AMERICAN FINANCE 393 



six classes of money — gold coin, uncovered notes, certificates 

 issued for gold, certificates issued for silver, bank notes and 

 legal tender silver dollars. Or only four classes might be 

 named, to wit: gold and its certificates, constituting 44.1 

 per cent; silver and its certificates, 21.2 per cent; uncovered 

 notes 13.2 per cent; and bank notes, 17.2 per cent. The 

 financial architect would seek to be rid of uncovered notes 

 and legal tender dollars, and might look askance at the large 

 bank circulation. 



The United States notes, at first and still in theory a 

 forced loan, began without reserve behind them. The re- 

 sumption act which aimed to redeem them in gold, gave them 

 a power for mischief as weapons for assault on the official 

 treasure. Danger arose when the revenue was inadequate, 

 and the treasury became impoverished. Peril ceased when 

 a surplus was created, and the yellow metal flowed into the 

 national coffers. In itself the United States note is weak; 

 it gains strength as gold is put behind it. The practical 

 banker may join with the theorist in the wish that it may 

 pass gradually into the gold certificate. That change is going 

 on without jar or friction on two paths; first, by the increase 

 in the gold in the treasury, and second, by the use of notes of 

 $10 instead of those of larger denomination. In five years 

 the $10 notes have run up from just less than $100,000,000 on 

 July 1, 1900, to $193,459,321 in 1902, to $245,440,011 on 

 the same date in 1904. The treasury gross gold in the 

 same period from $423,577,971 rose to $681,838,821, and 

 is now over $700,000,000. Thus these greenbacks have 

 turned from large notes in chief part to be 70.7 per cent in 

 $10 bills, for which the demand always, with rare excep- 

 tions, exceeds the supply. In the same five years additions 

 of 60.9 per cent to the gross gold in the official vaults have 

 been made. The share of the uncovered notes to the total 

 currency is steadily growing less. From 33.6 per cent in 

 1880, and 23.4 per cent in 1900, it has fallen to 13 per cent. 

 The danger from them has diminished in certainly as marked 

 a ratio. They are to decrease, while the general volume is 

 to increase. Congress could without friction use at once 

 $50,000,000 of the gold reserve for certificates of $10 



