COIN IN THE UNITED STATES.

Estimate of the amount of coin in the country from

The estimates of the amounts of specie in circulation in the whole country at any period must of course always be open to criticism, for the reason that no exact statistics are possible. From the period from 1854 to 1859 the only trustworthy figures are those given in the annual reports of the Secretary of the Treasury, showing the amount of coin held by the banks on or about the 1st of January each year. These have been used as a basis of approximation to the whole amount in the country for that period.

For the period from 1870 to 1876 the data are more definite. There are only three items worthy of con

sideration in the estimation of the amount for each year, viz.: the amount in the national treasury, the amounts in the national and commercial banks of the entire country (including all commercial banks on the Pacific coast), and the amount in circulation in the Pacific States and Territories.* (The savings banks. hold scarcely any coin.)

The actual amount of coin in the treasury of the United States each year, on October 1, was as follows, viz.: 1869, $108,800,000; 1870, $96,000,000; 1871, $90,500,000; 1872, $78,000,000; 1873, $80,300,000; 1875, $67,833,316; 1876 (June 3), $73,625,584.

According to the report of the Comptroller of the Currency for 1875, the total amount of nominal "coin" held by all the national banks of the United States on October 8, 1870, was $18,460,011. Of this amount $13,135,649 was held by banks in New York city. But of this $13,135,649 only $1,607,742 was actual coin, all the rest being United States coin certificates and checks. on other banks payable in coin. Upon this basis the amount of actual coin held by all the sixteen hundred national banks of the United States in October, 1870, could not have exceeded $2,200,000-this amount including all sorts of coin. Allowing $1,000,000 more

* The relative proportions of the banking business in the United States, transacted through the different classes of banking institutions, may be estimated by the following statement of the whole number of banks of each class, and the aggregate of deposits in each in the year 1875:

for the amount held by all other banks, not national (exclusive of the Pacific coast), and we have not to exceed $3,200,000. Estimating still $3,000,000 more for actual coin in the banks in California, it would leave a little over $6,000,000 as the aggregate of all coin in all banks in the United States and Territories in October, 1870. The amount of coin in the treasury of the United States October 1, 1870, was $96,000,000. If we make the very liberal estimate of $20 per capita for the 971,321 of the entire population of California, Nevada, Oregon, Arizona, Colorado, Idaho, Montana, New Mexico, Utah, Washington and Wyoming in 1870, it gives $18,426,420. Add this to the coin in the treasury and in the banks, and we have an aggregate of $120,826,420, say $121,000,000, as the entire stock of coin in the United States and Territories on October 1, 1870.

On October 3, 1872, the amount of actual coin held by the national banks of New York city was only $920,767 (see report of comptroller for 1873, page 44), and on the same basis the total amount held by all the eighteen hundred and fifty national banks of the United States could not have exceeded $1,200,000, which would give a little over $4,000,000 for all banks in the United States and Territories. The "specie," as reported to the comptroller by the national banks of the United States on October 1, 1875, was classified as follows, viz.: actual coin, $3,364,569; United States coin certificates, $4,485,760; total, $8,050,329.

PAPER MONEY.

BANK NOTES.

ANK notes were not at first, as most people pre

BANK

sume, an invention to increase the amount of money in circulation, but grew out of the necessity for some standard by which to regulate the value of coins. During the sixteenth and seventeenth centuries, as explained in the first chapter of this book, the debasements of the coins by different monarchs of Europe were so frequent and so great that merchants and traders had no safeguards against loss but continual resort to the assayers. These sometimes disagreed, and some authority of wider jurisdiction than the individual assayer was required. Banks had already been devised * as a means of assisting governments to secure the united co-operation of the people in the finances of the states, and in the exercise of this function it became necessary that each of the great banks should also fix the values of all home and foreign coins. The universal rule for this valuation was to receive all coins at the value of the pure gold or silver in them as compared with an ideal standard, viz., a specified number of grains of gold or silver, to be called a "ducat," a "florin," a "pound," or a "dollar." In most cases this ideal coin at first

* Bank of Venice, founded in 1157; Bank of Barcelona, in 1349; Bank of Genoa, in 1407; Bank of Amsterdam, in 1609; Bank of Hamburg, in 1619; Bank of Sweden, in 1656; Bank of England, in 1694.

corresponded to the principal national coin of the country in which the bank was located. But as the actual coins were debased from time to time, their value fell below that of the ideal coin accepted by the bank as its standard, and, in some cases, particularly that of the Bank of Venice, many of the foreign coins were received at valuations higher than warranted by the value of pure gold or silver in them. But these various coins once deposited with the bank the account was turned into "ducats" and the depositor credited with so many "ducats" of the ideal standard established by the bank. The amount thus credited, or any part of it, was transferable on the books of the bank, at the option of the depositor, to any other person to whom he might desire to pay money; but the money could not be withdrawn. The depositor thus got the benefit of a premium on many foreign coins which was not warranted by the value of the pure gold or silver in them. But this last mentioned inducement to deposit money in bank was peculiar to the Bank of Venice, and was one of the secrets of its popularity and good credit for so many years. The object was to secure the coin for the government, and the deposit was practically a subscription to a national loan. In the twelfth and thirteenth centuries, when the common rate of interest ranged from 15 to 25 per cent per annum, the loss on these coins, received at an overvaluation by the bank, was considered a small rate to pay for the use of the money for the state. But aside from this there was the consideration to the depositor in other banks as well as that of Venice, that he was at once assured of the value of the coin he received. The credits at the banks, instead of being only on the books and transferable by order,