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Source: Encyclopedia of Banking & Finance (9h Edition) by Charles J Woelfel
(We recommend this as work of authority.)

All 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.

Paper Basis

When 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.

Paper Money

Paper 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.

The 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convenience in handling; (2) saving of loss from abrasion; (3) economy of time in counting and weighing (gold coin, now withdrawn from circulation, formerly had to be weighed to determine the extent of abrasion); (4) greater security in case of loss or theft; (5) saving of interest for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.

For a description of different kinds of United States paper money, and legal tender and redemption qualities thereof, see MONETARY STOCK and UNITED STATES MONEY.


Know your Money.  U.S. Secret Service.  
R.  Paper Money of the United States :  A Complete Illustrated Guide with Valuations.  Coin and Currency Institute, Inc., Clifton , NJ , 1986.  
KRAUSE, C.L., and LIMKE, R.F. 
United States Paper Money.  Krause Publications, Incv., Iola , WI , 1986.
Paper Money.
  Paper Money Collectors, Florissant , MO.   Bimonthly.  
Treasury Bulletin.
  U.S. Department of the Treasury.  
United States
Currency.  Board of Governors of the Federal Reserve System.  
World Currency Yearbook.
  Currency Analysis, Inc., Birmingham , AL .  Annual.  

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