The Washington herald., 1920-09-12

10 Ine same way. As prices go up, II takes
more money to transact business. More
money is required in circulation. There is
much more business being done in this cOun-
try than ever before, and the doing of it
calls for money. 1t makes a special call
for change. and that is why we have been
printing dollar bills in unprecedented num-
bers.
HVOU never saw so many dollar bills as
L are running around loose at the present
time. We have had trouble to supply them
fast enough to keep up with the demand. One
thing We have done has been to split up big
notes into little ones. A fifty dollar bill.
let US say, comes into the treasury for re-
demption. Instead of printing a duplicate
of it, We turn out fifty one dollar notes.
You get the idea?
"A fifty dollar bill may obstruct bust
moss transaction. You've been in such fix
'rIrself. Plenty of small money, on the other
hand. facilitates business. Demand for it
increases with the volume of business. Then
you must remember that people are doing
a great deal of travelling in these days,
mainly for business purposes, and under
such circumstances they require a lot of
change. They are obliged to scatter money
about in small sums. The man who stays
at home can draw checks; and his need
Of change is merely incidental"
Isn't this multiplication of notes of
small denomination expensive for the gov
ernment?'
DO you know how much a dollar bill
costs? To make it. l mean" quickly re-
IL
a cent and a quarter; and its life is short
The average dollar bill lasts less than a
year then it is worn out. and has TO be
replaced with another. 1t passes from hand
to hand several times as often as a FIVE
dollar note; for which reason the latter
has a much longer life.
Recently the mint bureau melted 270,-
600 900 standard silver 'cartwheel' dollars,
and sent all but 10 900, 900 of them to India
in the shape of bullion, to help out a silver
famine. The silver certificates which rep
resented those dollars had to be withdrawn
from circulation and, to replace them, we
printed banknotes."
lis there less gold and silver in cir
culation now?" was the next query.
Here, of course, in the Bureau of En-
craving and Printing we have to do only
with paper money. But if you will take
a look at the last report of the director
Of the mint you will find that there is A
vast deal more of metal money now in
circulation than ever before. People have
got TO have it. Consider the modest penny,
which is in a way an index of business
In the last calendar year the mints coined
5SS, 935 900 cents in the previous year only
$40, ,614 ,634. The mints in 1919 coined 76.-
395, 900 nickels; in 1918 only 10 ,320, ,3l4
Metal money is not in my line how
ever. Let's get back to what We were talk
ing about The Federal Reserve system in
troduced a new form of paper money, called
Federal Reserve notes. These notes are
based on the assets of the issuing banks,
which include commercial paper, with the
requirement that the banks shall back their
notes with not less than 40 per cent Of
their face value in gold.
You can take a bunch of Federal Re-
serve notes to the treasury demand their
face value in gold, and get it offhand. The
treasury, however, does not encourage gold
payments, because it wants to conserve the
gold The banks, for the same reason, will
not let you have gold. Gold in your pocket
does neither the banks nor the government
any good; and paper money is just as useful
to you for spending purposes.
How long is it since you have seen one
of those cheerful looking yellow backed
treasury notes which bore on their faces an
ofer of redemption in gold coin on de-