ootnote 7: See above, ch. 3, sec. 6, table.]

[Footnote 8:

PER CAPITA CIRCULATION OF MONEY (ESTIMATED) IN THE UNITED
STATES IN VARIOUS YEARS.

1800......$4.99 1850......$12.02 1890......$22.82
1810...... 7.60 1860...... 13.85 1900...... 26.93
1820...... 6.96 1870...... 17.51 1910...... 34.33
1830...... 6.78 1880...... 19.41 1915...... 35.44
1840......10.91
]

[Footnote 9: On the function of deposits, see below, ch. 7, sec. 11.]

[Footnote 10: Consult Figure 1 in ch. 4 and Figure 2 in ch. 6 for the
graphic presentation of these and related facts.]

CHAPTER 5

FIDUCIARY MONEY, METAL AND PAPER

Sec. 1. Commodity and fiduciary defined. Sec. 2. Present monetary system
of the United States. Sec. 3. Saturation point of fractional money. Sec. 4.
Light-weight fractional coins. Sec. 5. Worn coins and Gresham's law.
Sec. 6. A general seigniorage charge on standard money. Sec. 7. Coinage on
governmental account. Sec. 8. The gold-exchange standard. Sec. 9. Nature
of governmental paper money. Sec. 10. Irredeemable paper money. Sec. 11.
Theories of political money.

Sec. 1. #Commodity and fiduciary defined#. The actual moneys in
circulation in every modern country consist of a wide variety of
pieces, differing in denomination, physical size, shape and materials,
mode of issue, source or authority of issue, and legal character.
Among these kinds, one is the standard and is a commodity-money.[1] In
such cases the coinage is free and nearly gratuitous, and the value
of the money is kept close to parity with its value as bullion by
changing bullion into coin, or coin back into bullion, whenever there
is an appreciable difference between the values in the two uses. This
adjustment is brought about by the free action of the people. The
government, having declared what is the standard money unit, and
having provided a mint to make coins, leaves it to citizens, acting
from the ordinary competitive motives, to decide when they will reduce
or increase the number of coins in circulation.

The other kinds of money are not commodity-money and the materials of
which they are made, whatever they be, are not worth as much in any
other uses as they are in their present monetary form. Their value is
always referred to, and adjusted to, that of the commodity-money, so
long as any of it is in circulation. In contrast with commodity-money,
these other kinds may be called fiduciary money. By fiduciary mone