these metals are issued
at weights corresponding with their bullion value, difficulties arise.
Not only are they too heavy for convenience, but with every slight
rise in their bullion value as compared with that of the standard
metal, they become worth more as bullion than as coin and begin to
disappear from circulation. This happened often throughout the Middle
Ages and until the nineteenth century. The attempt was generally made
to coin gold and silver at a ratio of weight corresponding exactly
to their market values at a given moment and, every time the market
conditions varied, the best full-weight coins of one of the two metals
were taken out of circulation. [4]The country thus suffered for lack
either of the larger gold coins or of fractional coins. At length, to
remedy this difficulty, fractional silver coins, often called
"token coins," were issued, in limited numbers, of less than full
proportionate weight and bullion value.

This plan, having been partially tried, was generally adopted by the
United States in 1853 at a time when the silver dollar of 371.25 fine
grains was legally rated at the same value as the gold dollars of
23.22 grains, and was freely coined. The fractional coins were made
a little over 6 per cent lighter per dollar than the dollar coin; two
half-dollars or four quarters or ten dimes contained 93.52 cents worth
of silver. Since then silver bullion has become worth much less in
terms of gold, and for years past the bullion value of the silver in
a dollar of silver small change has been between 40 and 60 cents. Why
then has the fractional coinage a monetary value equal to the standard
money, dollar for dollar?

The answer is, because it is artificially limited in quantity, so that
it does not pass the point of saturation in the field of its use. Its
value rests on its monetary use; it is fiduciary money, not commodity
money. It is limited simply by letting "the needs of the people"
determine its amount. This is done by issuing it only in exchange for
other money of the larger denominations, and by redeeming it in other
money on demand. Fractional coins are issued on the request of banks
in exchange for standard money. One needing "change" gets it at the
bank; when the bank finds its supply falling short it gets more from
the government mints. As business increased in 1898, the demand for
nickels, dimes, and quarters became unprecedented, and the mints
worked night and day to supply them. If