Money (Lat. and Ital. moneta), the currency of the realm or of the country; the standard of payment, whether of coins, circulating notes, or any other commodity. Anything which freely circulates from hand to hand, as a common, acceptable medium of exchange in any country, is in such country money, even though it cease to be such, or to possess any value, in passing into another country. In a word, an article is determined to be money by reason of the performance by it of certain functions, without regard to its form or substance. Money has been termed by Mr. Henry C. Carey "the instrument of association,'] and the same writer has said of it that it is "a saving fund for labor, because it facilitates association and combination, giving utility to billions of millions of minutes that would be wasted did not a demand exist for them at the moment the power to labor had been produced." Baron Storch terms money "the marvellous instrument to which we are indebted for our wealth and civilization." Mr.

Thorold Rogers has said: "Just as the development of language is essential to the intellectual growth of a people, so is a medium of exchange to civilization." Aristotle says of it, "that it exists net by nature, but by law." How true is this doctrine, or at least how potent is the law under a civilized government in imparting the quality of acceptability for the payment of debts and the purchase of commodity to that which it recognizes as money, clearly proved by the operations of the bank of Venice during several centuries, throughout which time its deposits, which were never payable, but only transferable on the books of the bank, were at a premium over coins, because they were the standard of payment furnished by the state and used for all large transactions. Indeed, this bank money was that which established the money of account and in which the value of all coins was expressed. Further, on the testimony of Thomas Baring, we are assured that it was found impossible during the crisis of 1847 in London to raise any money whatever on a sum of £60,000 of silver. During a similar crisis in Calcutta in 18fi4 it was jiially impossible to raise even a single rupee on £20,000 of gold. The former was not a legal tender above 40 shillings, while the latter was not so for any sum whatever.

About 1855 Holland adopted silver as the only legal tender at a fixed value, but attempted to coin -old coins having no such value, this only being regulated by the market price from day today. After 200,000 florins (about $80,000) had been coined, the demand entirely ceased. - Very dissimilar substances have been made to serve as money. The Jews, in addition to their ordinary money of shekels, talents, and drachms of silver, had "jewel money." Cattle were used as money in ancient Greece and in Koine; and hence the word pecuniary, from pecunia and this from pecus, cattle. Before the introduction of coined money into Greece there was a currency of "spits" or "skewers," of which six were a drachm (Money 1100350 , originally Money 1100351 , a handful); they were probably nails of iron or copper. The Lacedemonians and Byzantines and the people of Clazomenra used iron money. Among the most ancient existing imens of coin are those of elect rum, an alloy of gold with one fifth silver. Gold, silver, and copper were coined by the Creeks and Romans. Tin was coined by Dionysius I., tyrant of Syracuse, and Roman and British tin coins are known to exist. Early leaden money is mentioned; a leaden stater is preserved in the British museum, and leaden monev is now current in the Btirman empire. Platinum was coined in Russia from 1828 to 1845. Numa Pompilius, king of Rome about 700 B. C made money both of wood and of leather. Under the Caesars land, were made monev. The Carthaginians had a kind of leather" money. The emperor Frederick Barbarossa durins his contest with Milan (1158 '62), and John the Good, king of trance (1360), also issued leather money. Under William I. of Sicily (1154-'66), the Sicilians were compelled to give gold and silver in exchange for leather money. In 1574, when the city of Leyden was besieged by the Spaniards, leather money was issued.

The British museum has a specimen of a sequin in leather of Francesco Cornaro (1656). In the 13th century Nicolo and Matteo Polo found a money in use in China which was made of the middle bark of the mulberry tree, cut into round pieces and stamped with the mark of the sovereign; this money it was death to counterfeit or refuse to take in any part of the empire. In Britain, at as late a date as the Norman conquest, two kinds of money were in use, known as " living money" and " dead moirey." The former consisted of slaves and cattle, which were usually transferred with the soil, and the latter of metal. Montesquieu notices the existence among the inhabitants of the coast of Africa in the 18th century of an " ideal money," " a sign of value without money," the unit being the macoute, which was subdivided into tenths called pieces. This money of account had its origin, as appears from later testimony, in the rnacoute, a piece of stuff, a fabric; and Mungo Park says that in the early intercourse of the Mandingos with the Europeans, the article which attracted most attention was iron, on account of its high utility in making implements of war, etc.

Iron soon became a standard of payment, and gave rise to a money of account; and any commodity which was supposed to be of the value of a bar of iron was called a bar, as a bar of tobacco, etc. When the South sea islands were discovered the natives first exchanged their products with the Europeans for beads or anything gaudy which was offered to them; but they soon discovered the value of iron utensils, and they now freely exchanged anything they had for axes, hammers, nails, etc. Axes were eventually held in such estimation that they became a standard of payment and the basis of a money of account, the value of other articles being stated at so many axes. Cowry shells (cyprcea moneta) are used in India, the Indian islands, and Africa, in the place of small coin. In 1851 more than 1,000 tons were brought from India to Liverpool to be exported to the coast of Africa in exchange for palm oil. In Bengal a century ago 2,500 cowries were worth a rupee (46 cts.), and at the present time 8,200 are worth this sum. According to Dr. Barth, in Bornoo, central Africa, the ancient standard of the country was the pound of copper; but it has long since fallen into disuse, although the name rotl still remains.

The prices of commodities are still reckoned in the rotl, although cotton strips and shirts, cowries, and Austrian and Spanish dollars have become the mediums of exchange, their value being expressed in rotls. In India cakes of tea, and in China pieces of silk, pass as money. Salt is the current money of Abyssinia, codfish of Iceland and Newfoundland. At the great fair annually held at Nizhni Novgorod in Russia, the price of tea has first to be made known before the prices of other commodities are fixed, it thus becoming a standard by which all exchanges of merchandise are regulated. The skins of wild animals were used as money by the ancient Russians and by some of the Indians on this continent; and even by the people of Illinois at an early day raccoon and deer skins were so used. In 1574 quantities of pasteboard were coined in Holland. Of the aboriginal money of the American continent, from the mounds in and adjoining the valley of the Mississippi, specimens have been obtained composed of lignite, coal, bone, shell, terra cotta, mica, pearl, carnelian, chalcedony, agate, jasper, native gold, silver, copper, lead, and iron, which were fashioned into forms evincing considerable skill in art.

Cocoanuts were used as money in certain parts of the American continent when the Europeans first visited it. Wampum was used by the Indians as currency, and about 1635 was the prevailing one among the colonists of Massachusetts, was a legal tender, and was even counterfeited. About the same time corn and beans were used, and indeed a general barter currency was in vogue, and musket balls passed for change at a farthing apiece, and were a legal tender for sums under one shilling. Codfish was also used. The accounts of the New Netherlands were in 1662 kept in wampum and beaver skins; and in Virginia about the beginning of the 18th century the receipts issued for tobacco deposited in warehouses passed current as money. Adam Smith mentions that in Scotland about 1776 it was customary for workmen to carry nails as money to the bake shop and the ale house. Notched wood was used at one time in England. " In the British West India Islands," says Mr. Madden, author of "Coins of the Jews," "pins, a slice of bread, a pinch of snuff, a dram of whiskey, and in the central part of South America soap, chocolate, cocoa-nuts, eggs," etc, serve the same purpose.

Association with his fellow man being one of the first and most imperative needs of man, he thus finds, amid a variety of things, some one or more which will serve as the instrument of association. - R. II. Patterson, an eminent Scotch writer, has traced the origin of metallic money in the East through the tendency of man in the then primitive state of society to accumulate the precious metals at a time when there was little wealth beyond that of flocks and herds, crops of grain, and other personal property; and he goes on to say: " Next, as all men valued these metals, kings began to collect their revenues in that form. They coined the metal and made it receivable as tribute or taxes. This fully established the exchangeable value of the precious metals. It created a new demand for them, it rendered them indispensable in a department of national life where they had not previously been required; thenceforth all men needed them every year to pay the king's dues. Thus they became a circulating medium.

A man who had more oxen or grain than he needed for his own use, sold those commodities to others, receiving coins in return, which coins he could store for ever, which were useful to pay taxes, and when he so needed to purchase the labor or productions of others." " But," he adds, " the invention of money by no means put an end to payments in kind and the process of barter. It only supplemented them. Even in England until the reign of Edward I. the taxes were paid in kind to a large extent, if not entirely; and to a much later date military or other personal service to the state was accepted in lieu of taxes of any kind." As monarchs originally established coinage, so throughout all subsequent time the monarch or the state has claimed as among the highest of his or its prerogatives all control over " the current money of the realm." With coins this function has almost universally been directly exercised by the supreme authority, while with circulating notes, the prerogative still being claimed, the exercise of the function of issue has generally been delegated to banks.

The earliest recorded mention of the precious metals is found in Gen. xiii. 2, when Abraham returned from Egypt "very rich in cattle, in silver, and in gold." In xvii. 12 we find the expression, " he that is born in the house or bought with money of any stranger." The earliest account of a purchase and sale is given in Gen. xxiii., when Sarah the wife of Abraham being dead, he bought from Ephron a field in Machpelah for a burial place for her, and he " weighed to Ephron the silver which he had named in the audience of the sons of Heth, four hundred shekels of silver, current money with the merchant." It will be observed that this current money was not counted, but was weighed, the money of that day being pieces of silver cut to certain weights, as shekels and talents, but not coined. - The invention of coinage has been attributed to the wife of Midas, a legendary king of Phrygia, although it is quite probable that this was merely the introduction of the art from some other country more advanced in civilization. By some of the highest authorities the balance of testimony at present existing, so far as it can be traced, is regarded as in favor of the Lyd-ians (about 1200 B. C.) as the inventors, and with this view both Herodotus and Xenophanes of Colophon agree.

In the opinion of Mr. Madden, the earliest electrum coins have the appearance of greater antiquity than any in the whole Greek series; and it seems more probable that the invention was of Asiatic origin, as the part of Asia to which this electrum class belongs was at this early period subject to the Lydian kings. By some Greek writers the invention is attributed to Phidon, king of Argos in the 8th century B. C, and by others to the people of Aegina. Phidon is now believed only to have introduced coinage into Greece. We are assured 738 that the native bronze coin of China, the tsien or cash, bearing the inscription tung-pan, i.e., current money, had its origin about 1120 B. C at the beginning of the Chan dynasty. The original coins of Asia Minor were of gold or electrum (a mixture of gold and silver), and those of Greece of silver; while in Koine for nearly 500 years after its foundation no metal was coined'but copper or brass. The as, as, or libra, a pound weight of copper or brass, was stamped by the state in the reign of Servius Tul-lius (578-634 B. C). This coin, the unit of Roman money, was originally oblong like a brick, but subsequently was made round, and was cast, not struck. Before this reign they used for money unstamped bars of copper.

According to Pliny, silver was first coined at Rome in 2G9 B. C, the principal coin being the denarius; and gold in 207. although it is believed that the latter did not form a part of the ordinary and regular currency of the country until the time of Julius Caesar, about 40. The emperors pos-jed the privilege of coining gold and silver, but copper could only be coined ex senatus cnmulto. - At the date of the invasion of Britain by Caesar, 55 B. C, the ancient Britons had money of brass and iron, and it was paid by weight. During the reign of Augustus, Cu-nobelin, one of the native kings, had established his mint at Camulodunum (Colchester), where he caused to be coined money of gold, silver, and brass. Under the emperor Claudius the coinage of the Romans took the place of that of the natives, and circulated until after the abandonment of the country by the conquerors in the 5th century. The earliest coins of England subsequently issued are supposed to be the pennies of Ethelbert, king of Kent (560-616). These were coarsely stamped with the king's image on one side and either the name of the mint master or the city in which they were coined on the other.

At this time all money accounts began to be expressed in pounds, shillings, pence, and mancas or man--, although there was no coin but the penny, all other denominations being mere mon-eyes of account; 30 pence made a manca, 5 pence a shilling, and 40 shillings a pound. The mancas were reckoned both in gold and silver. In King Canute's laws the distinction is made that a muncusa was as much as a mark of silver, while a manca was a square piece of gold vahud at 30 pence. King Athelstan (930) decreed that money should be uniform and only coined in towns, and this decree mentions the fact that the clergy shared with the king the privilege of coinage. The Norman kings continued the practice of coining only pence, which were of silver, and with a cross so deeply impressed that they might easily be broken into halfpence and farthings. The date of the earliest use of the word sterling to denote the standard money of England 'has given rise to much learned discussion: but it has been well established by the testimony of the chronicler Ordericus Vitalis (1075-1143) that it was used as early as during the reign of William the Conqueror. The etymology of the word is by no means so certain.

Henry I. in 1108 attached severe penalties to the counterfeiting of money, and during this reign halfpence were first regularly coined. At the commencement of his reign (1154) Henry II. found the money so much debased and reduced in value from various causes, that he provided for a new coinage, and punished those convicted of tampering with it. In 1222 silver farthings were coined. In 1248 it was found that the money of the realm had been so clipped and otherwise defaced that its real worth bore no fixed proportion to its nominal value. Henry III. therefore ordered that the old coins should be brought to the mint and exchanged for new ones, weight for weight; thus entailing the entire loss, which was very great, upon the then present holders of these coins, which justly caused great complaint. During this reign, in 1257, gold pennies were first coined, which weighed 1/120 of a pound tower, and passed for 20d. In 1279 Edward I. caused a new coinage of halfpence and farthings to be made, providing at the same time that the old, which were principally mere fractions cut to suit, should no longer pass current.

Twenty years subsequently, and during the same reign, so much trouble and loss were suffered from foreign coins of inferior value, known as " pollards," "crockards," etc, that it was decreed that all importers of such money should be punished by death and the confiscation of their property. All persons arriving from abroad were to be searched, and those having such money were to be immediately imprisoned. All good foreign money was to be taken forthwith on its arrival to the exchange, and all false English money imported was to be seized. No person was allowed to sell wool, hides, skins, lead, or tin, except for good sterling money, silver stamped at the king's exchange, or for a good and sufficient quantity of merchandise; and no money or bullion "was to be taken out of the dominions without a license from the king, under penalty of seizure. Persons going abroad, or coming to England, were to be furnished at Dover with a quantity of money of the country to which they were going, sufficient to pay their expenses. The following year (1300) Edward positively prohibited the circulation of any money not of his own coinage. In 1301 he diminished the weight of the pound sterling three pennies, equal to one per cent.

This was "a departure from the ancient strict and honorable adherence to the integrity of the national money; and a breach, once begun, was with less scruple enlarged by the succeeding kings." Edward II., having married a daughter of the king of France, gave permission to the French merchants to trade with England, and return with their goods and money, notwithstanding the edicts of preceding monarchs against the exportation of coin and bullion. In the reign of Edward III. (1335), among the extraordinary means taken to prevent the importation of money of foreign coinage from abroad, may be mentioned that of obliging innkeepers to be sworn to search their guests for the detection of such money. Exchanges were established at Dover, London, Yarmouth, Boston, Kingston, and Hull, for furnishing to travellers going abroad foreign money. This monarch, having by 1344 exhausted his exchequer, and embarrassed himself with debts, in his unsuccessful attempts to conquer France, ordered that in future 266 pennies should be made from the pound sterling. Two years subsequently he increased the number to 270 pennies. In 1394 it was decreed that no silver money should be melted for the manufacture of plate or for any similar purpose.

Counterfeiting of English money would seem to have been a very common practice in those days; and in 1416 parliament passed an act declaring it treason to counterfeit the money of the kingdom, and providing for the punishment by the judges of importers of base coin. Five years later the currency was in so bad a state that a law was passed by parliament providing that all gold money should be passed only by weight, and that all light and vitiated coins should be taken to the tower to be recoined. In consideration of the loss sustained by the holders, the king remitted the usual charge for coinage. In the reign of Henry VII. (1504) a law was passed against either taking English money into Ireland, or bringing Irish money into England. The following year a trifling number of shilling pieces were coined, being the earliest known to have been made. Under Henry VIII. enactments against the exportation of money, plate, and jewels were again passed; and in this reign (1523) silver farthings were coined for the last time.

In the reign of Edward VI. (1551) the currency reached its worst condition of depreciation, and was " in such a state of confusion and fluctuation, that the sellers scarcely ever knew what value they were to receive for their goods," when the king applied active and vigorous measures for correcting the evil by raising the standard. Queen Elizabeth signalized the beginning of her reign by raising the silver coin to a higher standard of purity than had been known since the accession of Henry VIII. In 1601 she caused to be coined for Ireland shillings, sixpences, and threepences of a baser kind, and established offices for exchange between the two countries. For many years the tradesmen of London had made and issued leaden tokens, which circulated instead of copper coins. This circulation was to a great extent stopped about the beginning of the 17th century by the government, and the more general use of regular coins gradually took their place. James I. in 1613 debased a portion of the coin, having coins in circulation of two qualities of fineness.

In 1627 Charles I. issued a proclamation, saying in effect that the buying, selling, and exchanging of all manner of coins and bullion were prerogatives of the crown, which from that time forth he intended to exercise; he interdicted the goldsmiths from pursuing the business in any of its branches, and appointed Lord Holland and his deputies to have " the office of our changes, exchanges, and outchanges whatsoever in England, Wales, and Ireland." In 1632 he granted permission to the East India company to export to Persia and India £40,000 in foreign gold bullion; and being desirous of cultivating friendly relations with Philip IV. of Spain, he authorized under certain restrictions the export; of the precious metals to the Spanish Netherlands. According to Davenant, the entire gold and silver coinage of England for 100 years, from 1558 to 1659, was: of gold £3,723,000, and of silver £16,109,476, making in all £19,832,476. By the same authority it is estimated that in the year 1600 the total amount of gold and silver currency in England did not exceed £4,-000,000, and that in 1711 it did not exceed £12,000,000. In 1676, Charles II. being then on the throne, the money coined during the commonwealth and protectorate was called in and recoined.

This amounted to £800,000; and by estimating that coinage at one seventh, and giving an allowance for money hoarded, writers of that day put the total currency of the country at £6,000,000. The first copper coinage of England since the conquest was in 1672, during this reign. James II. (1685-8) issued coins of tin, and authorized those of gun metal and of pewter. The first sovereigns were coined in 1489, under Henry VII.; half, quarter, and eighth sovereigns by Henry VIII. in 1544; and the first guinea by Charles II. in 1675. - It may be instructive here to examine into the circumstances under which Great Britain was led to adopt the gold standard, after for a century having the double standard of both gold and silver. Owing to the over-valuation of silver in France before the commencement of the 18th century, the heavy silver coins rapidly disappeared from circulation in Great Britain, only the light and worn ones remaining, often 25 per cent, below the standard. The evil became so great that it brought on a discussion during the reign of William and Mary, in which the philosopher John Locke and William Lowndes, master of the mint, took decided and antagonistic parts.

The result was that the government undertook to recoin the entire remaining and worn silver currency, and to make it full weight without raising its value. This only facilitated its export and rendered it more difficult to maintain this part of the circulation, a difficulty which lasted throughout the century, the real value of the coins being so uncertain that the guinea fluctuated in price, as measured by silver, from 21s. 6d. to 30s It was therefore in 1774 declared that silver should no longer be a tender, except by weight, beyond £25. In the words of Mr. J. R. McCulloch, "from 1717 to 1816, no silver coins of legal weight and purity would remain in circulation, but were either incited down or exported to foreign countries." In 1816 the pound standard of silver was coined into 66s., the relative value with gold being as 1 to 14.287. Silver then became a legal tender for only 40s. and under, and has since only been coined for account of the government itself, at an apparent profit; but as the government maintains the circulation up to the standard, this profit is more nominal than real.

By the currency bill of 1819, providing for the resumption of cash payments in 1823, all the old statutes against the melting and exportation of coin or plate were repealed, as well as the oath required that it was not melted plate or coin or clippings of coin. In 1702 the congress of the United States by law fixed the relative value of silver and gold at 1 to 15; and as a consequence, when a foreign balance had to be liquidated, silver being over-valued as compared with European standards, gold was exported, and it was found impossible to maintain a gold circulation. In 1834 the standard was altered to 1 to 16, while with other nations it was generally 1 to 15 1/2. Now silver was so largely exported that the proportion was on March 3, . altered to 1 to 14.88, and silver was made a legal tender only for sums under $5. By the coinage act of Feb. 12, 1873, it was again changed to 1 to 14.95. After the discovery of gold in California and Australia the economists of Europe predicted a great decline in its value.

Prominent among these was M. Chevalier, who in 1859 published a volume entitled De la baisse 'probable de For, which was translated into English by Mr. Richard Cobden. Under the influence of the teachings of the economists, the Netherlands, Belgium, and Germany all demonetized gold and adopted silver as the only legal tender at a fixed rate. In those countries gold only circulated as a commodity, subject to daily fluctuations in value; and as a consequence, deprived as it was of its legal support as money, it was but little used. In 1861 Belgium, "at the urgent request of her commercial and industrial interests, and in defiance of the opinion of the theorists," re-adopted gold as a legal tender. The German empire has now (1874) adopted gold alone as a legal tender, with silver only for subsidiary coinage. Denmark, Sweden, and the Nether-an.ls have decided upon the same course, to be followed, as is believed, by Belgium. In India prior to 1835 -old and silver were both a legal tender, but silver then became the exclusive one. .In 1841 the Indian government authorized gold mohars to be received when offered for taxes.

In December, 1852, however, this was prohibited for fear that all payments might be made to them in gold, which wis the cheaper metal, while they might be obliged to make all payments in silver, which was the only legal tender. - The relative values of silver and gold at different periods have been as follows:

Home about the Christian era.............. 1 to 9

England, mint price, 1344.................. 1 to 12-475

" " " 1509.................. 1 to 11.400

" " " 1600.................. 1 to 11.100

" " " 1717.................. 1 to 15.209

" " 1816.................. 1 to 15.209

" " 1863.................. 1 to 15.009

The relative productions of these two metals have varied from about 42 oz. of silver to one of gold in 1800 to about 63 oz. of silver to one of gold in 1863. The following table, derived from the " indentures" made with the masters of the mint, exhibits the number of pounds, shillings, and pence which have at various times in England been coined out of a pound of silver, with the standard of fineness:

DATES.

Fine silver.

Alloy.

£

s.

d.

cz.

dwt.

oz.

dwt.

Before A. D. 1800.....

11

2

0

18

1

0

0

1300, 23 Edward I.

11

2

0

18

1

0

8

1344, 18 Edward III...

11

2

0

18

1

2

2

1346,20 "

11

2

0

18

1

2

6

1353,27 " "...

11

2

0

18

1

5

0

1412,13 Henry IV....

11

2

0

18

1

10

0

1464, 4 Edward IV...

11

2

0

18

1

17

6

1527.18 Henry VIII..

11

2

0

18

2

5

0

1543.34 " " ..

10

0

2

0

2

8

0

1545,36 " " ..

6

0

6

0

2

8

9

1546,37 " " ..

4

0

8

0

2

8

0

1549, 3 Edward VI...

6

0

6

0

3

12

0

1551, 5

3

0

9

0

3

12

0

1551. end

6 Edward

11

1

0

10

3

0

0

of 1552,

VI

1553, 1 Mary........

11

0

1

0

3

0

0

1560, 2 Elizabeth

11

2

0

18

3

0

0

1601,43

11

2

0

18

3

2

0

The last named proportions continued down to 1816 (56 George III.), and the standard of fineness is still the same, but the weight of the coins has been reduced, the shilling weighing but 87.4:3 grains, and a pound of silver thus producing 66 18/100 shillings. - Early in the latter half of the 17th century the public mind of England became deeply interested in projects for the establishment of institutions of credit which should economize the use and add to the power of the then limited metallic circulation of the realm. They had seen and appreciated how in Amsterdam the ownership of coins, and in Venice the ownership of these as well as of claims upon the state, were made to furnish the means for the adjustment of debts even more efficiently than the coins themselves, which were at the same time protected from clipping, sweating, wear, and tear; and how the bank of Genoa had even advanced beyond this, by furnishing its own notes for circulation. Indeed, they had noticed the success of the goldsmiths and other private bankers in issuing their own promissory notes, payable to the bearer on demand, as well as bonds or scaled bills bearing interest and payable at a fixed day, as currency.

In 1657 Samuel Lamb, a well known merchant of London, published a pamphlet entitled "Trade, Shipping, Banks," in which he took the ground that it was desirable to establish banks; "for no nation," he says, "yet made use of them, but they flourished and thrived exceedingly; they will, by well ordering of them, bring back the gold and silver drained out of this land by the Hollanders' banks," etc. The result of this discussion, which was continued for years, was the establishment of the bank of England in the year 1694. This institution, at once on commencing business, issued its notes payable without indorsement to the bearer on demand. Prior to this time bank notes, properly speaking, with an extended circulation without indorsement, were unknown in Europe, unless those issued in 1658 by the bank established by Palmstruck in Stockholm were of this character. The bank of England was the first in the world which agreed to issue its notes, payable on demand, in exchange for individual paper, payable at a future date. " The bank thus undertook," in the words of Stephen Colwell, " to perform an impossibility, in the hope that it would not be called upon to redeem the promise or make the attempt;" and he adds: " What the bank could do was to give its own notes of convenient denominations for circulation in exchange for individual paper, and payable at the same time as it; and in doing this alone the bank could have rendered a great service to the public with small risk." The same writer regards this step of the bank as "a Pandora's box of evils opened to trouble the commercial world," and to be the main cause of the unpopularity of banks even unto the present hour, by reason of their irregular action and instability. - In America, " the several provinces in their infancy," says Wright, the author of "The American Negotiator" (London, 1767), "had but little trade, and consequently little money.

The tools, utensils, and necessaries for planting they were at first supplied with from Britain, involved them in debt before they were able to raise goods for exportation to pay their creditors; and the goods they first raised were often so ordinary in quality or so little in quantity that they were able to export to a foreign market, that the net proceeds of the same often turned out poorly; by which means the planters remained continually in debt to the British merchants, and occasioned the balance of trade to be always against them; and having neither goods nor cash sufficient to remit to their creditors, the consequence has been that many bad debts have been made and great losses sustained, as the merchants of Great Britain have but too fatally experienced." As the northern colonies improved in their condition, the British merchants received their claims in part; but this "prevented the cash staying with them " (the colonists), " and obliged them to ship it off with their other merchandise toward paying their debts." The consequences, as already shown, were that the colonists were forced to use as money wampum, musket balls, beaver skins, tobacco, corn and beans, and in fact to resort to a general barter.

About the middle of the 17th century the trade with the West Indies brought into Massachusetts a considerable quantity of silver, and in 1652 that colony set up a mint in Boston and commenced the coinage of the " pine tree" currency, shillings, sixpences, and threepences, and continued to do so for a number of years. This being inadequate to their wants, the barter currency continued to be used. In 1690 the first paper money was issued by the colony of Massachusetts for the purpose of paying off the troops employed in an expedition against Canada, fitted out with the hope of booty which they had failed to obtain. In 1709 another expedition was proposed by this and other colonies, and more notes were issued. In 1698 Schuyler and Dillon, who made an expedition to Canada, reported with apparent surprise that there the currency consisted only of paper. Subsequently banks were established and currency issued by the various colonies, and made a legal tender; but in 1751 legal tender for paper money in the colonies was abolished by act of parliament, and in 1763 that body declared any issue void. Nevertheless, in 1773 bills issued by any of these colonies were allowed to be legal tender at their several treasuries.

When Louisburg was captured by the New England colonies in 1745, parliament ransomed the place, and the sum coming to Massachusetts, £138,649 sterling, was shipped from England in specie. This enabled the colony to retire all of her currency at the then existing rate of 11 for one, and as a consequence in 1774 she was entirely out of debt. The rate of exchange in Massachusetts in the under-mentioned years was as follows:

YEARS.

Sterling exchange in

Mass.

currency.

Value of an oz. of silver in currency.

1702...

133

6s.

10 1/2d.

1705.............................

135

7

0

1713...

150

8

0

1716...

175

9

3

1717...

225

12

0

1722.............................

270

14

0

1728.............................

340

18

0

1730...

380

20

0

1737...

500

26

0

1741...

550

28

0

1749...

1,100

60

0

The currency of Rhode Island suffered such a depreciation between 1744 and 1759, that while in the former year it required £450 to obtain £100 sterling, in the latter it required £2,300. However, in or about the year 1767, measures were taken to place the currency of some of the colonies on a better footing. The following were then the rates of sterling exchange in the provinces named: Massachusetts, 133 1/3; New York and East Jersey, 175 to 171 5/7; Penn-svlvania and West Jersey, 165 to 160 3/7; Virginia, 125; Maryland, 145; North Carolina, 145; South Carolina, 700; Georgia, 100; Jamaica, 140; Barbadoes, 135; Nevis and Mont-serrat, 175; Antigua and St. Christopher, 165. - The continental congress as originally constituted M'as as feeble a government as any that can be imagined. It had no executive head and no finance minister. It was expected to and did prosecute a war against one of the most powerful nations then existing, while it had no means whatsoever of levying taxes through any officials of its own. It might only recommend to the several colonies or states to levy and collect certain taxes for its use, but it had no means for enforcing the payment of them.

It however fully exercised the power to issue and borrow money, and on Mav 10, 1775. resolved to issue $300,000 of bills of credit, for the redemption of which the faith of the colonies was pledged; a quota was apportioned to each colony, which was liable for the discharge of its proportion. The united colonies were however liable for any part not discharged by any colony. Legal-tender acts of the most stringent character were adopted by congress and the colonies, and subsequently by the states. No taxes were even recommended by congress to be levied until Jan. 14, 1777; but the resolution then passed was so indefinite, no quotas being named in it, that it had little or no result. By resolution of Nov. 22, 1777, the states were recommended to raise $5,000,000, with quotas annexed; but this had very little effect, small sums only being raised and paid by some of them within the year 1778, and by others sub-sqnently. In an address to the people, May 8, 1778, congress said: "What are the reasons of your money being depreciated? Because no taxes have been imposed to carry on the war." In 1779 immense sums were called for, for that year and for 1780 - $186,000,000 for the latter year alone; but small was the actual amount received.

Before any depreciation of bills took place $9,000,000 had been issued; but in March, 1778, $1 in coin was worth $1 75 in paper; in March, 1779, $10; and in February, 1780, $40. At this latter date $200,-000,000 had been issued, and was estimated to be worth but $5,000,1100 in coin. By the end of this year the final redemption of the bills came to bo doubted, and the depreciation had reached 100 for one; by May, 1781, it was from 200 to 500 for one, and at or about this latter date they ceased to circulate as money at all. On June 2, 1781, the assembly of Pennsylvania, on the recommendation of congress, repealed all tender acts; and the same was lone about, the same date by all the states. The total amount of continental money issued officially stated on Jan. 30, 1828, by Joseph Noursc, register of the treasury, at $241,552,and by Thomas Jefferson it has been estimated at $200,000,000. Early in 1780 it was that specie "was never more plenty or more easih collected than at that time," the plentiful supply being occasioned by the large sums coming from the expenditures of the I British army in New York and of the French army and navy, and from imports from Havana In December, 1780, Peletiah Webster, a very careful writer on finance in Philadelphia, estimated the total amount of specie in the thirteen states at from $10,000,000 to $12,000,000. Large as this was then considered to be, it was not more than about the then annual expenditures of the government estimated in coin.

This will at once and readily give an idea of the stupendous work which was undertaken by this feeble government of a poor and scattered people, and go far toward explaining the total collapse of its finances, conducted without any power of taxation, and until 1781 without system or a head. During the war the several colonies and states also issued paper money of their own, to an estimated aggregate amount between 1775 and 1783 of $209,524,776. By resolution of Feb. 2, 1781, congress created the office of superintendent of the finances, to which on the 20th of the same month Robert Morris was appointed. On May 17 he submitted a plan for a bank, and on the 26th congress passed a resolution approving the plan, and pledging itself for its promotion, under the name of " The President, Directors, and Company of the Bank of North America," and on Dec. 31 it passed "an ordinance to incorporate the subscribers to the bank of North America." The capital was $400,000, of which $254,000 was subscribed by the government. This institution proved to be of very material assistance to the national finances.

The first congress under the constitution in 1789 passed an act imposing duties on imports, by which the pound sterling was valued at $4 44. There was at the time no United States coin of the denomination of the dollar, but this was merely the money of account based upon the Spanish dollar, which had long been in use in the country. Coins from all parts of the world were taken at the custom house at a statutory value. On April 2, 1792, congress passed a law organizing the mint, but permitting the circulation of foreign coins for three years, by which time it was believed the new coinage would be ready in sufficient amount. (For the provisions of this, and of prior and subsequent congressional acts relating to coinage, see Coins.) In 1791, on the recommendation of Alexander Hamilton, then secretary of the treasury, the first bank of the United States was established, and remained in existence until the expiration of its charter, March 4, 1811. During the war of 1812-'15 with Great Britain the government experienced great embarrassment in its finances, and by August, 1814, found it impossible to negotiate any further loans.

In 1812 treasury notes having one year to run and bearing 5| per cent, interest, were issued to the amount of $3,000,000; in 1813, $6,000,000; and in 1814, $8,000,000. These were not a legal tender, but were receivable in payment of duties on imports and other taxes due to the general government. In October, 1814, when Alexander J. Dallas became secretary of the treasury, these notes were in such ill repute that, in the words of a historian of that period, •' none but necessitous creditors or contractors in distress, or commissaries, quartermasters, navy agents, acting as it were officially, seemed willing to accept them." Indeed, they were at a heavy discount compared with bank notes, which were not redeemable in coin; but by Jan. 10, 1815, they sold at par. The government has repeatedly since been obliged to issue treasury notes bearing interest and payable at a fixed period after date, but not a legal tender, and not generally used as currency. On April 3, 1816, a bill for the incorporation of the second bank of the United States was passed, and this institution remained in existence until the expiration of its charter in 1836. From the inauguration of the present government under the constitution, March 4, 1789, until the civil war, 1861-5, with the exception of the circulation of the two banks of the United States, the treasury notes already mentioned, and the banks of the District of Columbia, the paper money of the country was generally furnished by banks chartered by the several states.

The commencement of the secession movement in November, 1860, soon caused a financial crisis and a total paralysis of business, under the effects of which the revenues of the government rapidly declined; and by Dec. 17 it became necessary to pass a law for the issue of $10,000,000 one-year treasury notes bearing 6 and 12 per cent, interest, and which were authorized to be paid to the public creditors. By act of March 2, 1861, $22,468,000 two-year and $12,896,350 sixty-day notes were provided for; and by acts of July 17 and Aug. 5,1861, $139,999,750 three-year 7'30 notes, and $50,000,000 treasury notes payable on demand, the latter being by act of Feb. 12, 1862, to meet a most pressing emergency, increased by $10,-000,000. The preparations for war from March 4, 1861, and its subsequent prosecution, called for immense expenditures; and by December, 1861, the secretary of the treasury had borrowed from the banks and capitalists of New York, Philadelphia, and Boston $144,000,000, which he had required them to pay in coin; and in the course of this month these banks found themselves under the necessity of suspending specie payments.

The demand treasury notes, not being a legal tender, did not enter freely into circulation, and there were instances of soldiers having to submit to the loss of a discount on those received for pay of from 4 to 20 per cent, in the District of Columbia. These notes were kept at par with the banks and received by them so long as they had to pay the government for loans; but by Feb. 5, 1862, the last of these loans was paid for, and the banks refused to receive the notes. The treasury was by this time nearly empty, and the secretary was unable to negotiate any further loans, while there were the most pressing demands upon him. The floating liabilities then due were $100,000,000, and not less than $150,-000,000 more would be wanted before July 1 following. The committee of ways and means of the house of representatives had about this time perfected a bill for the issue of $150,-000,000 in notes, to be a legal tender for the payment of all debts, public and private. The secretary early in February strenuously urged the passage of this act, to the support of which he had however come with great reluctance. He said: " Immediate action is of great importance. The treasury is nearly empty.

I have been obliged to draw for the"last instalment of the November loan; so soon as it is paid, I fear the banks generally will refuse to receive United States notes. You will see the necessity of urging it through without more delay." It passed the house of representatives Feb. 6, 1862, and the senate with important amendments on the 13th; and after being referred to a conference committee, it was passed in an amended form by the house on the 24th and by the senate on the 25th. The same day it received the signature of the president and became a law. These notes were made receivable in payment of "all taxes, internal duties, excises, debts, and demands of any kind due to the United States, except duties on imports, and of all claims and demands against the United States of any kind whatsoever, except for interest upon bonds and notes, which shall be paid in coin; and shall also be lawful money and a legal tender in payment of all debts, public and private, within the United States, except duties on imports and interest aforesaid." They were also receivable " the same as coin at the par value, in payment for any loans that may be hereafter sold or negotiated." By act of July 11, 1862, $150,000,-000 more of these notes were authorized, $50,-000,000 to be held as a reserve for the payment of temporary loans.

In all, by these acts and those of Jan. 17 and March 3, 1863, $450,-000,000 were authorized, and $400,619,206 were actually issued, besides compound interest and 7-30 notes. In addition to these, $50,000,-000 of fractional currency was authorized, of which $48,151,000 had been issued to Nov. 1, 1874. Subsequent to the close of the war, in addition to other notes, $44,000,000 of the legal-tender notes were retired, thus reducing their amount to $356,000,000; while by act of June 22, 1874, the volume of these notes was fixed at $382,000,000, which amount had been issued on Nov. 1, 1874. By act of congress approved Feb. 28, 1863, the national banking system was established. Under this system, to Nov. 1, 1874, circulation had been issued and was then outstanding to the amount of $351,-927,246. Under act approved July 12, 1870, providing for banks whose issues should be redeemable in gold on demand, $2,150,000 of notes have been issued. In 1873 the director of the mint estimated, from the most trustworthy data, the gold coin in the coun-trv at $135,000,000, and the subsidiary silver coin at $5,000,000, total $140,000,000; thus making the grand total of money of all kinds $924,228,246. A careful estimate of the circulating medium of the United Kingdom of Great Britain and Ireland at the close of 1872 placed the old coin at £84,551,000, the silver com at £15,000,000, and the bronze coin at £1,148,-000; total metallic circulation, £141,239,000. The'circulation of the bank of England on Oct. 16, 187.2, was £34,328,708. The notes in circulation in the United Kingdom, other than those of the bank of England, in September, 2, wore as follows: England, £5,057,910; Scotland, £5.313,560; Ireland, £7,242,0.1; making a total paper circulation of £51,942,-259, and of metal and paper combined of £193,181259 = $938,800,900. According to Necker, the circulation of France in 17.9 was equivalent to $450,000,000, all metallic.

The assignats issued by the revolutionary government of France during the years 1790-96 are estimated as high as $9,000,000,000. The circulation of France at the present time is estimated at 4,000,000,000 francs metallic, while the notes of the bank of France in circulation Oct. 9, 1874, were 2,970,881,660 francs; total 6,970,881.660 francs = $1,394,-176.332. - Money "/Account. A full and clear understanding of money can hardly be had without a realization of the true position and office of money of account; a subject seldom even adverted to in any of the treatises upon money. When any coin or weight of gold or silver, or any other article of value or of general acceptability, has for a considerable time been used as an equivalent or in payment for things purchased, the people using it assume the value of the article in question as the unit of a money of account, and employ it to express prices. By incessant use it is impressed upon and becomes familiar to the mind, is "committed to the memories of a whole nation," and " performs the same office with regard to the value of things that degrees, minutes, seconds, Arc, do with regard to angles, or as sales do to ideographical maps, or to plans of any kind."It becomes in fact " an arbitrary scale of equal parts, invented for measuring the respective values of things vendable." The use of a money of account is in no respect a mechanical process by which other articles are compared by weight or bulk with gold or silver; but it is an arithmetical one, by which they are compared with a unit of value, which has had its origin in some coin or other commodity which possesses the quality of accepta-buility for the payment of debts and the purchase of commodities.

Hence it is that a money of account, having been long in use, and become a part of the modes of thought of a people often long survives the existence of the coin or other commodity upon which it was based. Hie money of account of the bank of Venice, undisturbed for 500 years, had no coins to correspond with it, and the value of all coins was expressed in it. A money of account is a language in which all values or prices may be expressed, and by means of which the relative values of commodities may be stated. It is something which each and every one carries in his mind, as he does his knowledge of words or of arithmetic, and in so doing he is quite independent of any thought of coinage or of circulating notes. These are facts which have in whole or in part been recognized by various writers differing in almost all other respects in regard to money, and they have been controverted by but few. But being facts close at hand, familiar, and almost self-evidently true, their full significance and far-reaching importance have been overlooked and disregarded by almost all economists. Count Garnier and Stephen Oolwell have of all writers probably most fully appreciated the importance of a clear understanding of money of account.

According to the latter, it is the central point from which the whole science of money must be studied, and without which mode of procedure no true conception of it can be had. The money of account in use by a people is not only the standard by the aid of which the value of commodities may be stated, but is used to express the value of coins or circulating notes, and, if these coins or notes be of the same denomination as the money of account, unerringly indicates whether such coins or notes are at par, at a discount, or at a premium. Had men better understood this subject in Great Britain during the suspension of the bank of England, 1797-1823, there would have been far less discussion than there was as to whether bank of England notes were then at a discount or gold was at a premium. The bullion committee had a glimmering of the truth when they "doubted whether, since the new system of bank of England payments has been fully established, gold has in truth continued to be our measure of value." The money of account had in fact adjusted itself to the standard of payment furnished by the bank, and the committee half suspected that such was tho case. - Theory of Money. In its theoretic or economic aspects, money presents a field of apparently hopeless discord, controversy, and confusion, without a single doctrine established as a principle of universal or even of general acceptance.

In a word, no one of these doctrines can be presented as a truth which needs only to be stated, not demonstrated; no one who writes upon them can properly lay down any so-called principles without at the same time giving the ground upon which each one of them claims to rest. To go no further back, Montesquieu and Hume about the middle of the 18th century laid down the dictum which, stated in the words of Hume, is as follows: "It seems a maxim almost self-evident, that the prices of everything depend on the proportion between commodities and money, and that any considerable alteration on either has the same effect of heightening or lowering the price;1' and from that time to the present hour there has been a sharp and never ceasing controversy upon every phase of the subject. A memorable era in this controversy was the period between the suspension of specie payment by the bank of England, Feb. 27, 1797, and the decade following resumption in 1823, which gave rise to discussions which, in the opinion of Mr. J. R. McCul-loch, " all but perfected the theory of money." A particularly striking feature in the literature of the discussions of that time is that which is known as the "Bullion Report," i. e., the report from the select committee appointed to inquire into the cause of the high prices of gold bullion, and to take into consideration the state of the circulating medium and the exchanges between Great Britain and foreign parts.

This report was ordered by the house of commons to be printed June 8, 1810. The conclusions of the committee were, " that there is at present an excess in the paper circulation of this country, of which the most unequivocal symptom is the very high price of bullion, and next to that the low [high according to the American mode of expression] state of the continental exchanges; that this is to be ascribed to the want of a sufficient check and control in the issues of paper from the bank of England, and originally to the suspension of cash payments, which removed the natural control. For upon a general view of the subject your committee are of opinion that no safe, certain, and constantly adequate provision against an excess of paper currency, either occasional or permanent, can be found except in the convertibility of such paper into specie." The committee "doubted whether, since the new system of bank of England payments has been fully established, gold has in truth continued to be our measure of value, and whether we have any other standard of prices than that circulating medium issued primarily by the bank of England, and in a secondary manner by the country banks, the variations of which in relative value may be as indefinite as the possible excess of that circulating medium;" and thought that " an increase in the quantity of the local currency of a particular country will raise prices in that country, exactly in the same manner as an increase in the general supply of precious metals raises prices all over the world." Briefly, the report was, and probably is still, the most carefully elaborated and consistent statement of the doctrines of Montesquieu and Hume to be found in the language.

It was far, however, from setting the subject at rest. There was then a large school, and there is now perhaps a larger one, which argues against all the conclusions of the committee, as well as against the reasoning by which those conclusions are reached. It has been contended by this latter school that money has a fructifying influence upon industry, and that an increase in its volume may increase production, trade, and commerce, and, so far from necessarily increasing prices, in some cases actually reduce them; that if the theory were true, no increased production in a country, were it two, five, ten, or twenty fold, without a corresponding increase in the volume of money, could increase the aggregate value of these productions a single dollar. There are those who contend, in opposition to the bullion report, that "money should be a thing of a cguntry, of a people, and not of the world;" and that the financial and business affairs of a country should in no wise be based upon the precious metals, which are, it is contended, liable to export, beyond the control of the people or the authorities of a state.

There have long been a considerable number of writers in Great Britain holding these opinions, but it is in this country and within a comparatively recent period that such views have taken most decided and original shape. By no means all of these writers contend for an arbitrary volume of such money, only limited by the wants of the state or of the people at a particular time. Several of their plans have contemplated the conversion of this money by means of funding to any extent which a curtailment in the monetary wants of the people may demand. Probably the earliest advocate of such a system as is here referred to was Edward Kellogg, who in September, 1843, published in New York a pamphlet entitled " Currency, the Evil and the Remedy." He proposed as a remedy for usury, that the United States government should establish a national safety fund, which should lend money on mortgage of real estate at 3 per cent, per annum, in the form of " circulating medium or safety fund notes." which notes were to be payable or fundable at the pleasure of the holder in "treasury notes " or bonds, bearing interest at the rate of 2 per cent, per annum, and payable on and after one year from a given day, in circulating medium or safety fund notes.

This idea was elaborated by him in subsequent works; and immediately before and after the passage of the act of Feb. 25, 1802, providing for the issue of United States legal-tender notes, it was strongly urged upon the government by prominent financiers that these notes should be made interconvertible at the pleasure of the holder with United States bonds. This scheme of finance, called the " 3.65 bond plan," has attracted much attention. Its friends maintain that the interchangeahility of national paper money with government bonds bearing a fixed rate of interest will giye an automatic, self-adjusting volume of currency at all times, commensurate with the wants of the people and of business; and that it will preclude the possibility of financial crises by introducing a cash system of business instead of the credit one which at present exists. In entire consistency with the history of all financial schemes and theories, old as well as new, this plan is opposed with a vigor nearly if not quite equal to that with which it is advocated.