the United States. The national Constitution forbids the states to "coin money," or to "emit bills of credit," or to "make anything but gold or silver coin a tender in payment of debts." This gives our national government exclusive power over all forms of coin and paper that circulate as money in the United States. Therefore only one standard of coin and paper money is in use within our borders.

The moneys now in circulation in the United States are as follows:

(1) Gold coins in denominations of $5.00, $10.00, and $20.00.

(2) Silver coins in denominations of ten cents, twentyfive cents, fifty cents, and one dollar.

(3) Pennies made of copper, and five-cent pieces made of three-quarters copper and one-quarter nickel. (4) Paper moneys composed of

(a) Gold certificates

(b) Silver certificates
(c) United States notes

(d) Treasury notes

(e) National Bank notes
(f) Federal Reserve notes

(g) Federal Reserve Bank notes

In its gold certificate the United States promises to pay to the bearer on demand the amount in gold money pledged on the face of the certificate, such as, five dollars or ten dollars. In its silver certificate Uncle Sam promises to pay the bearer the number of silver dollars pledged on the certificate whenever he may demand them. In a United States Treasury note Uncle Sam simply promises to pay the bearer of the note in specie the amount named in the note. In a Federal Reserve note the United States promises to pay to the bearer of the note on demand the number of dollars named in the note, at any Federal Reserve Bank. A Federal Reserve Bank may issue its own paper money

(notes) provided the notes are backed up with the securities required by law.

The seven kinds of paper money mentioned above form the greater part of our currency in use. The The paper itself has no value except as we trust the government back of it to pay on demand the silver or gold it represents. This confidence has made us accept these paper bills as we would gold or silver.

The instant our confidence in the

government

is

lost (as it was several times

during the Civil

War, when the

Union Army was threatened with

defeat) the value of paper money decreases, so that paper money will not buy the same amount of goods that can be bought with "specie," as gold and silver are called.

Prices and Income. The worker today is as much interested in what his dollar will buy as he is in the number of dollars he receives for his work. The real income of the worker is the goods and services that his money will actually purchase. This income varies with the rise and fall of the general price level; that is, with the change in the price of the articles he desires to buy. When prices are going up, the worker's income has to rise in proportion; otherwise he is worse off than before. Do you remember that Alice in Wonderland at one time said she would have to run twice as fast as she was running in order to stay just where she was? Well, when prices double within a few years, as they did during the World War, we have to get twice the money income we had before in order that we may be as well off as we were before prices doubled.

Germany is a good example. Her paper mark was worth 23.8 cents in American money before the World War, the same as her gold mark. Following the war, so many paper marks were issued by the German Government that soon the paper mark was worth only ten cents in our money, then five cents, then one cent, and finally many thousands of marks were not worth as much as one cent. Suppose a man wanted to buy a book that cost one mark in Germany before the war; it would take 100,000 marks for him to buy this

in the years following the American Revolution, when our Continental money became worthless. The slang phrase "not worth a Continental" dates from the time when the paper dollar put out by the Continental Congress was wholly worthless. It is stated that one barber papered the walls of his shop with this paper money. One of the purposes of our national Constitution was to secure a federal currency that was worth its face value in gold.

Rapid change in the amount that money can buy affects certain people more than others. Thus in times of rising prices the man who manufactures an article, or the man who raises food, may sell his articles for a much higher price than it cost him to produce them and so benefit greatly. But the wage earner, the professional man, or the man who is living on the interest he receives from money invested has little,

if anything, to hold for higher prices. His income does not rise as rapidly as the price of the commodities he needs, so the money he receives does not buy as much as it did formerly. When prices are falling, these groups are affected in just the opposite ways. The wage earner and the owner of capital may be better off, because the rates of wages and of interest usually do not fall as rapidly as the price level. But the farmer and the manufacturer may be worse off, because they have to sell at prices below those prevailing when they planted their crops and made their goods.

We are used to thinking of prices simply as what we have to pay out for some commodity or service we decide to buy. In this we are wrong. In the price we pay is our share of the livelihood of many people, for this price represents our share of the income they earn.

The Corporation. We all know individuals who make their living as farmers, or manufacturers, or storekeepers, or in other businesses. Sometimes two or three men want to carry on a given business together. This they may do by forming a partnership. They agree upon how much money each shall put into the business, what the work of each shall be, how the business shall be carried on, and how the profits are to be divided. In big business it often pays for several or many people to join. This they may do by forming a corporation, rather than a partnership.

Those desiring to form a corporation apply to the state for a charter. This charter and the laws authorizing it tell what the corporation may do and may not do, how its officers are to be chosen, and how much money is to be invested. Those who invest in the business of such corporations get certificates of investment called shares of stock. These shares are usually for $100, or $500, or $1000; and each individual buys as many of these shares as he cares to. In this way huge businesses can be built up. The corporation plays a very large part in the modern business world. Wages. "Wages" are payments for work or for serv

ices. They are usually expressed in terms of money, such as, three dollars a day, or twenty dollars a week. This money wage is not the real income of the wage earner. His real income is the goods and services his money income will buy. The real wage varies from the money wage, as has been shown, because of changes up and down in the purchasing power of the dollar.

Labor may be paid for in many ways, but two common ways are time wages and piece wages.

Employee's No.

PRODUCTIVE DAY WORK

Detail No. 2142 Lot No. 587 Date March 4, 19
Article Upper Bracket-No. of Pieces in lot 100

Name John Edwards

Mach. No.425

Operation Milling Sides

for Connecting Rod

Quantity Finished

100

By time wages is meant payment of so

many cents an hour or of so many dollars a day or a week. This method as

Stop Mar 4 11.2
Start Mar 4

7.0

Time

4.2

sumes that the

be rewarded only by being promoted to a better job or by being given preference for employment when work is slack. Teachers and clerks are usually paid in this way, and about half of the industrial workers are paid under some form of time wages. The time-wage system requires careful supervision by foremen to see that no one shirks his job. With such supervision it is easy to get good quality of work, but hard to get quantity production, as the worker is not paid on the basis of how much he produces.

Wages under the piece-rate method are paid solely on the basis of the output of the worker; as, so many cents for