-tender silver dollars out of any and all silver bullion brought to the mints, for the benefit of the holder (no seigniorage), at the present ratio ; issuing silver certificates for such dollars when presented at the Treasury for the purpose. b. Variations of the proposition, providing for the coinage of the dollars at other ratios, viz. : 17 to I producing a dollar of 438.6 grains standard. 18 to I producing a dollar of 464.4 grains standard. 19 to I producing a dollar of 490. 2 grains standard. 20 to I producing a dollar of 516 grains standard. c. Combined with these a proposition to make the fractional silver pieces exact subdivisions of the dollars, exchangeable for silver certificates and with full legal-tender power. d. Another variation providing that the seigniorage accrue to the Treasury instead of to the holder of bullion — practically an unlimited extension of the act of 1878. e. A modification providing for the coinage of the silver produced in the United States only, with a seigniorage of 20 per cent. f. Combining with one or more of the foregoing, a proposition for a mone- tary union, to maintain the parity of silver of all the countries of the American continent. g: Providmg for the coinage of all bullion acquired under the act of 1890 ; the seigniorage estimated to arise therefrom to be made immediately available through the medium of silver certificates. B. — More moderate propositions respecting silver : a* Coinage of the bullion held under the lawof 1890 at the rate of $3,000,- 000 per month, and the monthly purchase and coinage of sufficient additional silver to coin JS2, 000,000 and later J3, 000,000 more ; limitation of the aggregate stock of dollars, however, to JS8oo,ooo,ooo ; cancellation of such silver certifi- cates and Treasury notes of 1890 as may be received by the Treasury, and pro- hibition of the issue of national-bank notes of denominations under jSio. b.* Coinage of $100,000,000 at present ratio, but at the commercial value, without the issue of silver certificates ; the seigniorage to be used to maintain the parity of the silver; the sale of bonds to replenish the gold reserve fund. c. Sale of the seigniorage in bullion form to maintain parity. * The two propositions, a and ^, contemplate the enforced circulation of silver dollars //-£> ianto. 68 THE MONEY OF THE UNITED STATES. d. Coinage of silver to equal annually the coinage of gold, at present ratio; the bullion to be purchased by the Treasury and paid for in silver dollars. e. Coinage of present stock of silver, and retirement of all notes or gold coin of denominations under |2o with silver certificates, making these a legal tender in amounts not to exceed |ioo. II. — Government Paper Issues, i. United States Notes, a. Increase the issue of such notes, in varying amounts, as high as f 1,000,000,000. b. Increase the issue of notes and provide for the issue of inter-convertible bonds, exchangeable for such notes, and vice versa. c. Repeal the legal-tender provision, discontinue the reissue of notes, utilize the f 100,000,000 reserve fund supplemented by a bond issue to retire the notes as rapidly as bank notes are issued to take their place in the circula- tion. d. Retire all United States notes and Treasury notes by an issue of bonds available for bank-note issues, and utilize the silver bullion held for the Treas- ury notes to increase the circulation by the gradual coinage of dollars and the issue of silver certificates. e. Retire all Government notes by acquiring coin sufficient for the purpose by means of a bond issue ; the Treasury to issue only certificates for gold and silver coin, and establish a safety fund for silver by setting aside the silver profit fund. f.. Retire all Government notes of denominations under %\o (or f 20) and issue silver certificates of the smaller denominations only, and gradually con- vert the Treasury notes into silver certificates by the coinage of all silver bullion in the Treasury into dollars. g. Refuse redemption of any notes in gold when the latter is intended for exportation. 2. Treasury Notes of iSgo. In addition to the above mentioned proposi- tions : a. Sell the silver bullion held, and use the proceeds to retire the notes ; any deficiency to be covered from the cash in the Treasury (in connection with United States notes, see II, i, c], b. Issue silver certificates in lieu of Treasury notes redeemed in silver dol- lars or received into the Treasury, coining the silver bullion into dollars for this purpose. c. Increase the issue indefinitely, and exchange the same for United States bonds to any holder, temporarily; interest on the bonds to be suspended while held for notes, and the latter to be canceled upon return of bonds in exchange. d. Permit deposits of gold coin and issue such notes to the depositor. THE MONEY OF THE UNITED STATES. 69 3. Silver Certificates, a. To make these a legal tender, the same as the dollars. b. To issue no silver certificates of denominations larger than J20. 4. Gold Certificates, a. To make these a legal tender, like gold coin. b. To issue, in lieu of gold and silver certificates, coin certificates, for either kind of coin. 5. Bullion Notes. To issue bullion notes instead of coin notes, to be redeemable only in silver or gold bullion respectively at the existing market rate for silver, to be maintained "by a tax on the issue, the notes to be legal tender (for a fuller explanation, see under Gold and Silver, b. III. — Bank Issues of Paper. '■ i. Propositions having in view the continu- ation of the present system of national-bank issues : a. Permitting the issue of notes to the extent of the par value of bonds on deposit instead of only go per cent. b. To provide for an issue of bonds to retire the United States notes ($364,- 000,000) and the Treasury notes of 1890 (|i56,ooo,ooo) enabling the national banks thus to acquire bonds for the purpose of issuing circulation to replace the retired notes. c. Permitting the deposit, for security of notes, of State, county and municipal bonds, as well as approved railway mortgage bonds, to enable the banks to increase their issues upon profitable terms. (A modification of this proposition excludes State bonds, since suits to recover on them would not lie, and also railway bonds as lacking in security.) 2. Propositions modifying the present system in important particulars: a. Providing for the issue of notes, without bonded security, to the extent of 75 percent, of the capital of a bank, the notes to be a first lien upon all assets and a duplicate liability of stockholders, repealing the 1 per cent, tax on national-bank issues ; and for special purposes permitting the issue of notes upon bonds at par, to the extent of twice the amount of the capital of banks in reserve cities ; note redemptions to be made at specified agencies for each sec- tion of the country. The tax of 10 per cent, on State-bank issues to be repealed for States passing banking laws in conformity with the foregoing. (In connec- tion with United States notes, see II, i, c). b. Providing for note issues without bonded security, but making them a first lien upon the assets of each bank, and providing a safety fund from the tax upon circulation to redeem notes of failed banks. c. The repeal of the tax of 10 per cent, on State-bank issues, permitting the emission of notes under State banking laws. d. The preceding provision supplemented by the condition precedent that the State laws provide for bonded security. A comprehensive combination : Redeem and cancel the $346,000, 000 of 70 THE MONEY OF THE UNITED STATES. United States notes by bond issues; redeem and cancel the Treasury notes, 1152,000,000 in gold or silver; coin the silver bullion into dollars and issue silver certificates to replace the Treasury notes ; issue gold certificates on gold-coin deposits; give the gold and silver certificates full legal-tender power; permit the issue of bank notes under Federal supervision to the extent of 75 per cent, of capital, without bonds, but with a first lien on assets ; provide a safety fund from tax upon circulation, utilizing the tax so paid in the past ; additional issues upon bonded security to be permitted. A comprehensive international plan proposes the establishment of an international monetary clearing house or commission representing all of the commercial nations, to select a universal standard, both gold and silver to be utilized at such a flexible ratio as to effect stability, and to adopt measures for facilitating international monetary transactions and supervise the same. In its details it provides for a proper distribution of money metals, to obviate losses by sudden fluctuations in volume, and for the issue of international gold and silver certificates. Underlying the proposition as a whole are the desire and expectation of Universal Birmetallism. INDEX. Page. Banks, Deposits and Cash held by -_ 59 New York City, Condition, 1893 ..., 65 Gold in 56 Bonds, United States, Volume of 29, 59 Reduction of 59 Sale of , for Resumption 21, 22 Bullion Notes, Proposed 69 Certificates, Clearing- house 39 Currency--— 24 Gold 18 Silver 19 Other 34 Circulation, Money in 44 Net Effective 53 Per Capita 53 Supplementary Statement 64 Clearing-house System 38 Certificates _ ., 39 International. _ _ 61 . 70 Coinage, Gold 8 Minor,- 14 Silver Dollars 9 Subsidiary Silver 13 Trade Dollars 15 Of World 60 Coins, Foreign 15 Tableof 16, 17 Present U.S., table 40 Currency Certificates 24, 25, 43 Denominations of Coins 40 Paper 40 Large and Small 49, 50, 51 Deposits in Banks ._ 59 Dimensions of Coins 8, 10, 11, 14 Effective Circulation , What is 41 Volume of.__._ 42, 53 Per Capita 53 Supplementary Statement... 64 Exports and Imports of Gold and Silver. 60 Foreign Coin 15, J8 Tableof 16, 17 Fractional Currency 36 Issues 37, 38 Legal Tender of._.' 36, 87 Free Coinage, Defined .. JO Propositions Looking to 66, 67, 68 Free Delivery of Silver Coin 10, 11 Free Gold in Treasury 33, 46 Gold, Imports and Exports.. 60 Premium on 22 Production, U. S. and World 60 Stock of in U. S 43 Overestimates 52 Net 53 Gold Certificates, Laws Relating to 18 Issues by Denominations 19 In Circulation 44 In Treasury 45 In Use, by Denominations 49, BO Propositions Relative to 69, 70 Gold Coin, Laws Relating to ..7. 8 Denominations of 7, 8, 40 Coinage of- 7, 8 Weight, Fineness, Dimensions 8 In Circulation 44, 53, 64 In Banks 53, 59, 64 Legal Tender of . 7, 8 And Bullion in Treasury 23, 46. 53 Proportion to Paper 47 Page. Imports and Exports of Gold and Silver 60 International Clearin^-hoube.. .61, 70 Kinds of Money, Entire Stock 42, 43 In Circulation 44 in Treasury 46 Supplementary Statement 64 Large Note Issues, Volume. 50, 51 Legal Tender of Gold Coin .„.7, 8 Silver Dollars 9 Subsidiary Coin 10, 11 Minor Coin 13, 14 Trade Dollar 14, 15 Foreign Coin ...15, 18 U.S.Notes 21 Decisions 24 Treasury Notes 32 Present Money 40 Fractional Currency 36, 37 Loss of Paper Money by Destruction 62, 61} Money of the U. S., tableof -.... 40 Entire Stock 43, 43 In Circulation __ 44 In the Treasury i 46 Per Capita 53 Retail 66 Effective 41, 42 Net Effective 53 Supplementary Statement 64 Metallic Stock 42, 43 Minor Coin. Laws Relating to. ...^ 13, 14 Composition, Weight, Dimensions 13, 14 Coinage of _ 14 Probable Amount in Use l 63 Legal Tender of 13, 14 Mutilated Paper Money, Volume of. 63 National Banks, Laws Relating to 25, 26 Number of and Capital 29 Failed 30 Deposits in 59 Reserves Held by 59 Bonds Available for 38 Gold Banks 80 National Bank Notes, Laws Relating to. ..25, 26 Issues by Denominations 27 In Circulation 44, 64 In Treasury 46, 64 Entire Stock 43, 64 Redemption of... 2S, 27 Fund for ..30, 31 Paper Money, Volume of 42, 43, 64 In Circulation 44, 64 In Treasury 46, 64 Denominations of 49, 60, Bl Public Debt, Volume of and Reduction in 50 Per Capita of Effective Money 53 Retail Money 56 Reserves of Banks 69 National Banks, Legal Provisions 26, 27 Resumption of Specie Payments 23 Retail Money, Volume and Per Capita 56 Ratio of Silver Coin to Gold Coin 9, 10, 11 Commercial of Silver to Gold 60 Redemption of Paper Money, Volume 62 Saving Banks, Deposits in 58 Seigniorage on Silver Coinage 9, 33, 33, 34 Propositions, Relative to 67, 68 Silver, Imports and Exports of 60 Production, U. S. and World 60 Price of and Ratio to Gold _ 60 72 THE MONEY OF THE UNITED STATES. Page. Silver, Bullion on hand 33, 34 Silver Dollars, Laws Relating to 9, 33 Coinage of 9,33,48 'Weight, Fineness and Ratio to Gold 9 Dimensions of _ _ 10 In Circulation 10, 44,64 In Treasury 46 Propo«;itions Relating to 66,67, 68 Legal Tender of 9 Silver Certificates, Laws Relating to 19, 20 Issues by Denominations 20 Volume of 43 In Circulation.- 4i, 64 In Treasury _ 46 Propositions Relating to 67, 69, 70 State Banks _ 31 Number, Capital, etc., various dates 33 Deposits and Reserves in -- 58 State Bank Notes _ 31 Volume of 33 Taxation of 31 Proposition Relating to 69, 70 Small Note Issues, Volume 49, 50, 51, 64 Per Capita 56, 64 Subsidiary Silver Coin, Laws Relating to. .10, 11 Denominations _ 10, 11 Coinage of _ 13 Weight, Fineness and Ratio to Gold. .10, 11 Dimensions 11 Volume of 43 In Circulation 44, 64 In Treasury 46 Propositions Relative to 66, 67 Pace. Subsidiary Silver Coin^ Legal Tender of -.10, 11 Supplementary Statement of Circulation 64 Taxation of United States Notes 24 National Bank Notes 28 State Bank Notes 31 Repeal Propositions .-69, 70 Trade Dollars 14, 15 Redemption of.---. 15 Silver Dollars Coined from 9 Treasury. Money in the 43, 46 Per Capita 53 Gold in the 23,46, 53 Treasury Notes of 1890, Laws Relating to..33, 33 Issues by Denominations. __-__ 34 Volume of .-— 41 In Circulation™, 44, 46 In Treasury ...__. . _. 64 Bullion held for 33 Propositions Relative to 68, 70 Treasury Notes, Other. 34 United States Notes, Laws Relating to. 20, 31, 23 Issues by Denominations 24 Volume of 43 In Circulation _ 4, 64 In Treasury 46 Certiiicates for 34 Legal Tenderof 31 Decisions _ 33 Depreciation of _ 22 Taxation of 34 Resumption of Specie Payments 23 Propositions Relative to 68, 69 Reserve for 22, 23 Knickerbocker Trust Co, 234 FIFTH AVE., Cor. 27th ST. DBi?a,33.cD=L, 18 TP^-A-IjIL. ST. ana. 3 IST .A.SS.A.TJ SO?. DESIGNATED LEGAIy DEPOSITORY. CflPlTflli flJSlD SUHPliUS, $1,000,000. JOHN P. TOWNSEND, President. CHARLES T. BARNEY, Vice-President. JOSEPH T. BROWN, 2d Vice-President. FRED'K L. ELDRIDGE, Secretary. J. HENRY TOWNSEND, Ass't Secretary. IHTEIRHST fililiOWED Ofl DEPOSITS. Checks pass through Clearing House same as on city banks. Acts as Executor or Administrator of Estates, and as Guardian, Receiver, Registrar, Trans- fer and Financial Agent for States, railroads and corporations. THE FOURTH NATIONAL BANK OF THE CITY OF NEW YORK OFFERS TO DE- POSITORS EVERY FACILITY WHICH THEIR BALANCES, BUSINESS AND RESPONSI- BILITY WARRANT. TiTlEQUARANTeE&TRU5T(o; 55 LIBERTY ST., N, Y. 26 COURT ST., BROOKLYN. BRANCH OFFICE: The Lisbon, N. E. cor. 58th St. and 7th Av., N. Y. CAPITAL AND SURPLUS, $2,701 ;084 Ejxamines and guarantees titles to real estate. Loans money on mortgage at 4, 4J^, and 5 per cent. Furnishes mortgages to investors. Receives money on deposit at current rates of interest. • Manages real estate and acts as Executor, Trustee, Guardian, etc. Performs all the usual duties of a Trust Company. COUNSKL : Stephen P. Nash. Richard Ingraham. George F. Demarest. Newell Martin. SOIylClTOR : Edward M. Sprague. TRUSTEES : Orlando B. Potter, Eugene Kelly, Alexander E. Orr, George G. Williams, John T. Martin, James D. Lyi:ch, William M. Ingraham, Charles S. Brown, William H. Male, Julien T. Davies, John Jacob Astor, Hugo Wesendonck, Benjamin D. Hicks, Emil Oelbermann, Martin Joost, John D Hicks, Clarence H. Kelsey, Louis WindmllUer, Charles R. Henderson, John W. Mutraj^, Ellis D. Williams, Samuel T. Freeman, Charles Matlack, William Trautwine, Charles Richardson. CLARENCE H. KELSEY, Pres. JOHN W. MURRAY, Vice-Pres. O. EGERTON SCHMIDT, Treas. FRANK BAILEY, Second Vice-Pres. LOUIS V. BRIGHT, Secretary. Bond #' Mortgrge Gurrantee Go. C55 Liberty St., N. Y. OFFICES: < N. E Corner 58th St. and 7th Ave., N. Y. (26 Court St., Brooklyn. CAPITAL AND SURPLUS, $1,113,169 Guarantees the payment of Bonds and Mortgages on real estate in New York and Kings Counties, Offers to investors choice mortgage investments, with payment guaranteed by it. DIRECTORS : Geo. G. Williams, William B. Isham, Orlando B. Potter, William M. Ingraham, Jacob H. Schiff, John W. Sterling, John J. Tucker, William Lummis, Alexander E, Orr, Martin Joost, Chas. R, Henderson, James D. Lynch, Frederick Potter, Chas. S Brown, Benjamin D, Hicks, Julien T. Davies, Clarence H. Kelsey, Felix Campbell, Ellis D, Williams. WILLIAM B, ISHAM, President, MARTIN JOOST, Vice-President. O. EGERTON SCHMIDT, Treasurer. CLARENCE H. KELSEY, 2d Vice-Pres. FRANK BAILEY, Secretary. EBENEZER K. WRIGHT, President. Stityvesant Fish, Vice-President. Geo. S. Hickok, Cashier. Edward E. Poor, Vice-President. Edw. J. Bai,dwin, Ass't Cashier. THE NATIONAL PARK BANK OF NEW YORK. Capital, $2,000,000. Surplus, $3,000,000. Extensive Safety Vaults for the convenience of Depositors and Investors. Entrance only through the Bank. Eugene Kelly, Ebenezer K. Wright, Joseph T. Moore, Stuyvesant Fish, George S. Hart, DIRECTORS : Charles Sternbach, Charles Scribner, Edward C. Hoyt, Edward E. Poor, W. Rockhill Potts, August Belmont, Richard Delafield, Francis R. Appleton, John Jacob Astor, George S. Hickok. MANHATTAN TRUST COMPANY COR. WALL AND NASSAU STS., NEW YORK CITY. CAPITAL, - - $1,000,000 The Company is authorized to act as Executor, Admiuistrator, Guardian, Receiver and Trustee ; as Fiscal and Transfer Agent, and as Registrar of Stocks and Bonds. The Company offers to' Executors and Trustees of Estates, and to Religious and Benevolent Institution*' exceptional facilities for the transaction of their business. Deposits received subject to cheque at sight, payable through the New York Clearing House. Liberal Rates of Interest Paid on Balances. OFFICERS. JOHN I. WATERBURY, President. JOHN KEAN, Jr., Vice-President. AMOS T. FRENCH, 2d Vice-President. C. H. SMITH, Asst. Sedy. AUGUST BEI,MONT, C. C. BALDWIN, . H. W. CANNON. T. J. COOLIDGE, Jr., . R. J. CROSS, JOHN N. A. GRISWOLD, JOHN R. FORD, H. -Li. HIGGINSON, . DIRECTORS, 1893. New York JOHN KEAN. JR., . Elizabeth, N. J. New York H. 0. NORTHCOTE, . London New York E. D. RANDOLPH, . . New York . Boston A. S. ROSENBAUM, New York New York JAMES 0. SHELDON, . New York New York R. T. WILSON, New York New York JOHN I. WATERBURY, . New York Boston RUDULPH ELLIS, • . Philadelphia THE GHI18E NATIONAL BANK OF THE CITY OF NEW YORK. UNITED STATES DEPOSITORY. Corner Pine and Nassau Streets, Capital and Surplus, $1,500,000 RECEIVE ACCOUNTS OF BANKS, BANKERS, CORPORATIONS AND FIRMS ON FAVORABLE TERMS, AND Wlhh BE PLEASED TO MEET OR CORRESPOND WITH THOSE WHO CONTEMPLATE MAKING CHANGES OR OPENING NEW ACCOUNTS. H. W. CANNON, President. WM. H. PORTER, Vice-Prest. J. T. MILLS, Jr., Cashier. C. C. SLADE, Asst. Cashier. DIRECTORS : H. W. CANNON. JAMES J. HILL, St. Paul, Minn. SAMUEL THOMAS. CALVIN S. BRICE. EDWARD TUCK. JOHN G. MOORE. WM. H. PORTER. A Wall Street ofi&ce witli DOW, JONES COMPANY'S news service in it is better fitted to keep you well posted on the markets than one without it. Information Makes Money. At the close of the markets each day you can get this news and other valuable information on Bonds and Stocks, in the WALL STREET JOURNAL, which no one who deals in Wall Street can well afford to be without. $5 a year. Send for sample copy. 43-44 Broad St., N. Y. Works Indispensable to Investors and Financial Men. UNIVERSAL BIMETALLISM AND AN INTERNATIONAL MONETARY CLEARINQ HOUSE, TOGETHER "WITH A Record of the World's Money, Statistics of Gold and Silver, etc. By Richard P. Rothwell, C. E., M. K-, Special Agent of the nth Census on Gold and Silver, Editor of the Engineering and Mining Journal, ex-President American Institute of Mining Engineers. Price, 75 Cents. THE MINERAL INDUSTRY. Its statistics, Technology and Trade. Prom the Earliest Times. Edited by Richard P. Rothwell. Photograph of the Entire Mineral Industry of the World. Vol. I., to end of 1892, $2.50. Vol. 11., to end of 1893 (in preparation), $5.00. THE SCIENTIFIC PUBLISHINQ CO., TooksIllers" NEW YORK: 37 Park Place. LONDON: 20 Bucklersbury. New York Security and Trust Go. 46 WALL ST., NEW YORK. Capital, $1,000,000.00. Surplus, $1,000,000.00. CHARLES S. FAIRCHILD, President. WILWAM H. APPLBTON, ist Vice-President. JOHN Iv. LAMSON, Secretary. Charles S. Fairchild, William P. Buckley, Ed-ward Uhl, James J. Hill, James Stillman, Hudson Poagland, H. Walter Webb, WILLIAM L. STRONG, 2d Vice-President. ZELAH VAN LOAN, Ass't Secretary. TRUSTEES : William H. Appleton, Stuart G. Nelson, M. C. D. Borden, Edward N. Gibbs, John G. McCuUough, John King, James A. Blair, William L. Strong, William A. Booth, B. Aymar Sands, Frederic R. Coudert, John W. Sterling, John A. McCall. This Company is authorized to act as Executor, Trustee, Administrator, Guardian, Agent and Receiver. Is a legal depositary for Court and Trust Funds. Will take entire charge of Real and Personal Estates, collecting the income and profits, and attending to all such details as an individual in like capacity could do. Receives deposits subject to Sight Drafts, allowing interest on daily balances, and issues Certificates of deposit bearing interest. Acts as Registrar and Transfer Agent of all Stocks and Bonds. This Company has been designated by the Superintendent of the Banking Department of the State of New York as a depositary for the reserve of State Banks. SPECIAL RATES OF INTEREST ALLOWED TO BASKS AND FINANCIAL IN8TITDTI0NS. TflE P^OVlOEflT ItlFE Rp Tl^UST CO]«PflJlV OK PHILA.DELF'HIA. Office, No. 409 CHESTNUT ST. INCOKPORATED THIRD MONTH 22, 1865. CHARTER PERPETUAI,. Capital - »1,000,000.00 Assets - ....*31,S03,93S.Sft INSURES LIVES, GRANTS ANNUITIES, RECEIVES MONEY ON DEPOSIT, return- able on demand, for which interest is allowed, and is empowered by law to act as EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN, ASSIGNEE. COMMITTEE, RECEIVER, AGENT, Etc., for the faithful performance of which its Capital and Surplus Fund furnish ample security. AI,I, TRUST FUNDS and INVESTMENTS ARE KEPT SEPARATE AND APART from the Assets of the Company. OWNERS OF REAI, ESTATE are invited to look into that branch of the Trust Depart- ment which has the care of this description of property. It is presided over by an officer learned in the law of Real Estate, seconded by capable and trustworthy assistants. Some of them give their undivided attention to its care and management. The income of parties residing abroad carefully collected aud duly remitted. SAMUEL R. SHIPLEY, President. JOSEPH ASHBROOK, Manager of Ins. Dep. T. WISTAR BROWN, Vice-President. J. ROBERTS POULKE, Trust Officer. ASA S. WING, Vice-President and Actuary, DAVID G. ALSOP, Assistant Actuary. J. BARTON TOWNSEND, Asst. Trust Officer. Samuel R. Shipley, Richard Wood, William Gummere, William Longstreth, T. Wistar Brown, William Hacker, Philip C. Garrett, Edward H. Ogden, Richard Cadbury, Charles Hartshorne, Justus C. Strawbridge, Asa S. Wing. Henry Haines, Israel Morris, James V. Watson, The Safety Valve Is a Live, Timely, Instructive Journal, containing Authentic Information of the Latest Designs in Econ= omical Apparatus, and Improvements in all that Concerns 5team Engine Practice. It contains the latest news of the Steam Trade, gathered from author^ itative sources, with the sole and distinctive purpose of informing the steam user which apparatus is giving the best results, and guarding him against that which is proved to be uncertain and wasteful. SUBSCRIPTION, ONE DOLLAR, PER YEAR. Office: 55 LIBERTY ST., N. Y. CITY. T^lB GEIlTHillt jiMIOKflli MM CITY OF NEW YORK. UNITED STATES DEPOSITARY. Capital Stock, - - $2,000,000. Surplus Fund and Profits, 5 70,000. Deposits, - - - $10,698,000. This Bank will be pleased to receive the accounts of Mercantile Firms, Individuals, Banks and Corporations. WILLIAM L. STRONG, President. EDWIN LANGDON, Vice-President. C. S. YOUNG, Cashier. LEWIS S. LEE, Ass't Cashier. DIRECTORS. WILLIAM A. WHEELOCK. EDWARD C. SAMPSON. WILLIAM M. BLISS. JAMES H. DUNHAM. SIMON BERNHEIMER. EDWIN LANGDON. JAMES W. SMITH. WOODBURY LANGDON. WILLIAM L. STRONG. JOHN CLAFLIN. JOHN A. McCALL. Jhe Seaboard }Jational B^nk oiT'sr OIF iJTE^w- ■stork:, 18 BROADWAY. Depository for the United States, State of Ne^w York and City of Ne"W York. Capital, Undivided Profits, $500,000 253,000 S. G. BAYNB, S. G. NELSON, J. F. THOMPSON, C. C. THOMPSON, PRBSIDBNT. Vicb-President. Cashier. Ass'T Cashier. The Bank acts as reserve agent for Banks throughout the country, and solicits correspondence and accounts of Banks, Bankers, Merchants, Corporations, etc. CoivivBCTioNS Made Promptly and Economically. "iSW-^^E y ^m -^i r