FINANCES OF THE UNITED STATES. 



267 



of the country. Though at present they float 

 at par with gold, any derangement of the ex- 

 isting system of circulation would make each 

 one of these several kinds of paper vary in its 

 value according to the character of the money 

 in which it is redeemable. As most of the act- 

 ual money now afloat is used in small trans- 

 actions among people of small means without 

 much technical education, it would seem de- 



sirable that some action should be taken to 

 simplify this currency, giving in its place a few 

 simple kinds bearing to each other some natu- 

 ral relation easily understood. 



The following statement shows the amount 

 and character of the principal outstanding 

 paper and coin circulation at certain dates 

 named, the amount of coin being estimated by 

 the Director of the Mint : 



The following table shows the issues of gov- 

 ernment and bank paper, and metallic reserve : 



The metallic reserve, as above stated, in- 

 cludes, in addition to the reserve for circula- 

 tion, such portion of the required reserve for 

 deposits as may be in specie. The publicly 

 announced policy of the Treasury of the Unit- 

 ed States, since the resumption of specie pay- 

 ments, January 1, 1879, has been to hold in 

 specie 40 per cent, of the amount of outstand- 

 ing United States notes, for the purpose of 

 redeeming such notes upon their presentation. 

 The amount of reserve held, however, has 

 usually been in excess of 40 per cent, of the 

 notes, and the Secretary of the Treasury has 

 ample power at any time to increase this re- 

 serve to the full amount of the notes outstand- 

 ing, by the sale of bonds of the description 

 authorized by the Refunding Act of 1870, if 

 necessary. The specie reserve of the Bank of 

 England since 1820 has seldom been 40 per 

 cent, of, the demand liabilities of the bank, 

 and at times has been as low as 17 per cent. 



Great Britain, with a trade exceeding prob- 

 ably that of any other nation, has a paper cur- 

 rency of but little over $200,000,000. This 

 currency is mainly issued by the Bank of Eng- 

 land, and is a legal tender only so long as that 

 bank shall redeem the notes at par in coin. 



The following statement shows the increase 

 of paper circulation in France : 



Table showing the specie and paper circulation in France from 1860 to 1878, compiled by the 

 Director of the United States Mint. 



