MONETARY STOCK.

The monetary stock of the country took on a growth during the fiscal year 1917 of $925,130,893, and amounted to $5,407,990,026 at the close of the year. The increase in gold was $569,440,358; in silver, $9,415,430; in Federal reserve notes, $371,239,510; and in Federal reserve bank notes, $3,790,245, while the national-bank notes decreased $28,754,650.

The amount of each kind of money included in the general stock is given in the statement following (this statement represents the monetary stock of the United States as shown by the revised statements for June 30, 1916 and 1917):

RATIO OF GOLD TO TOTAL STOCK OF MONEY.

The annual growth in the volume of gold as compared with the total stock of money since July 1, 1910, may be studied from the table following:

Ratio of gold to total stock of money from July 1, 1910.

[From revised statements of the Treasury Department.]

At the close of the fiscal year 1917 the money in circulation amounted to $4,763,575,632, an increase of $739,477,870 as compared with that of the previous year. The growth in the element of gold (coin and certificates) was $377,154,325.

The kinds of money in circulation, the circulation per capita, and the percentage of gold coin and certificates to the total circulation may be studied from the following table:

Money in circulation at the end of each fisca. year from 1910.

CIRCULATION AND POPULATION.

Statistics relative to the money in circulation and the population, by years, may be studied in the annexed table:

Increase in population and in circulation per capita.

CONDITION OF THE UNITED STATES PAPER CURRENCY.

The stock of paper currency in the United States at the close of the fiscal year 1917 amounted to $4,209,891,900, of which the Government issued directly $2, 934,273,685, and the banks $1,275,618,215. The $1 and $2 denominations are authorized only in the issues of United States notes and silver certificates, and for this reason it devolves upon the Government to supply the amount of such bills required in the channels of trade. During the past two years the resources for the issue of these notes have been practically exhausted and yet the supply was not equal to the demand. The yearly increase of such notes outstanding may be observed on page 29 of this report. Apparently the supply of $5 bills in circulation is about equal to the requirements. However, an increased demand for the denominations of $5 and under can be supplied by the national banks under the provisions of the act of October 5, 1917, section 3 of which reads as follows:

That from and after the passage of this act any national banking association, upon compliance with the provisions of law applicable thereto, shall be entitled to receive from the Comptroller of the Currency, or to issue or reissue, or place in circulation notes in denominations of $1, $2, $5, $10, $20, $50, and $100 in such proportion as to each of said denominations as the bank may elect: Provided, however, That no bank shall receive or have in circulation at any one time more than $25,000 in notes of the denominations of $1 and $2.

The Federal reserve banks have increased the circulation of their $5 notes by more than $62,900,000 during the last fiscal year.

UNITED STATES NOTES.

The United States notes are the well-known "greenbacks" or "legal tenders," the first issue of which was authorized by the act of February 25, 1862. The total amount authorized was $450,000,000, and the highest amount outstanding at any time was $449,338,902 on January 30, 1864.

Under the operations of enactments by Congress authorizing the canceling and retiring of these notes as they were received in the Treasury, the amount outstanding had been reduced more than $100,000,000 when the process was finally stopped by the act of May 31, 1878, which required the notes to be reissued when redeemed. At that time the amount outstanding was $346,681,016, and it has not been changed since, though $546,466,414 of these notes have been redeemed in gold under the provisions of the act of January 15, 1875 (resumption act), and paid out again, a proceeding which was properly designated as "the endless chain." The act of March 14, 1900, modified the operations of the resumption act by requiring that the notes redeemed shall not be paid out again until exchanged for gold, and under this act $534,015,038 of the notes have been redeemed in and exchanged for gold, making a total of $1,080,481,452 in gold that has been paid in redemption of United States notes since January 1, 1879, and yet, in spite of these payments, the volume outstanding remains the same as on May 31, 1878.

In order to increase the resources of the Treasury for the issue of small denominations for which there is constant demand, the Secretary of the Treasury on December 22, 1916, under the provisions of the act of March 4, 1907, authorized the issue of $1 and $2 United States notes.

The amounts issued and redeemed, by denominations, during the fiscal year 1917 are set out in the table following:

The issue of Treasury notes of 1890 for the purchase of silver bullion began on August 19, 1890, and from that date to November 1, 1893 (the date of the repeal of the purchasing clause of the act), the Government had purchased 168,674,682.53 fine ounces, at a cost of $155,931,002, for which Treasury notes had been paid.

The amount of Treasury notes redeemed in gold up to the close of the fiscal year 1917 was $110,714,364. Treasury notes redeemed in standard silver dollars are canceled and retired in accordance with the requirements of the act of 1890, and to the close of the year $84,683,867 had been so redeemed and retired. Sections 5 and 8 of the act of March 14, 1900, also provide for the cancellation and

retirement of Treasury notes to an amount equal to the coinage of standard silver dollars and subsidiary silver coin from the bullion. purchased with such notes. The cancellation of notes on account of coinage since March 14, 1900, was $69,271,135, so that there remained outstanding June 30, 1917, but $1,976,000, offset by an equal amount of standard silver dollars held in the trust funds for their redemption when presented. The amount of each denomination issued, redeemed, and outstanding may be studied in Table No. 19 on page 70 of this report.

GOLD CERTIFICATES.

The owners of gold coin exercise the option offered under existing law of depositing the coin in the Treasury and receiving therefor the ever popular gold certificates, which are issued in donominations from $10 up to $10,000, and furnish the larger denominations required in banking transactions and in the channels of trade. The gold deposited for these certificates is held as a trust fund for their redemption when presented at Treasury offices and is used for no other purpose. The volume of gold certificates is greater than that of any other kind of money in circulation. The amount of such certificates outstanding on June 30, 1917, was $2,094,336,669, of which there were held in the Treasury $510,100,760, leaving in actual circulation $1,584,235,909.

The transactions in this currency during the fiscal year 1917 are recorded by denominations in the table following:

Under existing law the silver certificates supply the larger part of the small denominations required in circulation. The act of February 28, 1878, authorized such certificates in denominations of $10 and above to $1,000. The act of August 4, 1886, authorized the denominations of $1, $2, and $5. The act of March 14, 1900, provided that thereafter the issue of silver certificates should be limited to the denominations of $10 and under, except that 10 per cent of the total volume of such certificates, in the discretion of the Secretary of the Treasury, may be issued in denominations of $20, $50, and $100. The total amount of silver certificates outstanding at the close of the fiscal year 1917 was $492,860,000, of which there were held in the Treasury $15,675,158, leaving in actual circulation $477,184,842.