short-term evidences of debt not under seal, i.e., negotiable instruments
used in borrowing short-term funds, especially funds for commercial purposes.
The following classes of paper are frequently referred to:
AGRICULTURAL PAPER, BUSINESS PAPER, COMMERCIAL PAPER, COMMODITY
PAPER, CORPORATION PAPER, MERCANTILE PAPER, and TRADE PAPER.
a country does not employ or no longer employs a metallic basis for its
currency system, and commodity prices and foreign exchange rates are based
upon (usually) depreciated PAPER MONEY.
instruments, e.g., Federal Reserve notes, silver certificates, U.S. notes,
Treasury notes of 1890, Federal Reserve bank notes, and national bank
notes (now in process of retirement), which serve as substitutes for metallic
money and form the principal part of the circulation media.
For the principles underlying paper money, see MONEY.
advantages of paper money over metallic money are as follows:
(1) greater portability, i.e., convenience in handling; (2) saving
of loss from abrasion; (3) economy of time in counting and weighing (gold
coin, now withdrawn from circulation, formerly had to be weighed to determine
the extent of abrasion); (4) greater security in case of loss or theft;
(5) saving of interest for the amount by which the value of paper money
exceeds that of the metallic money kept in reserve for its redemption;
(6) greater cleanliness since paper money can be frequently reissued.
a description of different kinds of