CURRENCY (ML. currentia, current of a stream, from Lat. currerc, to rim). The circu lating medium in which debts are paid and the business of the country transacted. This would seem to be also the definition of the term money, and, indeed, among economic writers there is no hard and fast line to distinguish the use of the respective terms currency and money. In gen eral, however, the term currency applies more specifically to those attributes of money which are included under the designation medium of exchange, as distinguished from those which at tach to its function as a standard of value.
While, with few exceptions, the money of civilized States rests upon a metallic basis of gold and silver, the circulating medium is often exceedingly complex. Of this the statement of money in circulation in the United States fur nishes an excellent illustration: The aggregate of these various forms of money constitutes the currency of the nation; but among them we can recognize one only—namely, gold coin—as possessing all the attributes of money. It is in the relation of these other forms to the standard money that the questions touch ing the currency arise. While a fuller discus sion of these questions most be reserved for other article{, a brief survey can be had in examining the list here given. In it we recognize three types—token currency, Government paper cur rency, and hank currency.
The subsidiary silver and minor coinage of the United States (the latter not given in the table) represent in the fullest sense token cur rency. The metallic value of the coins is in contemplation of the law less than their nominal value; their legal-tender quality is limited, as is also their amount. the Government un dertakes the obligation to redeem them in stan dard money. The silver dollars approach token currency in the lack of correspondence between their metallic and nominal values and in the limitation of their quantity, but they depart from its principles in possessing full legal ten der and in not being directly redeemable in gold.
Two forms of paper currency appear in the eireulation of the United States—the certificates and the legal-tender notes. 'Hie certificates,
whether of gold, silver, or eurrency. represent in another form a definite quantity of money de posited in the United States Treasury. They are not thetmielves endowed with the legal-ten der qualities of the money they represent. though receivable by the Government as money. The United States notes convertible into gold on de mand are secured not by an exactly equivalent holding of gold by the Treasury, but by a 're serve' of $15.0,000,000, which is deemed sufficient, to meet all ordinary demands for redemption. Experience has taught that all such obligations be on demand will not be pre--tatted simultane ously. The Treasury notes of 1890, popularly known as '-ierinatt nut es, welv issued in pay ment for silver bullion bought between IS90 and 1893. They are full legal tender and are re deemable in gold like the United States notes. They are gradually being retired in exchange for silver certificates based on silver dollars coined from the bullion purchased by the notes when first issued.
Banking currency is represented in our circu lation by the national-bank notes. These are receivable at par by all national banks and by the Government in payment of all dues except customs duties, and are payable for all debts owing by the States except intereet on the public debt and in redemption of United States or notes, for they rest, not. on the credit of the issuing banks, but on Govern ment bonds, and their redemption is guaranteed by the Government. Viewed in this light they appear as a form of Government paper currency.
The word currency is often used to include such credit instruments as cheeks and drafts, and is usually then designated 'deposit currency.' Consult: Far•er, Studies in the currency (Lon don, IS9S) ; Sound Currency Red Book, published by Reform Club (New York, 1890) ; Horace White, Money and Banking (New York, 1902). See BANKS; COINAGE; GREENBACKS; TREASuRY NOTES; 1\IONEY.