CURRENCY, a popular term sometimes used as synonymous with the phrase medium of exchange but more commonly confined to the paper elements of the medium. If used in the broader sense, two kinds should be distin guished, metallic and paper.
Metallic Currency may be classified on the basis of its form as and coin. Bullion is a name applied to uncurrent coins and to gold and silver bars or ingots. The metal in these may be pure, that is, without alloy, or standard, that is, mixed with the amount of other metals prescribed by law for coins. For example, a law approved 18 Jan. 1837 prescribed •that the standard for both gold and silver coins of the United States shall hereafter be such that of 1,000 parts by weight 900 shall be of pure metal and 100 of alloy; and the alloy of the silver coins shall be of copper ; and, the alloy of the gold coins shall be of copper and silver, provided that the silver does not exceed one half of the whole alloy)" These gold and silver bars are chiefly used as material for the manu facture of coin or in the payment of balances between banks, especially those located in differ ent countries. The latter is their chief use as currency. They may, however, and doubtless i sometimes are, used in payments between indi viduals and between individuals and banks.
Coins are stamped pieces of metal in form, size, weight and design of the stamp, calculated to fit them for use as hand-to-hand money. The form found to be most serviceable is that of a flat, circular .disc with a milled edge. The. circular form and the milled edge make clip ping difficult and loss of weight from wear and tear easily observable. The flat sides present a surface well adapted to receive a stamp. In order that the sizes and weights of the coins may be convenient, gold, silver, nickel or some kind of an amalgam and copper are used in their manufacture in all countries in which commerce is well developed, gold for those of highest denominations, silver for those denom inations next lowest, nickel or amalgam for those next and copper for those of the lowest denominations.
The denominations found most convenient are those based upon the so-called decimal sys tem. According to this the coin of lowest de nomination is usually one-one-hundredth part of the unit coin and the other subdivisions are one-twentieth, one-tenth, one-fourth or one fifth and one-half of the unit. The other de
nominations are the unit and multiples of 5, 10 and 20 times the unit. For example, in the United States the unit coin is the dollar and the subdivisions are 1, 5, 10, 25 and 50 cent pieces, and the multiples are 5, 10 and 20 dollar pieces. The 1 cent piece is made of copper, the 5 cent piece of nickel, the 10, 25 and 50 cent pieces and the dollar of silver, and the 5, 10 and 20 dollar pieces of gold.
The only noteworthy exception to the deci mal system among the nations of the present day is England. She has preserved the original system which was in operation in European countries before the decimal system was adopted. The old system was derived from system of weight at the time in use. As it is preserved in England the unit called the pound ; sterling is subdivided into 20 parts called shil lings and these again into 12 parts called pence, and these again into four parts called farthings.•• The denominations of the coins are the farthing, half-penny, penny, sixpence, florin or two-shil ling piece, half-crown or two and one-half shilling piece, the crown, half sovereign, sov er, two and five-sovereign pieces, The faing, half-penny and penny are made of , copper, the sixpence, florin, half crown and crown of silver, and the half sovereign, sov-i ereign, two and five-sovereign pieces of gnid.
The stamps put upon coins are designed to indicate their denominations, to make counter feiting difficult, and to serve artistic and com memorative purposes. The names given to them frequently have historical as well as practical significance. From the point of view of their relation to each other, coins may be classified as standard or subsidiary. Standard coins are those made of the standard of value, which in most countries at the present time is gold, and which are coined for individuals who bring to the mint metal of the proper standard. A small charge., called seniorage may be made or the entire • expense of the coinage may be borne by the government. Subsidiary coins are those which are made redeemable on demand in standard coins. They are usually also made legal tender only for relatively small payments,. coined on government account and in limited quantities, and the amount of the standard metal for which they are redeemable exceeds in market value that of the amount of the metal of which they are made.