regular ratio, and notably in the United States there ate paper currencies issued from different sources and resting upon different bases.
The money in circulation in the United States amounts to between one and a half and one and three-quarter billions of dollars, divided approximately as follows: Nickel and copper coins, twenty millions of dollars; silver coin, one hundred and twenty millions of dollars; gold coin, four hundred and eighty millions of dollars; paper currency, one thousand millions of dollars.
Statistics gathered by the Comptroller of the Currency show that, of the receipts of national banks, checks form an average of about ninety per cent, only about ten per cent being composed of paper currency and coin. Other statistics, also gathered by the Comptroller of the Currency, show that in retail transactions throughout the United States the medium of exchange is composed, on an average, to the extent of about forty per cent of checks and sixty per cent of paper currency and coin. The smaller retail transactions are effected almost entirely by the use of coin; as the transactions become of greater value, the more does paper currency enter into them; as their value further increases, the greater is the use of checks, and transactions of magnitude between different localities are settled by drafts and bills of exchange.
This progression in the medium of exchange, corresponding with the progression in value of coexistent transactions, agrees with the progression in the medium of exchange in correspondence with the progression in value of transactions, as they have developed throughout history, and makes manifest the fact that the most important monetary factors at present are paper representatives, of value consisting, first, of bank notes or government notes circulating generally as currency, issued under government regulation, and secured upon widely known bases; second, of checks, drafts, promissory notes, bills of exchange, and other instruments depending for their security upon the resources of the drawers and indorsers, the extent of which is not generally known.
As these paper representatives of value form by far the greater portion of the medium of exchange, the most important point of the monetary problem is raised by the question—
How may paper representatives of value be secured, to most satisfactorily meet the requirements of a medium of exchange?
Let the conditions incident to the issue and acceptance of a paper representative of value in a simple case be considered. When, a few years ago, a humble laborer, bereft of home, property, and family by the Johnstown flood, applied to the manager of a Pittsburg mill for work, he was provided with some immediate
