The silver certificates issued and redeemed, by denominations, during the fiscal year 1917 may be observed in the table following:

The demand for small denominations of currency is urgent during the first half of the fiscal year, but during the months of January, February, and March such bills are returned in large numbers to the Treasury for redemption generally accompanied with a request for larger denominations in return. The resources of the Treasury for the issue of paper money of the smaller denominations are practically limited to the presentation of the higher denominations which are redeemed and retired and are replaced by the smaller bills. In future the presentation of large notes will probably be too slow to meet the demand for small bills, and therefore the question of further provision for the issue of such currency calls for immediate attention. The changes effected in the total amount of United States paper currency of each denomination outstanding at the close of the fiscal year 1917 may be observed in the table following:

INCREASE IN SMALL DENOMINATIONS OF UNITED STATES PAPER

CURRENCY.

The growth in the volume of the $1, $2, $5, $10, and $20 denominations of United States paper currency for the past three years. measures the efforts of the Treasury to respond to the demands for small denominations as instruments of local trade. The appeal is not confined to any particular district; it comes from all sections of the country.

The following comparative statement shows the additions, by years, to the denominations named.

PIECES OF UNITED STATES PAPER CURRENCY OUTSTANDING.

The monthly variations in the number of pieces of United States paper currency outstanding may be studied for the fiscal years 1916 and 1917 from the comparative statement following:

PAPER CURRENCY, BY DENOMINATIONS, OUTSTANDING JUNE 30, 1917.

The kinds of paper currency and the amount of each denomination outstanding may be studied from the monthly statement for June,

RATIO OF SMALL DENOMINATIONS TO ALL PAPER CURRENCY.

The ratio of denominations of $10 and less to the total paper currency, by fiscal years since 1910, is recorded in the statement following:

COST OF PAPER CURRENCY.

The paper used is made by a secret process under Treasury supervision by annual contract under competitive bids. The Bureɛ u of Engraving and Printing, a branch of the department, designs, under the direction of the Secretary, engraves, and prints the notes and certificates complete. This currency is delivered to the Treasurer in packages of 4,000 notes, the product of 1,000 sheets of paper. Such a package is taken as the unit from which to reckon the cost.

With the allowance for every item of expense attending the making, the issue, and the redemption of this paper currency, it appears that the average cost is as follows:

Total average expense of 4,000 notes issued....
Total average expense of 4,000 notes redeemed..

Aggregate average expense of issue and redemption.......

$52.50

8.54

61. 04

It appears from the foregoing that the average cost for each note is about 1.526 cents. Calculations based upon these average expenses of issue and redemption indicate results that will be very close to the actual cost of maintenance of the paper currency, and such cost for the fiscal years 1916 and 1917 may be studied from the details set forth in the subjoined statement:

Total expense of issue and redemption.

Issued..
Redeemed..

Total..

Issued..
Redeemed..

Total...

1916.. 1917.

United States paper currency outstanding and cost of maintenance.

5,372,338.68

5, 118, 968.43 757,767.40 5,876, 735.83

In this connection attention is invited to the saving of abrasion on the gold and silver coins held in the Treasury against outstanding certificates and notes, which to all intents and purposes is an offsetting item against the cost of the paper currency, issued directly by the Government, though not so treated in the foregoing calculations.

AVERAGE LIFE OF PAPER CURRENCY.

The average lifetime of the pieces of paper money outstanding is undoubtedly shortened by the increasing activities of such currency in the channels of trade. This is particularly noticeable in the current issue of the smaller denominations, $5 and under.

The average length of service, in years, of the different kinds and denominations of paper currency may be studied in the table following:

Estimated length of service of paper currency.

The greater longevity of the Government issues of the denominations of $10, $20, $50, and $100 is due to the fact that these notes were formerly held from year to year in bank reserves.

PAPER CURRENCY PREPARED FOR ISSUE AND AMOUNT ISSUED.

At the close of the fiscal year 1917 the pieces of United States paper currency outstanding_numbered 417,938,931, of the total value of $2,935,273.685. The Treasury has to maintain this great number of pieces and also to provide for the annual growth of such denominations as may be in demand. It is incumbent upon the Treasury to foresee the wants of the people in the way of a circulating medium and always be ready to meet any demand that may properly be made. Experience and forethought prompt the preparation of an adequate volume of paper currency of the kinds and denominations authorized by law in advance of putting it in circulation. The reserve vault should be well stocked with such currency in order that it may be properly seasoned before it is paid out. With the improved facilities now in operation it is believed that the output in future will be ample for this purpose.