Page:EB1911 - Volume 18.djvu/733

 early English and French currencies was too large. Quite distinct from both the actual coins and the unit of value is the money of account, though in practice it is usually identical with one of them. In Russia in early times the rouble was an imaginary money of account not coined, while the copper copeck was the unit of value. Connected with the distinction between the coins and the unit is the highly important one between standard and token money, the former being of full power for discharging debts, and in the case of most systems only of equal value to the metal out of which it is made, while the latter is rated at a nominal value higher than that of its material. The silver and copper coinage in England and the smaller coins in the Latin union are only tokens; in the case of English silver coins, the cost value is less than 40% of the nominal one. The French tokens are made of inferior fineness (835 per 1000) to the full tender silver. Two restrictions are applied to token issues: (1) they are only legally available to discharge small debts—in England silver is limited to the payment of 40s.; (2) they can be coined only by the permission of the state. Thus in England the Bank of England is the state agent for the silver coinage. The limitations are evidently required to prevent the expulsion of standard money, and to avoid the flooding of the circulation with coinage that is not needed for the purpose of the limited exchanges to which it is confined. Intermediate between standard and token currency are those forms of coinage that are free from the first limitation, but restricted by the second. They have this further point of resemblance to tokens in that their nominal value is higher than that of their material—the French 5-franc pieces and the Indian rupees are prominent examples. Similarly, the analogy between representative money and token money is deserving of attention, and suggests the desirability of the latter being regarded as in some respects a fiduciary issue, for which the issuing authority incurs responsibility.

10. Typical Currency Systems: their Evolution and Governing Principles.—At first sight it appears that the systems of currency are almost infinite in their variety. They have grown up in different nations under the influence of local conditions and reflect the customs of the particular society. But, underlying these superficial differences, there are certain general principles that permit of a grouping into a small number of clearly marked types. The classification, though resting on logical grounds, is very largely in conformity with the course of historical development. 