Two kinds of money are in circulation in modern civilized countries; one is metallic money, the privilege of issue of which rests entirely with the Government; and the other, the paper money based on metallic reserve. There is no unanimity on the point as who should have the privilege of issuing the latter currency. In ancient times in China, the Government had the sole monopoly; in modern times, in India and in all South and Central American States, Governments have the privilege. In India, for instance, an adequate reserve is always maintained, both in gold and securities, and therefore the value does not depreciate; besides Indian paper currency is convertible. In the South American States, like Brazil and the Argentine, there are no adequate reserves for the paper in circulation, and most of the money is inconvertible; consequently, exchange is a great problem, even although these countries have adopted the gold standard. In England, the privilege of issuing paper rests altogether with the Bank of England, which is not a state institution; in the crisis arising out of this war the bank issued treasury notes besides Bank of England notes, but only as a temporary expedient. In Scotland several banks have the right of issue, although the Royal Bank of Scotland monopolizes most of the Scottish issues. While at present only the Bank of England issues notes in England, only sixty years ago 279 concerns issued bank-notes. Before 1875 there were thirty-two institutions issuing bank-notes in Germany; to-day besides the Reichsbank there are only the Saxon, Wurtemburg and Bavarian banks issuing notes. In Italy the issuing banks have been reduced from six to three. In Switzerland from thirty-two to one; in Belgium, in the Netherlands and France, there is a single issuing bank in each country. Japan has followed the example of France, in having a single issuing bank. The only serious exception to the general rule was the United States; in 1913 there were 7,525 national banks issuing bank-notes; but by the Federal Reserve Act* the number of issuing banks has been reduced to eight. In the ports in China, in Indo-China and Hongkong, all the foreign banks issue bank-notes, under more or less elastic regulations. For instance, in Shanghai there is no control at all, although there is no danger of the banks transgressing the proper limits. **