/# %) .% ^ MONETARY SYSTEMS 1 OF THE WORLD W.L.MUHLEMAN I % COMPLIMENTS OF /'X CHASE NATIONAL BANK, NEW YORK. ^^'' (5a Ha 2^59 ^mt ((allege nf Agriculture At (S[otnM Untuecsity SItbrarg Cornell University Library HG 259.M9 Monetary systems of the world; a study of 3 1924 013 814 276 Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/cletails/cu31924013814276 MONETARY SYSTEMS OF THE WORLD MONETARY SYSTEMS OF THE WORLD A STUDY OF PRESENT CURRENCY SYSTEMS AND STATISTICAL INFORMATION RELATIVE TO THE VOLUME OF THE WORLD'S MONEY Complete Abstracts of Various Plans Proposed for the Solution of the Currency Problem MAURICE L. MUHLEMAN Deputy Assistant Treasurer United States, New York CHARLES H. NICOLL publisher 189 Broadway, New York 1895 K "1 @ ( ^^oo TABLE OF CONTENTS. IntrodTiction. United States of America.— Present Monetary System. United States of America.— Obsolete Forms of Money. Tlie Britlsli Empire. The Latin Union. Other European Countries. Asia. Africa. America, other than the United States. Oceanica. Special Study of the Volume of United States Money. Volume of the World's Money. The Olearlng-House System. International Exchanges. International Monetary Conferences. Propositions for the Solution of the Currency Prohlem. Appendix— Causes for Recent Bond Issues in the United States. MONETARY SYSTEMS OF THE WORLD. PREFACE. THE lively interest aroused by the public discussions of the questions relating to our currency has given rise to a desire, greater than ever before, for accurate information on the subject. This bias manifested itself in the form of inquiries upon every phase of the subject, coming from all parts of the country. The silver question, which for more than twenty years has maintained the first rank in this country, as well as in many of the other countries of the world, has recently been displaced, in a measure, by the bank-note question, first again brought to the attention of the public by the platform of the Democratic party adopted in Chicago in 1892, and subsequently discussed at great length in Congress and in a number of periodicals. In the consideration of this phase of the money question, the systems of bank- note issues existing in the United States prior to the inauguration of the National- bank system m 1863 and the systems employed by other nations, have naturally become the subject of much study and consequently of prime interest to all who endeavor to know something about them. The inquiries received by me and by many other persons have not, therefore, been confined to the rather elementary topics which form the main portion of my previous publication, "The Money of the United States, "but have been extended to matters upon which it is much more difficult to obtain comprehensive informa- tion, viz., the moneys of other nations. I have, therefore, enlarged the scope of the previous work materially, including the greater part of the material therein contained in the present volume, bringing the statistics down to a later date and, especially, enlarging the account of our State banking systems prior to 1863. The information collated respecting the monetary systems of other nations is necessarily less exhaustive than the portion of the volume pertaining to our own country's circulating media ; but sufficient is given in each case to provide the general reader, and the student as well, with a concise presentation of the obtainable data in compact form and therefore convenient for ready reference. It is in this particular that the author of the work claims that its chief merit lies ; the greater portion of the matter is accessible to any one in position to consult libraries of the first class ; but it is scattered throughout many volumes, many of which are unknown, even by name^ to the general reader, and some 8 MONETARY SYSTEMS OF THE WORLD. probably for the same reason unavailable to the persistent student. To bring together, within the space of comparatively few pages, all of the important points involved in the questions has been the aim of the author. In doing this a judicious selection from the mass of statistics with which such a volume might be filled at the expense of its utility, has been exercised, and attention has been given first of all to the character of the inquiries which, in an experience of many years, have been found to indicate the direction of the desire for information. If, therefore, this volume does not contain a reply to every question that may arise, its absence is not necessarily due to accidental omission, but to a desire to keep the volume within the limits of a handy Manual. The statistical matter herein presented is taken, for the greater part, directly from OFFICIAL sources, and when taken from other channels of information it has in almost every instance been carefully verified by reference to other contem- poraneous independent publications. The statutes referred to in the first chapters, relating to our own forms of money, have been so thoroughly studied in the course of over twenty years of service in the Treasury, that the author is confident that no errors have crept into the publication. The same may be said, in a degree, of the facts collected relative to other countries, great care having been taken to insure correctness. In addition to the subjects which pertain directly to the monetary systems and the volume of the world's money, attention has been given to the most interesting and important one of international exchanges and the movement of the precious metals ; to the clearing-house systems and to the measures which have recently been proposed to improve the currency systems, both national and international. Maurice L. Muhleman. MONETARY SYSTEMS OP THE WORI^D. MONETARY SYSTEMS OF THE WORLD. INTRODUCTION. Brief General View op the Money of the World — Weight AND Value of the Units of Each Country — The Nomenclature of Coins— The Produc- tion of Precious Metals and Their Use. In the consideration of the means which the several nations of the world make use of to effect their exchanges, it is found that various forms of money are employed, and most of these forms again vary in different localities. The forms may, however, be generally classified as follows : 1. Gold coin (or bars). 2. Full legal tender silver. 3. Certificates of deposit for gold or silver. 4. Subsidiary silver coin (limited legal tender). 5. Minor coin — i. e., base-metal tokens. 6. Bank-notes. 7. Government notes. Perhaps the most important attribute of any form of money is its legal tender power; that is, the power, conferred by law, to discharge a debt payable in money. While every one of the forms of money given above, has in some countries a greater or less measure of such power, gold alone possesses, by virtue of com- mercial usage, the unlimited legal-tender quality throughout the civilized world. It is therefore, to this extent, the only international '>noney, excepting in the far East (India, China, etc.). Moreover, the value — or rather the purchasing power — of gold is the same throughout the civilized world. Since this value depends upon the quantity of pure metal contained in any given mass, it is of the greatest importance to know the fineness, as well as the weight. The fineness indicates the proportion of pure metal, and is usually expressed in thousandths. The inferior metal is added chiefly to increase the durability of the precious metal, and is termed the alloy. Thus : Coin of the United States is 900 thousandths fine ; containing 100 thousandths of copper ; five thousand ounces of such coin is therefore accepted as four thousand five hundred ounces of pure gold. In large' international transactions the weight of the mass is regarded and not the number of pieces. In like manner in the East, where silver coin is the recognized full legal-tender money, its weight and fineness are matters of first consideration. Coins are struck at varying weights m different countries, and the metal used varies in fineness ; the units vary accordingly, requiring computations in making 10 MONETARY SYSTEMS OP 1*HE WORLD. exchanges. The table herewith shows the weight and fineness of the monetary unit of each of the principal and some minor countries, and the v^ue of such units in money of the United States. *** TABLE OF THE WORLD'S COINS. Weights are given in grammes, values in United States coin, fineness in thousandths.^ The value of silver coins is based upon the coining value of an ounce of silver in the United States, $1.2929. Single-Gold Standard Countries. Unit. Value. Weight. Fine- ness. Subsidiary Silver Coin. Country. Principal Coin. Weight. Fine- ness. Equiv- alent at Coining Rale. Great Britain Germany , Pound Mark Krone Krone Ley Piaster Milreis Milreis Dollar Dollar Pound ¥4^86?^ •23.8 .26.8 .20.3 •19^3 .04.4 1.08 •54.6 I.OO 1.01.4 4 94^3 7.988 •398 •448 •33K .3226 .072 ""^8965 No gold 1.664 8.5 .916^ .900 .900 .900 .900 .916?^ .916?^ .917 coins •9i6» •87s Shilling Mark Krone Krone Ley S-piasters Testoon Milreis Half-dollar Half dollar 5-piasters 5^655 5^555 7^5 5^ 5^ 6.014 2.5 12.75 11.62 11.782 7. •92s .900 .800 -83s -83s .830 .917 •925 ■925 •833M $0.21.7 .20.8 Sweden > Norway > Denmark _) Austro-Hungary . . . .24.9 .17.4 .17.4 .20.7 •09.5 Brazil .48.6 Canada .44.6 Newfoundland Eevpt .44.8 •24.3 Australasia, Cape Colony, the British West Indies have the British standard, and in Canada the pound sterling is also a legal tender. Single-Silver Standard Countries. Country. Russia Mexico Central America Colombia Bolivia Peru Ecuador Iniia China Hong-Kong & Straits Cochii". ;!hina Unit Rouble Peso Peso Peso Boliviano Sol Sucre Rupee Taelt Dollar Piaster Equiv- alent at Coining Rate. 0.74.8 I. or. 6 •93-5 -93-5 ■93 5 -93-5 •93-5 -44-4 1.36.4 1.00.8 1.018 Weight 19.996 27.073 25- 25- 25. 25- 25- 11.664 3656 26.956 27.215 Subsidiary pieces = to Unit. Fine- ness, goo 902.7 900 900 900 900 900 9165^ 900 900 Weight. 17.99 27.073 25- 25. 25- 25- 25- 11.664 25. 27.215 Fine- ness. .500 .902.7 ■83s ■835 .900 .900 .900 .916?^ .800 .900 Gold Piece = to Unit. Weight 1.29 1.692 1. 613 1. 613 1. 613 1. 613 1. 613 11.664' Fine- ness. .900 .875 .900 .900 .900 .900 .900 .9165^ No coins No coins No coins Value. $0.77.2 .98.4 .96.5 .96.5 .96.5 .96.5 .965 7.10.9 * Mohur = to 15 rupees. t Shanghai tael. The new dollar coinage has not yet been rated. MONETARY SYSTEMS OP THB WORLD. Double-Standard Countries. 11 Country, United States Haiti Uruguay Argentine Republic . . Chile* Venezuela France 1 c Belgium « c Italy \'^.% Switzerland. ... 1 ^ [^ Greece J t_t Spain Servia Bulgaria Netherlands Algeria Tunis Japan Java, etc Philippine Islands Hawaii Unit. Dollar $1 oo Gourde q6.s Peso I o^.4 Peso q6.S Peso QI 2 Bolivar iq.S Franc 1 Franc Lira J- It). 3 Franc | Drachmaj Peseta IQ.1 Dinar iq.i Lew iq.3 Florin 40.2 Franc iq.S Franc iq-S Yen qQ.7 Florin 40.2 Peso q8.^ Dollar I 00 Value. Gold Unit. Weight. 1.672 I 613 1697 1. 613 1-525 .3226 .•5226 .3226 .3226 .3226 .672 .3226 .3226 1.667 .672 1. 691 1.672 Fine- ness. .900 .goo .917 .goo .900 .900 .900 .900 .900 .900 .900 .900 .900 .900 .900 .875 .900 Silver Unit. Weight. 26.729 25- 25. 25. 25. 5. 5. s. S- 10. s. 5. 26.956 10. 25,96 26.729 Fine- ness. .900 .goo .900 .900 .900 .900 .900 .900 .900 .900 .945 .900 .900 .900 ■945 .900 .900 Subsidiary Coin. Weight 25. 25- 25. 25. 25. 5- 57 Fine- ness. .900 .83s .900 .900 .900 •83s •835 .835 .835 .835 .640 .335 .835 .800 .640 .900 .900 Value. $o.93-5 ,87.0 93-S 93.5 93-S ,17.4 .17.4 .17.4 .17.4 .17.4 .09.5 .17.4 .17.4 .89.0 •095 .97.1 .93.5 * Chile is about to adopt a single-gold standard. Note. — The gramme is equal to 15.432 grains. Countries in which gold alone is legal tender are said to have the " single- gold standard;" where silver alone is so used, the "single-silver standard;" where both metals are used the " double standard " prevails. It will be observed that there is a marked preference shown for the employ- ment of metal 900 thousandths fine ; moreover, the majority of the units sx^ iden- tical with the franc of the French monetary system ; by combining five of the units it approximates the dollar system prevailing in the next largest number of countries. It would therefore require little more than the removal of individual national prejudices to reach the point of a universal unit. Since exchanges are made upon the basis of the pure metal in coins, the actual parity between Great Britain and the United States is represented by the value of the pound sterling, which is I4.86 J^; by adding the cost of transferring the coin or bullion (involving beside freight, insurance, interest, commissions and occasionally certain discounts), we arrive at the/ar of exchange : the amount necessary to discharge the debt one pound of a New York merchant at the office of a London merchant. The ratio in coinage is the term used to express the equivalent between gold and silver under the varying mint laws. Thus it will be seen that the gold five- franc piece weighs 1.613 grammes, while the silver piece of the same denomination weighs 25 grammes ; the relation is, therefore, as i to 15}^ ; in other words, a pound of gold would be coined into as many francs as 15^ pounds of silver. Therefore it is said that the coining ratio of France is 1:15 ,J^. 12 MONETARY SYSTEMS OP THE WORLD. This applies, however, to full debt-paying silver only : for it will be observed that while the subsidiary silver pieces of France bear the same relation in weight, the fineness is less, making the pieces less valuable. In many countries the same result is effected by reducing the weight, instead of the fineness, of subsidiary coin. It is for this reason that such coin is a legal tender for small payments only, rarely over ten dollars in any civilized country ; and it is made cheaper to prevent its being exported, being intended solely for domestic use. In like manner minor coin, intrinsically of little value, is a legal tender for very small amounts only ; say 25 to 50 cents. In most countries nickel and bronze are now used for this coinage. The ratio for coinage when established by each nation was intended to rep- resent approximately the actual _value relation between gold and silver ; and it may be said that for many years this was very nearly correct. But the great increase in the production of silver since 1873, and the restriction of its use by many nations, caused such a reduction in its market value, that the ratio is now nearer 27 to I of gold. Consequently almost all nations have discontinued the free and unlimited coinage of silver into full debt-paying money ; for it is obvious that if any one nation were to do so the silver product, costing but 63 cents per ounce, would be brought to that nation's mints and coined into pieces worth about |i.29y%% per ounce, which could be used to pay debts or purchase commodities in that country. Free coinage is a term used to signify that the mint is open to any one who may choose to bring bullion to be coined ; when the bullion produces more dollars or pounds or francs than it cost, the diflference is of course profit, and in the case of free coinage the owner gets it. When, however, as in the United States (see post), bullion is bought by the Government, the profit or seignorage is retained by it. This is termed coining on Government account. The term seignorage as used, to express the difference between the market value of bullion and its coining value, is not strictly correct. Originally it was the charge which the seigneur — lord or king, imposed for coining ; by increasing the charge so as to cover the difference above referred to, the term might be deemed applicable. By bi-metalism, strictly defined, is meant the free and unlimited coinage of both gold and silver into coins of full debt-paying power. Not the mere use of the double-standard, but the actually open mints on the terms above given. No country in the world is, therefore, bi-metallic to-day, since those conditions do not now exist anywhere. Paper money ( notes and certificates) is intended as a rule solely for circulation within the boundaries of the countries which issue them. They are found quite plentiful in other countries, however, for purposes of international exchange in small amounts. They are a legal tender only in the countries in which they emanate, and frequently not even there. Certificates represent actual deposits of coin or bullion ; and some issues of notes are similarly covered fully by metallic money. But notes are generally issued to a greater or less degree on the credit, either of the Government or of bank issuing them, and are exchangeable for coin MONETARY SYSTEMS OF THE WORLD. 13 in accordance with the measure of that credit. It is therefore clear that to the extent that notes are issued in excess of the metal held by the issuing bank or treasury, the volume of available circulating media is increased. This excess is usually given in statistical tables under the head of " uncovered notes.'' Strictly speaking this is not correct, since the metal in hand in a bank cannot be deemed to be entirely and solely available to pay notes ; some of it must necessarily be held against the deposits of issuing banks. Government notes are issued by comparatively few nations, the United States, Austria-Hungary, Russia, Italy, Canada, Japan and India being the princi- pal ones. Bank-M\o\.ts are issued in almost every civilized country. NOMENCLATURE OF COINS. Generally speaking, the names of coins are traceable back to the times when the precious metals passed by weight, — before discs or pieces were cut out and stamped. The shekel of the ancient Hebrews was a weight. The Roman as represented a pound before it was reduced in weight ; the denarius of the Romans, the denier oi'?r3XiC& and the dime (formerly disme) of the United States represent tenths of the principal piece. The livre of France, the pound of England, the peso of Spain's former coinage and the dimmutw^ peseta of its present system all signified weights of metal once equivalent to the nominal value. Another system of nomenclature of coins was based upon the name of the power which issued them. Thus, the ducat of a duke, the sovereign, the crown or krone, the imperial, the louis d' or, friederichs d' or, napoleons, etc. Other coins derived their names from the devices upon them, as the florin, which bore a flower ; the escudo, a shield ; the eagle of the United States ; the condor of South America. The dollar, derived from the German thaler, was apparently first issued by a community of the Joachims-thal in South Germany, whose pieces were of well- known purity and fixed value during periods when kings and dukes debased their coin without the slightest consideration for honesty. From this we have the rigs- (fefcj- of Scandinavia, the rix-daler of the Dutch, the Maria Theresa thaler, a unique coin still struck by Austria for the trade with the Levant and bearing the uniform date of 1780. The American dollar is based upon the Spanish milled dollar, the piece which probably first bore the corrugated edge now so common, and devised for the pur- pose of preventing the reduction of the piece by cutting off the rim. Although Spain has long since ceased using this coin, its colonies continue to do so, and the South American countries have to-day a modified /^io or dollar, which is in most cases equivalent to the five-franc piece of France. Mexico's old Spanish peso is sometimes called the piece of eight reals (derived from rey, a king), and in the United States, where these dollars or pesos of Spain circulated long after their own coinage was introduced, the reals were in some sections called shillings, in others bits, and in still others levies. They represented a nominal value of 12^ cents. The Portuguese have also a real in their coinage, and the present unit of that country is the milreis — or 1,000 reis. Here the original unit is worth 14 MONETARY SYSTEMS OF THE WORLD. only r^%\ of a cent. Brazil, which formerly belonged to Portugal, also uses the milreis, but its value is only half of that of Portugal. The shilling of Great Britain finds its counterpart in the skilling of Scandi- navia ; the mark of Germany, originally also a weight, is also found in the markka \ ofFinland ; the /^^wy is found as the ^y^K«?^ in Germany and /.?««« of Finland. The peso is in manysections of the world called th&piaster; but this piaster is very unlike that of Turkey and the Mohammedan countries, being twenty-five times more valuable. So there are ducats in Austria, in the Netherlands and in Russia, the latter being worth a few cents more than the two others. Florins are still found in Austria, the Netherlands and Great Britain, although no longer used where they first appeared (Italy). The value of the British florin is 2 shillings, of the Austrian 2^ francs, of the Dutch ^o}4. cents. The French system of francs is so largely copied that special attention is directed thereto. Its name is derived from the people who settled in that portion of Europe. As before stated, its value is 19 3-ioth cents. Belgium and Switzer- land use the same term for their units, but the equivalent pieces of other countries are known by other names : Italy, lira (probably from the name of the weight) ; Spain, peseta ; Greece, drachma, from its ancient coinage, and divided into 100 lepfa instead of centimes; Bulgaria calls her franc the lew of 100 stotinki; Roumania, the ley of 100* banis ; Servia, the dinar of 100 paras (the name of the Turkish divisional piece) ; Finland, the markka of 100 penni ; Venezuela, the bolivar (^e. name of the liberator, Simon Bolivar) of 100 centavos. Formerly the French livre was divided into 20 sous, so that the sous is equal to 5 centimes. Certain coins stand alone in their nomenclature: The ro»W^ of Russia and the rupee of India. The rouble is divided into 100 kopecks, but the divisional pieces have such names as pollinnik, tchetvertak, abassis, grivinik, pietak. The rupee is divided into 16 annas oi \pice, each of the latter equal to ^pie (about )^ of one cent). Persia has a coin called the thoman of 25 abassis, each of the latter equal to four scahis. These abassis are worth much less than the Russian, but the similarity of the name is striking. The crown of Great Britain is worth five shillings, that of Germany {krone) very nearly 10 shillings, that of Austria's new coinage about 2 shillings, that of Portugal about 44 shillings, the Scandinavian crown about one shilling. Japan calls her principal coin, very nearly identical with our dollar, the yen; it is divided into 100 sen. Formerly the unit was the cobang and the divisional coins were called itzebu. The " dollar " of South America is termed jo/ in Peru, boliviano \x\ Bolivia, Sucre in Ecuador, and the similar coin of Haiti is the gourde. Portugal's divisional pieces are testoons, the Scandinavians have ore, Austria has kreutzers, formerly and now again hellers, Egypt has pieces bearing the euphonious name of ochr-el-guerche . Guilders of Holland, gulden of the German States, the peso duros (hard dollars) are obsolete, and the new real of Spain is worth only about five cents. The tael of China is really a weight only ; and there are several of these, MONETARY SYSTEMS OF THE WORLD. 15 varying in value according to the locality. The principal piece used by the mass of the Chinese is the cash, a very cheap coin with a square hole in the centre. The smallest divisional coins in many countries are not coined, for example, the mill of the United States. Where divisional coins of small nominal value circulate it will be found that the people are either very economical, or, on the other hand, poor. THE PRODUCTION AND CONSUMPTION OF PRECIOUS METALS. The following table exhibits the production of gold and silver for periods since the discovery of America, and the commercial ratio of silver to gold at the end of each period : 1492-1520. 1521-1560. 1561-1600. 1601-1640. 1641-1680. 1681-1720. 1721-1760. 1761-1800. 1801-1810. 1811-1820. 1821-1830. 1831-1840. 1841-1850. 1851-1860. 1861-1870. 1871-1880. 1881-1890. 1891 1892 1893 Total. Gold. $107, Z04, 189, 223, 239. 313. 580, S". 118, 76, 94. 134. 363. 1.332. 1,263, i.iSOi 1.059. 130, 146, 155. ,931,000 ,697,000 ,012,000 ,572,000 ,655.000 ,491,000 ,727,000 ,675,000 ,152,000 ,063,000 ,479,000 ,841,000 ,928,000 ,981,000 ,015,000 ,814,000 892,000 ,650,000 ,298,000 ,522,000 8.397.39S.OOO Silver Coining Value. $54,703,000 297,226,000 597,244,000 678,800,000 584 691,000 579,869,000 801,712,000 1,273,468,000 371,677,000 224,786,000 191,444,000 247,930,000 324,400,000 372,261.000 507,174,000 918,578,000 1,298,820,000 177.352,000 197,741,000 208,371,000 $9,908,247,000 Ratio. I0.7S 11.30 11.80 14.00 15 00 15.21 14-75 15-09 15.61 15-51 15.80 iS-75 iS-83 15.29 15-56 18.05 19.76 20.02 23-73 26.49 For purposes of reference, the production of gold and silver in recent years is given below by countries in millions of dollars : Gold. Year. United States. Other America. Russia. Other Europe. Australia. Africa. China. Other. Total. 1879 . . . 39 7 28 I 29 2 I 107 1880 . . . 36 9 28 I 29 2 I 106 1881 . . . 35 7 24 2 31 2 -- 2 103 1882 . . . 33 8 24 I 32 2 a 102 1883 . . . 30 9 20 I 26 2 5 2 95 1884 . . . 31 10 22 I 28 I 6 3 102 1885 . . . 32 10 25 2 27 2 7 3 108 1886 . . . 35 10 21 2 26 2 7 3 106 1887 . . . 33 9 20 3 27 2 9 3 106 1888 . . . 33 9 21 2 29 4 9 4 III 1889 . . . 33 10 24 3 33 8 9 5 123 1890 . . . 33 II 25 I 30 10 5 4 120 1891 . . . 33 12 24 3 31 16 6 6 131 1892 . . . 12 25 4 3+ 24 8 6 146 1893 . . . 36 13 25 3 36 30 8 4 15s 16 MONETARY SYSTEMS OE THE WORLD. Silver. Silver at Coining Rate.* Market Price (+) and Ratio of Silver. Year. United States. Mexico. South America. Europe, etc. Total. $1,123 1. 145 I.13S 1. 136 I. II I.II3 1.064s .9946 .97823 .93987 ■93576 1.04633 .98782 .87106 .78031 1879 1880 1881 1882 1883 1884 188S 1886 1887 1888 1889 1890 1891 1892 1893 41 39 43 47 46 49 51 51 53 59 65 70 75 82 77 25 25 28 29 30 27 32 33 37 41 47 50 45 51 57 12 18 18 19 26 20 22 24 20 24 22 26 21 24 25 II 14 13 17 13 15 13 13 14 16 28 28 36 41 49 89 97 102 112 "5 III 118 121 124 174 177 198 208 18.40 18.05 18.16 18.19 18.64 18.57 19.41 20.78 21.13 21.9a 22 10 19.76 20.92 23.72 2649 * Coining rate is $1.2929 per ounce fine. + Per ounce fine. The consumption of the precious metals in the arts and industries is estimated as follows : By Soetbeer : Average annual, 1871-1880. Gold $55,600,000 Silver 19,400,000 Estimated Use of Gold and Silver in the Arts (Soetbeer). (In millions of dollars, excluding old material.) Country. United States Great Britain France Germany Switzerland Holland and Belgium Austria-Hun gary Italy Rus.sia Others Total Average, 1871-! Gold. 9.0 "■3 II. 2 7.8 7-5 i".6 30 1.6 2.6 55.6 Silver. 4.2 2.9 3.1 3.1 I.O 1-3 0.8 1-3 1.7 19.4 1893 : Estimates compiled from various sources. Gold. , Silver.. 1885. Gold. 13.0 IX. 2 II. I 80 6.6 1-9 1.6 30 1.6 1-3 59-3 Silver. 4.8 2.9 3-1 3-4 1.0 1.0 1-3 0.8 1.3 1-7 21.3 $50,200,000 16,600,000 For many years gold has been exported to India, China and the Orient gener- ally, and retained there ; for it is not used as a circulating medium. The amounts MONETARY SYSTEMS OF THE WORIvD. 17 so lost to the commerce of the world are variously estimated. The most recent estimate by Professor Soetbeer is that )J6oo,ooo,ooo is in hoards in those parts of the world. It appears that fully I25, 000,000 has been -annually gained by India for a long series of years ; and this sum added to the amount annually used in the arts, left a comparatively small amount for the purpose of coinage. It will be observed, however, that in recent years the production of gold has increased materially, and it is believed that the product for the year 1894 will prove to have been larger than ever before, so that the amount available for coinage has been larger. The World's Gold Coinage, iS'jg-iSgs. (In millions of dollars.) Year. U.S. Great Britain. Aus- tralia. Ger- many. Latin Union. Russia. Spain. Scan- dinavia. Austria. Other. Total 1879 -- 39 20 II 6 9 I .■; 91 1880. . 62 20 22 7 .. I 2 2 116 1881.. 97 20 2 3 21 2 .. 2 147 1882.. 66 19 3 3 2 3 4 100 1883-. 29 7 20 21 2 13 3 I 2 7 105 1S84.. 24 11 22 14 ,. 19 5 I 2 I 99 188^.. 28 14 22 2 I 21 2 3 3 9b 1886. . 29 22 8 6 IS 2 I 3 9 9,'; 1887. . 24 10 24 28 S 20 3 II 125 1888. . 31 10 24 34 I 20 3 12 i3S 1889. . 21 36 29 48 3 19 3 I 3 6 l6g 1890.. 20 37 26 24 S 22 9 I 3 2 149 1891.. 29 33 26 14 4 2 3 8 119 1892.. 3S 68 31 9 I 9 ^1 S 172 i«93-- 57 4S 32 26 10 2 56 4 232 The World's Silver Coinage^ i8yg-i8g3. (In millions of dollars.) Year . U. S. Mex- ico. India. Aus- tria. Spain. Great B'lain. Japan. South Am. Latin Union. Ger- many. Scan- din'via Other. Total 1879 ■ 27 22 28 13 3 2 4 5 I i°5 1880 • 27 40 8 4 2 2 2 8s 1881 . 28 24 21 9 3 5 4 5 3 " 6 108 1882 . 28 25 29 3 II I 4 2 2 III 188^ • 29 24 25 5 10 6 3 4 2 109 1884 . 28 25 17 5 7 3 4 I 2 4 96 188^ ■ 29 26 48 4 4 3 6 2 4 127 1886 ■ 32 27 27 4 5 2 9 4 3 7 121 1887 • 35 27 44 6 II 4 10 ■ 5 9 II 163 1888 • 33 27 3S S 4 4 10 7 I 7 I.3S l88q • 35 25 3? 4 S II 9 4 8 139 iSpo • 39 24 5« 4 y 4 6 '5; 1891 - 27 24 33 3 12 5 8 5 20 I3« 1892 1893 13 27 52 5 9 4 12 7 25 155 9 28 39 18 3 5 12 3 2 16 135 18 MONETARY SYSTEMS OF THE WORIvD. It will be observed that the coinages exceed the production in most years. This is, of course, due to large recoinages of foreign coin, each nation endeavor- ing to stamp as much gold as possible. The silver coinage in countries except- ing United States, Mexico, India, Austria, Russia and South America, has been chiefly of subsidiary pieces and recoinage of the same. Austria has recoined most of her own gold and silver under the law changing the monetary system. MONETARY SYSTEMS OP THE WORIvD. 19 THE UNITED STATES OF AMERICA. The Present Monetary System — Gold Coin — Silver Dol- lars — Subsidiary Silver Coin — Minor Coin — Gold Certificates — Silver Certificates — United States Notes — Treasury Notes of 1890 — National Bank Notes — Currency Certificates. The United States of America has probably the most heterogeneous system of money of any of the civilized countries, and it is due solely to the unbounded faith of the people in the unlimited credit of the nation that all of these kinds have for so many years circulated side by side at a parity, even during the overwhelming credit panic of 1893, when in fact every form of money was held at a premium. Of the several classes of circulating media mentioned at the outset, the people of the United States use all. The gold coin possesses full debt-paying power; the silver dollar, the United States note and the Treasury note of 1890 are equally good tenders unless otherwise specified in the contract ; the gold and silver cer- tificates and the National bank notes, while not a legal tender, are receivable for certain public taxes and by the banks ; subsidiary silver coin possesses a limited debt paying power, and minor coin even less. Many changes have taken place in the history of the country, in the character, weight and fineness of the several kinds of coin, and the paper representatives have been modified from time to time as conditions required. The coinage system was established by the act of Congress of April 2, 1792, organizing a mint. GOLD COIN. Gold was coined at the fineness prevailing in Great Britain, viz. : eleven- twelfths, or 916^-thousandths, the remaining parts, or alloy, consisting of silver and copper, not to exceed one-half of the former. The principal coin was the eagle (f 10), which weighed 270 grains standard, or 247 >^ grains fine ; half-eagles ($S) and quarter-eagles {$2j4) were also provided for. Gold coin was then made a legal tender "for all payments whatsoever," and has remained so to this day. The coinage was free and unlimited. In 1834 (June 28), Congress changed the weight of the eagle to 258 grains standard and 232 grains pure gold ; the half-eagle and quarter-eagle were reduced correspondingly ; this reduced the fineness of the coinage to nearly 900-thous- andths (899,225). To correct this the law of January 18, 1837, fixed the fineness at 900-thousandths ; since the weight of the eagle was not changed the pure gold 20 MONETARY SYSTEMS OF THE WORLD. therein was increased to 232.2 grains ; the divisional pieces were changed in pro- portion. In 1849 — law of March 3— double-eagles (;f20 pieces) and dollars were directed to be coined, and made full legal tender. A revision of the coinage laws was enacted February 12, 1873 ; as to the gold coinage the only changes made were the introduction of a three-dollar piece, and limiting the alloy to copper alone. A coinage charge of one-fifth of one per cent, was imposed, but this was repealed in 1875 (act of January 14), so that the coinage is again free. The coinage of gold dollars and three-dollar pieces was suspended by the act of September 26, 1890. Descriptive Table of Gold Coins. Denomination. Double-eagle Eagle Half-eagle Quarter-eagle Weight. 516 grains. 258 " 129 " Fineness. .900 ,goo .900 .900 Diameter. 1.3s in. 1.05 in. .85 in. .75 in. Tliickness. .077 in. .060 in. .046 in. •034 in. Gold coin if naturally abraded more than one-half of one per cent, in twenty years as shown by the date of coinage (or ratably for a shorter period), is a legal tender for its bullion value only. Deduced from the above table, the value of gold of standard fineness (.900) is $i8.6o>^, and '\ifine or pure, $20.67^% per ounce. Gold Coinage of the United States. Denomination. 1T93-1848. 1849-1891. Total. . $1,210,703,700 233,464,960 167,656,320 1,619,376 23,267,190 19.499.337 $1,210,703,700 259,127,230 212,921,675 1,619,376 28,681,005 19.499.337 $25,662,270 45.265.355 Half-eagles Three-dollars 5,413.81s $76,341,440 $1,656,210,883 $1,732,552,323 SILVER DOLLARS. The original silver dollar authorized by the Mint Act of 1792, was the equiva- lent of the " Spanish milled dollar," containing 37 iX grains of pure silver, and weighing with the alloy 416 grains. This was, therefore, at a fineness of 892.4- thousandths, the balance being copper, and the ratio to gold was 15 to i. The coin was called the "dollar or unit," and was a legal tender for all purposes. MONETARY SYSTEMS OE THE WORIyD. 21 The coinage was free and unlimited. By the change in the weight of the gold coins in 1834 (see ante), the ratio was altered to 16.002 to i. The law ol January 18, 1837, already referred to, fixed the weight of the silver dollar at 4i2>^ grains, and the fineness at 900-thousandths ; leaving the weight of pure silver the same. This changed the ratio to 15.988 (or nearly 16) to i, and the coining value of silver at $i-2^i-^- The Mint Act of 1873 discontinued the coinage of the dollars by omitting it from the list of authorized coins. In 1878 (February 28), Congress passed, over the veto of President Hayes, a law again authorizing its coinage, but in a limited amount only ; not less than $2,000,000 nor more than $4,000,000 worth of silver was to be purchased monthly and coined into the dollars of 1837 ; the coin was made a legal tender for all debts, public and private, unless otherwise stipulated — excepting for the redemption of gold certificates of the Government. The seigniorage accrued to the Treasury. (The minimum amount was invariably coined.) The act of July 14, 1890, provided for a coinage of silver purchased under it (see Treasury Notes of 1890, post) of not more than 2,000,000 ounces monthly until July i, 1891 ; thereafter the coinage was limited to the amount required by the Treasury to redeem the notes issued under the same act ; the seigniorage arising to be likewise coined. The act of March 3, 1887, directed that the "trade dollars" redeemed be coined into " standard " dollars of 1878. The coinage of silver dollars from 1793 to June 30, 1894, inclusive, has been as follows : Prior to 1837 $1,440,517 1837 to 1877 6,605,321 Under act of 1878 378,166,793 From trade dollars redeemed 5,078,472 Under act of 1890 36,087,943 Total $427,379,046 From July i to December 31, 1894, about $3,000,000 additional were coined. Only a limited amount of dollars actually circulate, not more than $50,000,000 to $60,000,000 being outside of the Treasury at any time in recent years, notwith- standing the free transportation out of the Government offices. But those held in the Treasury are almost all on deposit for silver certificates, described hereafter. ; The dollar is ^ of an inch thick, and its diameter is i>^ inches. SUBSIDIARY SILVER COIN. The original mint law of 1792 made the subsidiary coins exactly proportionate in weight and fineness to the silver dollar, and they were also legal tender in any amount. The act of 1837 changed them, as exhibited in the following table (weights in grains) : 22 MONETARY SYSTEMS OE THE WORIvD. Half-dollar . . . . Quarter-dollar. Dime Half-dime 1792. Weight. T04 413-5 20 4-5 1887. Weight. 20S 1-4 J03 1-8 41 1-4 205-8 Pure Metal in Both. 185 10-16 92 13-16 37 2-16 18 9-16 FineEess. Ratio 892,4 15 to I 9C0 15.988 to I A three-cent piece was provided for by the act of March 3, 1851, weighing i2}i grains, 75 per cent, thereof being silver and 25 per cent, copper ; therefore, only 750-thousandths fine, and a legal tender for only thirty cents. The act of February 21, 1853, provided for a reduction in the value of subsidi- ary coins, and that of March 3, 1853, niade the three-cent piece of the same pro- portionate value ; the half-dollar was thus made to weigh 192 grains, its fineness remained at 900-thousandths, the pure silver being 172.8 grains ; the ratio to gold was hence 14.884 to i. The legal tender power was limited to five dollars, and the seigniorage arising from the coinage was charged with the free distribution of the coins. The nickel three-cent piece provided for by the act of March 3, 1863, and the nickel five-cent piece by the act of May 16, 1866 (see Minor Coin, posi), took the places of the silver pieces of these denominations ; but a few were, nevertheless, coined annually until the Mint Act of 1873 dropped them from the coinage. Under this last mentioned act the change to the present coinage took place. The description of the pieces follows : Denomination. Weight. Pure Silver. Diameter. Thickness. Half-dollar . . . 192.9 96-45 38-58 173-61 86. 805 34-725 I 1-5 in. 19-20 in. 7-10 in. .057 in. .045 in. .032 in. Fineness of all 900-thousandths. The ratio to gold is therefore 14.953 to i. The legal tender power was continued at five dollars, but the act of June 9, 1879, increased it to ten dollars, and provided for the redemption of the coins (if not - mutilated) in " lawful money," at the Treasury or any Sub-Treasury in sums or multiples of JJ20, and for the re-issue in like sums. The free delivery was also continued. The half-dollar now weighs exactly 12}4 grammes, two being equal to the five- franc piece of France, in weight and fineness. A twenty-cent piece, weighing as much as two dimes, was authorized by act of March 3, 1875, but the coinage was discontinued by act of May 2, 1878. The amount of subsidiary coin was limited by the acts of July 14, 1875, and April 17, 1876, to the sum needed to retire fractional paper currency, then about J42, 000,000 ; the act of July 22, 1876, increased the limit to JjSso.ooo.ooo ; but con- siderable sums of this coin which had disappeared during the suspension of specie MoNE'fARY Systems op the world. 23 payments (1862-1878) re-appeared and there has been a redundancy of subsidiary coin for a number of years. Annual appropriations are made by Congress to replace worn pieces with new coins. Subsidiary Silver Coinage, 17^2-18^4. Denomination. 1792-1852. 1853-1873. 1874-1894. Total. Half-dollars $66,249,153.00 3,999,040.50 3,890,062.50 1,825,126.40 744,927.00 $33,596,082.50 18,002,178.00 $32,413,815.50 26,181,960.75 271,000.00 19.549.375-80 $132,259,031 00 48,183,179.25 271,000.00 28,610,171 30 4,880,219.40 1,282,087.20 Dimes '. 5.170,733-00 3.055.09300 537,16020 Three cents Total $76,708,309.40 $60,361,246.70 $78,416,152.05 $215,485,708.15 The occasion of the World's Fair was utilized to issue souvenir coins, half- dollars and quarters ; which while of a different design, possessed all the other characteristics of subsidiary coin of the United States, being also a legal tender up to ten dollars. The act of August 5, 1892, provided for $2,500,000 in halves, and that of March 3, 1893, for Jio.ooo in quarters.. The actual issue was as follows : Halves of 1892 $475,000.00 Halves of 1893 2,026,052.50 $2,501,052.50 Quarters of 1893 10,005.75 The coins were made from bullion obtained by melting down old subsidiary pieces ; so that the circulation was not increased. The new design for the ordinary subsidiary coins was adopted in 1891, under the law of September 26, 1890. MINOR COINS. The minor or token coinage of the United States was at first composed entirely of copper, but more recently nickel and bronze have been used. The original mint act (of 1792) provided for a cent weighing 11 pennyweights (264 grains) and a half cent of one-half the weight. The act of May 8, 1792, provided that when $50,000 of these coins had been struck, no other copper coins should pass current. Actually no such pieces were coined, for the act of January 14, 1793, changed the weight of the cent to 208 grains and that of the half cent to 104 grains. In 1795 the President was given power to reduce the weights of these coins, and under proclamation of January 26, 1796, he reduced them to 168 and 84 grains respectively ; Congress on'January 18, 1837, fixed these weights by statute. By the act of February 21, 1857, the weight of the cent was changed to 72 grains, 88 per cent, of which was to be copper and 12 per cent, nickel. The coin- age of the half cent was discontinued. 24 MONETARY SYSTEMS OE THE WORLD. In 1864 the act of April 22 reduced the weight of the cent to 48 grains, and changed the composition to 95 per cent, copper and 5 per cent, tin and zinc. The pieces were to be legal tender to the amount of ten cents. This is the present one- cent piece, having been continued by the mint law of 1873. The same act of 1864 provided for a two-cent piece of the same material, weighing 96 grains, and legal tender to the amount of twenty cents. A three-cent piece composed of not more than 25 per cent, niclcel and 75 per cent, copper, weighing 30 grains, and legal tender to the extent of sixty cents, was authorized by the act of March 3, 1863 ; the same act reduced the legal tender power of the cent and two-cent pieces to four cents. A five-cent piece composed of 25 per cent, nickel and 75 per cent, copper, weighing 77.16 grains, and legal tender to the amount of one dollar, was provided for by the act of May 16, 1866 ; and this coin was made redeemable at the Treasury in sums of not less than |ioo. By the act of March 3, 1871, a// minor coins were made redeemable in " law- ful money " in sums not less than |2o. The mint act of 1873 made all minor coins a legal tender to the amount of twenty-five cents, and discontinued the coinage of the two-cent piece ; the act of September 26, 1890, dropped the three-cent nickel piece from the coinage. The present coins are, therefore : Five-cent nickel, of 77.16 grains, 75 per cent, copper, 25 per cent, nickel. One-cent bronze, of 48 grains, 95 per cent, copper, 5 per cent, tin and zinc. Legal tender to the amount of twenty-five cents, redeemable at any sub- treasury in sums of $20 or more, furnished free of transportation charge from the mint at Philadelphia, and obtainable in exchange at any sub-treasury. The dimensions are : Five-cent pieces : diameter, 4-5th of an inch ; thickness, .062 of an inch. One-cent piece : diameter, % of an inch ; thickness, .043 of an inch. Minor Coinage, lyg^-iSg^. Denomination. Half cents Copper cents Copper-Nickel cents Bronze cents Two-cent pieces Three-cent nickels . . Five-cent nickels Total Periods. Amount. 1793-1857 $39,926.11 I793-I857 1,562,887.44 1857-1864 2,007,720.00 I864-I894 7,463,898.26 I864-IB73 912,020.00 1865-1889 941,349.48 I866-I894 13.553.730-50 $26,481,531.79 The supply of minor coin is regulated, as nearly as may be, by the apparent needs, by the Director of the Mint, under the supervision of the Secretary of the Treasury. The pieces not now in use are retired as rapidly as they are presented for redemption at Treasury offices. MONETARY SYSTEMS OF THE WORLD. 25 GOLD CERTIFICATES. The Secretary of the Treasury was authorized by act of March 3, 1863, to receive deposits of gold coin and bullion and to issue therefor certificates in denominations of |2o and upward, the gold to be held in the Treasury for the payment of the certificates on demand ; such certificates might also be issued upon gold in the Treasury, in payment of interest on the public debt. The act authorized the amount of certificates outstanding to exceed by 20 per cent, the gold coin and bullion in the Treasury. The certificates were not made legal tender, but were receivable for payment of duties on imports (then payable only in gold) ; they were payable "to order" and passed by indorsement. The issue began November i3> 1865, and was suspended December i, 1878 (to facilitate resumption of specie payments on January i, 1879). Another issue of gold certificates was authorized and directed by the 12th section of the act of July 12, 1882. Deposits were to be received in gold coin only, in sums not less than j!2o, and the certificates were of denominations not less than $20, corresponding with the denominations of United States notes ; the coin received to be retained in the Treasury for the payment of the certificates on demand. The limitation upon the issue is fixed so that when the amount of gold coin and bullion in the Treasury reserved for the redemption of United States notes falls below $100,000,000 the issue is suspended. The certificates are not a legal tender, but are receivable for customs, taxes and all public dues, and when so received may be re-issued ; they are also avail- able for the reserves of National banks. They were issued payable " to bearer " only, until 1888, when a series payable "to order" was also provided by the Secretary of the Treasury, but in denominations of jS5,ooo and |io,ooo only. On April 15, 1893, the reserved gold fell below $100,000,000 and the issue of certificates was suspended ; jjioo,ooo were issued when in February, 1894, the reserve for a short time rose beyond that amount, and in November, 1894, there were re-issued $130,000 during a few days that the reserve was again in excess of the fixed sum. These certificates as well as the silver certificates {^^e.post) are merely " ware- house receipts " for the coin on deposit ; while deemed an obligation of the Government, they are strictly exchangeable only into the coin which they represent. Gold Certificates — Issues and Re-Issues. Denomination. $20 SO 100 Soo 1,000 S.ooo 10,000 To order, series of 1888 : S.ooo 10,000 Total $948, 134,300 Old Series, 1865-1888. $960,000 20,234,300 32,844,000 121,881,000 457,885,000 314,330,000 New Series, 1882-1894. $27,360,000 21,400,000 24,820,000 29,250,000 60,300,000 62,600,000 163,000,000 51,570,000 112,620,000 $552,920,000 Total. $28,320,000 21,400,000 45,054,300 62,094,000 182,181,000 520,485,000 477.330.°oo 51,570,000 112,620,000 $1,501,054,300 26 MONETARY SYSTEMS OF THE WORLD. There were outstanding on June 30, 1894 (the close of the fiscal year), the fol- lowing amounts : $20 $7,464,594! 50 4,118,005 100 5,672,300 Soo 4.546,500 1,000 8,861,500 5,000 12, 185,000 10,000 23,540,000 Total $66,387,899 Of this total about 1250,000 consisted of certificates of the old series. SILVER CERTIFICATES. These certificates are issued upon deposits of silver dollars (or upon such dollars held in the Treasury) under the act of February 28, 1878, which authorized the coinage of the dollars. At first deposits were limited to |io or a multiple thereof, and certificates to denominations of Jio and upward; but the act of August 4, i885, required the issue of such certificates in denominations of f i, $2 and I5. The issue is, of course, limited to the amount of silver dollars deposited in the Treasury. The certificates are not a legal tender, but are receivable for customs, taxes and all public dues ; when so received they may be re-issued; and by the act of July 12, 1882 (section 12), may be held by National banks as part of their reserves. Silver Certificates Issued and Outstanding. Denomination. Issues and Reissues. Outstanding June 30, 1894. $1 $97,516,000 62,184,000 231,840,000 294.354,000 168,866.000 31,470,000 49,610,000 16.450,000 26,890,000 $22,281,229.10* 15.366,373-40* 87,651.884.50 104,611,711.00 68,849,576.00 13. 156.510.00 24,226,220.00 483,000.00 522,000.00 e , CO 100 coo Total $979,180,000 $337,148,504.00 * Fractions due to fractional redemption. UNITED STATES NOTES. Prior to i86i no notes not bearing interest were issued by the United States. But on July 17, 1861, Congress directed the issue of $50,000,000 of demand notes in denominations less than $50, in exchange for coin or in payment of debts due by the Government ; the notes were to bear no interest, but were receivable for t Fractional parts of paper money are redeemed in proportion ; and elsewhere in this volume. this accounts for odd amounts here MONETARY SYSTEMS OP THE WORLD. 27 customs and all public dues, and might be re-issued ; they were redeemable on demand at the sub-treasuries in New York, Philadelphia or Boston. The power to issue them was limited to December 31, 1862. An additional amount of $10,000,000 was authorized by the act of February 12, 1862. In all $60,030,000 were issued in denominations of I5, $fo and $20 ; by June 30, 1863, over $56,000,000 were canceled, and on June 30, 1894, there were out- standing only 154,847.50. The act of February 25, 1862, went a step farther, directing the issue of $150,000,000 of notes, bearing no interest, and making them a legal tender for all debts, public and private, excepting custom duties and interest on the public debt. The notes were, however, convertible into 6 per cent. 5-20 year bonds in sums of $50. At first no denominations under $5 were permitted ; this was changed in June of that year; $50,000,000 of the issue was to be used in redeeming the demand notes of 1861 ; and the notes when received into the Treasury might be re-issued. On June 11, 1862, Congress increased the issue to $300,000,000, and on March 3, 1863, to $450,000,000. This last law limited the right to convert the notes into bonds to July i, 1863. The highest amount of notes outstanding at any time was $449,338,902 on January 3, 1864. The issue was limited by act of June 30, 1864, to $400,000,000 beside $50,000,- 000 to be used for a short time to redeem temporary loans. When this was com- pleted the volume was gradually reduced, but Congress, by act of April 12, 1866, limited the retirement to $10,000,000 monthly for six months and $4,000,000 monthly thereafter ; authority was also given to fund the notes into bonds. By December 31, 1867, the amount outstanding was reduced to $356,000,000 ; and by act of February 4, 1868, the further retirement of notes was suspended. (This act became law without the President's approval.) On March 18, 1869, Congress solemnly pledged the faith of the United States to the payment of these notes in coin or its equivalent and to make provision at the earliest practical period for their redemption in coin. This was called "The Public Credit Act." During the panic of 1873 the Treasury increased the amount outstanding by issuing from the presurhed reserve of $44,000,000, nearly twenty-seven millions, bringing the amount outstanding up to $382,979,815. The act of June 20, 1874, fixed the maximum amount of these notes at $382,000,000. The act of January 14, 1875, provided that the notes be redeemed in coin, in sums not less than $50, at the sub-treasury in New York on and after January i, 1879 ) authorized the retirement of such notes to an amount equal to 80 per cent, of the new National-bank circulation then being issued, but not to exceed $82,000,000, The Secretary of the Treasury was also authorized to sell bonds to obtain coin, and to add such coin as might be available in the Treasury to provide for the redemption of the notes on and after January i, 1879. For this purpose the Treasury accordingly sold bonds, for which $96,500,000 was obtained. The retirement of notes followed until Congress on May 31, 1878, prohibited the further cancellation and directed the reissue of such as might be received or 28 MONETARY SYSTEMS OF THE WORLD. redeemed by the Treasury. The amount outstanding has therefore ever since remamed at $346,681,016, as it was at the close of business on the day the act was approved. Specie payments having been suspended generally, in all the States east of the Rocky Mountains, in December, 1861, gold commanded a premium and the United States notes fell below par and continued so until the end of 1878. The premium on gold and the gold value of the notes fluctuated as follows during the period : Year. 1862 1863 1864 186s 1866 1867 1868 1869 1870 1871 1872 1873 1874 187s 1876 1877 1878 Currency Price of Gold. January. Gold Price of Currency. January. $1 03 ■^■^y. S^H 44H 44 'A 33 ^ .S3X 35 20 loK og'A 12 loK 12 K I2X 07 02^ 97.09 cts 74.84 65-95 69.32 69.20 75- 18 75-04 74.07 83-33 90.29 91.32 89.28 90.70 8889 88.69 93-46 97.21 Price of Gold During Ihe Year. Highest, $1-34 I.72K 2.85 234^ I.67K 1.46 J^ 1.50 1.625^ 1.23 K I-I5H i.T5?« 1.19H 1.14?^ 1.17K I-I5 1.07% I.Q2^ $I.OlH I.22J4 I-51K I.28M 1-25 >^ I-32H 1.32 I.I9M 1. 10 108^ I;o8"^ i.o6ya 1.09 1.07 I.02j^ I. GO Average Gold Value of U. S. Notes. 69 49 64 71 72 72 75 87 90 90 87 90 96 Resumption of Specie Payments. — On January i, 1879, the Treasury with over $114,000,000 of gold in its vaults in excess of outstanding gold certificates, began the redemption of these notes at the sub-treasury in New York 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, 1894, was $163,098,829. As the notes were, after January i, 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 (a«fe, "Gold Certificates "), in a sense fixed the fund for redemption purposes at $100,000,000 ; and from May, 1885, this amount has always been considered and reported in the official state- ments 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 />o.s^, " Treasury Notes "), the fund was also used to redeem in gold, when demanded, the notes issued under this act and the fund consequently MONETARY SYSTEMS OP THE WORLD. 29 diminished rapidly, until in April, 1893, it fell below the f 100,000,000 specified ; and by January, 1894, the reserve was down to 165,650,000. Accordingly the Secretary of the Treasury, under the authority of the " Resumption Act " of 1875, which provided for tha sales of either 5 per cent, ten-year bonds, /^yi per cent, fifteen-year bonds, or 4 per cent, thirty-year bonds to obtain coin, sold $50,000,000 of 5 per cent, bonds at about a 3 percent, basis, thus replenishing the reserve. The redemption of notes continued, however, until August, reducing the gold to nearly 152,000,000. Accordingly in November, 1894, another issue of 150,000,000 of 5 per cent, bonds was negotiated on a basis yielding 2^ per cent., restoring the reserve for a short time. On December 31, 1894, the reserve stood at $88,000,000. The amount of gold in the Treasury in excess of the sum required to redeem gold certificates fluctuated as follows since resumption : Amount of Net Gold ( Coin and Bullion) in the Treasury. (In millions of dollars.) Years. 1879, ;88o, 881, 882, 883, 884, 885 886, 887 888 889, 8go, 891 892, S93 At the End of October December November February October January December December December March March May February March January December Highest. I57-I 130.2 173 168.S 157-3 1443 1479 170.9 208.6 218.8 197.8 190.5 1497 125.8 108.1 III. I At the End of January I16.6 July 115.2 January 148 December 131-9 January 125.6 July 119 May 115.8 January 136 January 168.4 October 191 August 180.6 September 147-9 June 117.6 July 110.4 December 65.6 August 52.2 Lowest. 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, how- ever (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. The power of Congress to authorize the reissue of these notes, as provided in the act of May 31, 1878, after redemption under the resumption act, was ques- tioned. The Supreme Court in Juillard vs. Greenman (no U. S., 404), held that Congress had the power ; and further that Congress had the power to issue notes and declare them a legal tender, in time of peace as well as in time of war. 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 30 MONETARY SYSTEMS OF THE WORLD. held that the notes were " obligations " and to be classed as " securities," hence not subject to such taxation. (Bank vs. Supervisors, 7 Wall, 26. ) The act of August 15, 1894, repealed the laws exempting notes from taxation. United States Notes Issued and Outstanding. Denomination. $1.. 2 . . . 5-- 10 . . 20. . . SO... 100. . . 500. . . 1,000. . . S.ooof. 10,000 1- Total Less amount destroyed in Chicago fire, de- nominations unknown Net outstanding. Issues and Reissues. $186,212,160 183,691,048 462,041,760 466,531,240 438,602,400 131,285,200 162,894,000 198,376,000 36i,6?8,ooo 20,000,000 40,000,000 $2,651,261,808 Outstanding June 30, 1894. $3,052, 2,470, 52.784, 84,094. 95.125, 14.133. 23,990, 12,039, 59.965. 15, 444.20* ,402.80 ,784.00 285.00 750.00 400.00 ,950.00 ,000.00 000.00 ,000.00 oco.oo $347,681,016.00 1,000,000.00 $346,681,016.00 * Fractions due to_ fractional redemptions. + Issued temporarily (1880-1883) during the suspension of tlie issue of gold certificates. TREASURY NOTES OF 1890. The act of July 14, 1890 (sometimes designated 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 jSi for 371X 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 ^i nor more than $1,000, were to be issued. These notes were made redeemable in coin at the Treasury or any sub-treas- ury, and might be reissued ; were also made a legal tender for customs duties and 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 discretion of the Secretary of the Treasury, and, to provide silver for the purpose, 2,000,000 ounces were to be coined monthly until July i, 1891, into dollars authorized by the act of February 28, 187S ; thereafter such dollars to be coined only when necessary to provide for such redemptions ; the seigniorage arising from the coin- age to accrue to the general fund of the Treasury. So much of the act of 1878 requiring the purchase and coinage of silver was repealed, MONETARY SYSTEMS OP THE WORLD. 31 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 $20,000,000 and jSio,ooo,ooo ivorth thereof were coined into dollars, producing, owing to the low price of silver, |i3,ooo,ooo of such dollars, j!io,ooo,ooo of the coin and the remaining $10,000,000 worth of bullion must be held for the notes issued, the balance of $3,000,000 being the profit or seigniorage accruing to the Treasury ; and on such dollars, when in the Treasury, silver certificates were issued under the act of February 28, 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 s^ 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 ; occasion having soon thereafter arisen for large exporta- tion of gold, this fund was drawn upon very heavily and seriously decreased, as has been shown before. {Page zg.) Treasury notes were redeemed in gold to June 30, 1894, to the amount of $67,154,562. The notes so redeemed were reissued, as were also such as were redeemed in silver dollars up to August, 1893. Subsequent to the latter date the notes redeemed in silver have been canceled and destroyed. By the act of November i, 1893, so much of the law of 1890 directing the pur- chasing of silver and the issue of notes, was repealed. The following table exhibits the operations under the law which went into effect August 13, 1890, to June 30, 1894 : Silver bullion purchased, 168,674,682 fine oz., cost $155,931,002 Bullion coined into dollars, 27,911,768 fine oz., cost 29,110,647 Average cost per fine oz $ 0.9244 " Balance (after allowance for wastage), 140,699,344 fine oz., cost 126,757,819 The bullion produced $36,087,943 After deducting seigniorage (some $6,900,000), there remain for redemption ot Treasury notes 29,173,183 Treasury note issue $155,931,002 Redeemed and canceled 3,346,585 Outstanding June 30, 1894 $152,584,417 The coinage of dollars was resumed soon after July i, 1894, and to the end of the year over $3,000,000 were coined. The bullion in the Treasury, on June 30, 1894, was sufficient to coin about $182,000,000 ; but it is necessary to provide only 126,757,819 dollars for the redemption of the notes represented by that buIUon. The profit or seigniorage thereon would therefore be a little more than $55,000,000. It would take about five years to goin all of this bullion. 32 MONETARY SYSTEMS OP THE WORLD. Treasury Notes Issued and Outstanding Jun^ jo, 18^4. Denomination. Issues and Reissues. Outstanding. $1 $25,344,137 22,048,000 S4. 140.000 61,000,000 26,640,000 1,170,000 i7,S7o,ooo 43,100,000 $12,829,457 10,346,325 33,819,18s 41,240,890 2 5 so 1,048,900 11,627,000 100 500 1000 21,562,000 Total. . . . $2SI,OI2,I37 $152,584,417 NATIONAL BANK NOTES. After the suspension of specie payments by the State banks in December, 1861, a National banking system was proposed, but the bill providing therefor was laid aside; it was finally passed on February 25, 1863; this law was found defective in many respects and an amended or substitute act was passed June 3, 1864. The life of each association was limited to twenty years. The minimum capital was fixed at ;f 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 paid in, whereupon notes to an amount not exceeding 90 per cent of the par value of the bonds, in blank, but duly counter- signed 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 |i, %2, Is. |io. |2o, I50, $100, J500 and $1,000 ; but only one-sixth of the issue could be in denominations under I5, and after the resumption 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 for payments by the United States except interest on public debt or redemption of National currency ; 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 notes, but each bank was obliged to redeem its own notes at its counter on demand in " lawful money," J. ^., legal tender, but it might, in addition, designate another National bank in any of the reserve cities specified by the act, as its redemption agent. Moreover the shareholders are liable to double the amount of stock held by them. 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 MONETARY SYS'jfEMS Ol^ THE WORLfi. S3 banks in the specified cities were to liold as mucia as 25 per cent, of tiieir circula- tion 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 are replaced by the Treasury, the cost of 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 deposits and on 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 placing 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 |5oo,ooo to 80 per cent, of the capital ; in excess of $1,000,000 to 75 per cent., and over $3,000,000 to 60 per cent. ; it also provided that the aggre- gate amount authorized to be issued be apportioned to the banks in States and Territories, $150,000,000 according to population, and the remainder according to existing banking capital, resources and business. The act of July 12, 1870, increased the authorized issue by $54,000,000, 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 $500,000 in notes ; and the Treasury was directed to equalize the circulation 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 i5^r^ the issue of the additional $54,000,000, and banks were author- ized to deposit lawful money with the Treasury (withdrawing their bonds) at any time, to reduce circulation, not to exceed in all $55,000,000, provided that the amount of bonds on deposit for any one bank were not reduced below $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 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 having a capital of 34 MONETARY SYSTEMS OE THE WORLD. ;Ji50,ooo or less need not have more than one-fourth of the amount of such capital on deposit in bonds to secure circulation, thus reducing the minimum to $12,500, the minimum capital remaining at |5o,ooo as theretofore ; the reduction of circu- lation consequent upon this provision and for other reasons, was limited to f 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 circulation outstanding. National Bank Notes Issued and Outstanding June 30, 18^4. Denomination. Issues and Reissues. Outstanding. $1 $23,169,677 IS.495.038 623,656,460 535.638.070 337.866,380 108.143,650 168,220,000 12,289,500 7,454,000 $357,050 174,282 61,510.485 66 006.800 2 c 48,685,320 10,274,550 19,680,800 133,500 Coo looo 32,000 Total . . . $1,831,932,775 $206,854,787 The highest amount outstanding at the close of any fiscal year was fo58,742,- 034 in 1882, and the lowest, $167,550,906 in 1891. The decrease in the volume of National-bank circulation is largely due to the decrease in the amount of the bonded debt of the United States and tothe rela- tively 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 90 per cent, of the par can be issued in notes and loaned, that the money if loaned out in the 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 following calculation, based upon a 6 per cent, rate for money, with 4 per cent, bonds at 116^: $100,000 fours at 116% ; interest $4,000.00 Circulation, 90 per cent, on par value $90,000.00 Deduct 5 per cent, redemption fund 4,500.00 Loanable circulation invested at 6 per cent $85,500.00 5,130.00 Gross receipts Deduct ; One per cent, tax on circulation Annual cost of redemption Express charges Cost of plates for circulation Agents' fees Examinations Sinking fund reinvested quarterly to cover premium 1,130.00 900 00 137-48 3.00 7.50 7-50 43.00 696.36 Net receipts $116,750 loaned at 6 per cent . Profit on circulation . . . . 1,794 84 $7,335-16 7,005.00 $330.16 MONETARY SYSTEMS OE THE WORLD. 35 If the interest rate were 7 per cent. , instead of 6, the profit would be only jSiS. In other words, if the funds of a bank having ^i 16,000 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 f t8, and the institution would have been free from the additional restrictions of the National-bank act. With relatively cheap bonds, the profits are larger ; but since the retirement of the 3 per cent, bonds issued under the act of July 12, 1882, all Government 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 $1,750,000,000 ; the market price of these issues ranged from jSSg to $125 in currency. 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 3^^ per cent., as were also the remaining 5 per cents. From 1882 to 1886, 3 per cents, replaced those bearing 2>% 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 f 1,200,000,000. Between 1886 and i8gi, nearly one-third of the 4 per cents, were retired, and all but J25, 000,000 of the 4J^ per cents, were redeemed, this small amount being continued at 2 percent.; leaving available, beside these, only $560,000,000 of 4 per cents.; $64,000,000 of Pacific Railroad 6 per cents., and |roo,ooo,ooo of new 5 per cents, recently issued ; a total of about $750,000,000, 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 each fiscal year (June 30), from 1866 (in millions of dollars) : 1866 1.213 1867 1.634 1868 2,092 1869 2,166 1870 2,051 1871 1.953 1872 1,845 1873 1.760 1,001 880 776 67s 649 649 699 These figures include the $61,000,000 of bonds issued in aid of Pacific railroads. Notwithstanding the untoward conditions tending to discourage the organiza- tion of National banks, the number of banks has been increasing, although, as will be seen in the tables presented farther on, 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, 3B63, 66 banks $7,188,393 capital paid up. October, 1873, 1,976 " 491,072,616 October, 1883, 2,501 " 509,699,787 October, 1894, 3,756 " 672,671,365 3G MONETARY SYSTEMS OF THE WORLD. The number of banks organized from the beginning of the system to October 31, 1894, has been 4,980 ; their original capital stock amounting to ^715,263,182 ; 969 banks with a capital of 1131,098,500 voluntarily liquidated ; 267 banks with a capital of 146,685,900 failed ; but 12 of the latter were restored to solvency. The liabilities of the remaining 255 banks amounted to ^5109,936,458 ; the nominal assets to $158,010,847 ; shareholders were assessed for deficiencies $24,051, 050. The actual collections from assets and assessments, including $21,871,822 of offsets, has been $96,916,595 ; still uncollected $43,846,521. The payments to creditors have amounted to 71 5-7ths of the gross liabilities ; in some 65 cases all claims were settled in full ; 125 cases are still in course of settlement. Of course the circulating notes of the failed banks have all been paid in full from the proceeds of the bonds sold. The tax on circulation paid into the Treasury from the organization of the National-banking system to June 30, 1894, amounted to $75,834,997.17 ; the tax on deposits to 1883 amounted to $60,940,067.16; and the tax on capital I0 $7,855,887.74 ; a total of $144,630,952.07. 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 m denomina- tions less than $5 ; limited in each case to 80 per cent, of the par value of the bonds deposited, and the capital of no bank to exceed$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, liquidat- ing or reducing circulation, at the close of each fiscal year, were as follows : 1867. $126,849 434, 160 1,017,565 2,727,108 2,826,059 1,917,602 1870 1871 1872 1873 „ , 1874 3,827,612 187s 18,203,667 1876 25,972,360 1877 12.991,361 1878 9.797.513 1879 11,596,061 1880 19,337,621 1881 $33,146,858 1882 37,056,729 1883 36,157,910 1884 39,368,121 1885 38.596.332 1886 60,248,705 1887 97,992,918 188S 91.952,843 1889 78,051,136 '890 55.619,359 1891 40,018,392 1892 26,763,509 1893 20,663,437 1894 26,371,685 MONETARY SYSTEMS OF THE WORIvD. 37 The amounts of these deposits aggregated to June 30, 1894, ^490,446,800.75. The redemptions of notes amounted to 1464,075,115.25, as follows : Notes of failed banks $15,479,267.50 Notes of liquidating banks , 143,742,098.75 Notes of reducing banks , 304,853,749.00 National-Bank Depositaries. — The National-bank act provided that upon a deposit of bonds to secure the same, deposits of public moneys received from internal taxes, etc., might be made with National banks. This has been a con- venience to the Government, and has kept considerable sums of money in use at times when it would otherwise have been locked up in the Treasury. At present 155 banks are so used, having public moneys amounting to about $14,000,000 on deposit, secured fully by bonds held by the Treasurer. These banks received during the fiscal year 1894, over $147,000,000 and disbursed or transferred the same without loss. Stateinent of 3,y3j National Banks, December ig, 18^4. Resources ; Loans $1,991,913,123 U. S. bonds to securft notes. . 195. 735. 950 Other bonds, etc 249,269,705 Due from banks 390,092,220 Due from Treasurer U. S 1.289,077 Other assets 98,659,789 Checks 93,920,258 Cash: Gold and certificates.. 175,794.767 Silver and certificates. . . 42,246,456 U. S. notes and ceitifi- cates 156,603,472 Five per cent. fund... 8,542,387 National-banknotes 18,522,596 Minor coin, etc 885.073 Total $3,423,474,873 Liabilities: Capital stock $666,271,045 Surplus 244,937,179 Profits 95,887,437 Notes in circulation 169,337,071 State bank notes 66,291 Due to banks 514,964,788 Dividends unpaid 1 , 130,390 Deposits, individual 1,695,489,346 Public deposits 14,016,742 Other liabilities 21,374,584 Total $3,423,474,873 CURRENCY CERTIFICATES. Certificates of deposit payable to order are issued to National banks for United States notes, by the Treasurer or any assistant-treasurer in denominations of $10,000 (formerly also $5,000), under the act of June 8, 1872. These certificates bear no interest, and the notes are held on special deposit to redeem them at the place where issued. They are chiefly used in the settlement of clearing-house balances and in the reserves of the banks. The movement of these certificates has been as follows to June 30, 1894 : 5000S issued, $102,630,000 ; outstanding, $395,000. io,ooos issued, $1,030,330, 000 ; outstanding, $58,840,000. The banks are to a large extent relieved from the care of a redundant issue of small denominations of United States notes by these certificates. The highest amount out at the close of any fiscal year was $59,045,000 in 1875, the lowest $9,020,000 in 1887. 38 MONETARY SYSTEMS OF THE WORLD. • 1=1 h_- «• 3i = V o MW . To the mount o ) cents fc all dues n o •■so o F en 2 "^ O SJ O S5 " S °1« ^§•2 3 3 M 5'S >. . ?- ™ 2 " a " ti)(>r 3 o - - ct^ "o 3 Oi-J « C oooooom . — . r-~i f~i in t^ i-t J5 f^M S 3 ;e.SS ■ *j 0*0 I O (J U i W 4J JJ 3 «2 w •O ^ ui s t: *i ZS V4 (U u S-S-H 1^ B 3 a— *c iS o oeoooo»ra«T OOOlOWi-i .2 >>■ " w o ^ 5 fl fc : SOOOOOlOOTr 4j «> rt:r; tn 1 '^~ *j 3 •3213" S'Sg-?; - aj 5J o SS2 ;^ IssS isl "S B " S t- *j "1 n aj 3 ""^t; s >.Oo S-S"2 3f§. o»«- ooooooc OOOiOi-i ^ u fa flH O h B « C B V "'SH ^^ eS H :^ ^ Srt MONETARY SYSTEMS OF THE WORLD. 39 THE UNITED STATES OF AMERICA. Obsolete Forms of Money — Foreign Coin — State Bank Notes — Fractional Currency— Trade Dollars— Old Treasury Notes and Certificates. FOREIGN COIN. Before the mint was able to supply the demand for money, foreign coins were accepted everywhere in the country at a fixed valuation, and Congress by act of February 9, 1793, made the gold coins of Great Britain, France, Spain and Portugal and the silver coins of France and Spain, a legal tender at their equivalent value on the basis of the coinage law of 1792. Although the act limited the provision to three years, it was revived in 179S, again in 1806, 1819, 1821, 1823, 1834 and 1843. The act of February 21, 1857, finally repealed all laws making foreign coins a legal tender in the United States. STATE BANK NOTES. From the beginning of the Government under the Constitution until 1862-3 the paper money of the United States consisted exclusively of notes of banks organized under State charters, and from 1791-1836 of notes of the Bank of the United States. The first of these chartered banks was the Bank of North America of Philadelphia, still in existence as a National bank. Organized as a private institution on June 17, 1780, it received a perpetual charter from the Continental Congress on December 31, 1781, and opened business thereunder on January 7, 1782. On March 8 Massachusetts and on April i Pennsylvania also gave charters. The latter was temporarily withdrawn, but renewed subsequently and thereafter periodically until 1864. Its capital was $2,000,000. The Massachusetts bank was chartered in 1784, and the Bank of New York organized in the same year received a charter in 1791, the first bank chartered in New York State and the third in the Union. In 1791 came also the first Bank of the United States, organized upon a plan recommended by Secretary Alexander Hamilton by act of Congress of February 25 ; its capital was |io,ooo,ooo, all paid up, either in coin (one-fourth) or United States bonds for the remainder ; the Government took one-fifth of the capital on bonds ; there were 25 directors. The bank was prohibited from holding more real estate than necessary for its business (except when taken for debts), but could loan money upon such property, unless by consent of the United States it could not increase its liabilities beyond |io, 000,000 in excess of its cash holdings, and directors were made personally liable for such excess. The interest rate on loans was fixed at 6 per cent. (This was subsequently repealed. ) There was no limit on the amount of its circulation other than the above, and its notes were receivable in all payments due the United States. The Government had the privilege of using the bank as its receiving and disbursing agent, and guaranteed that no other banks would be chartered by Congress during its existence. 40 MONETARY SYSTEMS OP THE WORLD. Only meagre reports of the transactions of the bank appear available . It had in January, 1809, a circulation of $4,500,000, and two years later over $5,000,000; its specie vi^as reported at jjSs, 000,000. Its charter expired in 1811. The Govern- ment's stock was sold by 1802 at premiums as high as 45 per cent., and including the dividends received, the United States made nearly 57 per cent, on this transaction. Application was, of course, made to Congress to renew the charter as early as 1808, but without success, largely due to the opposition of the State banks, which objected to the monopoly. The Government moneys were accordingly removed to these banks after 1811 ; the war of 1812 intervening, specie payments were suspended by all of them south of New England in 1814 ; about one hundred of these banks held $9,000,000 of the Treasury's funds. The State banks were at this period quite numerous, but except in New England, not under careful supervision ; the suspension of specie payments removed the only apparent check upon note issues, and an expansion took place reported to have been from $28,000,000 in 1811 to $110,000,000 in 1815. Being the sole medium of exchange, issued in denominations as low as 6 cents and irredeemable, great distress resulted ; the public debt increased rapidly, the bonds of the United States selling at a discount of 15 per cent, for currency depreciated 20 and 25 per cent. Reports of banks are not available prior to 1834, excepting for Massachusetts, which began in 1803 to require them ; but the meagre history of certain State banks for the period shows that the system prevailing generally was exceedingly lax. Bank charters were frequently given as the spoils of party to favored individuals, and it is charged that bribery was at times resorted to to obtain them. There was no guarantee that the capital stock was paid in ; very frequently it was not. And yet, at this time, until the organization of the second bank of the United States in i8i5. the banking interests were important, as the following table shows : State Bank Statistics, I'j84.-i8i6. 1784, 1790, 1792, 1800, 1804, 1811, 1813, 1814 1815. 1816. No. of Banks. 3 4 16 28 59 208 246 Capital, ¥2,100,000 2,500,000 17,100,000 21,300,000 39,500,000 52,750,000 65,000,000 80,000,000 88,000,000 89,000,000 Circulation. $2,000,000 2,500,000 11,500,000 10,500,000 14,000,000 28,100,000 66,000,000 104,500,000 68,000,000 Specie. $10,000,000 9,000,000 18 000,000 17,500,000 17,500.000 15 400,000 28,000,000 16.500,000 19,000,000 The disaster, only partially shown in the disappearance of $26,000,000 of the circulation in one year, led many members of Congress who had previously opposed it, to vote in favor of the renewal of the charter of the Bank of the United States; the bill passed January 20, 18 15, but was vetoed by President Madison. A second bill was approved by him April 10, i8i6, MONETARY SYSTEMS OE THE WORIvD. 41 THE SECOND BANK OF THE UNITED STATES. The charter was for twenty years — to March 3, 1836. The capital stock was f 35,000,000, of which the Government took j!7,ooo,ooo ; and five of the twenty-five directors were appointed by the President. The indebtedness of the bank exclu- sive of deposits was limited to the amount of its capital stock, and its notes were receivable in all payments to the United States. It took charge of the Treasury funds, transfers of stock and negotiation of loans for the Government, free of charge. The Secretary of the Treasury had the power, however, to direct the deposit of public moneys, elsewhere than in the bank and its branches. As to notes, none of denominations less than $5 were authorized, and all smaller than |ioo were to be payable on demand ; if payment in specie was suspended the bank became liable for interest on the notes at 12 per cent, per annum. The directors were made personally liable for debts contracted in excess of the capital and deposits. Directing officers for the branches, which might be established anywhere in the United States, were appointed by the directors of the bank. Congress pledged itself to grant no other bank charter (except in the District of Columbia) during the existence of the bank. On the 7th of January, 1817, in the midst of the depression which lasted from i8i4to 1820, the bank began business. It appears that prior to 1819 the charter was violated four times, but Congress refused to repeal it. In 1819 the bank imported $7,000,000 in specie from Europe at an expense of f 500,000, to aid in restoring stability. This expense, and other serious losses, threatened the bank seriously ; but from 1820 the country and the bank prospered, and all opposition to it appeared to have been dissipated. But as early as 1829 President Jackson raised the constitutional objection against renewing the charter ; it became a political question almost at once. Congress did not agree with the President ; but nevertheless his Secretary of the Treasury, Taney, gave notice that after October i, 1833, the public deposits would be made in State banks, the amount in the bank to be gradually withdrawn by payments of Government expenses. The State banks thus supplied with large amounts of cash began a system of expansion ; attracted by this opportunity new banks were organized without safeguards ; the circulation increased from J!94,ooo,- 000 in 1834 to f 149,000,000 in 1837. The bank naturally defended itself and party feeling ran high, but its charter was not renewed. It was freely charged that the bank contributed largely to the suspension of specie payments in 1837 and the panic which followed ; but the condition of the State banks was such that the crisis could hardly have been averted. After the expiration of its Federal charter the bank continued under a charter from Pennsylvania until 1841, when it succumbed. Its affairs were finally settled in 1856. Its notes and deposits were paid in full ; but the private share- holders, representing ;j28,ooo,ooo, lost all of this ;— the $7,000,000 stock held originally by the Government was paid back long before, — the Government having profited in all over $6,000,000 by the transaction. 42 MONETARY SYSTEMS OF THE WORLD. THE STATE BANKS which received the deposits were in a large measure loosely organized and managed. As before stated, Massachusetts and the rest of New Englandhad fairly solid institutions. This was largely due to the penalty imposed for failure to redeem notes, and to the "Suffolk Bank System," inaugurated by the New England Bank of Boston in 1813, continued by other banks and finally by the Suffolk Bank of Boston alone. The practice arose when the banks of Boston compelled other banks to redeem their notes on presentation or incur the penalty. First the notes were presented for redemption directly at the bank of issue ; but subsequently the notes were redeemed at the Boston agency of the issuing bank. This system operated to restrict the note issues within wholesome limits, and as a result no Massachusetts bank suspended payment in 1814. And this was done in the absence of a comprehensive banking law ; it was not until 1829 that such a law, limiting the powers of banks and fixing liabilities of directors, was enacted. It was not, however, sufficiently comprehensive, and the panic of 1837 caused thirty-two of the banks to suspend. From 1784 to 1836 only ten had failed. New York possessed a banking system under which charters were given to favored parties, largely as political party spoils ; the troubles of 1814-1820 were felt there as well as elsewhere, though not in the same degree. In 1821 a con- stitutional restriction requiring a two-thirds vote of the Legislature to grant char- ters, was adopted, but it did not serve the purpose of restricting the favoritism. In 1829 a system known as the " safety fund system " was adopted, requir- ing the establishment of a fund for the security of note-holders (and at first deposi- tors as well), by a tax of X of i per cent, annually upon the capital stock of the banks, until the fund amounted to 3 per cent, of the bank capital. Other States had pursued various courses in establishing banks. Ohio, Indiana, Illinois, Tennessee and Kentucky tried State banks, in which the State was more or less directly interested, as well as specially chartered institutions. Other States experimented with all of the various forms then in use ; but very few of the banks organized between 1803 and 1837 escaped the troublous times of the period fol- lowing the last mentioned year. The following incomplete tables exhibit the conditions of the State banks by geographic sections of the country at various dates, amounts being given in mil- lions and tenths. The first table is confined to a statement of the number of banks and their capital ; other statistics being unavailable. It was not until 1832 that the Federal Government provided by law for the collection of statistics of the banking interests of the country. Prior to that date the secretaries of the Treasury, from time to time, collected data, but these are very incomplete. In the first table, the marked and steady growth of New England institutions is conclusive proof of the solidity of the system of banking prevaiHng there. Instead of a decrease between 1820 and 1830, these States show an increase of 60 banks, with $15,400,000 capital ; the Middle States (including New York, New Jersey, Pennsylvania, Delaware, Maryland and the District of Columbia) showed MONETARY SYSTEMS OP THE WORLD. 43 a slight decrease ; the Southern States (including all south of the Potomac and Ohio rivers) suffered most severely during the period, while the States of the West (represented by Ohio, Indiana, Illinois, Michigan and Missouri) were almost equally unfortunate. Table I. — Number and Capital of State Banks, J801-1830. 1801. 1805. 1811. 1815. 1816. 1880. 1830. No. Capi- tal. No, Capi- tal. No. Capi- tal. No. Capi- tal. No. Capi- tal, No. 92 116 74 25 Capi- tal. No. Capi- tal. New England States. Middle States Southern States Western States 18 12 *2 7.6 12.9 30 47 20 7 ti 13-3 21.3 5-e 0.2 40.4 47 25 12 4 88 12.2 21.6 78 0.9 63 III 22 12 19.0 49.0 12.8 1-4 76 116 33 21 20.8 49-9 17.0 2 I 19.9 490 30-9 2.4 102.2 172 115 30 12 329 35-3 47-7 25-7 1-5 Total 32 23-5 75 42.6 208 82.2 246 89,8 307 I 10.2 * South Carolina. f Ohio. The second table gives a few additional data relating to all the banks in the country to 1830. Table 11. — Condition of State Banks, iSiy-iS^o. Year. 1817. 1819, 1820. 1829. 1830. Number. Capita 125 274 125 307 102 329 no 330 no Loans. 157 160 Deposits. 31 40. f 39 Circulation. Specie. 49 40.6 48.3 48.4 21. 5 16.7 14.9 13-5 The third table gives the condition of the Bank of the United States at cor- responding dates from 1817 to 1830, and from 1834 to 1840, for comparison with the fourth table. Table III. — Condition of the Bank of the United States at Dates Corresponding With the Statements Above and Below. 1817, 1819, 1820. 1829. 1830. 1833- 1834- 1835- 1836, 1837- 1838. 1839. 1840. Capital. 35 35-8 31-4 39-2 40.7 61.7 54-9 St 8 59-2 574 45-2 41.6 35.8 eposits. Circulation. n.2 1.9 S-8 6.6 6.6 3-6 17. 1 11,9 16.0 12.9 20.3 175 10.8 19,2 II. 7 17-3 5-1 23.1 2-3 11,4 2.6 68 68 6.0 3-3 67 Specie. 1-7 2.7 3-4 6.1 76 8.9 10. o 15-7 8,4 2.6 3-8 4-2 1-5 44 MONETARY SYSTEMS OF THE WORLD. The fourth table gives a comprehensive statement of the condition of the State banks, by sections, from 1834 (the first year in which approximately full statistics were published by the Treasury Department) to 1840 ; also a similar statement for all of the State banks, and finally for these and the Bank of the United States combined. The statements are by no means perfect. Table IV. — Aggregate State Banks, 18 ig and 1834-184.0. Year. 1819 1834 183s 1836 1837 1838 1839 1840 New England States. No. Cap. Loans. Dep. Circ. Specie, 8S 243 "258 (^248 321 3°9 308 301 i6-5 SO 6 52.8 52.0 66.1 62.3 62,2 ei.i 20.7 74.8 78.7 833 99-4 84.0 84.4 81.S 3-6 17.9 17.7 13- 1 20.3 13s "■3 11.6 5-5 15-2 I7-S 20.3 20.6 17.8 19. 1 16.6 2-3 2.0 2.S 3-3 4.0 3-4 4-5 Middle States. No. Cap. Loans. Dep. Circ. Specie. «Il6 ti35 ^156 «ISI 204 204 199 3S-9 53-4 50-9 60.1 78.3 80.8 79.0 77.1 21.9 101.5 93S 121. 5 151-3 127.7 133-3 108.7 47 33 3 30.2 47-S 52-1 30.6 33-3 29.0 17.8 307 24-S 3<-9 4S-0 28 8 38.0 2S-I 3-S 6.6 II. I I1.7 II. 7 10. 12.6 10.6 Year. Southern States. No. Cap. Loans. Dep. Circ. Specie 1819 1834 183s 1836 1837 1838 1839 1840 I Xz° 5o°.oo° ; for the bank, under excellent management, not only weathered the storms of 1837, but paid the Government deposits in full, paid large dividends, MONETARY SYSTEMS OE THE WOJO/D. Q^^7 T <^^ ^ and in 1854 when its charter expired returned to its sharehllg^rs n^|^^ dfiuble th^'V original investment. Practically the same institution was^»cl|^rtere,^Vf 1855, V\ with a capital of f 6, 000, 000, and continued until merged int<^S^^Lpnal feiA^It was one of the few Western banks that did not suspend spec]^ySjjM6|c^ in 1^7, and when it was merged its affairs were in admirable condition. As an extreme example of the opposite of this bank may'' experiences of the Planters' Bank of Mississippi and the Union Bank of tlie same State. This State also loaned its credit by the issue of bonds. The former bank had a capital of $3,000,000, of which jjSa.ooo.ooo came from the State. The bank prospered, and in 1838 the Union Bank was chartered with a capital of |i5, 500,- 000 ; $15,000,000 in bonds were to have been issued, but after the negotiation of {10,000,000, the State repudiated its agreement, apparently on some well founded charges of mismanagement against the bank. Subsequently the bonds were repudiated entirely and the people refused to permit the payment of interest on those issued for the Planters' Bank. Again contrasting the experience of another State, Louisiana, which had learned costly lessons, passed a law in 1842 which gave the banking system of that State a well-earned reputation throughout the Union. Banks were required to maintain a reserve in specie of 33 >f per cent, of their liabilities, the remainder to be covered by short commercial paper — not exceeding ninety days ; banks were prohibited from paying out notes of other institutions ; prompt redemptions were required ; directors were made personally liable, and examinations under a board of State officers were made periodically. Added to these legal provisions was the determination of the most solid of the banks to enforce them ; banks which were delinquent were either brought into line by their New Orleans con- nections or went out of business. Unquestionably the commercial prominence of New Orleans during this period (1842-1860) could have been maintained only by such a wholesome banking law, supplemented by the active co-operation of those in the business of banking. It is manifest from the foregoing that the requisites for safe banking with note issues were : i. A proper guarantee for the prompt redemption of notes under severe penalties. 2. Personal liability of directors. 3. Capital actually paid in and circulation limited in proportion to such capital. 4. Official super- vision and examination. Wherever all of these requisites were provided, banking was reasonably safe and profitable ; wherever they were lacking disaster followed. Capital stock was frequently paid for altogether in personal notes of hand, which in many cases were not met at maturity ; notes were issued by institutions without bona fide capital and apparently without limit excepting that arising from the awakened incredulity of the community ; where bond security was provided, it often hap- pened that when failures occurred and note-holders fell back upon the bonds, they were found to be largely reduced in value or even worthless. The countless millions lost to the people of the United States through their experiments in banking should, it seems, be sufficient to teach them the absolute necessity to provide the safeguards necessary to secure to them 48 MONETARY SYSTEMS OE THE WORLD. adequately protected currency ; a currency which shall be satisfactory to the citizen of Maine, even though issued by a bank in Texas, and to the citizen of Georgia, even though emanating from a banking association in Minnesota. On the other hand the propositions to reintroduce currency issued by banks chartered under State laws, need not necessarily involve the foisting upon the people the "red-dog" or "wild-cat " currency of ante-bellum days. A Federal law prescribing the ^^«era/ requisites could readily prevent this. A statement showing the condition of the banks at several periods between 1840 and 1863 is given below, by geographical sections of the country. In certain 1S43 1848 1853 18C4 1857 1858 1S60 1863 New England States. No. Cap. Loans. Dep. Circ. Specie, 276 280 401 439 504 496 506 /284 57.6 58.4 90-3 100.9 117.8 I19-S 125-3 SS-4 74.0 92.7 1592 172.4 180.0 181. 1 204.6 81.6 13,2 13.2 28.9 31-4 28.6 42-3 43-9 21. 1 16.3 26.3 53.8 52.7 43-1 3S.0 47.5 30-9 8.5 4.2 6.7 6.9 6-5 13.2 9.1 2.8 Middle States. *2I0 J264 •283 1 442 t47o t459 t485 491 78.5 72.2 71.7 114 8 i4°-3 154.4 159 I ISS3 Loan.s. Dep. 883 .31-9 131. 2 .53-2 IS9'5 79° 283.6 III. 9 300.0 139.9 247.7 113. 8 289.6 14s. 8 266.8 267.7 21.7 43-5 35-2 61. T 62.7 44-3 S3i 82.4 15-8 143 13.2 22.8 234 38.0 33-2 51-3 Year. 1843. 1848. 1853. 1854- 1857- 1858. i860. 1863. Southern States. No. Cap. Loans. Dep. Circ. Specie tl42 tl44 2 93 C202 C227 d20O ^246 i*4 77.2 62.7 52.0 83.8 94.0 90.0 1049 34-7 76.6 88.4 97-3 142.0 161. 1 116. 9 168.2 38.7 13-5 20.6 29.8 33-3 405 29.5 52.9 14.6 17.0 35-6 48.5 71.6 738 43-7 74° 22.5 12.4 ■19.5 19.5 23-5 21 6 22.0 31.8 15-2 Western Slates. S5 568 116 164 212 220 325 Cap. Loans. Dep. Circ. 16.2 149 a.i 6.4 9-5 18.8 6.6 14.9 12.8 26 I 10.5 19.9 19.0 32.3 13.8 23 5 22.0 ,35-7 154 24.9 23.8 27.5 9.9 19.8 34-4 43-8 138 35.S 23.8 32.6 21.3 22.1 2.9 6.1 5.8 62 61 S-3 8.3 10.8 1843 i. 1848 i. 1853 «■ 1854 i. 1857 i. 1858 i. i860 2. 1863 i. All Banks. Another Statement of All Banks. No. Cap. Loans. Dep. Circ. Specie 683 756 893 1247 1413 137s 1562 1023 229.6 202.7 226.9 318.5 3740 3878 423.7 269.2 253-7 331-1 442.1 630-3 676.7 573-3 706.3 4197 60.6 93.6 148.2 190.4 2244 195-5 256-3 324.8 61.4 120.3 157-4 209.0 204.5 145-7 2 10. 1 157-8 No. Cap. Loans. Dep. Circ. Specie 39-6 44-2 45-2 59-4 S7-6 78.S 82.4 80.1 751 750 1208 1416 1422 1562 1466 228 9 204.8 207 301 37°- 394 421 405 254-5 344-5 408.9 557-4 684.5 583-2 691.9 648.6 562 103.2 145-6 188.2 23° -3 i8s-q 253-8 393-7 58.6 128.5 146. 1 204.7 214.8 1552 207.1 238.7 33-5 46-4 47-1 59-4 S8.3 74 4 83.6 101.2 * Delaware incomplete, t South Carolina incomplete ; Mississippi and Florida mis.sing. J District of Columbia missing. § New Jersey and Pennsylvania missing, a South Carolina incomplete; Florida missing. ^ Illinois missing, c Florida missing, af Florida and Tennessee missing, i? Mississippi missing. /"Massachusetts missing; all banks converted into Nationals. ^Includes onlv Louisiana, Kentucky and Tennessee, /t Wisconsin, Kansas, Nebraska, included in 1861 : missing in 1863. z Incomplete returns. MONETARY SYSTEMS OF THE WORLD. 49 cases the statistics are necessarily incomplete ; but sufficient is shown to indicate the salient points in the statements for the periods. Amounts are, as before, stated in millions of dollars. Reference to the last-mentioned tables will show the effect of the free banking legislation of 1852 and thereabouts ; the number of banks and the banking capital increased marvelously and their transactions, particularly the note issues, grew largely ; on the other hand the specie holdings were not increased in any similar proportions. The panic of 1857 served to check the growth of banks ; the number in 1858 being only six greater than in the preceding year ; their circulation was reduced nearly |6o,ooo,ooo ; the specie of course increasing under the influence of the general suspension of coin payments. To further illustrate the condition of the currency during the periods under consideration, the following quotations of bank-notes are reproduced : During the suspension of specie payments from 1814 to 1817 the depreciation of paper reached as much as 15 per cent, in New York, 17 per cent, in Philadelphia, and 23 per cent, in Baltimore. At the beginning of 1815 the fluctuations were very severe ; from 15 per cent, in January to 2 per cent, in February in New York, and from 20 per cent, to 5 per cent, during the same period in Baltimore. New York quotations in January, 1838, show that the notes of banks as far away from the metropolis as Alabama, Mississippi and Florida suffered a discount of from 8 to 15 per cent., while at the same time Maryland notes were at 3 and 4 per cent., and New England from 2.% to 3 per cent. This was immediately after suspension of specie payments. Ordinarily for the three preceding years, New England notes were yi of one per cent, off; those of the Middle States ranged as low as 2 per cent, and Southern and Western notes were discounted as much as 6 per cent. In Philadelphia, in 1838, Mississippi notes were as low as 35 per cent, dis- count ; Tennessee notes reaching 30 per cent. ; Illinois, Ohio and Indiana notes fell to 1% per cent., although frequently quoted at par in 1835. The lowest actual quotation in the record referred to, which is very incom- plete, is 75 per cent, discount for notes of Kentucky banks in 1822. State banks without circulation continued notwithstanding the National-bank system. The returns for these are necessarily incomplete, but a brief summary of their condition on several dates is given below. Many States provide no system of reports, and from 1863 to 1873 very meagre statistics are available. 1874 1879 1884 1889, 1894, Number of Banks. 616 1671 3586 In Millions of Dollars. Capital. 59 3 104. 1 IIO.O 166.7 Z44.4 Deposits. Loans, 1437 166.9 3254 507-1 658.1 154-7 191.9 3323 508.4 666.0 MONETARY SYSTEMS OP THE WORLD. Condition 0/3,586 State Banks (i8g4)- Resources. I-oans $671,377,452 Bonds and Securities 84,541,728 Due from Banks 119,676,949 Cash 144,517,123 Other Assets 57,051,561 Total $1,077,164,813 Liabilities. Capital $244,435,573 Surplus 74,412,319 Circulation 4,529 Due to Banks 54,120,185 Deposits 658,107,494 Other Liabilities 46,084,713 Total $1,077,164,813 It will be noticed that the State-bank business is of no mean importance. In comparison with National banks, the average capital of each institution is much less, enabling sparsely settled communities to be furnished with banking facilities. OLD TREASURY NOTES AND CERTIFICATES. Treasury notes were issued during several extraordinary periods in the finan- cial history of the country ; but they were always interest-bearing and usually readily convertible and receivable for all public dues. The first period was 1812-1815, during, and for the purpose of carrying 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 $100, payable 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 $35,500,000 one-year notes, the issues of each year providing for the redemption of those of the previous year. The actual issues amounted to $28,318,400, bearing interest at the rate of 5 2-5 per cent, (or T.yi. cents per day on $roo). The act of February 24, 1815, provided for the issue of $25,000,000 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 no interest until converted into bonds. Authority was given to reissue notes received or converted. The total issue amounted to $8,362,394, and the reissues to $7, 182,740. These " war of 1812 notes " were very soon retired, either by redemption or con- version 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 $28,000,000. The fourth installment has never been paid. The disaster of 1837 left the Treasury almost without funds, and further issues of notes were resorted to. The amounts' authorized by the acts passed each year aggregated $31,000,- 000, payable in one or two years, with interest at not more than 6 per cent, nor less than l mill ($.001) per cent. Two millions were actually issued at this latter MONETARY SYSTEMS OF THE WORI.D. 51 exceedingly low rate, probably because there was an active demand for stable paper money, which the banks could not supply. The authority to reissue notes received for public dues brought the entire issue to over ^47,000,000 ; more than ^46,000,000 were retired by 1845 ; but very few of these notes are now unre- deemed. The third period, 1846-1847, was during the Mexican war. The rates of interest were the same as during the preceding period ; JS33, 000,000 were author- ized, and only $809, goo of notes were reissued ; all but $200,000 were retired prior to 1851. The fourth period, 1857-186:, 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 percent. 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 f 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. The act of March 3, 1865, permitted the conversion of these last-mentioned notes into bonds. Of this vast issue of notes all but about $375,000 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, 5 and 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 $2,850 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. Only $3,000 remains 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 52 MONETARY SYSTEMS OP THE WORI^D. of July 25, 1868, authorized the issue of 125,000,000 additional. Including reissues, jS88, 155,000 were placed, of which j55,ooo 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 Massachusetts 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 f 10 only, to aid in refunding the bonded debt, giving small investors an opportunity to obtain bonds ; a form of "popular loan." 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 multiple ; 140,012,750 was the limit of the issue ; 156,480 remained unconverted January i, 1895. FRACTIONAL CURRENCY. The suspension of specie payments caused not only gold, but subsidiary silver as well, to be hoarded and exported ; and soon thereafter the coin required for "small change" disappeared from circulation. Private institutions 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, prohibited the further issue of such substitutes for 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 denomi- nation of 5, 10, 25 and 50 cents were circulated, and made receivable for all public dues less than five dollars, and redeemable in notes in like sums. 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, except 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, i866, a 5-cent nickel coin superseded the 5-cent note. In 1874 the Treasury discon- tinued the issue of the 15-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 f 10,000,- 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 $15,842,610.11 ; on January i, 1895, it was still over $15,250,000, of which amount it was estimated $8,375,934 had been MONETARY SYSTEMS OE THE WORLD. 53 destroyed, and would never be presented ; the remainder is still carried as a liability of the Treasury. There is reason to believe that the amount destroyed is much larger than here given. Statistics relating to this currency are given below : Fractional Currency Issued and Outstanding to June jo, iSp^. Denominations. 3 cents 5 cents lo cents 15 cents 25 cents SO cents Total Less destroyed at Chicago fire, de- nomination unlcnown Unredeemed June 30, 1894 Amounts Issued. $601,923.90 5,694,717.85 82,198,456.80 5,305,568.40 139,031,482.00 135,891,930.50 Outstanding June 80, 1894. $90,240.48 * 1,858,907.47 5,062,559.52 240,423 53 4,282,188.20 3.770,756.55 $15,273,075.75 * The rule as to redemption of mutilated pieces for the fractional value applied to these notes also. The several issues of fractional currency by series were as follows : 1st. 18S2-1863 $20,215,635.00 2d. 1863-1867 23,164,483.65 3d. 1864-1869 86,115,028.80 4th. 1869-1875 176,567,032.00 Sth. 1874-1876 62,661,900.00 Total $368,724,079.45 The number oi pieces issued was 1,819,223,300. 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 Chinu and Japan, to compete with the Mexican silver dollar, which was a trifle less valuable. The same act made all silver coins legal tender to the amount of $$, and this was construed to include the trade dollar, although it was never contemplated that this coin should circulate in the United States ; accordingly by joint resolu- tion 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 October, 1877, the Secretary discontinued the receipts of bullion for this purpose, excepting in the Western mints ; as it was found, however, that the trade dollars which were coined there, were put into circulation in the United States, the coinage was entirely discon- tinued February 22, 1878, except for "proof pieces." 54 MONETARY SYSTEMS OF THE WORLD. 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, 187S 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 $1,706,020 imported ; of the latter amount, $830,561 were imported subsequent to the redemption act of 1887 ; $919,459 were melted up at the mints prior to the redemption act, and $7,689,036 were redeemed ; of the latter amount, $5,078,472 were recoined into standard dollars, and the remainder into subsidiary coin. MONBTARV SYSTEMS OF THE WORLD. 5S THE BRITISH EMPIRE. The United Kingdom — The Bank op England — Other Banks OP THE Kingdom — Coi^oniai, and Foreign Banks — British Dependencies and Their Connec- tion WITH THE Mother Country. . CSovereign=30 shillings @ 12 pence @ 4 farthings.) Foremost among all the nations of the world, in the magnitude of its com- merce, its vast colonial possessions and dependencies, and consequently its importance as the chief financial centre. Great Britain furnishes the most interest- ing subject for the study of the money of the world. The pound sterhng, the monetary unit of the kingdom and of a large portion of its imperial dominions, is at the same time the most universally recognized coin or unit in the world. It stands almost unique — as the largest of the units, with the sole exception of Egypt, which adopted its pound under the influence of the British. Not alone this : but its principal bank of issue, now over three hundred years old, stands as a monu- ment of financial sagacity and strength ; the "old lady of Threadneedle street " is to-day practically the mistress of the financial and commercial world ; a Bank of England note passes current in the marts of every civilized, and even half-civil- ized country. And yet, with all the power possessed by the pound sterling and the Bank of England note, it has been impossible, or at all events impracticable, to give them permanent circulation or a standing as the measure of values in all of the depen- dencies of this great empire. It is only in Australasia, Cape Colony and in a few of the minor colonies, that this has been done. The East Indian uses the rupee ; the West Indian prefers dollars and cents ; the Canadian likewise ; the great port of Hong Kong finds the sWver peso most useful. Thus the conditions of the environ- ment, making it more coi>venient for the colonists to use the units of their immediate neighbors, and the historic prejudices of the Hindoo, have been more potent than the force of the mother country's sovereign ; and the legislators in parliament finally gave up the attempt to institute a homogeneous currency throughout the dominions. The sovereign or pound sterling of to-day is not as ancient a coin as many of the units of other countries. Originally it was literally a pound of silver ; in the course of years it was reduced in weight, still retaining the misleading name, however ; until to-day, if reckoned in silver, the pound (20 shillings) is but five- eighteenths of a pound in weight. Under the act of Parliament of June 22, 1816, Great Britain, which had there- tofore had the double standard, became mono-metallic, with the single-gold 56 MONETARY SYSTEMS OE THE WORI.D. standard, and since that date silver has been a legal tender only to the extent of £n, or about |io, and is coined only on Government account. A pound Troy of gold of standard fineness, 916^ thousandths, under the law of 1816, is coined into 46.725 sovereigns ; so that the legal weight of the sovereign is .23682 of an ounce, or 123.274 grains, or 7.988 grammes ; and the fine gold con- tained in a sovereign is 113. 001 grains. The gold coins are a 'egal tender to any amount, not only in Great Britain, but in Australasia, the Dominion of Canada, Cape Colony, Malta, Natal and some of the West Indian colonies. Although individuals have the right to deposit gold at the mint and to obtain therefor ^3, 17 shillings loj^ pence per ounce of standard metal, the fact that there is considerable delay in coining has caused it to become the practice for indi- viduals to deposit their gold with the Bank of England, receiving at once .^3, 17 s. 9d. per ounce standard ; the difference ol i}4 pence being charged by the bank for interest, etc. The bank act of 1844 now requires the bank to receive gold at that valuation. The legal gold coins are the sovereign and half-sovereign ; two and five- sovereign pieces are also coined, but in very small numbers and not for circulation. The guinea, nominally 21 shillings, is not now coined, although certain fees are still reckoned in this coin. Under the law of 1816 i pound Troy of silver |J fine, equivalent to 925 thousandths, was to be coined into 66 shillings. The ratio to gold is 14.2878 to i. The silver coins are the crown = 5 shillings, the double-florin = 4 shillings, the half-crown = 2yi shillings, the florin = 2 shillings, the shilling, the six-pence or half-shilling and the three-penny piece or quarter-shilling ; very few of the two largest denominations are coined ; and four, two and one-penny silver pieces are struck.merely for the cabinets of numismatists. As the sovereign is worth |4.86%, the shilling is nominally worth 24 J^ cents, and the penny nearly 2/j cents. The weight of the shilling is 87j\ grains, or 5.655 grammes, and the fineness 925 thousandths ; it is therefore actually worth a little less than the quarter dollar of the United States, which weighs 6)4 grammes, but is only 900 thousandths fine. The minor coinage includes pence, half-pence and farthings ; the latter being worth about one-half of a cent. The pieces are of bronze. Table of Coins. (Gold, .9165^ Fine.) Denomination. Spounds 2-pounds Sovereign Half-sovereign Weight In Grammes. Grains, 39-94° 15-976 7.988 3-994 6i5-354 246.5^0 123.270 61.635 Pure Metal. Grains. 564.991 226. "3- 56-S Valu $24-332 9-733 4.866 2.433 MONETARY SYSTEMS OF THE WORLD. CSuBsiDiARY Silver, .935 Fine.) 57 Denomination. Crown Half-crown . . Florin Shilling Six pence Four-pence. . . Three-pence . Two-pence... Penny ....... Weight In Grammes. Grains, 28.276 4363SS 14.138 218.177 II. 310 I74.S3S S-65S 87.267 2.828 43-634 1.885 29.089 1.414 21.818 .942 14 544 •471 7.272 Pure Metal. Grains. 403.628 201.814 161.445 80.722 40.361 26.907 20,181 13-453 6.726 At U. S. Coin- ing Rate, $1.08.7 •54-4 43-5 21.7 10.8 07.2 05.4 .03.6 01.8 The imperial mint in London executes the coinage for the United Kingdom and the various dependencies, excepting Australasia, which is supplied from the mints at Sydney and Melbourne and India, which has mints at Bombay and Calcutta. Considerable quantities of coins for the colonies, as well as for other countries, are executed by the firm of Ralph Heaton & Sons, recently incorporated as "The Mint, Birmingham, Limited," in Birmingham, England. The accompanying table gives the amount of the coinage of the several classes of coins at the imperial mint and at the branch mints in Australia : 1817-1894. Sovereigns .!£'3io-485.394 Half-sovereigns 5i,i37r882 Add other pieces 43^.563 ^^362,059,839 Much hght gold has been recoined during recent years. To December 31, 1894, the amount was ^27,268,000 ; it is estimated that there is still about ;^i5, 500,000 of light gold in circulation, to be recoined as it comes in. The silver coinage from 1880 to 1S91 included : Crowns ^£'942,678 Double florins . Half-crowns... Florins Shillings Six-pences Three-pences. Other 537.966 3,098,359 2,105,530 2,925,05s 1,496,682 541.411 3.703 ^11.651,384 The coinage of silver for 1892 to 1894 was about 2,243,000 | " " from 1816 to 1880 has been 19.557.69° Total .,^33.452.074 The worn silver retired amounted to ^4,220,163 in the past fifteen years. The minor coinage of Great Britain for the Kingdom and for those colonies having no separate pieces, has been ;.f2, 233,714 since i860. The imperial mint coined for colonies, during 1894, 29,767,000 silver pieces, 1,550,000 bronze pieces and 276,000 nickel pieces. These will appear under their proper heads. 58 MONETARY SYSTEMS OE THE WORLD. The Bank of England performs the chief note-issuing function in the United Kingdom ; there are other issuing banks, as hereinafter stated, but " the Bank," as it is called, does by far the largest share. Founded in 1694, it has received renewals of its charter from time to time, the present one dating from 1844, given for an indefinite period. Under it the bank will eventually possess the monopoly of note issue in England and Wales. The business of banking proper and that of note issuing are separated. There is no limit to the amount of notes which may be issued, excepting the limit to its power of acquiring the precious metals. But notes to the amount of ;^ii, 015,100 were issued upon Government securities at the time of the renewal of the char- ter ; it also obtained the privilege of issumg an amount equal to two-thirds of the issues of other banks in England and Wales, when these go out of exist- ence or surrender their circulation ; so that at the present time the amount of notes resting upon securities is nearly ^16,500,000 ; the remainder of its issue is covered fully by coin or bullion. The capital of the bank is ;^i4,553,ooo (say $70, 773,000), and its surplus is over ;f3,ooo,ooo. The metallic reserve in the issue department of the bank is not subject to the deposits or other liabilities of the banking department. The bank has the power to issue notes upon silver bullion to the extent of one-fifth of its metallic reserve ; but, although it has recently been proposed to make use of this privilege, gold remains the only accepted metal. The bank's notes are legal tender in England and Wales, except as to payments by the bank itself. Certain private banks and joint stock banks in England still possess the power to issue notes ; banks in Scotland are, under a law of 1845, authorized to issue notes on practically the same terms as the Bank of England, the amount permitted in excess of metallic reserve being ;^2,676,35o ; and six Irish banks have the power of emitting notes to the amount of ^^6,354, 494 in excess of their metaUic reserve. Great Britain provides for the use of its colonies, chartered banks of issue having offices in London and making semi-annual reports to the Home Govern- ment. A brief statement of these banks is given below ; more details are to be found under the heads of the respective possessions in other portions of the volume. Certain institutions doing business in foreign countries have offices in, and make reports to. Great Britain. An example is the London, Mexico and South American Bank, having places of business in many parts of the American con- tinent. Altogether the banking capital and reserves and the deposits represented by the institutions are as follows : Of the United Kingdom ;^i23,9i8,oc» ;£'647,39i,ooo Colonial 34,810,000 161,589,000 Foreign 26,418,000 58,250,000 Totals ;^i8s,i46,ooo ;^867,23o,ooo MONETARY SYSTEMS OP THE WORtD. S9 Below will be found statements showing the condition of the Bank of Eng- land at the beginning of 1895 ; that of other English banks and of the Scotch and Irish banks near the end of 1894. Bank of England, January 2, 1895. Issue Department. Notes issued £4j,6^g, 89S Gold coin and bullion ;^30,849, 89S Government debt 11,015.100 Other securities 5,784,900 ^^47,649,895 Sanking Department. Capital li i4j5S3.ooo Government securities ;f 14,689,099 Surplus 3,192,427 Other securities 24,025,528 Public deposits 6,598,906 Notes 21,731,120 Other deposits 38,198,631 Coin 2,241,184 Bills 143,967 ;^62, 686,931 jf 62, 686, 931 A statement of the circulation and reserve of the bank for a series of years will be found in the chapter on the Volume of Money. Of the joint stock banks of England and Wales ninety-nine reported as follows : Capital ;,f 43,612,224 Reserve 25,274,811 Notesin circulation 892,935 Deposits 402,034,096 Cash assets" ;f 93, 685, 138 Securities 96,012,396 Loans 281,208,704 Other resources 21,998,185 Five banks did not report ; these have a capital of ;^25o,663. The joint stock banks have 2468 branches and agencies. Four banks of the Islands adjacent to England reported : Capital ;^i25,ooo Deposits 1,892,000 Loans 1,249,087 Cash assets * 216,769 Circulation 57.558 The Scotch and Irish banks reported : 10 Scotch. 9 Irish. 10 Scotch. 9 Irish. Capital ;^9,302,ooo ^7,101,251 Reserve 5,718,865 3.0S3.360 Notes 6,552,826 5,811,538 Deposits 92,091,072 41,669,860 Cash assets*. ..;^2i, cos, 284 £,'^°,°y><9°\ Securities 30,640,168 16,053984 Loans 61,116,873 31,477,589 Other resources.. 6,782,547 1,013,277 The Scotch banks have 995 and the Irish 484 branches and agencies. Private banks to the number of 41 reported as follows : Capital and Reserve ;^ii,983,ii3 Deposits 63,908,289 Notes in circulation 400,635 Cash assets* ^f 17,632,241 Securities 23,832,052 Loans 33,789,202 Other resources 3,330,027 * Cash in bank or on call at short notice. 60 MONETARY SYSTEMS OP THE WORLD. A resurnd of the circulation outstanding shows as follows near the end of 1894 : Bank of England jf 25,442,695 892.935 Joint stock banks . Scotch banks . . Irish banks . . . Private banks . Island banks . . 6,552,826 S.8ii,S38 400.63s 57,558 Total ;^39.i58,i87 or nearly $200,000,000. The Bank of England issues no notes under jCs ; but Scotch banks are per- mitted to issue notes of denominations as low as £1, and four-fifths of their circu- lation is in such denominations. From the preceding tables the available banking power may be estimated for the United Kingdom at : Capital and reserve ^^123,910,000 Deposits 647,391,000 Circulation 39,158,000 Total ^810,459,000 or over $4,000,000,000. The monetary stock of the United Kingdom is estimated as follows : Gold _^i2i, 000,000 Subsidiary silver 22.400,000 Notes 39,160,000 Total ;^i82,56o,ooo Deduct specie in banks 42,200,000 Leaves effective j^i40,36o,ooo The banks chartered for the purpose of furnishing facilities for the colonies are 32 in number (with 1733 branches. ) Of these 17 are in Australia and New Zealand, 3 in Canada, 4 in Africa and 8 in other colonies. They report as follows in October, 1894 : Capital ;,^27,268,ooo Reserve 7,542,252 Notes 7, 157,693 Deposits 161,589,685 Cash ;f40,058,95i Securities 13,312,176 Loans 174,494,663 Other resources 7,506,964 There are 24 banks doing busmess in foreign countries, same period are : Their reports for the Capital ;^2o,373,o72 Surplus 6 085,504 Notes 2,970,134 Deposits 58,250,057 Only 7 of these banks issue notes. 7 in Europe, 4 in Asia and 3 in Africa. Cash ^23,145,090 Securities 10,595,748 Loans 85,078,352 Other resources 2,305,948 Of the entire number 10 are in America, MONETARY SYSTEMS OP THE WORLD. 61 The many dependencies of Great Britain are here enumerated ; their mone- tary systems will be considered in detail under the proper geographic division. Dominion of Canada. Newfoundland. Bermudas. Tobago. Leeward Islands. British Honduras. In America. Bahamas. Jamaica. Trinidad. Barbados. Windward Islands. British Guiana. Falkland Islands. Dollars and Sovereigns used. Queensland. Victona. South Australia. New Guinea. In Oceanica. New South Wales. Tasmania. West Australia. New Zealand. Fiji. Borneo. Sovereigns used. Cape Colony. Gold Coast. Lagos. Mauritius. In Africa. Natal. Sierre Leone. Gambia. St. Helena. Sovereigns and Rupees used. India. Straits Settlements. In Asia. Ceylon. Hong Kong. Malta. Gibraltar. In Europe. Cyprus. Rupees and Dollars used. Sovereigns used. 62 MONETARY SYSTEMS OP THE WORLD. THE LATIN UNION. The Money op the I,atin Union — France and its Colonies — The Bank op France — Belgium — Switzerland — Italy — Greece . (Franc = 100 centimes.) The Latin Union as such, was formed by the States of France, Belgium, Italy, and Switzerland, in Monetary Convention, December 22, 1865, and Greece joined it in 1867. The four first-mentioned states, owing to their intimate commercial relations with France, had practically adopted the French system of the law of April 6, 1803, before. This was, to all intents and purposes, accepting the double standard at the ratio o{i5}4 silver to i of gold, the coins of both metals being full legal tender. But the convention of 1865 reduced the fineness of the subsidiary coins to 835 thousandths, and diminished their legal-tender power to 50 francs among indi- viduals and 100 francs in payments to the State. Accordingly the coinage of pieces under 5 francs was confined to the needs of the people for "change," and was executed only on Government account. The coinage of 5-franc pieces and of gold was unlimited. Table of Coins of the Latin Union. (Gold, .900 Fine.) Denomination. Wei gilt in Pure Metal. Value. Grammes. Grains. Grains. 32.258 16.129 6.452 3.226 1.613 497.806 248.903 99 56i. 49,780 24.890 448.025 224.012 89.605 44 802 22.401 $19 29.5 9.64.7 3-85.9 1.92.9 .96.4 CSiLVEE, .900 Fine.) Denomination. Weight in Pure Metal. At U.S. Grammes. Grains. Grains. Coining Rate. 25- 385.800 347- 220 $0-93-5 MONETARY SYSTEMS OF THE WORI.D. (Subsidiary Silver, ,835 Fink.) 63 Weight in Pure Metal. At U. S. Grammes. Grains. Grains. Coining Rate. lO. 5- 2-5 I. 154.320 77.160 38.580 15.432 128.857 64.428 32214 12 886 $■34.7 .17.4 .08.7 •03.5 The 5-franc piece is therefore the counterpart of two half-dollars of the United States, and is worth gi^Tj cents, at the coining rate of silver in the United States. As before stated, the gold franc is worth 19.3 cents ; the silver franc, owing to its reduced fineness, only 17.3 cents. The ratio for subsidiary coin is 14.38 to i. The subsidiary silver coinage has for some years been limited to 6 francs per capita of the population of each State. A kilogram* of standard gold will, at the ratio of the Latin Union, produce 3,100 francs, and the same quantity of silver 200 francs. The kilogram of pure or fine gold is worth 3,444f francs, and that of fine silver, 222f francs, at the coining rate. The coining charge is 7J francs per kilogram of gold and was i % francs per kilogram of silver before the suspension of the coinage. The convention of 1865 was designed to last fifteen years ; each State received at its public treasury the full legal-tender coins of any of the others of the Union, in unlimited amounts, and subsidiary coins to the amount of 100 francs. Each State bound itself to redeem its own coins in gold or in 5-franc pieces for a period of two years beyond the termination of the Union — at lirst 1882. In 1872 the depreciation of silver began, and as Germany had practically demonetized the white metal, it flowed into the open mints of the Latin Union and drew out the gold ; accordingly as early as 1874 the coinage of 5-franc pieces was limited, and finally in 1878 suspended altogether. A convention of the States of the Union in November, 1878, extended the compact until November, 1885, and in the last-mentioned year it was extended indefinitely, with the proviso that it might be terminated after January i, 1891, upon one year's notice. The free coinage of the 5-franc piece was permitted, but all pieces of that denomination presented by any of the other States were made redeemable in gold, and those pieces of the State opening its mints were not to be received by the treasuries of any of the others as theretofore. It is, perhaps, needless to say that the free coinage has not been resumed. If the Union is terminated each State must redeem the silver pieces it has issued which may be circulating in any of the other States, any balance due to be met in gold; this proviso is modified somewhat in the case of Belgium and Switzerland. * The kilogram =. 1,000 grammes ; the gramme = 15.432 grains, A kilogram of fine gold = $664,60, 64 MONETARY SYSTEMS OF THE WORLD. France has, through its commercial supremacy, a considerable advantage over its colleagues ; an examination of the silver coins in the Bank of France and its branches on certain dates shows that the proportion of foreign pieces is very large, not less than 500,000,000 francs ; and as Italy has steadily lost coin to France, the probability is that, were the Union to terminate, the latter country would have a tremendous debt to pay to France in gold. No notice has thus far been given of a desire to terminate the Union, although many writers have urged upon their several governments the expediency of so doing. Though not members of the Union, Spain, Roumania, Servia and Bulgaria adopted this monetary system at various dates, so that Southern Europe is practically on the same basis ; up to 1893 Austria's gold florin was two and one- half times the value of the franc, and Finland has an identical unit. Other countries having a similar monetary system are Bolivia, Ecuador, Peru and Argentine Republic ; Venezuela, Hayti, Colombia and Central America have exactly the same system. FRANCE. The coinage system of France has been fully described in the foregoing account of the Latin Union. It needs only to add that in addition to the coins named above, there is in this country also a 2-franc piece, not in general use ; and minor coin, all of bronze, are struck in denominations of ten ai.d five centimes for general circulation and of two centimes and one centime for collectors. France also provides coins for its colonial possessions, Algiers, Tunis and Cochin-China ; for the latter in pieces denominated dollars and cents (see under AsiSi post). The other possessions of France — Martinique and Guadeloupe in the West Indies, St. Pierre and Miquelon near Newfoundland, Pondicherry in India, Guiana in South America, and the Island of Reunion in the Indian ocean, require very little coin. The coinage of France from 1795 to the end of 1891, less recoinages, has been as follows : Of gold pieces— Francs. 100 francs t 59,608,900, SO " t 46,853,450. 40 " * 204,432,360. 20 " 7,235,972,380. 10 " 966,051,690. 5 " 210,947,190. Total gold 8,723,865,970. Silver pieces — 5 francs 5,060,606,740. * Obsolete coins prior to 1848. t Cliiefly for Napoleon III, MONETARY. SYSTEMS OF THE WORI^D. 65 Subsidiary silver — Fnmcs. 2 francs 79,091,092. I franc 111,521,651. 50 centimes 51,785,098 50 25 centimes* AUrecoined. 20 centimes 2,504,748.60 Total subsidiary 244,902,590. 10 Total silver 5-3^5. 509,330. 10 Aggregate gold and silver 14,029,375,300.10 Recoinages 33S.247,S84-'-'S 14,364,623,884.35 Of the total gold coinage 7,213,000,000 francs was under the present regime— the Third Republic — since 1870 ; the silver coinage during the same period amounted to over 1,077,000,000 francs. No silver has been coined in France since 1891. Of gold, there was coined in 1892, 4, 5 14, 120 francs, and in 1893 50,943,360 francs, making a grand total of 14,420,081,364.35 francs. The minor coinage has amounted to 62,000,000 francs. Notes are largely used in France ; these are emitted by the Bank of France exclusively, and are a legal tender so long as the institution maintains specie payments. The denominations run from 5 to 5,000 francs, but only very few of denominations other than 50, 100, 500 and 1,000 francs are issued. Chartered originally in 1800, it has survived the many changes from Republic to Empire, then to Kingdom, again to Republic, once more to Empire, and for a third time to Republic. The State has, however, no interest in the bank ; its chief officers are, it is true, appointed by the head of the State, and it is used as the depositary of public funds, but the capital is entirely in the hands of private individuals. Originally capitalized at 30,000,000 francs, it has successively increased its stock to 45 millions in 1803, 90 millions in i8o6, 91X millions in 1848, and finally to i82)4 millions in 1857, when its charter was last renewed. It expires in 1897, but there is not much doubt as to its renewal. It pays a moderate tax to the Government. Its power to issue notes has been increased by law from 350,000,000 francs originally to 3,500,000,000 francs ; in 1894 the vast accumulation of specie made it expedient to increase the limit to 4,000,000,000 francs. No law fixing the amount or proportion of specie to be held against notes exists. The bank has 78 branches throughout the country. The amount of its circu- lation and coin holdings for a series of years are given in another portion of this volume. * Obsolete coins prior to 1848. 66 MONETARY SYSTEMS OF THE WORLD. The following is a statement of the condition of the banlc and its branches at the end of 1894 : Liabilities. Francs. Capital 182,500,000 Reserves 42,515,507 Notes 31679,215,530 Deposits 488,010,223 " Public 144,978,760 Other items 149,696,730 4,686,916,750 Resources. Francs. Cash 3.304.83S.974 Securities 352,608,044 Other loans 912,538,593 Other demands 116,934,139 4,686,916,750 France has a number of banking institutions of the first class ; of these the following are the most important : Name. Capital. Resources. Credit Lyonnais Francs. " 133,000,000 170,000,000 120,000,000 75,000,000 Francs. 1,325,000,000 3,544 000,000 553,ooo,coo 480,000,000 Credit Foncier Society G^n^rale. A recent estimate of the circulation in use in France is : Gold 4,315,000,000 francs. Silver 3,265,000,000 " Subsidiary 250,000,000 " Notes uncovered 374,000,000 " Total 8,204,000,000 francs. BELGIUM. (Franc=100 centimes.) The coinage system of Belgium has been fully discussed above. The French system was actually adopted in 1832. It remains only to say that the Belgian mint also furnishes the coin for the Congo State in Africa, Bulgaria, Zanzibar and other States. The minor coinage consists of 20, 10 and 5 centime pieces of nickel, and 2 and I centime pieces of bronze. The coinage has been as follows from 1832-1887 : Gold 598,642,745 francs. Silver 495,678. 2ro Subsidiary coin 52,864,535 " Minor 15,273,826 There has been no coinage for home use since 1887. The silver circulation contains over 56 per cent, of coins of other States of the Latin Union. Notes are issued by the National Bank of Belgium alone ; it was chartered in 1850. The only interest of the Government in the institution is that it receives in MONETARY SYSTEMS OF THE WORLD. 67 lieu of taxes a part of the dividends above 6 per cent., and a tax is laid on circula- tion in excess of 275,000,000 francs. Its capital is 50,000,000 francs. Its circulation is only limited by the proviso that it must be covered by cash or readily negotiable securities ; but it must have in cash at least one-third of its demand liabilities. Notes are issued in denominations of 20, 50, 100, 500 and 1,000 francs ; they are not legal-tender, but being receivable at the public treasuries they pass current so long as redeemed by the bank. The report of the condition of the bank at the end of 1894 embraces : (In francs.) Resources. Cash 113.900,000 Loans 328.600,000 Advances 11,700,000 Securities 73,500,000 Liabilities, Capital 50,000,000 Notes 415,300,000 Deposits 39,500,000 Public deposits 28,800,000 Belgium also has 23 stock and 30 private banks reporting Capital of 190,000,000 francs. Reserve 80,000,000 " Other liabilities 680,000,000 " The monetary stock is estimated at : Gold 280,000.000 francs. Sliver 215,000,000 " Subsidiary 40,000,000 " Notes uncovered 320,000,000 " Total 855,000,000 francs. ITALY. (Lira=100 centesimi.) The unit in Italy is the lira, but in every respect like the franc ; divisional pieces are called centesimi ; and the minor coinage consists of bronze, in denomi- nations of 10, 5, 2 and I centesimi. The coinage from 1862, when the French system was adopted, has been : Gold 426,308 710 lire. Silver S9S.505.937 " Bronze (including large recoinages) 79,476,905 " Notes in denominations of 50, 100, 500 and 1,000 lire were, until recently, issued by six banks under the law of 1874, to the extent of three times their capital, with the proviso that the coin and bullion in the banks must equal at least one-third of the amount of notes and other demand obligations. For a period after the above-mentioned act the country was under a depre- ciated currency— specie payments having been suspended during the wars pre- ceding. Accordingly, the issues of the six banks were limited to an aggregate of 755,250,000 lire ; subsequently when resumption of specie payments ensued they were permitted to issue additional notes fully covered by metal (two-thirds gold and one-third silver). The banks were further authorized to issue notes in 68 MONETARY SYSTEMS OF THE WORI^D. denominations of lo, 20, 100, 250 and 1,000 lire, to the amount of 1,000,000,000 lire loaned to the Government ; these subsequently became the liability of the Government ; while the amount of these notes has been reduced, there are still outstanding 341,000,000 lire. Specie payments were again suspended recently, and the suspension still con- tinues. One of the principal banks closed under conditions which were very disastrous. Accordingly, three of the remaining five issue banks united and formed the Bank of Italy, which now with those of Naples and Sicily, monopolizes the note issues. These had at the end of 1894 a circulation of 1,111,000,000 lire and held gold to the amount of 431,000,000 and silver to the amount of 81,500,000 lire. The banks are required to reduce their circulation beginning in 1897, until after fourteen years the circulation is down to 864,000,000 lire. The note issuing power is limited to twenty years. The Government recently increased its note issues by 30,000,000 lire in one- franc notes, based upon metal in the Treasury. Against this total issue of 371,000,000 lire there are bonds, and about 168,000,000 lire of gold and silver held m the Treasury. The premium on gold at the end of 1894 was about 7 per cent. The condition of the Bank of Italy was at the end of June, 1894, as follows : (In lire.) Resources. Cash 351,200,000 Loans 357,300,000 Advances 364, 700,000 Securities 10,400,000 Other 97,000,000 The two other issuing banks show : Resources. Cash 160,000,000 IjOans 310,000,000 Other 32,000,000 The monetary stock is estimated at : Liabilities. Capital 210,000,000 Deposits 216,000,000 Notes 869,000,000 Reserve 42,500,000 Other 40,200,000 Liabilities. Capital 150,000,000 Notes 242,000,000 Deposits 130,000,000 Gold 500,000,000 lire. Silver 185,000,000 " Subsidiary coin 50,000,000 " Notes uncovered 814,000,000 ' ' 1,549,000,000 lire. Italy coins money for its African possessions Eritrea and Abyssinia. SWITZERLAND. (Franc = 100 centimes.) The gold and silver coinage here is the same as in France since 1850. The rninor coinage consists of a nickel piece of 5 centimes and a bronze piece of i centime. MONETARY SYSTEMS OF THE WORLD. 69 The coinage of Switzerland has consisted largely of r^coinages. Full statis- tics are not available. Approximately there has been issued from the mint in recent years : Gold 22,260,000 francs. Silver 13,803,000 " Subsidiary 22,000,000 ' ' Minor 4,000,000 Fully 57 per cent, of the silver in use is of Italian mintage ; and all but 5 per cent, thereof is of other States of the Latin Union. Swiss banks of issue were not regulated by federal law until 1881. Under this enactment banks may be organized to an unlimited extent with the approval of the Government, which also reserves the right to fix the volume of notes and the quota for each bank. The metallic reserve must be at least 40 per cent, of the notes in circulation ; the remaining 60 per cent, to be covered by obligations or commercial paper, readily negotiable. The notes have no legal tender power, but banks are required to accept each other's notes and to procure their redemption free of expense to the holder. At present a new law, pursuant to constitutional amendment, is under con- sideration, for the establishment of a federal bank with branches, with a capital of 25,000,000 francs, the stock to be owned and the bank managed, by the Federal Government. This is such a new departure in banking that the outcome will be regarded with considerable interest. Statements of the 34 Swiss banks of issue will be found below, for the end of 1894 : (In francs.) Liabilities. Capital 141,000,000 Reserve 29,000,000 Notes 165,400,000 Resources. Cash 91,700,000 Loans 322,700,000 Portfolio 163,800,000 Deposits 710,700,000 Estimated monetary stock : Gold 90,000,000 francs. Silver 40,000,000 ' ' Subsidiary coin 30,000,000 * ' Uncovered notes 79,000,000 " Total 239,000,000 francs. GREECE. (Drachma=100 lepta.) Here the franc is called the drachma and is divided into 100 lepta. The coin- age is of the Paris mint ; but as specie payments have been suspended for a num- ber of years, no coinage has taken place. The premium on gold at the end of 1894 was about 87 per cent. Minor coin of nickel of the denominations of 20, 10 and 5 lepta was author- ized in 1S93, and 12,000,000 pieces of the nominal value of 1,500,000 drachma! 70 MONETARY SYSTEMS OF THE WORLD. were struck. This coinage constitutes a variation from the rule of the Latin Union, since the 20 lepta pieces are subsidiary coins in the other countries. Notes are issued by three banks and have "forced circulation" like the "greenbacks" formerly in the United States. Since 18S6 notes of less than 5 drach- ma! are issued ; about 14,000,000 drachmai of these and 130,000,000 of the larger notes are in use. The National Bank of Greece reports, 1894 : (In drachmai.^ Cash on hand and in other banks . 7,800,000 Loans 421,100,000 Loans to Government 39,700,000 The Ionian Bank reports : Cash 2,700,000 Loans 13,500,000 Advances 7,000,000 Notes 110,800,000 Deposits 448,200,000 Capital Notes 7,000,000 Deposits 6,750,000 Capital 7,875,000 No Statement of the third bank is available. The stock of money is estimated as follows : Gold 5,000,000 drachmai. Silver Subsidiary 5.000,000 ' ' Uncovered notes 270,000,000 " Total 280,000,000 drachmai. MONETARY SYSTEMS OP THE WORLD. 71 OTHER EUROPEAN COUNTRIES. Germany. — The Scandinavian Union : Sweden, Norway and Denmark — The Netherlands— Austro-Hungary — Spain — Portugal — Russia — Turkey — ROUMANIA — SERVIA — BULGARIA. GERMANY. (Reichs-maik = 100 pfennige.) The present monetary system of Germany dates from the establishment of the empire in 1871. The law of that date, supplemented by one of 1873, converted the German States from the single-silver to the single-gold standard. The mark was made the unit ; 2,790 of these pieces are coinable from i kilo- gram of fine gold; there is a coinage charge of 14 marks maximum' per kilo.; the fineness of the coins is 900 thousandths, so that a mark-piece would weigh .398247 of a gramme. As a matter of fact, however, this would be too small a piece to coin, and the German unit of value is not coined ; for the silver mark is only a subsidiary piece. The value of the gold mark is 23.8 cents. The gold coins, which are full legal tender for any amount, are of the de- nominations of 20 marks, weighing 7.96495 grammes or 122.915 grains standard, 10 marks and 5 marks of exact proportions. The ancient thalers of Germany, coined by almost all of the States which in 1871 formed the empire, have not all been withdrawn from circulation, about 150,000,000 of them being still in existence. They were formerly reckoned worth about 77 cents ; but under the new law they are worth three marks, or 71.4 cents. These silver pieces are still full legal tender throughout the empire. The subsidiary coins, all 900-thousandths fine, are the 5, 2 and i-mark pieces, 50 and 20-pfennig pieces (^ and 1-5 of a mark respectively), of exact multiples and divisions of the mark, which contains 5 grammes of pure silver, or 5.555 grammes of metal 900-thousandths fine. The weight in grains is 85.733, ^nd the pure metal is 77. 16, so that the pure metal weighs as much as the 9-ioth metal in the former 20-cent piece of the United States. These coins are legal tender to the extent of 20 marks only, and the coinage is limited to 10 marks per capita ; they are redeemable in gold at the public treasury. The minor coinage consists of nickel pieces of 10 and 5-pfennige and bronze pieces of 2 and i-pfennige. Since 1887 the 20-pfennig piece has also been coined of nickel instead of silver, as formerly. The imperial Government has a "war chest" in Spandau, containing 72 MONETARY SYSTEMS OE THE WORLD. 120,000,000 marks of gold ; against this there are in circulation an equal amount of treasury notes, regarded as a permanent issue ; practically they are irredeem- able gold certificates. Notes are also issued by^the Imperial Bank, operating through branches. It is a private bank, but under the immediate supervision of the Government. It was established as the bank of the empire in 1875, but existed as the Bank of Prussia as far back as 1765. Its capital is 120,000,000 marks ; its circulation may not exceed three times its metallic reserve ; uncovered notes beyond a fixed amount are, however, taxable to the extent of 5 per cent. This fixed amount was originally 250,000,000 marks ; but 33 other banks were then authorized to issue without tax 135,000,000 marks ; as these banks go out of existence or sur- render their circulation, the Imperial Bank becomes entitled to increase its non- taxable circulation by the amount so withdrawn ; so that the present limit is about 300,000,000 marks. The fundamental point in the law estabUshing the Imperial Bank is that the Government may, at the expiration of its franchise, acquire the same by purchase by giving one year's notice of its intention so to do. The charter expired in 1891, but has been renewed for a period of ten years. Statements relating to the Imperial Bank and to other banks of issue follow : (In marks.) Resources. Metallic cash 1,046,597,000 Government notes 21,157,000 Other bank notes 9,459,000 Securities 71,971,000 Loans 537,322,000 Other 67,810,000 1,754,716,000 Liabilities. Capital 128,000,000 Reserve 30,000,000 Notes 1,079,683,000 Other 517,033,000 1,754,716,000 At the end of 1894 the bank had 820,000,000 marks in gold and 480,000,000 marks in silver. Eight other issuing banks show : Cash 23,000,000 Loans 172,000,000 Other 88,000,000 Capital ', 94,500,000 Reserve 15,500,000 Deposits, etc 60,000,000 Notes 115,000,000 The Deutsche Bank of Berlin, reports to London, 1894 : Resources. Cash ;^3.ii9.i32 Loans 16,498,499 Securities 1,499,839 Other I97i473 ;^2i,3i4,943 Liabilities. Capital j^3, 750,000 Reserve 1,279,628 Deposits 10.977.953 Other 5,307,362 ;^2i, 314,943 The Government notes are in denominations of 5, 10 and 20 marks, in amounts of 20, 30 and 70 millions of marks respectively. MONETARY SYSTEMS OE THE WORLD. 73 The coinage of Germany has been as follows, since 1872 and to the end of 1893: Gold 2,737,790,915 marks. Silver 484,048,609 " Nickel , 51,587,442 " Bronze 12,287.353 " Gold to the amount ot 3,328,215 marks and silver amounting to 13,038,513 marks have been withdrawn and recoined. Beside coining for its dependencies in Africa, Germany also provided the entire coinage of Egypt. Estimated Monetary Stock. Gold 2,500,000,000 marks. Silver 450,000,000 " Subsidiary coin 460,000,000 " Uncovered notes 155,000,000 " Total 3,565,000,000 " THE SCANDINAVIAN UNION. Sweden, Norway, Denmark. (Krone=100 ore,) It was natural that these three countries, peopled by descendants from a common stock and speaking the same language, should form a monetary union. This was not, however, accomplished until the depreciation of silver threatened to injure their former double-standard system. A single gold standard was adopted and has been maintained since 1875, with the krone or crown as the unit. 2,486 kronor are made out of one kilogram of fine gold. The krone is, there- fore, .44803 of a gramme, at 900 thousandths fine ; in grains it would weigh 6.914, hence worth 26.79 cents. The gold pieces, which alone are full legal tender, are the 20 and the 10 crown-pieces. Silver is coined only on Government account and in subsidiary pieces, of which the 2 and i crown pieces, only 800 thousandth fine, weigh 15 andjj4 grammes respectively ; are legal tender to the amount of 20 crowns, and are worth 49.9 and 24.9 cents respectively at the coining rate of the United States. The pieces of 50, 40 and 20 ore are only 600 thousandths fine, weighing 5, 4 and 2.42 grammes respectively, the 10 ore piece weighs 1.45 grammes and is only 400 thousandth fine. The four last-mentioned coins are legal tenders to the amount of only 5 crowns. The coins of one State circulate freely in all of them ; and each of the States will redeem its own subsidiary pieces in gold in sums of 10 crowns or multiples. There is no conventional limit to the amount of the subsidiary coinage, nor of the minor coinage. The minor coinage consists of bronze and comprises 5, 2 and i ore pieces. The last-mentioned piece is worth, nominally, X of one cent. 74 MONETARY SYSTEMS OF THE WORLD. Bank notes are supplied in Sweden by the Bank of Sweden, managed by officers appointed by the legislative body of the kingdom, and by private and joint-stock banks, with ten-year renewable charters, of which there are thirty. The bank has a capital of 25,000,000 crowns and a reserve of 5,000,000. Its notes are constitutionally legal tender. The issue is limited to 30,000,000 crowns and such an additional amount as it may have in credits in foreign banks plus its metallic reserve, which latter must be 10,000,000 crowns at least. Its notes are receivable at the public treasuries. Other banks may issue notes to the extent of the capital invested in mort- gages, plus one-half their credits and their metallic reserves, less gold equal to 10 per cent, of the capital. Their notes are redeemable in gold only, and circulate without force of law. The result is that the joint-stock banks issue about five-ninths of the notes in use in the kingdom. Statements of Swedish banks appear below. Norway has only one bank of issue, a joint-stock institution founded in 1814 ; the State is the principal share-holder and thus controls the bank. Its capital is 10,000,000 crowns and its notes, legal tenders within the kingdom, are limited to twice the reserve, of which one-third may be in foreign banks. Statements of the bank appear below. Denmark has also but one bank of issue, the National Bank, founded in 1818 with a capital of 27,000,000 crowns, and a circulation, which is a legal tender, of 30,000,000 crowns plus the metallic reserve for the time being. The Scandinavian banks show as follows near the end of 1894 (in kronor): Swedish Banks. Resources : Cash In other banks . Loans Other Liabilities: Capital Reserve Notes Deposits Other Totals. National Bank. 22,000,000 20,000,000 65,000,000 20,000,000 t_J. 45.oco,ooo 5.000,000 46,000,000 28.000,000 12,000.000 136,000,000 Other Banks. 19,500,000 39.500,000 355,000,000 286,000,000 87 700,000 23,500.000 59,000,000 382,000,000 147,800,000 700,000,000 Ba7ik of Norway. Resources. Cash 23,000,000 In foreign banks 11,500,000 Loans 35iOOO,ooo Other 6,000,000 Liabilities. Capital 10,000,000 Notes 48,ooo-,ooo Deposits 8,500,000 Other 8,500,000 MONETARY SYSTEMS Ol^ THE WOkLD. National Bank of Denmark. Resources. Cash 51 .ooo.coo In foreign banks 15,000,000 Loans 35,000,000 Other 24,000,000 Capifal... Reserve . . Deposits . Notes Other.... Liabilities. 27,000,000 3,coo,oao 7,600,000 75,000,000 12,400,000 The coinage of the Scandinavian Union has been, in kroner : Sweden. Norway. Denmark. Gold 57,841,055 17,568,708 *720,000 15,856,000 6,517.292 479.983 34.754.640 18,355.787 *72O,O0O ♦Estimated. NETHERLANDS. CFlorin= 100 cents.) From a single-silver standard system Holland in 1816 became double-standard upon a ratio of 15.873 to i ; again returned to silver in 1847, and again to the double-standard in 1875 ; but she is prepared to turn to the single-gold standard at any time with very little preliminary legislation. The unit is the florin or guilder of 100 cents ; the full legal-tender pieces being the 10 and 5 florins of gold, the florin, half-florin and rix-daler of silver ; the latter being equal to 2^ florins. The weight of a florin in gold would be .672 of a gramme or 10.37 grains, 900 thousandths fine ; the silver florin is 945 thousandths fine and weighs 10 grammes. Accordingly the gold florin equals 40.2 cents, and silver florin (nominally) 39.3 cents. The ratio is 15.625 to i. The rix-daler weighs exactly as much as the 5-franc piece, but is finer and hence equal to 98.2 cents. It will be observed that this florin is quite different from the Austrian coin of the same name. But following Austria — as a result of former intimate relation- ship — Holland also coins trade ducats and double ducats. Tliis ducat here weighs 3.494 grammes, but is but 983 thousandths fine ; it is worth JS2.28.3 or 4.10 of a cent less than the Austrian piece of the same name. The double ducat is just twice the weight and value. Coinage of silver is on Government account only, since December, 1877. Subsidiary coins are very cheap in the Netherlands, being only 640 thousandths fine. The denominations are 25, 10 and 5 cents, their weights being, unlike those of other subsidiary coins, not in proportion. The 25 cent piece weighs 3.575 grammes, the 10 cent piece 1.4 grammes, and the 5 cent piece .685 of a gramme, and they are worth respectively 9.5, 3.7, 1.8 cents at the coinmg rate of the United States. 76 MONETARY SYSTEMS OF THE WORLD. Minor coin of zj^, i and ^ cent pieces is provided in abundance. Tiie coinage for the motlier country lias been : Gold 78,330,00x3 guilders since 1871 Silver 475,093,000 " " 1840 Minor 2,135,000 " " 1871 Paper money is furnishied by tiie Government to the extent of 15,000,000 florins, said to be entirely covered, but apparently not by coin. The Bank of the Netherlands issues notes, the volume of which is limited by the requirement that 40 per cent, of the aggregate demand liabilities be held in gold or silver. The bank has purchased no silver since 1872. The notes are in denominations of 25, 40, 60, 100, 200, 300 and 1,000 florins. The institution was founded in 1814, and its present charter, issued in 1889, does not expire until 1914. The capital is 16,000,000 florins. The State has no interest in it, but its chief officers are appointed by the king. The possessions of the kingdom in the East Indies, Java, Sumatra, etc., are supplied with coins by the mother country, but with notes by the Bank of Java. The condition of the Netherlands Bank was as follows at the end of 1894 : (In florins.) Resources. Gold 49,000,000 Sliver 82,000,000 Loans 50,000,000 Other 36,000,000 Liabilities. Capital 20,000,000 Surplus 3,000,000 Notes 203,600,000 Deposits 5,000,000 Other banks to the number of 13 do business with a capital of over 7,000,000 florins ; deposits about 15,250,000 florins. The estimated stock of money is : Gold 68.000,000 florins. Silver 136,800,000 Subsidiary coin 8,700,000 Minor coin 2,000,000 Government notes 15,000.000 Uncovered bank notes 88,800,000 Total 319,300,000 florins. AUSTRIA-HUNGARY. cold system : florin=100 kreutzers.) (New system : krone^lOO heller.) (Krone=5^ florin.) The present monetary system of Austria-Hungary dates from 1892, and is a single-gold standard system, replacing the single-silver standard of 1857, modified bylaws of 1858, 1867, 1870 and 1887. The former gold florin was equal to 2]A francs ; full legal tender silver coins were struck on the basis of 11. in grammes of fine silver to the florin ; it therefore contained 12.345 grammes of standard silver and was a trifle less valuable than 2>^ francs. The new system has as a unit the krone (or crown) of .33875338 of a gramme of gold 900 thousandths fine, for full legal tender pieces ; for the subsidiary coin- MONETARY SYSTEMS OF THE WORI,D. 77 age the basis is the silver crown weighing 5 grammes of the fineness of 835 thousandths. The ratio is therefore 13.69 to i. Silver is coined only on Govern- ment account. For the purpose of comparison the following table of the old and new system is given : Gold Coins. Grammes, l ' Grammes. 8 florins 6.452 20 crowns 6.775067 4 florins 3.226 | 10 crowns 3.3875338 All .900 fine. Silver Coins. Grammes. i Grammes. 2 florins 24.691 > .900 Crown 5. > .835 1 florin 12.345s 5 fine. \ J^ crown 2'/i \ fine. The half-crown or 50-heller piece is the exact equivalent of the half-franc ; but the crown, being of the lower fineness, is less valuable than the franc, although of the same weight. Silver coins are legal tender only to the extent of 50 crowns, but unlimited in payments to the Government. The issue is limited to 200,000,000 crowns, of which 60,000,000 are for Hungary. The value of the crown of gold in money of the United States is 20.26 cents ; the florin was 48.2 cents. The silver crown is equal to 17.4 cents at the United States coining rate ; the florin was 46.2 cents. The reform of the coinage was undertaken in connection with the resumption of specie payments, which has been suspended for nearly fifty years. Even silver was at a premium until its serious decline in price began in 1878. During the transition period the old coins are accepted on a basis of one florin for two crowns, one kreutzer for two heller. The premium on gold at the end of 1894 was about 3^ per cent. Austria has for years coined so-called trade coins ; the ducat and quadruple ducat of gold and the Maria Theresa or Levantine thaler of silver. They are not legal tenders in the empire. The ducat weighs 3.4909 grammes, 986J- thousandths fine, and the quadruple ducat four times as much ; the value of the latter is I9.15. These coins are of the highest fineness used in coinage. The Levantine thaler was instituted in 1780 as a trade coin, and all pieces coined to this day bear the ancient date. The weight of the coin is 28.064 grammes and its fineness 833X thousandths. Austria, although a single-silver standard country prior to 1892, has coined no silver except on Government account since 1879. The minor coins of Austria-Hungary are 20 and 10 heller pieces of nickel and 2 and I heller pieces of bronze. Owing to the duality of the Government the subsidiary and minor coins are stamped with different designs in the two kingdoms. Austria has had a woful experience with paper money. The empire issued notes of denominations of i, 5 and 50 florins, and the Austro-Hungarian Bank, 78 MONETARY SYSTEMS OP THE WORLD. the only bank of issue, emitted notes of lo, loo and i,ooo florins ; although they were maintained at par with silver for some years prior to the recent reform, they were in fact irredeemable and subject at all times to more violent fluctuations than was the white metal. The bank is entirely independent of the State as far as its capital is con- cerned, but its connection therewith are most intimate. It loaned the empire 80,000,000 florins repayable at will. It is permitted to issue notes to the extent of 200,000,000 florins in excess of its metal holdings ; the sum must, however, be covered by commercial paper or security (including the Government debt and notes). The Government issue of notes amounts to about 400,000,000 florins. The resumption of specie payments involves, under the law, the acquisition of 624,000,000 crowns of gold by the two kingdoms of Austria and Hungary, 70 per cent, by the former and 30 per cent, by the latter. Hungary has obtained its quota, and by the end of 1894 Austria had acquired all but about 200 million crowns, of which more than half came from the United States. Payment was made by the issue of 4 per cent, bonds at from 2 to 3 per cent, discount. The mints of Austria-Hungary have turned out, preparatory to resumption, of gold coins : Hungary 145,398,013 crowns. Austria '. 228,000,000 " of subsidiary silver coins : Hungary 15,494,493 crowns. Austria 77,200,000 " Of minor coins about 15,000,000 crowns have been supplied. Under its old system Austria- Hungary coined : Gold ; ducats 132,814,896 florins. Other 76,707,427 " Silver trade thalers 85,831,102 " Other 475,673,861 Base silver 45,278,707 " Copper 14,873,636 " The currency of Bosnia, Herzegovina and Montenegro is Austrian, and Bul- garia has coins struck at the Hungarian mint. The condition of the Austro-Hungarian Bank near the end of 1894 was as follows : CIn kronen.) Coin 453,000,000 Loans 450,000,000 Advances 251,000,000 Other 446,000,000 Capital 180,000,000 Reserve 65,000,000 Notes 792,000,000 Deposits 24,000,000 Other 539,000,000 At the end of the year the bank had 327,000,000 crowns in gold and 294,000,000 in silver. MONETARY SYSTEMS OP THE WORIvD. 79 The Anglo-Austrian banks report to London, 1894 : Resources. Cash ;^I25.332 Loans 6,298,619 Securities 141,790 Other 93, 167 ^6,658,908 Liabilities. Capital j^i,50o,ooo Reserve 194,543 Deposits 2,536,750 Other 2,427,615 ;^6,658,9o8 There are 51 other banks in Austria (including private banks) and 172 in Hungary which have : Capital, 514,000,000 kronen, and resources 3,210,000,000 kronen. Nearly one-half of the resources in Hungary and one-fourth m Austria consist of mortgages. Estimated Monetary Stock. Gold 650,000,000 kronen. Silver 450,000,000 Subsidiary coin 200,000,000 ' ' Minor coin 30,000,000 Uncovered notes: Government 371 Bank 4; ' Total 2, SPAIN. (Peseta = 100 centimos.) Spain although not adhering to the Latin Union adopted the : system in 1868. The franc is termed peseta. In addition to the gold coins of the Union there is the 2S-peseta piece of 8.06451 grammes, 900 thousandths fine. The ratio of silver to gold is 15^^ to i. Silver coinage was suspended in 1878, except on Government account. The ancient coinage system of Spain, which still pre- vails in the Philippine Islands, consisted of the peso duro (hard dollar) of 25.96 grammes, 900 thousandths fine, equal to two escudos of 10 reals each ; the escudo was equal to 2^ pesetas, and thus the connection is made with the present coinage. The ancient gold doubloon was equal to 10 escudos, and worth J5.017. Minor coins are 5, 2 and i centimos. The coinage of Spain since the present system was adopted (1868) to 1893, has been : Gold 1,046,933,070 pesetas. Silver 911,490,256 " Notes are issued solely by the Bank of Spain, originally chartered in 1829, again in 1856, and in 1874 for thirty years. Its capital is 150,000,000 pesetas (formerly 100,000,000). Although the kingdom has no interest in it, the bank is used as the other European banks are, for public treasury purposes. It transacts its business through branches located throughout the realm. A minimum surplus reserve of 10,000,000 pesetas must be maintained. The note issue is limited to five times the capital, hence to 750,000,000 80 MONETARY SYSTEMS OF THE WORLD. pesetas, provided the amount be not in excess of four times its metallic reserve. Its notes are legal tender and in denominations of 25, 50, 100, 500 and 1,000 pesetas. A statement of the Bank of Spain for July, 1894, follows : (In pesetas.) Resources. Liabilities. Gold 197,952,000 Silver 230,486,000 In o'her bdnks 63,273,000 Loans 246,231,000 Securitits 769,547,000 Other 17,535,000 Capital and reserve 168,968,000 Notes 9t4,574,ooo Deposits 351,094,000 Other 6j, 390,000 The Union Bank of Spain and England reports to London, 1894 : Resources. Cash .^63.298 Loans 474,056 Securities 112,443 Other 5.700 Liabilities. Capital ;^25o,25o Reserve 35,000 Deposits 302,356 Other 67,891 £('SSA97 The estimated monetary stock is : Gold 200,000.000 pesetas. Silver 705,000,000 " Subsidiary coin 200,000,000 " Uncovered notes 430,000,000 ** ^655,497 Total 1,535,000,000 pesetas. The Spanish coins are used in Cuba and Porto Rico ; and a special coinage of pieces of the ancient regime is furnished for the Philippine and neighboring islands still under Spanish dominion. PORTUGAL. (Milreis = 1,000 reis.) Portugal's ancient system was superseded in 1854 (law of July 29) by the single-gold standard, the milreis being adopted as the unit. This coin weighs i .774 grammes and is 916 J^ thousandths fine ; in grains the weight is 27.368, and its value is fi.o8. Pieces are struck of 10, 5, 2 and i milreis, but few of the latter. They are fu! legal tender. Silver is coined on Government account only, and in pieces of 500, 200, 100 and 50 reis. The piece of 100 reis is called the testoon. Silver coins are also 916^ thousandths fine, and the 500 reis piece is equal to 47.6 cents. This piece weighs 12^ grammes and that of 200 reis 5 grammes or 77.16 grains, just as the franc or the twenty cent piece of the United States, but is of greater fine- ness. Silver coins are legal tender to 5 milreis, but larger sums are in fact accepted. The minor coins are 40, 20, 10, 5 and 3 reis of bronze. The influence of Great Britain is manifest in the fineness of the coins. MONETARY SYSTEMS OF THE WORLD. 81 The manner of noting amounts in milreis is 100,000 |ooo = 100,000 milreis. But the practice in recent years has been to count large sums in contos or thousands of milreis, thus 100 contos = 100,000 milreis. The British sovereign is legal tender for ^yi milreis. Notes are furnished by eight banks, of which the Bank of Portugal is the principal one. It was founded in 1822. Its notes are receivable for all public dues, while those of the other banks are not. The Bank of Portugal reports for 1894 : (In milreis.) Resources. Gold 3,005,000 Silver 5,853,000 Bronze 680,000 Securities 14,827,000 Loans .' 42,616,000 Liabilities. Capital Notes 50,542,000 Deposits 2,642,000 Public deposits 862,000 Specie payments were suspended some years ago and irredeemable notes circulate, gold being at a premium of from 10 to 30 per cent. No statement of the other issuing banks separately is obtainable, but they and 30 other banks reported the following items recently : Cash 14,637,000 Discounts 35i7S5,ooo Loans 5,316,000 Deposits 36,797,000 Notes 12, 109,000 The coinage of Portugal has been from 1854 '■ Gold 7,950,002 milreis. Subsidiary 23,789,436 " Total 3I1739.438 milrtis. The estimated monetary stock is : Gold , 15,000,000 milreis. Subsidiary coin 25,000,000 ' ' Uncovered notes 47,000,000 ' ' Total 87,000,000 milreis. RUSSIA. (Rouble — 100 kopecks.) The present monetary system of Russia dates from 1886. The unit is the silver rouble of 100 kopecks ; but gold is very extensively coined also, upon the ratio of the Latin Union (i5>^ silver to 1 gold). The gold coins are the 10 and 5 rouble pieces, called the imperial and half- imperial respectively. The former weighs 12.9039 grammes of 900 thousandths fineness, so that a gold rouble would be 1.29039 grammes if coined, and equal to I0.77.2. The former gold coinage was 916^ thousandths fine, like that of Great Britain, and the weight slightly greater. A ducat equal to three roubles is also coined ; its value is ^2.39.2. Silver coins are the rouble of 19-995 grammes, or 308.571 grains, 900 thousandths fine, the half and quarter of proportionate weight. These are full 82 MONETARY SYSTEMS OF THE WORI^D. legal tender, and the silver rouble is equal to Jo- 74- 8 at the United States coinage rate. Formerly, these coins were but 868 thousandths fine. Subsidiary pieces are only 500 thousandths fine, of denominations of 20, 15, 10 and 5 kopeclis ; the largest piece weighs 3.599 grammes, the others in pro- portion. A kopeck has the nominal value of % of a cent. The subsidiary pieces are legal tender to 3 roubles, but in payments to the Government, without limit. Paper is, however, the actual medium of exchange in Russia. Notes are issued in denommations of 100, 25, 5, 3 and i roubles, and are full legal tenders ; specie payments have been suspended since 1855 ; the premium on gold was about 48 per cent, at the end of 1894. The Bank of Russia issues the paper money exclusively, and its business is divided, like that of the Bank of England, into an issue and a banking depart- ment. The bank was established in i860, with a capital of 25,000,000 roubles; although its management is in the hands of officers appointed by the Government, the bank is in no sense a State bank at present. The note issues amount to about 979,000,000 roubles, against which it holds an ever increasing metallic reserve, having retained most of the gold product of the Russian mines of recent years. At the end of 1894 its metallic cash stood at 380 millions, of which only about 4 millions was in silver. In addition the bank holds in its issue department, about 568,000,000 roubles in Government obligations. The banking department reports : (In roubles.) Resources. Cash, paper 117,000,000 coin 31,000,000 In foreign banks io,ooo,coo Loans 104,000,000 " to State 71,700,000 Bonds, etc 496,300,000 Total 830,000,000 Liabilities. Capital 25,000,000 Reserve 3,000,000 Deposits 228,500,000 Public deposit 94,000,000 Other 489,500,000 Total 830,000,000 Twenty-nine other banking companies with capital of about 95,000,000 roubles are in existence. The coinage of Russia has been : Old system, 1800-1885. Gold 1,088,315,386 roubles. Silver 231,999,244 " Subsidiary 141,746,297 " New system, 1885-1893. Gold 114,517,740 roubles. Silver 6,316,705 " Subsidiary 12,832,676 " The Grand Duchy of Finland has always maintained an independent mone- tary system like that of the Latin Union, but gold alone is full legal tender. The unit is the markka of loo penni, and is equal to the franc. The bank of Finland issues notes which are convertible into coin. The amount at the end of 1894 was about 50,000,000 markkaa, against which the bank held gold, 22,000,000 and silver, 3,500,000 markkaa. MONETARY SYSTEMS OP THE WORLD. 83 Russian paper and silver are used in its Asiatic possessions of Siberia, Khiva and Bokhara. Estimated Monetary Stock. Gold 598,000,000 roubles. Subsidiary silver 77,000,000 '* Minor 12,000,000 " Uncovered paper 680,000,000 *• Total 1, 367, 000, coo roubles. TURKEY. CPiastre = 40 paras.^ The Ottoman Empire has a bi-metallic system, but is generally classed with single-gold standard countries. The Turkish pound or medjidie or lira, is equal to 100 piastres or units ; the piastre is divided into 40 paras, and the para into 3 aspes. Since the piastre is (in gold) only .07216 of a gramme, 916^^ fine, the value of the piece is but 4.4 cents, so that a para is equal to •j'jV of a cent and the aspes are worth ^Y,^ of a cent each. The pound is worth $4. 39. 6 ; a 5-pound piece and divisions are provided for. Silver coins are 20, 10, 5, 2 and i piastres, supposed to be 830 thousandths fine, the piastre weighing about 1.2 grammes. The silver coins and even the minor coins are debased, so that the nominal ratio of 15.09 to i of silver to gold cannot be depended upon ; 600,000,000 piastres of paper money issued from 1876 to 1881 was practically repudiated. It is reported that the debased coins are being gradually withdrawn Notes are now issued by the Imperial Ottoman Bank, which reports near the end of 1894 as follows through the office in London : Resources. Cash ;^i.S26.o2i Securities 5,030,148 Loans 8,817,548 Other S7.+20 ;f IS. 431. 137 Liabilities. Capital j^5,ooo,ooo Reserve 816,758 Circulation 870,051 Deposits 6,850,695 Other 1.893,633 ;^I5,43I,137 The coinage of Turkey has been : Gold 1,277,120,844 piastres. Silver 958,472,019 " The estimated stock of money is : Gold $1, 150,000,000 piastres. Silver 690,000,000 " Subsidiary 230,000,000 " Uncovered notes None. " Total 2,070,000,000 piastres. 84 MONETARY SYSTEMS OP THE WORI/D. ROUMANIA. (Lei = 100 bani.) This principality adopted the system of the Latin Union in 1867, but in 1890 the single-gold standard was adopted and the silver surplus sold. The weight and fineness of the coins remain the same, but the silver 5-ley piece is no longer full tender. Roumania has had coined 47,700,000 lei of silver coins. The lei is of course equal to 19.3 cents. Notes are issued by the National Bank, which reports at the end of 1894 : (In lei.) Coin 52,200,000 I Notes 115,800,000 Loans 31,300,000 \ Deposits 8,500,000 Its capital is 7,500,000 leis and reserve nearly half that sum. The circulation is limited to 2}4 of paper to one of coin. About 4,000,000 of the coin in bank was silver. The Government formerly issued notes to the amount of 125,000,000 lei, but these appear to have been withdrawn. The stock of money in Roumania is estimated at : Gold 75,000,000 lei. Silver 17,500,000 ' ' Subsidiary coin 25,000,000 " Uncovered notes 57,500,000 " Total 175,000,000 lei. SERVIA. (Dinar = 100 paras.) This kingdom also has the system of the Latin Union, since 1865. Gold pieces at 1.613 grammes, goo thousandths fine, to the dinar ; and a full legal tender piece of 5 dinars equal to 25 grammes, with subsidiary pieces of exact proportion in weight, but only 835 thousandths fine ; equivalent of the dinar, 19.3 cents nominal. Minor coin of nickel 20, 10 and 5 paras, and of bronze 10, 5 and I paras is furnished. There is no mint. The 20 dinar gold piece is called the Milan d' or, after the former ruler. The National Bank issues notes equal to thrice its metallic reserve. Its state- ment for the end of 1894 shows : (Tn dinars.) Coiii 10,600,000 I Capital 20,000,000 Loans 7,900,000 Notes 26,200,000 Advances 8,900,000 [ Deposits 7,700,000 Estimated monetary stock : Gold 15,000,000 dinars. Silver 5,000,000 " Subsidiary 5,000,000 " Uncovered paper 14,000,000 " Total 39,000,000 dinars. MONETARY SYSTEMS OP THE WORLD. 85 BULGARIA. (Lew — 100 stolinki.) This State also adheres to the Latin Union system, without being a member thereof. Its coins are exactly like those of Servia, under different names. Twenty centime pieces as well as lo, 5 and lyi centimes are of nickel. The coinage has been : Gold None. Silver 5,000,000 lews. Subsidiary 8,000,000 ' ' Minor 1,200,000 " Notes are issued by the National Bank, and those of the Imperial Ottoman Bank also circulate. A statement of the former near the end of 1894 includes : (In lews.) Cash 6,500,000 Loans 12,400,000 Advances 33,000,000 Estimated monetary stock : Notes 1,600,000 Capital 10,000,000 Reserve 750,000 Deposits 35,000,000 Gold 4,000,000 lews. Silver 15,000,000 " Subsidiary 20,000,000 " Uncovered notes None. Total 39,000,000 lews. BRITISH POSSESSIONS IN EUROPE. Malta, Gibraltar, Cyprus. Malta had its mint under the old regime of the Knights of St. John; their coins were unlike most others in their day — 1609-1800. The chief coin was the scudo of 12 tari, each of ia grant. Sicilian, and afterwards Spanish, coins superseded the native coinage ; even the South American dollars were for 10 years accepted by law. It was the Sicilian "dollar" — equal to 4 shillings 2 pence, which held the place of the chief monetary unit even after it had been demonetized in 1855. It was not until in 1885 the Italian Government demonetized the Sicilian pieces, that the British system was finally fully introduced. Two local banks established 1809 and 1810 issue notes to the extent of about $130,000, and foreign bank notes to the amount of, perhaps, $25,000 also circulate. Gold stock estimated f 1,600,000, six-sevenths British ; $650,000 in silver, of which $50,000 in French 5-franc pieces ; $25,000 in bronze minor coin, of which say $3,000 of pieces of the old style (grani) equal to yi farthing. Gibraltar still uses the Spanish monetary system in spite of the many attempts made to replace it with the British. The only evidence of British supremacy is the use of the bronze pieces coined at the London Mint, which are accepted at 48 86 MONETARY SYSTEMS OP THE WOEXD. to the 5-peseta piece or dollar. British gold and notes are not refused, however, and the silver is equally welcome. The monetary stock is about : Gold (British) $40,000 Silver (Spanish) 350,000 Bronze 12,000 There are no local note issues. The Anglo-Egyptian Bank has a branch here — the only incorporated bank in the place. Cyprus. Too little time has elapsed since the cession of this island by Turkey to permit the full change to the British system. Much progress has, however, been made, due perhaps to the provision for a continuance of the piasters for the minor coinage. This coin is the old Turkish piece and 180 are reckoned to the £. The monetary stock is estimated at : Gold (English) $1,500,000 Gold (foreign) 125,000 Silver (British) 300,000 Bronze 40,000 No notes circulate. The Imperial Ottoman Bank monopolizes the banking business. MONETARY SYSTEMS OP THE WORLD. 87 ASIATIC COUNTRIES. India — Ceylon — Hong- Kong — Straits Shttlbments— Japan — China — French Possessions — Indo-China — Fong King, EJtc. —Persia — Other Countries. ASIA. This continent, containing the largest portion of the world's inhabitants, is practically under two monetary systems. Beginning at the Red Sea and extending along the coast to Siam, the coun- tries use the rupee; beyond this limit the dollar, formeily the Spanish, latterly the Mexican, is the unit for all the vast exchanges of the Orient. The importance of this last mentioned coin, derived from the former suprem- acy of Spain, is an example, duplicated on the American continent, of the endur- ing influence of certain prejudices. The ancient Dutch guilder was formerly potent throughout the islands and peninsulas of Southern Asia, but its influence is now confined to the islands of Java, Sumatra, etc. BRITISH INDIA. (Rupee of 16 annes = 4 pice @ 3 pie.) India's currency system has been modified to a very important degree by the Government of Great Britain, but it has been impossible to deprive the 220,000,000 people of their ancient coins or their peculiar unit of value. As is the case in most Asiatic countries, gold is not a legal tender, but is highly prized for ornamentation ; nor is its value in procuring material from Europe disregarded. But for the purpose of circulation the mohur, the gold coin of India, might as well not exist. It was in 1835 that the existing system was declared operative by law. The rupee was continued as the unit ; this was the Madras rupee, preferred to a num- ber of others. This coin, as well as the half-rupee, are unlimited legal tender, and until 1893 (June 26) the coinage was unlimited and practically free. A kilogram of fine silver produces 93 >^ rupees ; thestandard of fineness is 916^ thousandths, and the unit weighs 180 grains,=to 11.664 grammes, so that the nominal value of the rupee is 45.9 cents. It contains 165 grains of pure silver. The coinage includes the half.quarter and eighth rupees, of exact proportionate weight and fineness of the principal coin ; but the two last mentioned pieces are legal tender for fractional parts of a rupee only, hence to an amount not to exceed one rupee. They are also called the 4 and the 2-anna piece, respectively. The gold coins are : the mohur, weighing exactly as much as the rupee and 88 MONETARY SYSTEMS OP THE WORLD. of the same fineness, equivalent to 15 rupees, consequently coined at the ratio of 15 to I ; divisions of the mohur are the lo-rupee piece, equal to J^ of a mohur, and the 5-rupee piece or y^ mohur ; there is also a double mohur equal to 30 rupees. There is no limit to the coinage of gold, but a mint charge of i per cent. The steady depreciation of silver in the markets of the world caused a mate- rial disturbance in the Indian exchanges with other countries ; the indebtedness of India to Great Britain on railways and public improvements, besides its share of the expense of the Government in London, required the annual remittance of over ^16,500,000 to the Home Government ; these payments had to be made in gold or its equivalent, and since the receipts were, of course, in silver, the addi- tional cost was increased with every decrease in the market price of the white metal ; necessarily the burdens of the people were largely augmented. The council of the Government of India therefore recommended the appointment of a commis- sion on the currency, and upon the recommendation of this body the mints of India were on June 26, 1893, closed to silver, with the avowed purpose of eventu- ally establishing the single-gold standard. The plan was involved considerably by the practice in vogue of providing for the remittances above mentioned by the sale of bills of exchange by the India council of the Home Government in London, instead of the actual export of coin from India. These bills were of course sold at about the ruling rate for silver in the market, and used by merchants to pay for merchandise imported from India. The India council attempted to fix an arbitrary rate of exchange on these transactions ; the theoretic par of exchange between England and India is 24 >^ pence, but the actual rate had fallen as low as 12 pence. The endeavor to arbi- trarily fix a rate at about i5 pence failed and the plan in its entirety could not be carried out. No silver has, however, been coined since the suspension, except on Government account. Amounts in rupees are stated in a peculiar manner. Thus a sum of 100, 000 Rs. is termed a lac ; and 100 lacs, equal to 10,000,000 Rs., are known as a crore. In the notation, however, 10,000,000 rupees would be stated thus : Rs. 1,00,00,000 ; but it is the custom to express large amounts in tens of rupees, thus Rx 1,000,000^ 10,000,000 rupees. An idea of the loss to India caused by the fall of silver may be obtained by the following comparison : In 1873-4 the average rate of exchange was 22,315 pence ; in 1892-3 the aver- age rate was 14,985 pence; on a remittance of ^16,500,000 the difference was therefore over Rx 8,700,000 ; the average annual loss in the period from 1874 to 1893 cannot have been less than Rx 4,000,000 — say 40 million rupees, or about |i8,4oo,ooo. India is one of the examples of a very poor country ; the minor coinage is not only in very small denominations, but is provided in vast amounts as the table of coinage below will show. The minor coinage consists of copper ; the anna is one-sixteenth of the rupee, consequently worth less than three cents ; the coin of the smallest denomination MONETARY SYSTEMS OF THE WORLD. 89 is the pie, equal to one-twelfth of an anna, consequently worth less than one- quarter of a cent. The pieces are : Double pice or half anna ; Pice or quarter anna ; Half pice or eighth anna ; Pie or twelfth anna. The first mentioned weighs 200 grains ; the others in exact proportions. The mints are located at Bombay and Calcutta. The coinage has been as follows from 1835 to 1891 : Rupees Rs. 3,149,857.487 Half-iupees 50,462,090 Quarter-rupees 60,59^.730 Eighth-rupees 41,582,530 Total silver 3,302,500,837 la 1892 55.539.738 In 1893 126,915,264 Rs. 3,484,955.839 It is estimated that scarcely one-third of this amount is still in existence ; large amounts have of course been recoined. The gold coinage has amounted to Rs. 24,206,440 during the same period, although gold to the amount of Rs. 1,513,029,920 was imported (in excess of ex- ports), and considerable amounts of gold are produced annually. The coinage of copper pieces during the same period amounted to Rs. 54,930,000 of pieces as follows : ^/i anna 8,930,000 rupees. K anna 40,500,000 ' ' J^ pice 2,500,000 " Pie 3,000,000 * ' In addition there were struck at the mints of India fully $2,000,000 worth of copper 5 cents, i, yi. and % cents for Ceylon, etc. The mints of India also coin for the neighboring possessions of Portugal. The need of a large number of small coins is clearly shown ; so vast a popu- lation with the most economical habits, whose daily wage can readily be dis- charged in copper, or at least small silver coins, requires a larger proportion than other people. The paper currency of India now consists of notes issued by the Government alone, since the law of July 16, 1861, which prohibited bank issues. The super- vision is in the hands of commissioners and deputies, and issues are made by geographical districts (eight), and the notes are redeemable only at the place of issue. They are legal tenders to any amount for all debts, public and private, in the respective districts, and must be received by the Government irrespective of the place of issue. The issue is limited to coin and bullion received in excess of 80,000,000 rupees (formerly 60,000,000), which amount may be issued upon securities of the Government. The denominations of the notes run from 5 to 10,000 rupees ; Rs. 257,000,000 circulate, all but Rs. 70,000,000 covered by metal. Allusion has been made to the hoards of gold in India. The most remark- able evidence of the existence of such accumulation of gold in the shape of native 90 MONETARY SYSTEMS OP THE WORI,D. coins as well as ornaments, is the large amounts brought to the mints in periods of famine. Reports reach us of hoards brought to light by the death of native princes in two cases recently, amounting to ;f 4,000,000 each. For the thirty-three years ending in 1892, India had imported and retained nearly ^5630,000,000 in gold. The five banks doing business in India and reporting to the Home Govern- ment in London are the Agra Bank, the Delhi and London Banking Company, the Mercantile Bank of India, the National Bank of India and the Bank of India, Australia and China. The statement of the last mentioned one will be found under China, The other four report : Resources. Cash £2, 837,012 Securities 1,490,026 Loans 11,099,724 Other 383,632 ^15,810,394 Liabilities. Capital ;^i,9g9,09S Reserve 140,000 Deposits 8,871,254 Other 4,800,04s ;fiS,8io,394 The Hong-Kong and Shanghai Bank, the Bank of China, Japan and the Straits and others do business. Three great local banking institutions are the Banks of Bengal, Bombay and Madras. A recent statement of the two first mentioned shows (in rupees) : Liabilities. ^^k:\ 38,450,000 Public deposits 24,220,000 Other 114,728,000 Resources. Cash 90,785,000 Securities 28,785,000 Loans 53,886,000 Other 3,952,000 The estimated monetary stock is : Silver ; $950,000,000 Uncovered notes 37,000,000 Minor 25,000,000 Native States of India. Many of these States continue to have coinages of their own. Thus, that of Pudakota has had 2,000,000 pice struck in 1889 ; Sindia, Nepal, Dewas and the Punjab still use their own pieces, but those of British India circulate freely. CEYLON. CRupee = 100 cents.) Although this island passed from the Portuguese to the Dutch and thence to the British, the intermediate Dutch monetary system has entirely disappeared. The present unit is the rupee of either Portuguese or British India ; but divisional coins are of 50, 25 and 10 cents in silver, and the 5, i and % cents of copper ; 100 of these cents are nominally equal to 44^ cents of the United States. The silver pieces are 800 thousandths fine, and legal tender to five rupees ; copper coins to % rupee. The coinage is executed at the Calcutta mint and in London. It is estimated that the stock of money is, silver Rs. 11,500,000 ; of which only MONETARY SYSTEMS OF THE WORLD. 91 about one-third is in circulation ; the remainder in banks and held by the Govern- ment against notes ; copper Rs. 948,966, a very large sum. In 1884, the Oriental Bank which had supplied notes failed. Accordingly, the Government undertook the issue of paper money, of 5, 10, 50, 100, 500 and 1,000 rupees ; to be full legal tender, and redeemable in silver on demand ; half the reserve must be held in coin, the remainder in Government securities other than those of Ceylon. About Rs. 7,500,000 are in circulation against which are held silver Rs. 4,478,581, and securities Rs. 3,058,000. HONG-KONG. CDoUar = 100 cents.) Perhaps the greatest struggle against preconceived notions is found in the monetary history of this island, which has become the entrepot of a very large part of the trade of China with the rest of the world. The Chinese had a decided preference for the Spanish dollar, which for decades had passed current throughout the Orient. When the British obtained possession of Hong-Kong they attempted to introduce their system, but failed. Finally, in 1863, the inevitable was recognized; the Mexican dollar, the modern prototype of the old Spanish, which was equally favored in China, was made full legal tender in the colony, as well as other dollars of equal value ; pro- vision was made for the coinage in London of subsidiary and minor pieces ; the latter in denominations of i-ioo and i-iooo of a dollar. This last mentioned piece was expected to supplant the Chinese " cash." The result was not as satisfactory as expected, and before much was accom- plished the Colonial Government established a mint in Hong-Kong in 1864. The following pieces have been coined at this establishment Dollars of 416 grains, 900 thousandths fine $2,108,054 Half-dollars of 208 grains, 900 thousandths fine 58,587 The above are full legal tender. 20-cent pieces, 800 thousandths fine $445,429 lo-cent pieces, 800 thousandths fine 2,479,216 S-cent pieces, 800 thousandths fine ir3i3,303 Cash to the number of $1,000,000 have also been provided. The value of this dollar at the United States coining rate was therefore ^1.008, that of the Mexican dollar is |i.oi6. These coins did not at once find favor and the mint was closed in 1866. Later the coins were sought after. Japan purchased the mint-plant and issued dollars of exactly the same weight and fineness ; the United States issued a trade dollar of 4 grains more ; but all of these were unable to displace the Mexican piece, although it was of less value than the last mentioned. In the colony at present the Mexican dollar continues full legal tender ; sub- sidiary pieces of 50, 20, 10 and 5 cents are tenders up to $2, and are provided by the London and Birmingham mints, as are also the cents of bronze, legal tender 92 MONETARY SYSTEMS OP THE WORLB. to $1. The coinage has amounted to over |9,8oo,ooo, chiefly of lo and 5-cent pieces, which were very popular until China herself began to coin silver (1890). The bronze cents remain a very useful medium. The stream of Mexican dollars continues to flow to the East as steadily as ever. The stock of silver in the vicinity of Hong-Kong is estimated at ^70,000, 000. The Hong-Kong and Shanghai Bank issues notes not only for the colony, but for this entire section of the East. It has branches at every important port. It was chartered by the local Government in 1866 with a capital of |io, 000,000; its note issue is limited to that sum ; shareholders are liable without limit for the notes ; a reserve of at least one-third must be maintained in Hong-Kong ; notes are of denominations of ^5 and multiples and are issued at any of the points where needed. The bank's condition in 1894 was reported to the Home Government as follows : Resources, Liabilities. Cash ;^i, 828,439 Bullion 939,160 Investments 768.000 Loans 10,989,000 Other 137,000 Capital jf 1,053,000 Surplus 442,000 Circulation 1,039,000 Deposits 9,705,000 Other 2,397,000 Notes are also issued by the Chartered Bank of India, Australia and China, under charters from the Home Government ; (formerly also by the Mercantile Bank of India, recently reorganized without issues). The Chartered Bank shows as follows : Resources, Liabilities, Cash ^1,979,000 Securities 800,000 Loans 8,008,000 Other 105,000 Capital ;f 800,000 Surplus 250,000 Notes 613,000 Deposits 5,433.000 Other 3,796,000 Of the notes of the two banks about 1(4,500,000 circulate about Hong-Kong, the remainder in the Straits Settlements and elsewhere. They bear on their face the indicia of value both in Chinese and English characters. STRAITS SETTLEMENTS. (Dollar = 100 cents.) This colony, embracing the busy ports of Singapore and Penang, passed through a history the same as Hong-Kong, except that for a time the rupee attempted to crowd out the Spanish-Mexican dollar. The result was the same. So that now the colony has the Mexican dollar, full legal tender ; subsidiary silver and minor coin identical with that furnished Hong-Kong comes from the London mint, where it is struck specially for the Straits. The amount of subsidiary silver furnished is about 12,750,000 and of minor coin 1368,850. Notes are issued by the same banks that serve Hong-Kong. The amount of circulation is about j!4,ooo,ooo, but has been much greater. MONETARY SYSTEMS OP THE WORLD. 93 Banking facilities are also afforded by the Bank of India, China and the Straits, reporting under its charter to the Home Government : Resources. Cash .^65,243 Securities 545, 615 Loans 2,537,775 Liabilities. Capital ;^278,37i Deposits 1,334,898 Other 1,657,114 JAPAN. (Yen=100 sen.) Prior to 1871 Japan's money consisted of the cobang, of gold, weighing about 200 grains, and the boo or itzebu, or ichebu, of silver, weighing 140 grains. They regarded the latter worth one-fourth the former, but finally reduced the weight of the cobang to 50 grains. The relation then was as 560 to 50, a ratio of 11.02 to i. But in 1871 a reorganization of the system took plat:e. The unit now in use, Ma¥ of 100 sen, was adopted. This coin was struck in both gold and silver, the latter approaching the Mexican dollar current in the vicinity ; it contains 416 grains, or 26.9563 grammes, of silver 900 fine ; the gold yen at first contained 1.5 grammes of standard metal (900 thousandths fine), but was subsequently changed to 1.667 grammes, thus fixing the ratio at about 16.11 to i. Although Japan is classed as a double-standard country, it has, in fact, more nearly a single-silver standard. The silver coinage is at present suspended, except on Government account. Japan formerly coined a trade dollar at 420 grains 900 thousandths fine, but it has not proved a very desirable coin. The gold pieces coined are : Weight in Grammes. Weight in Grains. Value. 33-333 16.667 8333 3-333 514,400 257,200 128,600 51,440 25,720 $19.93.8 9.96.9 4.98.4 1.99.4 •99-7 10 " The silver yen is worth, nominally, )f 1.008. Subsidiary pieces are only 800 thousandths fine and weigh 208 grains to the half yen, or 50-sen piece ; there are also 20, 10 and 5 sen pieces, the last mentioned being worth at our coining rate only 4.4 cents. The minor coinage is composed of nickel for the 5-sen piece and of copper for the 2, I and %. sen pieces. The coinage has been : Gold 66,156,000 yen. Silver 101,452,000 " Subsidiary 28,000,000 ' ' Nickel 3,768,000 ' ' Copper 12,418,000 " 94 MONETARY SYSTEMS OP THE WORLD. The supply of minor coins is therefore very large. Trade dollars were coined to the amount of 3,057,252. There are Government notes in use in denominations as low as 20 sen ; formerly also 10 sen. But all of these notes are gradually being retired and Bank of Japan notes substituted. Bank-notes were formerly issued by institutions similar to the national banks of the United States and consequently secured by bonds ; but the system is in course of being superseded by the single bank of issue. By 1897 all national charters expire. The Bank of Japan issues notes against silver, convertible at any time ; these are almost like the silver certificates of the United States. But the bank is per- mitted to hold against the notes, gold as well as silver coin, and Government obligations and first-class commercial paper. At the end of 1894 there were : Government notes 9,000,000 yen. Bank notes 22,000,000 " Silver certificates 134,600,000 " The statement of the issue department of the Bank of Japan, which, like that of the Bank of England, is kept separate from the banking department, is as follows for December 29, 1894 : Circulation 145.372,739 yen. Gold coin and bullion 32,346,062 yen. Silver coin and bullion 49,650,751 " Total metal 81,996,813 yen. Government obligations 46,071,755 " Other securities 4,500,000 " Commercial paper 13.004,171 " Total reserve 145,572,739 yen. The bank held in its banking department 10,977,599 yen of its own notes, leaving in actual use 134,595,140 yen. The bank is privileged to issue notes to any amount upon actual deposits of specie or bullion ; it may also issue upon securities to the present amount and to such further amount as may be surrendered by national banks ; it may, finally, issue, in cases of emergency, with the consent of and subject to a variable tax to the treasury, a further amount on commercial paper. It is compelled to redeem its notes in silver yen. The incorporated banks in Japan, 166 in number, show the following in recent reports : Capital 62,916,100 yen. Surplus and profits 42,057,780 " Deposits 69,595,637 " Loans 94,806,578 " Other resources 247.791.569 " MONETARY SYSTEMS OP THE WORLD. 95 Private banks, numbering 604, report : Capital 31,030,248 yen. Surplus 2,803,666 " Deposits 38 426,210 ' ' Loans 48,903,589 '* The Yokohama Specie Bank, included in the above-mentioned incorporated banks, reports to London, 1894 : Resources. Ca.sh j^2, 204,882 Securities 909,782 Loans 4,101,406 Other 8,640 ;^7,224,7io The approximate stock of money is : Liabilities. Capital ;^75o,ooo Surplus 614.717 Deptisits 2,650,339 Other 3,209,654 ^7,224,710 Gold 80,000,000 yen. Silver 72,000,000 * ' Subsidiary 16,000,000 " Minor 10,000,000 " Uncovered notes 83,600,000 " 261,600,000 yen. CHINA. (Dollar=100 cents. Until very recently China has had no coinage of its own unless the very inferior brass ''cash," small discs with square holes through them, and of which 1,350 are estimated to be worth a tael, can be considered. The metallic circu- lating medium is almost entirely silver, and in addition to the Mexican peso a number of other silver coins are in use ; many of these are divided by cutting, and almost as much silver in the shape of small bars or slugs circulates. Every piece, however, must, in order to be acceptable, be stamped or "chopped" by some well-known mercantile concern or local governor, as a voucher for its weight and fineness. When the trade dollars of the United States were returned for redemption in 1887 numbers of them bore these peculiar Chinese stamps. Gold is not a legal tender. In 1890 China finally opened her mint at Canton and has coined as follows : In 1893. Dollars Hall-dollars... 20-cent pieces. 10-cent pieces. 5-cent pieces. $43,933 $14,579 8,923 45.187 1.583 478 13 923,983 2,054.858 14,216,417 62,497 127,000 These pieces are supposed to be of the following fineness : Dollars 900 thousandths. Half-dollars 860 Smaller 820 96 MONETARY SYSTEMS OF THE WORLD. But they are really considerably less good. The weight of the dollar is .72 tael, and of subsidiary pieces in proportion. The tael is a weight, but in a sense also a unit of value ; there are, however, several kinds of these : the Shanghai, the Haikwan, etc. It is doubtful if the Chinese dollar will prove more successful than the others in driving the Mexican out of the Oriental trade. " Cash " are now coined out of metal composed of 60 per cent, copper and 40 per cent, zinc ; 137,000,000 were issued in 1892. The square hole in the centre is used to string them, and 1,000 are usually issued on a string, at a valuation of about 972 to the peso or Mexican dollar (equal to J1.01.6). The mint can turn out 500,000 cash per day. Notes of certain foreign banks, such as that at Hong-Kong, circulate freely ; and in some of the provinces local banks are authorized to issue them. But no statistics are published. China is supposed to be the first nation in the world to experiment with paper money, having had an abundance of irredeemable "shin- plasters " many centuries before the present era. To-day the mass of the 400,- ooo,oooof people supposed to inhabit the Empire use the "cash" only, in their daily transactions. Besides the Hong-Kong Bank, the Bank of China, Japan and Straits, the Bank of India, Australia and China, reported elsewhere, the National Bank of China, also chartered by Great Britain, does business. A statement of its condition October, 1894, follows : Resources. Liabilities. Cash £jA.Z('9 Capital ^^332.831 Loans ' 7°6.4i5 Circulation 19,788 Investments 10,000 Deposits 316.717 Otlier 115,623 Taking the Haikwan or Government tael as a basis, 100 of these are equal to III. 4 of the Shanghai, 101.75 of the Amoy, 105 of the Tientsin, and 102.15 of the Canton ; the last-mentioned is equal to 579.84 grains, or 37-573 grammes, and is the usual mercantile tael. The Haikwan tael is 590.35 grains, or 38.246 grammes pure silver ; that of Shanghai 564.2 grains or 36.56 grammes .898 fine. This gives the nominal value at the coining rate of the United States, of the Haikwan tael, f 1.59 ; Shanghai tael, I1.36. The divisions of the tael are nominally : i tael=io mace of 10 candareens or fun, each candareen being equal to 10 cash or li ; but intermediate pieces are not in use. Compared with the Mexican dollar, the mercantile tael is equal to ^r.395 and 1,000 dollars equal to 717 taels. Estimated Blonetary Stock. Silver $750,000,000 " Cash " 200,000,000 MONETARY SYSTEMS OP THE WORLD. 97 FRENCH INDO-CHINA. ToNG-KiNG, Annam, Cambodia. CPiaster— 100 cents.) These recent acquisitions of France have not been converted to the monetary system of the Latin Union. The Paris mint, therefore, furnishes them with silver coin based upon the unit in use throughout this section of the world— the Mexican dollar. The Indo-China piaster contains of silver 27.215 grammes, 900-thousandths fine, and is divided into hundredths or cents of proportionate weight and the same fineness. This unit is, therefore, better than the Mexican, Hong-Kong and Japanese trade dollars, and exactly the same as the trade dollar of 420 grains formerly issued by the United States. Minor coins of bronze are also supplied from the mint at Paris. Recent coinages for these sections have been : Of silver 16,000,000 piasters. Ofbronze 18,000 " Cambodia has had coined in Birmingham 30,500 kilograms'_of subsidiary silver. Notes are issued by the French Bank of Indo-China, which reports for 1894 : (In francs.) Resources. Cash 9,080,000 Loans 19,415,000 In banks 6,938,000 Other 1,285,000 36,718,000 Liabilities. Capital 3,000,000 Reserve 1,546,000 Notes 22,482,000 Deposits 8,577,000 Other 1,113,000 36,718,000 The French still retain the small colony of Pondicherry and vicinity in India. The money in use is largely that of India — the rupee ; but the franc is being used more and more. PERSIA. (Toman = 10 krans @ 20 shahis.) Nominally double-standard, Persia is in fact more nearly a single-silver standard country ; actually, however, its coins cannot be depended upon. The theoretic system has for the unit, the toman of gold, weighing 43.981 grains of 900 thousandths fineness, equivalent to fr.70.4. It is divided into 10 krans of 20 shahis each. The kran is a piece of 71.065 grains of silver 900 thousandths fine, and hence worth nominally about the same as the subsidiary franc of the Latin Union, say 17 cents. Pieces of 5, 2, i, yi and % krans are struck. The actual fineness of coins is found to be as low as 760 thousandths, the coinage being farmed out by the Government. Copper pieces of 2, i and ^ shahis are furnished in large quantities. The shahi is worth nominally 17-20, and the smallest coin 17-40 of a cent. 98 MONETARY SYSTEMS OF THE WORLD. Statistics of the coinage are not available. Notes are issued only by the Imperial Bank of Persia and its branches, redeemable only at the place of issue, and in denominations of i, 2, 3, 5, 10, 20, 25, 50, 100, 500, and 1,000 tomans. A statement of the bank for 1894 from its report filed in London, shows : Resources. Liabilities. Capital ;£^I, 000,000 Reserve 100,000 Circulation 59.107 Deposits and accounts 964,570 Other 31,721 Cash jf 187,601 Securities 373,406 Loans 1,575,040 Other 19.351 ^2,155,398 ^2,155,398 SIAM. (Tical = 64 lots @ 100 cowries.) This country has a peculiar monetary system, based upon cowries or shells, now not much used, but formerly the principal medium in many parts of Asia and Africa. To a certain extent small coins of pewter and of copper have been introduced to take the place of the shells. The equivalents are : 800 cowries = 1 fuang ; i bat or tical = 4 salungo, each twice the value of the fuang. The bat or tical is there- fore equal to 6,400 cowries. The pewter pieces are known as lots and ats ; two of the former equal one of the latter ; the copper piece is equal to 2 ats, of which there are 16 to the tical. It follows that the lots or smallest pieces, of which 64 equal one tical, are equal to 100 cowries ; 220 cowries are held equal to one penny English, so that the lot is nearly equal to the half-penny and the tical to 30 pence, or about 60 cents. Five ticals are held equal to three Mexican dollars. Apparently the tara, a name used for large sums, is worth 400,000 ticals, or about $240,000 Mexican. The tical is a small bit of a silver bar, bearing a stamp ; intermediate pieces are, however, similar to coins. The tical contains nominally 236 grains, or 15.292 grammes, and said to be 906X thousandths fine. The Hamburg mint has coined pieces for Siam, and in 1891 bronze pieces valued at 400,000 ticals were made in Birmingham. It is reported that a coinage of 8,160,905 ticals took place in 1892. The estimated amount of silver in use is 40,000,000 ticals. Bank-notes to the amount of $675,000, issued probably by some of the colonial institutions of Great Britain, circulate. KOREA. (Yang =. 100 cash.) Under the influence of Japan a mint was actually established in Korea but no coinage, properly speaking, has taken place. The actual currency consists of Japanese coins, Mexican dollars and the MONETARY SYSTEMS OP THE WORLD. 99 copper cash similar to those of China. Evidently these are of very inferior sub- stance, since it is estimated that 3,750 are equal to a Mexican dollar. The proposed coinage includes the unit yang, equal to 20 sen of the Japanese ; nickel and copper pieces are to be struck, and the cash is to be raised in value so that 100 equal i yang. OTHER COUNTRIES. Afghanistan has no coinage, properly speaking. The rupee is the money of account and Russian and British pieces circulate. The mint recently established at Cabul has not accomplished much. The coinage is to be based upon the rupee to be called the Kabuli rupee — the krans of Persia of half the value, and copper pice, of which 72 are to go to the rupee. Baluchistan uses the rupee, derived from the neighboring States of India. The Portuguese possessions m Asia use a coinage of which the unit is the xerafin, equal to yi, rupee, or 5 tangas, each of the latter equal to 60 reis. The Ultramarine Bank and the local government issue notes. Burmah is furnished with coins from the mints in India. The so-called peacock rupee is in use. Siberia. — This vast possession of the Russian Empire is rather sparsely settled and trade is not highly developed. It has no monetary system but that of the Empire. The Central-Asiatic section of Turkestan, Khiva and Bokhara uses several kinds of money, but very little of any one. The Russian paper and silver coins predominate. A coin of silver called the kokan, is being withdrawn by Russia. Asiatic Turkey, including Arabia, uses the Ottoman monies. 100 MONETARY SYSTEMS OF THE WORLD. AFRICAN COUNTRIES. Egypt — Ai,geria and French Possessions — Cape Colony and OTHER British Possessions — Congo State — Transvaal— Other Countries. EGYPT. O^E^lOO piastres of 10 ochr-el-guerche.) This ancient country adopted the single-gold standard in 1885. Prior to that year it had the Turkish system with the piastre of 40 paras. Its own former coinage amounted to : Gold 263,718,000 piastres. Silver 71,309,000 " Copper IS. 273. 473 In addition the Paris mint coined for Egypt from 1865 to 1872 : Gold 37,095,000 piastres, Silver 45,700,000 " Bronze 145,000,000 " The new system adopted in 1885 has for its basis the pound of 100 piastres ; each piastre is divided into 10 ochr-el-guerche or tenths. Gold alone is full legal- tender, but the gold pieces of other nations are taken at their value, some of them at the public treasury. Silver is legal tender to 100 piastres and nickel and bronze minor coins to 10 piastres. The pound is a piece of 8.5 grammes or 131.172 grains, 875-thousandths fine ; its value is therefore greater than that of the pound sterling, viz.: J4.94.3. The gold pieces are the pound, the half-pound or 50 piastres, 20, 10 and 5 piastres. In fact, however, the small pieces are not coined. Silver is coined in pieces of 20, 10, 5, 2 and 1 piastres ; provision is also made for yi. and ^piastres; but as these are very small divisions, they are not actually struck. The weight of the silver piastre is 1.4 grammes or 21.604 grains ; the fineness of all silver is but 833 "^-thousandths ; the value of the piece is therefore 4.9 cents (nominal). Nickel coins are made in denominations of 5, 2 and 1 ochr-el-guerche, and bronze pieces of }i and % of that division. The smallest piece is therefore -^^ of a piastre, consequently -^^ of 4.9 cents or 5*/,^, say nearly >i of a cent. The new coinage for Egypt has been executed at the Berlin mint, and up to 1893 it has been as follows : Piastres. Gold (all of 100 piastres) 5,202,400 Silver 139, 102,261 Nickel 12,621,841 Bronze 531,720 MONBTARY SYSTEMS OF THE WORLD. 101 The large volume of the minor coinage bears testimony of the poverty of the mass of the people in Egypt. No less than 14,000,000 bronze and 34,000,000 nickel pieces have been furnished in the eight years since the new system was introduced, beside the large quantities of the old coins still in use. It should be stated that the change in the coinage system did not involve any change in the relative value of the pieces. The new system is simply an exten- sion of the old. The stock of gold in Egypt is quite large ; it is estimated that fully $120,000,000 are held there ; but of course the mass of the inhabitants never see it, nor do they know the use of notes. Paper money is not issued in Egypt. There are many banking institutions, of which two of the principal ones are the Bank of Egypt and the Anglo-Egyptian Bank, which report to London for 1894 as follows : Anglo-Egyptian Bank. Liabilitie.*;. Capital ;^400,ooo Reserve 60,000 Deposits 695,000 Current accounts 711,554 Other 480,898 Resources. Cash ;£'338.377 Securities 148, 17S Loans 1,356,201 Other 504.699 ;f2.347,452 ^2,347,452 Bank of Egypt. Resources. Cash ;^37.994 Loans 852,094 Securities 99.271 Other 14.819 ;^i,oo4,i78 Liabilities. Capital ;^25o,ooo Reserve 100,000 Deposits 362,612 Other 291,566 ,,^1,004,178 FRENCH POSSESSIONS. CFranc = 100 centimes.^ Algeria. This prosperous colony of France has the system of the mother country in its entirety ; the ancient coins of the Moors having been superseded. The unit is the franc of the Latin Union, and its multiples and sub-divisions. The coins are the French pieces of the several denominations. Notes are issued by the Bank of Algiers and its branches, modeled very largely upon the lines of the Bank of France. Its condition at the end of 1894 was : Resources. Cash 34,251,000 Securities 11,866,000 Loans 98,820,000 Branches 98,597,000 In other banks 7.395.000 Other 21,681,000 272,610,000 (Tn francs.) Liabilities, Capital 20,000,000 Reserve 7,895,000 Notes 79,244,000 Branches 98,404,000 Deposits 5,133,000 Public Deposits 56,734,000 Other 5,200,000 272,610,000 102 MONETARY SYSTEMS OF THE WORLD. Tunis. This province of North Africa formerly had a system akin to that of Turkey, to which it belonged. The unit was the piaster of i6 karobs, the unit being equal to about 11% cents. Since the French have come into possession of the country the franc has been introduced and is gradually crowding out the old coins. The piaster is made equal to | of a franc. France has, from the Paris mint, furnished some 25 piastre gold pieces ; but also : Gold in 20 and lo-franc pieces 30,500,000 frpncs. Silver in 2, i, % and 1-5 francs 5,941,000 " Bronze (8,400,000 pieces) 672,000 " Native pieces equal to 26,000,000 francs have beenretired. Notes of the Bank of Algiers as well as those of the Bank of France circulate. The stock of money may be placed at 40,000,000 francs, of which 34,000,000 francs is in gold. Senegal, Gaboon, Etc. These French possessions on the west coast of Africa are under the French system of money. No separate coinage is provided for them, nor are pieces of other nations excluded. In fact, the British money in use in Gambia is found in these parts also. Madagascar. The French have obtained control of this large island quite recently, and the franc has become the prevailing coin. The five-franc piece is known as the "dollar," having supplanted the Mexican piece. Nominally there is a unit nearly like the dollar of old Spain, and called the ariary. It is theoretically sub- divided into 720 parts. "Cut coin " is largely used for divisions, but France will probably correct this by introducing fractional and minor pieces. R:i;uNiON. (Franc = 100 centimes.) This island, adjacent to Madagascar, has for many years been in the hands of the French, consequently the system of the Latin Union prevails. Notes are issued by the Bank of Reunion, to the amount of about 12,000,000 francs. BRITISH POSSESSIONS IN AFRICA. Cape Colony. The Dutch ceded this valuable colony to the British in 1795. Prior to this date not only the Dutch coins but other pieces of the leading commercial coun- tries circulated. Here, again, as a " way-station " to the Spanish possessions in the East, we find the Spanish milled dollar. After equalizing these various corns to the British standard, the colony issued paper currency which depreciated and continued fluctuating until about 1826. The rix-dalers of Holland were in that MONETARY SYSTEMS OF THE WORLD. 103 year replaced by. British pieces, and the paper rix-dalers were retired by 1841. The sovereign became and is to-day the standard, and the only full legal tender ; but it was not until 1882 that the British system became fully established. The Cape exported up to 1888 about 133,000,000 less gold than it imported ; consequently its circulation was well provided for. Since 1888 the Cape has been a very large exporter of gold. Its imports of silver have amounted to about $1,000,000 more than the exports; as a large portion of the exports were undoubtedly in bullion, and as the British mint reports having furnished at least $2,000,000 of subsidiary silver in recent years, it may be presumed that there are $3,000,000 of silver subsidiary coins in the colony. The amount of gold and silver which has been distributed beyond the borders of the colony proper, is estimated at about one-half of the above apparent holdings. Bronze coins have been furnished according to requirements, which are here less than in most countries. All the coins are of the Imperial or the Sydney mint stamp — no pieces being struck particularly for the Cape. After the retirement of the old rix-daler paper in 1841, banks issued notes under liberal laws ; in 1864 a tax oi i}4 per cent, was imposed on circulation ; in 1875 the issues were limited to the capital of the banks ; no other restrictions were placed upon the issue. In 1890-91 several banks closed and their notes were worthless ; accordingly the law of 1891 provided for the securing of notes by deposits of bonds of the colony, or of ^ bonds and ^ treasury exchequer bills; furthermore the notes were made a first lien on the other assets of the banks. The denominations are £1, 5, 10 and 20. The system, very like the National-bank system of the United States, was made use of to float bonds of the colony. In 1870 it was proposed to issue Government notes upon gold deposits on the basis of about 3 to i, but it failed to be adopted by the Council. The present issuing banks of the Cape are only three in number ; they have in circulation about $4,000,000 in notes, against about $5,000,000 in 1889. The specie holdings are from 4 to 5 times greater than the note issues. The notes are legal tender. These banks are chartered by the Imperial Government as well, and reported to the Home Government for 1894 : Resources. Liabilities. Cash ^^4,287, 511 "Securities 1,853,199 Loans, etc 11,070,118 Other 638,611 ^^17,849,439 Capital ;^i.S47.64S Surplus 795 000 Circulation 840,340 Deposits II 699,015 Other 2,967,439 ^17,849,439 The Standard Bank holds ;^i3,ooo,ooo out of the total of the above-named resources. It has a number of branches. Bechuanaland, Mashonaland and the unorganized territories under British control should be included with the Cape Colony. * Includes bonds deposited to secure circulation. 104 MONETARY SYSTEMS OP THE WORLD. Natal. This colony experienced difficulties similar to those of the Cape, but in a less degree. It appears strange that after the British system had been introduced, the colony lacked divisional coins for a long time, so that small change com- manded a premium of 6 pence to the pound ; rupees were for a time introduced from Mauritius. This was finally corrected. The Imperial mint has furnished about ^700,000 in subsidiary silver ; and bronze coins to a limited amount. Notes are issued by the Natal Bank ; a statement appears below. The circulation is about f 1,100,000, more than covered by specie in coffers. Capital ;^786,237 Surplus 48,000 Notes 190,599 Deposits 3,196,864 Other 271,193 ^^4,492,893 Cash j^i,2io,276 Securities 6S4i493 Loans 2,490,407 Other 137,717 ^^4,492,893 West Africa. Sierra Leone, Lagos, Gambia, Gold Coast. After an experience with various coins, and even with "cut money,"* these colonies finally settled down to the use of 5-franc pieces and British subsidiary and minor coins. It is estimated that there is about j5ioo,ooo of the former and $750,000 of the latter coin in the colony. Gold is not used much. French pieces are in use owing to the relations with the adjoining French colony of Senegal. The British mint has furnished for all the colonies on the West Coast of Africa about f 600, 000 of subsidiary silver coin. No paper money is issued, although the African Banking Corporation of Cape Colony has been considering the advisability of doing so. Saint Helena. This island possession, owing to its being in the way of all vessels passing around the Cape, permitted ail kinds of money to pass for many years. In 1880 British coins were made the sole tenders ; there are no note issues and gold is not in circulation extensively. |i6,ooo in subsidiary and minor coin has been furnished by the London mint. The entire monetary stock is estimated at $50,000. Mauritius. (Rupee = 100 cents.) This island, although nearer Africa, has an Asiatic currency system. It was formerly a French colony. The rupee displaced, finally, all other coins in 1876. But the French influence remained in force in providing divisional coins of 20 and * Coins cut into pieces and so circulated. MONETARY SYSTEMS OE THE WORLD. 105 lo cents of silver 800 thousandths fine and of 5, 2 and i cents of bronze, struck specially for the island in London. The 20 cent piece weighs only •2. 333 grammes and is therefore equal to but 8.1 cents at the coinage rate of the United States. The 5-cent piece is really equal to a penny. Of these there have been coined : 20 cents Rs. 118,000 10 " 143,000 261,000 32,500 32,500 32,500 97.500 A former paper circulation in dollars was superseded by legal tender Govern- ment notes, issued one-half on metal and one-half on securities. The amount in circulation is usually somewhat under Rs. 3,000,000. At the end of 1891 it was Rs. 2,688,250. Secured by silver Rs. 1,124,000 ** bonds 1,544,250 • — 2,688,250 British East Africa. The company trading here has had ten tons of cents coined for use among the natives, and 43,555 rupees in silver. CONGO STATE. This State, now under an international administration, with the King of the Belgians at its head, uses the system of the Latin Union. Only silver and minor coins are furnished, however. The mint at Brussels has turned out : Silver 5 francs 190,000 francs. *' 2 " 80,000 " I " 90,000 " y^ " 40,000 Copper 10 centimes 14.000 S " 8.750 2 " 500 I " 2.750 426,000 francs. TRANSVAAL. (_^ = 20 shillings @ 12 pence.) This South African Republic has, in order to facilitate its commerce with Cape Colony and Natal, adopted the British monetary system instead of the former Dutch money. The German mint furnished the coins, amounting to about ^31,000, as follows: Gold ^20,725 Subsidiary silver 10,175 Bronze minor (pennies) 116 106 MONETARY SYSTEMS OF THE WORLD. This does not, however, represent all of its coinage. Naturally the British coins in use in the Cape Colony and Natal circulate freely. Notes are furnished by the National Bank of the South African Republic, which reported for 1894 : Resources. Cash ;f7i4.903 Securities 542,867 Loans 939,086 Other 84,616 ;^2,28l,472 Liabilities. Capital ;^so2,ooo Surplus 8,000 Notes 130,183 Deposits 1,579,004 Other 62,283 ;f2,28l,472 The Transvaal is at present one of the principal producers of gold in the world. Orange Free State. — This independent Dutch Republic uses British money just as the South African Republic, Natal and Cape Colony, adjoining. No data of the kind and volume of money are available. ZANZIBAR. This State uses dollars of both gold and silver ; the minor coin is called the pesa. The mint in Belgium has supplied the coins as follows : Gold $10,000 Silver 110,000 Gold coins are 900 thousandths fine, the 5-dollar piece weighing 8.359 gram- mes, and the 2^ dollar piece one-half thereof. Silver pieces, also 900 thous- andths fine, are in denominations of |i (27.2155 grammes), )/i and X dollar ; the pesa, or cent is of 6.4799 grammes, ^ of copper; 23,324,000 of the cents have been furnished. The Maria Theresa dollar and the rupee also circulate freely. OTHER COUNTRIES. Tripoli — This ancient North African province of Turkey has a single-silver system, if its monetary arrangements can be termed a system. The unit is the silver mahbub of 20 piastres, Turkish. The monetary system of Morocco is practically a silver system. The ounce (okia) is a silver piece equal to 1% francs, therefore about the same as the Austrian florin. The Paris mint has recently furnished in pieces of 5, 2^, i and %, ounces, about 8,000,000 francs. The ounce is divided into 4 blankeels, of 6 floos each, the latter being equal to 9-100 of a penny or about 18-100 of a cent. The Cape Verde Islands, possessions of Portugal, use the Portuguese cur- rency ; but those on the East coast (Mozambique, etc.) use the rupee and the coins current in Zanzibar. There is also a barinha equal to 26 J^ reis in use. In the West Coast possessions the macuta, equal to 50 reis, is preferred. MONETARY SYSTEMS OI^ THE WORtD. 107 Eritrea and Abyssinia. — These Italian dependencies while using the Maria Theresa dollar as well as rupees and Egyptian pieces, have been supplied with about j!i, 800,000 in "Eritrean" dollars, halves, quarters and tenths from the Italian mint. The pieces are exact equivalents of those of like value of the Latin Union. Liberia. — ^This republic, while it is supposed to use money of the United States, practically accommodates itself to circumstances by receiving the coins of Sierra Leone, Senegal, etc., as well as others. Paper money is issued to a limited extent. German East Africa. — The possessions of Germany in this part of the world use the rupee, divided, as in Mauritius, into pesas or cents. Germany has coined 781,000 rupees in silver pieces of 2, i, yi, and % rupees, and of copper pesa-pieces about 41,000,000 for the company. 108 MONETARY SYSTEMS OE THE WORLD. AMERICA— OTHER THAN THE UNITED STATES. Canada — Newfoundland — British West Indies — Spanish West Indies — Haiti — San Domingo — Mexico — Centrae America — Brazii, — Chii^e — Argentine Republic — Peru — Bolivia — Ecuador — Colombia — Venezuela — The Guianas — Other Minor Divisions. CANADA. (DoIIar=100 cents.) As has been stated before (page lo), the Dominion of Canada has no gold coinage — the eagle of the United States (|io) and the sovereign are both legal tender to all amounts. The subsidiary coinage is supplied by the British mint. As the country belonged to France up to 1763, French and Spanish coin circulated freely for quite a while after the cession. Various acts of Parliament, as well as local laws, fixed a valuation on these pieces, at which they were accepted in money transactions. The many changes to which some of the coins were subjected led to a very confused system of currency, until finally the law of 1853 (Canadian) provided that dollars and cents and pounds, shillings and pence were to be the only moneys of account. This was finally (by 1871) amended for all the provinces, so that the single-gold standard became general ; the gold coins of the United States and of Great Britain were made legal tenders, the latter at $4.86J^ ; silver coins were made a tender to Jio only, and minor coin to 25 cents only. Gold coins of the United States are used exclusively except in Halifax ; but the usual medium is really paper, with silver for small change. Although a Canadian gold coinage is provided for in the law of 1871, no such pieces have ever been coined. The silver pieces are of the denominations of 50, 25, 10 and 5 cents and the copper piece of i cent is the only minor coin. The largest silver piece weighs 11.62 grammes or 179.32 grains, and is 925 thousandths fine; worth, therefore, 44.6 cents at the coining rate of the United States. The smaller pieces are in propor- tion. Formerly the silver coins were the 20, 10 and 5-cent pieces. The total subsidiary coinage has amounted to |S6,229,iio. No statement of the minor coinage is at hand. The experience of Canada illustrates the futility of the attempts made for so many years by the British Government to induce the people of the colonies to adopt the monetary system of the mother country. The trade relations with the MONETARY SYSTEMS OP THE WORLD. 109 United States, in this instance, were too powerful to permit the introduction of a standard or unit which would compel a constant computation of values and, perhaps, impose fluctuations in exchange upon those relations. Paper Currency. Dominion Notes. Canada issues Government notes — called "Dominion notes," first authorized under the law of the local Parliament of 1866. The authority was limited to $5,000,000 " on general account " and $3,000,000 to replace notes of banks surren- dering their power of issue ; these banks were offered an inducement of 5 per cent, on their circulation to surrender it. The Bank of Montreal was the only one which agreed to do so, and it afterwards resumed note issues (see/oj/). It was provided that 20 per cent, of the notes issued be covered by specie reserve, the remainder by Dominion bonds. In 1 858 the issue was enlarged by law, provided that any amount in excess of $5,000,000 be covered by 25 per cent, in specie ; the balance, of course, by bonds. In 1870 the issue was fixed at $9,000,000 upon a 20 per cent, specie reserve, any excess to be fully covered by specie. The demand for paper currency grew, however, and in 1872 the last-mentioned proviso was relaxed to the extent that issues in excess of $9,000,000 be covered by specie to the extent of 35 per cent ; in 1875 50 per cent, specie reserve was required for the amount beyond $9,000,000 and not above $12,000,000, the excess beyond the last-mentioned sum to be fully covered. In 1880 the present law was passed ; it authorized the issue of $20,000,000 to be covered by at least 15 per cent, in gold, 10 per cent, additional in gold or Dominion bonds guaranteed by Great Britain, and the remainder in ordinary Dominion bonds ; any excess above $20,000,000 to be covered fully with gold. The notes are full legal tender, but are, of course, redeemable in specie on demand. They are issued in denominations of 25 cents, $1, $2, $4, $50, $100, $500 and $1,000 ; of the old issues, called " Provincial notes," there are still $5, $10 and $20 notes outstanding. The amount outstanding varies very little ; at the beginning of 1892 it was as follows, by denominations : 25 cents $184,807.60 $1, $2 and $4 7,058,418.2s $50 and upward 8,953,050 00 $5, $10 and $20 10,941.16 Total $16,206,770.01 The larger notes are held by banks in their reserves. Against the note issue the Dominion Treasury held : Gold $3,532,327 Silver 86,966 Securities 16,196,667 Total $19,815,960 Showing an unused power of issue equal to over $3,600,000. Of the gold held, almost all was in United States coin. 110 MONETARY SYSTEMS OF THE WORLD. Bank-Notes. A number of banks issued notes prior to the confederation of the provinces into the Dominion m 1867, under local charters. Under the law of the confederation of 1867, only chartered banks were per- mitted to issue notes unless specially licensed. It will be recalled that an attempt was made to substitute Dominion notes for all bank notes, but as only one bank was mduced to comply, this law was repealed in 1870. By the act of 1871 bank notes were not to be issued under the denomination of $4, and at least one-third of the issues were to be secured by Dominion notes ; and in 1872 the tax upon circulation of banks coming under the provisions of the act of 1871 was abolished. The act of 1880 made many changes : 1. All notes were made first liens upon the assets. 2. The lowest denomination was raised to ^5. 3. If demanded a creditor must be given at least $50 of Dominion notes in any payment by the banks. In 1883 the minimum reserve of Dominion notes was increased to 40 per cent., the amount demandable in such notes by creditors from J50 to $60, and penalties were imposed for over-issues of notes or for an impairment of the reserve. The present bank act dates to 1890, as many of the charters would have expired in 1891. All banks excepting two are allowed to issue notes to the full extent of their paid-up capital unimpaired ; severe penalties are fixed for over-issues ; notes to be of $^ (mmimum), or any multiple, and any creditor might demand f loo in small Dominion notes in any payment. The notes were made a first lien upon assets, and shareholders are doubly liable on their stock. A redemption fund of 5 per cent, of the circulation is deposited in the Treasury and notes are redeem- able there ; for failure to redeem interest at 6 per cent, is collectible upon the notes. The banks are compelled to keep their notes at par, and thus provide redeeming agencies throughout the Dominion; no specie reserve is required, but the law compelling 40 per cent, of the reserve held to be in Dominion notes remains. Two banks, whose ancient charters prevent the double liability of shareholders from being applicable, are permitted to issue notes only to the extent of 75 per cent, of their capital. (La Bank du Peuple and the Bank of British North America.) Upon a deposit of cash or bonds of the Dominion they may, however, issue to the full amount of their paid-up capital. Bank notes are not legal tender. The issues amount from 30 to 36 millions. At the beginning of 1892 the total was $35,634,129. To cover this the banks may be said to have held of gold 15,480,848, of Dominion notes $10,113,040 and Dominion bonds deposited $843,075- Of the Canadian banks three have also charters from the Imperial Govern- MONETARY SYSTEMS OF THE "WORLD. Ill ment, and reported to London in 1894, as below. They are the Bank of Montreal, the Bank of British North America and the Bank of British Columbia. Capital .£5065. 754 Surplus 1,782,877 Circulation 1,475,940 Deposits 9,715,298 Cash ^2,546,972 Securities 1,064,954 Loans 14,809,523 Other resources 303,531 The statement below is inclusive of these figures. The principal banks of Canada have branches not only in the various parts of the Dominion but also in London, New York and Chicago. On July 31, 1894, the thirty-nine chartered banks of Canada reported : Resources. Loans $217,588,734 Securities 22,416,337 Bonds deposited to secure circu- lation 1,821,268 Specie 7.779.735 Dominion notes 15,690,145 Cash items 6,776,646 Due from banks and agencies. . . 24,482,843 Other 11,549,820 Excess liabilities 2,928, 125 Liabilities. Capital $62,156,255 Surplus 27,160,750 Notes 29,801,772 Deposits 176,583,465 Deposits, public 6,470,573 Due banks and agencies 8,597,614 Other 263,224 $311,033,653 $311,033 653 Estimated Stock of Money. Gold $14,000,000 Subsidiary coin 5,000,000 Uncovered notes 36,000,000 The paper money of the United States circulates quite freely in places near the border. NEWFOUNDLAND. This province, probably to its great detriment, has maintained a position of independence of the Canadian Confederation, being under separate government and in direct communication with the Home Government. To carry its peculiarity into its monetary system, it has provided for a dollar (by act of 1863, March 25) differing considerably from every known piece of that denomination. The unit is not coined, but theoretically it contains 25.682 grains, or 1.664 grammes of gold 916 J^ thousandths fine ; it is therefore worth I1.01.4 in United States coin. The actual coin in use is the JS2 piece, weighing double the unit. The dollar of the United States, the sovereign and the Spanish doubloon are full legal tender for I0.98.5, I4.80 and I15. 35 respectively. In 1887 the doubloon was omitted. The single-gold standard prevails ; the silver coins are therefore legal tenders to the amount of |io only. The silver dollars of the United States and Mexico were for a time recognized, but Newfoundland has now its own silver coins of 50, 25, 10 and 5 cents. 112 MONETARY SYSTEMS OF THE WORLD. The half dollar weighs i8i.8i grains, or 11.782 grammes, and the smaller pieces are exact sub-divisions ; all are 925 thousandths fine. Thus this colony has the coins of the United States in name, but uses the British standards of fineness. This condition grew out of the former prevalence of and preference for the old Spanish milled dollar, which was recoined at 5 shillings, although it was worth somewhat more. The Imperial mint in London furnishes the coin for Newfoundland ; since 1865 there have been struck : Of $2 pieces $197,100 50-cent pieces 236,000 25-cent pieces 147,000 10-cent pieces 34.800 S-cent pieces 28,800 The minor coin is the cent, composed of 95 per cent, copper, 4 per cent, tin and i per cent, zinc ; it weighs 87)4 grains, while that of the United States weighs but 48 grains ; $15,300 of this coin has been supplied. Notes are provided by two banks, which in 1892 had a circulation of f i, 192,655. Their affairs became very much entangled with the political strife in 1893 and 1894, and they were compelled to close in the latter year. At present it is at- tempted to provide paper money through Canadian banks, and coin has been brought into the colony from the United States to reheve the great stringency pending reorganization of the currency system. BRITISH WEST INDIES. (£=30 shillings @ 13 pence.) Throughout these island colonies of Great Britain the old Spanish dollars cir- culated exclusively for many years, followed by the Mexican counterpart in more recent periods. This fact has made the introduction of the British system a long and tedious undertaking. To this day accounts are kept in most of the islands in dollars and cents, although the currency having legal force is British. Gold coins of the United States are accepted everywhere and held by banks in their reserves. The active circulation, however, consists of British subsidiary coin and bank notes. In the Bahamas the Nassau Bank is empowered to issue paper upon specie or upon British or United States bonds. The Colonial Bank, chartered by Great Britain, having its mam office in Jamaica, supplies the lower islands. For many years the dearth of small coins led to the use of " cut money," larger pieces being cut into fractions and passed ; many cases of swindling, by cutting a dollar into five " quarters," for example, developed, and the Govern- ment finally prohibited the use of such pieces, and sufficient subsidiary coin was provided. In many of the sections copper and bronze minor pieces were not acceptable to the colored people, who constitute a large portion of the popula- tion ; nickel pieces were therefore introduced. Moreover the preference of the people for what was called a "bit" led the Government to obtain silver four- penny pieces, or groats, froni the British mint. These "bits" are worth only about MONETARY SYSTEMS OF THE WORLD. 113 8 cents nominal, unlike the former " bit " of the United States, which was in fact the old Spanish real and equal to 12^ cents. Great Britain has furnished about ;^i, 000,000 of subsidiary silver, ^10,000 of nickel and the same amount of bronze minor coins for the islands. The Colonial Bank, chartered in 1836 and again in 1856, issues the notes in use throughout the British West Indies and in British Guiana. It has agencies at every important point in these possessions. Its condition at the end of 1894 was as follows : Resources. Specie a3S6,848 Cash in London 281,699 Securities 826.971 Loans, etc 3,449,254 Other 25,000 Liabilities. Capital ^600,000 Surplus 150,000 Notes 460,761 Deposits 1,924,532 Other 1,804,479 /4.939.772 ;f4.939.772 The circulation, aggregating over JS2, 100,000, is distributed about as follows : Jamaica $900,000 British Guiana 300,000 Trinidad 500,000 Barbados 160,000 Others 240,000 CUBA AND PORTO RICO. These colonial possessions of Spain use the coin and paper motiey of the mother country, and have therefore the double standard with the peseta, the Spanish equivalent of the franc of the Latin Union, as the unit. Actually, however. United States gold coin is acceptable. There is an issue of paper money in Cuba, principally of small denominations, with forced circulation, partly withdrawn in 1893. Accounts are still kept in the old peso of 8 reals. The old Spanish gold quadruple onza of 417.59 grains 875 thousandths fine, equal to J15.73.6, and the Isabella doubloon of 129.538 grains 900 thousandths fine and worth fo.oi.y, circulate with the newer gold Alfonso or 25-peseta piece. It is estimated that the gold in banks and in use amounts to |i8,ooo,ooo, and the silver to I3, 000,000. The uncovered paper may be fixed at |i, 000,000, exclu- sive of the forced divisional paper. HAITI. (Gourde=100 cents.) This "black republic" has always been dominated by French influences, and it is therefore natural that when, in 1880, a monetary system was adopted, that of the Latin Union was the one chosen. The unit is the gourde, equivalent in every respect to the French 5-franc piece, and coined at the Paris mint. Gold pieces are the 10, 5, 2 and i gourde, the latter of i. 613 grammes, 900 thousandths fine ; silver pieces, the gourde of 25 114 MONETARY SYSTEMS OF THE WORLD. grammes, 900 thousandths fine, and 50,' 20, 10 and 5 cent pieces, exact subdivi- sions in weight of the chief piece, but only 835 thousandths fine. No gold has been coined. A 5-cent piece of nickel and a i-cent bronze piece are also provided. The National Bank of Haiti, with a capital of 10,000,000 francs, issues notes to an amount of thrice its metallic reserve. The principal money of Haiti consists of irredeemable notes and subsidiary and minor coin. Gold coins of the United States are used, principally to pay customs dues. It is estimated that $2,000,000 of such gold, $2,900,000 of silver and $4,000,000 in bank notes are in circulation and in the banks. The Government frequently issues notes arbitrarily ; thus in 1892 about $500,000 such notes were in use, but appear to have been retired. SANTO DOMINGO. This neighbor of Haiti, formerly a Spanish dependency and overrun with Mexican coins, recently (1894) adopted a new system, with the single-gold stand- ard, and subsidiary silver redeemable in gold. The unit is the dollar of the United States, and subsidiary pieces are relatively much less valuable. The Mexican dollar is rated at 50 cents under the new regime. The former system was practically that of the Latin Union. Notes of the National Bank circulate. The monetary stock is very small. MEXICO. (Peso = 100 centavos.) As one of the chief producers of silver in the world, it seems natural that Mexico should continue a single-silver standard country. The ancient Spanish peso of 8 reals practically continues, as in ancient times, to be the unit ; although in some respects the law of 1867 modified the subsidiary pieces. This piece weighs 27.073 grammes or 417.79 grains of the fineness of 972 /^ ; it is divided into 50, 25, 10 and 5 cent pieces of exact proportions. The coinage charge is 4y%V per cent., and the ratio is 16.51 to i. Gold is also coined, but at the low fineness of 875 thousandths, in pieces of 20, 10, 5, 2j^ and I pesos, the latter 1.692 grammes or 26.111 grains; therefore worth 98.4 cents. There are 11 mints in the country ; the greater part of the annual coinage is exported, since the peso is the favorite coin in the Orient. Many hundred millions of the Mexican pesos have been melted down. An idea of the quantity furnished may be derived from the accompanying table of coinage. MONETARY SYSTEMS OF THE WORI^D. 115 Mexico has coined from 1537 to 1893 : Gold 124,341,596 pesos. Silver 3.32I.339.7S7 " Copper 6,906 203 ' ' Nickel 4,000,000 " Total 3.456.587,556 pesos. The silver standard is well maintained, the paper currency being at par. Ten banks issue notes ; the most prominent being the " Mexican National " and the " London and Mexico." The statements of all of these banks at the end of 1894 shows : (In pesos.) Resources. Liabilities. Cash 30,425,000 Loans and discounts 31 ,076,000 Accounts current 20,478,000 Other 13,037,000 Capital 15,420,000 Reserve 6.142,000 Circulation 28,427,000 Accounts current 33,836,000 Other 11,191,000 95,016,000 The present stock of money is : Gold $5,000,000 Silver 45,000,000 Subsidiary 5,000,000 95,016,000 Total $55,000,000 CENTRAL AMERICA. (Peso =. 100 centavos.) These States have fallen into the system prevailing in the vicinity : the single- silver standard with the peso as a unit — not like the Mexican, but like that of the South American States, and therefore akin to the Latin Union's system. The peso is 25 grammes, 385.8 grains of silver 900 thousandths fine ; half and quarter- pesos are of the same relative weight and fineness ; but the 10 and 5 centavo pieces are only 835 thousandths fine. Gold corns are provided for, but not actually in use ; pieces of the United States are met with not only gold, but silver as well. In fact the mint facilities being poor the coins of other States are used extensively, a local stamp being superimposed to give them currency. Bits or cut coins are also met with. The gold coins are the onza or doubloon 417.59 grains, .875 fine, value ^15. 73. 6, and the half-onza; 20 peso piece 497.806 grains, .900 fine, value J19.29.5 ; and divisions as in Mexico. The onza, it should be said, was formerly a piece containing an ounce of gold ; but it has been reduced. The total circulation of the five States may be summed up as : Gold $500,000 Silver 6,000,000 Subsidiary 2,000,000 Uncovered notes 4,000,000 Total $12,500,000 116 MONETARY SYSTEMS OP THE WORLD. GUATEMALA. The coinage in this State is very small in amount. The stock of silver is about 2,000,000 pesos. Three banks have note-issues amounting to 3,000,000 pesos, secured by silver to the extent of 50 per cent. American gold coin is at a premium of 85 per cent. The resources of the three banks amount to 17,828,037 pesos. COSTA RICA. "The Mint, Birmingham," coined in 1889, subsidiary pieces of the value of 256,722 pesos ; in 1892, 138,091 pesos. Two banks do business with a capital of 1,000,000 and 1,500,000 pesos respectively. SALVADOR. has recently opened a mint, in private hands. In 1889 10,000 pesos in nickel 3 centavo-pieces and 4,000 pesos ot centavo pieces were coined in Birmingham. The new mint has coined 70,585 pesos of silver and proposes to coin 1,000,000 pesos annually for five years. There are three incorporated banks with a capital of 3,800,000 pesos and a private bank with a capital of 1,500,000 pesos. NICARAGUA. There is very little money in circulation. The Government issues notes to the amount of about 600,000 pesos. HONDURAS. This State has coined 743,173 pesos of silver and 1,118 of gold since 1879. BRITISH HONDURAS. This colony is the only one of the American dependencies of Great Britain which is on a silver basis, corresponding in this respect with the States of Central America and Mexico. Notwithstanding the many attempts to introduce the British system, the money of account has for over fifty years remained the dollar of four "maccar- onis'' or shillings. The law of 1855 fixed the dollar as the unit in which public accounts were to be kept, rating them at 4 shillings, and the " rial " or " real " at ^ of the dollar. In 1864 the real was abolished and cents came into use. Changes in conditions brought about many difficulties in trading and finally, in 1887, the dollar of Guate- mala was adopted as the unit ; like dollars of South American States were accepted on an equality ; fractional pieces were made legal tender up to $50, and bronze cents to the extent of 50 cents. The bronze cent is the only coin proper of British Honduras. It is furnished from the London mint. No gold or bank notes are used, but it is contemplated issuing Government silver certificates to relieve the people from the weight of coin. The amount of silver in use is estimated at $500,000. MONETARY SYSTEMS OP THE WORIvD. 117 BRAZIL. CM;ireis=l,000 reis.) This republic adheres to the monetary system of its mother country, Portugal, quite closely, excepting that its unit, the milreis, is only half the value of that of Portugal. The single-gold standard prevails. The fineness of all coins is 917 (probably gi6%) thousandths. Gold pieces of 20, 10 and 5 milreis, and subsidiary silver pieces of 2, i and ^ milreis are pro- vided for. The gold 10 milreis weighs 8.964 grammes, or 138.347 grains, and is worth JS5.46.2, or 54.6 cents to the unit. The silver milreis weighs 12.750 grammes, or 196.758 grains, and is equal to about 50 cents. The circulation of the country consists of paper almost exclusively, both Gov- ernment and bank notes. The amount is about 570,000,000 milreis. The Bank of the Republic of Brazil, with a capital of 190,000,000 milreis, shares the function of issuing paper with the Treasury. Gold commands a very high premium. Minor coin of nickel 200 and 100 reis and of bronze 40 reis are largely coined. In 1891 alone over 4,000,000 pieces were struck. Banking is to a considerable extent in foreign hands. Of the principal banks of this class the London and Brazilian Bank furnishes the following report : Resources. Cash ;^3.990.388 Loans 6,244,713 Other 109,664 Liabilities. Capital ^^750,000 Reserve 500,000 Profits 298,908 Deposits and accounts 8,795,857 ;^io, 344,765 ^,^10,344,765 The coinage of Brazil since 1703 has been : Gold 280,000,000 milreis. Silver 44,000,000 " The stock of money is estimated at : Gold 14,000,000 milreis. Subsidiary silver 12,000,000 " Uncovered notes 550,000,000 " Total 576,000,000 milreis. URUGUAY. CPeso=100 centavos.) This country adopted her present system of money in 1863, but coined no pieces until 1887, when the Paris mint coined some silver for it to the amount of 1,000,000 pesos. The single-gold standard prevails. In 1893 the Chilian mint also coined for Uruguay 1,000,000 pesos of silver The peso of gold is fixed at 1.697 grammes, with a fineness of 917 thousandths (derived from Portugal through Brazil) ; its value is therefore ^1.03.4. The silver peso is of 25 grammes 900 thousandths fine, therefore equal to the French 5-franc. piece. Smaller coins are exact subdivisions, and of denominations of 50, 20 and 10 centesimos. 118 MONETARY SYSTEMS OP THE WORLD. Actually many American, the British and some other European gold coins circulate freely, but gold has been at a premmm for several years, the expansion from Argentina having seriously affected the former stability of Uruguay. Government notes were formerly issued, but have all been retired. Notes are issued by two British, one local, one Spanish and two Italian banks Of these we have a report of the London and River Plate Bank for 1894, as follows : Resources. Cash Z'S. 219.477 Loans 10,549,865 Other 155,421 ;^I5,924,763 Liabilities. Capital j^goo.ooo Reserve 800,000 Notes 570,000 Deposits and accounts 13,495,826 Other 158,740 ;^i5, 924,763 This bank also does business in the Argentine Republic and in Paraguay and Brazil. The estimated stock of money is : Gold $4,000,000 Subsidiary coin 1,000,000 Uncovered notes 9.000,000 Total $14,000,000 PARAGUAY. CPesD = 8 reals.) This interior state of South America has nominally a double standard, but is actually under a depreciated paper system. All sorts of coins circulate when they can be obtained. It is estimated that there is less than Jpgoo.ooo of money at coin value in the country. Notes are issued by the National Bank of the River Plate, and by the Gov- ernment; in the aggregate there is about 7,300,000 pesos of paper in use besides the Brazilian notes, which circulate freely. Gold has been quoted as high as 660. ARGENTINE REPUBLIC. (Peso = 100 centavos.) After a disastrous experience with depreciated currency Argentina adopted a system in 1881, modeled upon that of the Latin Union, supplanting the old peso of 8 reals. The peso was made the exact equivalent of the 5-franc piece, 25 grammes or 385.8 grains, 900 thousandths fine, with a gold peso (theoretic) of i. 613 grammes, or 24.89 grains, 900 thousandths fine, equal to 96.4 cents. The gold pieces actually coined are the Argentino and J4 Argentino, 5 and 2^ pesos respectively. Sub- sidiary silver pieces are 50, 20, 10 and 5 centavos ; they are exact subdivisions of the peso, therefore unlike the subsidiary pieces of the Latin Union, which are but MONETARY SYSTKMS OF THE WORLD. 119 835 thousandths fine ; nor is the country fully double standard since silver is legal tender only to the extent of $10. Gold has for a number of years been at a premium, reaching at times a quo- tation of 300. Depreciated paper now reaching fully 300,000,000 pesos, supple- mented only by small coin, performs the function of circulation. The following statements of the paper issues are of date late in 1894 : Government issues 85,000,000 pesos. Bankissues 215,000,000 " Of which all is uncovered excepting : Government notes secured by bonds 73,000,000 pesos Bank " " " " 37,000,000 " Say 110,000,000 pesos Of this amount 36,000,000 pesos are of denominations of 2 pesos or under. The Banco Nacional is reported to have a capital of 50,000,000 pesos, deposits of 40,000,000 and discounts of 50,000,000 ; coin, 570,000. It has 51 branches. Incorporated banks to the number of 14 and private banks, 38 in number, report : Capital 102,800,000 pesos. Deposits 87,400,000 " Profits 5,500,000 " Notes 90,000,000 " Cash 26, 100,000 ' ' Discounts 121,300,000 " Mortgage banks issue so-called cedulas, which circulate to the extent of 365,000,000 pesos. CHILE. (Peso = 100 centavos.) Although Chile has determmed to adopt the single-gold standard in 1896, she must still be classed as a double standard country. The unit, as is generally the case in Spanish South America, is the peso ; instead of dividing it into 8 reals it now has 100 centavos. Gold coins are the condor (10 pesos), doblon (5 pesos), escudo (2 pesos). The gold peso weighs i 525 grammes, or 23.538 grains, and is 900 thousandths fine, therefore worth 91.2 cents. The silver peso is of 25 grammes, 900 thousandths fine, therefore the equiva- lent of the 5-franc piece. Subsidiary pieces are in exact proportions both as to weight and fineness. The law of 1892 proposing the single-gold standard provides for a gold coin- age with 1. 5976 grammes of 9167^ fineness, and subsidiary silver of 100, 20, 10 and 5 centavos, 835 thousandths fine, thus combining the British and French systems. The legal tender limit of silver is to be 20 pesos. This sounds very well, but actually Chile, like most South American states, is on a depreciated paper basis, gold havmg been quoted as high as 290, and the 120 MONETARY SYSTEMS OF THE WORI^D. subsidiary silver has been debased to a fineness of 500 thousandths. Notes are issued by the Government to the extent of 30,000,000 pesos, and by banks to the amount of 17,000,000 pesos. The Government has probably 10,000,000 pesos in coin preparatory to re- sumption in 1896, when notes shall cease to be a legal tender. About 6,000,000 pesos of the debased subsidiary coin has been issued and is in use ; probably 1,500,000 pesos of the full legal tender silver (i-peso pieces) is also in use. Chile has coined since 1772 : Gold 66,000,000 pesos. And silver 39,000,000 " PERU. (Sol = 10 dineros ® 10 centavos.) The single-silver standard prevails in Peru -with the sol, equivalent to the 5-franc piece, as the unit. Subsidiary silver is coined in proportionate vifeights and of a fineness of 900 thousandths, unlike the French. Gold is also coined on the exact basis of the Latin Union ; but in small amounts only. The denominations are 20, 10, 5, 2 and i sols. Silver coins are the sol, }4 sol, J sol, dinero or tenth, and half-dinero. Copper coins of the denominations of 2 and i centavo, to the amount of 300,- 000 sols, are provided for, and are legal tender to the amount of 5 centavos. For many years Peru was under a greatly depreciated paper system ; but recently silver has been reintroduced ; all paper having been practically repudi- ated after the war with Chile. The silver coinage of Peru since 1874 has aggregated 28 million sols, but the greater amount has been exported. Peru and Bolivia produce and have for several hundred years mined vast quantities of silver ; the Peruvian mint has been in existence since 1565 ; but most of its product has been sent abroad. No record exists of the coinage ; but it is estimated that 6,000,000 pesos per annum, for 300 years, is the average ; this would mean fully 1,800,000,000 pesos; and since the Peruvian institution was regarded as second only to the Mexican, this amount is probably not far from the truth. BOLIVIA. (Boliviano = 100 centavos.) The silver standard prevails. The unit is the boUviano of 25 grammes, 900 thousandtfe#fine, equal to the 5-franc piece. Subsidiary pieces are of proportion- ate weights and of the same fineness, in 50, 20, 10 and 5 centavos pieces. Actually, however, the unit is not in use, and the 20 centavo piece has become the unit. Theoretically, Bolivia coins gold on the basis of the Latin Union, the onza MONETARY SYSTEMS OP THE WORI.D. 121 (25 grammes, value 15 bolivianos), and its divisions, being provided for. Actually there is no coinage or circulation of gold. The Bank of Bolivia and that of Potosi issue notes fairly protected by silver coin in which they are redeemable. They report : Capital 4,148,000 bolivianos. Specie 780,000 ' ' Circulation 1,000,000 " Balances 5,000,000 " Bolivia has had coined in Paris 1,000,000 pieces of 10 centavos and 2,000,000 pieces of 5 centavos, in nickel. ECUADOR. CSucr6 = 100 centavos. Ecuador, like her neighbors, has the single-silver standard. The unit is called the sucr^, and it as well as the divisional coins are modeled after the pieces of the Latin Union, except that subsidiary pieces are 900 instead of 835 thousandths fine. Until 1884 coins of Peru and adjacent States circulated ; since then there has been a national coinage although there is no mint. The pieces have been struck in Birmingham ; the value of the coinage was 1,835,000 sucrds. In faot, however, depreciated paper circulates ; notes are issued by three banks which are nominally required to keep one-third of the issues in specie. The amount of circulation is 3,500,000 sucr^s. These banks report : Capital 3,040,000 sucres. I-oans to the State 2 046,000 '* Cash 2,000,000 " Total resources 9t959-S9i ** Minor coin of nickel 5, t and % centavos pieces, and of bronze 2 and i centavos pieces, are used. COLOMBIA. (Peso = 100 centavos.) The single-silver standard prevails and the coinage is based upon that of the Latin Union in every particular, except that the unit is the equivalent of 5 units of the Union. Actually the country is now on a paper basis, with "forced circulation." The larger unit here and elsewhere in South America having been adopted to facilitate the change from the old Spanish system of the peso of 8 reals. Colombia has three mints which have coined since 1753, of gold 166,000,000 pesos, of silver 18,000,000 pesos. The gold condor formerly found here was a piece of 248.903 grains 900 thousandths fine, and worth I9.64.7. Colombia has found it profitable to have its small coins struck in Birming- ham ; 2,378,272 pesos have thus been coined, besides a home coinage of 3,364,407 pesos of debased subsidiary coin only 500 thousandths fine, recently substituted for the former coinage at 835 thousandths. 122 MONETARY SYSTEMS OF THE WORLD. The bank-note issues of the country, for which the Government is partly responsible, amount to about 16,000,000 pesos. The banks hold 3,000,000 of coin, almost all silver. The nickel coinage of about 3,120,000 pesos and the debased silver coinage of 2,839,474 pesos, are in use ; thus making the available circulation about 25,000,000 pesos. A reform in the currency is seriously proposed, including the retirement of the present paper issues. VENEZUELA. (Bolivar =: 20 centavos.) This State has the double standard except that its largest silver coin is no full legal tender beyond |ioo. In other respects the system is that of the Latin Union, the bohvar being equal to the franc. The Venezolano is the counterpart of the 5-franc piece and takes the place of the peso. Divisional coins are called centavos, just as in the other Spanish South American States ; the piece of 4 centavos being a fifth bolivar. The system is somewhat defective in this respect. There is no mint in Venezuela, but considerable gold is produced. The United States and Belgium have coined for her. It is estimated that 90,000,000 bolivars of gold and 14,000,000 bolivars of silver are in the country ; the former is probably exaggerated Two banks have the power to issue notes, but only about 6,000,000 bolivars are in use. Three banks chartered in England do business in South American states ; the Bank of Tarapaca and London, the British Bank of South America and the London Bank of Mexico and South America. They report for 1894 : Resources. Cash ;^I, 144,659 Loans 5i9i7i776 Securities 440,999 Otlier 122,585 _,^7, 626,019 Liabilities. Capital ^1,400,000 Reserves 500,000 Deposits 2,314,712 Otlier 3,411,307 ;^7, 626,019 THE GUIANAS. The greater part of the territory known by this name formerly belonged to the Dutch, and consequently the ancient guilders and stivers of Holland are even now in use. That portion ceded to the British in 1814 has gradually been brought under the British system ; but accounts, even in Government offices, are kept in dollars and cents. Silver was excluded as full debt-paying money in the British section in 1876. The Government found it advisable, however, to provide a 4-penny piece of silver to replace the former " bit." No gold actually circulates, but there is about 1720,000 of subsidiary coin and 130,000 of minor coin. MONETARY SYSTEMS OE THE WORLD. 123 Notes of the Colonial Bank, {300,000, and of the British Guiana Bank, $380,- 000, circulate freely. Dutch Guiana continues to use guilders and stivers, the latter equal to about X of a cent, the former 40 cents. French Guiana uses the French system, but the trade being insignificant, there is not a large stock of money. OTHER DIVISIONS. Guadeloupe and Martinique. — These two West India islands belong to France and have the French system of money, with the franc as the unit. Gold is not in general use. A bank m Guadeloupe issues notes in denominations of 5, 25, 100 and 500 francs, to the amount of about 5,500,000 francs, holding about two- fifths in specie. St. Pierre and Miquelon, near Newfoundland, are also French. The Falkland Islands, off the coast of Argentina, belong to Great Britian. The population, of about 5,000 souls, uses about ^(25,000 of British subsidiary and minor coin. St. Thomas and Santa Cruz in the West Indies, and Greenland and Iceland in the Polar regions, use Danish money. Curasao is a Dutch colony and uses guilders. 124 MONETARY SYSTEMS OF THE WORI,D OCEANICA. Australasia — Dutch East Indies —Spanish Kast Indies - Hawaii — Other Minor Divisions. AUSTRALASIA. (£ = 20 shillings @ 12 pence.) This section of the world embraces Australia, New Zealand and Tasmania. Australia includes Victoria, Queensland, New South Wales, South Australia, West Australia and North Australia. The British system of coinage is in full force, the two mints of the colonies, at Sydney and Melbourne, being under the immediate supervision of the Master of the Imperial mint in London. Prior to the act of Parliament of 1854, dollars, rupees, guilders, pesos and other pieces circulated side by side with the British coins ; this act, however, declared only the sovereign of the Royal mint and of the branch mint then estab- lished at Sydney, to be legal tender for all purposes. This mint has also coined subsidiary and minor coin since 1868. The former is legal tender to 40 shillings, the latter to one shilling. The mint at Melbourne was established in 1872, but for gold coinage only. The other portions of Australasia are furnished with coin directly from Lon- don or from these mints. As might be expected, a very large portion of the gold produced by Australia has found its way to England. From 1855 to 1889 the Sidney mint struck ;^6i, 718,000 of gold. The Melbourne mint from 1872 to 1889 ^40,681,400 of gold. Both, ^102,399,400 of gold. From 1874 to 1889 Australian gold coin was received by the Bank of England to the amount of ^36,958,000 ; prior to 1874 it is estimated that ;^22, 000,000 were so received. This is not, however, a fair index to an estimate of the amount of coin in those colonies ; for it is stated that the product of the mines of Australia to 1892 amounted to about ^'358,000,000, of which ^^307, 500,000 was exported; which would leave them about ;^5o,5oo,ooo at the end of 1892. The Sydney mint coined from 1855 to 1892 ^70,036,000 gold, and that at Melbourne ^49, 671, 029. The silver coinage of the Sydney mint from 1868 to 1S89 was ^361,175. No silver has been coined since 1889. Minor coin was issued to the amount of ^32,560. The Imperial mint furnished the Australasian colonies with ;^65,ooo of minor MONETARY SYSTEMS OP THE WORLD. 125 coin since 1874, and with ^1,812,000 of subsidiary silver, witiidrawing from cir- culation tiience ;^377,ooo of worn pieces. Notes are issued by seventeen banlcs and their branches, chartered by the Home Government. There are, however, a number of locally chartered banks, under a law of 1840. They are authorized to issue to the extent of their capital, subject to a 2 per cent. tax. New South Wales has a special banking law, requiring at least ^125,000 paid up capital, and note issues must be made a first lien upon the assets. Following are items from the statements of banks in 1S92 : Assets. Coin and Bullion. Notes. ^^60,627,000 53,318,000 20,552,000 9,691,000 2,838,000 17.558,000 ;^8,287,ooo 5,313.000 2,082,000 970,000 380,000 2,400,000 _;^I,208,000 1,439,000 575.000 400,000 89,000 960,000 New South Wales Total ;^i64,584,ooo ^19,432.000 ;^4,67i,ooo Tasmania has banks with a note issue of about /"i50,ooo and coin on hand, ^715,000. It will be seen that the notes are covered by coin, in this case always gold, fully thrice. In New Zealand attempts were made prior to 1856 to maintain a Colonial Bank of issue under local Government auspices. It proved unsatisfactory, however. The existing banks are required to furnish frequent (in most cases weekly) reports. A statement of the general condition of sixteen of the banks chartered by and reporting to the Home Government in London, for 1894, follows : Capital ;^I7,692,497 Surplus 4,384,395 Circulation 3,706,400 Deposits 120,993,531 Cash jf 27,209, 275 Securities 5,072,596 Loans 121,968,833 Other resources 7,422,834 Total resources ^f 161, 673, 538 Or say $800,000,000 During the recent troubles in Australia, largely due to a too free loaning of money upon real estate, many of the banks lost their surplus and some were entirely wiped out. The estimated stock of money is : Gold ^31,000,000 Subsidiary coin 1,400,000 Minor . Uncovered notes. 60,000 none. ;^32, 460,000 126 MONETARY vSYSTEMd OF THE WORLD. DUTCH EAST INDIES. Java, Sumatra, Etc. (Florin=100 cents.) The monetary system of the Netherlands prevails in all of the Dutch posses- sions now remaining in the East Indies. Coin has been furnished from the mints of the Home Government to the extent of 21,340,000 florins, and as much as that is in circulation and in banks. Minor coin to the amount of 8,200,000 florins is in use. Notes are issued by the Bank of Java, organized in 1828 with a capital of 6,000,000 guilders (or florins). Its circulation amounts to 45,500,000 guilders; two-fifths of the notes must be covered by specie in the vaults. PHILLIPINE islands AND ADJACENT SPANISH POSSESSIONS. Here the ancient Spanish monetary system still holds sway, although shorn of much of its power by the preference given in modern days to the Mexican silver dollar. The double standard is supposed to exist, with a gold dollar at 1.631 grammes, 875 thousandths fine, and worth jSo.98.4 ; a silver dollar of 25.96 grammes, 900 thousandths fine, and worth at our coining rate Jo.93.4 ; subsidiary pieces of exact proportions. Minor coins are also furnished from Spain. A local bank issues notes fully covered. OTHER DIVISIONS. The Fiji Islands have recently come under British rule, and the British system has been introduced. About |8s,ooo in subsidiary silver has been supplied, and there is probably other coin in the islands amounting to f 250,000. Small amounts of notes issued by the Bank of New Zealand and the Union Bank of Australia circulate. New Guinea is provided with the little money she needs by the adjacent British colony of Queensland, thus introducing the British system, in that section of the island, and Java supplies the Dutch settlements. Borneo. The northern portion of this island is m control of the British, but independent in a sense. Its monetary system is similar to that of the United States, as far as it goes; the chief medium of circulation consists of 3,200,000 bronze cents and half-cents, recently made ; silver pieces of small denomination are also used, and there is a note issue of about |ioo,ooo in i, 5, 10 and 25 dollar notes. In addition the British Company of North Borneo has had 9,000,000 cents made for use here. The Dutch portion of the island is under the supervision of Java. Hawaii. The coinage of these islands is exactly like that of the United MONETARY SYSTEMS OF THE WORLD. 127 States. The only native pieces are silver dollars and subsidiary coins struclc at the San Francisco mint in 1884. Money of the United States is generally accepted, and its gold coins are legal tender to any amount ; silver coins to the amount of f 10. Coin certificates issued by the Government have a limited circulation. Samoa. The coins of the United States are by ordinance made current, but English and German coins are also used. Other islands in the Pacific Ocean use very little money, and then chiefly the smaller pieces of the country which for the time has control of their commerce. 128 MONETARY SYSTEMS OP THE WORLD. UNITED STATES OF AMERICA. A Speciai, Study of the Volume of the Money of the United States. 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. A table is first given showing the estimated circulation from 1800 to 1861, and another covering from 1862 to 1872. Table Showing the Money in the United States, the Amount in Use, the Population and the Amount in Use Per Capita (in Millions) 1800-186 1. 1800. 1810. 1830. . 1831.. 1832. . 1833- ■ 1834.. 1835- ■ 1836. . 1B37.. 1838. . 1839.. 1840. . 1841 . . 1842. . 1843- • 1844. . 1345- • 1846. . 1847. . 1848.. 1849. . 1850 1851. 1852. . 1853- ■ 1854.. T85S-- 1856.. 1857.. 1858.. 1859-. i860. . 1861., Year. State-Bank Total. Specie in In Circu- Popula- Per Notes. Treasury. lation, tion. Capita. 17 II 28 2 26 ^\ $4.99 30 28 58 3 55 7 7.60 24 45 69 2 67 9= 6.96 32 61 93 6 87 I2« 6.69 32 77 109 6 103 '3! 2-24 30 91 121 4 117 136 li'^ 31 91 122 2 120 14 8.60 41 95 136 12 124 K 8.64 SI 104 155 9 146 14° 9.86 65 140 205 S 20D 'S^ 13.17 73 149 222 5 217 15= 13.87 87 116 203 5 198 i6> 1233 87 135 222 2 220 16" 13.26 83 107 igo 4 18S ^7; 10.91 80 107 187 I 186 17" 10.59 80 84 164 .. 164 181 9.02 go 59 149 I 148 18' 7.87 100 75 175 8 168 I9» 8.68 96 90 186 S 178 19' 8-95 97 106 203 9 194 205 9-43 120 105 225 2 223 21' IOS9 112 128 240 8 232 2I» 10.66 120 "5 235 2 233 22' IO-34 IS4 131 285 7 278 23' 12.02 186 155 341 II 330 24 13.76 204 172 376 IS 361 248 14-63 236 188 424 22 402 25' 15.80 241 205 446 20 426 26* I5.IO 250 187 437 19 418 273 15-34 250 196 446 20 426 231 1516 260 ziS 475 18 457 28° 15.81 260 155 415 6 409 29' 13-78 250 193 443 4 439 30' 14-35 23s 207 442 7 435 3iJ 13-85 250 202 452 4 448 32' 13.98 In the tables the amounts are given in the nearest million (thus 15,789,- 000 is stated as 6) ; slight inaccuracies in making up aggregates will there- MONETARY SYSTEMS OF THE WORLD. 129 fore 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. Table Showing the Money of the United States, 1 862-18^2. (Specie payments suspended December, 1661.) 4J c pa a , M.S W w s Metal. Paper. Total. Metal. Paper Total. Metal. Paper. Total. Og-S §s ■3" E ^0.0 I.S I 1873 152 804 956 77 752 829 75 52 127 71 56 88s 1S74 l6[ 847 1,008 89 761 850 72 86 158 82 76 926' 187s 138 837 975 75 73S 810 •63 102 165 80 85 895 1876 15s 784 939 94 692 786 61 92 153 62 91 877 1877 207 778 98S "3 677 790 94 lOI 195 96 99 889 1878 301 763 1,064 151 656 807 150 107 257 93 164 971 1879 363 725 1,088 186 638 824 177 87 264 49 215 1.039 1880 500 725 1,225 300 678 978 200 47 247 35 212 1,190 1881 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 23s 1.413 1883 776 887 1,663 432 1,236 343 83 426 184 242 1,478 1884 799 917 1,716 426 816 1,242 373 loi 474 231 243 1.48S 1885 872 973 1,845 424 866 1,290 448 107 555 310 245 1.535 1886 903 920 1,823 457 792 1.249 446 128 574 265 309 1.558 1887 1,008 g02 1,910 480 837 1. 317 528 65 593 276 317 1.634 1888 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 1,65s 1890 1,152 1,004 2,156 484 945 1,429 668 59 727 471 256 1,68s 1891 i,ie>2 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 1894 1,251 1,170 2,421 607 1,057 1,664 644 "3 757 61S 142 i,8o5 * The fiscal year ends on June i: It will be observed that the metallic stock has increased $1,099,000,000 — due not only to the acquisition 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 over 100 per cent., a larger ratio than is shown by the money in circulation, indicating generally a much bet- ter condition of the Treasury. This latter statement must, however, be consid- ered in connection with the fact that since 1S79 the Treasury has held about Jioo, 000,000 as a reserve for the redemption of its notes ; but even if this be elimi- nated the Treasury's net cash has, with the exception of the last three 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 risen from jSi35,ooo,ooo in 1873 to over $700,000,000 in 1888 ; diminishing under the influence of European demands in more recent years. (As to over-estimates, see table G.) The increase in silver dollars and bullion has been continuous since 1878, MONETARY SYSTEMS OF THE WORLD. 131 B. Table Showing by Kinds the Money Composing the Entire Stock. (In millions of dollars.) > Metallic Stock. Paper Stock. ■ll U3 2 . n B := 0::: fi3 w ■i ^1 'S S>1 rt w S ^ s- \ -A 1^ "rt 2 o c •offl "1 ll I •=S3 T3 I 0) 5 m MIS 0^ 2S 1873 13s 17 152 39 356 347 32 30 804 956 1874 142 19 161 23 382 352 59 31 847 1,008 1870 no 23 138 22 376 ■ 354 58 27 837 975 1876 "3 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 I 088 1880 352 69 79 500 8 12 347 344 14 725 1,225 1881 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 • 3^6 13 887 1,663 1884 S4S 179 75 799 98 121 347 339 12 917 1,716 1885 589 208 75 872 140 140 347 317 30 974 1,846 1886 591 237 75 903 131 116 347 . 308 18 920 1,823 1887 6SS 278 75 1,008 121 146 347 279 9 902 1,910 1888 706 310 76 1.092 142 229 347 252 15 985 2,077 1889 680 344 76 1,100 154 263 347 211 17 992 2,092 1890 69s 380 77 1,152 157 302 347 186 12 1,004 2,156 1891 647 437 78 1,162 152 314 347 5 167 24 1.054 2 216 1892 664 491 77 1,232 157 332 347 10 I 172 30 1. 139 2,371 1893 592 538 77 1.207 94 331 347 14 7 179 12 1,110 2,317 1894 629 546 76 1,251 66 337 347 15 3 207 59 1,170 2,421 when the acqusition began, as much as ^546,000,000 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 ; m 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 1883, 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 circulation (including bank holdmgs). 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 {to be ana- lyzed hereafter) followed by six years of further increase of the volume, reach- ing its maximum in 1894. 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 132 MONETARY SYSTEMS OF THE WORI.D. C. Table Showing by Kinds the Money in Circulation. (In millions of dollars.) i Me tal. Paper. c 1 B >.a 16 ■J5 W J >,« ■»>, 3 E o « ■3. '0 2' h "o 6i T3 d l-r-l 2d c .2 c taO 1 H c i 1873 63 14 77 3+ 317 339 32 30 752 829 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 56 57 113 32 284 301 55 5 677 790 1878 8S I 65 151 25 275 310 .46 656 807 1879 III 8 67 186 15 .. 272 321 30 ^3^ 824 1880 226 19 55 300 8 6 313 337 14 678 978 1881 315 29 53 397 6 39 316 349 12 722 1,119 1882 358 32 52 442 5 55 312 351 13 736 1,178 1883 34S 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 lOI 302 307 3? 867 1,291 1886 358 S3 46 457 76 88 306 304 18 - 792 1.249 1887 376 55 49 480 91 142 3i8 -277 9 837 1.317 1888 392 56 5° 498 120 200 294 245 15 . 874 1,372 1889 377 54 51 482 117 257 300 207 17 898 1,380 1890 374 56 54 484 131 297 323 182 12 945 1,429 1891 408 58 58 524 121 307 324 40 162 21 975 1.499 1892 409 57 62 528 141 327 312 98 167 30 1. 075 1,603 1893 404 57 63 526 93 326 321 141 175 12 1,068 1,594 1894 498 51 58 607 66 327 269 135 201 59 1.057 1,664 estimates be not admitted, has been large ; tliis 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 Gov- ernment 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 performed 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 18S6, of the smaller denominations of this medium. Subsidiary silver, the circulation of which was materially lessened by the dis- placing effect of the output of silver dollars, has since the issue of the pieces of new design gained in popularity. The reported metallic circulation appears to have increased more than 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 certifi- MONBTARY SYSTEMS OP THE WORLD. 133 cates, has been very near the limit fixed by law throughout the period. National-bank notes have decreased largely, showing only a slight reaction in the last two years from the steady decrease since the maximum year, 1882, when the volume increased under the influence of the issue of cheap Government bonds, which were subsequently redeemed. The increase during the panic of 1893 is fairly kept up. 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 $104,000,000, due largely to the issue of Treasury notes for silver purchases 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 representative certificates during the following year, the amount of these forms of money having diminished from ^5550,000,000 in 1892 to $497,000,000 in 1893 ; the aggregate circu- lation 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. D. — Table Showing by Kinds the Money in the Treasury. (In millions of doll ars.) Belonging to the Treasury. 1 Deposit Only. , i >> Metal. ' Paper. 73 V "H •0 . "o S oi u E C •acQ 0^ 1 1 H ■3" > nited States Notes. Treasury •Si? 13 -2:-s ill > k. 0) ■^ H CB Crt in w D ^ z p 32 71 1873 33 3 36 5 7 ■ 8 20 5^ 39 127 1874 45 4 49 5 10 12 27 76 23 -. 59 82 158 1S75 35 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 5 53 9 21 16 46 99 41 55 96 19s 1873 84 13 7 104 19 2 26 . 13 60 164 44 2 47 93 257 '?Z9 120 30 9 159 3 45 ■ 8 56 215 15 3 3t 49 264 1880 118 37 24 179 7 19 . 7 33 212 8 13 14 35 247 1881 IS7 IS 27 199 .. 12 19 - ■; 36 23s 6 51 12 69 304 1882 143 24 28 195 12 22 6 40 235 5 67 13 85 320 1883 116 28 28 172 22 16 24 . 8 70 242 82 89 13 184 426 1884 107 20 29 156 27 23 28 . 9 87 243 98 121 12 231 474 1885 106 30 31 167 14 39 15 ■ 10 78 245 140 140 30 310 555 1886 102 68 29 199 55 28 23 • 4 no 309 131 116 18 265 574 1887 158 76 27 261 30 4 20 2 56 317 121 146 9 276 593 1888 172 25 26 223 22 29 38 . 7 96 319 142 229 IS 386 70s 1889 150 26 25 20 r 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 15 20 122 3' 7 I I 6 55 177 152 364 24 540 717 1892 99 15 114 15 5 5 4 5 34 148 157 433 30 620 768 1893 94 3 12 109 I 5 14 6 4 30 139 94 478 12 584 723 1894 6S S 18 88 10 19 I 3 7 54 142 66 490 59 61S 757 Note. — To ascertain the amount oi free gold in the Treasury, add amounts in first and fifth, columns. 134 MONETARY SYSTEMS OE THE WORLD. The first section is devoted to the money belonging to the Government, repre- senting practically the surplus in the Treasury at the end of each year. From 1879, however, this surplus includes the |ioo,ooo,ooo reserve, although this amount was not separately and specifically treated as such reserve in the finan- cial 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,ooo,ooo above the reserve, and with the gold certificates held ($14,000,000) made the entire stock of available gold only |20,ooo,ooo. 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 130,000,000, and the certificates lying useless in the vaults aggregated 139,000,000 ; and this silver hoard was constantly increasing, threatening to deprive the Treasury of all its free gold ; in fact, as will be seen, the silver stock, dollars and certificates, increased to $96,- 000,000 by the end of 1886. Accordingly bond redemptions, which had kept the surplus at lower figures, were for a time discontinued, and in i8S5 the Treasury had added to its gold holdings (including certificates) $37,000,000 ; moreover, soon after the end of the fiscal year, the issue of $1, $2 and $$ 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.,posf). The silver purchase law of 1890 (which, as has been explained on page 31, 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 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 iSgo stood at 1190,000,000, fell to $118,000,000 in 1891, to $114,000,000 in 1892, to $95,000,000 in 1893 and to $65,000,000 in 1894, a loss of $125,000,000 in four years. The remainder of the gold exported was provided by the banks, which during the same period surrendered $gi, 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 suspen- sion of the issue of gold certificates in 1S79 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 MONETARY SYSTEMS OP THE WORIyD. 135 money of Government issue since that date has been $554,000,000, 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 Gov- ernment 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, ulti- mately, indirectly dependent on the same stock. (Amounts in millions of dollars.) End of Fiscal Year. 1878 187Q, 1880 1881 1882 1883 1884 188S 1886 1887 1888 1889, 1890 1891 1892 1893 1894 Free Gold in Treasury. Notes in Circulation,* 104 120 118 157 143 138 134 120 157 187 194 187 190 118 114 95 65 321 302 327 328 325 323 319 331 324 327 307 317 335 385 440 474 463 Per Cent, of Gold to Notes 324 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 71 AH Paper in Circu- lation.* * 631 623 670 716 731 744 745 739 716 746 754 781 814 854 934 975 991 Per Cent, of Gold to Paper. 16.S 19.4 17.6 21.9 19.6 1S.5 18 16.2 21.9 25.1 257 23-9 23-3 13-8 12.2 ,98 5.6 * Includes Treasury notes after 1890. * * Includes United States notes, Treasury notes, National Bank notes and silver certificates, but no gold certificates, which are secured by gold in full. The existence of a surplus of subsidiary silver, heretofore mentioned, is man- ifested 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 any- thing but " change," unless specifically demanded, is idle cash in the vaults; only in 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 asset. 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 f I and $2 together, but separating the $5, $10 and $20 notes ; again group- ing the J50 and |ioo 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 136 MONETARY SYSTEMS OF THE WORLD. V H •I«10X cncocotsco oiMwvoco oohoo^doo mmmoo a>y!) MHHHH HHM«(N «(N1N««W dWMNWM •S350^ ijUEa iBUopie;^ 8 (^ O %^%> OOMHpJ «M0*0 C^OO S -O to ID iD^O *068l JO s3?o^ AinsBaJX ..|>,l-t- CT- a>00 •S31EDIJI1I33 JSAUS (M00\ tvt^NO'+O rNHOHtN.lO NO cn ■^lOioirjoo oo H H M o O > ■l^jox ■^COOClTl- C7vO\OCM/l iOfOt^O\MLO cn«iotx -^^o MIHIHHtH MMMHH MI-IHHIHOI «««««« ■S350^ ^lUBg i^uopE^ 00 cnuTO Lo Tf-\o w OOO •!*■ c^ H moo « omn in O h m iMcowoCT» o\a>oocr. c^oo oo oo in c^ lo ui tj- lo io*o •069X JO S330JSI AjtisEaJX -■ omiN-^ -I-ICICOCO •SSlOJsI S31E3S pSJIUn VO O UTO 0\ ^J^'*-lOO^rN. hvOvCOi^m OOOOOOMdCO ■^lO'*-'^'^ lOunvOvOvO IN Cn t>.0O ONOO LOiOLO^OVOLO •S31EDIJIJJ33 WAJIS OOCM "OWOW -t-00 looooHo a>oo H § c O •1B50X NfOMdvO C>cniO00(M rKNHvOwin u-)OwiOHtN VOVCOvOiO Tj--d-^Tj-io lOiO^OrO'^iO lO'O VO "O In C-N 'sajo^ 2[uEa; |BuoijBj;[ O ON CnVO "O tNtN^J-mO WHtH ■0681 JO s3io^s[ AjnsBaix t^ ^VO CO MON ■ssjo^ saiEis paijujl rn -^ ""i-vO O N\OHii-)0 m<-'0>0000 IN-O \0 ^^^0 VO ■S3JEDlfpJ33 J3A1TS roto oo Tj-oo ^t- o>oo « -q- -^ ^ Tf rr en a'§> g;f?^s& •JE3A IBOSI^ JO pU3 KItR'Rfc 'RR.g.i^^ S'^S^^^ S'd.'S.n,^^ ooraAojco oooooooooo ooooooajcooo S ^ooxmS' MONETARY SYSTEMS OF THE WORLD. 137 •IBJOJ, ■sajojsj 3(UEa: jBaoi^B^ 'O68I: }° S350j^ XjnsBaix •s3jo^ sajBig pajiuxi ■S31BDm]J33 -laA^tg MLOU-)-^ Cv.HCJiTl- I H LO « N H ■s3ieDgn.i33 pioQ CO (N H 00 O CO 1000 IJI LO 10 t-^00 OTiflO COTj-t^t^plO\ en a w (N Tf ^t- M 10*0 ooovo Nw^Nc^rf W 1-1 hi H H H H •F50X « 10 1^ o\co otN.oiNO tMinr^oow t^-Meirh o\oo OHHMW HOHMCl rf^f^'^HC'J HHMC1M« •ssjo^ ^lu^a paopB^ '0681 JO ssjoj^ AmsB3Jx •5310^ sajBJS p35tuxi ■s9}B3iji)j33 JaAjjg ■ CO IN cn. a> -^co c^ Oi ^s •S35eogpj33 ppo H io\0 MOO 0\0^ O CI CO"+ M M (M « « « •SajOJ^I T^OEa IBUOTJB^ '0681 JO sajo^ XinsB3Jx ■s3io^ ssjBJS psipXl •^ H CTi -J- W »0 0^ H M M o On H H w H •ssiBDgijja^ J^Ajig ■S31BDgiJJ33 p|0£) OncOPIMHCO "-"WThMCTvC-s uca^ l^^sij JO pua CO-^TJT^ Cn. 00 ON O H n CO-^uTO t-^00 OnO H cm CO -^ fv r^ t-^ l->. (>. !>. t^OJ ooco oooooooocooo ooonOvOnOnOn 00 00 00 CO 00 00 00 00 CO 00 00 00 CO 00 CO 00 000000000000 138 MONETfARV SYSTEMS OP THE WORLD. notes opened a large field for the certificates. The elimination ft-om the circula- tion 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 J20 is the smallest denomina- tion) 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. 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 com- parisons intended to be made. It may be fairly estimated that one- half the amount of notes held is composed of small denominations; on the other hand, the certi- ficates, if considered as large denominations, would be offset by such denomina- tions in use for purposes other than reserves. The following table (F.) presents a combination of all the amounts of paper money under $20, and of those under that denomination, with the proportion that each general class bears to the entire issue of paper. The amount of small notes has increased since 1872 by $304,000,000, and from the lowest point (in 1877) by $348,000,000. The proportion of the entire paper issue in small denominations fluctuated 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 denominations 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 denominations not e.xceeding |2o. An increase in the demand during the busier 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 resumption of the issue in 1883, causing a marked increase in the volume of " bank-reserve 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 J50 and f roo, since it was found impracticable to keep any considerable amount of the large issues in circulation. The same is true of NationaUbank notes. MONETARY SYSTEMS OP THE WORLD. 139 F.^ Table Showing the Kinds and Proportions of the Small and of the Large Denominations of Paper Money. (In millions of dollars.) 1 Small Denominations ($1 to $20). Large Denomi lations ($.50 to $10,000). i "o ficates. Iver ficaaes. I t « 5 J. s e 5 is. 3S 4j (in S J « 0^ t ■^-1 ,■ T3 U X. MS p 1 Is 2 u |l H^l "«1 t-i W (J 5 1 » h P,rH & Z CO H 207 ^H 6 1873 239 296 535 72.1 39 117 51 27.9 32 1874 . • 253 ■ 299 552 72.9 23 129 53 205 27.1 59 187s 239 . 298 537 714 22 137 56 215 28.6 58 1876 237 276 513 70.0 29 133 57 219 30.0 33 1877 227 264 491 68.4 41 133 53 227 31.6 55 1878 224 - 273 497 69.4 44 123 51 219 30.6 47 1879 215 . 280 495 713 16 2 132 49 199 28.7 31 1880 • - 4' 253 ■ 293 550 77-4 8 8 95 50 i6r 22.6 14 1881 . 38 264 . 301 603 79-5 5 12 84 54 155 20.5 12 1882 ■ 54 259 ■ 303 616 79-4 5 II 89 55 I bo 20.0 13 1883 9 72 260 298 639 731 73 16 88 58 235 26.9 13 1884 3 96 254 . 282 645 7'-3 85 25 93 57 260 28.7 12 1885 J 2 104 246 . 262 624 66.1 128 37 loi 54 320 33 9 30 1886 I 2 95 243 . 258 608 67.3 119 21 los 50 295 327 18 1887 ] I IBS 257 236 640* 71.6 no 10 91 43 254 28,4 9 1888 ] 3 221 262 214 710 732 129 8 85 38 260 26.8 IS 1889 I I 256 24s • 179 691 70.9 143 7 102 32 284 29.1 17 1890 I 2 293 266 ■ IS7 728 73-4 145 9 82 28 264 26.6 12 189I ] 4 297 274 3 7 142 764 74- 1 138 17 73 13 25 266 25-9 24 1892 ] 2 302 274 7 9 146 813 73-3 14s 29 75 21 26 296 26.7 30 1893 9 296 261 12 7 151 844 76.9 85 35 87 20 27 254 23.1 12 1894 7 299 238 II 8 177 839 75-6 59 33 109 35 30 271 24.4 59 * As to discrepancy see p. 138. 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 50 per cent, of the amount of the United States notes which they repre- sent are in small denominations, as stated above. In the table designated G., an estimate is presented of the net stock of effec- tive 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 1135,000,000 ; 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 ; $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 reduc- tion of $27,000,000 in the estimate, makingthis $108,000,000 instead of $135,000,000. 140 MONETARY SYSTEMS OF THE WORLD. The production of gold during this period of twenty-one years was about f 745,000,000 ; the imports of gold have amounted to about f66i,ooo,ooo, making a total acquisition of |i, 406,000,000 ; the exports of gold aggregated 1742,000,000, leaving a net acquisition of ^664,000,000. Adding this to 1135,000,000, the original estimate, gives $799,000,000 as the supply of gold ; the mint estimates give the amount in the country at the end of the fiscal year 1894 as $629,000,000, which would leave but $170,000,000 consumed in the arts in twenty-one years ; or if the reduced estimate of |io8,ooo,ooo be used, the consumption in the arts would have been but $143,000,000 ; 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 herein presented a much smaller sum than this has been (tenta- tively) deducted from the amount acquired, viz., about $260,000,000, leaving the amount of the total gold stock (coin and bullion) $512,000,000 at the end of 1894. A revised estimate of the amount of gold outside of the Treasury is thus G. — Table Showing Approximately the Net Effective Money and the Amounts Per Capita. , i Revised Estimates. >i Amount Per Capita of is V >• S I J 3 ^ 0) a" 3 1 11 Si. rt 20 1.1 si 2.S CO so > to li W K . c H U V 1 3 1 c .2 3 u a 8 '0 "3 a (i< u rf E w 2 H 3 CI P rt t W (In m illions of dolU rs.) ^•5 20.S7 I-.34 $ 19.23 259 1873 13s 27 108 3^. 802 56 858 417 1874 142 23 119 51* 827 76 ?°l 8.4 21.09 1.77 19.32 278 42.8 1875 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 44t 45- 1 1877 ^45 10 135 46 780 99 879 ^1-3 18.98 2.14 16.84 2.91 463 1878 213 27 186 58 780 164 944 174 1983 3 44 1639 3-91 476 1879 246 31 215 80 793 215 I 008 21.3 20 61 4-39 16.22 4-39 48.9 1880 352 35 317 191 943 212 1. 155 183 23-05 4-23 1882 6.21 SO. I I88I 478 "•l 437 274 1,078 235 1. 313 17.8 25-59 4-58 21.01 8.52 SI 3 1882 507 46 461 313 1,132 235 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 g.i6 53 7 1884 64 481 270 1,178 243 1,421 17.1 25.88 4.42 21.46 8.76 54-9 iSSq 589 70 519 272 1,220 24s 1.465 16.7 26.11 4-36 21.75 925 56 i i836 591 72 519 286 1. 177 309 1,486 20.8 2588 5-38 20.50 9.04 57-4 1887 6SS 84 571 292 1.233 317 1.550 20 2 26.40 S-40 21.00 9-73 58.7 1888 706 91 61S 301 1,281 319 1,600 19.9 26.66 531 21-35 10.25 60 1889 680 97 5S3 279 1,283 278 1,561 17.8 25.46 4 53 20.93 9-51 61.3 1890 693 99 596 275 1.330 256 1.586 16. 1 2533 4.09 21.24 952 62.6 1891 647 loS 542 3^3 1.394 177 1. 571 II-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-S 1893 592 112 480 292 1,482 139 1,621 86 24.19 2.07 22.12 716 67 1894 629 117 512 381 1.S46 142 1,688 8.4 24.64 2.07 22.57 7-47 68.S * This seems improbable, but is according to the statistics. MONETARY SYSTEMS OF THE WORIvD. 141 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 reached. The effective stock, it will be observed, shows no decrease after the contrac- tion 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 1893, 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}i 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 of 8.4 per cent, in 1894. The effect 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 Z^^- capita of the effective stock, of the amount in the Treasury and of that in circula- tion, 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 fluctua- tions 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 per capita up to and beyond that of 1874. The loss of gold, beginning in 1889, reduced the amount from the maximum of J26.60 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 reserve, was, for reasons heretofore given, increased in 1886 beyond the normal requirements, 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 per capita, the fact impresses itself on the observer that the needs, including the reserve requirements of banks, are somewhat in excess of |2i.so per head of population. The amounts shown to have been in circulation in 1890 to 1894 were therefore excessive, and had it not been for the abnormal hoarding following the disturb- ances 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 in- clude the gold necessary for the ultimate 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. 142 MONETARY SYSTEMS OF THE WORLD. A column is devoted to the gold stock per capita according to the revised estimate, to show the fluctuations which have taken place. About fe, or some- what 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 aggregate, is illustrated on more than one occasion, after resumption finally placed all our issues upon an equal footing. In 1883 the amount of circulation per capita was very nearly JS22, the increase over preceding years having been caused (as shown in the preceding tables) by the large issue of silver certificates during the period when National-bank issues were at their highest ; accordingly 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 for additional circulation existed, caused another outflow of gold in i885. The same process was repeated in 1888-9, and 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 |88,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. 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 statements 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 amounts /^r 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 according 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 %\2 per capita, 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, MONETARY SYSTEMS OP THE WOBIvD. 143 H. — Table Showing Approxunately the Supply of Retail Money, and the Atnounis Per Capita. Silver Dol- lars, Frac- v-' Small Notes. tional Cur- rency and Small Notes and Silver. Gold Coin. Small Notes, Silver and Gold Coin. > Silver. o w c 3 g 1873 673 III 784 157 133 II 144 162 802 1,710 \h 1874 717 144 861 172 144 27 171 160 86s 1,740 §ls 187s 732 166 898 180 133 28 161 165. 924 1.723 1— -O^i 1876 706 158 864 173 135 29 164 170 941 1.7" \s§~ 1877 668 227 895 179 123 37 160 183 866 1,712 1 = S, 1878 677 143 820 164 128 31 159 179 880 1.795 ■5-i.s 'c?9 768 167 935 187 138 39 177 178 802 1.798 0, 1880 967 209 1,176 235 174 55 229 203 819 1.724 74 1881 1,112 26t 1.373 275 173 41 214 221 892 1,640 84 1882 1,119 282 1,401 280 175 42 217 22s 967 1,464 176 '=|3 1,168 335 1.503 301 188 43 231 264 1,025 1.338 126 1884 1,099 325 1,424 28s 220 54 274 294 1.073 1,227 III 1885 1,248 344 1.592 318 263 61 324 382 1.095 1,196 31 1886 1,302 343 1.64s 329 22s 39 264 384 1,141 1,146 50 1887 1.388 448 1,836 367 24s *50 *295 354 1.235 1,022 124 1888 1.544 410 1.954 391 268 *6o *328 368 1.364 951 71 1889 i>6SS 507 2,162 432 264 »6o *324 387 1.465 830 121 1890 I.7S9 553 2,312 462 283 »66 '349 356 1.525 725 loS 1891 I.7S9 557 2,316 463 297 *70 *367 385 1.623 611 114 1892 2,022 648 2,670 534 327 '74 *40i 428 1,712 585 26 1893 1,814 707 2.521 504 346 *78 *424 377 1.78S 585 00 1894 2,271 658 2,929 586 404 *8o *484 471 1,748 635 00 * Partly estimated. t Excluding National-bank notes. X Excluding Pacific Railroad Aid Bonds. 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 per cent, 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 in the banks. In this connection the portion of Table F. showing the large denominations of paper (of which the bank reserves are largely 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. 146 MONETARY SYSTEMS OP THE WORLD. The first portion of table I. shows the relative increase in the volume of the commercial circulation which constitutes fully 90 per cent, of the aggregate of the " tools of exchange " utilized in our extensive internal commerce. Noteworthy 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 $650,000,000, and in the six succeeding years to $1,078,000,000. (2) The growth of deposits in State banks, while amounting to only $547,000,000 in the entire period, was propor- tionately larger than that of deposits in National banks. (3) The several periods of financial disturbance are clearly marked, viz., 1877-8, 1883-4 a"d especially 1892-3. (4) In only two of the years enumerated did the cash reserve held 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 and 1894. During these years small notes were held to a larger extent, and in 1874, 1884, 1890 and 1893 clear- ing-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. 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 changing the aggregate. In the twenty-two years the production of gold amounted to $781,000,000, the imports to $671,000,000, and the exports to $788,000,000, involving a transfer of $1,459,000,000, equal to more than one-third of the world's entire stock, with a net result of a loss to the United States of $117,000,000, 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 $1,459,000,000 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 $300,000,000 to other nations. Of our product of $1,120,000,000 we have therefore kept for our own use (assuming all of our importations to have been re-exported) the sum of $820,000,000, of which, as was shown in table B., $605,000,000 has gone into circu- MONETARY SYSTEMS OE THE WORLD. 147 K. — Table Showing the Gold and Silver Movement, etc. (Amounts in millions of dollars.) Gold, U. S. Silver, U. S. Excess of * 1 .H ,0 v> P ■w r tJ '^ X, w £ •32 > 3 a E 1-H i p. s p. w 3 1 Oh E 1*- 8 1 .3 SiO E2 1 1873 36 9 45 36 32 13 40 27 $1,298 1592 1874 35 19 34 15 37 9 33 24 1.282 16 17 187s 33 'J 67 53 34 7 25 18 1.250 16.52 1876 37 8 31 23 35 8 25 17 I -159 1794 1877 43 26 26 39 IS 30 15 1.202 17.20 1878 49 13 9 4 42 16 24 8 1.152 17-94 1879 45 6 S I 43 14 20 6 1. 116 18.55 1880 37 81 4 77 40 12 13 I 1.144 18.06 I88I 35 100 3 97 41 II 17 6 I -135 18.15 1882 34 34 32 2 45 8 17 9 1.138 18.19 1883 31 18 12 6 46 II 20 9 1. 119 18.48 1884 30 23 41 3 8 48 15 26 II 1.115 18.56 188s 32 27 9 18 50 17 34 17 1.092 18.92 1886 33 21 43 22 51 18 30 12 1033 20.04 1887 34 43 10 33 52 17 26 9 .981 21.02 1888 33 44 18 26 56 15 28 13 .956 21.59 1889 33 10 60 50 62 19 37 18 •935 22.18 1890 33 13 17 4 67 21 35 14 .968 21-33 I89I 33 18 86 68 73 18 22 4 I 048 59-83 1892 33 50 50 75 20 33 13 .937 22.07 1893 34 21 109 88 75 23 41 18 .843 24-57 1894 38 73 77 4 77 20 SI 31 .681 3050 T'l. 781 671 788 264 381 1,120 327 627 300 * Calendar years are converted into fiscal years. t Includes recoinages. lation ; 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 its commercial ratio 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 coin- age 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 ever in 1894, when 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 (j51.29.29). 148 MONETARY SYSTEMS OF THE WORLD. The amount of paper currency used is so great that a very large force is continually employed in counting and recounting the old and worn notes and cer- tificates, and another force fully as large is employed in preparing new ones. The volume may be approximately measured by the following table : Redemptions of Paper Currency Each Year Since iS^j. (In millions of dollars). 1873 1874 187s 1876. 1877, 187B 1879 1880, 1881 1S82 1883, 1884 188s 1886 1887 1888 1889. 1890, 1891. 1892 1893 1894 United States Notes. 64 94 no 97 82 80 64 81 54 79 110 86 84 63 74 64 59 78 71 66 91 91 Gold Silver Certifi- Certifi- cates. cates. 45 69 71 84 45 47 -. 41 8 7 2 2 I 9 9 12 25 20 21 21 10 28 10 22 65 22. 67 41 45 S6 69 72 66 93 77 III 27 124 Treasury Notes. 9 42 46 Currency National- Certifi- Bank cates. Notes. 25 36 53 50 81 138 108 99 56 77 94 57 107 41 62 35 20 55 15 75 20 83 28 93 39 91 59 60 37 48 24 59 30 52 28 44 28 46 64 44 61 52 31 62 Total. 170 266 400 388 260 278 261 185 133 179 234 252 256 220 191 234 249 251 288 342 434 381 In the years when a scarcity of currency existed the notes were evidently kept out longer than usual. The redemption of fragments of notes or certificates, involving a discount equal to the portion missing, has caused a gain of about |2i4,ooo, 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 $346,681,016. 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 pre- sented, 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 denomination of $20, may properly be considered a fair instance whereby to estimate the probable MONETARY SYSTEMS OF THE WORLD. 149 destruction of large notes. The issue amounted to 1980,000,000, and continued from 1863 to 1878. At the close of 1892 only $262,000 were outstanding, of which 1219,000 in notes of f 1,000 and over, represented by sixty-six pieces. The following table shows the amount of United States notes of the 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, 1875-1877 4th, 1875-1879 5th, 1878-1884 384 302 36 144 "3 6.7 4-9 0.2 2.6 3-2 28s 192 52 47 127 0.9 ^■9 I.I 2.1 5-1 669 494 88 191 240 7.6 68 1-3 4-7 8.3 1-7 1.6 °-S 1.8 2.8 0.3 I.I 2.1 4-5 4 I.I 1-4 i-S 2.5 3-5 Total. 979 17.6 703 II. I 1,682 28.7 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 $11,500,000) is considered. The amount of the annual redemption of these is rapidly diminishing, 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 $8,500,000, an amount somewhat less than one percent, on the aggre- gate 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 redemptions 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 will show that of the pieces now current about $20,000,000 have been coined, leaving about$5, 500,000 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 $15,000,000 are now in use. The Treasury held on October i, 1893, about $889,000, and on Janu- ary I, 1893, about $355,000, showing a gain of $534,000. During the same period 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. 150 MONETARY SYSTEMS OP THE WORLD. Supplementary Statement Showing Changes in the Circulation During the Panic From June jo to September so, ^Sgj. Eutiru Stock. In Circulation. In the Treasury. Aggregate Figures. Total. Metal. Paper. Total. Metal. 6d7 526 Paper. Total. Metal. Paper 1 0- September 30 2,404" 2,317 1,279 1,207 1,126 1,110 t.702 1.594 109s 1,068 702 723 671 63l 31 42 132 139 S70 584 Increase ( + ) or De- crease (-). + 87* + 72 + 16 + 108 i-8i + 27 —21 — 10 — II -7 -14 * As to discrepancy see page 128. Money in Circulacion. Gold Coin. Silver Dol- lars. en 1 6 — i T3 September 30 June 30 484 404 59 57 64 6s 80 93 32s 326 340 333 149 141 201 17s I.S90 1,482 132 139 1,722 1,621 545 480 Increase ( + ) or De- crease (-). +80 + 2 — I -13 — I + 7 + 8 +2i + 108 -7 + 101 -65 * Includes currency certificates. Paper Money. Per Cent. of Small to All Paper. Small Notes and Silver. Per Capita. 1 ta 191 ISO -a 1^ Details. Small Large. Of Effect- ive. In Circu- lation. Small Notes. Small Notes and Silver. K.-2 September 30 885 844 232 254 79.2 76.9 1,008 966 25-59 24.19 23,62 22.12 $ 1315 12.60 14-97 1442 173 188 181 142 Increase ( + ) or De- crease ( — ). +41 —22 + 2.3 +42 +1.40 + 1.50 + ■55 + -53 + 41 -15 +39 The total gain of money during this interesting quarter-year was ^87,000,000 ; but as the Treasury lost |2i, 000,000, the amount in circulation was increased f 108,000,000, |8o,ooo,ooo of which was in gold, $1,000,000 in silver and 127,000,000 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|i,ooo,ooo in Government issues ; but the low price of bonds induced National banks to increase their issues MONBTARY SYSTEMS OF THE WORIvD. 151 by f 26,000,000. The gain in gold was derived from imports in excess of exports 1I52, 000,000) from the Treasury (jjSi5,ooo,ooo) 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 percentage of small notes to all was 79.2, an increase of 2.3 per cent. The Amonnt per capita of the effective stock increased lr.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 seasons 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 deposits (25 per cent.), and the excess or deficit of cash compared with the reserve required — all in millions of dollars and tenths Date, 1893. Cash Held. Reserve Required. Surplus (+) or Deficit (— ). July I August 12 September 2. . September 30. October 28... November 25 . 100.7 919 121. 8 157 I 189.7 99 5 93 935 97 7 10S.3 118. 8 +1.2 -16.S — 1.6 +24.1 +48.8 +70.9 On August 12 the lowest point was reached, the full eflfects 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 November 25 amoimted to over $98,000,000, or more than 100 per cent., and had not ceased a this latter date. This inflow of money occurred at a season when it is usually needed for crop movements, and was therefore abnormal ; but the volume of this movement, which usually occurs from December to June, is often fully as large. 152 MONETARY SYSTEMS OP THE WORLD. THE VOLUME OF THE WORLD'S MONEY. Europe — Asia — Oceanica — Africa — North America — South America — Aggregate — Banking Power of the World. The statistics of the quantity of money in use in the world are necessarily to a large extent merely estimates ; but in very many cases these estimates have been verified by special examinations and borne out by collateral facts. The issues of paper money are in most cases readily obtainable, and usually the bank-holdings of specie are also published periodically. It is, therefore, as to the coin among the people, in actual use or in hoards, that doubt exists. Owing lo the constant commercial movement of gold, and to a large extent of the principal silver coins, the mint operations can give no clue. In relation to subsidiary and minor coin which are furnished for local use only, the coinage of the mints furnish quite a satisfactory basis for estimates. The aggregate reported coinage oi the precious metals is given as follows, to 1893 : Gold $7,988,733,793 Full tender silver 7,606,613,856 Subsidiary silver 866,311,200 Very large portions of these sums have evidently been recoined, since the very highest estimate of the quantity of gold coin, and bullion intended for coin- age, in the world, does not exceed f^, 150,000,000. Small amounts, relatively, of gold coin have been lost ; larger quantities have been used for industrial pur- poses ; but aside from the yearly outflow to India, the greater part of this large output of the world's mints has been remelted and recoined. To as great an extent full legal-tender silver pieces have been recoined; sub- sidiary coinage to a comparatively much smaller degree. The table of the world's money first presented relates to the countries of Europe only, and is divided so as to show the single-gold standard countries together, the double standard countries in another group, and separately Russia —now the only single-silver standard country of Europe. France has the largest circulation per capita, about $42.84 ; next comes Belgium with $27.58, the Netherlands with $25.89, Greece with $25.50 (chiefly depreciated paper); no other countries of Europe have as much as $20 per capita, and only eight of the remainder have over $15 ; all but one of the others under $10. Referring to the first group it will be observed that Germany, Austria, Hungary, Turkey and Roumania have in fact considerable sums of full legal tender silver in use, and on the other hand Russia possesses the fourth largest stock of gold in Europe. The countries having relatively the largest amount of uncovered paper are in fact at present struggling with depreciated paper — Portugal, Italy, Greece Russia and Austria-Hungary. MONETARY SYSTEMS OF THE WORLD. 153 The Monetary Stock of the World — Ii Six Tables, Table I. — Europe. Single-Gold Coun- tries. Great Britain Germany Portugal Sweden Norway Denmark Turkey Austria-Hungary Finland , Roumania . . . Double Standard Countries. France Italy Belgium Switzerland Greece Spain Netherlands Servia Bulgaria Islands, etc. .- . . . Single Silver Standard. Russia All Europe. . 388 49 4 4-7 4.3 *4.8 *43.2 2.4 S-8 158.1 38.3 305 6.2 29 2.2 17-5 4-7 2.2 4-3 0-3 109. 1 97-1 364-3 607, 625, IS 6-5 7-3 14.2 SO- 130. S- 15- 1.475-0 863. 100. S6- 18. I. 392 27 5 3 0.8 3-5 1,112.0 461 3,048. 105 219 653 37 43 141 55 941 i,r6o 112 719 no 840 25 40 5 II 2 9 5 20 10 90 40 251 3 8 5 23- 317- 40. 35 124-5 60. Soi-S 1,566, 147- 107, 32- 2, 220. 86. 5 2,177-5 521- 4.7095 207. 270- 59- 30.1 14- 23- 4-2 205. 10. 21-5 843.8 735 222. 90, 35 36. 182, 85 5 0-3 o I 1,391-7 783.1 3,018.6 1^ o 30 138 168 70 95 +203 466 207. 300, 59 30 14. 23 4. 343 10. 21 1,011. 8 735-8 292.3 90, 35-2 55- 182. 91- 5- 0.3 0.1 1,486.7 986.1 A 211. 262. 12.1 12. 6.1 17-4 6-5 182, S-i 10. 724.2 661. 129.5 26. 19-5 •9 95 55-3 2 2 2-5 0.1 992.0 462.1 3,484.62,178.3 38- 46-9 18.1 7-9 5-6 161. 4-9 II-5 293-9 748 162, 64 15 54 87- 35 496.9 524- 1.314-8 719. 878. 86.9 29.1 16.9 25.6 go, 412. 12-9 34-5 .304-9 ,640.8 309-8 171. 47-7 56-1 307- 121. 7 7-8 8. 4-5 2,674.4 1.045- 6,024.3 9-5 14- 2-5 0-7 0-5 0-7 9- 6. 0-3 i-S 44-7 13- 15- 4- i-S 2. II. I. 0-5 0-5 0.1 48.6 9- 102.3 * Asiatic possessions of Turkey and Russia are not included in this column; but the monetary supply is for the entire empire in both cases. t Actually redeemable by the Bank of Russia, however. The average per capita circulation for Europe is nearly J16 ; one-half the countries have less ; but their population is not as advanced in civilization as that of the other half The relatively high per capita supply of money in France is due to the absence of the use of checks ; nor are bank notes used as generally as in Great Britain ; so that much more coin is actually in use. Europe, then, with a population of 364,300,000 uses now $6,024,300,000 of money, composed of Gold $3,048,000,000 Full tender silver 1,160,000,000 Subsidiary silver 501,500,000 Uncovered paper 1,314,800,000 beside about $100,000,000 of minor coin. The note issues aggregate 13,484,600,000 154 MONETARY SYSTEMS OF THE WORtC. and the metallic reserves 12,178,300,000. (The variation in the amount of uncovered notes is due to the fact that in Turkey, Bulgaria and Great Britain the metallic holdings exceed the note issues.) A compartive table showing the specie holdings and circulation of the European banks for 1883 and. 1893 is presented : Europe. — Comparative Table of Note-issues and Reserves, 1883, /8gj. (In millions of dollars.) Great Britain France Germany Scandinavia. Netherlands . Belgium Austria Spain Portugal Italy Russia Switzerland . . Greece Roumania. . . Others Total.... Note-Tssues. Gold. Silver. Total Specie. 1883. 1893. 1883. 1893. 1883. 1893. 1883. 1893. 186 19+ 144. 159- 4- 6 148. 163. 588 696 184. 342- 200. 252 384- 594- 259 273 75- 139- 65- 62 140. 201. S6 66 26. 30. 3- 4 29. 34- 79 8S 10. 19. 39- .35 49- 54- 68 87 14. IS- S- 7 19. 22. 190 204 39- 43- 51- 68 90. III. 70 18S 5- 40. 13- 35 18. 75- 5 57 1-5 3- o.S 7 2. 10. 159 241 44- 79- 20. 10 64. 89. 718 «!.■; 140. 304- 2. 3 142. 307- 23 35 8. IS- 5- 3 13- 18. 19 23 1-5 O-S i-S O.S 18 26 7- 12. 7- 12. 9 15 4- 703.0 7- I. 2 S- 9- 2,447 3.007 1,207.5 408.5 494 1,111.5 1,701.5 These totals compare as follows with the condition in 18 Europe, in millions of dollars : and 1894 for all 1883. 1890. 1893. 1894. 2.447 2.732 3,007 2.993 Gold 703 408 971 425 1.207 494 1.387 543 I, III 1.396 1,701 1,930 1.336 1.336 1,306 1,063 The recent acquisition of specie by the banks made it possible to reduce the amount of "uncovered" paper issues materially; prior to this there had been a steady increase in the amount of the fiduciary circulation. This is not without importance in connection with the attempt to induce European nations to rehabil- itate silver ; since the provision of notes to meet the demands for additional money rendered it unnecessary to have recourse to the white metal. MONETARY SYSTEMS OP THE WORLD. 155 It will be observed that the enormous accumulation of gold in Europe has been largely added to in the past four or five years. In order to point out this more clearly, a statement of the gold holdings of the principal, and of all, European banks is presented : (In millions of dollars.) End of 1 890 189I 1892 1893 1894 England . France. Germany. Russia. Austria. 89 256 137 270 27 117 22s I4S 339 27 H2 267 177 32s 27 118 328 158 319 5° 124 339 139 301 43 163 414 161 304 6S 9+7 971 1,112 1,232 1,217 1,38s Here is an increase of $441,000,000 ; the United States lost during the same period |2oo,ooo,ooo ; the remainder came from the Russian and South African mines and from Australia. Many of the European banks lost gold to each other. Table II.— Asia. Japan China India \ Native States... \ Hong Kongt Straits Ceylon French depen'cs.. Korea Siam Persia Afghanist'n and I Baluchistan \ Russian Asiatic dependencies . . Turkey in Asia. .. d .2 « 2 2 a lU CI. H 0) i "a |s rt a s^ 3 ^^, Sp5 t3 §^ fa t/l h m H 41.1 80 72 16. 16S. 171. 16. 187. lOI. 86. 2S4- 400. 10* 740 10. 760. -- 750- 600" 900 50- I.S50. -- 130. 130. 93- 37- 987- .8 40 .30. 70. 10. .. 10. 18. 70. .3.8 a.S 20. 4S- 7- 7- 8. 4S- 3- 4 2. 6. 3-.^ 3.S 2S I. 7- 23-,=; .. 6 10. 16. 4S 4-.'; 2 2-S 18-S 10. s I. I. I. s. 10 14- 24. I. I. I. 24. 9- I 3 OS 4-5 03 0-3 0.9 45 787.7 691 1,800 1S3-S 2.644-5 193-8 I49-S 343-3 226.4 1265 2,161.0 II. 200. 25. o-S 3- 4.5 Supplied from Russia, India and Persia. 20. 21.6 833-8 Supplied from Russia, etc. Supplied from Turkey and Russia. * These amounts being chiefly in hoards are not included as '* effective." + It must be borne in mind that Hong Kong supplies many sections in the vicinity; its notes are in use throughout the islands and coast adjacent. 156 MONETARY SYSTEMS OF THE WORLD. The second table of the series relates to Asia ; here only one State, Japan, makes any pretension not to be upon a single-silver basis ; the remainder are avowedly so. Asia, with more than half the population of the globe, uses silver almost exclusively. The amounts given for India and China are, of course, largely dependent upon estimates. But there is every reason for believing that they are underestimated rather than overestimated. No figures are given of the per capita circulation, since the conditions render such figures misleading. Besides, it may be safely stated that approximately 50 millions of the inhabitants of the continent of Asia have no money to speak of. The third table shows the money of Oceanica, embracing the populous Dutch colonies of Java, Sumatra, the Spice Islands, under the dominion of the former, the Philippine Islands belonging to Spain and the important gold-producing regions of Australasia, belonging to Great Britain. Table III. — Oceanica. .2 % p. 2 3-S OJ i i ■if -1 Q i Australia* 4- loS 7-S 112. 5 21. 21. 7S II2.5 I. New Zealand*. .. 0.7 16 2. 18. s^ S- II tS^ 0.2 Dutch Indies 32- I 40 40. 81. £J. 21. 16 s. 86. 6. Spanish Indies . . 7-1 2 4 I. 7- i-S i-S 3 7- I. 0.1 OS I. OS 4. 0,6 4- I. 1.2 0.3 Hawaii 3 I. I. I. 224.0 48.S -- 4S-4 127 44 S3-0 O.I 48.6 los S-i 229.1 10.7 * Single-gold standard. Remainder double standard or indifferent. The next table relates to Africa. It is well known that in the interior of this continent there is practically no money in use; the population of this " dark region" is in fact a matter of mere conjecture. Our data deal, therefore, with the coast regions almost exclusively. It should be stated, however, that the valuable trade is annually drawing more Europeans thither, and the entire continent, not excluding even the Great Desert, is now claimed by one or another of the European countries. It has been found practical to deal with the natives by means of bright copper pieces, and many tons of minor coin have been made and introduced by the trading companies. Accurate statistics are necessarily meagre and unsatisfactory ; the following table is the best that can at present be given. In the greater portion of the con- tinent "standards'' are disregarded. MONETARY SYSTEMS OP THE WORIvD. Table IV.— Africa. 157 Single-Gold. .2 1 3 > 1^ .s ^ IS 11 "A r si o H ■li li > — r p .5 u S a Egypt 6,8 1-5 OS 0.2 i o.s5 4.2 i-S 0.2 \ 3-5 S 6.2 I.I '■■'1 o.i) 14.0 6. \ 04 120. 34- 3- 3-5 7- I. 0.1 127. 37.' 3-4 3-S 4.2 I. 0.6 4.2 I. 0.6 5-8 i5. 2.8 0.1 20. 2.9 3- 127. 37. SJ 171. 31- 7- 3-S 1.8 0-3 0-3 0.4 0.2 7- 0.2 Cape Colony Natal Orange Free State. South Afr. Repub. 0.1 Double Standard. 160.5 10. 6. 0.1 0-5 8. I. I. O.I 0-5 0.2 0-3 0.1 10..S 4- I. I. .8 0.1 I.O 0.1 0.1 0.1 171. 22. 7- 2. . 18 0-3 2. 03 04 0.2 5-8 16. 28 0.1 259 7- 1-3 0.1 9- I-S 7-3 o-S Tunis Reunion Madagascar Eritria ; Abyssinia \ Liberia 0.2 0.2 O.I West Coast : French Portuguese Congo State East Coast : Mozambique 0.2 British Single-Silver. Mauritius Tripoii .... S7-9 0.4 11 16.6 i. II. 2 3- V 82 0-3 0-3 3- 36.0 33 r. 10. 18.9 i-S 18.9 I-S 8.4 OS 10.5 I. 465 4-3 I. 10. 2.8 0.1 06 8.2 i. 97 3-6 14-3 I-S I-S I-S o-S I. iS-3 0.9 75-9 178. 1 20.9 223 221.3 24.7 26.2 348 ii-S 232.8 II. The northern portion of the continent of America, including the islands called the West Indies, are, in a monetary sense, fairly developed. A separate table is therefore devoted to this portion of the Western continent. South America is almost entirely dependent upon depreciated paper cur- rency, the troubles arising from recent expansions followed by tremendous collapses having involved Brazil, Uruguay, Argentina and even Chile. Paraguay has always been disorganized, and Peru has now a healthy single-silver system only by reason of having repudiated its paper currency. The mortgage banks' issues of cedulas are not included in the paper circula- tion in the table relating to South America. These amount to several hundred 158 MONETARY SYSTEMS OF THE WORLD. Table V. — North America. Single-Gold. a 1 2 '0 >■ 1 .2 ^' CO 1| 1^ rt f ■"is -13 5^ c 'o U M s Canada 4.8 0.2 1-4 68.9 2-4 I. 0.4 72.7 12.1 33 0-3 iS-7 94,8 14. 0.2 OS 14-7 * 626.6 18. 2. 0.1 646.7 S- o-S S-5 666.9 2. 2. 0.2 554-2 4S- 6. 0-3 51-3 605-5 5- 0-5 4- 9-5 76. I. I. 2. 80. S- 2. 0.2 7.2 96.7 19- 0.7 4-5 30- 1.2 23 33-5 207. 3- 4- I. 215. 1:^ 34-5 283.0 18.5 iS-S 884. 884. •• 902-5 48-5 1.2 2-3 125 1.2 3- 16.7 778. 2. 2. 0-5 782.5 30-5 2. 32-S 831-7 36. 36- 313- I. 2. 0-5 316-S 4- 4- 3565 55- 0.7 4-5 Newfoundland British West Indies O-S Double Standard. United States 24.2 1252.6 21. 5- 2-3 52.0 1091. 3- 4- I. 60.2 15656 22. 7- 2.8 0.2 Cuba and Porto Rico Haiti French West Indies O.I Single-Silver. 1280.9 55- 8-S 0-5 1099. 28.5 6. 1597-4 55- 12.5 05 iS-4 0.6 Central America British Honduras 64 1369. I 34-5 68 17256 0.7 Total "85.5 17.6 * The official estimate of gold in the United States is used in this table. Tadle VI. — South America. Single-Gold. a rt 1 Ph 2 in & .2 >-■ ■s-g ^1 h si -5 1. is t3 > w c ■3 U Brazil 14.6 08 15-4 4.2 3-3 2-3 0.4 7- 4- 6. I. 13- 5- 207. 10. 78. 285. 10. 10. I. 27s- 9- 288. 14. 302. 308. 1: 1.2 Total II. 3 15- 4- 22. 0.2 0.4 o-S I.I 34-1 2. 2. I. I. 6. 0.2 2. 2. 4.2 10.2 7- I. 7- 2. 2 10.2 0.2 2. 3- 2. 2. 18. 6. 24- 7- 1.2 217. 221. 30- 2. 0.2 78- 85- 17- 295- 306. 47- 2. 0.2 II. 4- 15. I. 0-3 284. 302. 32- I. Double Standard. n fi Chile Venezuela 0.2 Single-Silver. 10,2 05 1-3 4- 3- 2-3 38.2 0.6 2.4 5- 4-5 2. 253-2 4- 2 2 16. I. 102. 3-3 355-2 7-3 2.2 16. I. 20 3 0-3 0.7 3- 0.8 335- 7- 1-5 13- 0.2 373-2 7-6 39 18. 45 2.2 I.I Ecuador Colombia Peru 0.2 0-3 II. I .36-7 9.2 26.4 14-5 23.2 3-3 26.5 48 21.7 36-2 0.7 Total 70.7 493-4 1833 676.7 36.1 640.7 711-4 3- MONETARY SYSTEMS OF THE WORLD. 159 million pesos or dollars, and although performing some functions of circulation, their character warrants their being excluded. Mexico, Argentina, Chile and Uruguay issue these notes. The next table recapitulates the preceding ones, first by grand divisions, then by the three standards. , Grand Divisions. c * 1-^ > 1 IS 2-S V i a d m is si c ■a i 1 a '0 u G g Europe 3643 833.8 45 4 75-9 94.8 36.7 1450.9 194.4 331-7 924.8 1450.9 3048. 127. 178. 1 666.9 34-1 4135-1 1160. 1800. 44- 20.9 605-5 10.2 501.5 153.5 53 22.3 96.7 26.4 47095 2034.5 224. 221.3 1369.1 707 8629.1 2354.7 3794-1 2480.3 8629.1 30186 1938 48.S 24-7 283. 493 4 4062.0 1 126 I 2072.3 863,6 4062.0 466. 149-5 O.I 1.5 902.5 183.3 1702.9 2645 1097. 1 341.3 1702.9 3484.6 343.3 48,6 26.2 "85.5 676.7 57649 2178.3 226.4 34-8 831.7 36.1 1314.8 126,5 5.1 356.5 640.7 2455.1 6024.3 2I6I. 229.1 232 8 1725.6 711. 4 102.3 248.5 Oceanica 10.7 No. America. . . So. America 17.6 3- Total 3640.6 853-4 3535 282,4 2175 853-4 3412.3 11,084 2 393.1 By Standards. Single-gold Double Single-silver . . . 1782 2 1883.3 469.6 219. 1628.4 1793,2 3640.6 1390.6 3169.4 1204.9 863.8 1923.2 625.3 613.9 1250. 591.2 2968.6 5044. 1 3071-5 11,084.2 55-9 884 243.8 Total 4135-1 5764.9 3412.3 2455.1 393-1 * Excludes India and China $610,000,000, here. It appears therefrom that less than one-seventh of the population of the world prefers the single-gold standard ; but this small proportion possesses three- sevenths of the monetary gold in the world. The chief representatives, more- over, of this class are Great Britain and Germany, the former the chief creditor nation of the world. Comparative Table of Various Estimates of the World's Money. Mulhall. 1848. Mulhall. 1860. U.S. Mint. 188.1. Mulhall. 1890. U. S. Mint. 1892.* Present. 1894. Gold 785 1,940 1,300 1,700 2,400 1,800 3.294 2.754 1,984 3.950 4.005 4,230 3.901 3.931 2,700 t4.I35 4.494 2,455 Silver Uncovered paper Total 4.025 5.900 8,032 12,185 10532 11,084 * This does not include as many countries as the other estimates. $610,000,000, for comparison. t Excluding India and China An important feature in connection with the volume of money is the banking power of nations. Large proportions of the domestic exchanges are made by transfers of credits through the medium of checks and drafts, and comrnerce is 160 MONETARY SYSTEMS OF THE WORLD. facilitated by advances of credits measurable by the available moneys and credits of banking institutions. These are represented by the capital, surplus or reserves and deposits. A table showing the banking power of the world (Mulhall's estimate) for the year 1889 follows : Banking Power of the World, i88g. (In millions of ^,) Country. United Kingdom France Germany Russia Austria-Hungary Italy Spain Portugal Sweden Norway Denmark Belgium Holland Switzerland All Europe. . United States... Australia Canada Cape Colony Argentine Uruguay Capital. 284 140 85 42 4S 2S 31 6 9 S 14 704 270 26 13 1,030 Deposits. 626 128 146 64 83 16 4 IS 19 6 1.243 760 108 27 7 17 s 2,167 Total. 910 268 231 106 147 108 47 10 24 6 23 30 20 17 1.947 1.030 134 40 9 29 3.197 It will be observed that no allowance is made in this table for banks in Greece, Turkey, Servia, Bulgaria and Roumania ; this would make an addition of at least ;^45,ooo,ooo to the banking power of Europe, and the increase since 1889 would probably bring the total banking power of Europe up to ;^2,2oo,ooo,- 000. That of the United States may be safely placed at one-half that sum, and mcluding the banks heretofore referred to for other parts of the world, the aggre- gate banking power may be stated as follows : Europe j^2, 200,000, 000 Asia 150,000,000 Africa 50,000,000 Oceanica 175.000,000 North America 1,200,000.000 South America 140,000,000 ■^3,915,000,000 Or say $19,000,000,000 It is believed that in the detailed table the banking power of France is some- MONETARY SYSTEMS OF THE WORLD. 161 what underestimated; but it is a noteworthy fact that in France bank deposits do not perform nearly so largely the function of money as in Great Britain ; for this reason its per capita money circulation is necessarily greater. A statement of the metal holdings and note issues of the five principal banks of issue of Europe for a series of years follows : Coin-holdings and Note-issues of the Principal Banks of Europe for Certain Years. (In millions of dollars.) Near the End Bank of France. Bank of England. Bank of Germany. Bank of Russia. Bank of Austria. of Gold. Silver. Notes. Coin. Notes. Coin. Notes. Coin. Notes. Coin. Notes. 1871 1876 1881 1886 1B89 1890 £891 1892 1893 1894 Ill 306 131 228 256 225 267 328 339 414 18 128 232 23s 249 249 251 24s 252 247 461 566 600 610 641 636 723 736 I2S 140 100 94 89 117 112 118 124 163 I2S 14s 135 123 123 129 123 111 144 125 128 167 191 192 225 216 202 256 182 191 215 227 253 264 281 272 268 291 117 III 129 274 342 329 322 30s 308 S43 591 850 80s 80S 805 782 813 789 56 54 76 82 108 109 no 136 135 146 127 118 142 148 207 216 227 239 249 244 Notes. — The Bank of England holds no silver. The silver in the Bank of Germany is estimated to be about 30 per cent, of the total. The Bank of Russia carries now less than $4,000,000 in silver. The Bank of Austria has still about 50 per cent, of silver in its coffers. 162 MONETARY SYSTEMS OP THE WORIvD. THE CLEARING-HOUSE SYSTEM. The Nbw York Ci^earing - House — Transactions op All Clearing-houses in the United States, 1878- 1894 — I^ONDON Clearing-House — Clear- , iNG-HousB Certificates. By this term is designated a most simple process of making exchanges of bank checks, etc., with the minimum of labor and risk. Banks in the larger cities of the United States and in a number of cities in Europe as well, organize for the purpose of thus facilitating the settlements between them, each bank bearing its share of the expense, which, compared with the cost of collecting checks, is very small. For example, in New York all of the principal banks are thus associated ; practically all of the banks of the city " clear," but the smaller ones do so through some member of the Association. Each bank sends to the institution all of the checks it has received up to about 9.30 o'clock in the morning and delivers them to the representative of the banks upon which they are drawn ; by this process a "settling clerk," represent- ing his respective bank, is enabled to prepare in a very short space of time a sheet showing the amounts for which his bank is to be charged, and the amounts his bank is to be credited with. He then strikes a balance, which he transmits to the manager of the institution, present at the daily settlement. The manager's clerk prepares the general balance sheet. Obviously some banks will appear creditors and others debtors, but the totals of the accounts will balance unless an error has been made. The process, in New York, begins at exactly 10 o'clock a. m., and unless errors occur the balance is struck by 11.15 o'clock. A system of fines for tardi- ness, errors, etc. , serves to bring about exactness. All banks appearing as debtors on the balance sheet are required to furnish the manager with the amounts due by them not later than 12.30 o'clock, and by 1.30 o'clock the manager begins to pay to the creditor banks the amounts due them. It follows that he never carries over any funds. In this manner it frequently occurs that checks representing $250,000,000 are settled by the handling of only $5,000,000 of actual money. It is only when one bears in mind that under the former system 1250,000,000 of cash would have to be carried through the streets of New York that the reduced risk of this system can be appreciated. But the system goes farther in reducing chances of loss. Moneys are deposited in charge of a clearing-house committee, which issues certificates pay- able to order and to be regarded as cash only between the banks represented in MONETARY SYSTEMS Olf THE WORLD. 163 the institution, and so far as these certificates, or the Government's Currency Certificates, are used, the opportunity for loss or fraud is materially lessened. In some clearing-houses settlements are made by drafts of the manager against the debtor banks and in favor of the creditor banks. The returns of the clearing-houses are regarded as quite a satisfactory index to the volume of business of the country, since they necessarily represent, in a general way, the results of the aggregate transactions of at least the wholesale trade. The following table shows the total annual exchanges of the clearing houses of the United States since 1878 : 1887 $51,147,000,000 1888 49,541,000,000 1889 56,175,000,000 1890 60,829,000.000 1891 56,947.000,000 1892 62, 109,000,000 1893 54.309,000,000 1894 45,615,000,000 878 $27,814,000,000 879 38,526.000.000 880 49,990,000,000 881 63,471,000,000 882 60,878,000,000 883 51,731,000,000 884 44,200,000.000 885 41,474,000,000 886 , 49,294,000,000 The transactions of the London Clearing-House for the same period were as follows : 878 j^4, 992, 000,000 879 4,885,000,000 880 5,794,000,000 1 6.357,000,000 382. 883. 884. 6,221,000,000 5,929,000,000 5,798,000,000 5,511,000,000 5, 9:;2, 000,000 1887 ^6,077,000,000 1888 6,942,000.000 1889 7,619,000,000 l8go 7,801,000.000 1891 6,847,000,000 1892 6,481 ,000,000 1893 6,478,000,000 1894 6,337,000,000 It is estimated that 95 per cent, of the volume of business is transacted by means of bank checks. London's clearing-house was established in 1840, and was probably the first. New York followed in 1853. Seventy-one cities in the United States now have clearing-houses. It is surprising that so simple a system should have been so late in being adopted by banking institutions, but it will be equally surprising to our posterity that the system was not developed more extensively in recent years. In London some steps in the direction of development have been taken ; checks of country banks are now "cleared " there by means of a separate settle- ment. In New York one of the stock exchanges has adopted the "clearing" system with satisfactory results. But the great saving to commerce (which must of course bear the expense of exchanges) of a system of international clearings is so manifest, that it seems unreasonable that a system, like the local ones, should not be established in the near future. The subject will be further considered in the next chapter. Before leaving the clearing system a few words should be said in relation to 164 MONETARY SYSTEMS OE THE WORLD. CLEARING-HOUSE LOAN CERTIFICATES. These certificates have been issued during periods of great money stringency by clearing-house associations in various parts of the country. The course pur- sued is to receive from banks desiring to make use of such facilities, first-class securities or commercial paper upon special deposit under the supervision of a clearing-house committee ; certificates are issued thereon to the extent of a fixed per cent, (say 75) of the value of the securities. The certificates are used by banks to meet their clearing-house balances, and are usually in large denomina- tions, but in some cases, during 1893, they were issued in small denominations — some as low as 25 cents — to supply the absolute need of the public for circulation of some kind during the hoarding period. This method of supplementing the reduced monetary supply enables banks to afford the mercantile community relief during periods when loans and discounts are naturally not freely made. Thus the device of economizing the meagre supply of money proved invaluable on many occasions. The certificates were not kept in use for long periods, because they bore interest at the rate of 6 per cent, and sometimes more, so that it was profitable to retire them as soon as practicable. The principal issues of these certificates were : New York, September 20, 1873, to January 14, 1874 $26,565,000 May IS to October 3, 1884 24,915,000 November 11, 1890, to February 7, 1891.. 15,205,000 June 21 to November i, 1893 41,490,000 Philadelphia, 1873 6,785.000 1890 8,870,000 1893 10,965,000 Boston, 1890 5,065,000 1893 11,445,000 Another valuable co-operative feature of some clearing-house associations is found in the periodical reports of conditions that are made by the banks. In New York and in other cities this is done weekly, and the statement of the aggregates in the metropolis are regarded as of prime importance. The items shown are : Loans, specie and legal tender notes on hand, deposits and circulation. The statements are made up, however, from averages— that is to say, the average of the daily footings of these items is reported ; so that the bank state- ment does not accurately reflect the actual conditions of the banks at the time of making the reports. In New York city the United States Treasury Department is represented in the clearing-house by the Assistant Treasurer there, who transacts practically two-thirds of the Government's fiscal business. He is usually a debtor at the clearing-house. MONETARY SYSTEMS OF THE WORLD. 165 INTERNATIONAL EXCHANGES. The Commbrcb of the World — Movement op Precious Metals — International Clearing-House — Equivalents of Units. In this chapter an attempt will be made to indicate the volume of exchanges of commodities between nations and the manner in which settlements are made. It becomes necessary, therefore, to examine the volume of the international trade of the world. The following table includes the annual commerce of the principal and nearly all other countries, segregated by grand divisions of the world. (In millions of dollars.) (Mulhall.) Average Annual, 1881 -'86. (Mulhall.) For 1889. (Economiste Europ^en.) For 1893. Divisions. I S a. X W 1 P. e ■3 H i 1 X Great Britain 1. 955 905 765 430 1,760 5.81S no 258 120 1.455 670 770 330 4,825 95 396 135 3.410 1.575 3.360 2.135 835 1,020 530 1795 1.565 720 815 465 1,690 3.700 1. 555 1.835 995 3.485 2.033 771 1,033 592 1. 931 i,o8i 647 811 463 1,980 3. "4 1,418 1,844 I. OSS 3. 9" France Germany Netherlands Other Europe All Europe China India 10,640 20s 654 255 6.31s 130 324 ISO 5,255 115 462 150 11,570 786 300 6,360 180 261 413 4.982 181 357 317 11.342 361 618 730 All Asia 488 670 525 1.19s 305 130 200 626 790 540 1,114 1,460 1,065 604 770 540 1.310 340 125 200 727 830 590 1,420 310 150 260 1.331 1,600 1,130 854 740 657 855 1,019 759 1.709 United States Other America 1,416 1.330 235 140 240 2.525 540 270 440 2,730 650 275 460 1.397 291 164 130 1,778 318 179 180 3,17s 609 343 310 Total 8.133 7.396 15.529 8,894 8,122 17,016 9,196 8,292 17,488 Statistics on this subject are, however, somewhat misleading, for the reason that many of the principal nations serve only as intermediaries for others. Thus, Switzerland and other nations having no ports, and even such 166 MONETARY SYSTEMS OE THE WORLD. countries as Austria-Hungary, with a very small coast line, must bring their imported merchandise across the frontiers, through other countries ; and unless this "transshipment trade " is separated from the trade pertaining particularly to the country under consideration, the figures are necessarily too large. Moreover, the matter of payment for commodities is very much involved with the transfer of bonds or other securities not represented in commerce proper and hence not in commercial statistics, but frequently a very important element in settlements with debtor countries ; interest payments — an item not readily measured — contribute further unknown sums. The statistics here given are, therefore, useful chiefly to indicate the greatness of the volume of transactions and, in comparison, the smaller transmission of precious metals to discharge balances. The external commerce of the countries of the world therefore amounts to $[7,500,000,000, of which the imports were 19,200,000,000, which includes say $500,000,000 of transit trade, making the net $8,700,000,000, and the exports $8,300,000,000. Of this net total of $17,000,000,000 the proportion by countries of each of the three classes of money standards is approximately as follows : Imports. Exports. Single-gold standard $3,705,000,000 1,080,000,000 3,915,000,000 $3 540,000,000 1,085,000,000 3,675,000,000 Doubls standard Total $8,700,000,000 fp8, 300,000,000 Europe's share in the total commerce is about$ii, 350,000,000, and the imports exceed the exports by about $1,300,000,000. This is largely oflTset by the negotia- tion of securities and the payment of interest to European holders of such obli- gations ; for as a rule Europe exports comparatively small amounts of the precious metals annually. It is estimated that Great Britain alone holds ^3,000,- 000,000 of foreign obligations. Statements showing the movement of precious metals follow : Gold and Silver Movement {In Millions of £. — MulhalV). Exports. Great Britain. France. United States. Australia. Spanish America. Various. Total. 1861-1870. . . I87I-1880. . . i88r-i888... 203 291 164 197 138 116 135 147 76 108 76 34 81 75 41 262 204 239 986 931 670 MONETARY SYSTEMS OP THE WORLD. Imports. 167 Great Britain. France. United States. East. Various. Total. Average Annual. I86I-I870 . . . I87I-I880. . . I88I-I888... 264 312 1-2 281 262 125 43 60 87 126 128 165 171 168 986 931 670 98.6 93.1 837 It appears, therefore, that the average annual transfer of precious metals has fallen off nearly |7s,ooo,ooo each way, since the decade 1861-70. 1S81-78SS. {In Millions of £.—Mulhall.) Imports. Exports. Gold. Silver. Both. Gold. Silver. Both. 96 63 64 20 12 2 no 65 62 23 116 36 162 I2S 87 20 128 2 146 96 67 35 4 2 34 129 68 49 41 37 19 89 164 116 France United States 76 41 East Australia 34 218 Various Total 367 303 670 367 303 670 iSgj. {In Millions of $.) Gold. Net. Silver. Net Import. Export. Import. Export. Great Britain 121 59 35 30 32 95 22 24 I 25 + 26 + 37 + II + 29 + 7 73 32 2 4 35 68 24 12 2 22 + s + 8 Germany Austria + 2 + 13 Other Europe All Europe 277 28 IS 15 167 109 25 24 10 +110 - 81 -25 - 9 + 5 146 34 79 128 lOI 30 + IS -67 + 49 Total 335 335 259 259 From the last of the tables it appears that in 1893 ^518,000,000 in silver were moved. 70,000,000 in gold and 168 MONETARY SYSTEMS OF THE WORLB. Analyzing the latter year's bullion movement we find that the United States, Africa and Australia lost $115,000,000 of gold, and Europe and India gained that quantity. Of silver the United States, Mexico and South America furnished about $67,000,000 net, of which the major part went to the Orient by way of Europe. Mexico's imports are so much in excess of her exports of products that she is compelled to send her silver abroad. In the year 1893 her commerce required her to part with fully $52,000,000, at her own valuation, in pesos ; if these could have been transferred to the Orient directly, their value would have been greater than under existing conditions, which compelled her to send them largely to Europe at the market value of silver, which, at the depreciated price, involved a loss of fully $20,000,000. Thus Mexico, by reason of the demonetization of silver, is at a disadvantage, and the South American States, which are large exporters of silver, suffer from the same cause. The establishment of an international monetary clearing-house would, it is believed, serve to equalize the conditions vow so oppressive to many nations. This plan* briefly stated is : 1. To select a universal monetary standard. 2. To adopt measures for securing the use of gold and silver on such a flexible ratio as will effect permanent stability in the value of the world's money. 3. To adopt measures for facilitating international monetary transactions and for their supervision and control. This would, further, require the joint use of gold and silver by all nations in proportion to the commerce ; the issue of international certificates representing gold and silver ; the redistribution of the present monetary stocks to assure bi-metallism for each country ; the clearing of international debits and credits by the central institution, and the adjustment of diflferences. The institution to be under the management of a commission composed of representatives chosen from each country in proportion to its population and money. Such a system could be utilized to economize the international clearings, which now require the use of one dollar for every seventeen of commerce ; whilst domestic clearings usually involve the actual use of only one dollar in fifty. A more stable exchange basis between silver-using and gold-using count-ries would also be established, which would benefit not only the former, but also those who, in the latter, hold the debts of the silver countries. Moreover, these would be saved the troubles resulting from over-expansion ; their securities would be much more secure. The much-to-be-des>jfed international unit or coin remains still a thing of the future, due in great measure to the differences between the present units, and the difficulty of changing them so as to avoid the necessity of computations. A 25-franc gold piece has been recommended for this purpose. The variation * Plan of Mr. R. P. Rothwell, Engineering and Mining Journal. MONETARY SYSTEMS OE THE WORLD. 169 between it and similar coins of otlier leading nations is best shown by reducing tliem to weiglits of pure metal, thus : 25 francs = 7.258 grammes pure gold worth $4.82 2-5 Half-eagle = 7.523 " " " " 5.00 Sovereign =7.322 " " " " 4.865^ 20-marks =7.168 " " " " 4.76 2-s A table showing the equivalents of the principal coins or units of the world in terms of each other is of interest in this connection : Table of Equivalents of Principal Coins or Units. i Dollar of 20 shillings. ranc* Mark Florin (Dutch)... Krone (Austria).. Krone (Scand.).. Roublet Pesot Rupeet a c a c y .3 a .Q H\ I 3 Ik 3 E s S 3 ^ 4.11 5-18 4.20 2.43 4.92 3^73 1-34 .98 4.86.6 25.22 20.43 12.09 2397 18.16 6.50 4.80 ■19-3 .79 .... .81 .48 ■95 .72 .26 .19 .23.8 .98 1.24 •59 1.17 .89 •32 •23 .40.2 1.6^ 2.09 1.69 1.98 1.50 •54 .40 .20.3 .83 i-os .«.=; •50 .76 .27 .20 .26.8 1. 10 139 113 .67 1.32 ■.3» .26 .748 3.08 3.88 3 IS 1.86 3.68 2.79 •74 1. 01. 6 4.18 ^.2b 4.27 2-53 5.00 3-79 1.30 •444 i.«3 2.30 1.87 1. 10 2.18 1.66 •59 •44 2.25 10.96 •43 •54 .90 .46 .60 1.69 2.29 * Same as lira, peseta, drachma, lew, lei. markka, dinar, bolivar and 1-5 peso of Spanish America. + Silver rouble, peso, rupee, at United States coining rate. Quotations of exchange, i. e., the rate at which drafts on other countries can be purchased, are usually expressed in terms of one or the other of the respective units. In some cases the quotations are expressed in the same terms in both ; thus, in London, exchange upon Paris is quoted at 25.22 francs ; in Paris exchange upon London is quoted in the same manner ; the rates between London and New York are likewise quoted in the same terms, $4.86 J^. But exchange upon Berlin is quoted in Paris at 124, being the equivalent, in francs, of 100 marks ; in Berlin the quotation for Paris drafts is 81, being the value, in marks, of 100 francs. 170 MONETARY SYSTEMS OF THE WORLD. INTERNATIONAL MONETARY CONFERENCES. Monetary Chronology — The Conference of 1867 — The Con- ferences OP 1878, 1881 AND 1892 — Proposition Before Each. INTERNATIONAL MONETARY CHRONOLOGY. 1786. United States — Establishment of double standard at 15X to i. 1792. United States — Ratio changed to 15 to i. 1803. France — Double standard 15^^ to i established. 1810. Russia — Silver standard introduced, 15 to i. 1816. Great Britain — ^Single-gold standard introduced, Holland — Substitution of ratio 15J4 for 15)4 to 1. 1832. Belgium — Adopts French system. 1834. United States — Substitution of ratio 16 for 15 to i. 1835. India — Adoption of silver standard, ratio 15 to i. 1844. Turkey — Adopts double standard, 15. 10 to i. 1847. Holland — Adopts single-silver standard. Discovery of gold in California. 1848. Spain — Substitutes ratio of 15.77 for 16 to i. 1850. Switzerland — Introduces French system. 185 1. Discovery of gold in Australia. 1854. Portugal^Substitutes single-gold for single-silver standard. Spain — Modifies ratio to 15 48 to i. 1857. Monetary treaty between Austria and Germany (single-silver standard). 1862. Italy — Adopts French system. 1865. Latin Union formed — France, Belgium, Switzerland and Italy. 1867. First International Monetary Conference. 1868. Greece — Joins Latin Union. Spain — Adopts Latin Union system. Roumania — Adopts Latin Union system. 1871. Germany — Adopts single-gold standard. Japan — Adopts double standard, ratio 16.17 to i. 1873. United States — Gold standard adopted. Scandinavian Union formed, gold standard. 1875. Belgium, Holland and France suspend silver coinage. Italy suspends silver coinage. Holland — Double standard mtroduced, ratio 15.62 to i, but no coinage of silver. 1876. United States — Silver commission. MONETARY SYSTEMS OI* THE WORLD. 171 1878. United States— Returns to double standard (Bland-Allison law). Second International Monetary Conference. 1879. United States — -Resumes specie payments. Austria-Hungary — Suspends silver coinage. 1879. Germany — Suspends sales of silver begun in 1873. 1881. Third International Monetary Conference. 1885. Latin Union prolonged to 1891. 1886. Russia — Modifies coinage. Great Britain — Gold and silver commission. 1890. United States — Increases acquisition of silver (Sherman law), China — First opens its mint. 1892. Austria-Hungary — Adopts single-gold standard. Roumania — The same. Fourth International Monetary Conference. 1893. India — Closes mints to free coinage of silver. United States — Repeal of Sherman law ; suspension of all acquisition of silver. 1894. Germany — Silver commission. 1895. Germany — Resolves to call the Fifth International Conference. INTERNATIONAL MONETARY CONFERENCES. Conferences have frequently been held between nations to determine upon measures of greater uniformity in relation to monetary matters. The conference of 1865, which led to the formation of the Latin Union, and that of 1873, which resulted in the Scandinavian Union, are among the less important, because par- ticipated in by few nations only. But in 1867 France invited all nations to confer in Paris upon the subject of the modification of coinage for the promotion of commerce and the facilitation of international exchanges. The conference declared itself, in principle, in favor of the unity of the gold standard, while considering it advisable to temporarily continue the double standard in those countries accustomed thereto, and recommended an inter- national coin equal to 25 francs. While the conference had no power to bind, by its action, any of the States represented, its declaration probably influenced those which from 1 87 1 to 1873 proceeded to carry out a programme in harmony with that declaration. This conference unquestionably gave the French system of coinage and the metrical system of weights and measures an important standing in the world. When the subject of the rehabilitation of silver became more fully discussed, owing to the adoption of the so-called Bland-Allison law of February 28, 1878, a general international conference was deemed advisable ; the law referred to directed the President to invite the nations of the world to confer in Paris in 1878 for the purpose of persuading the commercial world, and Europe in particular, that silver continued to be necessary for monetary purposes. 172 MOKEXARY SYSTEMS OP THE WORLD. When the conference met in May, 1878, twelve nations were represented. Before its close others were added. But the delegates from Great Britain and Germany, as well as those of some other countries, were without power to bind their respective governments by their action. The principal object was to arrive at a ratio at which silver might be satis- factorily given as great a freedom in the mints of the civilized world as was given to gold. The conference found no difficulty in declaring that it was necessary to maintain in the world the monetary functions of silver as well as those of gold; but the manner in which this was to be accomplished was a point upon which no agreement could be reached. After full discussion and the preparation of much valuable literature upon the subject of money, the conference adjourned late in August without practical results. Hoping, rather than believing, that the opinions of the principal objectors to the rehabilitation of silver (Great Britain and Germany) might have undergone a change, or have become amenable to arguments, the United States and France jointly invited the nations to a second conference in 1881, also at Paris. This one was as fully attended by delegates as the preceding one. But the delegates were again unable to agree upon any method by which the desired object of restoring silver could be accomplished. An adjournment took place in July, with the understanding that the conference would reassemble in April, 1882, if called ; but conditions were not regarded as favorable to its reassembling, and the project was left to die of compulsory neglect. In the meantime, however, the fall in the price of silver had so affected the commerce and fiscal condition of India, and in the opinions of many had exercised an influence upon the condition of the people of the western countries as well, that a royal commission to investigate the question was appointed by the government of Great Britain in 1886. It consisted of twelve members, and its determination was looked forward to with great interest. When its report was finally published (in 1888), it was found that while all the members beheved that the monetary disturbances were at least in part due to the demonetization of silver, only six of the members recommended that Great Britain take some action, believing it not only practicable but wise. The other half of the commission could not assent to this, and accordingly nothing was done except to furnish a mass of valuable material for the student of these questions. Subsequently one of the six commissioners who declared against the rehabilitation of silver acknowledged his conversion to the cause of silver upon an internationally agreed ratio. Somewhat encouraged by these manifestations of interest the United States in 1892 again invited the nations to send delegates to a conference in Brussels. When it met, in November of that year, twenty nations were represented. The declared object of the conference was to obtain an agreement recom- mending international bi-metallism upon a ratio for silver which could be main- tained, but failing in this the delegates from the United States were instructed to endeavor to induce European nations to agree to an enlargement of the use of silver as money. A majority of the delegates, as in the previous conferences, substantially MONETARY SYSTEMS OE THE WORLD. 173 agreed upon the desirability of bi-metallism under terms of an international agree- ment, but just as before the representatives of the gold mono-metallic countries of Europe, to which Austria-Hungary was now added, did not manifest much sympathy with the movement, and in fact some of the delegates declared that for their respective countries the single-gold standard was the only possible measure. Many propositions were, of course, discussed, but the conference, after thanking the Government of the United States for calling them together, "suspended its labors" until May, 1893. It has not been reconvened. In 1891 a conference of the States of the American continent was held in Washington, but was fruitless on the money question. Below will be found abstracts of the principal propositions considered at the several conferences. In Great Britain an organization favoring international bi-metallism was formed and is making propaganda ; in Germany, also, the movement for the rehabilita- tion of the white metal is gaining ground, and only recently the parliament adopted a resolution directing a call for another conference. In the United States and in France those favoring bi-metallism have not remained inactive, so that there may be a conference of 1895. Propositions in the Conference of 1878. By the United States : I. It is desirable that the unrestricted coinage of silver and its use as money of unlimited legal tender should be retained where they exist and, as far as prac- ticable, restored where they cease to exist. II. The use of both gold and silver as unlimited legal tender money may be safely adopted, first, by equalizing them at a relation to be fixed by international agreement ; second, by granting to each metal at the relation fixed, equal terms of coinage. Answer by certain European States : I. While necessary to maintain the monetary functions of silver, the selection for use should be governed by the special position of each State or group. II. The question of restricting the coinage to be likewise left to the States, the disturbance produced by the fall of silver having affected the several countries variously. III. That the differences of opinion were so great (and even double-standard countries find it impossible to enter into engagements with reference to the free coinage of silver) as to exclude the discussion of the adoption of a common ratio between the two metals. Propositions in the Conference of i88i. I. Have the fall and the fluctuation in the price of silver been hurtful to com- merce and hence to general prosperity? Is it desirable that the relation between gold and silver be stable ? II. Should the fall and fluctuation be attributed to increase of production or to legislation ? 174 MONETARY SYSTEMS OE THE WORLD. in. Is it not probable that if a large group of States should agree to the free and unlimited coinage of silver with full legal-tender faculty, at a uniform ratio, a stability would be obtained, very substantial if not absolute ? IV. If so, what measures should be taken to reduce the fluctuations to a minimum ? V. In adopting bi-metallism what should be the international ratio ? Among the informal suggestions were : 1. Withdrawal of small notes and small gold coins. 2. Issue of silver certificates upon bars, the value of the latter to be inter- nationally rated. 3. Privileged banks of issue to take silver as well as gold for their reserves. Propositions of the British Gold and Silver Commission. By the six members opposed to bi-metallism : (Par. 107.) The first step towards answering the inquiry proposed to our- selves is to determine the subsidiary question whether a bi-metallic arrangement could create and maintain a stable ratio between silver and gold. We have already so fully set out the opposing views held on this point, that it will be sufficient, without examining them at any length, to state the conclusions at which we have ourselves arrived. We think that in any conditions fairly to be contemplated in the future, so far as we can forecast them from the experience of the past, a stable ratio might be maintained if the nations we have alluded to were to accept and strictly adhere to bi-metallism, at the suggested ratio. We think that if in all these countries gold and silver could be freely coined, and thus become exchangeable against commodities at the fixed ratio, the market value of silver, as measured by gold, would conform to that ratio, and not vary to any material extent. (Par. 138.) Though unable to recommend the adoption of what is commonly known as bi-metallism, we desire it to be understood that we are quite alive to the imperfections of standards of value, which not only fluctuate, but fluctuate independently of each other ; and we do not shut our eyes to the possibility of future arrangements between nations which may reduce these fluctuations. By the six members in favor of bi-metallism : (Par. 34.) No settlement of the difficulty is, however, in our opinion, possible without international action. The remedy which we suggest is essentially inter- national in its character, and its details must be settled in concert with other powers. It will be sufficient for us to indicate the essential features of the agreement to be arrived at, namely, ( i ) free coinage of both metals into legal-tender money ; and (2) the fixing of a ratio at which the coins of either metal shall be available for all payments, at the option of the debtor. Propositions in the Conference of 1892. By the United States : I. That the re-establishment and maintenance at a fixed parity between gold MONETARY SYSTEMS OP THE WORLD. 175 and silver, and the continued use of both as coined money of full debt-paying power, would be productive of important benefits to the world. II. That these ends can be accomplished by removing the legal restrictions which now exist on the coinage of silver into full legal-tender money, and restor- ing by international agreement the parity of value between the metals which existed prior to 1873 at such ratio as may be decided upon by this conference. III. That the essential provisions of such an international agreement should be : 1. Unrestricted coinage of both gold and silver into money of full debt-paying power. 2. Fixing the ratio in coinage between the two metals. 3. Establishing a uniform charge (if any) to the public for the manufacture of gold and silver coins. The plan proposed by Dr. Adolf Soetbeer was : 1. The acknowledgment of a fixed weight of pure gold as a universal basis for currency. 2. Recoining all gold and issuing no gold coins of less than 5.8065 grammes of pure gold (= to 20 francs or JS3.96) at mint charges of 2 per thousand {-fi; of i per cent. ). 3. Issue of gold certificates for gold deposits in amounts (or multiples) of 500 grammes of pure gold, upon actual deposits of coin. 4. Retirement of all paper money representing less than the value of 5.8065 grammes pure gold, and to issue no more. 5. Retirement within fifteen years of all silver coins current at more than 10 percent, of the fixed minimum gold coin, and coimng major silver coins to be receivable for all public dues by the country issuing them, to any amount, at the ratio of 20 to i; to be legal tender to thrice the amount of lowest gold coin ; coinage only on Government account. 6. Subsidiary silver coins to be issued as each country may determine. 7. Silver certificates to be issued only against actual deposits of major silver coins, in denominations of half the smallest gold coin or any multiple. 8. Mutual reports of laws and operations to be exchanged annually. 9. Withdrawal from compact only upon one year's notice. Mr. Alfred De Rothschild's plan : European States to agree to buy annually, in proportions and under condi- tions to be agreed upon, 30,000,000 ounces of silver to be devoted to monetary uses, for a period of five years, unless silver goes beyond a limit (in price) to be determined upon ; provided, however, that the United States continue to pur- chase 54,000,000 ounces annually and free coinage continue in India and Mexico. Minor propositions : A. Establish international silver money at a ratio to be based upon the market value of silver, to be unlimited legal tender in the contracting countries, but redeemable by the issuing nation. No limit to coinage ; charge of 10 per cent. ; ratio changeable by agreement. B. Issue full legal-tender silver certificates not redeemable in gold, but receivable internationally, at rates fluctuating with the market for silver. 176 MONETARY SYSTEMS OF THE WORLD. C. Issue international silver notes, not legal tenders, but redeemable in silver bullion at the current gold valuation, the quantity of silver varying, there- fore, according to fluctuations — the combined issuing nations to share losses due to depreciation. The German Bi-Metallists' Proposition, 1894. International treaty providing that each nation receive at a fixed place silver bars in weights of 5,000 grammes or multiples, 900 thousandths fine, and issue certificates redeemable at any depository, in silver bars, each nation to buy and sell such certificates at a price fixed first by the treaty, and annually thereafter by a conference in which each nation is represented according to population ; the price once fixed never to be lowered ; each nation to pledge itself not to sell silver nor to retire silver coins, nor restrict their legal tender power ; the silver certificates to be accepted at par with other money by each country and available for bank reserves ; treaty to last for 5 years and abrogated then only upon one year's notice, by a conference ; coinage of silver only at a seignorage equal to the difference between the fixed price and the coinage rate, until the ratio of i5}4 to i is re-estab- lished ; and coining nations need not maintain a depository for bars. In case of winding up, the conference to determine the disposition of the silver on hand in each place. Resolution of the German Reichstag, February 16, 1895. This resolution was to the effect that in view of the existing condition of trade, believed to be due to the fall in the price of silver, the Chancellor be requested to call an international conference at an early date to take measures to bring about the rehabilitation of silver as a circulating medium. It was adopted by a two-thirds vote. On March 16 the Council of State approved the request. Resolution of British House of Commons, February 26, 1895. Resolved, That the House regards with increasing apprehension the growing divergence between the values of gold and silver, and heartily concurs in the recent expression of the opinion of the Governments of France and Germany, in regard to the serious evils arising therefrom. The House therefore urges the Government to co-operate with the powers in the calling of an international con- ference. Act of Congress of the United States, March 3, 1895. "Whenever the President of the United States shall determine that the United States should be represented at any international conference called with a view to secure internationally a fixity of relative value between gold and silver as money by means of a common ratio between those metals, with free mintage at such ratio, the United States shall be represented at such conference by nine delegates." Three of the delegates are to be appointed by the President, three by the Senate and three by the House of Representatives. Missing Page 178 MONETARY SYSTEMS OP THE WORLD. Free and unlimited coinage of both gold and silver for any depositor into pieces stamped " not a legal tender," and instead of " one dollar " and multiples, marked " ten dimes " and multiples. The same, substituting for " dollar " the word " globe." Issue silver certificates in denominations of Jfs.ooo and upward upon deposits of small ones; similar to currency certificates (see page 37). Coin silver dollars freely at a ratio to gold based upon the average market price for 90 days preceding the date when this plan shall go mto effect, which ratio shall continue to be fixed until otherwise provided by law. Free, coinage and the issue of coin certificates, redeemable in gold or silver coin or bars at option of the Treasury ; such certificates also to be issued on deposits of bonds of the United States in the Treasury at the rate of interest which the bonds bear, but the aggregate of certificates not to exceed an amount which would leave the coin and bullion in the Treasury available for their redemp- tion at less than 60 per cent, of the issue. Coin silver bullion acquired under law of 1890 at the rate of |3,ooo,ooo monthly, and purchase sufficient additional silver to coin ^2,000,000 more, the aggregate stock of dollars not to exceed |8oo,ooo,ooo ; cancel silver certificates and Treasury notes of 1890 when received into the Treasury and prohibit issue of National bank notes under jjSio. BULLION NOTES AND CERTIFICATES. Purchase silver bullion at prices to be fixed by a "mint commission ;'' issue in payment Treasury notes redeemable in coin or in bullion at current price. Issue gold and silver notes of denominations as at present or larger, upon deposits of bullion, 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, and 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 exceedsji.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 $20 and jSio, and silver subsidiary pieces only, at the rate of 464.4 grains fine silver (516 grains standard : ratio 20 to 1), to provide coin for the redemption of the 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, f 1.35 per ounce fine ; the law authorizing the issue of currency certificates to be repealed. Issue gold bullion and silver bullion certificates upon deposits at present ratio ; coin the bullion from time to time ; when |ioo,ooo,ooo has been acquired. MONETARY SYSTEMS OP THE WORLD. 179 issue in addition an equal sum of the respective kinds of certificates ; ttie cer- tificates to be legal tender for all purposes and redeemable in gold coin or silver coin, according to their tenor. UNITED STATES NOTES AND TREASURY NOTES. Issue $300,000,000 additional notes, to be convertible into bonds. Issue $600,000,000 of notes (on aluminum or on silk-fibre paper as the people may prefer) and retire all outstanding bonds therewith. Issue 1250,000,000 additional legal tender notes. Coin silver and issue notes until the total circulation shall amount to $6,000,- 000,000. Issue $300,000,000 of notes and place in reserve for every $3 issued $1 in coin ; or if coin cannot be obtained deposit 5.20 bonds (not to exceed $100,000,000), which may be sold from time to time to obtain coin. Issue notes to the States to the amount of $30 per capita, upon the deposit of State bonds in the Treasury. Issue notes upon deposits of gold coin. Issue notes to the amount of National-bank notes retired. Make the present notes redeemable in equal parts of gold and silver coin. Issue in lieu of the present notes Treasury notes convertible into bonds at the option of the holder ; such bonds to be reconvertible into notes, the bonds to bear no interest while the notes are outstanding. Issue no more notes or certificates under $5. Redeem all notes by issuing bonds which shall be available for National-bank circulation. Issue notes for Clearing-House certificates (see p. 164) bearing 6 per cent, interest ; the certificates tp be returned to clearing-houses issuing them upon return and cancellation of notes. Issue additional notes to the amount of the revenue for the current fiscal year, and as much more annually as the revenues shall increase. Issue " national currency notes " under supervision of a commission com- posed of Treasury officers, to be legal tender for all purposes and available for reserves of National banks; to any bank upon the deposit of bonds - of the United States, at par — of States or municipalities which never defaulted in their interest at 90 per cent., provided the bank guarantees the bonds ; if bonds depreciate, addi- tional deposits shall be made ; the Treasury to have a first lien upon the bank's assets to the amount of such notes; notes subjected to a tax — of 1 per cent, on the amount of notes— up to 50 per cent, of the capital — 2 per cent, for the excess up to 75 per cent. — and 4 per cent, on the excess up to 100 per cent, of the capital of the bank to which notes may be issued ; failure to comply with regulations of the commission subjects bank to liquidation ; banks may deposit any lawful money and receive back their bonds, such lawful money to be held to redeem the currency notes represented ; the United States pledged to redeem all currency notes in coin ; sale of 4 per cent. 5-year bonds authorized to obtain coin ; for every 50 millions of currency notes issued the commission shall issue 20 millions of bonds 180 MONETARY SYSTEMS OF THE WORLD. and hold proceeds as a special redemption fund ; currency notes redeemed in coin or received for public dues shall be reissued ; general provisions of National-bank act made applicable to the banks and notes herein specified. Sell the silver bullion in the Treasury and redeem the Treasury notes of 1890 with the proceeds, any deficiency to be provided for out of the revenues. Repeal legal tender provision as to notes ; issue bonds and utilize gold reserve to retire the United States notes as rapidly as National-bank notes are issued in their stead upon the bonds so supplied. Buy gold coin and bullion with notes, silver coin and silver certificates ; hold gold so acquired and any other that may be in the Treasury solely for the redemp- tion of Government notes ; issue additional Treasury notes in all respects like the present ones, to the amount of gold acquired under this plan ; coin the seignorage and issue silver certificates therefor at once. Abrogate the supposed right of any holder of notes to demand any particular kind of coin ; the Secretary of the Treasury to maintain the parity between gold and silver and not to discriminate in favor of either. Issue 5250,000,000 of legal-tender notes ; f 100,000,000 to cover destroyed or lost notes, $150,000,000 to cover the decrease of National-banknotes ; |ioo,ooo,ooo to be issued annually, on account of increasing population ; coupled with a grad- uated income tax. NATIONAL BANK NOTES. The Baltimore plan : Repeal the requirement in the National-bank act for the deposit of bonds to secure circulation issued ; allow banks to issue notes to the extent of one-half their paid-up unimpaired capital, subject to a tax of J^ of i per cent. ; and " emergency circulation " to the extent of 25 per cent, additional of such capital to be subject to a considerably heavier tax. Redemption of notes by the Treasury through the 5 per cent. fund. A "guarantee fund" of5per cent, of the circulation to be established, to be held in the Treasury for the prompt redemp- tion of notes of failed banks by the Treasury, to be made good out of the assets of such banks upon which the Treasury is to have a first lien, as well as upon the existing double liability of the shareholders. Permit banks to issue notes to the extent of the par of bonds deposited (instead of 90 per cent.), and repeal the tax of one per cent, on circulation. Permit note-issues without bond-security, the notes to be a first lien upon the bank assets, and if not sufficient to redeem the notes of failed banks, other banks in the same State to be assessed pro rata to make up the deficiency ; the issues to be limited to 75 per cent, of the paid-up capital of each bank ; " emergency circulation " equal to J^ of the authorized amount maybe issued, subject to a tax of 6 per cent, per annum. Cancel bonds on deposit by National banks for circulation; issue notes to the banks to the extent of fi2o (including notes now issued by banks) for every jSioo of bonds so canceled ; bank-notes thereafter to be the obligations of the United States, receivable and redeemable the same as Treasury notes ; coin the silver bullion held, to provide for the redemption of notes. MONETARY SYSTEMS OF THE WORLD 181 Provide for coin as well as bond security for bank notes ; repeal lo per cent, tax upon State-bank issues, provided such banks deposit coin and bonds as herein required, with proper State officers, and provided States adopt laws in accord with this proposition ; National banks may also deposit State, county or municipal bonds, if solvent, not more than 20 per cent, of any one State, etc. ; coin must equal 20 per cent, of total security deposit, half of silver and half of gold ; the United States to have a first lien upon the assets of National banks to secure noteholders ; failure to redeem notes in coin at its counter subjects National bank to liquidation and State bank to ten per cent tax. Repeal requirement of deposits of bonds, and prohibit the issue of notes ; bank notes retired to be replaced by United States notes. In lieu of bonds. National banks to deposit legal-tender notes to the extent of 30 per cent, of their circulation, which shall not exceed 75 per cent, of the paid- up capital ; legal-tender notes deposited to constitute a guarantee fund to be maintained at that figure by the bank, to be returned if bank retires notes ; notes to be a first hen upon assets of banks ; tax of Y2 per cent, contmued ; no notes lower than |io to be issued ; redemption of notes by banks or at their agencies, instead of by Treasurer ; safety fund of 5 per cent, to be gradually established by a tax to further protect notes ; if this fund and guarantee fund and cash assets are not sufficient to meet the notes of a failed bank ; all other banks to be assessed to redeem such notes, reimbursable from the funds thereafter . remove limitations upon reducing or increasing circulation ; any surplus in the Treasury may be used to redeem and cancel the notes on deposit, but not to exceed 70 per cent, of bank notes issued. State banks to issue notes free frorn 10 per cent, tax, under State supervision, provided, first, the amount does not exceed 75 per cent, of the paid-up capital ; second. State laws are passed making shareholders doubly liable, and notes are a first lien upon assets ; third, that the bank maintains the 30 per cent, legal tender deposit with proper State officer, and fourth, continues to redeem its notes promptly on demand. Issue notes to extent of 75 per cent, of capital paid up, without bond security, but no notes under $10 ; require banks to maintam a 25 per cent, specie reserve on circulation with the Treasury ; tax of 2 per cent, per annum to go into a fund for expenses and to redeem failed banks' notes, the tax to be reduced as the fund grows ; reserve to be under control of a board of bank presidents and Comp- troller of Currency, in New York ; notes redeemed currently out of one-fifth of reserve to be in hands of Comptroller, reimbursable at once by banks ; Govern- ment notes to be redeemed to the extent of 75 per cent, of new bank issues, by sales of bonds when necessary. STATE BANK NOTES. Repeal the tax of 10 per cent, upon issues of notes, which nov/ prevents the State banks from issuing them. A modification providing that State banks before issuing notes must deposit with a State officer solvent bonds of that State or a county or city therein, to the full amount of such issue, which shall not exceed f 5 per capita. 182 MONETARY SYSTEMS OF THE WORLD. Authorize the issue of State bank notes on deposits of United States notes, coin or coin certificates, with the Treasurer of the United States ; amount not to exceed the bank's capital, plus an amount equal to the average annual reserve of coin, but "reserve issues " notto exceed 50 per cent, of total issue. United States notes to be retired to the extent of 90 per cent, of the deposits of cash for security, the remamder to be held in reserve for redemptions ; eventually these notes to cease having legal-tender power, and subsequently Treasury notes to be retired in like manner ; banks refusing to take out notes to be taxed 12 per cent, on amount allottable to them. National banks to continue as now. Upon certificate from the Governor and Treasurer of any State, satisfactory to the Comptroller of the Currency, that a State bank has deposited approved State or municipal or other bonds, such bank's note issues shall be exempt from payment of the 10 per cent. tax. Repeal 10 per cent, tax on notes and all bond-security provisions ; permit State banks to receive notes from Treasury the same as National banks, if State laws provide for double liability of shareholders, make notes a prior lien upon assets, and adequate provision for redemption of notes ; issues to be limited in both State and National banks to 75 per cent, of capital ; State banks to come, in other respects, under provisions of National Bank Act ; National bank notes made a prior lien upon assets ; ^ per cent, annual assessment upon circulation to meet expenses and provide a guarantee redemption fund in the Treasury of 3 per cent, on the circulation, to be used to redeem notes of any failed banks when assets are insufficient. State banks (or National banks) to issue notes under Federal supervision to the extent of one-third of paid-up capital ; aggregate not to exceed |io per capita of population, unless Government notes are withdrawn, then JS15 per capita; 25 per cent, reserve upon circulation in coin or lawful money to be constantly held in bank ; a tax of one per cent, on circulation to be paid ; additional circulation to the extent of 20 per cent, of the capital may be issued subject to a 2 per cent, tax ; the tax so received to be deposited in a fund in the Treasury and invested in bonds, and when it reaches 75 per cent, banks may surrender the 25 per cent, reserve to Treasury and relieve themselves of all liability for notes ; failure to redeem notes at counter involves liquidation ; provisions of National-bank act not affected hereby, apply to the banks availing themselves of the provisions of this plan. State-banks to issue notes free from tax, if the States respectively pass laws embodying in addition to such other provisions as they shall prefer, the following : issues not to exceed 75 per cent, of paid-up capital ; notes to be a first lien upon assets ; stockholders doubly liable for notes ; prompt redemption of notes by banks in legal tender money of the United States ; examinations by proper State officers and published reports at least five times a year. Any persons, corporation, association or mining company may obtain char- ters as silver-guaranty banks, subject to the National-bank act, except as provided herein ; deposits of silver buUion to be accepted by the Treasury at market value and in addition United States bonds equal to 20 per cent, of the value of MONETARY SYSTEMS Olf THE WORLt). IsS such deposit ; notes to be issued to the amount of the value of the silver bullion ; notes to be full legal tender except for customs duties ; depreciation of silver to be made good by additional deposits ; only domestic silver bullion (sworn to be such) acceptable as security ; duty upon all silver imports of 20 cents per ounce ; aggregate issue of such notes not to exceed $8 per capita. See also under National-bank notes. GENERAL PROPOSITIONS. Purchase and coin (at ratio of 16 to i) all silver and gold bullion offered ; abolish the gold reserve ; issue $2 in "greenbacks " for every dollar of silver or gold coined ; all to be legal tenders and interchangeable in sums not over jSioo ; Government payments to be made in equal proportions of each kind of such money, excepting bonds, which may be paid in equal parts of gold and silver coin. Purchase all silver bullion mined in the United States and coin the same at the present ratio ; issue United States notes to the extent of eight times the value of the bullion acquired (but not more than j!5o,ooo,ooo in anyone month) for a period of three years ; loan the notes upon real estate at 2 per cent, for periods not longer than eight years. Re-establish free and unlimited coinage of silver dollars ; call in and redeem all bonds at the rate of |io,ooo,ooo per month, using the silver and the $100,000,000 gold reserve to pay them ; issue a sufficient amount of "paper money " to retire all National-bank and Government notes, gold and silver certificates, and as much more as may be needed to pay expenses of the Government, all of which paper money is to be full legal tender ; repeal all currency and bond laws, the National-bank act, the tariff and internal revenue laws. Making contracts payable in specific kinds of money void after passage of the law. Repeal a// legal tender laws — those applicable to gold and silver, as well as those applicable to paper. The money of the United States to consist of gold and silver coin and Treas- ury notes redeemable half and half in such coins ; notes when redeemed may be reissued ; retire all Government notes or certificates and issue these Treasury notes in lieuthereof ; buy all domestic bullion in lots not less than JSioo (of which 50 per cent, must be gold), but only while silver bulHon is below $1 per ounce ; pay for the bullion in these Treasury notes ; coin shall be legal tender for all payment, unless otherwise specified, if tendered in equal parts of silver and gold ; duties on imports payable in gold only, but other taxes in gold and silver or in notes ; State banks to receive these Treasury notes upon deposit with Treasurer of the United States of gold coin 50 per cent, and bonds 50 per cent. , United States bonds at face value. State bonds at 10 per cent, discount on market rate, city bonds and solvent railways' first mortgage bonds at 15 per cent, discount, provided the banks' own corporate bond for the full amount, guaranteeing them, is also filed ; such banks subject to examination by the Treasurer of the United States and to a tax of i 184 MONETARY SYSTEMS OF THE WORLD. per cent, on the notes received, to provide a fund for the creditors in case of failure of the bank. National banks to remain as now. Issue Treasury notes to buy gold and silver bullion ; the amount issuable to be 3^ times the amount of net gold and silver owned by the Treasury ; notes redeemable in coin or bullion at holder's option, but whether in gold or silver at the option of the Treasury ; sufficient coin to be struck for this redemption, but for no other purpose ; notes to be legal tender, but receivable for public dues only from citizens of the United States ; aliens or such persons acting as agents for them must pay dues to the United States in gold coin or bullion. All kinds of money, coin or paper, including bank notes, to be equally and interchangeably full legal tender, except that aliens and their agents, etc., shall pay dues to the United States in gold ; subsidiary silver coins to be legal tender to j525, minor coins to |5 ; contracts payable in any kind of money at debtor's option; gold contracts declared void and not enforceable. Authorize a Federal Currency Bank with branches, the capital, $40,000,000, to be provided by all banks, State or National, that desire to issue or continue issuing notes ; deposit of approved securities or coin and bullion with such bank, which shall supervise the issue and redemption of notes, and guarantee them ; the bank to do no deposit or discount business, but to be permitted to buy and sell bullion and foreign exchange, to issue "emergency circulation" upon bills receivable deposited with it by other banks, but subject to a progressive taxation, by the Federal Government under whose supervision it shall be ; authorize it, further, to have the Government's deposits either in its own or in some guaranteed banks' vaults, upon the deposit with the Treasury of approved bonds ; the Gov- ernment paper issues to be retired by means of 2 per cent, bonds ; all provisions for Treasury redemptions or securing of bank-notes to be abolished ; notes to be issued in distinctive forms or colors to indicate the character of the security for the issue and to be a first lien upon the assets of the issuing bank. Appoint a monetary commission of fifteen, not more than seven to be bankers, and not more than two from any one geographic section, to collect data bearing on the subject and to frame a comprehensive system of currency for the United States. Authorize the issue of silver certificates to the extent of three times the amount of dollars on deposit ; issue legal-tender notes for any deficiency in the revenue ; gold to be paid upon any note or obligation of the United States to the extent of only one-half the amount when in excess of |i,ooo, unless the surplus of gold or scarcity of silver makes it advisable to do otherwise. Establish at least one sub-treasury or Government bank in each county in the United States under the supervision of a Banking and Loan Bureau in the Treasury Department ; all notes and certificates of the Government to be legal tenders, and gradually redeemed — gold certificates in gold, silver certificates in silver and notes in the metal at the time most plentiful in the Treasury ; all metal in the Treasury to be covered into one redemption fund; a new form of legal tender Treasury note to be issued in lieu of the various paper issues named, to the amount of three times the coin and bullion ; all bullion to be forthwith coined; MONETARY SYSTEMS OP THE WORLD. 185 silver to be coined free and unlimited in amount ; Government banks herein provided for to be under supervision of the Treasury through a bonded manager or director appointed by the Loan Bureau ; these banks to receive deposits from individuals of jpi and upward, at 3 per cent, interest ; if for short terms (less than one year) 15 per cent, of the cash must be kept at place of deposit ; long term deposits may be transferred to points where needed ; surplus Treasury notes to be deposited in these banks in proportion to the needs of the community ; these notes and the deposits may be loaned to any citizen giving personal or real estate security, not to exceed, however, $3,000 at any one time to any one person, at 4 per cent, interest, for periods from 3 months to 20 years, but loans on personal security not longer than i year ; the United States to guarantee the deposits ; postal savings banks to be established as adjuncts to Government banks ; no more National banks to be established or continued after expiration of charters. Establish a central bank with principal and subordinate branches, with $100,000,000 capital, ^ gold f bonds ; any bank may become a branch, by invest- ing part of its capital in the main institution, directly or through other banks ; all these shall be allowed to issue notes ; Government notes to be retired by issue of 3 per cent, interminable bonds, to be taken by the banks, and National-bank notes to be exchanged for the new bank notes ; new notes to be prepared and issued to banks by the Treasury ; old bank notes to be surrendered to the Treas- ury for bonds now held ; after fixed date no Government note shall be a legal tender, and other notes taxed 10 per cent. ; banks not coming into the scheme to pay a tax of X pcr cent, on deposits and same on loans and discounts ; customs duties to be paid in gold, internal taxes in notes of solvent banks ; Treasury and State bank departments to exercise joint supervision ; silver to be coined for banks at their cost, with name of bank and weight, and the distinctive word " free' ' thereon, such coin to be at 90 per cent, of the gold value of silver bullion therein, redeemable by issuing bank in gold, and payable in redemption of small bank notes to the amount of $5. The central bank to guarantee the redemption of notes in coin, directly or through its principal branches, and it shall have power to com- pel liquidation for failure to redeem notes, concurrently with the Comptroller of the Currency. Coin the silver now in the Treasury and purchase any silver that may be offered, coining the same from time to time ; issue 3 per cent, ten-forty-year gold bonds, to obtain gold sufficient to maintain the parity of silver and gold money ; issue silver certificates upon the coin and bullion in the Treasury, which certificates are to be legal tenders ; amount of bonds and of certificates limited to $500,000,000 ; bi-metallic coins authorized, the "metric dollar " to weigh 12 grammes, of which .885 gramme gold, 9.915 grammes silver, 1.200 copper, and the "metric four- doUarpiece," 6 grammes of gold, .3 gramme silver, .7 gramme copper, the latter for domestic and international use ; provide for State-bank notes without tax where State laws require securities to be deposited and prompt redemption of notes ; National banks to be permitted to loan money on bond and mortgage. Issue coin certificates on gold and silver coin and bullion in the Treasury or hereafter acquired, redeemable in gold or silver coin at the option of the Treas- 186 MONETARY SYSTEMS O-F THE WORLD. ury ; retire all gold and silver certificates and Treasury notes with the coin certifi- cates, as well as all United States notes under |io and over jtsoo, substituting other denominations for the latter. Issue full legal-tender currency notes redeemable in coin, to the amount of the interest-bearing debt, at par, retiring the debt with such notes ; if debt is not presented within ninety days, it is to be forever barred ; issue an additional amount of currency notes to pay pensions, which are to be paid only in such notes ; two-thirds vote of Congress required to make this plan legal. Coin the seignorage bullion and issue certificates thereon ; provide for the issue of 3 per cent, five-year coin bonds to maintain the parity of the two metals at present ratio ; bonds now outstanding may be retired with the new bonds on a 3 per cent, basis ; repeal to per cent, tax on State-bank notes ; tax on National- bank notes to be reduced to X o^ ^ psr cent, per annum, and such notes to be issued to the par value of bonds on deposit; make such notes a first lien upon the banks' assets. Retire all silver certificates, gold certificates and Treasury notes of 1890 with a new form of Treasury notes, legal tender for all purposes except where gold is contracted for ; to be redeemable in standard coin and reissued ; the silver bullion in the Treasury to be coined and all the coin to become the property of the Treas- ury as fast as the certificates and notes are retired ; bank reserves to be held in silver dollars to the extent of 50 per cent. ; a reserve equal to 30 per cent, of all Government notes outstanding to be established, one-half silver and one-half gold ; either kind of metal, if below 6 per cent, in relation to the notes outstand- ing, to be replenished by the sale of five-twenty-year bonds at best rates obtain- able to procure such metal. Purchase all gold and silver bullion offered, paying 60 cents per gramme of fine gold, to be increased annually by one cent per gramme until 1935; jSi^per gramme thereafter, and silver at one twenty-fifth of the price of gold ; ratio I to 25 ; coin pieces now only at ultimate value in 1935 ; issue specie notes full legal tender even when otherwise contracted ; redeemable in gold or silver at option of holder, but until 1935 in bullion only, for the first quarter of each year ; deposit all present or acquired gold and silver coin and bullion in a specie reserve fund ; issue notes to the extent of all coin and bullion now in the Treasury or derived from revenues ; no coins now in use to be reissued when once received ; maintain equal amount of gold and silver in reserve by issue of 4 per cent, thirty-year bonds ; redeem all outstanding Government notes and certificates with specie notes ; purchasing price of silver may be reduced to prevent undue accumulation ; establish bond-listing commission to determine which State, county or municipal bonds may be received for security for National-bank circulation ; tax on bank circulation 4 per cent., payable quarterly out of interest due on bonds ; fund so raised to be eventually used to redeem notes if all other resources fail ; the United States to be entirely responsible for the redemption of bank notes. MONETARY SYSTEMS OF THE WORIvD. 187 APPENDIX. THE CAUSES FOR RECENT BOND ISSUES BY THE UNITED STATES TREASURY. In January, 1893, the condition of the Treasury was by no means encouraging. The excess of expenditures over receipts, the continuing exportation of gold drawn chiefly from the gold reserve on notes presented for redemption, and the compulsory purchase of silver, by which the supply of such notes was increased, led Secretary of the Treasury Foster to believe it necessary to make use of the power given by the act of January 14, 1875, and issue bonds to replenish the gold reserve, which at the end of February, 1893, had fallen to $103,000,000. On March 4 Secretary Carlisle took hold of the Treasury Department ; there was a slight improvement in the conditions during that month, but it was only temporary, and by June the reserve had decreased to $95,000,000, the general cash balance (inclusive of the reserve) having remained fairly stationary. At the end of the fiscal year it was found that the receipts had exceeded expenditures by only $2,000,000, and the revenues in prospect were not nearly as large as had been estimated. On June 30 President Cleveland called Congress in extraordinary session on August 7, to consider the financial situation ; in his message at the opening of the session particular stress was laid upon the importance of stopping the buying of silver, and the discussion was practically limited to that question. A bill was at once introduced providing for the discontinuance of such purchases ; various amendments looking to free coinage were introduced, but rejected by majorities of 102 and more in the House of Representatives, which finally passed the original bill by a vote of 239 to 108, on August 23, 1893. The Senate, after many propositions to amend were voted down, some by very narrow majorities, finally passed the bill" with an amendment declaring it to be the policy of the United States to continue the use of both gold and silver as standard money, to coin both into money of equal value, to be secured by inter- national agreement or legislation ; that the eflTorts of the Government should be steadily directed to the establishment of a safe system of bi-metallism. This occurred on October 30, 1893, the vote being 43 to 32. The House of Represen- tatives on November i, passed the amended bill and it was signed by the Presi- dent the same day, whereupon Congress adjourned. By this time the general cash balance had declined to $102,000,000, and the gold reserve to $84,000,000. The gold importations of the preceding summer, to allay the panicky conditions which then prevailed, served to check the withdrawals from the Treasury ; but it had been found necessary to use gold in the regular dis- bursements. When, in December, exports were resumed the Treasury stock was not called upon to supply much for that purpose ; but general payments reduced the cash balance to $90,000,000, only $9,000,000 beside the gold, so that it was absolutely necessary to continue using it for regular disbursements. By the end 188 MONETARY SYSTEMS OF THE WOULD. of January, 1894, the net gold stood at $65,000,000, the other available cash at $19,000,000. Secretary Carlisle having pointed out to Congress, which had reassembled in regular session early in December, that he should have some legislation providing for borrowing money at rates less onerous than those imposed by the act of 1875 (which authorized issues of 4 per cent. 30-year, 4^ per cent. 15-year, and 5 per cent. lo-year bonds) and receiving no encouragement, finally called for proposals for the purchase from the Treasury of $50,000,000 of the last-mentioned class of bonds, as follows : CIRCULAR.— INVITING PROPOSALS FOR FIVEJ PER CKNT. BONDS. Treasury Derartment, "| Office op the Secretary, > "Washington, D. C, January 17, 1894.) By virtue of the authority contained in the act entitled "An act to provide for the resumption of specie payments," approved January 14, 1875, the Secretary of the Treasury hereby offers for public subscription an issue of bonds of the United States to the amount of $50,000,000, in either registered or coupon form, in denominations of $50 and upwards, redeemable in coin at the pleasure of the Government after ten years from the date of their issue, and bearing- interest, payable quarterly in coin, at the rate of 5 per cent, per annum. Proposals for the whole or any part of these bonds will be received at the Treasury Department, office of the Secretary, until twelve o'clock noon, on the first day of February, 1894. Proposals should state the amount of bonds desired, whether registered or coupon, and the premiumi which the subscriber proposes to pay, the place where it is desired that the bonds shall be delivered, and the office, whether that of the Treasurer of the United States or an Assistant Treasurer of the United States, where it will be most convenient for the subscriber to deposit the amount of his subscription. Failure to specify the above particulars may cause the proposal to be rejected. As soon as practicable, after the ist day of February, 1894, the allotment of bonds will be made to the highest bidders therefor, but no proposal will be considered at a lower price than 117.223. which is the equivalent of a 3 per cent, bond at par, and the right to reject any and all proposals is hereby expressly reserved. In case the bids entitled to allotment exceed the bonds to be issued, , they will be allotted pro rata. Notices of the date of delivery of the bonds will be sent to the subscribers to whom allotments are made as soon as practicable, and within ten days from the date of such notice subscriptions must be paid in United States gold coin to the Treasurer or such Assistant Treasurer of the United States as the subscriber has designated, and if not so paid the proposal may be rejected. The bonds will be dated February i, 1894, and when payment is made therefor, as above, accrued interest on both principal and premium from February i, 1894, to date of payment, at the rate of interest realized to the subscriber on his investment, will be added. All proposals should be addressed to the Secretary of the Treasury, Washington, D. C, and should be distinctly marked " Proposals for subscriptions to five per cent, bonds." J. G. Carlisle, Secretary, The proposals aggregated $52,292,150, of which ^42,996,850 offered the " upset " rate, and fe, 295,300 better rates ; all of the latter were accepted and the former scaled to the amount remaining of the JS5o,ooo,ooo, producing $58,660,917. Notwithstanding the fact that payments in gold coin were asked for by the Secre-r tary, $24,396,459 were practically paid for otherwise, the gold for the actual pay-^ ment having been withdrawn from the Treasury. But of the amount received for the bonds and premium, enough gold was acquired to bring up the reserve to $106,000,000, and the general cash contained $33,000,000 of other moneys. By this time Congress had set itself to work upon its special task — the revision MONETARY SYSTEMS OP THE WORI/D. 189 of the tariff; and in anticipation of many changes, merchandise importations had fallen off materially, thus keeping the revenue down ; the decrease in consuming power after the panic, the reduction in the volume of manufactures, etc., served to aggravate the general situation ; Congress stopped its special business long enough to pass a measure for the coinage of the seignorage bullion and issuing silver certificates ($55,000,000) thereon at once ; which was the only relief offered to the Treasury. The President promptly vetoed the bill. Gold exports became heavier in the course of the spring and summer, all being supplied by the Treasury on notes redeemed ; by the 8th of August the gold reserve touched its lowest point (152,200,000); the general cash which the $71,000,000 deficit in the Treasury had again brought down to $117,000,000 in June, rose somewhat in July and August by payments of the whiskey tax, and at the end of August the Secretary-had $127,000,000, of which $55,000,000 was in gold. Congress passed the tariff law August 27 and adjourned soon thereafter. Exports ceased about the 8th of August and the reserve began to increase slowly ; but by the end of October it was only $61,000,000 ; the other cash in the Treasury standing at $46,000,000. Accordingly in November a second bond issue of $50,000,000 was decided upon, and a circular issued November 15th, inviting proposals for $50,000,000 additional 5 per cent, bonds of the same issue as that of February. The circular varied from the previous one in one particular, viz : Bidders whose proposals are accepted will be required to pay twenty per cent, in gold coin, or gold certificates, upon the amounts of their bids as soon as they receive notice of the acceptance of such bids, and to pay in like coin or certificates an additional twenty per cent, at the expiration of each ten days thereafter, until the whole is paid ; but they may, at their option, pay the entire amount of their bids when notified of acceptance, or at any time when an instalment is payable. The first payment, however, of not less than twenty per cent, must be made when the bidder receives notice of the acceptance of his proposal. It will be observed that no " upset " price was fixed in this circular. The proposals received aggregated 1178,341,150, at the following rates : At above 117.077 $10,935,250 At 117.077 for all or none 50,000,000 At froTi 116.8898 to 117 077 5,629,800 At 116.8898 for all or any part 50,000,000 At below 116.8898 61,776,100 The two proposals for $50,000,000 each came from a New York syndicate and were in the alternative. It was manifestly better for the Treasury to accept the first-mentioned proposal of this syndicate, as more money was obtainable under it than under any combination of the other proposals, and this one was accord- ingly accepted. The bonds were of the same issue as those of February and had therefore only about 9X years to run ; the investment rate was therefore about 2^ per cent. The amount received was $58,444,900. Although it was reported that a tacit agreement was made by the syndicate among themselves to draw no gold from the Treasury for the payments to be made under the proposal, and although the actual payments were made in gold, a considerable sum was withdrawn to recoup certain parties who had advanced 190 MONETARY SYSTEMS OF THE WORLD. the coin for the purpose. The Treasury lost in December |22,ooo,ooo more gold than was exported, and the reserve, which had recovered to $tii, 000,000 early in that month, was down to |S6,ooo,ooo again at its end. During the calendar year that closed with that month the excess of exports of merchandise and silver over imports was fully |i86,ooo,ooo ; nevertheless it was necessary to export $81,000,000 more gold than was imported, indicating a steady return of American securities from abroad and the general withdrawal of credits, ostensibly due to the fear of silver payments here. Congress was appealed to in the message of the President and in the annual report of Secretary Carlisle, early in December, to take measures to remedy the evils ; again on January 28 the President sent a special message ; but it was in vain that a more reasonable bond authority was requested ; propositions to retire the United States notes and Treasury notes, thus doing away with the facility for withdrawing gold, were scarcely given a hearing in Congress ; the conditions continued ; the deficiency in the revenues, amounting for the calendar year to jf6i, 000,000, served to aggravate the untoward state of affairs. In January the net excess of gold exports amounted to JS25, 000,000 and the withdrawals upon notes were upward of $43,000,000 ; the gold reserve fell to $49,000,000 at the end of the month. It became necessary, therefore, in order to maintain gold payments, to acquire further sums of the yellow metal by bond issues ; but more was needed than this : it was requisite that the gold placed in the Treasury remain there ; that the exports be checked and imports be induced. In other words, the Treasury was compelled to buy gold in the markets of the world, instead of in New York only, and to buy in addition such a credit as would keep the gold so acquired in its vaults. Accordingly the President and the Secretary of the Treasury on February i opened negotiations looking to this end, using the authority, still existing, of an act of March 17, 1862, embodied in the Revised Statutes as Section 3,700. Within a few days the public learned of this movement, and when it became definitely understood, the exports of gold ceased at once, some of the gold which had been withdrawn from the Treasury for that purpose being actually returned to its vaults. But the reserve had fallen to $42,000,000 in the week. The contract with the syndicate was finally signed on February 8, as follows : CONTRACT. This agreement entered into this eighth day of February, 1895, between the Secretary of the Treasury of the United States, of the first part, and Messrs August Belmont & Company, of New York, on behalf of Messrs. N. M. Rothschild & Sous, of London, l^ngland, and themselves, and Messrs. J. P. Morgan & Company, of New York, on behalf of Messrs. J. S. Morgan & Company, of lyondon, and themselves, parties of the second part. Witnesseth ; "Whereas, it is provided by the Revised Statutes of the United States (section 3,700) that the Secretary of the Treasury may purchase coin with any of the bonds or notes of the United States authorized by law, at such rates and upon such terms as he may deem most advantageous to the public interests ; and the Secretary of the Treasury now deems that an emergency exists in which the public interests require that, as hereinafter provided, coin shall be purchased with the bonds of the United States, of the description hereinafter mentioned, authorised to be issued under MONETARY SYSTEMS OF THE WORLD. 191 theact entitled "An act to provide for the resumption of specie payments," approved January 14 1875, being bonds of the United States described in an act of Congress approved July 14, 1870, entitled "An act to authorize the refunding of the National debt," Now, therefore, the said parties of the second part hereby agree to sell and deliver to the United States three million five hundred thousand ounces of standard gold coin of the United States, at the rate of $17 80441 per ounce, payable in United States 4 per cent, thirty-year coupon or registered bonds, said bonds to be dated February x, 1895, and payable at the pleasure of the United States after thirty years from date, issued under the acts of Congress of July 14, 1S70. Janu- ary 20, 1871, and January 14, 1875, bearing interest at the rate of 4 per cent, per annum, payable quarterly. First. — Such purchase and sale of gold coin being made on the following conditions : 1. Atleast one-half of all coin deliverable hereinunder shall be obtained in and shipped from Europe, but the shipments shall not be required to exceed three hundred thousand ounces per month, unless the parties of the second part shall consent thereto, 2. All deliveries shall be m,ade at any of the Sub-Treasuries or at any olher legal depository of the United States. 3. All gold coins delivered shall be received on the basis of twenty-five and eight-tenths grains of standard gold per dollar, if withinlimit of tolerance. 4. Bonds delivered under this contract are to be delivered free of accrued interest, which is to be assum.ed and paid by the parties of the second part at the time of their delivery to them. Second. — Should the Secretary of the Treasury desire to ofier or sell any bonds of the United States on or before the first day of October, 1895, he shall first offer the same to the parties of the second part ; but thereafter he shall be free from every such obligation to the parties of the second part. TTiird.—T'hQ. Secretary of the Treasury hereby reserves the right, within ten days from the date hereof, in case he shall receive authority from Congress therefor, to substitute any bonds of the United States, bearing 3 per cent, interest, of which the principal and interest shall be specifi- cally payable in United States gold coin of the present weight and fineness for the bonds herein alluded to ; such 3 per cent, bonds to be accepted by the parties of the second part at par, i. e., at $18,60465 per ounce of standard gold. Fourth.— ^o bonds shall be delivered to the parties of the second part, or either of them, except in payment for coin from time to time received hereunder ; vrhereupon the Secretary of the Treas- ury of the United States shall and will deliver the bonds as herein provided, at such places as shall be designated by the parties of the second part. Any expense of delivery out of the United States shall be assumed and paid by the parties of the second part. Fifth. — In consideration of the purchase of such coin, the parties of the second part, aud their associates hereunder, assume and will bear all the expense and inevitable loss of bringing gold from Kurope hereunder ; and, as far as lies in their power, will exert all financial influence and will make all legitimate efforts to protect the Treasury of the United States against the with- drawals of gold pending the complete performance of this contract. In witness whereof the parties hereto have hereunto set their hands in five parts this 8th day of February, 1895. J. G. Carlisle, Secretary of the Treasury. August Belmont & Co , On behalf of iflessrs. N. M. Rothschild & Sons, London, and themselves. J. P. MOEGAN & Co., attest: On behalf of Messrs. J. S. Morgan & Co., London, and themselves. W. E- Curtis. Francis Lynde Stetson. In accordance with its terms, the President called upon Congress to give him the power to sell a 3 per cent, gold hond in lieu of a 4 per cent, coin bond, but before the ten days' option expired the House of Representatives, by a vote of 120 to 167, refused to grant the desired authority. The execution of the terms of the contract began at once ; imports of gold were made weekly ; the payment of the amount to be derived from this side of Missing Page INDEX. PAGE Abstracts of Currency Plans, U. S 177 Abyssinia 107, 157 Afghanistan 99, 155 Africa, Countries of 100 Commerce of - 165 Gold Product 15 Monetary Stock 156, 157 Movement of Gold and Silver 167 Algiers 101, 157 Alloy _ _ 9 America, Countries of ,_. 108 Commerce of 165 Monetary Stock 158 Movement of Gold and Silver 167 Annam — See Indo China - 97 ' Argentine Republic __ 117 Monetary Stock _ j58 Arf Gold and Silver used in. 16 Asi' , "ountries of._ 87 Commerce of 165 Monetary Stock 155 Movement of Gold and Silver 167 Aus' isia ISi Coinage of 17, 124 Commerce of 165 Gold Product 15 Monetary Stock __ 156 Movement of Gold and Silver 124, 167 Austria-Hungary — _ 76 Kank of -.-78, 155, 161 Co,...ge - - 17, 78 Monetary Stock _ - 153 Purchases of Gold by 78 Bahamas - 118 " Baltimore Plan," U. S - 180 Bank of the United States 39,41, 43 Austria - ---78, 155, 161 England 58,59, 161 France -- 65, 155, 161 Germany - 72,155, 161 Russia --- 82,155. 161 Banks, National, U. S 82-37 State, U. S - ---39-50 Propositions as to 180, 182 Bank-deposits, U. S - - --- 145 World 160 Bank-notes - - 12 In Asia — - 155 In Africa 157 PAGE Bank-notes in America 158 InEurope 153, 154, 161 In Oceanica - 156 National, U. S - -- 82, 131 State, U. S- -.39, 128 Banking Capital of the World 160 Banking Power, Great Britain _ 58 World - 160 Belgium - 66 Monetary Stock 153 Bi-metalism 13 Propositions as to 171-175 Bolivia 180, 158 Borneo 126, 156 Brazil - 117 Monetary stock of --. 158 British Empire 55 Dependencies, List of 61 In Africa 102-105, 157 In Asia 87-98, 155 In Europe 85 Gold and Silver Commission 172, 174 Guiana 122 Honduras - 116, 158 India — See India _ 87 West Indies - 118, 158 Bulgaria-- 85, 153 Bullion Notes and Certificates 175,176, 178 Cambodia 97 Canada, Dominion of 108 Banks of - 110, 11] Government Notes 109 Monetary Stock - 158 Cape Colony -- 103 Gold Exports --_ 103 Monetary Stock 158 Central America.. 115, 158 Certificates, Bullion 175,176, 178 ClearingHouse Loan 164 Currency, U. S 37 Gold, U. S 25 Silver, U. S 26 Ceylon - 90 Monetary Stock --- 155 Chile 119 Monetary Stock 158 China 95 Commerce of 165 Gold Product 15 194 MONETARY SYSTEMS OF THE WORLD. PAGE China, Monetary Stock 155 Clearing-House System __. _ 163 Loan Certificates -.- 164 International, Proposed 168 Transactions, London _-_ 163 UnitedStates 163 Coinage, British System 57 French System 64 United States ..20-25 *' On Government Account " 12 World's .17, 152 Coin, International, Proposed — 168, 171 In European Banks 154, 161 Coins, British 56 French 63 United States 19-25.38 Equivalents of Principal 169 Fineness of _. - 9 Nomenclature of 13 Values of Foreign, in U. S 10 Colombia 121, 158 Columbian Souvenir Coins, U. S 23 Commerce of the World 165 By Standards 166 Conferences, International Monetary 170 Congo State ...105, 157 Costa Rica 116 Cuba 113, 158 Currency Certificates, U. S — 37 *' Cut Money" - 104, 112 Cyprus 86 Danish Possessions in America 123 Denmark 73 Monetary Stock 153 Denominations of Paper Money, U. S 136 Deposits in Banks, U. S 145 World 160 Dimensions of Coins, U. S 30^22 Discount on State-bank Notes, U. S 49 Dollar - - 13 Double Standard _ 11 Countries, Coins of 11 Commerce of 166 Money of 159 Dutch East Indies ....126, 156 Guiana — ---. 132 Ecuador 121. 158 EflEective Circulation, Africa 157 America 158 Asia 155 Europe 153 PAGE Effective Circulation, Oceanica 156 United States 1^0 World - ^^9 Egypt - -""J?2 Monetary Stock lo7 England, Bank of ..58,59,155, 161 Equivalents of Principal Coins 169 Eritria - 107, 157 Europe, Coin and Notes of Banks ■ft--155, 161 Commerce of 165 Countries of 55 Gold in Banks of 153.154, 155 Monetary Stock ..153, 154 Movement of Gold and Silver... 167 Note-issues in... .. 153,154.161 Exchange, Par of 11, 169 Quotations of 169 Exchanges, International 165 Exports and Imports, World.. 165 Gold and Silver, U. S 146 World. 166 Falkland Islands 123 Federal Bank, Proposed, U. S 184 Switzerland 69 Fiji.... 126 Fineness of Coins 9 Finland 83, 153 Foreign Coins in U. S 39 Valuesof 10 Fractional Currency, U. S 52 France 64 Banking Power 66, 160 Bank of 65,155, 161 Coinage of 64 Commerce of 365 France, Monetary Stock 153 Money Per Capita 152 Franc System of Coinage 14, 63 Free-banking, U. S 45 Free Coinage 12 Propositions as to 173, 175, 177 Free Gold in U. S. Treasury 29, 135, 192 French Africa... 101, 157 Asia _. 97, 155 Guiana 123 West Indies 123, 158 German Bl-metallists _ j7g East Africa 107^ 157 Germany 7] Bank of - ...72,155, 161 Coinage of 73 Commerce of 155 MONETARY SYSTEMS OF THE WORLD. 195 PAGE Germany, Monetary Stock 153 Gibraltar 85 Gold, Coinage, U. S 17, 20 World IT, 152 In Africa - 157 In America 158 in Asia - 155 In Europe ...-153, 154 In Oceanica - ISf* In European Banks 153, 154, 155 Movement, U. S 146 World - 166, 167 Premium, U. S -- - 28 See also Austria, Greece^ Italy, Portugal, Russia, South America. Product, U. S : 15. 146 World ---- 15 Used in Arts 16 Gold and Silver Commission, British 173, 174 Gold Certificates, U. S 25 Propositions as to _ 175, 177 Gold standard Countries, Coins of _ 10 Commerce of 166 Monetary Stock. - 159 Government Notes, Africa _ 157 America - - 158 Asia - 155 Europe _ _ - 153 Oceanica 156 World - 159 Great Britain --. 55 Banks of -- 59 Colonial and Foreign __ — 60 Great Britain, Banking Power. 58, 160 Coinage of 5( Commerce of 165 Monetary Stock _ 153 Movement of Gold and Silver 167 Greece --- -- 69 Monetary Stock --- 153 Guadeloupe 123 Guatemala - 116 Guianas 122, 158 Haiti --113, 158 Hawaii - 126, 156 Holland— See Netherlands 75 Honduras 116 British 116, 158 Hong-Kong 91, 155 Imports and Exports, World's - 165 Gold and Silver, U. S 146 World 167 PAGE India .. 87 Commerce of 165 Gold Absorbed by 16 Monetary Stock 155 Native States of 90, 155 Silver Question in. . 88 Indies, Dutch East 126, 156 Spanish East 1-6, 156 West 112, 123 Indo-China, French 97 Industrial Use of Gold and Silver 16 International Clearing-House 168 Coin 168, 171 Exchanges 165 Monetary Chronology 170 Monetary Conferences 170 Italy 67 Monetary Stock of 153 Jamaica 112 Japan 93 Monetary Stock 155 Java — See Dutch Indies 125 Kinds of Money 9 In U. S 131-133 In World 159 Korea 98, 155 Latin Union . . .. 63 Coinage of _ ._ 17 Legal Tender 9 See also under United States. Liberia 107, 157 London Clearing-House 163 Madagascar 102, 157 Malta 85 Mauritius 104, 157 Mexico 114 Monetary Stock 158 Silver Product 16, 168 Coinage .17, 115 Mexican Dollar in Orient.. 87, 91, 93, 96, 98, 99, 126 Minor Coin 9, 12 In Europe 153 InU.S.--. 23 In World 159 Money, Kinds of 9 U. S 38, 130 Stock of, Africa 157 America _ 158 Asia 155 196 MONETARY SYSTEMS OF THE WORI.D. PAGE Money, Stock of, Europe 153, 154 Oceanica 156 World _ _ 159 Morocco _ 106, 157 Mozambique 106, 157 Natal .104, 157 National Banks, U. S 33 Propositions as to _ 180 Cape Colony 108 Japan.. 94 Netherlands 75 Commerce of 165 Monetary Stock 152 Indies— See Dutch Indies - 126 Newfoundland Ill, 158 New_ South Wales 185 New Zealand 125 Nicaragua 116 Nomenclature of Coins 13 North America _ 108, 158 North Australia 126 Norway 73 Monetary Stock _ 153 Note Issues and Coin, European Banks 154, 161 Oceanica, Countries of 134 Oceanica, Monetary Stock 156 Orange Free State 106, 157 Ottoman Empire — See Turkey 83 *'Paper Money" 12 Of Africa 157 Of America 158 Of Asia 155 Of Europe 153, 154 Of Oceanica 156 Of World 159 Of United States 128-130, 136 Paraguay.. 117, 158 Par of Exchange 11, 169 Per Capita, Amount of Money, U. S 140 Europe 152 Persia 97. 155 Peru 120, 158 Philippine Islands 126 Porto Rico ....118, 158 Portugal 80 Monetary Stock — 153 Possessions of ....99,106, 157 Pound Sterling 05 Premium on Gold, U. S ^ See also South America, Austria, Greece, Italy, Portugal, Russia. PAGE Production of Gold and Silver, U. S 18, 46 World 15, 16 Propositions, Monetary, at International Con- ferences 173 United States 177-186 Queensland 125 Ratio ...11, 15 At Monetary Conferences _. 173, 174 Reserve, Gold, U. S 29, 135 In Banks, U. S 145 Europe 154 Resumption of Specie Payments, U. S 28 Austria 78 Retail Money, U. S 143 Reunion 102, 157 Rothschild Plan for Silver 175 Roumania 84, 153 Russia 81 Bank of. ..83,155, 161 Gold Product 15 Monetary Stock 153 Salvador... 116 Samoa ..: 127 Santa Cruz 123 Santo Dominigo . 114 Savings Banks Deposits, U. S 145 Scandinavian Union 73 Monetary Stock 153 Seignorage 12 Silver, U. S 31,177, 183 Senegal _ 102 Servia 84, 153 Siam 98, 155 Sierra Leone 104 Silver, Certificates U. S 26 Propositions as to 177 Coinage, U. S 2], 22 World 17, 152 Movement, U. S 146 World 166, 167 Silver, Price of 16 Product, U. S 16 World 15_ J6 Mexico 2g South America ]g Propositions as to, U. S JW npo International jwq Purchase Law, U. S.- r^. Ratio of _ .„ Stock of, in Africa ..„ . . . 157 In America TA- " ^58 In Asia 155 MONETARY SYSTEMS OF THE WORIvD. 197 PAGE Silver, Stock of, in Europe 153 In Oceanica 156 In World 159 Used in Arts , 16 Silver Standard Countries 10 Coins of __ 10 Commerce of.. _. 166 Monetary Stock 159 Small Notes, U. S .136, 138 Soetbeer, Plan for Silver -- 175 South African Republic 105, 157 South America 117 Monetary Stock 158 Silver Product 16 South Australia 124 Spain _ 79 Monetary Stock 153 Possessions of 113, 136 Spanish Peso or Dollar 13, SO, 91, 92, 103,112,114, 126 St. Helena _- --.. 104 State Banks, U. S - 39-50 Propositions as to 183 Straits Settlements _ 92, 155 Subsidiary Silver Coin 9, 10, 13 U. S .-. 21 World 153, 159 Sub-Treasury Banks, U. S., proposed. 185 Sumatra — See Dutch Indies 126 Sweden 73 Monetary Stock ___ 153 Switzerland 68 Monetary Stock J 153 Tasmania 125 Taxation of Notes, U. S 29 Tong-K-ing", French Indo-China 97 Trade Dollars, U. S.-- — --- 53 Coins, Austria _ 77 Japan 93 Transvaal 105 Treasury, U. S., Monevin... 133, 140 Treasury Notes of 1890, U. S-. 30 Old, U. S -. 50 Trinidad, British West Indies - 113 Tripoli ■- 106, 157 Tunis - 102, 157 Turkey — S3 Monetary Stock 153 Uncovered Notes _ 13 Volume of, Africa _., 157 America 158 Asia - - 155 PAGE Uncovered Notes, Volume of, Europe 153, 154 Oceanica.- ]56 World - 159 UnitedStates 19, 138, 177 Abstracts of Monetary Plans 177 Bank of the 39, 42, 43 Banks, Deposits in 145 Gold in ...143, 145 National 32-37 New York 151, 192 State 39-50 Banking Power 160 Bonds, Issue of 29, 192 Causes for 187 Retirement of 35 Bullion Notes Proposed X78 Circulation, Money in... 139, 132 Effective 140 Per Capita 140 Clearing House, Certificates 165 New York 162 Transactions _ 164 Coinage, Gold 17-19 Silver 17-21 Subsidiary >. 23 Minor-- 24 Coins. Table of 38 Columbian Coins 23 Commerce of ..165, 192 Compound Interest Notes 51 Currency Certificates.. 37 Currency, Volume of 128, 158 Currency Table 38 Demand Notes 26 Denominations of Paper 136 Deposits in Banks 145 Depreciation of "Greenbacks" 28 State-Bank Notes 49 Effective Money 140 Federal Bank Proposed 184 Foreign Coin 39 Value of 10 Fractional Currency ,. 52 Free Banking in 45 Free Gold in Treasury 29, 135, 187 Gold, Certificates 25 Coin and Coinage _. 19 Movement 146, 193 Premium on. 38 Production 16, 146 Proportion of, in Treasury, to Paper., 135 Reserve 29, 135 Replenishment of 187 Statistics of 139 198 MONETARY SYSTEMS OF THE WORLD. FACE United States, Gold, Stock of Banks 143, 145 In U. S 138, 131, 139, 140 Indiana, State Bank of 46 Kinds of Money, Stock ...128, 131 In Circulation. 133 In Treasury 133 Large Notes 139 Legal Tender, Decisions 29 Gold 19 Minor Coin 83 Propositions as to l"?? Silver Dollars 20 Subsidiary Silver 21 Table of Money 88 Trade Dollars 53 Treasury Notes of 1890 30 Treasury Notes, Old 50 United States Notes 26, 29 Fractional Currency .. 52 Loss of Paper Money by Destruction 148 Louisiana, State Banks 47 MinorCoin 33 Money, Table of 38 Monetary Stock 128,129,130, 158 Effective 140 National Banks 32 Condition of 37 Taxation of 33, 36 National Gold Banks 36 National Bank Notes ^... 32 Volume of 131 Propositions as to-.- 180 National Bank Redemption Fund -36 New York Banks 151, 192 Notes — See U. S. Notes, Treasury Notes. Obsolete Forms of Money 39 Panic of 1893 160 Paper Money 25,26,27,30,50, 52 Volume of 138, 131, 168 Per Capita Circulation 140 Production of Gold and Silver 16, 17, 146 Ratio of Silverto Gold 20, 38 Redemption of Paper Money. 148 Refunding Certificates -. 53 Reserve, Treasury 29, 135, 187 Banks - 145 Resumption of Specie Payments ..27, 28 Retail Money - 143 Revenues, 1893-1895 192 Safety-Fund Banks - 45 Seven-thirty Notes 51 Silver, Certificates 26 Coin and Coinage 30, 31 Dollars - 30, 132 PAGE United States, Silver, Propositions as to. .-177, 183 •Purchase Law of 1890 30, 134 Repeal 30, 187 Seignorage 20, 31 Small Notes - 138. 139 State Banks - 39-50 State-Bank Notes • 40,48, 128 Depreciation of 49 Propositions as fo - 182 Subsidiary Silver Coin 21 Sub-Treasury Banks Proposed i-.>.. 185 Suffolk Bank System"??- >i.....=... ...r:r.'r rf3,. Supplementary Currency Statement 1-50 Table of Money.... ". 38 Taxation, U. S. Notes 29 State Bank Notes 183 Trade Dollars 53 Treasury, Money in 130, 133 Condition of 187 Treasury Notes of 1890 _ 30 Redemption in Gold 31, 192 Propositions as to 179 Treasury Notes, Old _.; 50 United States Notes -.:._- 26 Discount on .... 28 Legal Tender of... 27 Propositions as to ^ 179 Redeemed in Gold 28, 31, 187 Uruguay 117, 158 Value of Coins 10, 169 Venezuela 122, 158 Volume of Money, U. S 128 Africa - 157 America 158 Asia 155 Europe 153 Oceanica. : 156 World 159 West Australia- 124 World, Banking Power 160 Coins of - 10 Coinage of 17, 152 Commerce of .-. 165 Monetary Stock-- 159 Movement of Gold and Silver. igg Production of Gold and Silver 15 Zanzibar - ...106, 157