PHYSICAL ARITHMETIC. CHAPTER FIRST. FINANCIAL. SECTION I.-VALUE. ART. 1. Standard of Value. Every currency is based upon a standard of value, that is, a definite quantity of some precious substance. Gold and silver are very suitable substances for the purpose, consequently they have been adopted in almost all parts of the world. Gold may be adopted as the sole standard, or silver as the sole standard, or both may be adopted, forming what is called a double standard. A double standard is made possible by fixing by law the value of silver in terms of gold; but as the commercial value of silver relatively to gold is subject to fluctuation, it may be necessary to change the legal value from time to time, to prevent the metal which is undervalued from being exported to other countries. Formerly the standard of this country was double, but since 1816 gold has been the sole standard. Silver is at present the standard in India. Until recently the standard was double in France, the relative value of gold to silver being fixed at 15 to 1; but the adoption by Germany in 1871 of a single gold standard has caused France to adopt a single gold standard also. ART. 2.-Principal Unit of Value. The principal unit of value, in the monetary system of this country, is the amount of pure gold contained in the sovereign. The sovereign is 123-27447 grains in weight, and eleven twelfths of this is pure gold; the remaining twelfth is alloy, which is disregarded in estimating the value of the coin. This unit of value is denominated the pound sterling. A The pound sterling was originally a pound weight of silver; the pound used being neither the troy nor the avoirdupois, but the pound sterling, which was equivalent to 5400 grains. standard of this pound was preserved at one time in the Tower of London, hence the denomination of a "Tower pound." The value of the pound was depreciated from time to time, so that the term does not now at all agree with its ancient definition. ART. 3.-Units of Account. The units in terms of which accounts are kept are the pound, the shilling, and the penny. The shilling, considered not as a coin, but as a unit of value, is the twentieth part of the pound; the penny, considered as a unit of value, is the twelfth part of the shilling so defined, or the two hundred and fortieth part of the pound. The farthing as used in accounts is rather a fraction of the penny than a separate denomination; it is not taken account of by public offices, bankers, and merchants. The abbreviations L. S. D. Q. are the initial letters of the Latin words libra, solidus, denarius, quadrans. ART. 4.-Metallic Currency-Gold Coins. A coin proper is a stamped piece of metal, the stamp guaranteeing that the piece contains a specified amount of the standard metal. Hence in the system of this country the coins proper are of gold—they are the five-pound piece, the two-pound piece, the sovereign, and the halfsovereign, but the two former are not in general circulation. The fineness is the same for all, namely, eleven twelfths pure gold to one twelfth of alloy. This fineness may be expressed millesimally as 916.66 parts by weight of pure gold in 1000 parts by weight of the coin. The weights of the coins are in proportion to their values. The substance of a coin is slowly diminished by ordinary wear and tear, and it might be greatly diminished for fraudulent purpose; hence in the case of coins proper it is necessary to fix the minimum weight at which the coin will be accepted at its full value. This is called the least current weight. For a sovereign it is 122-50000 grains, which differs from the standard weight by 77447 grains. The least current weight for the half-sovereign is 61.125 grains. The lightness of coin can only be determined by weights which have been examined and certified by the Board of Trade. When gold coins are tendered at the Bank of England each piece is weighed singly, and the light coins are cut and returned to the person tendering them, who has to bear whatever they have lost by abrasion during their existence as coins. ART. 5.-Silver Coins. The silver coins at present in use are, first, the florin, equivalent to two shillings, the shilling, the sixpence, and the threepence; second, the crown, equivalent to five shillings, and the half-crown, neither of which have been struck since 1851, and the groat, or fourpence, which has not been struck since 1856; third, the twopence and the penny, which are only coined for the purpose of being distributed (with the groat and threepence) as alms by the sovereign on the Thursday before Easter, and are on that account called "maundy money." The fineness of all these silver coins is the same, and is thirty-seven fortieths by weight of pure silver to three fortieths by weight of alloy. The standard weight of the shilling is 87-27272 grains, or 66 shillings are coined out of 1 lb. troy (5,760 grains) of silver of the standard fineness. The weights of the other coins are in proportion to their nominal values. ART. 6.-Legal Tender; Token-coin. Silver coin are legal tender |