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simultaneously, should be governed by the special position of each state or group of states." They agreed also that bi-metallism must be determined by the discretion of the individual states chiefly in relation to the country's relation to the silver market; and that, in lieu of the fact that a mutual agreement on the question of ratio between the two metals could not be reached, the question had better be dropped for the time being. The conference therefore produced no effective results.

The French and United States governments joined in calling the third conference. The decline of gold production again brought up the problem of bi-metallism. England and France met with seriously diminished gold reserves, and the United States was forced to import gold, which upset the European market. Germany was unable to find a satisfactory means of disposing of her stock of silver. Nineteen countries attended the conference. It recommended the establishment of the 15% to 1 ratio, and then adjourned for the purpose of giving the various nations time to consider the proposition, with the intention of reconvening on 12 April 1882. However, the conference was not reassembled on that date, and was therefore fruitless.

The fourth conference was called by the United States "for the purpose of conferring as to what measure, if any, can be taken to increase the use of silver as money in the currency system of nations." Twenty countries were represented. A delay was caused by the fear of a cholera epidemic, and in November 1892, the sessions were finally held. England and the United States were the most enthusiastic members of the group. Political factors. began to play also on the interests of these two countries, and the discussion, though lengthy, was altogether unprofitable. Various

schemes for a bi-metallic standard and for the wider circulation of silver through some cooperative system were brought forward. There was no unanimity and the conference finally adjourned; 30 May 1893, was the date set for its reconvention, but this never took place. (See MONEY). Consult the various official reports of the conferences; and also Coinage Laws of the United States) (1792-1894); Muhleman, M. L., Monetary Systems of The World' (New York 1895); and Russell, H. B., 'International Monetary Conferences' (New York 1898).

MONETARY CONVENTIONS, conferences between European nations, for the regulation of their coinage. Two of such conventions have been held, the "Latin Monetary Convention," and the "Scandinavian Monetary Convention.» The former includes France, Belgium, Italy and Switzerland, the agreement having been made in December 1865, in virtue of which the coinages of those countries are of the same weight and fineness. Greece subsequently joined the convention, and assimilated her drachma to the franc. Spain, Austria and Hungary, Finland, Rumania, Serbia, Bulgaria and Monaco have also coined large amounts of either or both gold and silver money, of weight, fineness and value exactly proportionate to, or identical with, that of the countries included in the convention. Since 2 Aug. 1892, the gold standard has prevailed in Austria, and since 1 Oct. 1897, in Japan. The

"Scandinavian Monetary Convention" dates from 1873, and includes Norway, Sweden and Denmark. See LATIN UNION.

MONETITE, a native acid phosphate of calcium, CaHPO. occurring massive and in small, triclinic crystals, in the islands of Moneta and Mona, in the West Indies. The mineral is found in limestone, beneath a deposit of guano. (Also spelled "monitite.")

MONEY, Walter, English author: b. Donnington, Berkshire, 21 Aug. 1836. He received his education in a private school and early began to study on historical and archæological subjects, and for a number of years was the local secretary of the Berkshire Society of Antiquarians, London, and of the British Archæological Association. From 1889-97 he was a member of the Berkshire County Council. Among his publications are 'The History of Newbury'; "The History of Hungerford; The History of Speen the Roman Spinæ; 'Church Goods in Berkshire'; 'The Two Battles of Newbury, 1643-44); The Story of the Siege of Donnington Castle'; 'The Siege of Basing'; 'A Royal Purveyance in the Elizabethan Age'; 'A Popular History of Newbury and the Neighborhood' (1905); and many memoirs on historical and archæological subjects.

MONEY. Money is a term used to describe the standard of value and a very important part of the medium of exchange of a country. By a standard of value is meant any commodity, which is used to measure and express the ratios in which other commodities exchange for each other. For example suppose wheat has been traded for wood, cattle, sheep and plows on the following terms: 1 cord of wood for 5 bushels; 1 ox for 50 bushels; 1 sheep for 20 bushels; and 1 plow for 10 bushels. The figures 5, 50, 20 and 10 express the market values of these commodities and the ratios at which they should exchange for each other, and, since each refers to bushels of wheat, wheat may be called the standard of value.

Standards of Value. In a community in which barter was the only method of exchange produced or the service he rendered for the each person would trade the commodity he other commodities and services he required, and would express their values in terms of the commodity or service thus bartered, no other method of expressing their values being available to him. Standards of value in such a community would therefore be individual and would be as numerous as the individual traders, and difficulty would be experienced in discussing values because each person would speak a language not intelligible to others or only intelligible after a mathematical calculation. For example, one man would express the value of a given commodity, say a horse, as so many bushels of wheat, another as so many cords of wood, another as so many yards of cloth, another as so many days of labor, etc. The only method of removing this difficulty would be the acquisition by each member of the community of the ability and the habit of quoting values in terms of the same commodity; that is, by the acquisition of a community standard.

Such community standards were early established in every trading group of which history furnishes any record, and, as trade developed

between different communities, standards common to wider and wider areas and to larger and larger groups appeared, until, with worldwide trade, we have standards common to many nations. Indeed, at the present time all the nations in which commerce has been highly developed use the same standard, gold, and only two standards, gold and silver, are used throughout the civilized world.

Only a commodity which possesses a high degree of utility for purposes of ordinary consumption can serve as a community standard since only for such a commodity would every person barter his commodities or services, and such barter, as we have seen, is a condition necessarily precedent to service as a community standard. Since several commodities in the same community and at the same time, however, may possess this essential quality of univeral exchangeability, other qualities are also important in the determination of a community's standard. These are high value in proportion to bulk, divisibility, durability, fitness for coinage and steadiness or stability of value. The first four of these are important, because, as will appear later, it is desirable that the standard of value should serve as an element in the medium of exchange, and the fifth because of the relation between the standard of value and prices which will also be explained later. Among several commodities, therefore, for which every person has frequently bartered his commodities or services, the one which possesses these other qualities in the highest degree of perfection will become the community standard. This fact explains the almost universal use of gold and silver for this purpose, and the possession of the first of these qualities, relatively high value in proportion to bulk, and possibly the last one, steadiness and stability of value, in a higher degree than silver, account for the use of gold as a standard in the most important commercial nations of the world.

The numerical expression of the ratios in which goods exchange for the standard of value is called prices. Thus in the United States when we say that the price of a bushel of wheat is one dollar, we express the fact that wheat is exchanging on our markets for standard gold at the ratio of one bushel of the former for 25.8 grains of the latter, which amount of gold has been declared in our statutes to constitute a dollar. This being the case, the causes of changes in prices may be grouped under two heads, namely, those affecting the value of the standard commodity and those affecting the value of the commodity the price of which is under consideration, value in this connection meaning not ratio of exchange, but that quality of a commodity which is changed in magnitude by changes in the relations between its demand and supply. The price of wheat, for example, will change when the relation between its demand and supply changes, or when the relation between the demand and supply of gold changes, unless the change in the value of one commodity exactly offsets that in the value of the other.

The phrase standard of value, as used in the preceding sections, should be qualified by the adjective primary, in order to distinguish it from standards occasionally used which may be described as secondary. In the United States a secondary standard was in use from 1862 to

1879. In the former year the United States government, in order to assist in paying the expenses incident to the war then in progress, issued its notes promising payment to bearer in denominations suitable for circulation as money and made them legal tender in payments between individuals, i.e., decreed by law that the tender of these notes in the payment of financial obligations would constitute discharge of such obligations.

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These notes speedily depreciated. to say, the people of the United States, and of other countries as well, did not consider them worth, and would not give for them on the open market, the amounts the payment of which was promised on their faces. As a result of this depreciation these notes took the place of coin in the circulating medium of the country, because people could melt down the coins and exchange the bullion for these notes at their depreciated value and with them meet a much greater volume of financial obligations than they could have met by tendering the coins directly. When everybody thus came to tender depreciated notes in the payment of all their obligations, prices were universally quoted in these notes instead of in gold, and they thus became the standard of value of the country.

The dependence of prices upon the value of gold was not, however, thereby in any way broken. What the government promised to pay in these notes was dollars, and dollars meant a certain amount of gold carefully specified in laws enacted by Congress. The value of the notes themselves, i.e., what people were willing to pay for them on the open market, was daily quoted in terms of the gold standard. The notes, therefore, were a secondary standard only, gold continuing to serve as the primary standard. Under these conditions prices fluctuated, not only because of changes in the relative value of gold and of commodities, but also because of changes in the degree of depreciation of these notes.

The phrase medium of exchange describes the go-between in exchanges now almost universally used in place of barter. Instead of exchanging the good or service we have directly for the one we want, we nowadays exchange it for a third thing which we in turn exchange for what we want and this third thing is called a medium of exchange. A farmer, for example, who comes to market with a load of grain and wants an overcoat does not search for a clothier who not only has for sale the coat he wants, but also wants the grain he has, but he exchanges his grain for coin, or government notes, or bank checks, and transfers these to the clothier in exchange for the coat.

Medium of Exchange. The explanation of the almost universal practice of using a medium of exchange is found in the difficulties of barter. One of these is to find two persons each of whom has the thing which the other wants and wants the thing which the other has, and is willing to take the precise amount of the thing desired which the terms of the exchange agreed upon would bring him. There would be little commerce if this difficulty could not be overcome, and in overcoming it the. medium of exchange has rendered a service essential to the progress of civilization,

In a state of barter also the process of saving is so difficult and expensive as to be practically

impossible as a general practice and on a large scale. It is that of hoarding surplus products. In such a state the farmer saves by storing his surplus grain and allowing his herds to grow and accumulate, the manufacturer by piling up goods in his warehouse, the wageworker, not being able to accumulate his services, could only save by exchanging them for such commodities as he might desire to consume in the future and hoarding these. In all these cases, however, the risk that the product hoarded would keep during the savings period, that it could be sold at the end of that period, and that the terms of the sale would be such as to render the sacrifice of saving worth while, would have to be assumed. In the vast majority of cases, these risks would be so great as to more than offset the inducement to save. The losses experienced by people who had attempted saving under these conditions would discourage others, and it is safe to say that few would ever make the attempt. A proper medium of exchange removes all these risks and thus renders saving possible and attractive.

A medium of exchange also promotes borrowing and lending. Without it a person with an unused surplus could aid another with a deficit only by transferring his surplus to him, but unless this happened to be in the precise form needed, which would rarely be the case, it would do the borrower little or no good. On the other hand, with a proper medium of exchange the lender can transfer to the borrower the means of purchasing at any time anything the market supplies, thus enabling him either to satisfy his own immediate wants or to purchase the means of producing wealth.

In order that exchanges may be accurately, conveniently and safely made under all conditions, that is, when the commodities to be exchanged differ widely in quality and value or when they differ very little, when the exchange is to be completed without delay or after a delay of days, weeks, months or years, when the persons between whom the exchange is to be made are face to face or separated widely in space or time, etc., the medium of exchange must represent every conceivable combination or amount of value; must be easily, cheaply and safely transportable from place to place; must be easily recognizable, durable, and certain in value; must be acceptable to all the parties involved in the trade, and must be automatically adjustable in volume to the fluctuating needs of commerce.

In the United States at the present time the medium of exchange must render it possible to make trades in values as low as one cent and as high as millions of dollars, and in every possible combination of amounts between those figures. It must be possible also to make up these amounts in a very short space of time, without long and difficult calculations and without danger of loss. The medium of exchange would be imperfect and quite incapable of meeting the public needs if it did not measure up to this requirement.

Since commerce takes place between people living far apart, in different cities, states and even nations, the medium of exchange must be of such a character that it can be sent through the mails and by express, over the railroads and on steamships, and be carried about in bags, pockets and purses, and it must be pos

sible without danger of loss to transport in these ways all amounts large and small.

The importance of being easily recognized is well illustrated in a busy station where change must be made with great rapidity and where difficulty of distinguishing one element of the medium of exchange from another would render impossible the transaction of the necessary business.

Without elements of great durability a good medium of exchange would be impossible, because the wear and tear necessarily involved is great, and as an instrument of saving it frequently needs to be kept for long periods of time. Certainty of value is also absolutely essential. If there is any uncertainty regarding the value of any element of the medium of exchange, people will either refuse to accept it, in which case it will cease to be a medium, or they will protect themselves against possible loss by charging a higher price for the goods or services exchanged. In either case commerce is obstructed or made impossible.

In order that people may be willing to part with their commodities in return for the medium of exchange, they must be assured that it in turn will serve them in making desired purchases that is, that the persons who have the goods they want will be willing to accept it in exchange for such goods. This requirement implies the possession of practically universal acceptability in some of the elements of the medium, of acceptability among wide circles in all of them, and of interchangeability between all, such interchangeability enabling the holder of any element which does not possess universal acceptability to exchange it for one which does.

The volume of exchanges in any community varies from time to time. In this and most other countries it varies with the seasons, being greatest in the spring and fall and least in midsummer and midwinter. The medium of exchange should adjust itself to these changes increasing automatically in volume as volume of exchanges increases, and decreasing automatically under the opposite conditions.

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The qualifications required in a a good medium of exchange account for the composition of the currencies of modern nations and for the changes which have taken place in the past and which are still in progress. Every such currency consists of elements which from different points of view may be classified as follows: (1) hand-to-hand money, written or printed orders of one party to pay specified sums to another, and book accounts; (2) coin, government notes and bank currency, the latter sub-classified into bank notes and checking accounts; and (3) standard money and credit currency.

By hand-to-hand money is meant those elements of the medium of exchange which perform their service by mere transfer from hand to hand without endorsement or any other formality. In the United States at the present time it includes all our coins, several varieties of governmental notes and bank notes. Under the head of written or printed orders to pay specified sums to specified persons belong bank checks and drafts, postal money orders, express money orders and other similar devices. Some of these can be transferred between other than the original parties by the formality

of endorsement. Book accounts are widely used and constitute much the most important element of the medium of exchange of modern nations. Any book account serves as a medium of exchange if directly or indirectly it enables purchases and sales of commodities to be balanced against each other, for example, that of a grocer who credits farmers with the proceeds of eggs, butter, vegetables, and other produce purchased and debits them with their purchases from him, or that of the farmer himself who credits his hired man with the wages agreed to be paid for his services and debits him with house rent, milk, butter, eggs, potatoes, wood and other produce advanced him. Indirectly the checking accounts of commercial banks balance against each other on a large scale the purchases and sales of individuals, communities and nations, and thus constitute the largest element of the medium of exchange of all highly developed commercial nations.

The second of the above classifications is based in part upon the form and in part upon the source of the medium of exchange. The metallic element of the medium usually takes the form of coins, though bullion is also used. Government notes are those issued by the goyernment and for the payment of which it is responsible, while bank currency originates with banks, which are responsible for meeting the obligations involved in its issue. The name paper money is frequently applied to government and bank notes to distinguish them from coins. Coins may be sub-classified on the basis of the metals employed in their manufacture into gold, silver, nickel, or amalgam and copper, and on the basis of their relation to each other, into standard and subsidiary.

The basis of the third classification is the presence or absence of the element of credit. Standard coins, that is, those made from the standard of value, are the only ones in which this element is entirely absent. All other coins, all paper elements of the currency and all book accounts which serve as a medium of exchange contain the element of credit in some degree. Our silver coins, for example, are actually worth as bullion much less than the amount stamped upon them and government and bank notes are in and of themselves worth practically nothing. People take them at the value indicated by the stamp upon them only because somebody in whom they have confidence is under obligation to make that value good, the government in some cases, banks in others, specified persons or corporations in others. The term credit currency is appropriately applied to all elements of the medium of exchange which circulate at a value greater than the market value of the substance of which they are made because the credit of some government or bank or person or corporation is an essential factor in such circulation..

The maintenance of a medium of exchange consisting of coins made of different substances and of paper elements issuing from different sources is only possible when complete elimination has been made of the interest of anybody and everybody to discriminate in favor of one element and against others. If such discrimination is for any reason profitable, those elements which alone can with profit he used as a medium of exchange will soon be

the only ones so used. The others will be devoted to other uses which are more profitable and on this account will disappear from circulation. This fact was observed in the 17th century by Sir Thomas Gresham, director of the English mint, and stated in the form of a law which has since borne his name. "Bad money," h said, "drives good money out of circulation." This law has been brought into operation many times by the circulation in large quantities of worn and clipped coins. When the proportion of such coins becomes large, full weight coins will either be melted down and sold as bullion or clipped and sweated. It was cases of this kind which Sir Thomas Gresham had in mind when he used the adjectives good and bad in the statement of his law, bad money referring to worn and clipped coins and good money to full weight coins.

The operation of this law has also been frequently illustrated by the substitution of silver for gold coins and vice versa. In the early part of our history five silver dollars contained 15 times as many grains of silver as did a five-dollar gold piece grains of gold, 15 to 1 in 1793, at the time these coins were first minted, being about the relative values of the same weight of silver and gold. Subsequently the value of silver relatively to gold fell so that it required nearly 16 ounces of silver to sell upon the markets for as much as an ounce of gold. The result was that gold coins completely disappeared from circulation, because they were worth more as bullion than as coin. For the opposite reason, silver remained in circulation and silver bullion was taken to the mint and coined. Later still in our history, on account of a great fall in the value of gold relative to silver, gold coins took the place of silver, the latter being melted down or exported and sold as bullion.

The disappearance of coin as the result of the circulation of depreciated notes is another form in which the truth of Gresham's Law has. been frequently demonstrated. During the war between our northern and southern States, both the Federal and the Confederate governments paid a portion of their bills in their own notes payable to bearer, made legal tender and issued in denominations suitable for circulation as money. They very soon depreciated and became a secondary standard of value, and coin of all kinds disappeared from circulation, since on the bullion market they could be sold for these notes at a good premium, and a five-dollar note would pay as many debts or buy as many things as five silver dollars or a fivedollar gold piece.

The terms in which Sir Thomas Gresham stated his law may be objectionable because the phrases bad money and good money are not accurate descriptions of the forces which crowd some of the elements of the medium of exchange out of circulation and hold others in, but the law itself is as certain in its operation as those of the Medes and Persians. It is really only one form of the expression of a law of much broader application, namely, that all men are prone to make the most of their possessions.

The device of making some coins subsidiary to others which are called standard and of making the paper elements of the currency redeemable in coin prevents the operation of

Gresham's law and has, therefore, been incorporated into the practice of all commercial nations. (See article CURRENCY). This practice renders it desirable that standard coins should constitute an element of the medium of exchange, since the stamps on the other coins and the paper elements of the medium refer to definite amounts of the standard of value, and their exchange on the markets, rapidly and conveniently at all times and places for precisely these amounts requires that this commodity should be put up in convenient sized and conveniently labeled packages and be widely spread throughout the commercial world. These ends can only be attained when the standard of value is put up in the form of coins and used as a medium of exchange.

The money of a country, which consists of its standard of value and of those elements of its medium of exchange which pass freely from hand to hand by mere act of transfer and without endorsement and which are accepted without question by everybody, is an historical product, and can, therefore, be explained only by reference to its history.

The Monetary System of the United States. The foundation of the monetary system of the United States was laid in 1792 in which year Congress passed our first coinage act. That act provided for the manufacture of gold coins of the denomination 10, 5 and 21⁄2 dollars, to contain respectively 2471⁄2, 1233⁄4 and 61% grains of pure gold; of silver coins of the denominations dollar, half-dollar, quarterdollar, dime and half-dime, to contain, the dollars, 3714 grains of pure metal, and the other proportionate amounts; and of copper coins of the denominations one cent and one-half cent. It further provided that the gold and silver coins authorized should be manufactured without charge by the United States mint for any persons who would supply gold and silver bullion of the requisite degree of fineness and that all such coins should "be a lawful tender in all payments whatsoever."

While the mint ratio of 15 to 1 between gold and silver coins established by this act closely corresponded to the bullion ratio between the two metals in 1792, it no longer did so in 1794 when the mint at Philadelphia was ready to begin operations. At that time the bullion ratio was about 15.37 to 1, and it never again fell to so low a point as 15 to 1. Gresham's law, therefore, operated almost from the beginning and the gold coin disappeared from circulation. Unfortunately the new silver coins did not circulate freely. Pending the construction of a mint and the manufacture of a suffi cient quantity of new coin to supply the needs of the country, Congress had authorized the use of several kinds of foreign coins, including the Spanish milled dollars. Since these latter contained more silver than the new American dollars and since both the Spanish and the American dollars were accepted at their face value in both the United States and the Spanish West Indies, with which we were at the time carrying on an active trade, the merchants of Boston, New York, Philadelphia and Baltimore engaged in this trade discovered a source of profit in shipping American dollars to the West Indies and in bringing West Indian dollars home and transforming them into American dollars at the mint. L

A remedy for this condition was not successfully applied until 1834, and in the meantime the currency of the country consisted chiefly of notes issued by the banks of which there were two varieties state institutions and the United States banks - the first one operating in

the period 1791-1811 and the second in the period 1816-36. The notes of many state banks were issued in small as well as large denominations, thus in part supplying the need for small change which the scarcity of coin frequently rendered urgent. In the interval between the first and the second United States banks, 1811-16, our second war with England was fought, and the conditions thus created, aggravated by the liquidation of the first United States Bank forced the state banks into a state of suspended specie payments. Their notes depreciated in consequence and coin of all kinds, foreign as well as domestic, disappeared from circulation. The remedy applied was the authorization of the second United States Bank which was charged with the task of securing a resumption of specie payments. President Jackson's war against this bank started during his first administration had reached a stage by 1834, which foreshadowed the certain end of that institution so soon as its charter should expire in 1836 and that fact, together with the discovery of gold in North Carolina and a recollection of the currency difficulties which succeeded the liquidation of the first United States Bank accounts for the passage in 1834 of another important coinage act.

That act lowered the weight of the gold coins by decreasing the amount of pure metal in the eagles from 247.5 to 232 grains, and that in the other gold coins proportionately thus changing the mint ratios between gold and silver coins from 15 to 1 to 16 to 1. The bullion ratio of that time being about 15.73 to 1 gold coin was slightly overvalued at the mint and, therefore, was restored to circulation, but for the same reason, silver disappeared. and a new problem was created, namely that of supplying the country with small change. That problem was solved in 1853 by an act which reduced the half-dollars, quarters and dimes to the status of subsidiary coins by diminishing the amount of metal in them by 7 per cent, by taking away from private persons the privileges of having silver bullion transformed into them at the mint, and by providing that hereafter they should be manufactured only on government account and sold to private persons at par for gold and that in the future they should be legal tender only for sums not exceeding five dollars. The silver dollar was not affected by this act, but its coinage was unprofitable because the bullion necessary to manufacture it was worth considerably more than a dollar.

The acts of 1834 and 1853 together with the increased production and falling value of gold occasioned by the discoveries of new mines in California and Australia gave the country for the first time an adequate supply of specie. The greater part of the circulating medium even during this period, however, was supplied by the state banks, which increased rapidly in number, especially after the removal of the competition of the second United States bank in 1836. This portion of the currency was defective on account of wide differences in the

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