for making coinage a government monopoly and for surrounding it with all possible safeguards.

4. The naming and stamping of coins.-The naming of coins is a purely arbitrary matter, and practice varies widely in this particular. The tendency in modern timse seems to be toward employing the names used in the system of accounting. For example, in this country we commonly call our gold coins two-and-a-half-dollar, five-dollar, tendollar, and twenty-dollar pieces. The official names, however, are the quarter-eagle, half-eagle, eagle, and doubleeagle, these names being derived from the figure of an eagle stamped upon one side of the coin. In England the practice of employing special names is more common, her gold coins being universally known as the sovereign and half-sovereign, and her silver coins as crowns, half-crowns, florins, shillings, and sixpences. With the exception of the two last mentioned all these names are derived from devices on the coins or from old customs. Until comparatively recent times this practice was almost universal, the names of the reigning monarch or of the king who first ordered the coin minted being the most commonly employed. As examples may be mentioned the French Napoleons, the Prussian Friedrich d'ors, and the English George d'ors. Such devices as the figure of an angel, a lamb, a pig, and the rising sun gave names to coins of considerable importance in the Middle Ages. Special names are frequently conferred upon coins by popular usage; as, for example, in this country the names nickel and copper for our five-cent piece and penny. Our twenty-five-cent piece, or quarter of a dollar, is known by various peculiar names in different parts of the country.

Besides the purpose of ornamentation the devices stamped upon coins are designed to serve as means of preventing "sweating" and clipping and of rendering easy the

detection of abrasion. The milled or indented edge, the practice of stamping both sides, and the circular form of coins are explained in this way. So far as possible, it is also desirable to use designs which are difficult to copy and which may thus aid in the detection of counterfeits.

5. Seigniorage.-The expenses of coinage are paid in two different ways. Sometimes individuals are permitted to bring gold or silver bullion to the mints and have it transformed into coin absolutely free of charge. In such a case the expenses of coinage are paid out of the ordinary revenues of the government and are a charge upon the nation as a whole in the same sense as other ordinary public expenditures. Sometimes, however, governments exact payment for coinage in the form of the retention of a certain percentage of the bullion brought to the mint by private individuals. This practice is entirely similar to that frequently employed by millers in rural districts. Farmers who take wheat to the mill usually receive in flour something less than the full product, the miller retaining a certain amount as payment for his services and the use of his mill. In the same way when private individuals bring gold and silver to the mint, governments sometimes exact a toll in the form of a certain percentage of the metal deposited. The amount thus exacted is called seigniorage, and the practice of meeting the expeditures of coinage in this way is ordinarily known as the taking of seigniorage.

At the present time the amounts exacted are usually sufficient simply to pay the actual expenses of the process, but formerly it was common to take much larger sums. During the Middle Ages persons who possessed the right of coinage not infrequently retained a considerable portion of the metal which was brought to them. On account of the peculiar notions of that day regarding the power of monarchs to fix arbitrarily the value of money this prac

tice was not considered in any sense improper, and was not supposed to involve any particular injury to the public. Indeed, the business of minting was looked upon as a proper source of public revenue, and as much as possible was made out of it.

In order to distinguish between the practice of merely paying necessary expenses by means of this toll and of exacting an additional amount for the purpose of gain, a French writer, M. Chevalier, proposed that the former practice be known by the name of brassage and the latter by the name of seigniorage. M. Chevalier's suggestion, however, has not been generally followed, and the term seigniorage has ordinarily been employed to apply to both practices. It would be better, however, not to use the term seniorage to apply to certain gains accruing to the government from coinage. It is now the universal practice to refuse to private individuals the right to have silver transformed into subsidiary coins, and since their intrinsic value is always less than the value at which they circulate, a considerable gain may accrue to the government from their manufacture. The amount of profit thus derived, however, is diminished and may be entirely offset by their redemption in standard money, to which the government is usually obligated by law. In any case, the gain cannot properly be classed as a charge made to cover the expenses of coinage, and should, therefore, be separately considered and not confused with seigniorage. Our government, for example, has derived some profit from the manufacture of silver dollars, coins which until recently could not be classed as subsidiary. To put such profits in the same class with tolls exacted from persons who bring gold to the mint is to confuse two very different things, and such confusion is almost sure to arise when the term seigniorage is applied to both. In view of the fact that this term is often used to mean things so very

different, the student should always identify the sort of charge or profit referred to, and consider it separately and on its own merits.

Whether or not it is desirable to take seigniorage is still a moot question. It is claimed, on the one hand, that coins perform a special service, and, therefore, possess a higher degree of utility than the bullion they contain, and that this should be represented by an increase in their value equal at least to the expense of their manufacture. It is frequently said that there is no more reason why a coin should represent the exact value of the material out of which it is made than that a steel rail should have the same value as the iron it contains. It is also urged that the taking of seigniorage acts as a check upon the melting-down and exportation of coin. In case the government freely transforms bullion into coin, metal-workers are quite as apt to secure the gold and silver needed for their purposes by the melting-down of coins as by the purchase of bullion upon the open market. Whenever for any reason, too, there is a demand for gold for exportation, coins are quite as apt to be sent as bullion, if their market value is precisely the same. If no seigniorage is charged, it is urged, the government is thus obliged to incur an unnecessary expense in the manufacture of coins which in many cases remain in circulation for only a short period; and since coins are designed for purposes of circulation only, it is urged that some check should be placed upon their illegitimate use.

The advocates of the abolition of seigniorage, on the other hand, emphasize the importance of a perfectly free movement of the precious metals from country to country and from the arts to the mints and vice versa. A proper distribution of the precious metals throughout the world demands that they should flow freely from one country to the other whenever there is even a small difference in value

between two markets. Any obstruction of this free movement is sure to produce an artificial level of prices, and thus to contribute to a lack of stability in the business world. It is equally important, it is claimed, that a proper distribution of metals between their various uses should take place, and, hence, that no more gold should take and retain the form of coin than is necessary for the economical transaction of the commerce of the world. Every encouragement possible, therefore, should be given to the melting-down of coins for use in the arts whenever for any reason their quantity is excessive. In reply to the argument that the people should not be burdened with the expense of minting coins which are destined for the melting-pot or for exportation, it is said that the government is quite as much justified in furnishing the community with good metallic money at the general expense as in furnishing a good judicial system or any other public service.

In order properly to weigh these arguments a number of considerations are necessary which must be deferred to later chapters of this book. It is possible here, therefore, only to state clearly the nature of the questions involved. First of all, it should be noted that at the present time the problem of seigniorage concerns only standard coin. There is no difference of opinion among economists or statesmen regarding the proper treatment of subsidiary coins, and, as we have already said, it is questionable whether the term seigniorage should be applied to the gains arising from the minting of these. That gold is the standard of value of the most important nations of the present day and that its more extended use in this capacity is probable are facts which also affect the question, especially when the constantly increasing use of credit money is considered. Since gold is suitable only for coins of large denominations, and since many forms of paper money can,