these coins were made in
great quantities and forced into circulation by the government through
paying them out to creditors and officials, their quantity would
become excessive and they would fall in value (be at a discount)
compared with standard money. But as this is not done, and as,
moreover, they are redeemed on demand at the treasury (and practically
at every bank and post office) in other money, any slight tendency
to depreciation in any locality is at once corrected. As it is, the
government makes a seigniorage profit on the fiduciary coinage, as
shown in the following table. [5] The fractional coinage is maintained
at a parity with the standard money in accordance with the monopoly
principle, expressed in the limitation of the amount.

_Receipts:_

Earnings (charges for refining, assaying, manufacture
for other countries, etc.)......................... $392,000
Bullion recovered, by-products, old materials, etc... 143,000
Profits on seigniorage, subsidiary silver............ 3,013,000
Profits on seigniorage minor coinage and recoinage... 2,387,000
----------
Total receipts.......................................$5,935,000

_Expenditures_:
All kinds............................................$1,138,000
----------
Net revenues from mint service.....................$4,797,000

Sec. 5. #Worn coins and Gresham's law.# Coins may be light-weight as the
result of another cause--namely, the abrasion (wearing off) of the
coins in circulation. Nearly always when this has occurred the worn
coins have still been accepted as money,[6] and ordinarily without any
depreciation. That is to say, they have a value as money greater than
the value of the bullion that is in them. Everybody takes them without
hesitation as readily as if they were full weight. If, however, at
this point, new full-weight coins are put into circulation, these at
once disappear while the old ones remain in circulation--a fact that
has always been somewhat mystifying.

In explanation of the phenomenon was formulated "Gresham's law" of
the circulation side by side of coins of different bullion value: bad
money drives out good money. Sir Thomas Gresham (whose name has but
recently been given to this so-called law), explained the principle
to Queen Elizabeth when counseling her