In the earliest use of metals as money they were not coined but passed by weight just as formerly in California, and more recently in Alaska, gold dust passed by weight. A later development was the formation of the metal into rings or into lumps with a stamp on one side indicating the weight. To safeguard the money against clipping, it was finally found desirable to stamp it into flat, circular disks with impressions on both faces and with the edges lettered or milled so as to guard against debasement.

116. Seigniorage

During the Middle Ages when the lord, or seignior, possessed the monopoly of coinage, he charged for his service by taking a percentage of the metal which was given to him and returning the remainder in the form of coin, in the same way that as owner of the mill he took for the service of the mill a toll of the wheat which was brought to him, and returned the rest in the form of flour. From this practice has come down to us the term, seigniorage, to designate the payment which is made to the government on the occasion of the coining of money. The term seigniorage is used in two senses: it means, first, the charge which the government exacts to cover the necessary cost of coinage; and, secondly, it refers to any charge which the government makes for the act of coining, including a charge in excess of the cost of coinage. The term brassage is sometimes used to indicate seigniorage in the first of these senses.

117. Free Coinage

The term free coinage is sometimes taken to mean coinage for which no charge is made by the government, but it is more commonly interpreted as meaning that an owner of money metal has a right to take the metal to the mint and to have it converted into coin. If the owner of the metal has this right, there is free coinage, although he may have to pay for the privilege of having the metal made into coins. In this sense, free coinage is not necessarily gratuitous coinage.

In the United States there is free coinage of gold. The owner of the gold may take that metal to the mint and receive gold coins for it. The owner of silver has not, however, a similar right. There is not free coinage of silver. When it is desired to coin more silver pieces, the government coins them out of silver bullion which it has bought in the market. Nickel and copper coins are likewise coined by the government for itself out of its own metal. There is no free coinage of these metals.

118. The Coinage Of The United States

Like all civilized countries, the United States uses both metals and paper in its money system. The metals used are gold, silver, nickel, and copper. The unit of value is the dollar. This is the value of a coin which weighs twenty-five and eight-tenths grains and which is nine parts gold and one part alloy. In other words, the pure gold in the coin weighs twenty-three and twenty-two hundredths grains. Although the gold dollar is our standard of value, it is not actually coined any longer. Our gold coins are the quarter eagle, the half eagle, the eagle, and the double eagle, worth, respectively, two and one half dollars, five dollars, ten dollars, and twenty dollars.

The silver pieces are the dollar, the half dollar, the quarter dollar, and the ten cent piece. The silver dollar is nine-tenths silver and one-tenth alloy. It contains three hundred and seventy-one and twenty-five hundredths grains of pure silver and weighs four hundred and twelve and one-half grains. It is almost exactly sixteen times as heavy as the gold dollar. The fifty cent, twenty-five cent, and ten cent pieces contain less than one-half, one-fourth and one-tenth, respectively, as much silver as the silver dollar.

Nickel is used in the five cent piece and copper in the one cent piece. In paper money, there is the gold certificate, the silver certificate, the United States note or greenback, treasury notes, and bank notes.