v LrlEfRA.RY 
 
 OF THE 
 
 UNIVERSITY OF CALIFORNIA. 
 
 CrI KT OK 
 
 Received 
 
 Accession No. 
 
 , 189 
 
 
 . Class No. 
 
1337 
 
SILVER IN EUROPE 
 
 BY 
 
 S. DANA HOBTON 
 
 SECOND EDITION, ENLARGED. 
 
 Neto Dark 
 MAC MILL AN AND CO 
 
 1892 
 
COPYRIGHT, 1890, 
 
 BY 
 
 S. DANA HORTON. 
 
PREFACE TO SECOND EDITION. 
 
 The new matter here added refers primarily to nota- 
 ble events that have occurred since the date of the 
 first edition (April, 1890), but at the same time it has 
 its bearing upon the general direction of the Silver 
 Movement since the last International Conference in 
 Paris, 1881-1882. ME. GOSCHEN'S PEOPOSALS of De- 
 cember 2, 1891, are the first actual step forward in 
 Europe made in this behalf since 1881, but, as will be 
 fully explained in an introductory paper on PEOGEESS 
 IN ENGLAND (page 291), this step of a Tory Government 
 in 1891 is a pendant to the action taken by the Liberal 
 Government in 1881. 
 
 The general argument leading up to it appears to 
 be in fair measure set forth in a tract distributed 
 early last year by the Parliamentary leaders of the 
 Silver Party to their colleagues, the larger part of 
 which is here reprinted. As a statement of the whole 
 case for Great Britain, this paper is deficient in taking 
 for granted, or passing by in silence, the great special 
 interests involved in silver ; namely, the agricultural 
 interest, and the interest of trade with silver countries, 
 together with manufacturing for that trade. Of these 
 two "silver interests," which may be classed under the 
 
 iii 
 
I\T SILVER IN EUKOPE. 
 
 titles Wheat and Cotton, the former is no longer a 
 stranger in this country though both were so when I 
 raised the point about them at the Atlanta Commer- 
 cial Convention in May, 1885. The interests of Lan- 
 cashire industries, and of the cotton trade generally, 
 are indicated in the extracts which follow on page 
 319, under the title SILVER IN THE ENGLISH ELECTIONS. 
 
 Had time permitted, I should have been glad to 
 remodel the book, changing its form and giving it at 
 least the consecutiveness lacking to a collection of 
 distinct essays. 
 
 But the reader will pardon when he observes that 
 most of my papers herein reprinted were like briefs 
 with which (to use the terms of my profession) I had 
 been ' fighting a case ' in Europe, and he will pardon 
 all the more readily when he realizes that the ' fighting 
 of that case ' is really the thing that Americans are 
 chiefly interested in, whether they are as yet aware of 
 it or no. He will then perhaps discover that that is 
 precisely what his neighbors need to learn those 
 whom he finds indifferent or visionary or wrong-headed 
 about silver ! 
 
 If submitting these arguments to the American reader 
 in form as delivered in Europe shall arouse a sense 
 of the realities of the struggle there in progress, then at 
 least it can be said of these disjunct pages that, though 
 the road be a rough one, still we arrive, as the French 
 idiom has it we "get there," and by a shorter cut. 
 
PREFACE TO SECOND EDITION. V 
 
 Among these realities let me mark here points which 
 it may prove peculiarly useful to dwell upon at this 
 juncture, when the air is full of talk of an International 
 Conference, at Chicago or elsewhere. Europeans will 
 never remonetize silver merely because Americans wish 
 them to do so ; they will do it only when they recognize 
 it to be their interest. An International " Conference " 
 having as such no original power to establish a coin- 
 age system, there is sometimes danger of forgetting 
 that what is really wanted is action rather than talk. 
 Nor is the decision of a ministry, or authorization of 
 a legislature, to take part in a Conference, necessarily 
 anything more than an expression of polite interest. 
 
 The real thing desired is an Act of Parliament, an 
 Act of the French Legislative Body, an Act of the 
 German Imperial Diet beside an Act of Congress. 
 
 As most readers are aware that it is no light matter 
 to pass a bill in Congress, they will perhaps shrink 
 back at sight of the task that has been set for this 
 generation of getting concordant legislation in Europe. 
 But this generation or its leaders must learn that it is 
 for the interest of England, of France, of Germany that 
 these respective acts be passed. Once it is recognized 
 that the European outlawry of silver is a blunder, a 
 blunder for Europe, and there is daylight ahead ! A 
 campaign against the forces responsible for that blun- 
 der may be arduous and long, but if there be good 
 management it must succeed in the end ; and what 
 American does not wish to see his country contribute 
 
vi SILVER IN EUROPE. 
 
 to that management ? What we are concerned about, 
 then, is the American contingent in the forces of a 
 reform which must show front in Calcutta, in Paris, 
 and in London, as well as here. 
 
 Moreover, the main strategic combinations are simple, 
 in spite of the expansion of the theatre of war. The 
 controlling headquarters are very near together. It 
 was in Paris that the governments of Berlin and 
 London, in 1881, made surrender, for the rest of man- 
 kind, of the main principles of demonetization. 
 
 A decade has passed since that preliminary victory ; 
 heedlessness and neglect have prevailed. The greater 
 the need of effort, of ability, and of caution, now ! 
 
 The Silver Movement in Europe, unlike the free- 
 coinage movement here, has for its object not the 
 local, but the general, reversal of the outlawry main- 
 tained against silver, primarily by European statutes 
 and decrees ; America's joining Europe in free coinage 
 when Europe is ready, being taken everywhere for 
 granted. This Movement has its history, its fortunes, 
 its story of good or bad management, of local failures 
 or successes. It is through experience of these that 
 forecast of its future is to be gained, and the knowledge 
 how Americans can assist in promoting good manage- 
 ment in Europe, and likewise a sense be acquired of what 
 we must avoid here lest our interposition weaken the 
 efforts of our allies in Europe. Naturally, the action of 
 one partner to a proposed agreement must influence 
 that of the others, and it is plain this country is con- 
 
PREFACE TO SECOND EDITION. Vll 
 
 stantly taking a hand in Silver Diplomacy, so to speak, 
 for good or for evil, and whether we are generally con- 
 scious of it or no. Evidently if we are to help and not 
 to hinder, it is doubly important that our information 
 should be correct as to the situation in Europe, and 
 that what we do, and likewise what we omit to do, 
 should be calculated with a view to things as they are ! 
 
 A word on the task undertaken by the silver reform- 
 ers abroad. 
 
 As they are the sole allies of the American policy, it 
 is hardly less than the duty of educated Americans to 
 recognize what they are doing. 
 
 What is their work? It is essentially a work of 
 education ; though agitation and management, both 
 political and diplomatic, can direct the work and 
 utilize its conquests. But ignorance is the enemy ; and 
 it is a patriotic work that the reformer is doing in his 
 own country. His struggle is not against interests, his 
 attack is not upon the fortunes of any class of his 
 fellows, it is upon their minds. Ignorance, I repeat, 
 is the enemy though of course by its side are inertia, 
 heedlessness, prejudice, dulness, and the pride of 
 dogma. In short, the reformers are "right." The 
 English silver reformer is a patriotic Englishman, the 
 French reformer a patriotic Frenchman, the German a 
 patriotic German. 
 
 The emphasis of this statement is called for by 
 reason of the opposing notions that are widely cur- 
 rent among us, both in the gold camp and in the silver 
 
viii SILVER IN EUROPE. 
 
 camp, as if silver were an American interest alone ! 
 Had that been the case, its doom would have been 
 sealed long ago. 
 
 The opposition to the Silver Movement is also some- 
 times painted in deceptive colors. The language of 
 eloquence and of passion before many a constituency 
 has presented an indictment against the originators of 
 the outlawry of silver in Europe, and against its apolo- 
 gists to-day, as well as against the partisans of gold in 
 this country an indictment for conspiracy against the 
 rest of mankind ! 
 
 This untenable indictment is a great compliment to 
 the foresight and power of organization of a class which 
 can boast of quite as much dulness as its neighbors. 
 
 Of course special interests, and short views about 
 them, affect opinion, and naturally they have played 
 their part here. But in a broad sense, anti-silver 
 legislation was adopted to satisfy opinion based upon 
 avowed and legitimate interests represented in public. 
 Everywhere, in every country, those learned in mone- 
 tary matters were avowed inspirers of the movement 
 against silver, believing that they were right. 
 
 They were wrong ! Experience adds annually a new 
 volume of evidence to that effect. But the lapse of 
 time also makes the remedy more difficult. The 
 greater the need of a vigorous campaign of education 
 to the end that the one possible remedy be speedily 
 applied. 
 
 April, 1892. 
 
PREFACE. 
 
 A rising wave of interest in Silver has within the last 
 year been spreading over the country, deriving momentum 
 from the apparent need that Congress make provision to 
 fill the void in the money-stock of the country left by the 
 retirement of the notes of National Banks. A new stage 
 of discussion and of experimental legislation is thus to be 
 entered, in which the status of the white money-metal in 
 other lands will remain entitled to peculiarly watchful and 
 earnest consideration. 
 
 The following pages are designed as a contribution to 
 that end. 
 
 It is not to be expected that they will render justice in 
 detail to a subject so multifarious and so pervaded with 
 subtleiies and insoluble problems that a library could be 
 filled with its literature. Their theme is the movement for 
 the general restoration of Silver to legal equality with gold. 
 While the reader is invited to consider topics that may 
 appear to bear no close relation to each other, the effect 
 as a whole will be, I trust, to present to him in perspective 
 the changing status of the money-metals, and the changing 
 forces of opinion relating to that great mistake, the general 
 outlawry of silver, which only the chief nations by uniting 
 can repair. 
 
 iii 
 
IV SILVER IN EUROPE. 
 
 In a review of events the Monetary Congress, held at 
 Paris in September last (1889), naturally conies into the 
 foreground, and as importance can be attached to that as- 
 sembly chiefly as the scene of an English pro-silver dem- 
 onstration, it is here referred to in connection with the 
 developments in England, in a chapter which I have en- 
 titled THE PARIS MONETARY CONGRESS AND THE ENGLISH 
 SILVER MOVEMENT. 
 
 In sequence to this a translation is given of a speech of 
 mine at the Congress, made in reply to notable champions 
 of gold there present, to whose views and authority it will 
 be seen that I make reference, by which further light may 
 be thrown on the opinions current in Europe. 
 
 The nature and range of the subjects involved in silver, 
 as they present themselves to the European monetary 
 legislator, are outlined in the QUESTIONS addressed, in 
 1887, to certain foreign scholars by the BRITISH ROYAL 
 COMMISSION ON GOLD AND SILVER. In the belief that my 
 work will throw light into these recesses, I have printed 
 my ANSWERS to these Questions, which were handed to 
 the Commission in February, 1888. 
 
 These are followed by an examination of doctrines re- 
 lating to monetary legislation that hitherto have prevailed 
 among the learned, a paper entitled the PARITY OF MONEYS, 
 
 AS REGARDED BY ADAM SMITH, RlCARDO, AND MlLL which 
 
 was printed in London as an open letter answering a ques- 
 tion of a member of the Royal Commission, and was sent 
 
PREFACE. V 
 
 to members of the Commission, then in session, and to 
 others interested in monetary discussion. " 
 
 The pages above referred to, devoted to the growth of 
 opinion in England, formed the historical portion of an ad- 
 dress on FEDERATION FOE PARITY OF MONEYS AND THE AD- 
 VANCEMENT OF SCIENCE, sent (in response to invitation) to 
 the late meeting of the American Association at Toronto. 
 In that address I endeavored to state the new principles 
 of monetary jurisprudence in a form at once practical and 
 convenient for the general reader, and I therefore present 
 it here. 
 
 The important issue raised before Congress and the 
 country by the Eeport of Mr. Winclom, as Secretary of the 
 Treasury, is considered in its general relations in a paper 
 entitled BULLION OR COIN, which is supplemented by an 
 account of the currency proposals of David Ricardo (1816), 
 under the title RICARDO ON BULLION NOTES AND SILVER. 
 
 Another subject is also discussed,which explains itself by 
 the title, A PAN-AMERICAN DOLLAR AND THE POLICY OF UNION. 
 
 In view of current misapprehensions with reference to 
 the possible action of foreign Powers, I present some 
 considerations ON MEASURES IN AID OF DEMONETIZATION. 
 
 A selection of papers embodying proof and justification 
 of views and evidence of facts, set forth throughout the 
 volume, are offered at the close in the form of a document- 
 ary chronicle of THE ANTI-SILVER MOVEMENT AND ITS RE- 
 VERSAL, which serves as appendix. 
 
 * London: Macmillan & Co., June, 1888. 
 
ERRATA. 
 
 Page 74, line 4, for "observed" read " obw-ve." 
 Page 80, line 13, for " and from" read " not from." 
 

 TABLE OF CONTENTS. 
 
 I. THE PARIS MONETARY 'CONGRESS' (SEPTEMBER, 1889) 
 AND THE ENGLISH SILVER MOVEMENT. Pages 1-31. 
 
 THE ORIGIN AND EFFECT OF THE 
 CONGRESS. 
 
 THE SUBJECT OF DEBATE AND PRO- 
 CEEDINGS. 
 
 The organization. 
 
 The subject of debate. 
 
 The diplomatic situation of silver. 
 
 An English and German demonstra- 
 tion in Paris. 
 
 Academic debate. 
 
 THE ADVANCE OF OPINION IN ENG- 
 LAND. 
 
 The Commons Committee of 1876. 
 
 A fatal mistake. 
 
 Bonanzas and Council Bills. 
 
 The Monetary Conference of 1878. 
 
 1. The attitude of the English 
 
 representatives at the Con- 
 ference of 1878. 
 
 2. Their attitude at the Mone- 
 
 tary Conference of 1881. 
 
 3. The work of agitation and edu- 
 
 cation in England. 
 
 4. The Royal Commission on the 
 
 Depression of Trade and In- 
 dustry (1884-'86). 
 
 5. The Royal Commission on 
 
 Gold and Silver (1886-'88). 
 Its conclusions. 
 The present situation. 
 The future. 
 
 II. A KEVIEW OF ANTI-SILVER ARGUMENTS. Pages 33-53. 
 Speech in Eeply to Mr. Levasseur and Mr. Du Puynode 
 (Paris, September 13, 1889). 
 
 Explanatory. 
 
 The policy of union. 
 
 Why should France object ? 
 
 The doctrine of the market. 
 
 The ' single gold standard.' 
 
 Sources of this theory. 
 
 England its stronghold. 
 
 Based on certain errors. 
 
 Mr. Levasseur's position. 
 
 His scheme. 
 
 How it must look to Englishmen 
 
 and Germans. 
 The policy of demonetization. 
 
Vlll 
 
 SILVEE IN EUROPE. 
 
 III. QUESTIONS OF THE KOYAL COMMISSION ON GOLD AND 
 SILVER, AND ANSWERS. Pages 55-106. 
 
 Prefatory. 
 
 The 'fall of silver.' 
 
 The Eoyal Commission. Its pur- 
 pose and jurisdiction. 
 
 To investigate the effect of well- 
 meant legislation. 
 
 To recommend remedies. 
 
 Motion to reverse judgment. 
 
 Universal bias. 
 
 Ten years' delay. 
 
 Answer explained. 
 
 Preference for gold. 
 
 Bonanzas and Council Bills. 
 
 Probable future of silver. 
 
 "Wholesale prices. 
 
 Appreciation of gold. 
 
 Errors current. 
 
 Stability and Parity. 
 
 ' Contraction.' 
 
 Normal stock. 
 
 England's condition. 
 
 Supply of metal. 
 
 ' Scarcity ' and Parity. 
 
 The concept 'standard.' 
 
 Various aspects of ' quantity.' 
 
 Quantity theory. 
 
 Credit and cash. 
 
 Methods of economizing specie. 
 
 Federation for Parity. 
 
 Law of Parity and Gresham's Law. 
 
 Effect of restoring silver. 
 
 Questions of the ratio. 
 
 Provisional measures. 
 
 Sensitiveness and stabilitv. 
 
 IV. THE PARITY OF MONEYS AS REGARDED BY ADAM 
 SMITH, RICARDO, AND MILL. Pages 107-147. 
 
 An Open Letter Answering a Question of a Member of 
 the Royal Commission on Gold and Silver. 
 
 The question. 
 
 Origin of the doubt. 
 
 Cause of Parity. 
 
 A fashion of thought. 
 
 From Adam Smith to Mill. 
 
 A reign of Parity. 
 
 Analysis superficial. 
 
 Their practical notions. 
 
 Money as an object of science. 
 
 Mill's classifications. 
 
 Herbert Spencer. 
 
 Cause of inattention. 
 
 * Mercantile svstem.' 
 
 Freedom and ms medicatrix naturae. 
 
 Nature and art. 
 
 Incomplete grasp. 
 
 Ricardo's 'few words.' 
 
 Mill on Freedom and Money. 
 
 Novelty of exaggeration. 
 
 The fable of Midas. 
 
 Money and Bartec. 
 
 Pliny and the Utopias. 
 
 Mill and ' Ideal Money.' 
 
 A visionary hypothesis. 
 
 Conclusion. 
 
 Appendix. Money and the State. 
 
TABLE OF CONTEXTS. 
 
 IX 
 
 V. FEDERATION FOR PARITY OF MONEYS AND THE 
 
 VANCEMENT OF SCIENCE. Pages 149-168. 
 An Address before the American Association. 
 
 AD- 
 
 Abstract. 
 Introductory. 
 
 Affirmative statement of the Fed- 
 eralist position. 
 
 1. That silver and gold are the 
 
 money -metals, and that gold 
 is money and silver is money 
 to-day. 
 
 2. That parity of money is desir- 
 
 able. 
 
 3. That it is the law of each na- 
 
 tion which determines what 
 is money in that nation. 
 
 4. That the preponderant em- 
 
 ployment that is to say, 
 economic ' demand ' for 
 silver and gold is an effect 
 of the laws of nations. 
 
 5. That monetary laws establish 
 
 parity. 
 
 <5. That permanent parity be- 
 tween silver and gold is pro- 
 ducible by a proper regula- 
 tion of their employment. 
 
 7. That concurrent laws for legal 
 
 equality of the metals in an 
 effective majority of nations 
 will establish parity outside 
 as well as within their direct 
 jurisdiction. 
 
 8. That such parity benefits each 
 
 nation by assuring compar- 
 ative stability to the valua- 
 tion in which it is interested. 
 
 9. That federation is a condition 
 
 and a guarantee of such con- 
 current laws replacing those 
 which now maintain dis- 
 parity. 
 
 10. That the paramount monetary 
 issue of the age is whether 
 a settlement on this basis 
 should be made. 
 
 The Dis-Unionist or Anti-Federalist 
 position. 
 
 First grouping. 
 
 Second grouping. 
 
 VI. BULLION OR COIN? 
 
 (1) ft is futile to treat the silver 
 
 dollar independently of sil- 
 ver itself. 
 
 (2) The people of the United 
 
 States do not take to tlie sil- 
 ver dollar very kindly. 
 
 The advantages of paper. 
 
 Paper based on bullion. 
 
 Bullion in banks. 
 
 The policy of Seigniorage. 
 
 Gratuitous mintage. 
 
 Free sale of bullion. 
 
 Pages 169-198. 
 
 Monetary policy in the future. 
 Bullion and the general remoneti- 
 
 zation. of silver. 
 Free mintage, gratuitous mintage, 
 
 and free sale of bullion. 
 The policy of the Conferences. 
 The novelty of Mr. Wiudom's plan. 
 Legal equality of the metals. 
 The parity of bullion . 
 Resolution of American Bankers' 
 
 Convention. 
 Dutch Bank Charter Act. 
 
X SILVER IN EUROPE. 
 
 VII. RICARDO ON BULLION NOTES AND SILVER. 
 Pages 199-208. 
 
 His idea of a standard. Modernness of anti-silver doctrine. 
 
 Plans for resumption. Lord Overstone and Mr. Hag- 
 
 One-pound notes. gard. 
 
 VIII. A PAN- AMERICAN DOLLAR AND THE POLICY OF UNION. 
 Pages 209-222. 
 
 John Quincy Adams on metrical re- Currency of foreign coins. 
 
 form. Proper object of Federation. 
 
 Course of events. The American Conference. 
 
 The gold mark. Position of Mr. T. J. Coolidge. 
 
 The countries of the franc. Report of Committee. 
 
 The change of ratio. A Monetary Union sanctioned. 
 Mexican dollar and Brazilian mil- 
 
 reis. 
 
 IX. ON MEASURES IN AID OF DEMONETIZATION. 
 Pages 223-234. 
 
 Place where silver is money. Sources of misunderstanding. 
 
 ' Monetizing ' in one place and de- Supposed case of the Bank of 
 
 monetizing in another. France. 
 
 Political effect. Present use of silver stock. 
 
 Supposed case of Austria-Hungary. Intervention of the Government. 
 
 Four methods of demonetization Depressing gold price of silver. 
 
 distinguished. Gold party and silver party. 
 
 The public and private. Degree in which demonetization is 
 What loss ? facilitated. 
 
 Exaggerations on this head. Forces to prevent. 
 
TABLE OF CONTENTS. XI 
 
 APPENDIX. 
 
 THE ANTI-SILVER MOVEMENT AND ITS REVERSAL. A DOCU- 
 MENTARY CHRONICLE. Pages 235-290. 
 
 I. INTRODUCTORY. 
 
 Character of the movement. Its sequel in the Scandinavian 
 
 Successive steps. Union, Germany, Latin Union, 
 
 Its universality. United States. 
 
 The Conference of 1867. Relative value since 1870. 
 
 II. THE WORK or THE CONFERENCE or 1867. Pages 241-251. 
 REPORT OF MR. DE PARIETJ. 
 
 The Monetary Treaty of 1865 as a Is the silver franc available ? 
 
 basis of union. The primacy of gold in the Roman 
 
 Propositions of France to other na- Empire. 
 
 tions warmly received, by Europe Its present position. 
 
 and the United States. Gold the standard, with silver as 
 
 The Conference. 'transitory companion. 
 
 Its object. Five francs of gold nine-tenths fine 
 
 Variety of issiies raised. unanimously chosen as the unit. 
 
 The program of discussion. 25-franc piece recommended by 
 
 Twelve questions submitted. Austria and the United States. 
 
 Expectation that treaties will be Intel-nationality of silver coins un- 
 made to give effect to decisions. important. 
 
 Preference for the Latin Union 
 System. 
 
 III. THE GERMAN COMMERCIAL CONVENTION OF 1868. Pages 252-254. 
 The work of the Permanent Com- Decimal system. 
 
 mittee. Collection of essays to accompany 
 
 Resolution adopted. report and petition to the Gov- 
 
 Unity desired. ernments. 
 
 Silver mark scheme withdrawn. 
 Principles of the Paris Conference 
 
 of 1867 adopted. 
 
 IV. THE PROPOSALS OF THE UNITED STATES BEFORE THE CONFERENCE OF 
 1878. Pages 255-259. 
 
 Propositions stated. Answer of European Delegates. 
 
 Propositions held in reserve. Reply of American Delegates. 
 
Xll SILVER IN EUROPE. 
 
 V. THE CONFERENCE OF 1881. Pages 259-261, 
 Declarations of France and the Question of ratio. 
 
 United States. Its permanence. 
 
 Evil and remedy. Resolutions for adjourned meeting 
 
 Concurrent action. in 1882. 
 
 VI. THE PROPOSED CONFERENCE OF 1882. Pages 261-262. 
 Copy of Identical Note sent to the meiitsof France and of the United 
 
 Various Powers by the Govern- States. 
 
 VII. FOREIGN COINS AS LEGAL TENDER AND THE POLICY OF UNION. 
 
 Pages 263-265. 
 Coinage systems in cases of con- Novel situation produced by the 
 
 quest or union. attack upon silver. 
 
 Instances in history. The material becomes chiefly im- 
 
 Coinage treaties in the past. portant. 
 
 Refer chiefly to weight and device. Legal equality of metals. 
 Two metals recognized as material Disadvantages avoided. 
 
 of money. 
 
 VIII. THE ROYAL COMMISSION ON GOLD AND SILVER, 1886-1888. 
 
 Pages 266-273. 
 
 EXTRACTS FROM THE FINAL REPORT. 
 PART I. Apprehensions discussed. 
 
 Peculiarity of supply. PART III. 
 
 Agencies controlling demand. Gravity of situation. 
 
 India Council Bills. Experiment of unregulated use of 
 
 Influence of the Latin Union ratio. money-metals. 
 
 PART II. Breach in 1873-' 74. 
 
 Interest of India. Proposed remedy. 
 
 Conditions of a stable ratio. 
 
 IX. THE STRENGTH OF THE ENGLISH SILVER PARTY. Pages 274-281. 
 Platform of Bimetallic League, and The Silver Deputation of May 30, 
 list of officers. 1889. (List.) 
 
 X. THE MONETARY CONGRESS OF THE FRENCH EXPOSITION (1889). 
 
 Pages 282-284. 
 List of official delegates. List of Congresses. 
 
 APPENDIX TO CHAPTER VII. Pages 285-290. 
 Currency Proposals of D. Ricardo. 
 
I. 
 
 THE PARIS MONETARY 'CONGRESS 
 
 (SEPTEMBER, 1889) 
 
 AND THE 
 
 ENGLISH SILVER MOVEMENT. 
 
THE PABIS MONETARY < CONGRESS ' (SEPT., 1889), 
 AND THE ENGLISH SILVER MOVEMENT. 
 
 THE ORIGIN AND EFFECT OF THE CONGRESS. 
 
 The idea of having international meetings, reunions, or 
 conventions at the time of an international exhibition of 
 products is very readily conceived, and sure to recom- 
 mend itself ; and having been put in practice by the French 
 in 1867 and in 1878, it was very natural that the rule 
 should be followed in 1889. But while monetary reform 
 is sufficiently important, one would say, to dictate its own 
 times and places, it is a curious fact that it has been 
 brought to the fore-front in Paris at the date of each of the 
 French Exhibitions, and yet from motives or reasons in 
 each case distinct. 
 
 The Exhibition of 1867, the first of its kind, offered the 
 advisers of the Emperor Napoleon an occasion for ad- 
 vancing the primacy of France upon the very path of 
 light that is to say, in every direction. Far-sighted 
 policy had already brought the unification of monetary 
 systems within their range. It was in August, 1866, that 
 a treaty of monetary union with Belgium, Switzerland, and 
 the new kingdom of Italy had come in force, to which in 
 1867 Greece, Rournania, and the Papal States gave their 
 adhesion. Correspondence with other nations had fol- 
 
THE PAEIS CONGRESS OF 1889. 
 
 lowed upon this notable achievement, with a view to their 
 joining this 'Latin' union, and when in due time the dis- 
 position of nations was sufficiently ascertained, a Confer- 
 ence was called in Paris for June 1867, at which were 
 present the delegates of twenty-two nations, including the 
 United States. It is to be noted that at about the same 
 date there was also at Paris a ' Congress of the Exposi- 
 tion,' which dealt with Weights, Measures, and Coins. 
 This has sometimes been confounded with the ' Conference 
 of 1867.' 
 
 The origin of the Monetary Conference held in Paris in 
 1878, the year of the second great French Exposition, is 
 to be sought in Washington, in the second section of the 
 Act of Congress of February 28, 1878, directing the calling 
 of a Conference in Paris within six months. This Ameri- 
 can Conference is well entitled to be known as the Confer- 
 ence of 1878, albeit there was also a Conference of the 
 States of the Latin Union in Paris in the same year. 
 
 The meeting in 1889 of which we are speaking was 
 merely a ' Congress of the Exposition,' and came into 
 being without any distinctive fatherhood of government or 
 signification of political or public interest. 
 
 In December, 1888, the Floquet Ministry having the 
 arrangements for the Exhibition on their hands, a list was 
 made of conventions, as we should call them, to be held 
 during its pendency, and among them was suggested a 
 monetary convention. The monetary question, with sixty- 
 
ITS 
 
 eight other subjects,* was put on the list, and an organiz- 
 ing committee was appointed. 
 
 Such was the origin of the Conyres, as it is called in 
 French. 
 
 No purpose was fixed, no jurisdiction assigned, except- 
 ing in so far as the word " monetary " has a meaning. 
 The character and effect of the Congress was left to the 
 future, and must depend upon those who thereafter should 
 take it in hand. 
 
 In setting forth the outcome of the meeting I shall adopt 
 the language of an ' interview ' (in the Paris New York 
 Herald of September 15, 1889), the informality of which 
 will be excused in consideration of its directness and 
 brevity. 
 
 To one familiar with the political aspects of Silver it 
 was plain that this accidental Congress contained an ele- 
 ment of danger to the future of the project of Monetary 
 Federation. It was perhaps unfortunate that this ap- 
 parently aimless assembly was called, but it had been 
 called, and called under the auspices of the French Gov- 
 ernment, which, in 1881-'2, had joined the United States 
 in supporting that project. The only thing to do for the 
 
 * The Exhibition was under the direction of the Ministry of Commerce 
 and Industry. The Monetary Congress was held in a hall in the Trocadero 
 Palace. If I remember rightly there was a Congress on Co-operative Stores, 
 a Fire Brigade Congress, and a Railway Congress about the same time. 
 The latter was, I believe, independent of the Exposition. The list may 
 interest the curious in connection with the coming Quadricentennial, and I 
 have, therefore, reprinted it in the Appendix. 
 
6 THE PARIS CONGRESS OF 1889. 
 
 cause was to prevent the meeting from being a failure, 
 and, on the contrary, so far as was practicable, to make 
 it a success. 
 
 The subject had long been in abeyance on the Conti- 
 nent. In the years since 1882 the scheme of joint action 
 of nations to restore silver had come to seem very remote, 
 and since 1885 had been, as it were, concealed from view 
 by the nearer, though comparatively trivial monetary is- 
 sues connected with the fate of the Latin Union. It 
 was in 1885 that the second term of the Monetary Treaty 
 of 1865 expired, and the various Monetary Systems of 
 Europe have an interest in the future of this Treaty 
 Union, either directly or through relations with the par- 
 ties to it. It is now in full force (as modified) only from 
 year to year, and is liable to be terminated by notice at 
 the will of any of the Signatory Powers. Under the cir- 
 cumstances, it appeared that if the scheme of a new Mone- 
 tary Union was to be dealt with in Paris with benefit to 
 the cause, it was from England, where silver has long been 
 a subject of agitation and, if possible, from Germany 
 also that impulse and reinforcement must come. 
 
 In the end the great Deputation of English ' silver men ' 
 (see Appendix) which waited on Lord Salisbury and Mr. 
 Goschen on May 30, elicited a response from them which 
 simplified the problem, what was to be done with this Con- 
 gress in Paris. That response challenged the friends of 
 silver to make a showing in the Congress. 
 
 It was a change of venue, but it has not operated to our 
 disadvantage. As I had the opportunity of pointing out 
 
ITS EFFECT. 7 
 
 to them this challenge opened to English allies of the 
 cause the occasion to break the 'boycott' which the Lon- 
 don press has steadily maintained against them hitherto. 
 Independently of all else, this effort was worthy of their 
 energy. 
 
 This advantage has been fully gained. It will be evi- 
 dent to English readers that when the London Times pub- 
 lishes a column and a half on silver, telegraphed from 
 Paris by Mr. de Blowitz, as it has to-day, a new stage in 
 the progress of the cause of Monetary Union has been 
 reached. 
 
 The Congress has, in fact, been a field-day, in which 
 the reformers of England and Germany have displayed 
 their forces. They have made a report upon the good 
 work of conversion that is going on in their countries. 
 That work of conversion is the very life of the cause. 
 There have been only these two chief Powers left to be 
 converted since -France and the United States, by the Con- 
 ference of 1881 and 1882, put the future of silver at their 
 door. Germany waits for England, and England is mov- 
 ing in the path of conversion. 
 
 But beside this effect, we have obtained the tactical 
 advantage of bringing the representatives of primitive 
 economic orthodoxy face to face with the leaders of a liv- 
 ing reform requiring the former to face a responsibility 
 which they had never fully realized before. Some of these 
 well-meaning academicians begin to recognize that their 
 anti-silver and anti-parity theories are somewhat incom- 
 plete. 
 
8 THE PARIS CONGRESS OF 1889. 
 
 The total effect, then, of this interchange of opinion 
 has been excellent. It, in some measure, disarms opposi- 
 tion on the Continent and certainly strengthens the hands 
 of the friends of silver in England. 
 
 Beyond this, of course, the Congress can have no 
 effect. It was understood beforehand that it was free to 
 all who were interested in monetary discussions, and that 
 no vote was to be taken. It was only a demonstration of 
 opinion, an occasion for interchange of views. The ob- 
 ject proposed has been attained in fair measure. To re- 
 vive the interest in the subject, which on the Continent 
 had very generally died out, and to answer the challenge 
 of Lord Salisbury and Mr. Goschen, and bring new light 
 into English anti-silver circles, cannot fail to strengthen 
 the cause of Monetary Union. 
 
 For certainty of clearness I should make reference 
 to the erroneous information that obtained currency in 
 the United States, at and about the date of its occur- 
 rence, as to the scope and character of the ' Congress." 
 It seems to have been generally supposed to be an official 
 body* with diplomatic functions, like the Conferences held 
 in 1878 and 1881, and remark was widely made in the 
 press upon its failure to come to a vote ; an impression 
 
 * Official color was, in fact, given to this error (no doubt inadvertently) 
 through the publication, under the auspices of the Departments in Wash- 
 ington, both before and after the Congress, of a Consular report, dated 
 July 8, in which the Congress was referred to in the same terms as the 
 Conference of 1881, and into which some other analogous errors had 
 crept. 
 
THE COURSE OF DEBATE. 9 
 
 quite natural though erroneous ; but misleading in a high 
 degree, raising as it did the whole question of the ' for- 
 eign relations ' of money, and especially of the future of 
 silver. 
 
 The list of official representatives at the Congress is 
 given in the appendix.* 
 
 THE SUBJECT OF DEBATE 
 
 AND PROCEEDINGS OF THE CONGRESS. 
 
 The Organization. 
 
 The Congress was opened Sept. 11, with a letter 
 from M. Kouvier, the Minister of Finance, read by M. 
 Magnin, Vice-President of the Senate, Governor of the 
 Bank of France, who was President of the Committee of 
 Organization, and became the President of the Congress. 
 M. Pelligrini, Vice-President of the Argentine Republic, 
 was made Honorary President, and to the names of Le*on 
 Say and Cernuschi, Vice-Presidents of the Committee and 
 of the Congress, were added those of Dana Horton, Emile 
 deLaveleye, Grenf ell, Levasseur, Luzzatti, and MaxWirth.t 
 The presence of official delegates from the British Indian 
 Empire (Mr. Fremantle, Master of the Mint, and Mr. Mur- 
 ray, of the Treasury), from Japan, and from the South 
 
 * Of my countrymen I know only of Mr. D. O. Mills and Mr. Edward 
 Tuck as being there. The latter was, I believe, owing to a clerical error, 
 mentioned in some quarters as being a delegate of the United States, but 
 this error was at once corrected by Mr. Tuck. There was no official rep- 
 resentation on the part of the United States Government. 
 
 t This list is also given in the alphabetic order of countries. 
 
10 THE PARIS CONGRESS OF 1889. 
 
 American States, to mention no others,* shows the range of 
 attention excited by the Congress. 
 
 The Subject of Debate. 
 
 For the debates an ample series of subjects had been 
 set forth, but in the end one paramount subject engrossed 
 attention, and occupied the entire space of the six sessions 
 of the Congress (Sept. 11-14). 
 
 The restoration of silver to its former legal equality 
 with gold, in a strong Union of nations, remains, as it has 
 long been, the order of the day. 
 
 The Diplomatic Situation of Silver. 
 
 A brief retrospect is necessary to indicate the stage now 
 reached in the movement for the adoption of this measure. 
 Silver having become in 1876 the object of agitation in 
 both continents, the proposal of a federation for concur- 
 rent free mintage of the two metals was formally made by 
 the United States in a Diplomatic Conference called to 
 meet in Paris in 1878. In 1881 the proposal was renewed 
 by France and by the United States (acting upon the sug- 
 gestion of France) in a Conference called in Paris for that 
 year. The respective attitudes of nations then disclosed, 
 offered substantial concurrence of all in joint measures to 
 bring about the end proposed, a stable parity of the metals. 
 But the quota of co-operation offered by two of the chief 
 Powers England and Germany fell short of that pro- 
 posed by, and expected from, the others. The partial pro- 
 
 * The full list will be found in the Appendix. 
 
AN ENGLISH DEMONSTRATION. 11 
 
 silver measures offered by England and Germany were con- 
 ditioned upon complete restoration of free mintage in other 
 States, upon whom, accordingly, the burden of maintain- 
 ing the parity of the world's money would substantially 
 fall. 
 
 France and the United States were not satisfied with 
 this quota from the two other Powers ; they required 
 more effective co-operation before they would open their 
 mints freely without limit to new silver. Thus the halting 
 attitude of England for Germany would have followed 
 England in a further advance broke up the proposed 
 alliance. Since the Conference of 1881 and 1882 the 
 issue What England, and in second rank what Germany, 
 is ready to do, has remained the paramount practical issue 
 in this field, down to the present day. 
 
 The task evidently pre-ordained for the meetings in 
 the Trocadero was to collect and focus light upon this sit- 
 uation. 
 
 An English and German Demonstration in Paris. 
 
 In his opening discourse, M. Magnin pointed the 
 moral of late occurrences in England which decisively es- 
 tablish a new point of departure, and especially of the Silver 
 Deputation* which waited upon the Marquis of Salisbury 
 and the Chancellor of the Exchequer, on May 30, last, 
 and of the response then elicited from the heads of the 
 English Government. The Deputation was pronounced, 
 
 * See list in Appendix. 
 
12 THE PARIS CONGRESS OF 1889. 
 
 it is understood, by so competent a judge as Lord Rowton, 
 to be the strongest Deputation which ever waited upon a 
 Minister of the Crown. The answer of Lord Salisbury and 
 Mr. Goschen seemed to single out the coming Monetary 
 Congress of the French Exposition as an arena where the 
 cause of silver was to be fought for. 
 
 The account already given of the Congress shows that 
 the challenge was accepted. The English bimetallists 
 deployed their forces in great strength. Mr. Henry 
 McNiel, the Chief Secretary of the Bimetallic League, 
 was present. Addresses from Mr. Henry R. Grenfell, 
 Ex-Governor and Director of the Bank of England, Vice- 
 President of the League ; Sir Henry Meysey-Thomson ; 
 Professor H. S. Foxwell, Fellow of St. John's College, 
 Cambridge, Professor of Political Economy in University 
 College, London ; Mr. Fielden, the representative of the 
 Workingmen's Organizations of Lancashire ; proved that 
 the work put upon Englishmen in 1881 had been manfully 
 performed with a success which seems to promise final 
 triumph. A similar report from Germany, in the address 
 of Dr. Otto Arendt, the leader of the silver agitation in 
 Germany, with a letter from Freiherr von Kardorff, its 
 parliamentary leader, made like answer for Germany, and 
 certified that the government in Germany would second 
 the policy of England, as has been generally maintained. 
 
THE COURSE OF DEBATE. 13 
 
 Academic Debate. 
 
 As a supplement to this entirely practical proceeding 
 in which representatives of English and German opinion 
 made, in Paris, a report of the progress of their countries 
 toward the Monetary Alliance * before proposed, in Paris, 
 by the United States and by France ample space was 
 offered for academic debate. Fortunately for the liveli- 
 ness of interest felt in each succeeding session of the 
 Congress, the phases of opinion which make up the op- 
 position to the policy of Parity Union, found ample repre- 
 sentation among the Parisian members of the Congress. 
 MM. Levasseur, Frederic Passy, Fournier de Flaix, 
 Du Puynode, Clement Juglar, Mannequin, Cochut, and 
 MM. Coste and Kaffallovich (who were the secretaries 
 of the Congress) presented anti-silver arguments made 
 familiar to monetary students by the Conference of 1867 
 and by the opposition speakers in the Conferences of 1878 
 and 1881, bringing down to date, as it were, the argu- 
 ments of the gold party in Europe while the affirmative 
 was represented by a list of speakers, among whom M. 
 Cernuschi was prominent, and which numbered, beside 
 those already mentioned (and myself) M. Emile de Laveleye ; 
 M. Alphonse Allard, of Belgium ; M. Boissevain, of Hol- 
 land ; M. Lalande, of Bordeaux ; and M. Moret, Ex-Minister 
 of Foreign Affairs of Spain. 
 
 * This Quadruple Alliance is assumed to secure the adhesion of lesser 
 Powers. 
 
14 THE ENGLISH SILVER MOVEMENT. 
 
 THE ADVANCE OF OPINION IN ENGLAND. 
 
 I now set forth in brief outline the course of events 
 which led to this demonstration in Paris of British interest 
 in the Restoration of Silver. 
 
 Silver became the object of public attention in England 
 in 1876, which was the date of the phenomenal fall in its 
 ' price ' and of the opening of those discussions in Congress 
 and in the Silver Commission then appointed, that were 
 closed with the final passage of the Coinage Act of Feb- 
 ruary 28, 1878. A Select Committee of the House of Com- 
 mons, of which Mr. Goschen was Chairman, made its re- 
 port on the Depreciation of Silver in the summer of 1876. 
 
 The Select Committee of 1876. 
 The conclusions of the Report were as follows : 
 
 " Your Committee are of opinion that the evidence taken 
 conclusively shows that the fall in the price of silver is 
 due to the following causes : 
 
 " 1. To the discovery of new silver mines of great rich- 
 ness in the State of Nevada. 
 
 " 2. To the introduction of a gold currency into Ger- 
 many in place of the previous silver currency. This 
 operation commenced at the end of 1871. 
 
 "3. To the decreased demand for silver for export to 
 India. 
 
 " It should be added 
 
 " 4. That the Scandinavian Governments have also 
 substituted gold for silver in their currency. 
 
THE COMMONS COMMITTEE OF 1876. 15 
 
 " 5. That the Latin Union, comprising France, Belgium, 
 Switzerland, Italy, and Greece, have, since 1874, limited 
 the amount of silver to be coined yearly in the mints of 
 each member of the Union, suspending the privilege, for- 
 merly accorded to all holders of silver bullion, of claiming 
 to have that bullion turned' into coin without restriction. 
 
 " 6. That Holland has also passed a temporary act, pro- 
 hibiting, except on account of the Government, the coin- 
 ing of silver, and authorizing the coining of gold. 
 
 " It will be observed that two sets of causes have been 
 simultaneously in operation. The increased production 
 of the newly-discovered mines, and the surplus silver 
 thrown on the market by Germany have affected the 
 supply. At the same time the decreased amounts required 
 for India, and the decreased purchases of silver by the 
 members of the Latin Union, have affected the demand. 
 A serious fall in the price of silver was, therefore, in- 
 evitable." 
 
 A Fatal Mistake 
 
 The Committee made the radical mistake of putting 
 among the causes of the change of ratio between silver and 
 gold, not only without qualification but even first on the 
 list, the Nevada Bonanzas a factor whose efficiency in 
 lowering silver existed purely by favor of other factors 
 mentioned, and which therefore should be placed in a dis- 
 tinct and subordinate position, with clear indication of its 
 nullity from the point of view of state policy. The same 
 error applies to the factor which in the list above is num- 
 
16 THE ENGLISH SILVER MOVEMENT. 
 
 bered 3, ancTwliich is better known under the name of 
 the India ' Council Bills,' a factor which is also nil ex- 
 cept by reason of the others. These two factors belong 
 to the second line of fructifying causes. Granted the action 
 of governments that is to say, the laws and decrees which 
 closed the mints of Europe to silver, the gold-rate of silver 
 might naturally suffer some increase of its fall by reason 
 of enlarged new supply from the Bonanzas, and likewise 
 by reason of diminished demand for India. But in the 
 absence of these anti-silver laws and decrees it would have 
 suffered no fall whatever. The " demand " for mintage to 
 which the Committee refers, was in the case of the Latin 
 Union a demand of character absolutely distinct, a fixed- 
 ratio demand, a preordained employment equalizing silver 
 with gold at that ratio. 
 
 The truth thus ignored by the Committee is the very pith 
 and marrow of the whole business, so that their report is 
 a brilliant, and most unfortunate, exemplification of the 
 obscurity of monetary questions. It was twelve years later 
 that the truth which the Committee of 1876 might have 
 seen but failed to see, was officially recognized, namely, 
 by the Koyal Commission on Gold and Silver. 
 
 Yet the course of reasoning which leads to this truth 
 seems not too difficult. It was merely necessary to study 
 with unprejudiced eye both sides of the policy of demone- 
 tization which had been adopted on the Continent ; or in 
 other words to inquire what would have happened to the 
 ratio between the money metals if free mintage had been 
 maintained in Europe for silver as well as for gold, 
 
BONANZAS AND COUNCIL BILLS. 17 
 
 This inquiry was really imposed by the mandate under 
 which the. Committee did its work. One would suppose 
 it a natural course for a legislator brought face to face 
 with a business catastrophe following directly upon a rev- 
 olutionary series of laws of outlawry directed specifically 
 against the object chiefly involved in the catastrophe, to 
 inquire whether the catastrophe could have occurred, or 
 what would have happened, if these peculiar laws had not 
 been passed ; that is to say, if the object in question, sil- 
 ver, had been left alone where it was. Yet, it was this 
 which Mr. Goschen's Committee omitted. 
 
 The causes marked 2, 4, 5, 6, taken together, are the 
 Acts of Demonetization. Without these Acts the " fall in 
 the gold price of silver " could not have occurred. These 
 acts were within the control of governments ; they could 
 be reversed or repealed, and thus an end could be put to 
 the ' fall.' A proposition to that effect from Mr. Goschen's 
 Committee or from the House of Commons would have met 
 with cordial support in other nations. On the other hand 
 the factors which the Committee marked 1 and 3 were not 
 within control. No one would seriously propose to close 
 the mines of the Eocky Mountains ; nor to cancel that debt 
 of India to Europe which led to the use of Council Bills 
 for clearance between the continents, by which debit and 
 credit were balanced as far as they would go, and the un- 
 necessary shipment of specie avoided. Hence in putting 
 into the front rank these ancillary and subordinate factors, 
 the Committee established a bar to action. With such 
 impossibilities in the foreground it was plausible to treat 
 
18 THE ENGLISH SILVER MOVEMENT. 
 
 the intervention of Governments in reference to Silver as 
 quite out of the question. 
 
 The error went to the very life of reform. It was a 
 dogma of paralysis. No estimate was made of the evils to 
 arise from the situation thus analyzed, and no remedial 
 measures were suggested. The unfortunate result is seen 
 in that sluggishness of the forward movement to recognize 
 the neglected truth, of which the following pages are a brief 
 record. 
 
 To assist the reader unfamiliar with the subject to 
 make these several conclusions his own, I pursue in some 
 detail the query, what effect bonanzas of silver could have 
 had on the ratio between silver and gold if silver had re- 
 mained freely coinable money in Europe just as it was 
 before the Acts referred to were passed. What could 
 happen ? 
 
 Let us follow in imagination the advent in Europe of 
 this tiny stream of Nevada Silver, turning itself into coin 
 at Paris and Brussels, Utrecht, Berlin, and so on, and 
 gradually adding itself to the thousand millions dollars' 
 worth of silver coin already there, with other thousands of 
 gold (beside paper) in use side by side with them. What 
 would be the result ? 
 
 A little more silver money in Europe ! That is all ! 
 What difference would that make ? How could that affect 
 the ratio of gold to silver ? 
 
 Any change that occurred must naturally take the form 
 of a premium on gold. How could an increase of the 
 silver stock produce that effect a gradual increase, say of 
 
BONANZAS AND COUNCIL BILLS. 19 
 
 5 per mille, or one per cent., or 2 per cent., as compared 
 with the moneys of Europe ? Nay, let us ask whether if 
 all the bonanzas, unrelieved by Indian demand, had been 
 unloaded in France alone, they could have driven gold to 
 a premium ? Impossible ! Even the suspension of specie 
 payments by the Bank of France did not do that. In- 
 deed, France would have held less silver metal in any 
 case than she holds to-day, when, in spite of the fall of 
 silver bullion her silver coin is not at a' discount. Of 
 course our supposition really implies that the new silver, 
 so far as it went to the European continent, would be dis- 
 tributed among all the money-using populations of the 
 continent. 
 
 The reader will find this supposition pregnant with sug- 
 gestions ; especially when he realizes that but for the closing 
 of the mints to silver through ill-advised statute and de- 
 cree, new life-blood would have poured into the circulation 
 of Europe, most welcome to the veins depleted by the 
 collapse of credit in the years of disorganizing liquidation 
 after 1872. And not even the wildest doctrinaire would 
 have prophesied a premium on gold. 
 
 So much was lost by the Committee's failure to pene- 
 trate below the surface of their subject ! Yet the points 
 I have referred to were apparent to some who were study- 
 ing the subject at the time among whom I may myself 
 be numbered. The report of the Congressional Commis- 
 sion appointed in 1876 is in striking contrast to that of 
 the Committee of the House of Commons, 
 
20 THE ENGLISH SILVER MOVEMENT. 
 
 The Conference of 1878. 
 
 The second section of the Act of Congress of February 
 28, 1878, proposed the restoration of silver by concurrent 
 action of nations. 
 
 In pursuance of that Act an invitation was issued by 
 Mr. Evarts, then Secretary of State, to the Governments 
 of the principal European nations, which was accepted by 
 all, with the exception of Germany. The Conference met 
 in Paris in August, 1878, as the guest of the French Re- 
 public, in the Palace of the Ministry of Foreign Affairs. 
 
 The resolutions adopted in this Conference, together 
 with those adopted in the Third International Monetary 
 Conference, which was called by France and by the United 
 States in 1881, are set forth in the Appendix. 
 
 The advance of opinion in England on the subject pre- 
 sents itself in the following successive stages : 
 
 1. The attitude of the English representatives at the 
 Monetary Conference of 1878. 
 
 The speeches of Mr. Goschen at Paris put the veto of 
 English science and sagacity upon the further rejection of 
 silver money upon the Continent. This, logically, was 
 not only an abandonment of the case for England's anti- 
 silver laws, but it operated as an admission that the oppo- 
 site of such rejection, the restoration of silver (proposed 
 by the United States), was a measure which would benefit 
 the United Kingdom. It was thus an affirmation of the 
 internationally of money. 
 
THE CONFERENCES OF 1878 AND 1881. 
 
 But the requirements of logic were not applied. No 
 prospect was held out of any active measures to be adopted 
 by England in pursuance of the proposal of the United 
 States. 
 
 2. The attitude of the English representatives at the 
 Monetary Conference of 1881. 
 
 The attitude of Mr. Fremantle, Sir Louis Mallet, and 
 Lord Eeay was an advance beyond this position. Al- 
 though promising no further change in the local sytem 
 of Great Britain than the acceptance of silver as a 
 deposit for Bank of England notes up to the limit of exist- 
 ing statute, to which was added for India the maintenance 
 of free coinage of rupees, the recognition of the interest of 
 the Empire in the policy now proposed by two Great Powers 
 was made more clearly and more strongly. An analogous 
 admission was contained in an offer of co-operation from 
 Germany, which had closed its sales of melted thalers in 
 1879, and had accepted the invitation to the Conference. 
 But the co-operation offered by England and by Germany 
 was not held sufficient to warrant the United States and 
 France in opening their mints. As a sequel the silver 
 question was left at England's door. It was plain that 
 under no circumstances could the accession of Germany 
 offer so important a consideration to France and the 
 United States to induce them to establish concurrent free 
 coinage of silver, as the accession of England ; and at the 
 same time it was probable that Germany's adhesion would 
 follow that of England. 
 
22 THE ENGLISH SILVER MOVEMENT. 
 
 3. The work of agitation and education in England. 
 
 France and the United States not finding that the situa- 
 tion warranted them in restoring silver mintage, it became 
 incumbent upon those interested to set on foot in England 
 a work of education and agitation which should at length 
 secure the desired change in her policy. The International 
 Monetary Standard Association (Bimetallic League) in 
 England, and likewise the Internationale Doppel-Waeh- 
 rungs herein in Germany, were founded in the interval 
 between the adjournment of the Conference of 1881 and 
 the date of its intended re-convocation in 1882. 
 
 Of their labors through the press, by tracts and lec- 
 tures, public meetings, and the rest I will not attempt to 
 give here a detailed account. Suffice it to say, that since 
 1 882 a work of education and agitation has been carried on ; 
 that public-spirited men have been rallying to the cause 
 from time to time ; while the doctrine of monetary union 
 and parity of the money-metals, has been preached in the 
 high-ways and bye- ways. In the meantime the evils which 
 we had prophesied have been descending, chiefly upon 
 England, and have given cumulative force to the teachings 
 of reformers. 
 
 I may conveniently mention here a measure * of external 
 strategy which has been amply urged as efficacious for the 
 ripening of conviction in England, namely, that the Ameri- 
 
 * Stoppage at a future date, in case Europe should refuse to come to 
 terms, was embodied in the Senate amendment to the House Trade-Dollar 
 Bill, reported by Mr. Morrill for the Senate Finance Committee in January 
 or February, 1885. In the House it formed the alternative measure with 
 
AGITATION AND EDUCATION. 28 
 
 can Congress should fix a limit of time to the continued mint- 
 age of new dollars. In the never-ending strife in America 
 between those who saw only the silver side of the shield and 
 those who saw only the gold side, the merits of this great 
 stroke for the cause of silver federation have failed of prac- 
 tical recognition. But the event has justified what was 
 said in favor of fixing a limit. 
 
 The results obtained in England to-day the present 
 strength of the pro-silver movement in England attest 
 the sagacity of the propositions urged upon Congress. 
 The conviction that is ripening slowly under unfavorable 
 conditions, would have ripened quickly under favorable 
 
 which free coinage was defeated in the spring of 1886 ; a defeat which 
 seems to have operated as a stimulus to the silver movement in England. 
 (See pages and .) 
 
 The history of the silver debate in the House in 1886 is briefly this : On 
 February 16 Mr. Eland's free coinage bill, which was supported by two 
 other members of his Committee, was reported by Mr. James for the Com- 
 mittee on Coinage, adversely, " with an expression of their unqualified 
 condemnation." The bill was put upon the calendar, and Mr. Dibble, of 
 South Carolina, in concert with the majority of the Committee on Coinage, 
 offered the following amendment as a substitute : 
 
 "That unless meantime, through concurrent action of the nations of 
 Europe with the United States, silver be remonetized prior to July 1, 
 1889, then and thereafter so much of the act of February 28, 1878, entitled 
 ' An Act to authorize the coinage of the standard silver dollar and restore its 
 legal tender character,' as authorizes and directs the Secretary of the 
 Treasury to purchase silver bullion and cause the same to be coined, shall 
 be suspended until further action by Congress." 
 
 The vote was taken April 8, 1886. It stood, on the Free Coinage Bill, 
 nays, 163 ; yeas, 126 ; not voting, 34 : on the Conditional Limitation 
 Bill, nays, 200 ; yeas, 84 ; not voting, 39. 
 
24 THE ENGLISH SILVER MOVEMENT. 
 
 conditions, and such favorable conditions would have been 
 provided by the bill for Conditional Suspension of the 
 Dollar Coinage, which was supported by the international 
 bimetallists in Congress in 1885 and 1886. 
 
 It would have operated as the strongest pro-silver meas- 
 ure within the reach of Congress. Failing this reinforce- 
 ment the slow processes of education and agitation in Eng- 
 land were continued. 
 
 4. The Royal Commission on the Depression of Trade and 
 Industry. 
 
 An overt public act appeared when the Royal Coin- 
 mission on the Depression of Trade and Industry was 
 appointed in 1884. Among its members was Mr. Gibbs, 
 Director and former Governor of the Bank of England, 
 Mr. Goschen's colleague at the Conference of 1878, now 
 the President of the Bimetallic League. Its final report 
 was made two years later, in 1886. In its diagnosis of 
 economic malady the disturbance of the money basis of 
 trade and industry caused by the outlawry of silver in 
 divers nations was marked as a region which deserved to 
 be explored by a Special Commission. The report is given 
 in the Appendix. 
 
 5. The Royal Commission on Gold and Silver. 
 
 Such a Special Commission was proposed to Parliament, 
 and was appointed on September 6, 1886. Its Report (pre- 
 sented November 8, 1888), based upon volumes of evidence 
 and exhaustive study by men of distinguished competence, 
 
THE COMMISSION ON GOLD AND SILVER. 25 
 
 is a memorable landmark in the advancement of science. 
 It is an achievement of moral as well as intellectual dignity. 
 With it the doctrines which many of its members had 
 been wont to hear denounced as heresy, if not as lunacy, 
 have become admitted truths of monetary science. 
 
 The full extracts from the Report which are given in 
 the Appendix, leave only for this page the gist of the con- 
 clusions arising from this elaborate investigation. 
 
 The outcome is a victory. The American proposals of 
 1878 are justified by the English propositions of 1888. 
 
 Six of the Commissioners urge that Her Majesty's Gov- 
 ernment call the representatives of nations together to 
 offer concurrent free mintage of silver at a ratio to be 
 agreed upon. The other six are not prepared for so pro- 
 nounced and far-reaching a declaration ; but the princi- 
 ple of international concert is admitted, and a goodly 
 part of the opinions subscribed to by Lord Herschell, Mr. 
 Fiemantle, Sir John Lubbock, Sir Thomas Farrer, Mr. 
 J. W. Birch, and Leonard H. Courtney, M. P., are very 
 much at home as part of the platform of the Bimetallic 
 League. 
 
 The following suggestions (presented in abbreviated form) 
 proceed from these gentlemen who are known to the now 
 anxious partisans of anti-silver laws as the " gold men " 
 of the Eoval Commission. 
 
26 THE ENGLISH SILVER MOVEMENT. 
 
 Negotiations with other countries 135-130. 
 
 It might be worth while to meet the great commercial na- 
 tions on any proposal which would lead to more extended 
 use of silver, and so tend to prevent the apprehended fur- 
 ther fall in its value, and to keep its relation to gold more 
 stable ; * * * probably in the direction of an agree- 
 ment that each nation should annually coin a certain 
 amount of silver, not necessarily the same in all coun- 
 tries. It is worthy of consideration whether foreign gov- 
 ernments might not be approached with a view to a larger 
 coinage of silver than at present, in conjunction with an 
 arrangement on the part of India for keeping open her 
 mint, and on the part of the Bank of England, as to a re- 
 serve of silver. 
 
 Issue of small notes based on Silver 137. 
 
 We think that the best suggestion in relief of the ten- 
 sion of the existing situation is to be found in the issue 
 of small notes based on silver as substitutes for the 
 half sovereign. Twenty-shilling silver notes might also 
 be issued. These would probably pass largely into use 
 without any alteration of the law of legal tender, and the 
 Bank might safely be required to issue such notes to 
 some fixed amount, in exchange for silver bullion taken at 
 the average market price ; or upon conditions of retain- 
 ing silver of equal nominal amount. The objections on 
 the part of expense, and the danger of forgery, are met 
 by the example of the United States, where enormous 
 note circulations for small amounts is current. 
 
PRESENT AND FUTURE. 27 
 
 The Present Situation. 
 
 It is plain that the harvest of conversion in England 
 is coming into sight. It is a harvest that took a long and 
 weary seed-time after "a long and weary breaking of the 
 ground. England has unfortunately been busy with other 
 things, and she remains busy. She could not leave Ireland 
 in order to study silver and gold : one might say she could 
 not stop worrying, or worrying about, Ireland, according 
 as one's sympathies are Liberal or Tory. In less troubled 
 times she would have been free more quickly to learn new 
 truths, or rather to recognize old truths in the garb which 
 new experience lends them, and thus would not have 
 blocked the advance of a reform of which she is to be the 
 chief beneficiary. 
 
 What has been accomplished is indicated by the Depu- 
 tation of May 30th, and by the demonstration in Paris, of 
 which an account has been given. 
 
 In an appendix will be found a list of names, which 
 needs no comment as setting forth the strength of the 
 English friends of Silver Federation. 
 
 Their course is complicated by the parallel advance into 
 public notice of two other monetary questions, namely, 
 the questions of withdrawing and recoining light gold 
 coin, and of issuing one-pound notes (perhaps 'ten-shilling 
 and two-pound notes). 
 
 The condition of the gold coin has excited the attention 
 of monetary writers now for many years. A considerable 
 proportion of the gold coin in England is under-weight. 
 
28 THE ENGLISH SILVER MOVEMENT. 
 
 According to a rough approximation current in England, 
 sovereigns lose two pence worth of gold in ten years, which 
 is not far from one per cent, and there has been no im- 
 portant recoinage since 1817. The half-sovereigns suffer 
 more in proportion from wear than the sovereigns. 
 
 The proposal made by Mr. Lowe (Lord Sherbrook) then 
 Chancellor of the Exchequer, in 1869, to cut down the sov- 
 ereign about four pence, and charge the deduction as seign- 
 iorage, was intended to bring about assimilation between 
 the English and French units, making the sovereign equal 
 to a twenty-five-franc piece, but the peculiar merit was no 
 doubt observed, that this measure would have provided 
 the means of putting the coinage on a uniform basis. 
 The proposition was rejected. A few years ago Mr. 
 Childers, as Chancellor of the Exchequer, brought for- 
 ward a plan of cutting down the half-sovereign by a 
 tenth, making it a gold token, and so covering the expense 
 of a general rerninting by the gold thus saved. 
 
 This also was rejected. 
 
 The expectation has been general that Mr. Goschen's 
 fame as a financier is to receive an added lustre by his 
 coping successfully with this problem, which has foiled 
 his predecessors. The special point of query is, where the 
 money is to come from ? Among the competing sources 
 is the issuing of silver tokens, which in 1889 gave the 
 difference between 14.28 (the weight of English change 
 relatively to gold) and 21 to 22, say fifty per cent., as profit 
 to the Treasury, less expenses. Another source which has 
 been mentioned is a tax on circulating notes, which seems 
 
PRESENT AND FUTURE. 29 
 
 to imply that an alteration in the law is to be made, which 
 is expected to go further than merely withdrawing the ex- 
 isting prohibition upon the issue of notes by the Bank of 
 England under five pounds. The way has, in part at least, 
 been paved for such change of English policy by the fa- 
 vorable experience of Scotland, which was allowed to main- 
 tain its one and two-pound notes. Having greatly recom- 
 mended themselves there, they have, from time to time, 
 been brought to general attention as a possible example 
 well worthy to be followed in England. 
 
 A beginning was made with the light gold coin by a law 
 passed in June, 1889, ordering the withdrawal of gold 
 coined before the present reign, and it has been under- 
 stood that large purchases of silver were made, followed 
 by a considerable increase in the issue of silver change. 
 
 Public attention has also been directed to the question 
 whether half-sovereigns are to be reissued or not ; that is 
 to say, whether the melted gold is to come forth in the 
 shape of twenty or of ten-shilling pieces, a matter which 
 lies within the control of the Crown. Such a withdrawal 
 of small gold would be regarded as intended to make room 
 for silver. 
 
 It is plain there is material for a currency debate, if 
 Parliament can find time and taste for it. 
 
 In the meantime no positive steps are known to have 
 been taken by the Government to give practical sequence 
 to the proposals for concerted action of nations made by 
 either wing of the Royal Commission. 
 
30 THE ENGLISH SILVER MOVEMENT. 
 
 The Future. 
 
 The future is in the making. It depends on the will 
 and upon the ability that is to say, on the knowledge and 
 energy, the grasp of a few men, and upon the permission 
 or acquiescence of many others. 
 
 Circumstances favorable to success exist. The question 
 is, whether advantage will be taken of them. That is the 
 question! It is not new. The circumstances have been 
 favorable since 1881. And many opportunities for action 
 have occurred since then, of which no use has been made. 
 And the statute of limitations has been running against all 
 settlement. 
 
 I am very willing to believe this page may find readers 
 to whom the principal statements above made will seem 
 so obvious as to be trivial and unnecessary. To such a 
 reader I have a word to say in explanation of them. 
 
 Of the many who now wish well to the project of 
 restoring silver to legal equality with gold, a very large 
 number act, or suffer, under the belief either that the pro- 
 ject is so sound and sensible that it will " get itself " adopted, 
 or that the unstable condition of the money basis of the 
 property and investments of mankind will, if left to itself, 
 provoke a crisis so disastrous as to make concurrence of 
 nations in remedial action an inevitable measuie of self- 
 protection. 
 
 To those who hold these views which are exceedingly 
 natural and utterly erroneous the remarks which my 
 critic finds so obvious as to be trivial and unnecessary, 
 
PRESENT AND FUTURE. 31 
 
 are by no means obvious. On the contrary, their truth is 
 excluded by the views of these excellent friends of parity 
 and peace. 
 
 And yet these are the very people whose support is 
 needed to make the project of restoring silver to its an- 
 cient parity a success. So, while the truths I have stated 
 are not obvious to them, still less are they trivial or un- 
 necessary. On the contrary, they are the truths most 
 necessary to be understood, to be grasped, to be held with 
 the utmost vigor of conviction. 
 
 If those who are now friends of the project in the 
 United States were only so convinced of the truths first 
 above stated as to be willing to use their influence in 
 favor of it, the project would very speedily become a 
 reality. 
 
II. 
 
 A REVIEW OF ANTI-SILVER ARGUMENTS. 
 
 BEPLY TO 
 
 MR. LEVASSEUR AND MR. DU PUYNODE. 
 
A REVIEW OF ANTI-SILVER ARGUMENTS. 
 
 REPLY TO ME. LEVASSEUE AND ME. Du PUYNODE, 
 
 In the Monetary Congress of the Exposition in Paris, 
 September 13, 1889.* 
 
 EXPLANATOEY. 
 
 The following pages are a translation from a steno- 
 graphic report, in French, as printed (with some trifling 
 corrections) for the official journal of the Congress. These 
 remarks were made in response to a request, coming from 
 various sections, that I should speak, and were made not 
 only without notes but with nothing which could properly 
 be called preparation. 
 
 If a friend on the silver side should reproach me for 
 neglecting the cause by not making a set speech, I should 
 
 * PIEERE-EMILE LiEVASSEUR (b. 1828;, member of the Institute, Profes- 
 sor in the College of France. The list of his financial and economic 
 works begins in 1854, and numbers among other important titles : The 
 Gold Question (Paris, 1858). The History of the Working Classes in France 
 from CcBsar^s Conquest to the Revolution (Paris, 1859). 
 
 MICHEL GUSTAVE PARTOUNAU DU PUYNODE (b. 1817), Doctor of Laws, a 
 founder and chief editor of the Journal des Economistes, President of the 
 Council-General of the Department of the Iiidre. The list of his finan- 
 cial and economic works begins in 1843, and contains among other impor- 
 tant titles: Money Credit and Taxation (Paris, 1853), and The Great 
 Financial Crises of France (Paris, 1826. ) 
 
36 SPEECH IN THE CONGRESS. 
 
 be able to make good a defence on the following lines, 
 which are worth mentioning, not for any personal reason, 
 but because they may throw light on some of the ob- 
 stacles to the success of the federation project. In the 
 effort to promote that project, in which I have been 
 active since it was conceived, the exposed and defence- 
 less condition of the cause in respect to prolixity has 
 often impressed me ; for even slight verbal excesses repel 
 and repress, rather than encourage, the wished -for grow- 
 ing interest and persuasion, when one is dealing with 
 such a subject which can well be pictured as a morass 
 of problems, intersected by a few safe paths, easy to walk 
 on, but also easy to stray from. The work of agitation 
 and education which has been going on in Europe for so 
 many years offers ample and varied illustration of what 
 I mean. 
 
 So far as an appearance on the platform at the Troca- 
 dero was concerned, I felt that my country's attitude as 
 to silver was sufficiently known, and that, personally, my 
 past services as a founder and promoter of the federation 
 project relieved me from the need of saying much. My 
 contributions upon the subject are numerous and not un- 
 known to monetary students, while speeches in support of 
 the policy which I had, I believed, justified in 187(5, in a 
 Treatise on Silver and Gold, were made in Paris in 1878 
 and 1881, before official delegates of nations, the majority 
 of whom were at last in favor of it. Our friends from 
 England and Germany, it appeared to me, were entitled 
 to the floor. This view, I may add, I had occasion to press 
 
EXPL AN ATORY. 3 7 
 
 in the proper quarters long in advance of the meeting of 
 the Congress. 
 
 Beyond the reception of reports from these still delay- 
 ing but expected allies in the coming Parity Federation, it 
 seemed to me that the opponents of this policy should have 
 their say. They should then be fully met on our side, face 
 to face, hand to hand, argument to argument in reply > to 
 use a term more familiar to a lawyer than to a professor, and 
 with their flanks exposed under the burden of proof. This 
 course I thought, under the circumstances, more suitable 
 than the academic procedure, which may be described as a 
 series of essays spoken or read, and perhaps formally 
 directed against each other, but in a vague and incon- 
 clusive manner a sort of parade charge through a mone- 
 tary bog, after which each party returns to its own camp. 
 
 In preparing this translation to be offered to the public 
 I have in several instances observed that there was too 
 great condensation of statement, and hence I have inserted 
 in brackets a few phrases or sentences in order to explain 
 by amplifying. 
 
38 SPEECH IN THE CONGRESS. 
 
 A EEVIEW OF ANTI-SILVER ARGUMENTS. 
 
 Mr. President and Gentlemen : 
 
 I shall address you very briefly, limiting myself to criti- 
 cism, partly from the scientific and partly from a practical 
 point of view, of the position taken by speakers who are 
 opposed, or who believe themselves opposed, to the move- 
 ment for the restoration of silver to its former condition of 
 money equal to gold ; equal, that is, before the law. 
 
 I regret that Mr. Levasseur is not here to-day, for I 
 desire particularly to indicate the great importance of 
 certain practical conclusions which he has set forth and 
 defended here. Mr. Levasseur has also told us that to be 
 a partisan of what is called " the Single Gold Standard," 
 is not a certificate of old age ; there are still young men as 
 well as old men who are in favor of it. He also observed 
 that there is a great difference of opinion on this topic, 
 and he sought to. investigate the source of this difference. 
 It appears to me, however, that he has not noticed the 
 true cause. The true cause is this, that there was an ortho- 
 doxy, and that this form of religion is disappearing, or, 
 rather, transforming itself into a new orthodoxy. 
 
 We respect the economists of the past. Eleven years 
 ago, gentlemen, I crossed the sea to bring you the pro- 
 posals of the United States proposals for a Monetary 
 Federation based upon the principle of Union which 
 
THE POLICY OF UNION. 39 
 
 had been consecrated by the consent of all the econ- 
 omists of France and of other countries. These propo- 
 sitions have been discussed here before you during some 
 days, by Englishmen, by Germans, by Hollanders, who 
 have expressed their adhesion to them. The funda- 
 mental difference between the new principle and the old 
 is this : we think that the accord of monetary laws should 
 relate to the material and not to the form. The Monetary 
 Unions known to the past have dealt chiefly with the 
 coins, the mintage, the stamp ; and the material of which 
 money is made has been a little neglected. We came, 
 therefore, not as innovators, but merely, as it were, to 
 propose an amendment, and ask for it the support of 
 economists who had already given their adhesion to the 
 principle of Monetary Union. 
 
 You see, gentlemen, it is perfectly natural, this differ- 
 ence of opinion of which the Honorable Mr. Levasseur has 
 spoken ; there are economists who propose an amend- 
 ment of science, and to obtain its acceptance of course, 
 that takes time. 
 
 But we, who have desired for so long a time that you, 
 who are opposed to us, should accept an amendment of 
 monetary science, we have the right to recall to your 
 minds that it is not probable that monetary science should 
 remain without improvement, without growth. We have 
 asked you to understand us. Gentlemen, I do not wish 
 to speak ill of any one ; I have no idea of making an at- 
 tack upon friends who are here, and mst together in an 
 international reunion. But I pray you to accept from 
 
40 SPEECH IN THE CONGRESS. 
 
 me a complaint. You have not yet done us the honor 
 fully to understand our propositions, and it is for that 
 reason that you are here to oppose the pro-silver move- 
 ment in England and in Germany, of which these gentle- 
 men have spoken. 
 
 I beg you to observe, gentlemen, that the thing we are 
 speaking of is practical in its nature. I ask those gen- 
 tlemen who have spoken, and those who are about to 
 speak ; I ask Mr. Passy * and others who are to address 
 you : Give us the reasons why England should not ac- 
 cept the proposition to form a Monetary Alliance with 
 France. [Applause.] 
 
 If you can show that monetary union is not a good policy. 
 I beg you to do so. But I will say this to you, if it is 
 not a good thing that Paris or France should have a stabJe 
 parity of money with London, with Calcutta, with San 
 Francisco, with Buenos Ayres, then demonstrate, I pray 
 you, why it is a good thing that Paris should have a stable 
 parity of money with Marseilles, with Bordeaux, and with 
 Calais. [Applause.] 
 
 There is the point ! This is a practical matter, gentle- 
 men. We are not here for the purpose of making aca- 
 demic eulogies on certain doctrines of science ; it is with 
 a view to action, to results, with a practical object, that we 
 desire to compare our ideas. 
 
 I have complained, gentlemen, that our adversaries 
 have not yet done us the honor of understanding us. I 
 
 * FREDERIC PASSY (b. 1822), member of the Institute of France, Deputy. 
 The list of his economic and political works begins in 1856. 
 
THE LAWS OF THE MARKET. 41 
 
 assure you that the divergency that exists between our 
 opinions can be harmonized, if our adversaries will do us 
 this honor. For us, gentlemen, it is necessary to under- 
 stand your position, your opinions. If we cannot do 
 that we can have no hope of persuading you. We began 
 with the study of the opinions you share, and it was be- 
 cause we understood them that we have been able to add 
 the corrections of which I have spoken. 
 
 I now allow myself, gentlemen, to call attention to certain 
 remarks which fell from speakers who have preceded me 
 to-day. There is an order of fact and opinion, the signi- 
 ficance of which was indicated by the honorable gentle- 
 man who has just spoken, Mr. Du Puynode, in referring 
 to the two metals as subject to the laws of the market. I 
 adopt for a moment the language used by the distin- 
 guished speaker ; I also say they are in the market. But 
 I ask, what market ? I aver that it is a market in which 
 a decision of the English Parliament can determine the 
 position of a metal. Mr. Du Puynode cannot deny that. 
 It is impossible. Everyone knows that if the English 
 Parliament passes a law, a law for gold money in England, 
 or a law for silver money in England, it will be gold in 
 one case, or silver in the other ; that will be money in 
 England. The market we are in, then, is a market in 
 which great nations are, so to speak, buyers. 
 
 Very well, we are here to say, or rather these English 
 and German representatives are here to say, after the invi- 
 tation of France and the United States (1881) : Yes, we 
 are ready that our countries respectively shall enter tliia 
 
42 SPEECH IN THE CONGRESS. 
 
 market as buyers, and we know that if we do so, if these 
 nations combine, they can fix the relative importance of 
 gold and silver. There are no other nations that have the 
 power to neutralize what these nations shall determine. 
 
 I shall now ask you, gentlemen, to consider for a mo- 
 ment the origin of these ideas on the " single gold stand- 
 ard," which have been set forth by speakers who are among 
 the partisans of this metal. What is the source, what is, so 
 to speak, the history of the evolution of this theory ? 
 
 My researches into the history of monetary policy* have 
 enabled me to ascertain that in the past, in most nations, 
 the system of money was 4 this : There was a principal 
 money and a secondary money. Everywhere throughout 
 
 the world there was the "single standard," if you desire to 
 
 X. 
 
 call it so, of silver, and another " standard," but a second- 
 ary one, of gold. [There was, therefore, a combined single 
 and dual standard.] 
 
 From the legislative point of view silver was superior, 
 gold the inferior. This is the system of money which has 
 continued down to our century. 
 
 Mr. Du Puynode has cited to you, and, I believe, Mr. 
 
 * The statements of historical facts given in this and following pages, 
 which are at variance with the hitherto accepted versions of history, are 
 set forth, and I believe, justified in " Historical Material," aud " Contri- 
 butions to the Study of Monetary Policy," in the Document of the 
 Monetary Conference of 1878 (Washington, 1879), and in "The Silver 
 Pound and England's Monetary Policy since the Restoration " (London: 
 Macmillan & Co., 1887), copies of which works were distributed to mem- 
 bers of the Congress through the hands of MM. Guillaumin & Co., pub- 
 lishers, 14 Rue Richelieu, Paris. 
 
LOCKE AND NEWTON. 43 
 
 Mannequin and another of our speakers, have cited to you, 
 a great work of Lord Liverpool.* Now, Lord Liverpool 
 thought he could transfer, from silver to gold, this posi- 
 tion of legal superiority. But he was not an enemy of 
 silver. His propositions embraced free coinage of silver in 
 England. 
 
 Mr. Mannequin has cited to you the names of Locke 
 and Newton. But they were as much in favor of two 
 money metals as we are. This has been proved. I shall 
 have the honor of bringing to your attention manuscripts 
 of Newton, which I discovered in the Archives in Lon- 
 don, and also a report of Locke which had not been gen- 
 erally known, all of which I published two years ago.| 
 It is now proven that for Locke and for Newton and for 
 all the elder English authorities the true system was a sys- 
 tem of money made of the two metals, the one superior, 
 the other in a legal position, so far as the thought, the in- 
 tention of the legislature was concerned, a little inferior 
 that is all. 
 
 And now I pray you, gentlemen, to glance (in passing) 
 at the practical importance, for our question of the origin 
 of the theory of the single gold standard, of the fact that 
 we have here to-day the representatives of public opinion 
 in England [to tell us that conversion in favor of silver is 
 proceeding in the home and native soil of that erroneous 
 doctrine]. 
 
 * A Treatise on the Coins of the Realm in a letter to the King. London. 
 1805. 
 t See preceding note, page 42. 
 
44 SPEECH IN THE CONGRESS. 
 
 Eleven years ago, during the Monetary Conference of 
 1878, I had the great pleasure of making the acquaint- 
 ance of Michel Chevalier,* to whom I was presented by 
 M. de Parieu. Chevalier spoke to me of the object of 
 the Conference, and said words which remain and always 
 
 * MICHEL CHEVALIER (b. 1806, d. 1879), member of the Institute of 
 France. He was seat, in 1833, by Mr. Thiers, to study the methods of 
 transportation in the United States. He published Letters on North 
 America (2 vols., Paris, 1836); Material Interests of France, Public 
 Works, Roads, Canals, Railways (Paris, 1838) ; History and Description of 
 Modes of Transportation in the United States (Paris, 1840). In 1840 he 
 succeeded Rossi as Professor of Political Economy in the College of 
 France. Among his numerous succeeding works I mention here his 
 Treatisa on Money, the first thorough and comprehensive work on the 
 subject, and his Probable Fall of Gold (Paris, 1859), which was translated 
 and reprinted in England by Cobden. He was made member of the 
 Academy of Moral and Political Sciences in 1851 ; was Counsellor of State 
 under the Empire; a Deputy, and Senator. 
 
 I have always regarded him as the controlling spirit in the monetary 
 thought of his time, and as the chief spiritual progenitor of the decisions 
 of the International Monetary Conference of 1867, and hence of the Anti- 
 Silver Movement. 
 
 The saying of Chevalier, above quoted, seemed to me the symptom of 
 an admission extending to the innermost core of the subject ; the admis- 
 sion, namely, that if we succeeded in one way we should succeed in the 
 other ; that if England should join with the other nations, the parity of 
 the metals would be maintained the contrary of which opinion still 
 plays its part as a tenet ; it is not yet dislodged entirely from the convic- 
 tions of the learned. Reference wiil be found to this point on a later 
 page. 
 
 The present representatives of the Chevalier tradition in France, the 
 gentlemen who addressed the Congress on the anti-silver side in such 
 force, including the accomplished young journalists who acted as its Sec- 
 retaries, illustrate the persistence of the mathematician's idea of the 
 
THE SINGLE STAND AKD. 45 
 
 will remain in my memory : " You will never succeed in 
 converting England" 
 
 There, gentlemen, is the basis of the opinion of all those 
 who oppose this movement for the restoration of silver, 
 which is now going on in England and Germany. France 
 and the United States, as you are aware, were gained long 
 ago. The main support of the opinions of those who 
 oppose us, is still and always England, and it is because 
 it was believed to be descended from ancestors so worthy 
 of respect as Locke and Newton that this idea, opinion, 
 or theory of the Single Gold " Standard " an idea which 
 belongs properly to mathematical sciences has been ac- 
 cepted in political and economic science. 
 
 Gentlemen, look about a little, if you will, and consider 
 what is your idea. Everyone makes his ideas for him- 
 self. What is your idea of a " standard " ? It is a weight, 
 
 " standard," to which I have referred on pages 45 to 47. The same 
 remnrk would be justified by the existing opinion in academic circles 
 in other European capitals, though such opinion makes itself heard 
 chiefly when attack is made upon the existing primacy of gold, which is 
 de facto the established " standard" of Christendom, that is to say, privi- 
 leged by law and by administrative regulation in Europe and America as 
 the ruling money, freely coinable and receivable everywhere. In each 
 country the gold party is still in some measure inspired with faith in its 
 metrical and mathematical concept ; ' standard" (etaloii), which it adopted 
 from the exact sciences iu the course of the long-continued agitation for 
 perfecting and unifying weights, measures, and units. 
 
 I may here appropriately observe that if Michel Chevalier had not be- 
 gun life as an engineer with an engineer's confidence in physical weights, 
 measures, and units the monetary history of his time might have been a 
 very different one. 
 
46 SPEECH IN THE CONGRESS. 
 
 says one. Very well, put it in a glass case where we keep 
 standards of weight. No, no ; that is not all. This weight 
 is circulating through the country. Then in the case of 
 money the weight is not everything. But where is the 
 " standard," gentlemen, where is the " standard," if it is 
 in the pockets of the people, and if it is a weight ? I beg 
 you, gentlemen, to make an effort to give substance, to rep- 
 resent in its reality, your idea of a " standard," and you 
 will see there is something wrong in it. 
 
 [You cannot with impunity predicate of values that qual- 
 ity of physical fixity and invariableness which the word 
 '" standard " represents, by reason of its general applica- 
 tion to the constants with which science measures space, 
 time, matter, and force.] 
 
 There is money, gentlemen what is money by law. 
 Talk of that and I understand you, and I care very little 
 what you say of a " standard." 
 
 Very well ; this theory of the single standard made of 
 gold took its rise in this way. There was a misunder- 
 standing that is all a misunderstanding about the 
 former " constitution of money," which was, as I have ex- 
 plained, silver as principal money, gold as secondary 
 money, but both of them money, and both fully money ; 
 the difference in their rank being a difference in the intent 
 of the legislator, not in their employment by the people. 
 Rights of coinage an'd legal tender power were the same. 
 But, in the plan of the legislator, the basis of the sys- 
 tem was silver. If it should become necessary to change 
 the ratio, then it was the gold coin whose weight must be 
 
THE SINGLE STANDARD. 
 
 increased or diminished. That was the legal difference 
 between the two kinds of money. Here, then, was the 
 misunderstanding [a confusion of concepts, an exaggera- 
 tion, you see, of the legal theory of unity at the ex- 
 pense of the facts, the actual and lawful duality], and 
 it was believed that the authority of Newton and Locke 
 and of other guiding spirits made for this [exaggera- 
 tion which ignored the fact, for a] theory, or rather for a 
 definition a tendency of opinion about money which 
 belongs rather to the physical sciences than to political 
 economy. 
 
 Based upon this error came the prestige of the United 
 Kingdom to fortify it ; the fact that the laws of this 
 great people, the people most advanced and best known 
 in the world of international trade the chief maritime 
 nation gave a marked preference and privilege to gold 
 money. The law for free coinage of silver still existed on 
 the statute book, but it had not been put in force. Well, 
 the prestige of the. English system impressed itself upon 
 general opinion ; nothing occurred to disturb the im- 
 pression ; and when the great agitation for the improve- 
 ment of Aveights and measures and units [that is, of real 
 " standards "] came, there was this error about the nature 
 of money at the foundation [of the general opinion of the 
 learned in these matters], and the experience and the au- 
 thority of the United Kingdom sustaining it. Thus it 
 came to pass that the mathematician's enthusiasm, enthu- ' 
 siasm for the metric system, misled economists [and states- 
 men] into the disastrous path Avhich the International 
 
48 SPEECH IN THE CONGRESS. 
 
 Conference of 1867 recommended the effort to abolish 
 silver money. 
 
 Here, gentlemen, you see the origin of opinions which 
 still even to-day have maintained a certain influence. 
 
 But, gentlemen, before leaving the tribune I allow my- 
 self the pleasure of noting that, after all, the opposition in 
 France on the part of the masters, the professors of science, 
 does not amount to very much 
 
 MEMBERS. [Oh! Oh!] 
 
 Mr. HOETON. According to the opinion of Mr. Levas- 
 seur ! 
 
 This is not merely my opinion, gentlemen ; it is the 
 opinion of Mr. Levasseur ; for he has proposed to you the 
 free coinage of silver. 
 
 A MEMBER. But under what conditions ! 
 
 Mr. HORTON. I will tell you the conditions. I regret 
 that Mr. Levasseur is not here. 
 
 The PRESIDENT. He was obliged to leave Paris this morn- 
 ing. He asked me yesterday to present his regrets to the 
 Congress. It was my forgetfulness that prevented my do- 
 ing so. 
 
 Mr. HORTON. You w r ere all here ; you all heard Mr. 
 Levasseur. According to what I heard, he was for the 
 free coinage of silver, at the market rate, was it not ? 
 
 MEMBERS. [Yes ! Yes !] 
 
 The SECRETARY, Mr. COSTE. That is to say, that before 
 coining a five-franc piece he Avould want not merely silver 
 -enough to coin it, but a third more. 
 
ME. LEV ASSE UK'S PLAN. 49 
 
 A MEMBER. They would have to begin again when the 
 rate changed.* 
 
 * NOTE. The member who said this was in error as to Mr. Levasseur's 
 proposition, at least unless both myself and Mr. Coste are wrong. "Be- 
 ginning again when the rate changes " implies what Americans have known 
 as the " cart-wheel dollar " the effort to coin a dollar " with silver enough 
 in it to make it equal to a gold dollar." To do this it would be necessary 
 to change the weight (and perhaps to recoin the existing stock) whenever 
 a change should come in the gold price of silver. 
 
 The effect of Mr. Levasseur's proposition would be so at least I 
 understood it aud explained it at the time to some of his friends, 
 that the Government would buy all the silver that should be offered to 
 it, and pay in five-franc pieces. In self-defence it would be obliged to 
 coin up the bullion. To maintain its silver coin at par with gold would 
 be necessary for self-preservation, and hence it could tolerate no discrim- 
 ination against silver coin. 
 
 The Government must therefore use silver coin on the same terms with 
 gold in its own transactions. In that case there would be, de facto, unlim- 
 ited legal tender for silver, so far as such transactions are concerned. In 
 presence of such an arrangement, with this avenue for use wide open, the 
 little fence set up on the side of compulsory legal tender (limiting it to 
 1000 or 500 francs) would be of no avail. The limitation would be nulli- 
 fied in practice, even if it were not repealed out of hand. 
 
 So, as I said in the above lines, What difference would it make? 
 
 I may usefully recall here that the vocabulary of money is very deficient 
 in the means of clear thinking and precision of statement on these heads ; 
 and French, which expresses "legal tender" by "liberatory force," or 
 "power," is no better off. 
 
 I have endeavored to reinforce the plain English of monetary talk (which 
 is not yet plain enough), by introducing the word "partial" partial legal 
 tender in the special sense of money which, in certain quarters, is legally 
 receivable without limit. With us, for example, the national bank 
 notes and silver certificates ai-e partial legal tender, being receivable for 
 public dues. 
 
50 SPEECH IN THE CONGKESS. 
 
 Mr. HORTON. Mr. Levasseur gave a great many argu- 
 ments ; he was very eloquent ; I remember with pleasure 
 that he said many brilliant things, and that they were 
 aimed at us, and all was very well said ; but at the end, he 
 proposed the free coinage of silver. 
 
 The SECRETARY, Mr. COSTE. Permit me to say that Mr. 
 Levasseur added that the silver coin should have its legal 
 tender limited to 500 francs. 
 
 Mr. HORTON. Five hundred francs, or 1,000 francs, or 
 something like that. 
 
 The SECRETARY. It was I who, in first addressing the 
 Congress, took occasion to point out that it ought not to 
 go beyond 1,000 francs, and in fact that the legal tender 
 power should not be so high, but Mr. Levasseur indicated 
 500 francs as the limit. 
 
 Mr. HORTON. According to my remembrance he spoke 
 of 500 francs, but he also spoke of 1,000 francs, and added 
 at the end, " something like that." 
 
 But what difference does it make ? If all the opposition 
 which exists against the movement in England and Ger- 
 many, the object of which is to persuade these nations 
 or governments to ally themselves with France and the 
 United States if all this opposition, I say, melts down 
 and disappears in a proposition like that of Mr. Levas- 
 seur, I have great pleasure in assuring my friends from 
 England and Germany that we need have little solicitude 
 for the future. If these gentlemen who are opposed to 
 us are of that way of thinking, they are on the right track ; 
 
MR. LEVASSEUR'S PLAN. 51 
 
 they have made good progress ; they are at last coming 
 over to be our friends and to stand by our side. 
 
 These gentlemen from England have come here on the 
 invitation of the Direction of the Exposition ; they have 
 given a report on the progress which has been made since 
 the silver question was left, so to speak, at England's door, 
 at the close of the Conference of 1881 and 1882 ; and these 
 other gentlemen have come from Germany for a similar 
 object. They are curious to see if the men of science who 
 are here assembled can say anything to convince them 
 that they are wrong ; that they must turn back, retrace 
 their steps, and abjure their opinions. 
 
 Well, gentlemen, when the practical outcome of a dis- 
 course so eloquent as that of Mr. Levasseur is the free 
 coinage of silver, I assure you we are very near a general 
 agreement. 
 
 Mr. FREDERIC PASSY. It is not free coinage at the rate 
 of 151. 
 
 Mr. HORTOX. A word more ! The honorable Mr. Du 
 Puynode, who has spoken of England as the native land 
 of the single gold standard, also added some words of en- 
 couragement as to the condition of England in these late 
 years. One would suppose that is, if I heard him 
 rightly that there had been no " hard times "* there. 
 
 Mr. Du PUYNODE. I said there had been hard times, 
 but that the crisis has passed for England. 
 
 Mr. HORTON. If the crisis has passed we are all re- 
 joiced, are we not? 
 
 * Crise. 
 
52 SPEECH IN THE CONGRESS. 
 
 But what I wish to point out to you is this : the prac- 
 tical question for this assembly is to know whether the 
 outlawry of silver has been an efficient cause of hard times 
 in the past. If that is the fact, the thing to do is to pre- 
 vent the outlawry of silver in the future. [Applause.] 
 
 Well, on this question, I have heard nothing, and yet it 
 is the chief practical question. We are not here to inquire 
 if we are feeling well. [Laughter.] We want to know if 
 there is something to be done to ward off any disease that 
 is in the air. [Applause.] 
 
 Now, gentlemen, I have one word to add touching the 
 attitude of those who defend the outlawry of silver. I 
 point out to you that the very existence of their opinions 
 to-day is due to the fact that their propositions were not 
 adopted. The demonetization of silver ! we can use the 
 words if we wish but the great fact, the important fact, is 
 that the demonetization of silver did not take place ; the 
 movement was checked, and it went no further. 
 
 If that movement had gone on we should have witnessed 
 a different state of affairs [we should have witnessed dis- 
 asters far beyond all that has oppressed mankind since 
 1873.] This is what we wish to explain, and what the 
 speakers who oppose the restoration of silver ought to be 
 denying. But they cannot do this. 
 
 The sale of melted silver dollars in Germany was closed 
 ten years ago. Gentlemen, if you wish to get to the root 
 of this question I give you notice of this because we 
 expect you to do so, to recognize the significance of the 
 issue which our friends from England and Germany have 
 
THE POLICY OF DISUNION. 53 
 
 put before you ask for yourselves, or let us ask you to 
 tell us, what would have been the result if the French 
 dollars* which we had the pleasure of inspecting this 
 morning in the Bank of France, had been sold ? 
 
 There is the point ; the point about which jou should 
 take sides. Your advice is asked ; people wish to know 
 whether you are in favor of demonetizing silver. If you 
 are not in favor of it, we beg you to say so Mr. Levas- 
 seur has already done this and we ask all speakers who 
 are opposed to the silver movement in England and Ger- 
 many to tell us what ground they would have taken if such 
 a sale had occurred, and what would happen if they should 
 succeed in inducing the governments to undertake a gen- 
 eral attack against silver. 
 
 I thank the assembly for its kindly reception. [Ap- 
 plause.] 
 
 * 1,250,000,000 francs' worth in 5-franc pieces. 
 
III. 
 
 QUESTIONS 
 
 OF 
 
 THE EOYAL COMMISSION 
 
 ON 
 
 GOLD AND SILVER, 
 
 AND 
 
 ANSWERS. 
 
 55 
 
PKEFATOKY. 
 
 The following letter and enclosure gave the occasion 
 and motive for preparing these pages : 
 
 GOLD AND SILVER COMMISSION, 
 8, EICHMOND TERRACE, LONDON, 
 
 August, 1887. 
 
 SIR : The Commission appointed by Her Majesty's Gov- 
 ernment in the course of last year to investigate the re- 
 cent changes in the relative values of the precious metals 
 have made some progress with their inquiry, and have taken 
 a considerable body of evidence from persons in this 
 country ; but they feel that they would have imperfectly 
 discharged the duty imposed upon them if they had not 
 had recourse to some of the many competent authorities 
 on the subject who reside in foreign countries. 
 
 It is, however, obviously impossible to elicit the views 
 of these gentlemen by the usual method of oral examina- 
 tion, and the Commission have therefore drawn up the 
 enclosed paper of questions, comprising the more im- 
 portant points on which they are anxious to obtain the 
 opinion of those who have studied the subject. 
 
 Should you feel disposed to assist the Commission in 
 this way, they would be very much obliged if you would 
 favor them with written answers to any or all of these 
 questions. 
 
 If, however, you are unable, for any reason, to comply 
 with the invitation of the Commission, they desire me to 
 convey to you their apologies for having ventured to 
 trouble you with this letter. 
 
 57 
 
58 QUESTIONS OF THE ROYAL COMMISSION. 
 
 I forward under another cover a copy of the First Re- 
 port of the Commission, which has been recently issued. 
 I have the honor to be, sir, your obedient servant, 
 
 (Signed) GEO. H. MURRAY, 
 
 Secretary to tJie Commission. 
 
 To Mr. 8. DANA HORTON. 
 
 The above circular letter was sent to a limited number 
 of persons in different countries, and replies, to the num- 
 ber of eight I believe, including the replies of the Hon. 
 David A. Wells and the following, were printed in the ap- 
 pendices of the Commission's Report. 
 
 The enclosure is as follows : 
 
 QUESTIONS. 
 
 1. To what do you attribute the fall in the value of sil- 
 ver, as compared with gold^ since 1874 f 
 
 2. What probability is there of a continuance of the fall f 
 
 3. To what do you attribute the fall in the wholesale 
 prices of many commodities which has been in progress 
 during the last 10 or 12 years f 
 
 4. Has it extended to (&) retail prices (b), wages and other 
 payments for services rendered (c), land and houses f 
 
THE QUESTIONS. 51) 
 
 5. Has the fall resulted in any material prejudice to the 
 commercial or general interests of the world f 
 
 6. Do you consider that the countries using the gold 
 standard,, or any of them, are suffering from an injurious 
 contraction of the currency which might have been obviated 
 or mitigated by an increase in the supply of gold f 
 
 7. To what extent and in what way are prices affected by 
 the quantity of the metal or metals used as standards of 
 value f 
 
 8. What is the relation, if any, between the supply or 
 quantity of the precious metals and the fluctuations of 
 credit f 
 
 9. Has there been during the last 15 years any important 
 development of the system of cheques, bank credits, bills of 
 exchange, or other means of economizing the use of the 
 precious metals f 
 
 10. Do you consider that an international agreement 
 could be made for the free coinage of gold and silver as 
 legal tender money at a fixed ratio f 
 
 11. Is it in the power of Governments to maintain such 
 a ratio if agreed upon; and would the practice of the com, 
 mercial world follow the law f 
 
60 QUESTIONS OF THE ROYAL COMMISSION. 
 
 12. What would be the effect of such an agreement, if 
 carried out, upon (a) prices, and (b) the production of the 
 precious metals f 
 
 13. Do you consider an international agreement for bi- 
 metallism possible on any other ratio than 
 
 14. Failing an international bimetallic agreement, what 
 measures could be adopted by the commercial nations of the 
 world for giving increased stability to the relation between 
 gold and silver f 
 
 15. It is argued that, in the absence of bimetallism, the 
 effect of any disturbance of the currency is limited to half 
 the currencies of the world, and thereby increased in inten- 
 sity. Do you consider this view correct; and, if so, do 
 you think the evil a serious one f 
 
 16. If the effect of such disturbances could be spread all 
 over all countries, would greater stability of the standard 
 of value be secured thereby f 
 
QUESTIONS OF THE ROYAL COMMISSION ON 
 GOLD AND SILVER 
 
 ANSWERS. 
 
 I. 
 
 QUESTION I. 
 
 To what do you attribute the fall in the value of silver, 
 as compared witJi gold, since 1874: f 
 
 DEFINITION (relating also to other QUESTIONS). 
 
 The form of the QUESTION " to what do you attribute " 
 a certain phenomenon ? opens a wide field. It brings into 
 view the entire range of elements which have combined 
 their influence to produce the phenomenon : and the 
 temptation arises in answering the question either to con- 
 template with indifference both causes and conditions, or 
 fail to recognize the restraints upon freedom of choice 
 among them. In a certain sense each of these regions is 
 a little world in itself, for there is an endless multiplicity 
 of factors distributed in time and space, without the con- 
 current existence of which the monetary situation could 
 not have been exactly what it is. For the purpose of 
 gaining any useful generalization as to that situation, the 
 range of view must be limited to the causes and condi- 
 tions that are close at hand, and they must be distin- 
 guished, the controllable forces must be recognized as 
 such, the subject looked at in mass and in perspective. 
 
 61 
 
62 QUESTIONS OF THE ROYAL COMMISSION. 
 
 These observations, however obvious and common- 
 place, would be germane if it were for a purpose purely 
 scientific that the labors of the ROYAL COMMISSION were 
 undertaken ; if it were merely an Economic Academy 
 gradually accumulating the materials for an exhaustive 
 Dictionary or Cyclopaedia of Monetary Science. This 
 however is not understood to be its character. However 
 important the contribution which it makes to the knowl- 
 edge of monetary economy, its function is primarily a prac- 
 tical one, that of a Special Council of State, its function 
 as a scientific body being tributary to its function as a 
 political body. Its members, deliberating upon the reme- 
 dies of existing evils and the means of preventing future 
 ^vils, are to act by recommendations, positive or negative, 
 ^ expressing themselves favorably or unfavorably, upon a 
 proposal to modify English monetary laws ; and are, at the 
 same time, to exert an influence, favorable or unfavorable, 
 upon the prospect of the adoption of modifications of their 
 laws by the legislatures of other nations, an influence 
 which cannot fail seriously to affect British interests. The 
 point of view of the ROYAL COMMISSION is, then, really that 
 of the learned law-giver at the moment of decision, or of 
 drafting a decree. Although it deals with a subject pre- 
 senting many problems unsolved or insoluble, its object is 
 to act ; as a council of astronomers would reform a calen- 
 dar, or select a meridian, without determining the chemis- 
 try of the sun, or completing a catalogue of the stars. 
 
 In so far as the ROYAL COMMISSION shall affect legisla- 
 tion, whether positively or negatively, passively or ac- 
 
THE TASK OF THE ROYAL COMMISSION. 63 
 
 tively, by leaving things as they are, or by suggesting 
 change, it directs the will of nations for good or for ill. 
 Its choice between the two paths which lie before it must 
 mark a turning-point in history. The paths are well dis- 
 tinguished ; for a decade of controversy has been explor- 
 ing these fields of thought, and all mankind have an interest 
 in the decision. Further light is to be thrown upon the 
 questions : Has the general outlawry of silver money pend- 
 ing since 1873, been beneficial to England ? Will the 
 restoration of silver to permanent monetary equality with 
 gold by joint action of nations be beneficial to England ? 
 questions upon which England gave some answer before 
 the nations in the International Monetary Conferences of 
 1878 and of 1881. Impetus will be given to decision of 
 the questions : Shall England promote Monetary Union or 
 Monetary Disunion ? Shall England aid in giving stability 
 or instability to the foundation of the valuations of man- 
 kind ? 
 
 To deal with these issues is the gist of the mandate of 
 the ROYAL COMMISSION. 
 
 The course of definition, then, which I am now seeking 
 to present, that which, with a view to action, would in- 
 sure a grasp of the situation as a whole, is the course 
 which the COMMISSION takes in order to fulfil its trust, to 
 " rise to the height of its great argument." Hence, one who 
 seeks to give answer to the QUESTIONS of the COMMISSION 
 will do well to regard the same perspective in his replies, 
 as far as his vision may reach. But to do this, and to 
 guaranty thorough understanding of these replies on the 
 
64 QUESTIONS OF THE ROYAL COMMISSION. 
 
 part of a reader, they must be seen and be shown in their 
 relations ; it is necessary not only to declare the stand- 
 point, but to define it with particularity. To this end, a 
 certain energy of precision is required, to overcome an 
 existing tendency toward confusion, an opaqueness of the 
 very atmosphere by which all readers of the day are sur- 
 rounded. There is an omnipresent never-resting pressure, 
 a momentum of opinion, a gravitation of interest, which 
 resists an adequate recognition of the obvious truths 
 heretofore set forth, and which therefore calls for a cor- 
 responding energy in their vindication. I do not here 
 refer merely to the well-known obscurity and difficulty of 
 the subject by reason of which the questions of the 
 ROYAL COMMISSION, though brief in themselves, would 
 need a volume for exhaustively explicit treatment but to 
 a peculiar tendency toward error in the minds of many 
 men of learning, the nature and origin of which is given 
 by the following facts : 
 
 These anti-silver laws, whose effects the EOYAL COMMIS- 
 SION is called upon to study, were not adopted without 
 deliberation. The advice of counsel was taken, men of 
 action submitted to men of thought, and the advising 
 counsel were the learned of a generation. It was the 
 general consensus of the learned opinion of the time 
 which these laws were intended to reflect. The republic 
 of monetary learning, an iinperium in imperils, an eco- 
 nomic church which respects no national boundaries, was 
 unanimous. If believed in the Unification of Money in 
 security of valuations, in simplification of the means of 
 
UNION SOUGHT AND DISCORD GAINED. 65 
 
 exchange, in facilitating international trade and invest- 
 ment an aim nobly in unison with the progressive spirit 
 of an age whose glory it is already to have made giant 
 strides in this direction, by putting nature's forces in har- 
 ness, as well as by cultivating the faculties of men. This 
 was the aim, the object, the end. What could be more 
 worthy ? 
 
 But of the means to attain this end what account is to 
 be given ? What was this means ? The outlawry of 
 silver, the legislative or administrative exclusion of silver 
 from legal privileges hitherto enjoyed equally with gold. 
 Did this tend toward the Unification of Money and the 
 benefits it was to bring in its train ? This is one phase of 
 the subject before the ROYAL COMMISSION. In considering 
 it, there are at least two hypotheses that must be enter- 
 tained, namely, either that this repeal of laws equalizing the 
 metals w r as wise, or it was unwise. The inquiry can hardly 
 be carried on without entertaining these two suppositions. 
 If the latter supposition, which I aver to be true, be dis- 
 passionately examined with some deliberation, it will 
 appear that it entails precisely the conclusions as to the 
 present confused state of monetary learning to which I 
 have referred. It must be assumed then that, in the field 
 of action, lay error. The means was not only inadequate 
 for its special end, sacrificing substance to shadows, but 
 was disastrous in the wider field of its influence. 
 
 Failing, however, to perceive all this in advance, the 
 learned world was betrayed into acting as sponsor of a 
 mistaken scheme of Unification, accessory before the fact, 
 
66 QUESTIONS OF THE ROYAL COMMISSION. 
 
 aider and abetter in the great overt acts of the anti-silver 
 movement, the anti-silver laws of Germany, which were 
 followed in natural sequence by the anti-silver laws of 
 other states. The event is unique, without precedent. 
 For the first time in history has a theory of the closet 
 been so abruptly transformed into jus gentium, the law 
 common to the nations. How far, then, did the inter- 
 preters of science feel themselves committed to justify the 
 correctness of their practical suggestions ? How far did 
 they recognize the means which they had suggested to 
 attain an end, as merely tentative, as an experiment, as 
 the object of scientific curiosity rather than of partisan 
 attachment ? Did they feel themselves committed to the 
 error as well to the truth, to the mistaken means, as well 
 as to the justified end ? 
 
 The question is of decisive practical importance. 
 
 Certainly the average man would naturally regard them 
 as so committed, and, human nature being in full opera- 
 tion, it is quite plain that it required a certain rare eleva- 
 tion of spirit, for one who had borne a part in the anti- 
 silver movement, to grant access to his mind for that 
 course of study of the practical working of the change 
 wrought by anti-silver laws, which showed he had been 
 in the wrong. Beside this the mere momentum of ac- 
 complished facts, the complexity and obscurity of the 
 subject, made such study an effort which could not fail 
 to be unwelcome, and would easily seem to be unnecessary. 
 To whatever extent, then, economists failed to support a 
 new and heavy burden of learning and of unlearning, an 
 
ADMISSION OF A GREAT MISTAKE. 67 
 
 unique array of forces was summoned to defend error. 
 Conviction must take time, and until it becomes general, 
 fallacious doctrine must here and there be flourishing 
 under the shadow of authority, an abnormal atmosphere of 
 monetary opinion must obscure, refract, or distort the image 
 of truth. It is then, quite in the natural order of events 
 that mighty forces should be at work to prevent recogni- 
 tion of the truth as to the questions before the COMMIS- 
 SION ; a resistance for which the vitality of a race, or of a 
 religion, alone affords adequate parallel. 
 
 To prove this steadiness of pressure, the very existence 
 of the ROYAL COMMISSION is itself a witness. It was com- 
 missioned in 1886 to perform a task, a goodly part of 
 which a SPECIAL COMMITTEE of the HOUSE of COMMONS, 
 appointed in 1876, might, could and, it may be argued, 
 should, have performed. Ten years of the life of a 
 generation, a goodly fraction of the most active years of 
 the XIX century, are thus, in a certain sense, a measure 
 of these forces. 
 
 For whatever obstacles to conviction and bent toward 
 fallacy there may be, the special subject now considered 
 supplies outwork and bulwarks and fortress and the very 
 inner and final citadel of strength. One may say, indeed 
 the very configuration of the ground combines the natural 
 advantages for the defence of error. 
 
 It is, upon final analysis, the free will of men which 
 affords the staple of discussion, but the free will of men 
 moving as it were, in two distinct masses, the one belong- 
 ing to the individual acting separately, the other to the 
 
68 QUESTIONS OF THE ROYAL COMMISSION. 
 
 organized will of the community, the state, acting through 
 governments. The difficulties of adequate distinction be- 
 tween the two orders of volition, of assigning its true place 
 to each, offer amplest field for a confusion which must 
 surely tend to obscure the duty of statesmanship, whose 
 task consists in overcoming inertia, in stimulus and direc- 
 tion and control of the will of nations. Thus the mere 
 enthusiasm of the votary of science making " better the 
 enemy of good," as the French phrase has it may tend, 
 by delaying action, to defeat the true object of inquiry. 
 
 It is with a view to these various considerations that the 
 present response to the invitation of the COMMISSION is 
 conceived ; and in order, as far as may be, to guard against 
 misapprehensions which may naturally arise, I have pre- 
 sented laconic replies surrounded, as it were, with signals 
 of definition and explanation. 
 
 ANSWER. 
 
 I attribute the fall in the value of silver as compared 
 with gold, to anti-silver laws and governmental regulations, 
 in the western nations. 
 
 EXPLANATION. 
 
 Throughout the entire pendency of the breach of parity 
 between silver and gold, the opinion has been currently 
 expressed, that this fall is attributable to certain other 
 alleged causes, which are hereinafter set forth. 
 
 (A.) A Preference for gold or antipathy to silver. 
 
 The error of this view consists (1), in an erroneous in- 
 
ANSWER AND EXPLANATION. 69 
 
 terpretation of the word " cause," or (2), in a misapprehen- 
 sion touching the practical operations of business, the use 
 of money. 
 
 (1.) The word "cause" is used to designate the motives 
 which led the individual rulers of Germany to establish 
 gold, and reject silver, money, and of France to check the 
 rate of silver mintage, etc., and it is assumed that prefer- 
 ence for gold and antipathy to silver are an adequate char- 
 acterization of these motives. Without stopping to inquire 
 whether this characterization is correct it is sufficient to 
 point out that it is irrelevant. What we are concerned 
 with is a deed, an act, not an opinion, or intention, just as 
 in a surgeon's diagnosis of a gunshot wound it is indifferent 
 whether the shot was fired intentionally or by accident. 
 
 (2.) A field of importance is, in imagination, opened to 
 this " preference for gold," by flatly ignoring the most obvi- 
 ous facts about the uses of money and the nature of the 
 institution of money. The exertions of the visionary in 
 the defence of anti-silver laws have offered a parallel to 
 the speculations of the mediaeval schoolmen. There is no 
 lack of opinions on money which are explicable only on 
 the ground that their authors are ignorant of the existence 
 of laws of Legal Tender, Coinage, Banking, etc., or imagine 
 that, if there are such things, they are of no effect, that the 
 citizen pays no attention to them, acting exactly as he 
 would act if there were no such laws. As is usual in case 
 of delusion, the sense of humor here shines by its absence, 
 for these products of a sophisticated imagination exist for 
 the special purpose of defending nothing less than actual 
 
70 QUESTIONS OF THE ROYAL COMMISSION. 
 
 laws of Legal Tender and Coinage, anti-silver laws, gold- 
 favoring laws, to which their advocates ascribe great effi- 
 cacy. 
 
 (B.) The slightly increased production of silver from the 
 mines has been regarded as a cause. 
 
 (C.) Certain special instances of a reduction of the em- 
 ployment for silver, which are familiar to the COMMISSION, 
 have been treated as a cause. 
 
 The error of B. and C. lies in treating as paramount 
 and efficient a factor whose influence is only ancillary and 
 subordinate. While the slightly increased output of sil- 
 ver, and the India Council Bills, etc., exerted a depressing 
 influence on the market ratio of silver to gold, yet they 
 were only enabled to do so by anti-silver laws. 
 
 But for these laws they would have had no effect. 
 Their effect is thus a part of the effect produced by the 
 anti-silver laws, hence they are not entitled to be regarded 
 as a cause of the fall, in the proper sense of the words. 
 That these points are so often ignored is due to the con- 
 fusion analyzed in the DEFINITION. I am not aware that 
 the facts have been categorically disputed. To disprove 
 my point, it would be necessary to maintain that if the 
 Mints of Germany, Holland, France, Belgium, etc., and of 
 the United States, had remained open to free coinage of 
 silver, gold would still have risen above the French par in 
 silver, by reason of Nevada's silver product and India's 
 payments in London ; an opinion which is obviously erro- 
 neous. 
 
THE FUTURE OF SILVER. 71 
 
 II. 
 
 QUESTION II. 
 
 What probability is there of a continuance of the fall ? 
 ANSWER. 
 
 The chief element in the calculation of this probability 
 is necessarily the action of governments, and the action of 
 governments will presumably be affected to an important 
 extent by the action of the ROYAL COMMISSION. 
 
 To discuss the probable action of the United States, of 
 Germany, of France, or of other Powers, without reference 
 to the alternative possibilities of a decision on the part of 
 the British-Indian Empire, a decision which, in its prelimi- 
 nary form of a Report of the ROYAL COMMISSION, is regarded 
 as impending, would be futile. In estimating the impor- 
 tance of this decision, from the international point of view, 
 essential data are embodied in the conclusions of the two 
 International Monetary Conferences called to discuss the 
 proposal of a concurrent regulation of the legal position 
 of the money metals. 
 
 In the Conference of 1878, called by the United States, 
 in which Germany was not represented, the delegates of 
 the other principal Powers united in a declaration recog- 
 nizing " that it is necessary to maintain in the world the 
 monetary functions of silver as well as of gold." In the 
 Conference of 1881, called by France and the United 
 States, the attitude of representatives of the British-Indian 
 Empire and of the German Empire, the chief Powers 
 
72 QUESTIONS OF THE ROYAL COMMISSION. 
 
 whose adhesion to the programme of concurrent action was 
 withheld, nevertheless respectively recognized an interest 
 in the carrying-out of that programme, offering certain 
 measures to be adopted within their respective jurisdic- 
 tions as a contribution to its success. 
 
 To whatever extent, then, this action of the two Powers 
 can be held to have any binding effect, the question of 
 principle, touching the main issue within the considera- 
 tion of the EOYAL COMMISSION, was admitted, and the issue 
 was narrowed to the question of amount, How much these 
 Powers were respectively prepared to do in order to bring 
 about a settlement of the existing conflict of Coinage 
 Systems. 
 
 The quota of co-operation actually offered not having 
 been looked upon by other nations as sufficient, a long 
 period of monetary inaction, so far as modifications of 
 monetary laws are concerned, has followed, which seems 
 to imply an expectant attitude, looking especially to a 
 new departure on the part of Great Britain. 
 
 III. 
 QUESTION III. 
 
 To what do you attribute the fall in the wholesale prices 
 of many commodities which has been in progress during the 
 last 10 or 12 years. 
 
 DEFINITION. See QUESTION I. 
 
 ANSWEE. 
 
 I attribute the general fall of prices to the anti-silver 
 
THE APPRECIATION OF GOLD. 73 
 
 laws and regulations adopted and carried out in various 
 states since 1871 ; but this assertion cannot properly be 
 held to imply necessarily that if there had been no anti- 
 silver laws there would have been no fall of prices, nor 
 that there would have been a rise of prices. No prob- 
 abilities of this kind can be laid down with precision of 
 detail. But from the point of view of the legislator, 
 responsible for the action of the state, and treating the 
 action of individuals, in all the minutiae of processes 
 of production and distribution, as merely giving the 
 conditions amid which he is to act, it is sufficient 
 to say with certainty that if there had been no anti- 
 silver laws the fall of prices might not have occurred, 
 and that the greater part of that fall could not have 
 occurred. Whatever doubt may be justified in the 
 matter, the opposition to the outlawry of silver is entitled 
 to the benefit of the doubt ; the presumptions are against 
 the outlawry of silver. They are likewise in favor of its 
 being set aside now. 
 
 EXPLANATION. 
 
 Among the current explanations of the general fall of 
 prices (or appreciation of gold, which is only another 
 mode of describing the same event) prominence is often 
 given to certain notable features of modern economic life ; 
 namely, new inventions, improved means of transit, trans- 
 port, and communication, new methods of business, etc., 
 all tending to lessen the labor of production. It is there- 
 
74 QUESTIONS OF THE EOYAL COMMISSION. 
 
 fore important to ascertain what place is to be given to 
 these elements of the situation. 
 
 Referring to the considerations presented in the defini- 
 nition of QUESTION I, I first observed that these elements, 
 from the standpoint of monetary policy, occupy at best 
 an inferior and subordinate place, as affording merely the 
 conditions with reference to which the legislator has to act. 
 If the tendency of their influence upon prices is down- 
 ward, and thus to produce an injurious rise in the pur- 
 chasing power of money, the business of the legislator is, 
 if possible, to counteract this tendency, and if, as has been 
 stated, the maintenance of silver in parity with gold would 
 have this result in any important degree, then the practi- 
 cal question is decided in favor of silver. The same re- 
 sponse applies to the reasoning, that sometimes attains 
 currency, about overproduction, which should rather be 
 named under-consumption. 
 
 But the anti-silver argument based upon new in- 
 ventions and improved methods is not content with 
 elevating conditions into causes. It goes further. It is 
 in substance maintained sometimes in specious, vague, 
 or confusing language that because new inventions and 
 improved methods are economic benefits, therefore the fall 
 of prices is an economic benefit. Here lies the real 
 strength, because here lies the seductiveness of the argu- 
 ment. In essence, this reasoning is merely a resolute beg- 
 ging of the question, and puts the cart before the horse. 
 This will be apparent from the following analysis. 
 
 If a general fall of prices, or rise in the value of money. 
 
SOPHISMS ABOUT APPRECIATION OF GOLD. 75- 
 
 is an evil at all, it is an evil because it is a derangement of 
 the terms of existing investments and obligations, and a 
 derangement peculiarly unfortunate ; being more injurious 
 in proportion than its complement, a fall in the value of 
 money, because it disturbs the adjustment of the machinery 
 of business and so checks the normal growth of enterprise. 
 Evidently no peculiarity of origin of the rise in the value 
 of money can divest it of this latter character ; it must be 
 a derangement, no matter how it comes to pass. To deny, 
 then, that such a dislocation of values is an evil at all is 
 an obvious error. It implies, in fact, the impossible opin- 
 ions that it is not desirable that money should remain 
 stable in value, and that " hard times " are not an evil. 
 From this it is but a short step to affirm that it is the busi 
 ness of statesmanship to prevent prosperity ! . 
 
 We proceed to consider the argument which defends 
 this evil, as a price, so to speak, paid in order to secure 
 the admitted economic benefits of new inventions and im- 
 proved methods, and therefore more than made good by 
 the profits of the operation. 
 
 The illusions embodied in this view- will, I think, be dis- 
 closed by the following analysis. "What is the difference 
 of effect between an invention that does not lower prices 
 at all to imagine an extreme case and an invention 
 which lowers them? Does it not consist in this, that in 
 the latter case it is (what economic science knows as) " the 
 consumer " who has the gain, which in the former case 
 would go to " the producer ?" Can there be any doubt 
 that the admitted benefits of new inventions and of im- 
 
76 QUESTIONS OF THE ROYAL COMMISSION. 
 
 proved methods can be obtained without paying such a 
 price, so ruinous a price, as a general rise in the value of 
 money ? There should be no doubt. It is not necessary, 
 it never was (strictly) necessary, to pay this price. (See 
 0, page 82.) 
 
 That this truth is left out of sight is probably due to an 
 exaggeration of the importance of the new inventions and 
 improved methods which have come into play since 1873. 
 Offering, as they do, the strongest, because most seductive, 
 argument to defend the anti-silver laws from the charge 
 of having produced a ruinous dislocation of values, so 
 much has been said about these new inventions and methods 
 since 1873, that men forget what happened before 1873 ; 
 and forgetting what happened before 1873, they ignore 
 what might have happened since 1873 but for these same 
 anti-silver laws. 
 
 Before 1873, a marvellous development of " cheapen- 
 ing r ' inventions and methods took place, while there was 
 no fall of prices, and also during periods when there was a 
 rise of prices. Why could not the same experience be 
 repeated ? Evidently it would have been repeated after 
 1873, if the conditions of quantity (parity. See Def. of 
 Q. YI) had been maintained by a proper course of mon- 
 bary legislation. The entire plea of new inventions and 
 new methods is thus put out of court. 
 
 It remains to consider some special points which have 
 been relied upon to excite sympathy for this plea. Spe- 
 cial reasons are alleged why a fall of prices is a benefit : 
 namely that it tends to improve the relative position of 
 
WAGES AND THE UNEMPLOYED. 77 
 
 the manual-labor classes. 'If this entry to its credit were 
 correct (in certain cases), it would be more important, 
 than it is, to note that the debit entries are also to be 
 taken into consideration ; that the annual return for 
 manual labor is not to be ascertained by multiplying an 
 average of daily wages by 300, but is a question of fact 
 to be proved by testimony, in which the number of " un- 
 employed," the regularity and certainty of work for the 
 employed, would come under examination. 
 
 But the credit entry is not correct. This entry is not 
 to be made correct by the mere observation that the pro- 
 ductiveness of work, in obtaining satisfaction of his needs 
 for the worker, has actually increased of late years. To 
 rely upon this observation is to reveal confidence in a 
 false issue. The true issue is : Would the satisfaction of 
 the worker have been less, if there had been no anti-silver 
 laws f I am not advised that any apologist of anti-silver 
 laws has even tried to establish the affirmative of this issue. 
 
 IV. 
 
 QUESTION IV. 
 
 Has it extended to (a) retail prices, (b) wages and other 
 payments for services rendered, (c) land and houses f 
 
 ANSWER. 
 
 On these subjects I have no fruits of original research 
 to present, and can therefore add nothing to the evidence 
 already before the Commission, unless by way of analysis 
 and criticism of that evidence. 
 
78 QUESTIONS OF THE ROYAL COMMISSION. 
 
 In a general way an affirmative reply to QUESTION IV 
 is indicated in the answers to other QUESTIONS, and some 
 brief criticism is also set forth touching certain inferences 
 which have been drawn from the facts toward which 
 QUESTION IV is directed. 
 
 V. 
 
 QUESTION V. 
 
 Has the full resulted in any material prejudice to the 
 commercial or general interests of the world f 
 
 DEFINITION. See QUESTION /. 
 ANSWER. 
 
 Yes, so far as a vitiated system of money can affect 
 them. Of course the respective degrees to which various 
 national systems of money have been so affected cannot 
 be stated with precision. 
 
 EXPLANATION. See also QUESTION ///. 
 
 The general importance of stability of average purchas- 
 ing power and of parity between monetary systems con- 
 nected by trade or investment are elementary, rudimen- 
 tary, principles of monetary policy : very much as the rule 
 of the majority is an elementary principle of representa- 
 tive bodies. 
 
 These principles belong in fact to the category of defi- 
 nitions. It is impossible to define good money without 
 including the " parities " which have been violated in these 
 dislocations of values, and it is impossible to define what 
 
PARITY AND STABILITY. 79 
 
 is desirable so as to exclude what is good. Granted the 
 existence of men, it is desirable that there should be good 
 men, and so, likewise, granted that money exists, it is de- 
 sirable that it should be good money. 
 
 Now to say that the money of Europe has been and is 
 good money as good money as it would have been if 
 there had been no breach of these parties is intrinsically 
 absurd, and nothing but the confusion produced by the 
 causes analyzed in the DEFINITION of QUESTION I prevents 
 universal recognition of this absurdity. 
 
 If the absence of a certain par between London and 
 Bombay is not a material prejudice, the absence of a cer- 
 tain par between London and Manchester is not a mate- 
 rial prejudice ; if a past fall of prices of 25 per cent, is 
 not a material prejudice, a future fall of 25 per cent, will 
 not be a material prejudice, or 50 per cent, or 75, 80, 90, 
 a fall which would reduce the business world to universal 
 bankruptcy or repudiation. So long as human nature en- 
 dures, men who buy and sell will be glad to know what 
 the price is to be, men who invest will desire a return, 
 mortgagees will desire that their security shall be enough 
 to pay the debt, and mortgagors will desire to realize as 
 much as possible from their " equity of redemption." 
 
 It is upon the propriety and persistence of such desires 
 as these in men, or in other words, upon the inexpugnable 
 basis of human nature, that the affirmative answer to 
 QUESTION V is based 
 
80 QUESTIONS OF THE KOYAL COMMISSION. 
 
 VI. 
 
 QUESTION VI. 
 
 Do you consider that the countries using the gold stand- 
 ard, or any of them, are suffering from an injurious con- 
 traction of the currency which might have been obviated or 
 mitigated by an increase in the supply of gold f 
 
 DEFINITION. 
 
 The question is a double question. The first part re- 
 lates to a matter of fact : " Are certain countries, is any 
 country, suffering from contraction of the currency ? " 
 
 The countries referred to as " using the gold standard " 
 use this standard and from " choice," but in obedience to 
 statutes which accord the full rank of national money to 
 gold alone. 
 
 The second part is a matter of opinion : " Could such 
 contraction, if existing, have been obviated or mitigated by 
 an increase in the supply of gold ? " 
 
 What is the meaning of " contraction of the currency ? " 
 The history of the phrase is a long one. Originally ap- 
 plied to the various species of Paper Money, it is only 
 lately, so far as I am informed, that it has been used to 
 describe the event which I assume the KOYAL COMMISSION 
 has in view, namely, a deficient supply of Metallic Money. 
 
 The distinctly artificial or conventional origin and char- 
 acter of Paper Money, which is admittedly a product of 
 law and of governmental action, and the "quantity" of 
 which is subject to governmental control, import distinc- 
 
THE MEANING OF CONTRACTION. 81 
 
 tions which are of vital importance in defining the new 
 meaning of the phrase. 
 
 Inasmuch as " contraction " implies that something is 
 contracted, it is essential to have a clear understanding of 
 what that something is ; and, the thing contracted being 
 plainly a quantity, it is necessary, in order to appreciate 
 the decrease in quantity, to have an idea what the original 
 quantity was. 
 
 What, then, is the starting point, the original quantity, 
 the disappearance or non-appearance of a part of which 
 makes the *' contraction ?" 
 
 In the case of Paper Money, created, as it is, within the 
 view of the public, it is a comparatively simple matter to 
 come to an understanding. The case of Metallic Money 
 is different. Not only is there neither precision, nor con- 
 currence of opinion touching that which is indeterminate, 
 but the principles relative to the subject are still to be 
 agreed upon. Nowhere in the range of monetary discussion 
 is there, in my belief, a greater lack, or greater need, of 
 clearness. In order to an adequate treatment of QUESTION 
 VI, it is therefore necessary to establish some general 
 views with reference to the quantity of Metallic Money. 
 
 What, then, is the normal stock of Metallic Money ? 
 
 Three alternatives suggest themselves as giving the de- 
 sired point of departure : 
 
 A. The actual stock, in a given nation at a given time 
 let us say in Great Britain, in 1874 may be taken as 
 the original quantity, and a subsequent reduction of that 
 stock may be regarded as " contraction." 
 
82 QUESTIONS OF THE ROYAL COMMISSION. 
 
 B. The actual stock in 1874, plus an annual increment 
 (estimated upon some established rule) to be applied as 
 due each subsequent year, may form the first term of com- 
 parison. A failure in subsequent years to enlarge the 
 stock to the agreed extent will then be regarded as a defi- 
 ciency. 
 
 C. The supposed requirement (for any given year) may 
 be fixed by the establishment of certain conditions to be 
 fulfilled. Such conditions are, for example, suggested by 
 the once universally-admitted principle that money should 
 be stable in value. The normal stock, then, for the period 
 1874-1887, would be that stock and increment which 
 should have maintained the general average of prices at 
 the level of 1874. 
 
 A deficiency, then, existing by comparison with either 
 of these three requirements might be regarded as a " con- 
 traction." Looking, however, to the practical objects 
 which the learned law-giver has in view, the requirement 
 set forth in C. would be entitled to precedence. Of course, 
 whether, in any given case, it is in the power of the law- 
 giver to afford any remedy for a contraction, from the 
 point of view either of A., B., or C. is a distinct question 
 concerning which nothing is said here. (See below.) 
 
 In further explanation of the answer to QUESTION YI, 
 the subordinate query should also be stated whether a 
 contraction is " injurious " or no, upon which point the 
 considerations presented under QUESTIONS III and V are 
 applicable. 
 
HARD TIMES IN ENGLAND. 83 
 
 ANSWER. 
 
 The points elsewhere herein set forth touching the pe- 
 culiar effect of the breach of established parity between 
 silver money systems and gold money systems, and touch- 
 ing the relation of quantity to prices, and the causation of 
 monetary changes, apply as reservations to limit and ex- 
 plain the following reply : 
 
 Yes. England has so suffered, and is so suffering. The 
 experience of other gold standard countries is similar, but 
 naturally not identical. For obvious reasons I shall fol- 
 low the QUESTION into detail in reference to England alone. 
 A fall of prices (appreciation of gold), depreciation of 
 property, derangement of the calculations of trade and in- 
 vestment, all upon a scale of importance attracting the 
 attention of the law-giver, are ascertained, and are ad- 
 mitted. 
 
 A deficiency in the normal stock of Metallic Money in 
 England is also ascertained. The requirements set forth 
 in the third mode of determining the normal stock (C) are 
 evidently lacking. So, likewise, from the standpoint of 
 the second explanation (Bj, there is a deficiency. Again, 
 as to the actual stock of 1874 (A), the evidence tends to 
 sustain thejbelief that there is actually less metallic cash 
 in England in 1887 than in 1874. That this contraction 
 is injurious is apparent. 
 
 This injurious contraction referred to could have been 
 mitigated and probably obviated by an increase in the 
 supply of gold money ; but, while it was not within the 
 
84 QUESTIONS OF THE ROYAL COMMISSION. 
 
 power of legislation to command such an increase by in- 
 creasing the product of the mines, it was, and (for the 
 benefit of the future) is, within its power to obtain a sim- 
 ilar result, in profitable degree, by reuniting the broken 
 standard of silver and gold. 
 
 DEFINITION OF THE SECOND PART OF THE QUESTION. 
 
 The second part of the QUESTION VI : " Could this 
 contraction of the currency have been obviated or miti- 
 gated by an increase in the supply of gold," seems to sup- 
 ply its own answer. To whatever condition of things the 
 phrase " contraction of the currency " may be applied, an 
 increase of the supply of gold money must serve as the 
 opposite and negation of it. As surely as subtraction is 
 to be obviated or mitigated by addition, so surely does in- 
 crease of money obviate or mitigate or, rather, prevent 
 contraction, or deficiency, of money. The stress of the 
 QUESTION seems therefore to lie in the degree of mitigation. 
 How much effect will be produced by such and such an 
 in increase in the supply of gold ? 
 
 An increase in the supply of gold may describe two dis- 
 tinct events : 
 
 (a) an increase of the existing stock in the hands of 
 
 man, or 
 
 (&) such an increase as shall, under existing circum- 
 stances, render an enlarged stock of money available 
 for a given nation at a given period, or, more definitely 
 stated, 
 
PARITY AND SUPPLY. 85 
 
 (a) 'an increase of the annual output of gold mines, and 
 (b) the occurence of such a change in the conditions of 
 supply or employment of money-material that an in- 
 creased amount of gold money comes normally into 
 use in a given country at a given time. 
 It will be observed that the second case (b) contemplates 
 a greater quota of change supplied to remedy or pre- 
 vent a deficit than the first case (a). 
 
 If we imagine the requirements set forth in (b) applied 
 to England, it becomes apparent that the change referred 
 to must embrace the money-using world as well as Eng- 
 land. The general conditions of supply or employment of 
 money-materials, which are to enable gold money to flow 
 into England will therefore demand attention. What is 
 contemplated in QUESTION VI, and thus in the ANSWERS to 
 be made to QUESTION VI, as a " contraction of the cur- 
 rency " is not an event occurring in isolation, but rather 
 an event alone to be understood as a part, by means of an 
 explanation of the whole. 
 
 For money-using England as well as the money-using 
 world, there are two money-metals, not one alone. The 
 supply and employment of silver, and the ratio of exchange 
 between silver and gold are decisive factors in the mone- 
 tary position of gold. 
 
 With this observation the question of quantity of gold 
 is brought face to face with an order of events distinct, 
 and, from some points of view, incommensurate. The 
 breaking of the par of silver and gold, and the derange- 
 ment of valuations arising in exchanges between silver 
 
86 QUESTIONS OF THE ROYAL COMMISSION. 
 
 countries and gold countries are in fact comparable 'to the 
 invasion by one of the forces of nature, of the field ordi- 
 narily exposed to the undisturbed working of another force. 
 
 The collision of coinage systems merits, therefore, a 
 treatment quite distinct from the issues directly raised by 
 QUESTION YI. Suffice it to say here that the evils conse- 
 quent upon that breach and collision are obviously to be 
 in some measure remedied, and the future effects of that 
 breach and collision can be entirely prevented by remov- 
 ing the cause that is to say, by restoring equality be- 
 tween the metals. 
 
 Without entering further upon this field, it is legitimate 
 and important to explain that the ANSWERS TO QUESTION 
 YI, although accepting the terms of " quantity " imposed 
 by that QUESTION, make full allowance (if the definitions 
 be clearly understood) for the perturbation due to the 
 break of the parity and the subsequent clashing and con- 
 flict of coinages. The definition of the normal stock (see 
 page 82) and of an increased supply of gold (6, see above) 
 show that the narrow view touching a " scarcity of gold " 
 is here excluded. It is to be recognized that the peculiar 
 effects of the break of an established parity do not elimi- 
 nate the element of quantity from the monetary problem 
 in the wider sense. What increased output of gold mines 
 or silver mines would have been needed to cause a rise of 
 silver prices in silver countries, which would have left gold 
 prices where they stood before the divergence of the ratio ? 
 Opinions may vary touching the required quantity (as well 
 as the effect of such imagined output upon the course of 
 
SUBSIDENCE OF OCCIDENTAL VALUES. 87 
 
 trade, development of wealth, distribution of capital, etc.), 
 but it will hardly be denied that in the scale of magnitudes 
 some point could be reached where this imagined effect 
 would be produced. Is it not quite probable that a repeti- 
 tion of such an experience as the Great Gold Discoveries 
 in Australia and California would have transferred the 
 change of price-level from a downward movement of gold 
 prices in the Occident to an upward movement of silver 
 prices in the Orient ? 
 
 Turning from these speculations to the actual condition 
 of the nations in the period 1874-1887, we can profitably 
 seek to define the importance of the break-down of the 
 parity formerly maintained by France and her allies. 
 What would have been the condition of things if the par 
 had not been broken ? The question, what increased prod- 
 uct would have come from the mines, in that event, is im- 
 portant, but can be laid aside here in order to simplify the 
 issue. We assume, then, the par of 15^ to 1 maintained, 
 but the other great factors of the monetary situation of 
 Europe, the product of the mines, the expansion of the 
 United States, the Indian railroads, etc., such as they 
 have been in fact. Could the local subsidence of the valua- 
 tions that are expressed in pounds sterling have occurred ? 
 It is safe to say that the cause of the greater part of this 
 subsidence would have been removed. 
 
 But as QUESTION YI treats the position of gold money 
 as a matter of quantity alone, it is germane to show that, 
 from the standpoint of the legislator, parity is a factor of 
 available quantity. 
 
88 QUESTIONS OF THE EOYAL COMMISSION. 
 
 VII. 
 QUESTION VII. 
 
 To what extent and in what way are prices affected l}y 
 the quantity of the 'metal or metals used as standards of 
 value f 
 
 DEFINITION. (See also QUESTION /.) 
 
 The phrase " standard of value " in the above question, 
 can only profitably be used as a synonym of money, just 
 as the " metals " contemplated in it are gold and silver, 
 and no other, and " prices " is but a name for the re- 
 spective equivalents of vendible things in money units. 
 
 If to regard a metal as a standard of value carried with 
 it no actual employment of pieces of that metal for the 
 uses known in fact as monetary, that is to say, if the 
 metal were purely a term of mental comparison and 
 nothing more, as might be the case if one were to consider 
 as a matter of curiosity, what a horse was " worth " in 
 platina or in gallium, the question might be treated in a 
 different way. 
 
 There would then be no need of laws of Legal Tender, 
 of Coinage, of Banking, there would be no Monetary 
 Systems, there would be no money and no questions of 
 currency, of monetary policy. But this is not the case. 
 It is but a dreamland of the economic visionary to which 
 this latter spiritual meaning of " standard of value " points. 
 Money exists. The actual world of human society has 
 always been, and is to-day, a world of payments as well 
 as of price. 
 
THE CLOUDLAND OF MONEY. 89 
 
 Price lias, in fact, always implied action, the poten- 
 tiality of action, of payment ; it exists by contemplation 
 of an actual exchange of one thing for another, and the 
 one thing is the vendible object and the other thing is 
 money, and it can be nothing else, except by favor of a 
 license of speech which has no place in monetary dis- 
 cussion. Many prices are not paid, many exchanges are 
 made without transfer of cash. Cash payments are but a 
 fraction of the totality of transactions, and the rapidity 
 with which cash does its work is a matter of surmise, but, 
 notwithstanding, the nucleus of these comet-like phe- 
 nomena is a solid fact in more than the purely material 
 sense. There is a stock of cash, and with it some propor- 
 tion of prices is paid. But between the actual amount of 
 cash and the sum of possibilities of demand for payment 
 (the totality of transactions) there is a broad space, so 
 broad that it may well be likened to the furthest sweep of 
 the comet in its flight. It is in these interstellar spaces, 
 so to speak, that the visionary finds fields of fancy beyond 
 the reach of the glass of a Montesquieu. The fatal attrac- 
 tiveness of this region of ideal money, of " money of ac- 
 count" or " metal used " mentally " as a standard of value " 
 is well attested by the experience of to-day, there being no 
 lack of minds that have 
 
 Eaten of the insane root 
 
 That takes the reason prisoner. 
 
 Hence the necessity of a most rigorous course of defini- 
 tion. 
 
90 QUESTIONS OF THE ROYAL COMMISSION. 
 
 QUESTION YII relates, then, to the effect of the quantity 
 of metallic money upon prices. But there are various dis- 
 tinct aspects in which " the quantity of metal or metals 
 used as money " may be regarded ; among which are : 
 
 1. The weight of the Units of Coinage. 
 
 2. The relation of parity between the two money-metals, 
 
 3. The number of existing copies of the Units. 
 
 4. The metal not coined which has a monetary use. 
 
 5. The metal which may be relied on to recruit the stock 
 of money. 
 
 The quantity of substitutes for metallic money is also 
 an element of importance for any practical conclusions. 
 
 For purposes of clearness then, treating the question 
 in a practical way, it is necessary to contemplate some 
 normal state of these elements of " quantity," and this- 
 can be conveniently attained by turning the eye away from 
 the present amorphous conditions, brought about by the 
 late revolutionary divorce of silver and gold, and regard- 
 ing the conditions as they were before 1873, when parity 
 existed between the metals, which affected the total 
 stock. In this assumed normal state there was an in- 
 crement : a yearly increase of the stock. Let us then 
 a Pply QUESTION VII to the state of affairs as it was in 
 1873, 1863, 1853, 1843. 
 
 There were " prices " in those years, and " prices " in 
 the sense in which the word is used in QUESTION VII, 
 namely, the general mass, or average, of price of things 
 vendible. 
 
THE QUANTITY THEORY. 91 
 
 We ask whether these prices would have been the same 
 as they actually were if the world's stock of silver and 
 gold in 1843, 1853, 1863, 1873 had been less than it actu- 
 ally was if it had been half what it was, for example. It 
 is well-nigh self-evident that prices could not have been 
 the same. Indeed, if we carry out the hypothesis with 
 loyal fulness of statement, it will be plain that, in all 
 probability, prices would have been only half what they 
 actually were. 
 
 If, on the other hand, we imagine an equal diminution 
 in the world's stock of any other form of wealth, the 
 amount of money-metal remaining what it was, we are led 
 to a very different conclusion. 
 
 Of course no one can answer the question in this form 
 with precision. No one can answer QUESTION YII in any 
 form with absolute precision. 
 
 But the prevailing force of tendencies can be clearly 
 stated, and if the elements of any given special case are 
 carefully studied, an approximately correct conclusion 
 can be formed. Despite all the fluctuations of business, 
 the constancy of human nature and the inertia of the 
 metals, and of laws, afford ample material for practical 
 decision. 
 
 ANSWER. 
 
 The general tendency is that prices are in direct ratio to 
 the quantity of money ; but this a tendency limited by 
 factors which may be briefly indicated in the proviso- 
 
92 QUESTIONS OF THE ROYAL COMMISSION. 
 
 " other things being equal." As for the way in which 
 quantity acts upon price it can be regarded as a special 
 instance of " demand and supply." 
 
 VIII. 
 QUESTION VIII. 
 
 What is the relation, if any, between the supply or quan- 
 tity of the precious metals and the fluctuations of credit f 
 
 ANSWER. 
 
 I do not avail myself of the opportunity to enter fully 
 upon this question on account of the great extent of an 
 inquiry into the multifarious and evanescent phenomena 
 to which it points. I venture, however, to present some 
 elementary observations which may be the more impor- 
 tant because they are not infrequently ignored. 
 
 To affirm that there is no relation between the supply 
 or quantity of the precious metals and the fluctuations of 
 credit is, if the proper meanings be given to the words, 
 an error, if indeed it be not actually a contradiction in 
 terms. What are the fluctuations of credit ? An increase 
 or decrease in the quantity of obligations expressed in 
 terms of money, which obligations are often transferred 
 or exchanged for a money price. Whether the relation 
 of credits to hard cash be likened to the relation of a 
 comet's tail to its nucleus, of the sun's corona to the sun, 
 of the earth's atmosphere to the earth, it must be a rela- 
 tion and a relation of quantity. 
 
 Whatever problems insoluble in the present state of 
 
METHODS OF ECONOMIZING SPECIE. 93 
 
 knowledge, these various relations may present to human 
 curiosity, a considerable body of data has already been 
 acquired which cannot fear to be superseded. So like- 
 wise in reference to the relations between credit and cash, 
 enough is known to give security in dealing with the main 
 practical tasks which are to-day incumbent upon the leg- 
 islator. So far as the practical task is concerned, to which 
 the labors of the ROYAL COMMISSION are directed, what is- 
 known of the relations of cash and credit can certainly 
 afford no valid argument against a settlement of the Silver 
 Question by concurrent action of nations. 
 
 IX. 
 
 QUESTION IX. 
 
 Has there been during the last 15 years any important 
 development of the system of cheques, lank credits, bills of 
 exchange, or other means of economizing the use of the pre- 
 cious metals ? 
 
 ANSWER. 
 
 i 
 
 As compared with preceding decades, there has been 
 in the last 15 years no important development of the 
 methods of economizing specie. 
 
 EXPLANATION. 
 
 It may be said, in a certain narrow sense, that an im- 
 portant development of this kind is always going on, for 
 although, regarded as a whole, the movement may be 
 
94 QUESTIONS OF THE ROYAL COMMISSION. 
 
 dhecked or counteracted in times of war or panic, yet 
 local expansion of specie-economizing credit may have 
 been present to minimize the final result. 
 
 Among the most notable changes in the direction of 
 economy in the use of the precious metals in late years, 
 I should mention : 
 
 The telephone. 
 
 The postal order system. 
 
 The extension of the telegraph. 
 
 The extension of railways. 
 
 Question IX, as I understand it, demands a comparison 
 of what has occurred through these and similar agencies, 
 with what occurred before. This comparison seems to 
 me to be clearly unfavorable to the later period. The 
 earlier decades of the development of railways and tele- 
 graphs saw more important changes than the latter ; the 
 postal order system was preceded by great postal reforms ; 
 and the telephone would perhaps operate rather to pre- 
 vent the necessity of credits than to economize specie. 
 And the great development of systems of Banking and 
 Clearing belongs to the earlier period. 
 
 The rate of increase of the ratio of money transactions 
 to metallic stock has therefore probably been reduced of 
 late years. The fact that prices have fallen in spite of 
 the growth of methods of economizing specie, points in 
 the same direction, for it is obvious that, so far as it may 
 go, economizing specie tends to promote a rise of prices. 
 
THE COMPLEMENT OF GKESHAM's LAW. 95 
 
 X. 
 
 QUESTION X. 
 
 Do you consider that an international agreement could 
 be made for the free coinage of gold and silver as legal ten- 
 der money at a jixed ratio f 
 
 ANSWER. 
 I do. 
 
 XI. 
 
 QUESTION XI. 
 
 Is it in the p OKI er of governments to maintain such a ra- 
 tio if agreed upon ; and would the practice of the commer- 
 cial world follow the law f 
 
 ANSWER. 
 
 Undoubtedly. 
 
 EXPLANATION. 
 
 The exercise of power referred to is in substance identi- 
 cal with that which all governments have been wont to 
 apply with 'success. Touching the " practice of the com- 
 mercial world," I assert in favor of an affirmative answer 
 what in the law is known as an estoppel. The established 
 opinions of all economists in a similar case should preclude 
 them from withholding their agreement with this affirma- 
 tion. This consensus of opinion has been so universal as 
 to have been embodied in the name of a " law." 
 
 The theorem known as " Gresham's law " is one of the 
 
96 QUESTIONS or THE EOYAL COMMISSION. 
 
 commonplaces of economics, and the affirmative answer to 
 question XI rests upon the same basis as Gresham's law. 
 That law is but a generalization touching the working of 
 human self-interest. Under the gravitation of self-interest, 
 men prefer what is crudely called the " cheaper " money 
 to the " dearer " money. That is to say, men gladly part 
 with that which they can most easily spare, and, inasmuch 
 as everything which is paid is also received, it is plain that 
 men are not unwilling to receive payment in anything 
 which they can pay aw r ay again. All men are willing to 
 make profit in a monetary transaction ; there is a constant 
 pressure in that direction among money-using men, just 
 as every part of a body of water is always pressing down. 
 This is the controlling fact, this is human nature. But 
 this downward pressure of water has two distinct lines of 
 manifestation, the one where resistance is complete, the 
 other where resistance is incomplete ; the latter being the 
 current, the fall, movement, tending toward the perpen- 
 dicular, the former the smooth level of the lake, quiescent, 
 horizontal. 
 
 It is the former, which is bodied forth in Gresham's 
 law. The latter in the law I vindicate ; the one is the law 
 of disparity, the other is the law of parity. As gravity, 
 operating upon the enclosed waters of a lake, establishes 
 and maintains a level surface, so this gravitation of self- 
 interest maintains parity. The desire, the pressure, exist, 
 but are neutralized by opposing desire, opposing pressure. 
 For the one and the other the resistance, the enclosure, is 
 necessary ; that is all that is required for either money or 
 
THE EFFECT OF RESTORING SILVER. 97 
 
 water. Whether it be pond, lake, or ocean, if the enclosure 
 be there, the level surface is inevitable. 
 
 Whence comes the strange parity between cheap bronze 
 pennies, light silver shillings, solid gold sovereigns and 
 paper promises to pay five, or a hundred, or a thousand 
 pounds ? Evidently the English lake is well embanked 
 around by English law. If analogous enclosure be given 
 to silver and gold money by the monetary laws of nations, 
 a similar level of parity will be produced and maintained. 
 This can be done by giving the two metals equality before 
 the law in a strong body of nations. 
 
 XII. 
 QUESTION XII. 
 
 What would he the effect of such an, agreement, if carried 
 out, upon (a) prices, and (b) the production, of the precious 
 metals f 
 
 ANSWER. 
 
 In reference to the respective production of the two 
 precious metals, the current estimates of probabilities 
 point to a diminished output of gold and to an increased 
 output of silver. The restoration of silver to monetary 
 equality with gold, presumably at a higher ratio than has 
 obtained of late years, would tend, within limits, to stim- 
 ulate its production ; but the estimate of amounts of in- 
 crease are frequently exaggerated, sometimes to a prepos- 
 terous degree. An impulsion to business activity would 
 
98 QUESTIONS OF THE ROYAL COMMISSION. 
 
 also tend to enlarge the range of gold mining, and hence 
 to increase the output of gold and to restore the balance. 
 
 So far, then, as the annual product of the money-metals 
 is concerned, the total effect of joint action of nations to 
 equalize them, must be to relieve the monetary interests of 
 nations from evils connected with that source ; connected, 
 that is with a prospect of wider divergence between the 
 metals, and of an increasing intensity of employment or 
 demand, for a limited stock of gold. The practical sense 
 of this danger exists in many quarters, where its scientific 
 weight has not yet been formally recognized. This will 
 appear if we imagine the effect of really important Gold 
 Discoveries. Is there any doubt that they would be hailed 
 by economists as a relief? Can it be denied that they 
 wQuld bring a certain relief ? (I refer, of course, to such 
 Discoveries in their character, not of an increase in the 
 world's stock of wealth, of capital, but in the world's stock 
 of money, of circulating treasure. So far as the former 
 character is concerned, the increment in gold would count 
 no more than the same figures in silver or in steel.) But 
 if this be true of what avail are incantations of casuistry 
 to exorcise " the appreciation of gold? " Whatever relief 
 could be wrought by Gold Discoveries which are not to 
 be had, can be attained by Intermonetary Union, which is 
 to be had. 
 
 In reference to both prices and production of metal, the 
 effect would be in some measure dependent upon the ratio 
 adopted. 
 
 ' Of the probable effect upon prices of the establish- 
 
THE NATURE OF THE SETTLEMENT. 99 
 
 ment of a ratio, which shall bring the metals more closely 
 together than they stand as bullion to-day, while detailed 
 prediction can at best move within but narrow limits, yet 
 in general it can safely be affirmed that (assuming the cur- 
 rency of existing silver coin to remain undisturbed), this 
 change would directly operate chiefly upon trade between 
 silver-using and gold-using countries, and upon the great 
 stocks of Money only in so far as their purchasing power 
 is affected by the state of this trade. So far as such trade 
 is concerned, it is also to be noted that no injurious effect 
 can be safely predicted, in the estimate of which the fol- 
 lowing points shall have been ignored, namely : 
 
 First. That the change in question is, as far as it goes, 
 a restoration of the status qiw ante. 
 
 Second. That its impact is reduced by being distributed 
 between the two metals. 
 
 Third. That in so far as the change is regarded as a 
 settlement, and firm establishment of the foundations of 
 business, there is some credit entry against every debit, a 
 counter-claim for betterment which in goodly measure off- 
 sets each item of damage.' 
 
 If the ratio of 15 J to 1 were restored, the existing sil- 
 ver in the hands of man must remain in situ. (I assume 
 that the United States adapts its silver coin to the new ratio.) 
 The silver coin in gold-money lands is in use at its face 
 value, and the silver coin in silver-money lands is detached 
 from gold, connected with it only by flexible cords of trade. 
 What, then, are the specific dangers to Europe that are 
 to come from the rise of silver other than a fall of " the 
 
100 QUESTIONS OF THE ROYAL COMMISSION. 
 
 price of gold in the money of the country " in Mexico or 
 Buenos Ayres or Bombay, etc. ? Is it the return of con- 
 fidence that is feared? In that case measures can be 
 taken to prevent undue expansion ; and such measures 
 could legitimately form a part of the programme of a 
 Monetary Union. 
 
 But exaggerated views which represent the foundation 
 of an Intermetallic Union as importing a monetary con- 
 vulsion are, in many cases, explicable through the analogy 
 of an optical illusion. The inference touching the future 
 is from what is past and known, and what is past and 
 known is naturally regarded, as it were, in one picture ; 
 as, for example, all the depressing elements of the last 
 thirteen years may be crowded into one frame. A Res- 
 toration of the United Standard is regarded as implying 
 the reverse of all this, and is contrasted with it on even 
 terms, except that the element of time is left out of sight, 
 so that everything is imagined as happening suddenly, at 
 one stroke of the magician's wand. Hence exaggeration, 
 which easily rises to any height of error. 
 
 It thus becomes important to observe that the nations- 
 which are to bring their laws into concord and give legal 
 equality to the two metals will themselves determine the 
 seasonable terms and times for this action, and are not 
 likely to act with undue haste. It also is necessary to re- 
 call that the years which have passed since 1873 are past, 
 and with them have gone their " might-have-beens." For 
 instance, the money-metal that " would have been " mined, 
 and was not mined, in these thirteen years to enrich the 
 
THE KATIO TO BE ADOPTED. 1.01 
 
 world's stocks, is to be mined in the coming years, being 
 next in the lode, and it will need years to mine it. These 
 too obvious remarks are called for when the alchemy of 
 learned fancy is in vogue, by which that metal is " taken 
 as mined," just as a resolution in a deliberative body is 
 sometimes " taken as read ! " 
 
 XIII. 
 QUESTION XIII. 
 
 Do you consider an international agreement for bimetal- 
 lism possible on any other ratio than 15 J to 1 ? 
 
 DEFINITION. 
 
 I assume the word " bimetallism " here to mean free 
 coinage and full legal tender of silver and gold at a certain 
 ratio (See, also, Definition XY) and that the word " pos- 
 sible " is taken in the sense in which it is usually applied 
 to political events. 
 
 ANSWER. 
 
 Yes. 
 
 EXPLANATION. 
 
 No opinion is here implied upon any details of proba- 
 bility, whether at Berlin, Paris, London, or Washington. 
 
 The question of the ratio stands in the second rank. 
 The first interest of the nations is concurrence, by which 
 the status of the money-metals may be fixed. The ratio 
 is a matter upon which any nation can afford to make con- 
 cessions to the needs of others. 
 
102 QUESTIONS OF THE EOYAL COMMISSION. 
 
 At the Monetary Conference of 1881 the Declaration 
 on this subject of the Delegates of France and of the 
 United States, made in the name of their respective gov- 
 ernments, was as follows : 
 
 'Any ratio, now or of late in use by any commercial 
 nation, if adopted by such important group of States,, 
 could be maintained; but the adoption of the ratio of 15J 
 to 1 would accomplish the principal object with less dis- 
 turbance in the monetary systems to be affected by it than 
 any other ratio. 
 
 ' Without considering the effect which might be produced 
 towards the desired object by a lesser combination of 
 States, a convention which should include England, France? 
 Germany, and the United States, with the concurrence of 
 other States, both in Europe and on the American Conti- 
 nent, which this combination would assure, would be ade- 
 quate to produce and maintain throughout the commercial 
 world the relation between the two metals that sucli con- 
 vention should adopt.' 
 
 XIV. 
 QUESTION XIV. 
 
 Failing an international bimetallic agreement, ivhat 
 measures could be adopted Inj the commercial nations of 
 the world for giving increased stability to t/ie relation be- 
 tween gold and silver f 
 
HALF-MEASURES. 103 
 
 DEFINITION. 
 
 By the words " international bimetallic agreement " as 
 here used I understand a treaty, supported by appropriate 
 legislation, for free mintage of silver and gold as full legal 
 tender at one ratio. 
 
 ANSWER. 
 
 Measures establishing a steady demand, and especially 
 any measures (short of the treaty above referred to) tend- 
 ing to establish a fixed gold price for silver, would if 
 moving in concurrence, tend to increase stability, but 
 would of course be liable to be counteracted by fluctua- 
 tion in the output of the mines, and by changes of em- 
 ployment for existing metal used as money, etc. 
 
 XV. 
 
 QUESTION XV. 
 
 It is argued that in the absence of bimetallism, the 
 effect of any disturbance of the currency is limited to half 
 the currencies of the world, and thereby increased in in- 
 tensity. Do you consider this view correct,' and^ if so, do 
 you think the evil a serious one f 
 
 DEFINITION. 
 
 Current uses of the word " bimetallism " attach to it 
 such a variety of meanings that in replying to QUESTION 
 XV it seems desirable carefully to define the sense in 
 which its terms are understood. The actual condition 
 
104 QUESTIONS OF THE ROYAL COMMISSION. 
 
 of the monetary systems of the world which I suppose the 
 ROYAL COMMISSION to have had in view is that which exists 
 while the " currencies " are deprived of the benefit of laws of 
 alternative or optional free coinage of the two metals, which 
 establish their practical interchangeability at a fixed ratio. 
 Such a condition has lately been brought about by anti- 
 silver statutes repealing such laws of equalization of the 
 two metals, and must continue until new laws of equaliza- 
 tion shall be passed in a body of nations sufficiently strong 
 to attain this end. But the absence of such laws of equali- 
 zation does not in fact import to-day, and is not here con- 
 templated as implying, in the " currencies of the world," 
 the absence of silver money or of gold money, nor the 
 absence of full legal tender power, nor the absence of 
 freedom of coinage, for either metal ; so that whatever 
 " two-metallism " or " bi-metallism " may be regarded as 
 implied by these facts is still present, and to remain. QUES- 
 TION XV therefore embodies a comparison between the 
 " currencies of the world " as they have been of late years, 
 and as they formerly were (or would be again) under guar- 
 antees of intermetallic parity. 
 
 ANSWER. 
 
 The establishment of permanent parity between the two 
 money-metals must impart a certain fluidity or elasticity 
 to the moneys of the world, which would act as a whole- 
 some air-brake to deaden the shock of such disturbances 
 as seem to be contemplated in the QUESTION. 
 
ELASTICITY OF MONEY. 105 
 
 This, however, does not assert that anything more than 
 the primary impact can be limited to one metal, or to the 
 nations whose monetary laws attach the principal mon- 
 etary interests of citizens to that one metal ; or that in the 
 present state of instability the area of the other metal can 
 be held safe against the propagation of disorder originally 
 arising in the domain of the first. So far as the evil is con- 
 cerned, it is at least sufficiently serious to recommend the 
 relatively trivial effort required to prevent it. 
 
 XVI. 
 QUESTION XVI. 
 
 If the effect of such disturbances could be spread over all 
 countries, would greater stability of the standard of value 
 l}e secured thereby? 
 
 DEFINITION. 
 
 At first glance it w r ould not appear that the spread of 
 disturbances could serve toward securing greater stability. 
 But I assume the QUESTION is only intended to convey the 
 idea of greater stability than is attainable under certain 
 circumstances. And, as is explained in the preceding sec- 
 tion (XV), this implies exposure to the first impact of some 
 disturbances and to the rebound of others. It is further 
 to be observed that although the QUESTION is stated in the 
 most general terms it presumably refers to the actual con- 
 dition of things to-day. 
 
106 QUESTIONS OF THE ROYAL COMMISSION. 
 
 The QUESTION lias in view the future of the countries 
 which now have gold as their " standard of value " to the 
 extent of excluding silver from free coinage. It can thus 
 be stated as follows : Could Europe and North America 
 attain greater monetary stability or protection against 
 " monetary disturbances " if the metals were fused into one 
 United Standard a measure which would give gold, the 
 lighter metal, the advantage of being ballasted, as it were, 
 by silver the heavier metal, amid the winds and waves of 
 monetary disturbance ? 
 
 ANSWER. 
 
 Yes. The United Standard would give Europe and 
 America greater monetary stability than the Disunited 
 Standard. 
 
 January, 1888. 
 
 These answers were sent to the COMMISSION in print, being privately 
 printed in Lausanne, with the title "The United Standard." 
 
IV. 
 THE PARITY OF MONEYS 
 
 AS EEGAEDED BY 
 
 ADAM SMITH, RICARDO, AND MILK 
 
 AN OPEN LETTER 
 ANSWERING A QUESTION OF A MEMBER 
 
 OF THE 
 
 KOYAL COMMISSION ON GOLD AND SILVER. 
 
 107 
 
THE QUESTION AS STATED WAS, 
 
 Assuming that demand is the most potent factor 
 in determining the value of the precious metals : 
 and that Governments have power, by adopting or 
 rejecting them for coinage, to increase or diminish 
 their value, is it clear that this power goes to the 
 extent of enabling them thereby to fix the precise 
 relative value of gold and silver ? 
 
 In order to simplify the issues I have thought 
 it best to pass by whatever may be debatable in 
 the above assumptions, and consider merely the 
 question alone, the terms of which may be slightly 
 modified in the interest of precision. The text 
 of the following pages is therefore 
 
 Is it clear that the power of Governments goes 
 to the extent of enabling them to establish a stable 
 ratio between gold and silver f 
 
 108 
 
To Sir THOMAS H. FARRER, Bart., 
 
 Abinger Hall, Dorking. 
 
 DEAR SIR : The question suggests a query which seems- 
 to me to lead directly to the completest answer, and that is,. 
 
 How has it come to pass that the doubt it expresses can 
 e.nst / 
 
 The elements of an answer which, on general principles, 
 one would expect to cover the ground, are contained in 
 facts which are plainly in sight. The question is an eco- 
 nomic question. The merely political side of the action 
 contemplated is not in the field of view. We are not ask- 
 ing whether this or that nation will or will not pass certain 
 laws ; we ask what will happen if they do pass them. In 
 other words, when we speak of laws, we mean laws, not 
 Bills which failed to pass. 
 
 Now, there is no doubt, in spite of all the mirage which 
 can be conjured up, that the quantity of gold and silver 
 in men's hands is limited ; and, regarded as a total, a stable 
 quantity unchanging to a marked degree. The predom- 
 inant demand and use for these metals is monetary, and 
 the laws of nations control this demand. How is it pos- 
 sible, then, that the power of these enactments can be 
 gainsaid ? If the laws of nations work together to main- 
 
 PKEFATORY NOTE. The question was handed me by Sir Thomas Farrer 
 in 1887, while I was his guest at Abinger. The answer was made the 
 year after in print, his name being given with his permission. The 
 pamphlet on the title-page gave AMICUS CURI.E as the author. 
 
 109 
 
110 THE PARITY OF MONEYS. 
 
 tain parity, how can they fail to produce it ? What is there 
 which can resist them ? Nothing ! For the laws of sup- 
 ply and demand (the theory of supply including that of 
 "cost of production") are really law, and not dreams. 
 
 The only apparent chance for escape is the mirage I 
 have referred to, the confusion about the limits of the 
 supply. An important phase of this mirage may be de- 
 scribed as an idea that the time is coming when there will 
 be not enough "to go around " of one metal, and at the 
 same time too much " to go around " of the other. Has it 
 not the air of a dream ? Who, indeed, has the right to 
 
 />! 
 
 predict the coming of such an event ? There never was 
 such a time. Money of the two metals has been known 
 since the age of fable. It was, if I remember the story 
 correctly, about 2700 B. C. that the Chinese are said to 
 have stamped the " second metal " as " treasure current in 
 the peaceful city." Certainly there has been abundant 
 opportunity for experiences of the kind described. Yet 
 there never has been a time like that which our sooth- 
 sayers predict. And there is nothing in sight in the con- 
 ditions of production of the metals to promise such a time 
 for the future. Here we may hold ourselves cited to con- 
 sider " cost of production," and the sins of thought that 
 are perpetrated in its name. The errors grow out of the 
 careless use that is sometimes made of a phrase which 
 needs for its adequate handling a most delicate adjust- 
 ment."" It is necessary to keep constantly in view and 
 
 * When X., for example, speaks of it, he gives me the impression of a man 
 who thinks a glass should be equally good at all ranges without adjust- 
 
SOURCE OF THE DOUBT. Ill 
 
 no doubt this is difficult for the economist, busy with the 
 eventful lives of ordinary commodities that gold and silver 
 are precious, that they are imperishable and rare, that the 
 utmost find of any year is no more than a feeble fraction 
 of the stock in hand, so that an inherent intrinsic monopoly 
 value attaches to them, against which mere "cost" of pro- 
 ducing fresh bullion alone is powerless, for its utmost force 
 is spent in feebly augmenting the supply. 
 
 The above answer, then, may fairly, as I have said, be 
 supposed to cover the ground. In my belief it does cover 
 the ground. And yet the doubt expressed in the question 
 exists in some minds. What is the origin of this doubt ? 
 Is there some " fashion of thought " which, like a defect of 
 sight, or color-blindness, vitiates the effect of evidence ? 
 
 The doubt so expressed will appear all the more strange 
 when we regard its habitat in a certain light. It is a doubt 
 touching the power of laws to maintain parity between two 
 kinds of money. This doubt arises, where ? In a land 
 
 ment. Whether it is chairs, of which the use is limited and the available 
 supply, in a sense, unlimited, or silver, of which the use is unlimited and 
 the supply limited, it is the same " cost of production " for him. It never 
 has occurred to him that the " cost " he speaks of, approximately bears 
 the relation to the general cost of providing money that the water spouted 
 into the air by a whale bears to the general level of the oceau. In fact, 
 one would suppose from what he says, that now for the first time in the 
 history of the world has silver mining been profitable. Fortunately the 
 Welsh gold mines have made a diversion, for it is plain, if the published 
 accounts are correct, that the " cost of production " of gold is going to fall 
 as low as certain mines are supposed to have brought the cost of produc- 
 ing silver, so that one fall will neutralize the other ! 
 
112 THE PARITY OF MONEYS. 
 
 which for generations has been the scene of a series of re- 
 markable parities, kindred to that which is now our theme. 
 
 Are not bronze pennies at par with silver shillings / 
 
 Are not shillings at par with sovereigns f 
 
 Are not sovereigns at par with legal-tender 'bank-notes f 
 
 Arc not five-pound notes at par (per pound sterling] with 
 twenty -pound notes f 
 
 Is not the price of gold bullion so steady that one can say 
 there is parity between it and money f 
 
 To these questions the answer " yes " must arise in an- 
 tiphonal chorus. Qn both sides of the shield the silver 
 side and the gold side these affirmatives are admitted, 
 these parities are recognized as fact. There is a chain of 
 parities extending from bronze to bullion and bank-notes. 
 It is very germane then to appeal from the parity that is 
 denied to the parity that is admitted, and so to ask, How 
 comes it that these parities exist ? How comes it that 
 every one admits the fact ? 
 
 To the latter question the answer is obvious. No mat- 
 ter how novel may be the idea of inquiring into the why 
 and wherefore of these parities ; whether they have been 
 recognized in their true character or no, they are matters 
 of common daily experience, or easy observation. The 
 parities to which every one is witness are, in fact, as com- 
 mon as prose. Perhaps they never have been called by 
 their true name, but, as in the case of men who talked 
 prose without knowing it, the moment the idea is suggested, 
 it takes a firm place in the mind. 
 
CONTINUING CAUSE OF PARITY. 113 
 
 As for the cause the reason why these parities exist 
 I confidently appeal to you with the remark that the entire 
 structure of monetary laws enacted by Parliament, and 
 carried out by officials or obeyed by citizens, is harmoni- 
 ously arranged to maintain them. The effect is a regula- 
 tion of the employment for these various things, for the 
 pennies, the shillings, the sovereigns, the notes, and the 
 bullion ; and thus the work of maintaining this equipoise 
 is done. But the " causing cause " of the phenomenon is 
 the statute enacted at Westminster. Can you suggest any 
 other explanation ? Or may I venture to believe that this 
 explanation is quite as difficult to dispose of as the idea 
 of gravity, an idea which has been ineradicable since the 
 days of Newton ? 
 
 I come back now to my query, How has it come to pass 
 that the doubt expressed in the question can exist ? The 
 answer to my query will, I think, present itself most clearly 
 in following the story of the notions about money lately 
 current in the learned world. Is there a warp or flaw or 
 aberrant and deflecting element in the medium through 
 which money is regarded ? If there be such which affects 
 our theme, it may well prove to be that " fashion of 
 thought " of which I have spoken, which, operating like a 
 defect of sight, or color-blindness, vitiates the power of 
 evidence and argument. And in ascertaining that there is 
 such a fashion of thought not only shall we find the an- 
 swer to our query, but also with it, possibly, lenses which 
 in some cases may do something to restore the normal 
 sight. 
 
114 THE PAKITY OF MONEYS. 
 
 In relation to this idea of a " fashion of thought," I 
 ought perhaps to explain more clearly what I mean. When 
 a habit of looking at certain things in a certain Avay is in- 
 tensified, and, as it were, gains precedence through a high 
 degree of certainty that this is the right way of looking at 
 these things, then this habit, which for the time is a sec- 
 ond nature, may become militant and agressive. The fakir 
 who astonishes through his fortitude under self-inflicted 
 torture, is proving the marvellous power of the will to con- 
 trol the senses. It is not merely that he is enabled to bear 
 pain without flinching, it is also that he is strong enough 
 in spiritual force to ignore or stifle pain. Why may not 
 an analogous power be exercised with reference to the use 
 of mental powers, so that ratiocination is benumbed, and 
 the attack of argument and evidence foiled completely by 
 the mind's unconscious efforts of self-defence against 
 them ? 
 
 Now, if there be anything in the notions current about 
 money among the learned in these last decades, which op- 
 erates in the way thus described, it is plain that its roots 
 lie deep, as a part of the historical development of eco- 
 nomic theory, or of the mental habits of the time. Of course 
 I cannot expect to deal exhaustively with such a matter in 
 these pages. That could not be done without writing a 
 book, and a book of considerable length. I can only 
 touch here and there in the " stream of evolution," and re- 
 port the result of analysis. But no one is likely to sup- 
 pose that these lately current notions could be what they 
 are in England, but for the influence of great economic 
 
MONETARY SITUATION DOWN TO 1873. 115 
 
 writers, and so my task can safely lie in a review of what 
 such men said. Beyond that lies the field of what they 
 thought, or can be safely supposed to have thought, or to 
 have left unthouyht, that bears upon this matter of the 
 Parity of Moneys. You will readily agree with me that 
 chief among the forces towards which inquiry should turn, 
 are the writings of Dr. Adam Smith, of David Eicardo, and 
 of John Stuart Mill. They are certainly competent to 
 have " set the fashion " of thought. What had they to say 
 of money ? 
 
 As I approach their writings, I remark certain general 
 characteristics of the times in which these great men lived, 
 which are the necessary soil, or atmosphere, or frame- 
 work to give a choice of similes in which their thoughts 
 must be regarded. 
 
 First. The world in which they lived was a world in 
 which silver and gold were money, equally money. There 
 was no " Silver Question " in those days in the sense in 
 which there has been a Silver Question since 1873. On 
 the contrary, so far as the great world was concerned, 
 there was no break between the metals. There was a little 
 sparring from time to time, like a family quarrel, but in 
 the main there was no great conflict of coinage systems ; 
 in general, there was intermetallic, intermonetary peace. 
 
 /Second. So far as the relative value of the metals is con- 
 cerned, there had been what, to our eyes, is a phenomenal 
 steadiness. The ratio of the year when Mill died (1873) 
 was but little different from that of two centuries before. 
 Xiocke, as monetary adviser of the government, observed 
 
116 THE PARITY OF MONEYS. 
 
 the same ratios, close to 15.50, which were noted in Lom- 
 bard Street while the later editions of Mill's " Political 
 Economy" were coming from the press. Indeed, a very 
 slight percentage covers the maxima of fluctuation in that 
 period. 
 
 This being the case, one naturally asks whether the cause 
 of this stability was ever made the subject of formal in- 
 quiry. If such inquiry had been made, then the whole 
 matter which is now before us might have come under 
 most competent analysis. Can you, Sir, with your com- 
 prehensive range of reading, point to such an inquiry ? 
 But though I ask the question, I will not fear to go onward 
 and assume its answer. If correction comes and no one 
 can be more competent than yourself to administer it I 
 must submit to it. I know of no such inquiry, and have 
 no reason to think it exists. 
 
 Furthermore, I observe that while no doubt a path-find- 
 ing genius directed to this forbidding field of money would 
 have found a rich vein in such inquiry, yet it is not in ac- 
 cordance with ordinary experience that such work should 
 be done. Is not science, like nature, notoriously opposed 
 to doing things by a very sudden leap ? That certainly is 
 my impression. It seems to me that the old rule of doing 
 what thy hand findeth to do is generally observed in the 
 growth of knowledge ; that those who enlarge its borders 
 most usefully occupy themselves with problems which 
 really require practical solution that is to say, which make 
 very emphatic demand for solution. They are perhaps 
 likely to accomplish more in this line than in dealing with 
 
STATUS OF SILVER UNQUESTIONED. 117 
 
 questions which are not yet, so to speak, on the order of 
 the day. 
 
 Now, to follow the figure, the great problems before you, 
 which the Royal Commission must act upon in one way or 
 another the Parity of Moneys, the forces that produce 
 it were not only not on the calendar for Mill, the latest 
 of the authorities I refer to, but there was really no " no- 
 tice " that the question would come up at all. There was 
 no idea abroad of abolishing one of the Precious Metals as 
 a money-metal, and still less were there overt acts pointing 
 clearly toward such outlawry, during the time when the 
 first edition of Mill's Economy was being published (1848). 
 This point, I mean the novelty and the modernness of the 
 anti-silver doctrine to study the effects of whose partial 
 triumph the Royal Commission was created is one which 
 I am perhaps bound to consider as not yet admitted. I 
 therefore refer to the discussion of the points involved, 
 and to the evidence presented, in " The Silver Pound," a 
 work of which copies were presented to the Royal Com- 
 mission nearly a year ago. I believe it will plainly ap- 
 pear, from the considerations there set forth, that the idea 
 of excluding silver from its equal place side by side with 
 gold is a novelty which had not in 1848 made its entrance 
 in the world of thought. It is true that later, among the 
 sequences of the gold inundations from California and Aus- 
 tralia, came isolated suggestions about demonetizing gold, 
 but that was all. It was not till after this idea had spent 
 its force that men began to think of getting rid of silver. 
 Neither the Treatise of Lord Liverpool nor the anti-silver 
 
] 1 8 THE PARITY OF MONEYS. 
 
 statute of 1816 were intended to promote that general 
 exclusion of silver, for which the turn of fortune and of 
 events has, in our generation, shown them to be in fact 
 the remoter motive forces. They were, so to speak, the 
 material innocentlv accumulated, to which, more than a 
 generation later, the enthusiasm of metrical reformers 
 communicated the spark that inflamed. There was, I say 
 then, no notice to John Stuart Mill, in the days when his 
 great work on Economics was being written, that the 
 cashiering of silver as money-metal, or its reduction to 
 the ranks, would ever come upon the order of the day. 
 Hence there is no likelihood of finding in Mill's writings 
 that exhaustive, thorough examination of the questions 
 growing out of such an event, which his great competence 
 would otherwise justify us in expecting. 
 
 As I write this I recall a conversation I had, in 1876, 
 with one of Mill's earnest students, whose appreciation I 
 can well believe would have been very gratifying to the 
 author. It was General Garfield. With his objection to 
 my ideas of joint action of nations to hold the money- 
 metals to their level, came a reference to John Stuart Mill 
 If all this was true, why did not he, the Master, say so ? 
 My answer was then, as now, Mill did not live to see the 
 sequel of the great legislative attack upon silver by Ger- 
 many and the other nations. 
 
 I repeat, then, it is probable that no specific and in- 
 tended scrutiny of the problems to which your question 
 points, or of the then existing evidence, is to be found . in 
 Mill ; and, of course, still less in Ricardo or in Dr. Smith. 
 
NOTIONS ABOUT MONETARY SYSTEM. 119 
 
 Coming now to their writings, I observe, first, that there is 
 a very marked note of neutrality (if, indeed, one should 
 not say unconcern, or inertness, or even fickleness) on the 
 crucial point, the matter of the " standard " which they 
 respectively think should be adopted or maintained in 
 England. That intensity of feeling which is to develop 
 itself after 1867 in favor of gold and against silver, a feel- 
 ing which is to rival in temperature the passions of party, 
 gave no premonition in Smith or Kicardo, and shows it- 
 self in Mill only as predisposition, or as diathesis, to bor- 
 row a term from medicine. 
 
 Dr. Smith speaks of all accounts being kept in silver, 
 yet of gold as being the majority of the circulation, and 
 he mentions and briefly discusses the idea of changing 
 the ratio, and then, apparently as an alternative, suggests 
 in a tentative way, that lighter coins might be made, and 
 be legal tender only for a guinea. Throughout his work, 
 silver is the metal ordinarily named as the synonym of 
 money, and a " regulated proportion between silver and 
 gold " is mentioned as the natural outgrowth of national 
 development. 
 
 Eicardo, in distinction from Smith, uses gold as the 
 common name for money, but this is only a conventional 
 convenience of speech, just as he assumes for convenience 
 that money is stable in value. Per contra in his " Plan 
 of an Economical and Secure Currency " for England, he 
 proposed, not gold, but silver, as " the standard." More- 
 over, on what is seen to-day to be the vital point of the 
 whole matter Wherefore and how came gold to be chief 
 
120 THE PARITY OF MONEYS. 
 
 metallic money in London in his day ? he squarely op- 
 posed Lord Liverpool* and makes incisive reference to a 
 little flight of fancy of Dr. Smith.t 
 
 Mill, though objecting to a " double standard," so far 
 from showing disrespect for silver as a money-metal, fol- 
 lows Lord Ashburton in pointing out that the inconven- 
 iences of the " double standard " are avoided, and its 
 advantages obtained by what he (erroneously) supposed 
 to be the system of France. His idea was that silver was 
 the standard (or as I should call it, unit and sole legal 
 tender), while gold held a (supposed) anomalous position 
 which I should describe as that of a trade coin, with a 
 name which served to give it a certain rating, that could 
 be varied by agreement. 
 
 This brief but comprehensive glance at the practical 
 ideas of Smith, Ricardo, and Mill, about the " standard " 
 as an object of state policy is, I think, conclusive, as re- 
 
 * Of Lord Liverpool's idea of a preference for gold because England 
 was so rich, he says (p. 222), "it is not because gold is better fitted for 
 carrying on the circulation of a rich country, that gold is ever preferred 
 for the purpose of paying debts." In another place he observes that the 
 use of gold in the eighteenth century in England was due to "the inac- 
 curate determination of the Mint proportions." (p. 271.) 
 
 t Referring to Dr. Smith's idea that " during the continuance of any 
 one regulated proportion between the respective values of the different 
 metals, the value of the most precious metal regulates the value of the 
 whole coin," Ricaido makes the significant comment : ''Because gold was 
 in his day the medium hi which it suited debtors to pay their debts, he 
 thought that it had some inherent quality by which it did then, and 
 always would, regulate the value of silver coin." (p. 224.) 
 
 t Mill's Principles of Political Economy, edition of 1848, Vol. II, p. 4. 
 
MONEY AS AN OBJECT OF SCIENCE. 121 
 
 spects a certain branch of this inquiry. One cannot look 
 in their writings for anything definite and thorough about 
 the nicer issues now before us. As no germ of incitement 
 is to be found in their writings for a revolution of one 
 metal against the other, so there is nothing positive as to 
 the possibility of that absolute intermetallic peace, of 
 which we are now treating, and which is the object of the 
 policy of Monetary Union. In the world of practical life, 
 Smith, Ricardo, and Mill take the metals, so to speak, for 
 " what they are worth," but do not dogmatize either about 
 parity or disparity. 
 
 But you will say that, notwithstanding this, I have al- 
 ready pointed to their teaching as responsible for a fashion 
 of thought about parity of Moneys which I regard as 
 fraught with error, and you will ask where that teaching 
 is. It is this which I propose now to show. 
 
 And first of their general impressions of the subject, its 
 character, importance, the standing of money in the com- 
 monwealth. From that point of view, upon which it seems 
 to me it is inevitable that one who wishes to deal com- 
 petently with monetary legislation should place himself, 
 it is of importance to know how far he can look to Smith, 
 Ricardo, and Mill for instruction about matters of princi- 
 ple. What, for example, had these authorities to say of 
 the importance of monetary legislation, of the occasions 
 which call upon the legislator for interference, and of the 
 mode and the purpose of such action ? Incompleteness, 
 or onesidedness, in the scientific treatment accorded by 
 these writers to the subject of Money must prove to be 
 
122 THE PARITY OF MONEYS. 
 
 misleading. As there is no doubt that they would be re- 
 ferred to as authorities, so their message would prove a 
 source not of instruction, but of confusion. Now, in fact, 
 at least as I understand the matter, they omit to deal with 
 it exhaustively, or even methodically. To whatever ex- 
 tent, then, their influence whether by omission or com- 
 mission, the influence of what they taught, or what they 
 did not teach remains a power, it requires revision. As 
 for my views of what the course of this revision should be, 
 I have expressed them from time to time since 1876, but 
 will briefly set down herewith as a postscript a statement 
 on the subject of Money's place among the functions of 
 government, which can conveniently be compared with 
 the views of Mill which I now quote, and also with what 
 once were the views of Herbert Spencer.* 
 
 The omission or defect to which I have referred is great- 
 est in Mill, less in Eicardo, least in Smith. But it is not 
 merely because Mill wrote last, with a greater expanse of 
 monetary experience in sight than the others, that the de- 
 fect is more marked in his case. It is also because of the 
 scope and plan of his work. An analogous remark applies 
 to Eicardo. In Smith's great book the historical element 
 predominates : it was a conspectus of the economic condi- 
 tion of societies. Ricardo's work, Principles of Political 
 Economy and Taxation, was a series of generalizations, 
 which might be called in some measure a supplement and 
 criticism of Smith. But Mill's twelve hundred pages con- 
 tained not only Principles of Politiatl Economy, but 
 
 *See note to page 125. 
 
MILL'S CLASSIFICATION. 123 
 
 Some of their applications to Social Philosophy. It pro- 
 fessedly covers the ground of Economics in a wider sense,, 
 the economic side and the political side, and in the latter 
 of course the field of economic statecraft, the sphere and 
 duty of government. Book IY is entitled Influence of 
 the Progress of Society on Production and Distribution + 
 while the last book, Book V, treats, in eleven chapters, 
 Of the Influence of Government. 
 
 Where, then, does Money stand, as an object of legisla- 
 tion and of administration ? What is the scientific classi- 
 fication of this matter of legal tender for payment, and the 
 regulation of the Mint, which Adam Smith had referred to 
 as from early ages the object of governmental care ? Mill, 
 in Book Y and Chapter I, deals with the whole matter. 
 He treats of the functions of government where does he 
 find a place for Money ? 
 
 I doubt if any member of the Eoyal Commission is pre- 
 pared for the answer. Life is said to be measured rather 
 by sensations than by time, and when, under the mandate 
 of the Sovereign of a great Empire, gentlemen have been 
 studying, for nearly two years, a question which has con- 
 siderably interested the world since 1876, it is inevitable 
 that they should rapidly outgrow a certain circle of ideas, 
 which once may have been quite familiar. If the man could 
 wear the cap that fitted him as a child, there would be no 
 shock in realizing what it is Mill says about Money. 
 
 Mill* treats money as "coining," and puts it side by 
 
 * Vol. II, page 377. 
 
124 THE PAEITY OF MONEYS. 
 
 side with weights and measures a matter of convenience, 
 to save the trouble of assaying. As for the regulation of 
 Paper Money and of Credit generally, I find no mention 
 of them here, though they are elsewhere exhaustively 
 discussed by Mill. So coinage is put side by side with 
 weights and measures. That is all ! Let us pause for 
 a moment to consider where this doctrine will carry us. 
 Imagine a cabinet, a parliament, charged with the con- 
 duct of the monetary interests of a great nation, draw- 
 ing its inspiration on that subject from such teaching. 
 Evidently, if Money be cut down, in the case now before 
 you, to the limits of the theory as stated, the sovereign and 
 the rupee are but weights of metal. You will agree with 
 me, I doubt not, if it is true that the sovereign and the ru- 
 pee are only weights of metal, this alone and nothing more, 
 then the Royal Commission has been dealing all this time 
 with a matter of the size of the Troyes Pound or the Impe- 
 rial Gallon. Shall we say, if Mill is right, there may yet 
 be a " Trojan" Question or a " Gallonial " Crisis? 
 
 Is the implication quite clear ? To make this page more 
 luminous, let me apply the same method in another field 
 for example, to great works of art that have been the grace 
 of civilization, and so are more attractive than dry-as-dust 
 theories of economy. Let those who have visited Rome 
 and Paris, and Dresden know that the theory I am attack- 
 Ing is like that which should treat the Antoninus of the 
 Capitol as a mixture of copper and tin, the Venus of Melos 
 as carbonate of lime, and the Sixtine Madonna as pigment. 
 I am sorry to add there is nothing in the rest of Book V 
 
MILL AND HERBERT SPENCER. 125 
 
 to redeem the defects of this view. Evidently the writer's- 
 thoughts were elsewhere, or the mere inconsistency of this 
 with other parts of his work would have occurred to him. 
 Of course it is not at all implied by this that such defects 
 are common; indeed, I have elsewhere said enough to 
 disprove this. Nor, indeed, is it just to my admiration for 
 the great thinker to allow the implication to pass that he 
 may not in any case have taken a broader view than is 
 here revealed by his book. One would not build an in- 
 dictment upon a slip of the pen. But print is a persistent 
 force, and fame gives posthumous power for harm to the 
 indiscretions of the great. .Disciples have a fatal facility 
 for building systems on the oversight of the master.* 
 
 * An illustration is given in the use lately made in some quarters of Mr. 
 Herbert Spencer's utterances on this subject. See " Journal of the Inst. 
 of Bankers," Pt. VI., Vol. VII., p. 399. The reference is, I believe, to 
 " Social Statics" (c. xxix.)- A glance at the book seems to me to show 
 that it is unjust to Mr. Spencer to hold him responsible for the letter of 
 what there is printed. The book was written about 1850, and the pref- 
 ace of the American edition (1864) states that the reprint must not be 
 taken as a literal expression of the author's present views, and this pref- 
 ace is reprinted in the edition of 1868, and referred to in the new preface. 
 
 The chapter in question reveals complete unconsciousness of laws of 
 legal tender. The essential character of money, which Adam Smith with 
 his catholic good sense was aware of, is thus ignored. The author deals 
 with money by taking it for granted. He objects to "interference with 
 currency," and thinks that mints are unnecessary but he never objects 
 to making silver and gold legal tender, or explains how governments 
 could exist without money ! His unconsciousness of the facts also comes 
 to the surface in his characterization of Scotland as aland of free-trade in 
 currency, in which, of course, money is implicitly included. 
 
126 THE PARITY OF MONEYS. 
 
 How, then, did it come to pass that monetary legislation 
 was lightly dealt with by Smith, Kicardo, and Mill ? What 
 ^vvas the source of this " fashion of their thought "? 
 Asking, as we do, how they regarded the Parity of 
 Moneys, and such Parity being obviously an equilibrium 
 supported by legislation, it is in the path of these inqui- 
 ries that we shall surely discover the key to what they 
 may have to say which bears upon the matter. We have 
 seen that they lived securely while there was compara- 
 tive legal equality between gold and silver, and that this 
 condition of things seemed so entirely normal and natural, 
 that its causes were not examined in a scientific spirit. I 
 now inquire whether there was not an active influence, no 
 longer negative, but positive, working against truth a 
 fashion of thought which produced what I might call an 
 innocently studied neglect of the scientific basis of mone- 
 tary legislation, and hence a marked bias in reference to it. 
 
 I find such an influence. I find it in the natural exag- 
 geration of the enthusiasm of the great conflict in which 
 these great men spent their mental life. A spirit of reac- 
 tion was naturally engendered by this conflict, which ob- 
 scured the truth about money, but failed to reveal itself as 
 a prejudice to these lovers of truth, because no serious 
 consequences or erroneous conclusions growing out of 
 their default could show themselves at the time. 
 
 These thinkers arose to attack and destroy false sys- 
 tems. For them the Commercial or Mercantile System, 
 together with its various developments of vexatious state 
 interference, was the Enemy. Their teaching was aimed 
 
THE MERCANTILE SYSTEM. 127 
 
 to persuade the world to renounce this devil and all his 
 works. 
 
 The Mercantile System, which, to use Dr. Smith's 
 words, " represented national wealth as consisting in the 
 abundance, and national poverty in the scarcity of Gold 
 or Silver," was a doctrine and a policy. Gold and Silver, 
 then, were involved in the struggle. But in that case 
 monetary legislation also w 7 as necessarily involved in it 
 together with them. Economic legislation generally was, 
 in its purpose and effect, monetary legislation, the aim 
 being to increase the national store of gold and silver. 
 The great work of these men was thus an effort to abolish 
 a doctrine and a policy relating to the precious metals 
 which implied all manner of artificial regulations on the 
 part of the state. Was not this a conflict likely to excite 
 an enthusiasm that would be capable of exaggeration, 
 which everyone would regard as entirely pardonable, if 
 not indeed laudable ? How could the question escape 
 exciting a " political being " like man, whose nature it is 
 to put his heart into politics. I find it perfectly natural 
 on their part to be disposed to draw the line against 
 monetary legislation generally or, if this could not be 
 done entirely, at least not to admit the subject into the 
 inner circle of their " system " or scheme. 
 
 But the real effective strength of this disposition can 
 only be realized w T hen we consider the general orbit of 
 thought upon which these great men were swept along 
 with their time, leading and yet led. What is the dis- 
 tinguishing mark of the whole age of thought ? Freedom, 
 
128 THE PAEITY OF MONEYS. 
 
 the rule of Nature, one phase of which is well suggested 
 by the words laissez-faire, and non-interference. Set the 
 individual free ; remove all barriers to his development, 
 was the watchword in the camp of science. This, then, 
 was the principle. But like all principles it needed for 
 its rightful application a sound understanding of its nat- 
 ural limits. Exaggerate the force of it, let it carry men 
 to extremes, and you will seethe gaols open and the Mint 
 closed ! 
 
 There is, by the way, what seems to me a curious par- 
 allel to the whole situation now before our view, which I 
 will mention, as I do not remember ever to have seen it 
 referred to. This idea of a state of freedom and rule of 
 nature* is but the same principle applied to the social life 
 of men as that nature in whose light the Father of Medi- 
 cine regarded the bodily frame. The appeal of the eigh- 
 teenth or nineteenth century for the health of the economic 
 body is still to that healing power of nature (vis medica- 
 trix naturae, as the modern Latin phrase has it) which Hip- 
 pocrates must have revealed to Aristotle. But mark the 
 sequel ! The principle of medicine being to allow nature 
 to act, it is said to have been discovered by the Mediaeval 
 Church that various operations of medicine, and, in gen- 
 eral, surgery, were rather an interference with nature, and 
 hence they were forbidden to ecclesiastics. Are we not 
 bound to trace and identify a similar superstition among 
 economic writers ? Were they not infallibly led to treat 
 
 * Quesnay's first work seems to have been his Droit Naturel. 
 
MONEY IN A STATE OF NATURE. 129 
 
 certain departments of the medicine of the state as an 
 interference with nature ? 
 
 I trust you will kindly absolve me from any intent of 
 disrespect toward the theories of nature.* Of course 
 thought is no more likely to divest itself of the antithesis 
 between nature and art than between right and left or be- 
 tween the equator and the poles. But there are limits ; 
 and there is a disposition to overpass them a natural dis- 
 position ! I recall an illustration of this extreme view, 
 which may be suggestive, namely, a comparison between 
 Varro's modest line " that Nature gave the fields and hu- 
 man art made the cities " and Cowley's 
 
 " God the first garden made, and the first city Cain !" 
 
 Now, I entirely disclaim accusing Mill of regarding 
 monetary laws as a work of Cain. But it could fairly be 
 said the mood of the passage from Mill just referred to, 
 and of others I shall cite, is represented by Cowper's 
 
 " God made the country, and man made the town." 
 
 As for the great Father of Economic Science, Dr. Smith, 
 I certainly wish he had read (or re-read) his countryman 
 Sir James Steuart. Perhaps he would have done so but 
 for the depression caused by observing those acts of law- 
 givers touching money that filled the chief place in the 
 public eye. Those acts, as they class themselves before 
 me, were the debasement of metallic money, the issue of 
 paper money, and the prohibition of the export of coin 
 
 * Naturam expellas furcd tamen usque recurret! 
 
130 THE PAEITY OF MONEYS. 
 
 and bullion. Of these, the first and the last were dis- 
 tinctly tainted with purely " mercantilist " origin. With 
 reference to the latter I may mention, in passing, a curi- 
 ous fact, to which I have seen no allusion in regions where 
 one would expect to find it, except in the statute book. It 
 was not till Mill was in his teens that it became lawful to 
 export guinea gold. The fifth century of this mercantilist 
 law in England was closed in 1819. With such instances 
 of vexatious or disastrous state interference before him it 
 is not strange that monetary legislation exerted a certain 
 repugnance in the thinker's mind. 
 
 What, then, is the natural effect, in the case of such 
 men, of an unsympathetic attitude toward monetary juris- 
 prudence ? Evidently an incomplete, unsystematized 
 handling of the subject. Where actual history is in sight 
 to be appreciated by the experienced observer's eye, or 
 where action is to be taken for which the counsel of the 
 sagacious thinker is needed, we find the great excellency 
 which the fame of such men justifies us in expecting. 
 Once outside of that range, we are in strange country. 
 
 That I do not fail to appreciate that sagacity has al- 
 ready been shown. It remains to add evidence in contin- 
 uation of what has been said of the place of money in the 
 functions of government. The illustrations which I shall 
 give under this head relate to the incompleteness and in- 
 consistency of statements, the manner in which some of 
 the great problems of Money are left outside the focus of 
 attention, and the visionary character of some of the rea- 
 soning on the subject. 
 
INCOMPLETE GRASP OF THE SUBJECT. 131 
 
 We have noted already the mode in which the action of 
 the state legislation and administration, creating, estab- 
 lishing, supporting a monetary system is taken for 
 granted. The great monetary questions of the day, chief 
 among which is the regulation of Bank issues, are fully 
 discussed. Properly speaking, for the sake of consistency, 
 these subjects ought to be made to fit into a general sys- 
 tem of monetary legislation. But this step seems not to 
 have been attempted. Salient facts are recognized, but 
 the scientific appreciation of them is incomplete, and there 
 is no proper apportionment of them to their place in the 
 system as a whole. For reasons already stated in what 
 has been said of the general scope of the " Wealth of Na- 
 tions," this remark applies far less to that great book than 
 to the " Principles " set forth by Eicardo and by Mill. 
 
 The " sketchiness " of Bicardo's book in this regard is 
 notably exhibited in a passage, which, in the days of a 
 Boyal Commission on Gold and Silver, wears a very strange 
 air : 
 
 " It may perhaps be necessary," be observes, ''to say a few words 011 
 the subject of the two metals, Gold and Silver." (p. 221.) 
 
 As if only a few words were necessary ! Elaborate dis- 
 cussion is given of the modes of regulating money credit, 
 of Paper Money and Bank-notes, all of which have an 
 existence only relatively to Metallic Money. And yet the 
 principles of regulation of Metallic Money are but lightly 
 glanced at. As a matter of convenience Bicardo takes 
 Gold to represent Metallic Money, and assumes Gold to be 
 
132 THE PARITY OF MONEYS. 
 
 stable iii value, and though he recognizes in the amplest 
 manner that these are assumptions made purely for con- 
 venience and clearness, and without foundation in fact 
 still those chapters are wanting in which the relations of 
 Gold and Silver and the question of the general level of 
 prices should be dealt with. At the same* time I cannot 
 resist inquiring what would have happened if Ricarclo had 
 been led in some way, to put his Scheme of a Monetary 
 System for England into his " Principles." Would not 
 the necessity of cohesion have forced itself upon his mind? 
 Could later economics have taken the tone we have wit- 
 nessed, if he had treated ex cathedra of the Principles of 
 Monetary Legislation with a high-pressure interference 
 scheme to back them ? The central idea of what I shall 
 name Ricardo's Bullion Standard and Bullion Certificate 
 Scheme, was parity maintained by all the force of law that 
 was to be had. And I must also allow myself the daring 
 statement that the same thing may be said of all orthodox 
 plans for a convertible paper currency if the philosophers 
 only knew it ! 
 
 The same incompleteness, with a touch of the visionary 
 dogmatism of a mind possessed, as it were, with the idea 
 of freedom, are visible in Mill. In his chapter On the 
 Value of Money as dependent on the Cost of Production, he 
 says : 
 
 " We are, however, to suppose a state, not of artificial regulation, but 
 of freedom. In that state, and assuming no charge to be made for coin- 
 age, the value of money will conform to the value of the bullion of which 
 it is made." (I, p. 24.) 
 
MILL ON MONEY AND THE STATE. 133 
 
 With this passage we pass at once to the centre of Mill's 
 system ; we can at once proceed to judge of the correct- 
 ness of his general ideas about money and the state. 
 
 We observe that he speaks of " a state, not of artificial 
 regulation, but of freedom." We know he can only mean 
 freedom under the law, for he is not speaking of savages, 
 but of an organized society, and a purpose of his book is 
 to afford counsel to rulers how to make wise laws. We at 
 once ask, then, what is the principle of distinction between 
 such " law " and " artificial regulation," so far as money is 
 concerned. And then we find both principle and regula- 
 tion brushed aside ! The entire system breaks down 
 through the one phrase " assuming no charge to be made 
 for coinage." Mill actually assumes in his " state of free- 
 dom " the entire apparatus of " artificial regulation " under 
 which he was born. He endows his " natural " state, by 
 this brief but comprehensive assumption, not only with 
 the general law of Money, but also with the Statute of the 
 18th year of Charles II, chapter 5, with the Tower Mint, 
 and with a yearly appropriation for expenses. But even 
 then he cannot reach the parity he speaks of between bull- 
 ion and coin. Not merely free coinage and gratuitous coin- 
 age, but still another artificial regulation is wanted, namely, 
 that statute which compels the Bank to buy gold bullion 
 at a fixed price. And yet it is this which, in fact, really 
 makes gold bullion stable in value in England ! Is it nec- 
 essary to add further evidence of the utter inadequacy of 
 Mill's ideas of the relation of monej^ and the state ? I 
 submit that this one passage makes good my charge. 
 
134 THE PARITY OF MONEYS. 
 
 Of course it is impossible to advance very far in politi- 
 cal economy without treating of value ; and when value is 
 reached, money is not far off. Now it is no treason, in 
 the year 1888, to say that money is a subject which pre- 
 sents some difficulties. It was convenient very conven- 
 ient to treat of value directly without troubling one's self 
 seriously about the " medium," money. But if one does 
 not trouble one's self seriously about money, the principles 
 of monetary legislation fade into thin air. It is quite in 
 keeping with this mood to observe, as Mill does : 
 
 " There cannot, in short, be intrinsically a more insignificant thing in 
 the economy of society than money." 
 
 Here, again, is an even more striking instance of dis- 
 praise of monetary legislation, than Kicardo's " few 
 words." Of course, to us in this generation it is pecu- 
 liarly easy to find such passages a ground of surprise. 
 We live in a time of monetary discussions. Not to men- 
 tion lesser proofs, we can recall in 1876 the Special Com- 
 mittee of the House of Commons on the Depreciation of 
 Silver, and the Congressional Commission on Silver in the 
 United States ; the International Monetary Conferences of 
 1878 and 1881, the Royal Commission on the Depression 
 of Trade which closed its long labors in 1886, and the 
 Eoyal Commission on Gold and Silver Currency, which 
 followed, and is now * in session. After all such a profound 
 stirring of opinion and effort of study, it seems to us very 
 strange that a great economic teacher could say, " There 
 cannot be intrinsically a more insignificant thing in the 
 * First printed in May, 1888. 
 
THE FABLE OF MIDAS. 135 
 
 economy of society than money." No doubt, in a certain 
 sense, the statement is true, and the truth is an important 
 truth ; but what is true in it is not a novelty, while the 
 too vigorous statement, leading to an exaggeration of the 
 truth, is new. The truth itself is of most venerable ances- 
 try. Was it not early in Grecian fable that the legend 
 arose of Midas, to whom the god gave his wish, that all 
 he touched should turn to gold ? Midas starving in the 
 midst of his gold, 
 
 Kich beyond hope and wretched past despair, 
 Loathing the wealth he cannot choose but coiu, 
 Cursing the boon that not an hour ago 
 He praj r ed for, 
 
 as Ovid tells the story, offers a parallel, not too remote, 
 both to the ideas of Dr. Smith about the Mercantile Sys- 
 tem and to analogous opinions as to the role of money. 
 Taken, then, merely as a forcible statement of the purely 
 ancillary relation of money to " real wealth " to com- 
 modities and property and services which make up that 
 sum of things desired, to attain which money is only a 
 means this phrase of Mill's commands assent. But it is 
 more than this in effect ; it is an indication of what I 
 have spoken of, the disposition to ignore the nature, and 
 the importance, of money and of monetary law. 
 
 This will appear more clearly upon examining the con- 
 fusion between Money and Barter. Barter being an ex- 
 change of goods for goods without money, it is plain that 
 to say that modern exchanges, which are in fact exchanges 
 of goods for a price, and of a price for goods, are barter, 
 
136 THE PARITY OF MONEYS. 
 
 is playing upon words. It is a metaphor, to be justified 
 by rhetorical or poetic considerations, but not otherwise. 
 In the mental process which its use implies, money sus- 
 tains the role of a dissolving view. Always a " middle 
 thing," /jLSffov, tertium comparationis, but sometimes viewed 
 under the simile of an instrument, wheel, vehicle, etc., it 
 becomes for some minds a " medium " and nothing else, 
 and then as a mere " mode of exchanging," as Mill calls 
 it, becomes quite diaphanous, as if it were thinned and ex- 
 panded into an atmosphere, which, of course, is invisible. 
 But these metaphors are serious affairs. The monetary 
 question embraces a considerable range of interest. Ex- 
 tending from Indian taxation, or the solvency of France, 
 to such a local domestic affair as the present abraded state 
 of English gold coin, it is important enough to repay look- 
 ing after. If you allow these metaphors full swing and 
 it lies in the power of the Royal Commission to do this 
 they will decide the questions before you off-hand. If 
 trade is barter, of what use are standards, and statutes to 
 watch over them? All that the " Precious " Metals have 
 to do is to exist, and that they do by the help not of man, 
 but of nature. No edicts are needed ; the fulminations of 
 Professors and of Princes are mere wasted powder. The 
 way of Parliaments, Commissions, and Congresses of Mon- 
 etary Unions is quite clear and perfectly simple. It is to 
 do nothing! but, of course, only after rejwdiny every- 
 thing ! 
 
 The confusion of money and barter to which I allude 
 finds root, I think, in one of those phrases for which 
 
ELOQUENCE AND PRECISION. 137 
 
 Ricardo's natural eloquence and cogency of statement are 
 responsible. That he suffered some of the disabilities of 
 the so-called " practical man" is an obvious remark when 
 made, as I make it, fifty years after Senior said he was 
 " the most incorrect writer who ever attained philosophical 
 eminence." And in referring to money, he spoke as a dic- 
 tator, especially after the Resumption of Cash Payments. 
 It is one of his generalizations that seems to have ob- 
 scured in the eyes of Mill some modest truths with which 
 Adam Smith was quite content. I doubt if Ricardo real- 
 ized the force of what he was saying. The evolution of 
 doctrines amid the changes and chances of this world are 
 not likely to have occupied his thoughts very seriously. 
 And it is to one of his most brilliant generalizations that 
 the error seems traceable. The truth conveyed was in 
 fact so important and the metaphor so attractive, that it 
 seems to have been impossible for his followers to make 
 good those limitations of its field which should exclude 
 serious error. 
 
 " Gold and Silver," says Ricardo, " having been chosen for the general 
 medium of circulation, they are, by the competition of commerce, dis- 
 tributed in such proportions to the different countries of the world as to 
 accommodate themselves to the natural traffic which would take place if 
 no metals existed and the trade between countries were purely a trade of 
 barter." 
 
 Here is, at the same time, a great truth, and a most 
 prolific source of error. Of the truth it is needless for me 
 to speak. I shall presently cite the opinion of Mill as to 
 its originality. But what of the error? 
 
138 THE PARITY OF MONEYS. 
 
 Let us observe the hypothesis and dwell upon it a mo- 
 ment ! " Natural traffic ! " Natnra naturans ! If there 
 were only no metals, that we might get back to a state of 
 nature, of freedom ! If we were in that happy state there 
 would be the same traffic, we should buy freely, without 
 money and without price, just as we do now. And it 
 would be natural traffic, freed from the vexations that 
 money brings. 
 
 It is a far-off echo of that devout wish with which the 
 too-learned Pliny was, in his time, inspired by most fa- 
 mous authors of still elder days. (Jtimnnque posset e vita 
 in totum abdictiri, or, as the older translation gives it, 
 " Oh that the use of Gold were cleane gone ; would God it 
 could possibly be quite abolished among men * ~ :: ~. 
 
 What a blessed world was that, and much more happier 
 than this wherein wee live, at what time as in all the deal- 
 ings betweene men, there was no coine handled, but their 
 whole trafficke stood upon bartering and exchanging ware 
 for ware, and one commoditie for another." What more 
 attractive? And yet absolutely, hopelessly visionary ! Is 
 it in Plato's * Republic,' or in Moore's ' Utopia,' or in 
 ' The New Atlantis,' or in * Oceana,' that this miracle of 
 " natural traffic" can be imagined as taking place ? Why 
 this excursion into dreamland ? 
 
 Now, I do not mean that it is possible that any good 
 head could be so possessed with this dream as to vitiate 
 all his thought. But is not a little unsteadiness of nerve 
 enough when one is navigating, what Petty called two 
 
MONEY AND BARTER. 13 if 
 
 centuries ago, " the deep ocean of all the mysteries con- 
 cerning money ? " 
 
 Observe the effect this passage of Bicardo's had upon 
 Mill. He says of it, after quoting it in full (v. ii, b. iii., c. 
 xxi) 
 
 " Of this principle, so fertile iu consequences, previous to which the 
 theory of foreign trade was an unintelligible chaos, Mr. Kicardo, though 
 he did not pursue it into its ramifications, was the real originator. No 
 writer who preceded him appears to have had a glimpse of it ; and few are 
 those who even since his time have had an adequate conception of its 
 scientific value." 
 
 Observe also the sequel ! " It is not with money," says 
 Mill elsewhere, " that things are really purchased." 
 
 This, you will notice, is a statement which goes far be- 
 yond the idea which I have sought to express in the phrase 
 " money is an order payable to bearer upon wealth in gen- 
 eral;" and which, in various forms, is common to a great 
 number of writers, among whom I may name Aristotle 
 and Adam Smith. In Mill's mind this phase of money 
 seems to grow in actuality. In another passage he ob- 
 serves 
 
 "All interchange is in substance and effect barter; he who sells his 
 productions for money, and with that money buys other goods, really 
 buys those goods with his productions. And so of nations ; their trade 
 is a mere exchange of exports for imports ; and whether money is em- 
 ployed or not, things are only in their permanent state when the exports 
 and imports exactly pay for each other." (ii, 168.) 
 
 Let us analyze this with some care ! " Things are only 
 in their permanent state ! " Precisely ! There is the truth L 
 
140 THE PARITY OF MONEYS. 
 
 <r ' Things " tend toward further exchanges, so as to rectify 
 the balance. The order payable to bearer on wealth in 
 general is a thing which the bearer naturally desires to 
 " realize upon." It is true of individuals and it is true of 
 nations. If a nation receives a mass of cash on balance 
 of its foreign trade the tendency is (and should be) not 
 " to use the most ferocious measures " (to quote a quota- 
 tion of Herbert Spencer) "to keep it from going out 
 again," but to circulate it. Of course the mercantilist 
 would use the most ferocious measures to keep it back. 
 Is it not evident that the anti-mercantilist crusader must 
 wax a little warm in stoutly resisting, and was in no mood 
 to mince matters of doctrine when he got the enemy 
 within range of his mace ? 
 
 Why was it that the great man did not calmly state the 
 facts and omit the imaginary aggravating circumstances of 
 rhetoric ? Why say that exchanges with money are in 
 substance and effect exchanges without money, or, in other 
 words, that black is white ? What but confusion can be 
 gained by such tropes and figures ? After this no wonder 
 this same great treatise, that has done so much for the 
 advancement of science, should offer matter so incongruous 
 as speculations about a pound, which should " not express 
 any real thing, but should be a mere unit of calculation ?" 
 (ii, 4.) In this latter case Mill seems to me to give more 
 weight to a tale of Montesquieu's (and perhaps a dream of 
 Sir James Steuart) than to the reasoned opinion of Ricardo. 
 It is in such speculations that certain theories find their 
 lofty source, which, when they show their importance in 
 
THEORY OF IDEAL MONEY. 141 
 
 descending to practice, may take opposite directions, as- 
 if leaving a watershed. I should briefly describe twa 
 classes of them as the doctrine of the Printing Press, and 
 the doctrine of the Banking House. Of the former, the 
 Paper-Money school, little has been heard, I believe, by 
 the Royal Commission, but the latter doctrine is certainly 
 so strongly held in certain regions that I venture to say if 
 Bacon were living he would call it " the idol of the Bank- 
 ing House. '* It is the disposition to think that, for the 
 monetary legislator, cash is unimportant because credit is 
 colossal ; which is not very remote from saying the trunk 
 and branches of our tree are so enormous, that the root& 
 are quite unimportant ! 
 
 But enough has been said to show that as a systema- 
 tized branch of knowledge Money lay outside the focus 
 of Mill's attention. 
 
 * If to regard a metal as a standard of value carried with it no actual 
 employment of pieces of that metal for the uses known in fact as mone- 
 tary ; that is to say, if the metal were purely a term of mental comparison 
 and nothing more, as might be the case if one were to consider, as a mat- 
 ter of curiosity, what a horse "was worth" in platina or in gallium, the 
 question might be treated in a different way. 
 
 There would, then, be no need of laws of Legal Tender, of Coinage, of 
 Banking, there would be no Monetary Systems, there would be no money 
 and no questions of currency, of monetary policy. But this is not the 
 case. It is but a dreamland of the economic visionary to which this latter 
 spiritual meaning of "standard of value" points. Money exists. The 
 actual world of human society has always been, and is to-day, a world of 
 payments as well as of price. (See answer to Question VII of the Com- 
 mission.) 
 
142 THE PARITY OF MONEYS. 
 
 With another illustration I close this letter. Mill re- 
 marks that : 
 
 "In order to understand the manifold functions of a Circulating Me- 
 dium, there is no better way than to consider what are the principal 
 inconveniences which we should experience if we had not such a 
 medium?" * * * 
 
 What shall I say of this ? If it were in a popular 
 lecture there would be mere petulance and hypercriticism 
 in noting what, from a higher point of view, will seem 
 deficiencies. But it is not a popular lecture. It is in 
 " Mill's Principles of Political Economy," and in the 
 chapter where the completest scientific exposition of the 
 role of money in society is to be looked for. Surely these 
 are precincts that have no right to harbor metaphors and 
 hypotheses which cannot give a satisfactory account of 
 themselves ! It is therefore quite germane to our object 
 to observe that, taking the matter strictly, I find here a 
 companion vision to Kicardo's. 
 
 This hypothesis of a world where there is no money at 
 all, leads straight to dreamland. The reason of this is 
 that the mind is invited to enter upon a supposition with- 
 out going through to the end : it sees only certain feat- 
 ures of the supposed case, but is not apprised concerning 
 the existence of features it does not see, and no notice is 
 given of the superficial and provisional character of any 
 inferences which thus can be drawn. As Mill states it, 
 the assumption is inevitably implied that " we " should be 
 " we," that the modern world would be the modern world, 
 
A WORLD WITHOUT MONEY. 143 
 
 or indeed (to go into particulars) that London could be 
 London, and the English money-using community an 
 economic body just as it is, if there were no English 
 money. Is it not also implied that this would be true if 
 there never had been any English money, or any money 
 at all ? Why not ? To most readers certainly this would 
 seem a natural conclusion. But this is absurd ! Who can 
 speak with certainty of detail upon a supposition which 
 substitutes an imaginary history of civilization for the 
 facts ? 
 
 If once this full meaning of Mill's hypothesis is stated 
 and accepted, its visionary character will presently stand 
 revealed. We can assist the process by asking, Why not 
 inquire how the world would get along if there never had 
 been any division of labor, or any language ? Or again, 
 Why not attempt to characterize the family by the same 
 method ! The family is a very great subject of thought 
 for philosophers of every school and specialty, although 
 it is the most familiar thing there is so familiar, indeed, 
 that the word familiar is derived from the word family. 
 But money is a great subject, too, in its humble way ! 
 
 Let us make the attempt ! In order, then, to under- 
 stand the family, we should proceed upon the idea that 
 there is no better way than to ask what would be our po- 
 sition if there were no sex and no children ? Do you not 
 agree with me that this is a fair parallel ? Again, recall- 
 ing the familiar analogy between the circulation of money 
 and the circulation of the bloo^l, let us imagine Harvey 
 studying the circulation of the blood, and inquiring what 
 
144 THE PARITY OF MONEYS. 
 
 would happen if there were a natural circulation where 
 there was no blood at all. 
 
 How does this method strike you as a way of clearing 
 the air, or, rather, of sending light into the nooks, corners, 
 and recesses of the obscure labyrinth of money ? Is it 
 not an unpractical way of looking at the subject ? And 
 yet this is the century which appreciates Francis Bacon's 
 method, which is getting itself trained to use the novum 
 organum ! Can it be said that money has here received 
 its share of scientific treatment ? Evidently not ! 
 
 I submit that the views I have advanced are justified 
 by the evidence I have presented. The natural result of 
 the doctrine I have analyzed is evidently that unpractical 
 fashion of thought, of which I spoke at first, that defect 
 of sight or color-blindness in reference to monetary legis- 
 lation, and a habit of mind which enlists the will to resist 
 and to prevent the approach of knowledge. You will 
 observe that there is a progression in the attitude toward 
 money of these leading minds ; a progression which may 
 quite legimately have communicated a certain momentum 
 to opinion in these last two or three decades. The pro- 
 gression is from apparent complacency and neutrality to 
 indifference and finally disparagement. This course, as I 
 say, tended to perpetuate itself, and its natural sequence 
 is that in the higher walks of science money has, to an 
 important extent, been ignored, and monetary legislation, 
 as it were, " tabooed :"* language being used only consist- 
 
 *Among other curious results of this error is the fact that in some 
 minds the practical monetary question of the day has, by a variety of 
 
ADVANCEMENT OF LEARNING. 145 
 
 ent with the idea that the state ought not to have any- 
 thing to do with it. 
 
 To remedy this condition of opinion it is necessary to 
 change the fashion of thought throughout, and hence to 
 begin at the source by a revision and correction of gene- 
 ral ideas about money and the state, and to this work, as 
 you are aware, I have sought to contribute. To the fact 
 that such revision has not penetrated everywhere through- 
 out the body of the learned is to be ascribed, as it seems 
 to me, the unwillingness of some minds to accept, as con- 
 clusive; reasoning such as that which I briefly set forth 
 at the outset of this letter. But for this fashion, the 
 economic question as to the power of nations to maintain 
 Parity between the Money-Metals would long ago, to- 
 gether with many other questions of moment, have been 
 resolved in all minds conversant with economics. 
 
 If I am mistaken in this opinion, I shall be greatly in- 
 debted to you if you will set me right. 
 Believe me, Sir, with much respect, 
 
 Very sincerely yours, 
 
 S. DANA HOBTOK 
 
 Athenaeum Club, 
 
 London, May, 1888. 
 
 illogical links of association or analogy, been connected with a matter so 
 foreign to it as the question of tariffs, of '-protection" and " free-trade," 
 and this, sometimes on one side, sometimes on the other, upon lines quite 
 contradictory with each other. 
 
146 THE PARITY OF MONEYS. 
 
 MONEY AND THE STATE : OR, THE PLACE OF MONEY AMONG 
 THE FUNCTIONS OF GOVERNMENT. 
 
 When, in the earlier stages of civil society, systematized 
 government came into existence, there arose of necessity 
 what I shall call an Institution of Obligatory Payment. 
 This may be regarded as accompanying both the growth 
 of rights and the differentiation or specialization of func- 
 tions among the members of the community. Whether in 
 public war or peace, or within the domestic sphere, in mat- 
 ters civil and in matters criminal, comes Obligatory Pay- 
 ment. Be it Tribute, or Tax, or Fine, or Damages, it is the 
 agent, adjunct, and ally of those powers of the community 
 to keep force and fraud in subjection, which are the very 
 essence and life of the Civil State. The material of Obliga- 
 tory Payment is money. It is the State which fixes upon 
 the object with which payment can be made, and estab- 
 lishes the name of Money, or Units of Valuation. 
 
 But what of Voluntary Payment the work of commerce 
 with its medium of exchange to relieve the individual 
 from the manifold inconveniences of barter ? Voluntary 
 Payment is present and of equal date, if not, indeed, the 
 elder. But not the stronger ! The individual, one against 
 all, cannot escape the controlling force of the corporate 
 will, which, in prescribing how Tax and Fines and Dam- 
 ages are paid, shows him the most convenient medium for 
 exchanges. Of course, the individuals form the State, 
 governments are their representatives, and mere conven- 
 
MONEY AND THE STATE. 147 
 
 ience in some measure leads the former to respect the 
 will of the people. But the single corporate will is para- 
 mount. Whatever the play of interaction, the effective 
 control is in the State. And the State cannot escape the 
 duty of exerting a control, for that control is a condition 
 of the State's existence. Without organization to restrain 
 force and fraud the State ceases to exist. It must defend 
 its existence against enemies ; it must keep the peace 
 within, and see that civil rights are respected in some 
 measure ; and for this it must have Obligatory Payments, 
 Money, Accounts, Valuations. The tendency of economic 
 writers has been to ignore this, and to start from the 
 trader's medium of exchange, and to regard it alone. 
 
 In setting forth this view as my own I allow myself to 
 cite the testimony to that effect of Professor De Laveleye, 
 in an address before the French Institute (Acad. of Moral 
 and Political Sciences), May 10, 1881. 
 
 A paper on ' The Parity of Bullion and Modes of Main- 
 taining it,' which followed the above as first printed in 
 London, June, 1888, is given on later pages in sequence 
 to the chapter on ' Bullion or Coin ? ' 
 
V. 
 
 FEDERATION FOR PARITY OF MONEYS 
 AND THE ADVANCEMENT OF SCIENCE. 
 
FEDEKATION FOE PAKITY OF MONEYS AND THE 
 ADVANCEMENT OF SCIENCE. 
 
 AN ADDRESS ANSWERING THE QUESTION " WHAT SHALL WE 
 
 DO ABOUT SILVER," BEFORE THE AMERICAN ASSOCIATION 
 
 FOR THE ADVANCEMENT OF SCIENCE. 
 
 ABSTEACT. 
 
 The persons addressed are the members of this Section. 
 For them Silver represents a duty. It was Science turned 
 politics that engendered that morbid condition of money 
 which creates the Silver Question, and it is for the interpre- 
 ters of Science to redeem this error by promoting a speedy 
 settlement of the issues thus raised. What is to be taught 
 by those who wish to advance Science ? The true reme- 
 dial policy was instituted by the United States in 1878, by 
 proposing to nations controlling the majority of the money- 
 metals the adoption of concordant laws assuring them 
 legal equality. It is in supporting this lead that Science 
 advances. 
 
 The basis of truth and fact sustaining this policy can be 
 summarized on the following lines. 
 
 NOTE. This subject was chosen by the Committee of Section I (Eco- 
 nomic Science and Statistics) in 1888, and Professor Sumner and I were 
 invited to represent the opposing sides of debate at Toronto, September 
 
 3, 1889. This paper was forwarded by me from Europe to the Secretary. 
 
 151 
 
152 SCIENCE AND THE FEDERATION POLICY. 
 
 AFFIRMATIVE STATEMENT OF THE FEDERALIST POSITION. 
 
 I. 
 
 That Gold and Silver are the Money-Metals, and that 
 Gold is Money and Silver is Money to-day. 
 
 II. 
 
 That Parity of Moneys is desirable. 
 
 III. 
 
 That it is the law of each nation which determines what 
 is Money in that nation. 
 
 IV. 
 
 That the preponderant employment that is to say, 
 economic " demand " for Gold and Silver is an effect of 
 the laws of nations. 
 
 V. 
 
 That Monetary Laws establish Parity. 
 
 VI. 
 
 That permanent Parity between Silver and Gold is pro- 
 ducible by a proper regulation of their employment. 
 
 VII. 
 
 That concurrent laws for legal equality of the metals in 
 an effective majority of nations will establish Parity out- 
 side as well as within their direct jurisdiction. 
 
ABSTRACT. 153 
 
 YIII. 
 
 That such Parity benefits each nation by assuring com- 
 parative stability to the valuations in which it is interested. 
 
 IX. 
 
 That Federation is a condition and a guarantee of such 
 concurrent laws, replacing those which now maintain dis- 
 parity. 
 
 X. 
 
 That the paramount monetary issue of the age is whether 
 a settlement on this basis shall be made. 
 
 STATEMENT 
 
 OF 
 
 THE DIS-UNIONIST OR ANTI-FEDERALIST POSITION. 
 
 Scientific conservatism and dependence upon the ex- 
 ample of England. 
 
 The opinion of Michel Chevalier in 1878. 
 
154 SCIENCE AND THE FEDERATION POLICY. 
 
 FEDERATION FOK PARITY OF MONEYS AND THE ADVANCEMENT 
 OF SCIENCE, OR "WHAT SHALL WE DO ABOUT SILVER?" 
 
 Who are " we " that are to do something about silver ? 
 What are the active forces of which I am to speak ? 
 
 Am I to set forth what I think we, the people of the 
 United States, or of Canada, should do about silver ? It 
 is only at elections that the people can act, in the proper 
 sense act as one united force and I am not aware that 
 there is an election at hand. I may, however, say in 
 passing, that if there were elections at hand, I should only 
 need to repeat the substance of certain planks of political 
 platforms about silver which have been actually adopted ; 
 for example, by the Republicans in the State of Ohio in 
 1877, by the National Republican Convention in 1884, and 
 by the Republican and Democratic Conventions in New 
 York State in 1885. The first mentioned is a recommen- 
 dation, while the latter are a ratification, of the policy 
 adopted by Congress in the second section of the Act of 
 February 28, 1888. This is not the section compelling the 
 compulsory coinage of silver dollars, it is that by which 
 the United States inaugurated a policy of restoration of 
 silver to its former equality with gold by joint action of 
 nations. 
 
 This policy, which by its nature combines the elements 
 of a domestic policy and a foreign policy, has remained 
 since 1878 a settled policy of the United States. I ven- 
 
WHAT SHALL WE DO ABOUT SILVER? 15f> 
 
 tare to believe it is as firmly established as the Monroe- 
 Doctrine. So far, then, as the United States as a whole 
 are concerned, I need not undertake the task of making 
 suggestions about anything it may need to do with refer- 
 ence to silver. 
 
 Nor shall I ask what the several branches of the legis- 
 lative ' powers that be ', whether the Senate or the House, or 
 this Committee thereof or that, have to do on this subject. 
 Nor shall I venture to discuss the possibilities that lie 
 before the President or his Ministers in this regard. No 
 doubt there are essays to be written which might rightly 
 hope to attain such an audience. But there is no need 
 now to go beyond the limits of this room, or the list of 
 the members who belong here, to find ample work to be 
 done, good work, work of conversion, for the advance- 
 ment of science, work that all the members are pledged to 
 support. 
 
 The " we " of whom I speak, then, are the members of 
 the section of Political Economy and Statistics of this 
 Association. I conceive they have something to do for 
 themselves and for their fellow-men in regard to this 
 matter of silver. The silver question covers something 
 more than a scientific generalization waiting to be proved, 
 a compound waiting to be analyzed, a discovery waiting 
 to be verified. All these can wait. But the silver ques- 
 tion involves a duty to be performed, and to wait is to- 
 neglect that duty. It is a duty which the interpreters 
 of science now living owe it to themselves to the cause= 
 of learning to perform without delay. 
 
156 SCIENCE AND THE FEDERATION POLICY. 
 
 Be it known to all friends of science and never forgot- 
 ten it was science which engendered the silver question 
 with the dangers and anxieties that have come in its train. 
 It was the mistaken learning of 1867, of 1871, and 1873, 
 which did the damage that the settlement of the silver 
 question is to check, and, as far as may be, to make good. 
 It was upon the incital, and with the approval, of an over- 
 whelming majority of the learned of all nations, that the 
 .statutes and decrees of silver outlawry in divers nations 
 became fact. Americans must take to heart that for this 
 general error of policy the United States have their share 
 of responsibility, for in 1867"" the influence of the Amer- 
 ican Union in the family of nations was militant in Paris, 
 aiding and abetting the anti-silver movement then or- 
 ganizing. And all was done with the best intentions, and 
 under the advice of counsel recognized as learned in the 
 law. 
 
 What " we have to do about silver," then, is to educate 
 
 * This was shortly after the Latin countries had joined in a Monetary 
 Treaty, forming the " Latin Union," which the United States was invited 
 to join. Hon. Samuel B. Ruggles, of New York, was accredited to the Con- 
 ference of 1867 by Mr. Seward, then Secretary of State. Among the 
 monetary questions then debated was reducing the weight of the gold 
 dollar, so as to coin (when specie payment should return) a five-dollar 
 piece, which should equal either the English sovereign, or a proposed 
 25-franc piece, which was intended to replace the 20-franc piece, Louis 
 -d'or or Napoleon, in France. 
 
 In the Document of the Monetary Conference of 1878 are reprinted 
 the various state-papers, which explain the situation in 1867. A resume 
 of the proceedings of the Conference, in the speech of Mr. de Parieu, is 
 given in the Appendix. 
 
WHAT SHALL WE DO ABOUT SILVER? 157 
 
 public opinion and to advance science, to learn and ta 
 teach important truths relating to money for silver is 
 money, and has been since the economic world began 
 important truths, I say ; truths that will assist the present 
 generation of citizens or legislators to safeguard their 
 higher interests by what they do or leave undone with 
 reference to it. 
 
 What are. these truths? The first truth of all, first 
 because simplest and at the same time universal, prim a 
 inter pares, is that the policy of federation for equality 
 of the metals before the law -which is the American 
 policy, if our brothers of Canada* will permit us, vis-a-vix 
 to Europe and Asia, to represent the Continent is right. 
 
 The policy of federation to restore silver to its former- 
 legal position, the policy of establishing and maintaining 
 parity between the two halves of the world's money, is 
 right. The accord of an effective majority of nations to close 
 a period of disastrous economic conflict and disturbance 
 by a catholic measure of peace and order, is a good work. 
 Once achieved, a nation may be proud of its share in it. 
 There is enough of barbarism and dulness within sight in 
 our time to serve as a foil to this enterprise of civiliza- 
 tion ; and individuals who contribute their little quota to- 
 ward bringing about its success, need to have their labours- 
 
 * I may add in parenthesis that they can the more willingly permit us to 
 do this, since they are in some measure committed in favour of that pol- 
 icy. Such at least was the impression which the highly appreciated Ca- 
 nadian ally of the United States delegation, Sir Alexander Gait, conveyed 
 to the members of the International Conference at Paris in 1881. 
 
158 SCIENCE AND THE FEDERATION POLICY. 
 
 brightened if not lightened by appreciating the quality 
 of it. 
 
 The project passes slowly towards achievement slowly, 
 for it must triumph over both the prejudices of men and 
 the inertia of nations. But it is progressing, and pro- 
 gressing fast, now at length that the harvest of conversion 
 in England is coming into sight in England, which alone 
 has blocked the way ; for in 1881 the attitude of Germany 
 promised her readiness to join in full with France and the 
 United States when England should do so. The time, 
 then, is approaching for realization of the project proposed 
 in 1878, the time when civilization is to make a forward 
 step to reach a united standard. 
 
 What the members of this section " have to do about 
 silver" is to accelerate this advance ; to recognize, and upon 
 occasion to teach, the basis of truth and fact upon which 
 is reared this policy of federation to secure legal equality 
 between silver and gold.* 
 
 I shall try to characterize briefly this basis of truth and 
 fact by a rough sketch-map, political rather than economic, 
 giving practical generalizations rather than their scientific 
 sub-structure. 
 
 * As has long been my custom I give notice to any one seeking informa- 
 tion touching the measure proposed in 1878, that the Document of the 
 Conference of 1878 is still gratuitously distributed from the Depart- 
 ment of State at Washington, by mail, upon application to the Chief 
 Clerk. 
 
THE FEDERALIST POSITION. 150 
 
 AFFIRMATIVE STATEMENT OF THE FEDERALIST POSITION. 
 
 I. 
 
 That Silver and Grolcl are the Money-Metals, and that 
 Gold is Money and Silver is Money to-day. 
 
 Of the above affirmation I select as the only probable 
 object of denial which calls for encounter, the statement 
 that silver is money to-day. Are all the members of 
 this section fully aware of this ? I hope they are, but I 
 fear they are not ; I fear there are exceptions. I have 
 had the opportunity of meeting, in books or in conver- 
 sation, the minds of most of the learned of our century 
 who have dealt with monetary questions, and I have 
 found in all that goodly company few who entirely 
 realized in the subtle yet most important sense in 
 which the phrase is now to be used that silver is money. 
 This sense or meaning of the phrase springs from the in- 
 ternationality of money ; the solidarity of interest, the 
 effective contiguity, or the continuity of the various sys- 
 tems of money (which make up the total money of the 
 world), whereby each has an interest in all, enjoys the lat- 
 eral support of all, and each serves in part as a means of 
 business communication with the other. There is here a 
 truth which is far from having completed its struggle for 
 recognition. Indeed the concepts in use to-day in rnon- 
 
160 SCIENCE AND THE FEDERATION POLICY. 
 
 etary discussion are curiously adapted to veil it from the 
 understanding. What with "Single Standard"* and 
 " Double Standard " and " Bimetallism " and " Monomet- 
 allism," it is singularly easy to ignore the internationally 
 of money. Then again there is the word " demonetize." 
 What have we not heard of eloquence about the demoneti- 
 zation of silver, and yet in spite of the demonetizing 
 devil and all his works silver is money. So likewise, one 
 might say, for generations men have heard of the conquest 
 
 * In connection with my criticism of the verbal fallacies prevalent among 
 the partisans of gold, and especially the application to money of the 
 word " Standard" in the sense of the exact sciences, to which space is 
 given in pages 45 and 47, I may justly add a pendant touching the silver 
 side of this protracted controversy ; for there are verbal sins on our side 
 that are highly regrettable. What, with metallisms mono and bi, a subject 
 already difficult and obscure, has been befogged and bemuddled ; in fact, 
 if one were to say bimetallism = be-muddle-ism he would not be far 
 wrong. 
 
 No doubt, special study is required that one may realize, as, for example, 
 Bacon did, the " difference it makes what a thing is called," how " words, 
 as a Tartar's bow, do shoot back upon the understanding of the wisest, 
 and mightily entangle and pervert the judgment " how " the ill and unfit 
 choice of words wonderfully obstructs the understanding" how ''words 
 plainly force and overrule the understanding, and throw all into confu- 
 sion, and lead men away into numberless empty controversies and idle 
 fancies." 
 
 I doubt if any one has used either of these muddle-isms mono or 
 bi , much without being, in appreciable measure, " thrown all into con- 
 fusion" by them, with "obstruction of the understanding," and so led 
 away "into numberless empty controversies and idle fancies." 
 
 If the object were talk and not action, confusion and not clearness, 
 what better reinforcement could be found ? 
 
 Whoever assists, as I have tried to do, to disinfect such words, gives 
 
THE FEDERALIST POSITION. 
 
 of Kussia by the great Napoleon the remarkable thi 
 about which was that it never occurred. 
 
 There have been local Acts, and partial Acts, of outlawry 
 against silver, Acts which have done more harm to the 
 erring constituency of gold than to the constituency of sil- 
 ver. But that is all. It is ten years since Germany gave 
 up trying to " make soup out of hot water alone," as Bis- 
 marck described it, and abandoned her sale of bullion 
 made of melted thalers. 
 
 In closing, a word of definition rather than argument 
 concerning the supply of silver. Silver is a money-metal, 
 imperishable and rare. The annual find of new metal has 
 never been more than a minute fraction of the existing 
 stock. In spite of silver mares' nests, whether in Australia 
 or in the Americas, there is no valid ground for expecting 
 any real revolution in the conditions of new supply, nor 
 even that the fluctuations of silver output will equal those 
 of gold in the past. Hence the stock in existence that is 
 to say the economic " supply " is a limited supply ; a 
 monopoly of nature not to be broken down. 
 
 succor in spite of themselves to the Romeos of reform, who take the po- 
 etic view, and find a less misleading name not needed for a rose so sweet 
 as this, thereby most innocently forgetting that while it is true "A rose 
 under any other name would smell as sweet," the sweetness of it is not 
 within their jurisdiction. Their humble, prosaic, and practical object is 
 merely to persuade people in this busy world to take their cause on its 
 merits and not believe it is what its enemies say it is, nor what their words 
 assist in making it appear. 
 
 The point has been settled by the English-speaking race in saying, 
 ' Give a dog a bad name and hang him.' 
 
162 SCIENCE AND THE FEDERATION POLICY. 
 
 II. 
 That Parity of Money is desirable. 
 
 This affirmation is not unnecessary, as an unbiased 
 mind might suppose. There are most serious obstacles 
 to logical thinking on this head. The mental vision of 
 our time suffers largely from what I will imagine an ocu- 
 list calling " atrophy of the apparatus of accommodation." 
 Or perhaps one may say that there is normal sight, but it 
 is only in spots. 
 
 A criss-cross of premium or discount between the moneys 
 of different centres of business is recognized as an abomi- 
 nation to the economic mind in every professor's study in 
 the world, provided the places are near each other, as for 
 example New York and Philadelphia, or London and Man- 
 chester, or Paris and Marseilles. The same truth has 
 vogue when applied to Paris, London, New York, and San 
 Francisco. The negation of such common basis, the criss- 
 cross of premium and discount, a kind of organized disorder 
 or Babel of valuations a financial St. Vitus' dance is rec- 
 ognized as a grave malady by all regular physicians. It is 
 plain to all they need a common and stable basis for the 
 valuations through which their business proceeds. Here 
 there is no help but in parity. But beyond this range, dis- 
 tance seems to bring confusion to the view. How is it with 
 parity between Asia, Europe, and the Americas ? Here, 
 for old-school professors, the light grows dim and all signs 
 
THE FEDERALIST POSITION. 
 
 seem to fail. Their lapse of logic is as great as if the reg- 
 ular pharmacopoeia should allow its prescriptions to be 
 used only for people engaged in retail trade. 
 
 III. 
 
 That it is the Law of each Nation which determines 
 what is Money in that Nation. 
 
 To a public which has passed from state bank notes to 
 silver certificates it is unnecessary to expand this thesis. 
 
 IV. 
 
 That the Preponderant Employment -that is to say, 
 economic " Demand ''for Silver and Gold is an effect 
 of the Laws of Nations. 
 
 This is a simple corollary of the preceding. To one 
 who is disturbed by the contrast between use in the arts, 
 and monetary use, and attracted by the subtleties of cau- 
 sation and of motive, I can briefly suggest two queries. Do 
 legislatures make certain material legal tender because 
 individuals like certain kinds of ornament ? Do not 
 individuals choose ornament in part because of the 
 costliness of the material, and of its immediate converti- 
 bility into money ? 
 
 Y. 
 
 That Monetary Laws establish Parity. 
 
 In establishing money of different kinds or denomina- 
 tions, such laws invariably seek to determine the relation 
 of these kinds or denominations. If they are wise laws 
 they succeed. A law which makes twenty-dollar notes 
 and one-dollar notes equally legal tender, effects an equa- 
 
164 SCIENCE AND THE FEDERATION POLICY. 
 
 tion between twenty ones and one twenty. If one denom- 
 ination were made convertible and legal tender, while the 
 other is neither convertible nor legal tender, the nominal 
 equation is likely to be falsified by a discount on the one 
 or a premium on the other. 
 
 VI. 
 
 That permanent Parity between Silver and Gold is pro- 
 ducible by a proper Keg'ulation of their ICmploymeiit. 
 
 As has been stated, the stock-in-existence that is to 
 say, the economic " supply " is limited by nature. To 
 regulate the relative " demand " is to regulate their relative 
 
 value. 
 
 VII. 
 
 That concurrent Laws for legal Equality of the Metals 
 in an effective Majority of Nations will establish Parity 
 outside as well as within their direct Jurisdiction. 
 
 It is the "law of supply and demand" which operates 
 as a guarantee of the equation. 
 
 If the great Powers and their probable allies give legal 
 equality to silver and gold (of course at the same ratio) 
 their parity at points outside of the direct jurisdiction of 
 these nations cannot be prevented, except by an alteration 
 of human nature, leading men to prefer loss to gain. 
 There may be fluctuations of " exchange," but that does 
 not affect parity. 
 
 Ample experience also justifies the averment. In late 
 centuries the fluctuations of relative value were fluctu- 
 ations within the range of effective legal ratios. In this 
 
THE FEDERALIST POSITION. 165 
 
 century, so long as the Mint of Paris was open (before 
 1873) there has been substantially parity at Paris, and the 
 local fluctuations elsewhere were chargeable, substantially, 
 to " exchange " on Paris. I say " substantially " to make 
 room for dealing fully with misapprehensions current in 
 relation to this point. Without entering into detail I will 
 briefly mention that I have discovered the proof that 
 standard gold bullion has fluctuated in London in this 
 century as against standard gold coin. 
 
 VIII. 
 
 That such Parity benefits each Nation by assuring 1 com- 
 parative stability to the valuations in which it is inter- 
 ested. 
 
 The benefit applies in various directions and degrees in 
 different nations, but there is something like equality in 
 the shares of the nations in this benefit, because of an 
 equality in the ratio of such benefit to the total economic 
 
 interests of the nation. 
 
 IX. 
 
 That Federation is a condition and a guarantee of such 
 concurrent laws replacing- those which now maintain 
 disparity. 
 
 This natural view, which guided the Government of the 
 United States, and afterwards that of France, in approach- 
 ing other nations on the subject, is supported by the sub- 
 sequent inaction of nations. Each is unwilling to move 
 without the other, and it is only accord which will make it 
 safe to break the vicious circle. 
 
166 SCIENCE AND THE FEDERATION POLICY. 
 
 X. 
 
 That the paramount monetary issue of the ag*e is whether 
 a settlement on this basis should be made. 
 
 There is no alternative to this settlement, which under 
 the guarantees of federation gives parity through concur- 
 rence of laws, other than the. perpetuation of the evils of 
 that instability in the foundations of business and invest - 
 ment whereof mankind has had ampler experience since 
 1871 than at any period since the Thirty Years War. The 
 mere delay fostered by opposition to settlement creates 
 new obstacles to settlement. The opponents of the feder- 
 ation policy are in a double sense friends of disorder. 
 
THE DIS-UNIONIST POSITION. 16' 
 
 THE DIS-UNIONIST OR ANTI-FEDERALIST POSITION. 
 
 Those who oppose the growth of opinion in favor of 
 Federation may be conveniently classified as follows : 
 
 First Grouping. 
 
 Those who have learned only a part of the truths hith- 
 erto set forth. 
 
 Those who have refused to learn any of these truths. 
 
 Second Grouping. 
 
 Those who think the federation project will never be 
 adopted, chiefly because of the expected continuance of 
 England's refusal to co-operate. 
 
 Those who think the federation would not maintain 
 parity between the two metals even if England were to co- 
 operate, with free coinage of an English Silver Dollar. 
 
 I hope that my friends in the dis-unionist camp will find 
 nothing to offend them in this classification. One who has 
 been militant, as I have for so many years, naturally at- 
 tains what I may call a certain perspective in regarding the 
 position of his " friends the enemy ; " and their Parthian 
 campaign of retreat has been full of instruction. In fair- 
 ness I may confess that the key-note of what I have been 
 saying was given me by one of the highest names in the 
 camp of the opposition and in the literature of money, for 
 
168 SCIENCE AND THE FEDERATION POLICY. 
 
 Michel Chevalier is among the prophets for all who have 
 a monetary faith. It was by another anti-silver champion, 
 I should add, by Esquirou de Parieu,* the economic ad- 
 viser of Napoleon III. and father of the Latin Union, 
 that I was introduced to Chevalier. The distinguished 
 author of the first great Treatise on Money said to me, 
 "You will never succeed in converting England^ The 
 prophesy was made in the Institute, at the close of a 
 meeting of the Academy of Moral and Political Sciences, 
 at which he had presided. I did not, however, relax my 
 labors amid the foundations of monetary science. 
 
 On other pages the reader will find material bearing 
 upon Chevalier's forecast : in the references to the various 
 stages of growth of the Silver movement in England, and 
 an account of its strength in 1889. 
 
 * MAKIE Louis PIERRE FELIX ESQUIROU DE PARIEU (b. 1815), member of 
 the Institute of France, Deputy in 1848, Minister in President Napoleon's 
 Cabinet (1849-'51;, head of the Council of State (1855-'70), member of 
 the Ollivier Cabinet (1870), Senator (1876). His principal work is a 
 Treatise on Taxation (Paris, 5 vols., 1862). 
 
 His numerous contributions to monetary discussion gave impulse to the 
 movement for the unification of coinages in connection with the metric 
 system, and are among the main forces which led to the anti-silver de- 
 cisions of the International Monetary Conference of 1867, of which he 
 was the guiding spirit and virtual President. 
 
 Had the Latin Union, or had France, gone on in the path he marked 
 out, the mintage of silver would have been stopped before the war with 
 Prussia or Germany. An interesting field of surmise is opened by the 
 query, how this measure would have affected Germany. 
 
 His Keport summing up before the Conference the results of its pro- 
 ceedings is reprinted in full in the Appendix. 
 
VI. 
 
 BULLION OR COIN? 
 
BULLION OK COIN? 
 
 It has been brought to my attention that certain Eng- 
 lish journals (December, 1889), in discussing Mr. Win- 
 dom's proposals to substitute Bullion for Coin as the basis 
 of our increasing paper issues, assume a lofty tone of criti- 
 cism, and this fact has suggested to me that pages from 
 my portfolio might assist in covering a certain deficit in 
 the stock of learning available for the general public. 
 
 In this country there are symptoms in some quarters of 
 a sense of dread, growing out of the novelty of the measures 
 proposed to Congress, while in other quarters objection 
 and opposition announce themselves, which can perhaps 
 be fairly described as arising from a sense of injured 
 pride, as if the national silver dollar were threatened 
 with disrespectful treatment. The examination which I 
 propose may therefore naturally take form in the query : 
 How is the "future of the silver dollar " to be affected by 
 ceasing to coin it and using bullion in its place f 
 
 This form of query will, perhaps, most simply indicate 
 the standpoint which people in this country generally will 
 take in looking at the subject. The silver dollar is a rally- 
 ing point, a watchword, a formula of faith, for many minds, 
 notably in the Mississippi Valley and in the Mountain 
 States, and any apparent attack upon it must undergo 
 most jealous scrutiny. 
 
 171 
 
172 BULLION OR COIN? 
 
 I shall make no attempt to anticipate the various lines 
 of criticism, on matters of detail, of the Bill to be discussed 
 by Congress, which would serve as response to the above 
 query. Indeed, I pass by important subjects of discussion 
 which suggest themselves, and restrict myself to the bare 
 general issue which makes the title of this paper. 
 
 My effort is to set forth general truths, in view of which 
 it is well that the discussion should proceed. 
 
 (1.) It is futile to treat the silver dollar independently of 
 silver itself. 
 
 I am aware of the temptation this subject exerts upon 
 subtle minds, offering a field of distinction as delicate as 
 the law, if not indeed as fine as old-time metaphysics. 
 I shall say naught in disparagement of the process of ab- 
 straction, which peels down concepts by gradations as 
 fine as the outer skin of an onion ; for it may be as useful 
 to a thinker, as to a microscopist, to 
 
 Distinguish and divide, 
 
 A hair twixt south and southwest side. 
 
 But there are regions of discussion where such niceties 
 are out of place, and seriously impede the understanding. 
 The hotspur partisan of silver denies the "depreciation" 
 of silver, and is justified, so far as a part of what the gold 
 fanatic means by depreciation, is concerned. There is a 
 factitious ' appreciation ' of gold. Yet it is a fact. To ex- 
 plain how it was brought about does not abolish the why 
 and the wherefore of its continuance as fact. 
 
 T have in other pages told my story of the course of 
 
THE CHANGED POSITION OF SILVER, 173 
 
 ' fructifying causation,' whereof the present condition of 
 monetary systems is the outcome ; how enthusiasm for met- 
 rical reform found no scholarship nor statesmanlike grasp 
 of the teachings of experience to restrain the effort to 
 unify the ' world's measure of values ' by abolishing what 
 seemed a mere disturbing element, the silver unit. In 
 the gradual recognition of the suicidal character of this 
 effort, reformers, scholars, statesmen, have since found 
 occupation. But however unfortunate the error proved 
 for Europe as well as for this country still these Euro- 
 pean laws which made the silver question were passed. 
 
 The esteem in which silver was held relatively dimin- 
 ished ; the esteem in which gold was held increased. What- 
 ever distinctions are made with ap- and 6/6-preciation, 
 there is no doubt that it was silver which went down re- 
 latively, and gold which went up. To refuse this fact a 
 recognition of any share of its importance is to repeat the 
 error of the panegyrist who too zealously based the praise 
 of his hero upon battles which he would have won if he 
 had not been prevented by the enemy. In such an under- 
 taking a keen sense of humor assists in sharpening the 
 perception of facts. 
 
 So far as the future of the silver dollar of Hamilton and 
 Gallatin is involved in the broader question of the relative 
 monetary rank which silver has in fact lost, but which will 
 be restored to it when the agitation and education in 
 Europe elsewhere referred to in this volume shall have 
 done their work this point will be briefly touched in 
 other pages. 
 
174 BULLION OR COIN? 
 
 I now turn to another vital fact which bears directly 
 upon the question here at issue. 
 
 (2.) The people of the United States do not take to the 
 silver dollar very kindly. They do not seem to want more 
 than one apiece, per capita, for their pockets, their tills, 
 and their strong-boxes. They persist in " treating Silver 
 as a commodity" to borrow a very vague term for a very 
 plain use. 
 
 However inconvenient this fact may be, it can only be 
 dealt with as a fact. It is futile to try to explain it away. 
 The fact is fact. Silver certificates are not silver dollars, 
 and can no more be made into silver dollars than orange- 
 peel water can be made into wine by stress of imagination. 
 Silver dollars have been within reach for eleven years. 
 Halves and quarters have been within reach still longer. 
 Yet there are twenty-two millions of silver change that 
 have been losing interest for many years as a "dead asset" 
 in the Treasury ; a melancholy monument of the days of 
 callowness and inadvertence when the United States 
 Congress was assisting the demonetization of German 
 silver. I have never heard that the Treasury has inter- 
 posed any obstacles in the way of a demand for silver dol- 
 lars, as compared with other current money. We must ac- 
 cept the books of the Treasury as a record of the people's 
 will. In the last four years there have been about sixty 
 millions of silver dollars in the hands of the people. I 
 know of no indication that a change of habit is to enlarge 
 the use of them. 
 
WHY NOT LEAVE SILVER UNMINTED ? 175 
 
 I am glad to believe, however, that such an increase is pos- 
 sible. It can hardly be affirmed with certainty that we have 
 reached the saturation point in reference to silver coin, or 
 that measures may not be devised to promote the further 
 popular use of coin. The subject merits attention greater 
 than it appears to have received. In referring to it I take 
 occasion to make my reservations, and disclaim any opinion 
 adverse to extending the use of coin. Whether the greater 
 use of coin (both gold and silver) in Germany and in France 
 stands in connection with the thriftiness of Germans or 
 Frenchmen is a subject that will bear study. It appears 
 probable that the use of coin, and to some extent the hoard- 
 ing of coin, especially by that vast majority of the popula- 
 tion that lives by manual labor, tends to promote thrift in 
 the individual, as well as to support sound finance in the 
 government. 
 
 In dealing, however, with the monetary use of silver 
 coin it is important to recognize the marked peculiarities 
 of our system in reference to gold. The gold in the 
 Treasury as stated for July 1, 1889, consisted of 186 mil- 
 lions belonging to the Treasury, and 117 millions ware- 
 housed therein for the benefit of those who use gold cer- 
 tificates ; and 65 millions of the total sum were in bullion. 
 
 Why not leave silver unminted as well as gold ? 
 
 For any possible change of habit in the direction of 
 extended use of silver dollars, the existing stock of them 
 is already a superabundant provision. If we take the ex- 
 treme supposition of a change in the habit of the people 
 
176 BULLION OR COIN? 
 
 which should double their absorption of these coins, there 
 would still be left in existence, beyond its requirement, 
 over two hundred millions of them. 
 
 Why should the people be taxed to pay for minting 
 more dollars ? The minting has cost some millions 
 of dollars, and it certainly seems probable that money 
 could be expended in some other way to better advantage. 
 
 The terms of Mr. Windom's proposition and the facts 
 just referred to seem to narrow the issue to the query : Is 
 it not worth while to omit minting coin which, when minted, 
 will be used as bullion f 
 
 This apparent confusion of the two ideas which we have 
 hitherto kept separate, will be useful if it serves as an oc- 
 casion for defining them. It is perhaps very easy to ig- 
 nore or forget that coin may be bullion, though bullion is 
 not coin. The difference of meaning here is but one degree 
 removed from that which constitutes a mare a horse, 
 though a horse is not a mare. Coin is, in fact, sub- 
 divided bullion bullion of legal fineness duly certified. 
 If it lie in a vault, the bullion use of it predominates. If it 
 pass from hand to hand, the coin use is in the ascendant. 
 
 Passing now to another distinction, I observe that Avhile 
 coin is money by tale, and bullion is potential money by 
 weight, bullion may also be really money, effectively money, 
 if the law so provide. The law provides for turning bul- 
 lion into coin, for its purchase or its exchangeability, and 
 it can also give it directly the power of paying debts. I 
 am not aware that it has ever been done, but it is possible 
 to make ingots full legal tender under proper regulations. 
 
THE USE OF CERTIFICATES. 177 
 
 The advantages of paper, 
 
 So far as the safety and security of the proposed paper 
 representatives of the deposited bullion are concerned, it 
 is a notable fact that in this country, by favor of the con- 
 fidence which the manifold guarantees of our financial 
 system inspire, the element " credit " seems to disappear. 
 Confidence is so complete that it is easy to forget that it 
 exists. The acceptance of a Government receipt for ware- 
 housing money-metal, resembles accepting a valid transfer 
 of title to immovable property in the place of manual appro- 
 priation arid possession. So strong is this confidence that 
 the analog}' of " livery of seisin " suggests itself ; an illus- 
 tration which the layman will find no difficulty in follow- 
 ing when he reflects how the deed that was done when John 
 Doe handed to Richard Roe a clod from the field he was 
 selling him, is the predecessor of the paper deed which in 
 these days is made to "do" much to the relief of the 
 modern John and Richard. 
 
 Of the advantages which the use of paper offers, when 
 thus made a plenipotentiary representative of money-metal, 
 some are sufficiently obvious, others are less likely to be 
 known, and some, indeed, can hardly be said to be always 
 appreciated even by those regarded as conversant with 
 such matters. 
 
 So far as the objections to the use of paper are con- 
 cerned (including the expense) it should be very clearly un- 
 derstood that the issue at present under consideration 
 does not, strictly speaking, involve that side of the ques- 
 tion, for the contrast to be drawn is merely between cer- 
 
178 BULLION OR COIN? 
 
 tificates based upon coin and certificates or notes based 
 upon bullion. 
 
 Of the advantages of paper, I mark under the first head 
 above referred to, the ease of carriage, and the relief given 
 from the necessity of counting or weighing. An advan- 
 tage less likely to attract attention is the ease of identifica- 
 tion of ownership. These several advantages belong 
 equally to the two kinds of paper under consideration. 
 
 Paper based on bullion. 
 
 Beside these is to be noted in favor of the use of bul- 
 lion, the saving of expense by not minting. 
 
 If we inquire for objections here we shall find that under 
 prudent management no inconvenience can arise, for the 
 source from which danger could come, under existing cir- 
 cumstances, is the improbable event of sudden and ex- 
 treme panic, in which the timid would seek possession of 
 their money-metal and would be embarrassed in their 
 efforts to use it for payments. 
 
 The friction of coin against coin, making wear and tear 
 which goes on till the coin has to be reminted, may occur 
 when coin is in transit, when it is moved in a bag, as well 
 as when it is handled or carried in the pocket. Bullion 
 can be shipped not only with more convenience but with 
 less abrasion than coin. 
 
 Again, bullion is used by weight. The scales are better 
 adjusted than in the case of coin. Here we touch the 
 source of subtleties, to which no doubt in all the centu- 
 ries of man's experience money has given rise ; one of the 
 
THE ADVANTAGES OF USING BULLION. 179 
 
 ' mysteries of money.' Indeed, how can the mystery be 
 penetrated when we realize that ' coin is something that 
 always ought to be, yet rarely or never is, but at the same 
 time is taken as if it were what it ought to be,' and that 
 this puzzle is fact in all monetary systems by force of enact- 
 ment, whether it be decree of autocratic, or statute of rep- 
 resentative government ! 
 
 There is an ideal fineness of metal, or proportion be- 
 tween the precious metal and the alloy, and an ideal weight 
 of metal of the proper fineness. But the processes of mint- 
 age do not often attain the desired ideal perfection, and 
 the law gives tolerance for error within certain limits, 
 which in the quaint language of the coiner's art are termed 
 the "remedy;" remedy above and remedy below, within 
 which limits the coin is accepted as if it were of the true 
 weight and fineness. To this slight variation is added the 
 reduction of weight which normal wear and tear or artifi- 
 cial processes can produce. And for this, laws and cus- 
 tom also give a limited tolerance. Thus is offered a field 
 for little speculations which, when multiplied, may play a 
 greater part in the business world than economists find 
 it easy to trace or measure. 
 
 In the use of bullion the scales, as I said, can be more 
 consistently applied, and so at least a part of the uncer- 
 tainties and difficulties of the use of coin be avoided. 
 
 It may be not without interest to enter upon a brief 
 examination of past experience relating to preferences of 
 policy as between bullion and coin. Suggestive lines of 
 
180 BULLION OK COIN? 
 
 contrast between earlier times and ours in this regard, will 
 be found, as it were, to cross eacli other. 
 
 Bullion in banks. 
 
 In the early history of banking, developed as it was to 
 meet the need of trade beyond the local jurisdiction, a trade 
 which we should now call * international,' bullion value 
 was necessarily looked to as security rather than the cur- 
 rency of coin for which the guarantee was local and limited. 
 This would apply as a general statement to the various 
 precursors of our modern banks in the Italian Republics, 
 in the Free Cities of Germany and the Low Countries, 
 and to the English goldsmith, of whose notes the English 
 bank-note is the successor. When a new departure was 
 taken at the close of the XYIIth century, by the founding 
 of a national " Bank of England," which has, in some meas- 
 ure, served as a model for banking systems in other 
 countries, its charter, which prohibited dealing in all other 
 goods, made gold and silver bullion, as well as bills of 
 exchange, the staple of the enterprise. Gold and silver 
 bullion still remain the lawful basis of the notes which 
 modern English legislation has made legal tender between 
 citizens, so long as they remain convertible.* 
 
 The policy of Seigniorage. 
 
 The familiar antithesis between popular rights and priv- 
 ilege maintained by arbitrary power, finds its parallel in 
 
 * The act of 1844 limited the amount of silver in the Issue Department 
 to one-fourth the gold one part of silver to four parts of gold. Since 
 the Gold Discoveries no use has been made of this privilege. 
 
THE SEIGNIORIAL SYSTEM. 181 
 
 the contrast between the seigniorial system and free 
 mintage. The right of a citizen to have his bullion turned 
 into coin without denial or delay was established by the 
 English Parliament in 1666, along with the principle of 
 gratuitous mintage, to which I shall presently allude. The 
 policy of Princes, however, operated in the main in the 
 same direction under the seigniorial system, as freedom 
 of mintage under the popular system. It was the interest 
 of Princes to coin as much as possible, in order to recruit 
 their finances by seigniorage. The percentage of bullion 
 thus gained meant not only pocket-money for the seignior, 
 the Lord of the Mint, but the means of carrying on the 
 State. 
 
 The confusion arid injury thus imposed upon business 
 interests will be recognized when it is seen that coins 
 thereby acquired a local currency value far beyond the 
 value of the metal they contained, while the bullion value 
 remained of necessity preponderant in the calculations of 
 international trade. Thus the power of turning bullion 
 into cash could be used as an instrument of oppression 
 as well as of speculation by the favored courtier to whose 
 hands it fell. 
 
 Gratuitous Mintage. 
 
 The principle of gratuitous mintage, though not yet 
 generally accepted, tends to impose itself in our time. It 
 has a curious history. While the motive for adopting it 
 in England in 1666, the time of its first appearance in 
 modern law, seems to have been to promote an enlarge- 
 
182 BULLION OR COIN? 
 
 ment of the circulation by inducing citizens to bring their 
 bullion to the mint, yet the underlying theory of it is a 
 subtle truth intimately interwoven with the very nature 
 and purpose of the venerable institution of money. 
 
 It is this : that money should be good wherever it goes, 
 and equally good in all places ; worth as much in one 
 place as another. But if coin is to be worth as much in 
 one place as another, its value should be its bullion value, 
 the value of the metal of which it is made. To accomplish 
 this result, the coining must be done gratuitously : for if 
 there be a charge paid for the coining, the coin is worth 
 more than the metal, at least at the place of minting. 
 Hence the state which maintains the mint must assume 
 the burden of minting without charge ; the taxpayer thus 
 assuming a burden which " naturally " would fall upon 
 the bullion-owner. 
 
 My remark that gratuitous mintage has a curious his- 
 tory will be justified when the reader learns that this sim- 
 ple statement with which I venture to think he will 
 find it not very difficult to concur, is but an amplification 
 of the dicta of leading jurists of the Middle Ages. I 
 I have traced this doctrine to them;* and far beyond 
 them I found its source in the Roman law. If I put the 
 Roman's theory into the language of to-day, I may say 
 it means " the internationally of coin." 
 
 *The statement of this discovery is set forth in " Monetary History anl 
 Monetary Jurisprudence," an address before the British Association for 
 the Advancement of Science, at Manchester, September, 1887. 
 
FREE SALE OF BULLION. 183 
 
 The principle is now generally accepted to the limited 
 extent of abolishing seigniorage, but the cost of coinage 
 is still very generally charged to the depositor. France 
 has reduced her charge several times in this century, but 
 still charges for coining gold, and when she coined silver, 
 charged more ad valorem than for gold. In India there 
 is a heavy charge for coining rupees, a part of which 
 should perhaps be really counted as seigniorage. In this 
 country we maintained a coinage charge for a limited 
 period. 
 
 Free Sale of Bullion. 
 
 It will be seen upon reflection that a system of obliga- 
 tory purchase of bullion, which I shall name " Free Sale 
 of Bullion," in which the full value is given in current 
 money, is the fullest possible application of the princi- 
 ple that underlies both free mintage and gratuitous 
 mintage. There is no time lost in mobilizing bullion 
 into current money. The system introduced by the 
 statute of 1666 leaves a little loss of interest to be 
 borne by the depositor, namely, interest for the time 
 taken in manufacturing the coin, the length of which must 
 depend upon the convenience of the operation of the 
 mint. This loss is fixed by a modern English statute, 
 for gold, at three half pence per sovereign. The Bank is 
 compelled to pay 3 17s. 9d., for the ounce of gold which 
 is worth 3 17s. lO^d. Our statute of 1792 charged half 
 a cent per dollar, if both the depositor and mint director 
 desired ; which suggests the query whether the Treasury 
 
184 BULLION OK COIN? 
 
 of those days had the cash on hand for its " Bullion 
 Fund." 
 
 Free Mintage, Gratuitous Mintage, and Free Sale of 
 Bullion. 
 
 We are now prepared to mark the relation and distinc- 
 tions between free mintage, gratuitous mintage, and free 
 sale of bullion. 
 
 Free Mintage is of the first importance. The right of 
 the owner of bullion to have it turned into coin is a right 
 of primary and fundamental import as establishing the 
 legal status of money-metal. Gratuitous Mintage is of 
 subordinate rank ; for mintage may be free and bullion 
 thus become potential money, in the full sense of the 
 phrase, whether the cost of minting it be paid by the 
 owner or by the State. As I have indicated, Gratuitous 
 Mintage is a practice still foreign to important monetary 
 systems, while Free Mintage is generally established.'"" 
 
 It will, I think, be recognized that a right of Free Sale 
 of Bullion, as I have called it, is entitled to a distinct place 
 in our classification, though I do not recall ever having 
 heard of it, or read of it in monetary books. 
 
 *Here I may properly explain that the adjective " free " has been ap- 
 plied in authoritative works, as including Gratuitous Mintage as well as 
 Free Mintage in the sense above defined, aud that I have done what I 
 could to promote clear thinking by seeking to naturalize the above dis- 
 tinctions in the language of money. It is evident that the two ideas are 
 distinct in their nature, and that nothing but confusion can be gained by 
 fusing them under one word. 
 
MONETARY POLICY IN THE FUTURE. 185 
 
 Free Sale of Bullion has existed in various countries 
 in a special form, as a concomitant or arrangement of con- 
 venience incidental to a system of Free Mintage, as for ex- 
 ample, when the Mint (or a Bank) is bound to pay for the 
 bullion at once upon accepting it for mintage. In the in- 
 stances lately referred to, a fixed charge was deducted to 
 cover the advantage in time and convenience thus given 
 the bullion owner at the expense of the Mint. The Free 
 Sale of Bullion produced in this country, which is now 
 proposed for the action of Congress, is free from this 
 -deduction. 
 
 Monetary Policy in the future. 
 
 These several lines of historical development seem to 
 converge toward the following policy : 
 
 The establishment (by enactment and not merely by 
 favor of administrative discretion), of the right of free 
 mintage, and of gratuitous mintage ; the actual amount of 
 mintage performed by Government in obedience to this 
 rule being limited by 
 
 The establishment of the right of free sale of bullion ; 
 the monetary use of this bullion being secured by 
 
 The establishment of a system of paper representatives, 
 which circulate as money, transferring the title to the bul- 
 lion deposited. 
 
 I state the idea in general terms which are applicable 
 to such various forms of paper issue and conditions of 
 
186 BULLION OR COIN? 
 
 redemption as may suit the respective convenience of the 
 several monetary systems in which the principles above 
 stated might be adopted. I also withhold any statement 
 of detail as to amounts and price which in presence of 
 the existing general outlawry of silver are vital questions, 
 so far as that metal is concerned and likewise the condi- 
 tions to be fixed under which bullion would be received ; 
 as for example, the place of receipt, or the composition of 
 the metal, whether it is already ascertained, or to be ascer- 
 tained, or of coinable fineness, or of fineness held to be, in 
 various degrees, " suitable to the operations of the mint." 
 
 It seems apparent that speaking generally, the trend of 
 habit in the Western World is toward the policy I have 
 outlined.* 
 
 There is, as I have indicated, no full acceptance of such 
 policy on the part of any nation to-day. Habits and in- 
 stitutions change slowly, and it would be bold prophecy to 
 aver that the general adoption of this policy is near at 
 hand. I merely aver that the tendency is in that direction. 
 
 Is there good ground for solicitude on this account, or 
 any general ground for opposition to this tendency ? I 
 see none. 
 
 * I say nothing here of the expanding use of coin in a community that 
 has not known it before ; as for example, Africa, or the Pacific Islands; nor 
 do I propose to speak of Asia, nor venture on the great " Chinese puz- 
 zle " of money the puzzle of Chinese money sycee, ' cash,' and foreign 
 dollars, and the tael, and a mint under the banner of the Green Dragon. 
 
BULLION AND PARITY UNION. 187 
 
 Bullion and the General Eemonetization of Silver. 
 
 The question now arises whether the movement for joint 
 action of nations to restore silver to its former equality 
 with gold offers any conflict of principle with the tendency 
 which I have above ascertained. 
 
 As I have borne some share in that movement in vari- 
 ous countries since its inception, I may not inappropriately 
 give my testimony on that issue. 
 
 I see no conflict between the two, no objection to a for- 
 ward step in the direction above indicated. It is true that 
 the idea of minting, of coin, as distinguished from bullion, 
 has all along been kept in the foreground in the advocacy 
 of such restoration of silver to its former place. It was- 
 natural and proper that this should be so. The central 
 feature of monetary systems has been, is, and is likely to- 
 remain a unit of valuation embodied in coin. This being 
 the case, free mintage is the natural and proper objective 
 point for the advocates of the reform proposed. 
 
 But the fundamental object is equality of legal status 
 for the two metals. As the greater includes the less it is 
 plain that this implies no opposition to an enlarged em- 
 ployment of metal in the form of bullion as compared 
 with coin. Indeed I have, for many years, been of the 
 opinion that the adoption of the proposed measures for 
 legal equalization of the metals would tend to reduce for 
 both of them the now exaggerated need of spending and 
 of losing so much in the minting and use of coin. 
 
 These views may now conveniently be tested by refer- 
 ence to the formal proposals made in the Conference of 
 
188 BULLION OR COIN? 
 
 1878, and by a farther examination of the bearing of Mr. 
 Windom's plan upon the policy of the Conferences. 
 
 The policy established by the Allison Amendments to 
 the Bland Bill. 
 
 Under the authority of the act of February 28, 1878, 
 calling the Conference of 1878, the following propositions 
 were presented by the American Commissioners, in 
 August, 1878, to the representatives of the various 
 Powers in Paris, the form being that of a draft resolution 
 
 I. It is the opinion of this Assembly that it is not to be 
 desired that Silver should be excluded from Free Coinage 
 in Europe and the United States of America. On the con- 
 trary, the Assembly believes that it is desirable that the 
 Unrestricted Coinage of Silver, and its use as Money of 
 Unlimited Legal Tender, should be retained where they 
 exist, and, as far as practicable, restored where they have 
 ceased to exist : 
 
 II. The use of both Gold and Silver as Unlimited Legal- 
 Tender Money may be safely adopted. 
 
 First. By equalizing them at a relation to be fixed by 
 international agreement ; and 
 
 Secondly. Bj granting to each metal, at the relation 
 fixed, equal terms of Coinage, making no discrimination 
 between them. 
 
 The following third proposition was prepared and held 
 in reserve, awaiting the development of the views of the 
 Conference : 
 
 III. The Delegates here present agree to recommend 
 
THE POLICY OF THE CONFERENCES. 189 
 
 to their respective governments that, by the free coinage 
 of silver at a relation to be agreed upon, or provisionally, 
 through extended coinage upon government account and the 
 accumulation- of silver bullion in Public Treasuries, they 
 make a concerted effort to restore silver to its function 
 as money of full power. 
 
 In the absence of co-operation in Europe, the course 
 of the United States was thus definitely marked. We 
 maintained the attitude of favoring Concurrent Free Mint- 
 age, ready to establish it as soon as Europe should be 
 ready ; and in the years which have passed, Congress has 
 carried out alone the proposition, which the Commission 
 of 1878 formulated and placed in the second rank. 
 
 An extended coinage on Government account has been 
 kept up, and a notable accumulation made in the Public 
 Treasury of silver ballion, but subdivided, in the form of 
 coin. The proposition now made is to leave bullion un- 
 minted. 
 
 The novelty of Mr. Windom's plan. 
 
 The proposal of the Secretary of the Treasury is that 
 holders of native* silver bullion shall have the right to 
 sell it to the Government at the market price for new 
 "Treasury notes" (expressed in dollars) which are legal 
 
 * The product of the mines of the United States or of ores here smelted 
 and refined. 
 
190 BULLION OK COIN? 
 
 tender to the Government and also convertible in certain 
 ways.* 
 
 This is proposed as a substitute for the present law 
 under which the Government is compelled to purchase 
 -and coin two million (gold) dollars' worth of silver bullion 
 per month, and has the liberty to purchase up to four 
 millions' worth. 
 
 The plan is presented in view of a very general sense of 
 dissatisfaction with the present law of compulsory coin- 
 age, which is shared by the Secretary. At the same time 
 the plan is conceived in the spirit of entire accord with 
 the policy of the Conferences, which its author puts in 
 view in his Keport as directed toward the true goal, the 
 iinal and satisfactory solution of the silver difficulty. 
 
 It will appear, from what has gone before, that while the 
 proposed law, regarded as a whole, is without precedent, 
 yet the novelty of it, so far as the issue between bullion and 
 coin is concerned, lies in the frankness and fullness of its 
 adaptation to facts. This is a rare merit. 
 
 How unwieldy a monetary system is, how difficult it is 
 
 *The further details are as follows: The notes are to be redeem- 
 able on demand at the Government's option, either in gold coin or 
 in silver bullion of equal value to the notes on the day of demand, or in 
 silver dollars at the holder's option. The Government in effect becomes 
 the owner of the bullion although compelled to hold the deposit, but has 
 the right to dispose of bullion at the market price to the limited extent 
 of any demand for redemption made by holders who are unwilling to take 
 silver dollars in return for notes, and it has the right to coin bullion and 
 issue the coin to make good any gold or silver coin issued for redemption 
 of notes. Mr. Windom's Bill was presented to Congress January 20, 1890. 
 
OBSCURITY OF MONETARY QUESTIONS. 191 
 
 for nations to mould and modify their monetary policy by 
 reference to changing facts which affect its soundness, is 
 shown by ample experience throughout the past. 
 
 Perhaps the following illustration will commend itself 
 to the reader, quite independently of any bias touching 
 matters of controversy. 
 
 The surplus in the Treasury, long the source of political 
 pre-occupations, offered in the late electoral contest a very 
 apple of discord, as an evil which the opposing champions 
 of High and Low Tariff charged each upon the other. Yet 
 so far as I am informed, in the whole year of debate which 
 began with Mr. Cleveland's Message of December, 1887, 
 and ended with General Harrison's election in November, 
 1888, no word was said in public concerning an undisputa- 
 ble source of the surplus with which neither customs nor 
 excise, neither protective duties nor the tax on spirits and 
 tobacco, etc., had aught to do. 
 
 I refer to the item of Seigniorage, as the language of 
 the Treasury calls it (on full Legal-Tender money), which 
 has reappeared on the books of an English-writing Na- 
 tional Treasury for the first time since early in the reign of 
 Charles II. We have taken to the modern representative of 
 "His Majesty's rate," so. naturally that orators and news- 
 papers now take it quite for granted ! If bullion or cash 
 had been held in the Treasury to make good in specie 
 the face value of the Silver Coin outstanding, dollars and 
 change, which would have taken a hundred millions, there 
 would have been no surplus at all to speak of ! Even now 
 I do not recall seeing anything in print as to the effect of 
 
192 BULLION OK COIN? 
 
 Mr. Windom's plan in checking the surplus. If his pro- 
 posal to repeal the present compulsory coinage law be not 
 adopted, the sum of near nine millions is given in the 
 Treasury estimates for the coming years as the expected 
 revenue from Seigniorage on Silver Dollars. 
 
 Contemporary movements in England are of analogous 
 effect. The Bank of England still neglects its legal privi- 
 lege of issuing notes on Silver Bullion, presumably because 
 silver is not regarded as ' good enough.' Yet the Treasury 
 has been buying silver at 22 and coining it at 14.30 ! This 
 50 per cent, in Seigniorage on change, issued at a time 
 when gold half-sovereigns are being withdrawn, is a wel- 
 come pe7)dant to our Dollars! 
 
 In both countries a rise in silver would turn into real 
 profit this nominal profit in the past, but check it in the 
 future. 
 
 In view of the peculiar courses into which the prac- 
 tice of nations as to silver has fallen, it is doubly im- 
 portant for monetary thinkers to recur to first principles ; 
 to ascertain, as it were, the points of the compass, and get 
 a rudimentary notion of sailing directions, which should 
 be available for the fleet of ships of State. 
 
 I therefore, with whatever emphasis I can command, 
 present ther following averments : 
 
 Acts of silver outlawry adopted between the First In- 
 ternational Monetary Conference (1867) and the Second 
 (1878), the chief of which was the closing of the Paris 
 Mint, created for the money-using world a transition state 
 
THE PROJECT OF FEDERATION. 193 
 
 of unstable equilibrium, the only escape from which is by 
 that return to concurrence in maintaining equality of the two 
 money metals which was proposed to the nations in 1878. 
 No arrangement for silver money in the period which 
 elapses before the solution proposed through the Con- 
 ference of 1878 is attained, can have the prospect of sta- 
 bility and the certainty of effect which gold money enjoys. 
 The chief test of new measures is whether or no they ad- 
 vance the desired return to concurrent laws equalizing 
 the metals ; and the general criterion is, whether or no they 
 adapt themselves to the facts as they are, rather than to 
 visionary theories, which may be conceived with a view 
 to what the facts ought to have been, what they ought to 
 be now, or what they should be in the future. 
 
 Legal equality of the metals. 
 
 I now pursue further the inquiry touching the plan of 
 concurrent action of nations for the restoration of silver. 
 I submit that in such a plan, the question how much each 
 member of the proposed Union may prefer to economize 
 in its minting, and in its use of coin, may advantageously 
 be left to the intelligent self-interest of the nations re- 
 spectively. They can safely do what they please with the 
 bullion they receive. It is a matter in which other nations 
 are not concerned. 
 
 In so far, however, as equality of legal status between 
 the two metals is involved, all nations are interested, and 
 
194 BULLION OE COIN? 
 
 hence in any complete scheme of joint action, the con- 
 ditions under which bullion can be exchanged for cur- 
 rent money come necessarily into view. While the de- 
 sired equality can be substantially secured through the 
 right of free mintage, it can be perfected only by equal- 
 izing, as between the two metals, the conditions which 
 may exist as to the right of sale of bullion. Whatever 
 right is given to one metal should also be given to the 
 other. The question whether the Government shall hold 
 the bullion uncoined is another matter. So are the ques- 
 tions whether it shall make a charge for minting coin or 
 no, and whether it shall make a deduction for time, like 
 the three half -pence to the pound which the Bank of 
 England retains. I do not mean that these are not im- 
 portant subjects. I mean that they are of subordinate 
 rank, as compared with equality of treatment for the two 
 metals within the borders of the several nations. 
 
 As will appear more fully in the sequel, the point here 
 raised of equal rights for silver and gold bullion has not 
 entirely lacked attention. The object aimed at would 
 naturally be obligatory purchase (Free Sale) of gold and 
 silver bullion in each country, at identical relative rates 
 for either metal in the various respective currencies. I 
 reprint below an extract from earlier publications which 
 contains matter bearing upon this point. 
 
 On referring to this extract it will perhaps be found to 
 sustain the view which has been foreshadowed in the ob- 
 servations already made in this paper, that the new 
 departure proposed by Mr. Windom, while conceived in 
 
THE PARITY OF BULLION 195 
 
 its details with a view to the determining conditions of the 
 present state of affairs in one country, is capable of ex- 
 tension and of application in all countries as an element 
 of a general amendment of monetary systems. 
 
 TUB PARITY OF BULLION, AND MODES or MANTAINING IT. 
 
 (First printed with ' The Parity of Moneys, as regarded by Adam Smith, 
 Ricardo, and Mill,' which forms chapter IV of this volume.) 
 
 In advocating the Eeinstatement of Silver as Money the 
 chief practical measure recommended has been Free Coin- 
 age, that is to say, the duty of the Mint to coin for all 
 comers, either gratis or with a charge, according to the 
 laws of the country. This would leave the door open 
 to those little inequalities of value from which a Gold 
 Coinage System has not always protected gold bullion,* 
 even when its position was the most favorable while it 
 lay between the Tower and the Bank of England. 
 
 A suggestion touching this important point of detail in 
 the plan for joint action of nations, was made in the Con- 
 ference of 1881 by Mr. N. G. Pierson, a delegate of Hol- 
 land (now Governor of the Bank of Holland), namely, that 
 Banks of Issue could be charged with a duty, which would 
 remedy this difficulty, namely, the duty of buying bullion 
 from all comers at a fixed price for each metal. There are 
 also other grounds in favor of such a measure, which I 
 will not enter upon here. 
 
 * Evidence on this subject is given in ' The Silver Pound,' page 60. 
 
196 BULLION OR COIN? 
 
 Some years later, being invited to deliver an address 
 before the American Bankers' Association (at its meeting 
 in Boston, August, 1886), I chose the Parity of Bullion as 
 my subject, and made my address an argument for the 
 adoption of a resolution which I caused to be presented, 
 and which was adopted. 
 
 The resolution is as follows : 
 
 WHEREAS, The question of proper measures to be taken 
 in concert by the commercial nations, in order to regulate 
 metallic money has, since the International Monetary Con- 
 ferences of 1878 and 1881, received earnest and increas- 
 ing consideration, while the growing divergence between 
 the precious metals has caused cumulative disturbance of 
 values, and has injuriously affected business relations in 
 all parts of the world, and threatens further evil for the 
 future, and, 
 
 WHEREAS, The policy proposed to the nations by the 
 United States in 1878, and by France and the United 
 States in 1881, of restoring silver to free coinage by a 
 union composing the chief monetary Powers, deserves uni- 
 versal support ; and, 
 
 WHEREAS, It is important, in order to prevent inequality 
 between different nations, in the operation of the monetary 
 system so proposed, that silver bullion and gold bullion 
 should enjoy equality, as well as silver coin and gold coin ; 
 and, 
 
 WHEREAS, Experience has shown that the provision of 
 the law of Great Britain, whereby it is the duty of the 
 Bank of England to buy all gold offered to it at a fixed 
 
PARITY OF BULLION. 197 
 
 price per ounce, tends to establish a fixed price for gold 
 bullion universally, and that analogous provisions of law 
 in the several nations of the European continent tend fur- 
 ther to relieve gold bullion from local fluctuations of price ; 
 and it is evident that similar provisions applied to silver 
 bullion, in support of its use as money, would give it sim- 
 ilar protection from fluctuation ; and, 
 
 WHEREAS, Such provisions must become an important 
 part of any plan of international action, and hence deserve 
 thorough and thoughtful consideration ; therefore, be it 
 
 RESOLVED, That a committee be appointed by the Pres- 
 ident to take into consideration this whole question in 
 every particular and report to the Executive Council of 
 this Association at such early date as shall be found con- 
 venient. 
 
 The Resolution was supported by Mr. George S. Coe, 
 of New York, a founder and former President of the As- 
 sociation, and was moved by Mr. Deshler, of Ohio, and 
 seconded by Mr. Moss, of Ohio. The Committee was 
 afterwards appointed. I am not informed concerning any 
 report. 
 
 The Bank Charter Bill, which was laid before the Sec- 
 ond Chamber of the States-General of Holland in April, 
 1887, contains (according to my translation) the follow- 
 ing proposed amendment of the existing Act, calculated 
 to give effect to the plan mentioned : 
 
 " The State, in the event of its entering a Monetary 
 Union founded on the system of the double standard, and 
 
198 BULLION OR COIN? 
 
 in case the obligation shall have been laid upon the chief 
 Banks of Issue in the countries that form this Union, to 
 buy at the mint-price all the money-metal offered them for 
 sale, of which the coinage has been made free to all by 
 law, retains the privilege of imposing the same duty upon 
 the Bank of the Netherlands." 
 
VII. 
 EICARDO 
 
 ON 
 
 BULLION NOTES AND SILVER. 
 
 199 
 
RICARDO ON BULLION NOTES AND SILVER. 
 
 In the wide circle who respect the authority of leaders 
 of thought in the past a peculiar interest will be attached 
 to the views of David Ricardo upon monetary subjects, 
 for his prestige in the broader tield of economic thought 
 attaches peculiarly to his labors on currency. His mem- 
 ory is still and well it is that it should be so " the 
 shadow of a great name." Dying in his prime, at the close 
 of a long struggle of financial politics in which he had 
 been militant, and leaving works which are a landmark in 
 science, his public career fortified his reputation and in- 
 fluence in later days as a thinker, by the authority which 
 belongs to conspicuous service in action. 
 
 In examining some years ago into the factors of the 
 then general conviction among learned men in England, 
 that the exclusion of silver from English money (except 
 as change) was a sound and wise measure, I was led to ex- 
 amine closely into the opinions of this notable man about 
 silver and gold. The result was very different from what 
 would have been expected, judging from the attitude on 
 that subject lately assumed by his disciples, for the im- 
 pression seemed universal among them that the law and 
 the prophets against silver are fortified by Ricardo's name. 
 
 I shall, therefore, in indicating his opinions upon bullion 
 and coin, set forth what he thought on the broader issue 
 of the "battle of the standards." 
 
 201 
 
202 BULLION NOTES AND SILVER. 
 
 Bicarclo's literary activity began in 1808, when he put 
 himself in the van of the movement to reform the paper 
 money regime,* two years in advance of the famous Bullion 
 Committee. It was not long after that he brought for- 
 ward a scheme of paper notes based on bullion. In 1816 
 he printed full " proposals for an economical and secure 
 currency and on the profits of the Bank of England.'* 
 The greater part of this pamphlet deals with the internal 
 regulation of the Bank and with its relation to the Gov- 
 ernment and the public. I reprint in the Appendix the 
 scheme which he describes as " an expedient to bring the 
 English currency as near as possible to perfection." The 
 centra] point of interest here is that this perfection con- 
 sisted, in his mind, in making the notes redeemable in 
 uncoined gold (or silver), at the mint standard or price, 
 instead of by delivery of coin. 
 
 With reference to Eicardo's attitude in relation to the 
 respective claims of silver and of gold to be the " standard " 
 or chief money of England, there is this to be said. It 
 plainly did not lie in his plan to complicate the main 
 issue and weaken his own position as an apostle of con- 
 vertibility and " Hard Money," as we should say, by at- 
 taching himself as a partisan to the claims of either silver 
 or gold, or of the two together, as the unit of coinage. 
 
 I call attention to the phrase unit of coinage, because 
 I find that Ricardo used the word " standard " in a sense 
 quite different from that which we attach to it commonly 
 
 * The suspension of cash payments had begun in 1797. Resumption 
 was ordered by the act of 1819, and was completed in 1823. 
 
IDEAS OF A STANDARD. 203 
 
 to-day. It is a very malarious word and needs constant 
 disinfecting by definition to be used with safety. I find 
 Ricardo was in favor of the " silver standard," and yet I 
 do not believe that he meant by that the demonetization, 
 of gold. 
 
 Without taking ground rigidly in favor of either of the 
 three proposed or possible local "standards" or units of 
 value (the single gold unit, the single silver unit, and the 
 dual silver and gold unit), Ricardo declares his preference 
 for silver, and gives his reasons. At the same time an impar- 
 tial recognition of the availability of the two metals which 
 is natural to a time when, as I have shown, the idea of 
 abolishing one of them had not been conceived, is pre- 
 sented in his writings in a manner which is not a little 
 confusing to the modern reader. He often, apparently 
 for the sake of convenience, speaks of " gold," when 
 another writer whom experience had warned that pre- 
 cision was vital and would have said " metallic money,'* 
 or "the money-metals." 
 
 This practice, while harmless at the outset, has natu- 
 rally, under the changed conditions which have obtained 
 for a later generation, become so misleading in its effect 
 as to require these special words of caution to one who 
 shall cite Ricardo on monetary subjects. An example 
 of this nature may be 'found in the naive account 
 given of Ricardo's position by the late Mr. J. R. McCul- 
 loch, who became for a later generation a representative 
 of " gold orthodoxy," and who, in his reference to Ricardo 
 in the account of his life and writings, prefixed to the 
 
204 BULLION NOTES AND SILVER. 
 
 collected Works, of which he was the editor, entirely ig- 
 nores the existence of silver. This falsification of most 
 important testimony is the more dangerous because of its 
 innocence. 
 
 Kicardo's plans * were not adopted in full. The Act of 
 1816 made gold the " Standard Measure of Value," im- 
 posed a heavy Seigniorage on Silver Coin, and left the ex- 
 ercise of the right of Free Coinage (which it re-enacted) 
 subject to the issuance of a Proclamation of the Crown. 
 
 I 'eel's Bill, as it was called, the Resumption Act of 1819, 
 which closed the paper money period that began in 1797, 
 applied the idea of redemption in bullion to the following 
 extent : It provided that the Bank must deliver on de- 
 mand in exchange for bank notes, gold bullion of standard 
 fineness not less than sixty ounces at one time, first, at <4 
 Is. per ounce for a certain period ; then at any rate be- 
 tween that figure and 3 19$. 6d. per ounce ; then at the 
 latter figure ; then at any rate between =3 19$. 6d. and 3 
 17$. 10J</.; then from May 1, 1821, to May 1, 1823, at the 
 
 * The following comment may prove of interest : 
 
 "I cannot resist inquiring what would have happened if Ricardo had 
 been led in some way to put his Scheme of a Monetary System for England 
 into his 'Principles.' Would not the necessity of cohesion have forced 
 itself upon his mind ? Could later economics have taken the tone we have 
 witnessed, if he had treated ex cathedra of the Principles of Monetary 
 Legislation with a high -pressure interference scheme to back them ? The 
 central idea of what I shall name Ricardo's Bullion Standard and Bullion 
 Certificate Scheme was parity maintained by all the force of law that was 
 to be had. And I must also allow myself the daring statement that the 
 same thing may be said of all orthodox plans for a convertible paper cur- 
 rency if the philosophers only knew it !" See above, page 132. 
 
PLAN OF RESUMPTION. 205 
 
 latter figure, which was the mint price of gold ; and from 
 May 1, 1823, in gold coin if required. The Bank had the 
 option of paying in coin after May 1, 1822. 
 
 In fact, however, the Bank anticipated this date, and 
 began paying in coin May 1, 1821, so that the experiment 
 of bullion redemption was not fully tried. 
 
 Kicardo's comment on this action of the Bank is inter- 
 esting. It was made in Parliament during the debate of 
 1822. He maintained that the inconveniences of the re- 
 turn to a metallic standard had been infinitely increased 
 by large premature purchases of gold. They ought not 
 to have paid in specie until 1823. Mr. Peel's bill was in- 
 tended to try w li ether a bank could not be advantageously 
 carried on upon the principle of pay ing the notes in bullion. 
 If the bank had gone on wisely in their preliminary ar- 
 rangement, the bullion part of the plan would have worked 
 for a number of years beyond the time stipulated. 
 
 Without going into the pros and cons of Ricardo's 
 measure, I may allude to two elements of conviction then 
 in force, which probably had exerted a decisive influence 
 in defeating the bullion redemption feature. 
 
 Though curiously diverse and disparate, the two lines 
 of opinion lead to the same conclusion. 
 
 First was the confidence inspired by the book of 
 Lord Liverpool, whose death occurred just as Ricardo 
 came upon the monetary stage, and whose prestige as a 
 lifelong counsellor of George the Third was fortified 
 by his measures to maintain a coinage system of "legal 
 tender, by weight as well as by tale," which were first 
 
206 BULLION NOTES AND SILVER. 
 
 adopted in 1774, and the principles of which were sup- 
 posed to be impregnably established by his " Treatise on 
 the Coins of the Realm in a Letter to the King " in 1805. 
 
 The second element to which I refer was the abhor- 
 rence felt toward one-pound notes, as a temptation to 
 forgery. Ricardo's plan involved their maintenance. 
 To those who prayed " Lead us not into tempation," 
 it seemed a wrong thus to facilitate forgery, " a dread- 
 ful wound to the morality of the people," to quote a 
 phrase from the Edinburgh Review. The notes seemed 
 stained with blood, not quite innocent, but blood that 
 need not have been shed. These notes of small denomi- 
 nations came in with the suspension of cash payments 
 the statute prohibited them before that and it is said 
 that between 1797 and 1818 three hundred and thirteen 
 forgers died on the scaffold. 
 
 In connection with the fact of Ricardo's preference in 
 favor of the silver standard for England, it is well to re- 
 member that there was nothing phenomenal in this piece 
 of good sense, for the anti-silver sentiment which is known 
 to this generation is very modern. I have elsewhere set 
 forth ample evidence on this subject. It was the metrical 
 reform movement, at its height after 1850, in which the 
 prepossessions of the physical scientist and of the account- 
 ant put to sleep the judgment of the economist and the 
 prudence of the statesman, that inspired the attack against 
 silver. The history of bullion in English law affords a 
 curious bit of corroboration to this statement. 
 
 When the Bank Charter Act came before Parliament for 
 
MODERNNESS OF ANTI-SILVER DOCTRINE. 207 
 
 renewal in 1833, the monetary reformers, with Mr. Lloyd, 
 better known as Lord Overstone, at their head, succeeded 
 in making it obligatory upon the Bank to publish regu- 
 larly a statement of its condition. Now, in that statement 
 gold and silver bullion were fused together. They appeared 
 in print as " bullion " a collocation plainly abhorrent to 
 later generations when gold orthodoxy had come into the 
 ascendant. Coming from Lord Overstone, the admission 
 is singularly strong evidence of the general opinion that 
 one money-metal was " as good as the other." 
 
 The Bank Charter Act of 1844, by restricting the pro- 
 portion of silver to be held as a deposit to one-fifth of the 
 total amount, made it necessary to report silver bullion by 
 itself, and a provision was enacted to that effect. 
 
 An interesting instance also occurs to me of the reap- 
 pearance of the idea of Bullion Certificates in a form 
 which satisfied in full the theory of Sir Kobert Peel as to 
 the true standard of Great Britain being a definite quan- 
 tity of bullion. 
 
 In 1847, Mr. Haggard, a respected official of the Bank 
 of England, published a pamphlet, entitled " Observations 
 on the Standard of Value and the Circulating Medium of 
 this country," in which he set forth a plan for the refor- 
 mation of the English Monetary System, which I present 
 here in brief, stating it entirely in my own words : 
 
 The Standard of Yalue to be Silver Bullion ; four 
 ounces (thirty-seven-fortieths fine) being the sub- 
 stratum of a Paper Pound Sterling. 
 
 0? THS 
 
 [TJII71R 
 
208 BULLION NOTES AND SILVER. 
 
 The Full Legal Tender circulation to consist of paper 
 representing that Bullion ; the Paper (Bank notes, 
 so called) being Legal Tender from the Bank, as 
 well as between individuals. 
 
 The coin to consist of Gold and Silver at 15^ to 1 ; 
 Gold Legal-Tender for 200 ; Silver Legal-Tender 
 for 2 ; both kinds charged with ' seigniorage.' 
 
VIII. 
 
 A PAN-AMERICAN DOLLAR AND THE 
 POLICY OF UNION. 
 
A PAN-AMEEICAN DOLLAR AND THE POLICY 
 OF UNION. 
 
 Until the status of Silver as a money-metal is restored 
 it is futile to fix a weight for an international dollar. 
 
 No doubt it would be a convenience to have coins of 
 different nations of the same weight or of weights bearing 
 very simple numerical relations to each other ; but to give 
 such coins legal-tender power outside the country that 
 mints them is another matter altogether. 
 
 The United States invited England, France, and Ger- 
 many to join in settling the status of Silver, but never pro- 
 posed to accept their coins as legal tender in the United 
 States. 
 
 In the greatest work* ever composed by a minister of 
 Foreign Affairs while minister, John Quincy Adams ob- 
 served that " to despair of human improvement is not more 
 congenial to the judgment of sound philosophy than to 
 the temper of brotherly kindness ;" and it was to improve- 
 ment by assimilating the weights and measures of different 
 countries that his thought and work were directed. 
 
 The analogies of such a reform with the assimilation of 
 the weight of national coins suggest the application of this 
 
 * His Keport upon Weights and Measures prepared in obedience to a res- 
 olution of the Senate of March 3, 1817. Philadelphia, 1821. 
 
 211 
 
212 A PAN AMERICAN DOLLAR. 
 
 remark to the present theme. Unfortunately the three 
 score years and ten which have passed since philosophy 
 and brotherly kindness were thus seen to bid men hope, 
 afford material I will not say to encourage despair nor to 
 discourage effort, but at least to fortify patience. 
 
 " Uniformity of weights and measures," said Mr. Adams, 
 " is and has been for ages the common anxious and earnest 
 pursuit of France, of Great Britain, and, since their inde- 
 pendent existence, of the United States." And yet, to-day, 
 in 1890, the Anglo-cosmopolitan world still counts in feet, 
 pounds, and gallons ; albeit, at the same time, side by side 
 with them, the unified French system has been slowly en- 
 larging its sphere. But in the domain of coinage no such 
 orderly progression, still less a steady march toward uni- 
 formity appears. To say volcanic upheaval, is to give a 
 better description of the fact. It is true that there have 
 been achievements in the line of uniformity. Notable 
 among these is the unification of German coinage systems, 
 which came with an analogous rectification of the political 
 map of Europe ; but its effect was to perpetuate diversity 
 while reducing the extent of existing diversity. The new 
 " gold mark " of 1871-'3 bears no simple relation to dol- 
 lar, franc, sovereign, guilder, ruble, or rupee. It is also 
 true that within this period a cosmopolitan silver dollar 
 has, step by step, won its way to adoption by a goodly 
 part of Christendom. If my count is correct a hundred 
 and twenty millions of population now accept a silver piece 
 which began its career as the Hercules crown, the five- 
 franc piece of the French Ee volution. From Finland to 
 
THE COUNTRIES OF THE FRANC. 213 
 
 Cadiz, by way of the Danube and Greece, from Paris to 
 Patagonia, by way of Hayti and Cuba, that weight of silver 
 is money for the nation or league that coins it. But not 
 at the same rate ! There is a nominal value and a bullion 
 value, and for seventeen years the two values have been 
 divorced. Coins struck at different mints, of the same 
 weight of silver, some are worth many per cent, more than 
 others, according to the gold price of Silver. Uniformity 
 or even identity is thus defeated in favor of something 
 which is at the same time nominal and intrinsic, and to 
 which the lore of the scales, the thermometer, and the 
 microscope gives no clue. It is in the presence of such 
 facts and of the broad considerations arising from them 
 that the proposal of a Pan-American silver dollar must be 
 assigned to its place. 
 
 To complete our survey of them I shall ask the reader 
 the frank question whether he ever, before reading this 
 paper, had heard of the five-franc piece as a coin of serni- 
 universal currency whether he ever was informed of 
 this assimilation of coinage systems, extending from Fin- 
 land to Patagonia ? 
 
 Now I venture to believe he never heard of it before. 
 No doubt he has heard of the five-franc piece, perhaps 
 handled it indeed, it was once a dollar of the United 
 States, full legal tender at 93 J and at 93 cents and he 
 has probably heard of the Latin Union, perhaps been a 
 tourist within its borders, in France, Italy, Belgium, 
 Switzerland. But my question relates to that far greater 
 range of unification, which touches at one extremity the 
 
214 A PAN-AMERICAN DOLLAR. 
 
 ancient Grand Duchy of Finland and covers a goodly part 
 of the ancient American Empire of the Spanish dollar on 
 the other. It is of this I venture to believe the reader 
 has never heard before. 
 
 This affirmation I make in order to elicit an important 
 lesson which bears directly on our theme, namely : the 
 narrow range of interest actually engaged in this matter 
 of uniformity of the weight (and alloy) of coins. Without 
 being trivial when regarded alone, the subject is relatively 
 trivial when brought, as it generally is, into competition 
 with the really vital issues involved in coinage policy. Side 
 by side with these its insignificance can be described only 
 by a figure ; as, for example, the insignificance of smart 
 uniforms or well-burnished musket-barrels as compared 
 with a successful campaign. 
 
 Of course there is great difficulty in recognizing the true 
 perspective in monetary matters, by reason of the subtlety 
 of the distinctions of which careful account must be 
 made. Thus, as we have observed, there is uniformity 
 apparent and uniformity real, which may change places 
 under the operation of various causes ; there is identity 
 which is real and yet nominal at the same time. In deal- 
 ing with coins we are engaged with the problems of 
 evanescent value, with the ' mysteries of money.' The 
 mind must accustom itself to pass with ease from point to 
 point of such a sequence of ideas as identity, uniformity, 
 parity, exchangeability, convertibility, redemption. Start- 
 ing with a bit of stamped metal, which is a simple thing 
 to describe, or weigh, or analyze, one must review, or be 
 
MEXICAN DOLLAR AND BRAZILIAN MILREIS. 215 
 
 prepared to review, the conflicting financial policies of 
 nations. It is like the difference between standing on the 
 shore and navigating the ocean. 
 
 We return to consider a universal American dollar as a 
 practical measure to-day. We have seen that the advan- 
 tage of such a coin is not likely to be very great under 
 any circumstances. We now advance to the observation 
 that as matters now stand it is impracticable to attain 
 this advantage, whatever it may be. 
 
 If Mexico should diminish the weight of her dollar to equal 
 the dollar of Hamilton, of the Fathers of our Republic, 
 there would be the same difficulty as to its value, the same 
 contrast which has so often been observed at the two ends 
 of the bridge at the boundary at El Paso, the bullion value 
 for one and the higher face value for the other, the latter 
 appearing the more real because of its relation to the ma- 
 jority of existing exchanges and valuations in which Ameri- 
 cans are interested. If Brazil should undertake to estab- 
 lish her paper-money in some stable relation to a new 
 silver piece equal to our dollar, in the place of gold milreis, 
 it could make no change in the fact that the Anglo-Ameri- 
 can silver dollar is at par with gold, and the Latin-Ameri- 
 can dollars are not. So if the other Latin countries should 
 abandon the Hercules crown, with its associations of his- 
 torical continuity going back beyond the pound of Charle- 
 magne, there would still be that fatal bar of premium or 
 discount to bring uniformity to naught. 
 
 Thus far we have spoken merely of assimilation, of uni- 
 formity in the weight of a silver dollar to be issued by the 
 
216 A PAN-AMERICAN DOLLAR. 
 
 several American States ; but there is another and radi- 
 cally different proposition involved in the plan as it is 
 usually entertained. Moreover the distinction to which I 
 here give emphasis is not as often apprehended as it should 
 be, even in quarters where thorough acquaintance with the 
 subject is looked for. 
 
 I refer to the plan of making such a coin legal tender 
 in a nation other than that under whose authority it was 
 minted. There is a constantly active disposition to fuse 
 this idea and the idea of uniformity together, suppressing 
 the vital distinction which I vindicate. 
 
 In considering this plan of reciprocal legal tender we 
 will leave at one side the facts as they are, to which we 
 have already directed our attention. We will imagine for 
 the moment that silver occupies the same monetary rank 
 in all of the several American countries ; and upon this 
 supposition we will proceed to the inquiry why the pro- 
 posed coin should be legal tender in each, why it should 
 have compulsory currency in countries other than that in 
 which respectively it was coined ? 
 
 If the coins are good, if they are of full weight and 
 purity, they will pass on their merits when exported to 
 other countries where similar dollars are coined. They 
 there come into the hands of the class of men who are 
 familiar with coins, and know whether they are good or 
 not. Thus they would serve in the payment of commercial 
 balances between countries as international money, as gold 
 does now. They would be taken 011 their merits just as 
 gold eagles are taken in Paris and London, or napoleons 
 
CURRENCY OF FOREIGN COINS. 217 
 
 in London and New York, or sovereigns in New York and 
 Paris. The eagle, the napoleon, the sovereign, are not 
 legal tender except in the country that coins them. Why 
 should the silver dollar receive a greater privilege ? 
 
 The coins of the different states of the Latin Union are, 
 it is true, receivable in the public offices of each state, and 
 under the system of internal revenue there prevailing the 
 practice of these offices is potent in establishing the cur- 
 rency of coins. But this arrangement grows out of the 
 semi-political and social causes which have led to a thor- 
 ough-going uniformity of coinage (embracing multiples and 
 fractions of the franc), established with centralized and 
 concurrent control a system made practicable by the close 
 vicinity of these nations and the entire ease and great ex- 
 tent of communication between them. And even under 
 these circumstances the law does not enforce that com- 
 pulsory legal tender between individuals which we are now 
 considering. 
 
 Such compulsory currency, conferred merely by favor of 
 a foreign stamp upon a coin, seems plainly to be a statu- 
 tory arrangement, by help of which, although contrary to 
 the intent of the legislator, fraud may be assisted to find 
 its victim. It is not difficult for a citizen to understand 
 what are the coins of his own country and the merits or 
 demerits of the several pieces which may come to him in 
 his business transactions. But imagine people in the va- 
 rious country neighborhoods scattered over the continental 
 domains of the United States called upon to deal with 
 coins of any and all American Republics, Haytian, Domin- 
 
218 A PAN-AMERICAN DOLLAK. 
 
 ican, Mexican, Nicarauguan, Guatemalan, Honduran, Sal- 
 vadorian, Costa Rican, Venezuelan, Colombian, Bolivian, 
 Ecuadorian, Peruvian, Chilian, Brazilian, and Argentine ! 
 An opportunity for undiscoverable frauds of which the de- 
 fenceless poor must be the chief victim ! Even leaving 
 the question of counterfeiting out of sight, the facility of 
 finding a market for light coins in the country districts 
 would be a continual temptation. And neither local nor 
 international control would avail wholly to neutralize this 
 temptation. 
 
 It is also to be considered that so far as governments 
 should under such a system become responsible for making 
 good the defects of the circulation, the scheme would tend 
 to make the greatest monetary Power a guarantee for all. 
 And as fate seems to have marked out the United States 
 for that position, the burden, whatever it is, would fall 
 here. 
 
 Now, if there were any great advantage to be gained by 
 a system of reciprocity so very far-reaching it would be 
 necessary to enter into the details of debit and credit, pro 
 and con, in this behalf. 
 
 But there are none ! There is no close political and 
 social inter-relation, nor is there close neighborhood be- 
 tween the Anglo-American Republic and the Latin- Ameri- 
 can Eepublics such as could, by mere iteration of the effort, 
 enlarge into the range of practical importance the trivial 
 convenience to importers and tourists of not having to ex- 
 change one kind of cash for another. When the steamers 
 at New York for South America are as many and as 
 
PROPOSALS OF THE CONFERENCE OF 1878. 219 
 
 crowded as those now sailing for Europe, and when the 
 trains carry more passengers across the Mexican than 
 across the Canadian border, it will be time to take into 
 favorable consideration a reciprocity of legal tender or a 
 fusion of currencies, which we have not thought seriously 
 of offering to the pound sterling or to the Canadian dollar. 
 
 This reference to our policy in Europe brings in view 
 the fact that such reciprocity or fusion formed no part of 
 the plan of monetary federation proposed to the European 
 nations in the Conference in Paris in 1878. That pro- 
 posal referred not to the weight nor to the extra-territorial 
 currency of coin, but to the material of money. It dealt 
 with the substance, not with the form. The question of 
 form was excluded. 
 
 This was not done without opposition. 
 
 The issue was raised and was decided. The utterances 
 of the American delegates at both Conferences will be 
 found in harmony with the aims of the agitation which 
 preceded the decision of Congress to call the Conference, 
 and with reference to which the words of the statute would 
 naturally be construed. In the Document of the Confer- 
 ence of 1878, I took pains to bring into prominence the 
 distinction between our proposal and earlier plans of 
 monetary union. I reprint extracts bearing on that 
 subject in the Appendix. I may also refer to late remarks 
 on the same subject on page 39. 
 
 It will be seen that in formulating the policy of the 
 United States as we did, we not only disengaged the 
 important from an entanglement with the trivial, but 
 
220 A PAN-AMERICAN DOLLAR. 
 
 removed from a plan that is practical and practicable an 
 extraneous element, both impracticable and impolitic. 
 
 And now what shall we say of the Act of Congress ap- 
 proved March, 1888, which put among the objects to be 
 deliberated upon in a Conference of the Delegates of 
 American Nations in Washington, 
 
 the adoption of a common silver coin to be issued 
 by each government, the same to ~be legal tender in 
 all commercial transactions between the citizens of 
 all the American states f 
 
 Here we have bound in one phrase, for all American 
 republics, 
 
 assimilation of weight and value, 
 reciprocity of legal tender, 
 
 the first of which at least at present is quite impossi- 
 ble, and the second objectionable in a high degree under 
 any circumstances. 
 
 One may well wonder how such a bill could become 
 law. It must be admitted with regret that this legal-tender 
 clause gives a striking instance of the lack of adequate 
 arrangements for the revision of the language of bills 
 before Congress ; a lack which has been often remarked, 
 and will, no doubt, in due time be supplied. The evil 
 genius that inspires legislative ' slips of the pen ' could 
 hardly have chosen a more shining page than that which 
 bears an invitation from this country to the Latin-Ameri- 
 can Kepublics to a Conference in Washington, intended 
 to promote brotherhood throughout the Americas. 
 
AMERICAN MONETARY UNION. 221 
 
 The sequel, as thus far developed, is, in brief, the fol- 
 lowing : 
 
 The International American Conference which was con- 
 vened in October, 1889, appointed a Committee on Mone- 
 tary Federation, from which final reports were made at 
 the close of March, 1890. 
 
 Hon. T. Jefferson Coolidge (United States) presented a 
 minority report, the recommendation of which was to the 
 effect that the Delegates to the Conference advise their 
 respective governments that it was inexpedient to adopt 
 a common silver coin, to be either a partial or full legal 
 tender in the several countries, until the efforts of the 
 United States to re-establish the former status of silver by 
 concurrent action with European nations shall have been 
 successful. 
 
 In closing his address Mr. Coolidge added : "I desire 
 it distinctly understood that I approve entirely of all the 
 Eepublics of the Americas adopting a currency of uniform 
 fineness and weight. My objection is to the legal-tender 
 clause." 
 
 In the final Keport of the Committee the following 
 resolution was proposed : 
 
 The International American Conference is of opinion 
 that great advantages would accrue to commerce between 
 the nations of this continent by the use of a coin or coins 
 that would be current, at the same value, in all the coun- 
 tries represented in this Conference, and therefore recom- 
 mends 
 
222 A PAN- AMERICAN DOLLAR. 
 
 1. That an International American Monetary Union be 
 established. 
 
 2. That as a basis for this Union an international coin 
 or coins be issued, which shall be uniform in weight and 
 fineness and which may be used in all the countries repre- 
 sented in this Conference. 
 
 3. That to give full effect to this recommendation there 
 shall meet in Washington a commission composed of one 
 delegate, or more, from each nation represented in this 
 Conference, which shall consider the quantity, the kind of 
 currency, the uses it shall have, and the value and propor- 
 tion of the international silver coin or coins and their rela- 
 tions to gold. 
 
 4. That the Government of the United States shall in- 
 vite the commission to meet in Washington within a year, 
 to be counted from the date of the adjournment of this 
 Conference. 
 
 The report is signed by the Hon s E. A. Mexia (Mexico), 
 Morris M. Estee (United States), Jose Alfonso (Chile), 
 Jeronimo Zelaya (Honduras), Juan Francisco Velarde 
 (Bolivia), and Carlos Martinez Silva (Colombia). 
 
 The resolution was adopted. 
 
IX. 
 
 ON MEASURES IN AID OF DEMONETI- 
 ZATION. 
 
 223 
 
ON MEASURES IN AID OF DEMONETIZATION. 
 
 Repugnant as demonetization is to the friends of silver, 
 it is not unlikely that some of the interesting incidents of 
 that erroneous policy may have escaped attention ; and 
 hence it may be profitable to analyze the situation with a 
 view to possibilities in that direction. The reader will 
 observe that I am not attempting to prophesy. I am 
 merely suggesting certain elements for a seaman-like fore- 
 cast bearing upon the navigation of a ship of state. 
 
 The friend of silver desires to enlarge the range of its 
 monetary use ; the demonetizer to reduce that use by 
 closing his territory against it. Now, it will become ap- 
 parent upon examination that so far as the general position 
 of silver is concerned it makes little difference in what par- 
 ticular place this monetary use exists. To increase the use 
 of silver in one place and thereby diminish it in another is 
 futile. 
 
 The practical absurdity of this course is duplicated when 
 the measure proves a political blunder. And this would 
 be the case if Demonetization in the United States facili- 
 tates demonetization abroad. Not only will it do no good 
 to silver, so far as the dollars Demonetized are balanced by 
 dollars demonetized, but wherever it happens it weakens 
 the silver party and its prospects by withdrawing from 
 their side the political interest in a general restoration of 
 
 225 
 
226 MEASURES IN AID OF DEMONETIZATION. 
 
 silver to its place as money, that grew out of the former 
 ownership of this silver, which we suppose to be demone- 
 tized. 
 
 For example, there is the case of Austria-Hungary. Ac- 
 cording to report, efforts are on foot there to establish the 
 gold standard. Suppose that circumstances are provided 
 by pro-silver action here which enable Austria-Hungary 
 to sell out her silver stock for gold. That stock is not a 
 very great sum, yet as far as it goes it would neutralize 
 that amount of ' monetization ' here. But beyond all that 
 is the political effect of shutting the doors of that Empire 
 to silver in the future. And that effect does not stop at 
 the border. It must bear upon the future policy about 
 money of the growing Danubian States, of Russia, of Ger- 
 many, and so of Italy. To produce such a result tends to 
 darken the future of silver. 
 
 Let us for a moment consider what might be done in 
 other countries in the way of demonetizing silver and what 
 loss, if any, would accrue to them from such act. 
 
 Demonetization or a reduction of monetary employment 
 may be said to occur wherever the character of money is, in 
 law or fact, withdrawn from silver. 
 
 These conditions I find to be fulfilled by the following 
 acts : 
 
 (1.) Any step toward closing the mints now open to 
 
 silver. 
 (2.) Any step withdrawing legal tender privileges from 
 
 silver. 
 
REDUCING THE EMPLOYMENT OF SILVER. 227 
 
 (3.) The retirement and melting down of silver coin, now 
 
 circulating at a nominal rate. (Europe.) 
 (4.) The accumulation of gold stocks in the place of 
 silver stocks, where silver coin circulates at its 
 normal value. (Asia. South America, and Mex- 
 ico.) 
 
 Of these acts, a decrial of coin (3) and a change of legal 
 tender law (2) need be public. The practice of a Treasury 
 as to the receipt of coin may, de facto, reduce as well as 
 enlarge the legal tender privilege without attracting gen- 
 eral attention. 
 
 Below the range of such public acts, the monetary em- 
 ployment of silver may be diminished, privately as well as 
 openly, 
 
 by Governments, by Banks, etc., by individuals. 
 
 What direct and immediate losses are likely to accrue 
 to the actors, through such acts of demonetization ? 
 
 The direct and immediate loss is, in any case, very 
 slight, provided the act does not immediately produce an 
 actual fall of silver relatively to gold. I emphasize the 
 words " direct and immediate," for experience amply 
 teaches that such losses exert a deterrent effect out of all 
 proportion greater than their importance (as compared 
 with the losses which are remote or indirect) would war- 
 rant. And the visible or obvious remote and indirect 
 loss will be very slight, provided the act does not clearly 
 promise to produce an actual fall of silver at a later 
 period. To an enlightened eye there is a real loss in 
 
228 MEASURES IN AID OF DEMONETIZATION. 
 
 the tendency of such acts to defeat, or at least postpone, 
 the future settlement of the relations of money-metals, 
 which, remaining unsettled, must continue to maintain un- 
 rest in various degrees throughout the various regions of 
 the economic world. But this objection does not appeal 
 to the partisan of gold, and hence would not avail to 
 check the supposed efforts of a gold party to get rid of 
 silver. 
 
 Moreover, if the United States undertakes to ' take care 
 of silver,' it is easy for a European to belittle these evils 
 and dangers. So, too, of the danger referred to in the pro- 
 viso that the act of demonetization shall not produce an 
 actual fall of silver. It is easy for a European who wishes 
 to do so to think he can transform his little stock from white 
 to yellow, without disturbing the market, so long as a great 
 Power like the United States is monopolizing as a pur- 
 chaser. 
 
 With reference to (3) the melting down of coins circu- 
 lating above their normal value relatively to gold, it is 
 important to mark the prevalence of an exaggerated esti- 
 mate of the losses which would arise from such acts. I 
 say exaggerated, but I must add that there are notable 
 instances where even a preposterous estimate has been 
 recommended to the public in good faith by highly repu- 
 table authorities. 
 
 For example, the two hundred and fifty million dollars 
 in the Bank of France have been talked and written of 
 as if the sale of them, supposing the present price main- 
 tained, would mean a loss of sixty millions. The same rea- 
 
DOLLARS IN THE BANK OF FKANCE. 229 
 
 soning is applied to other Banks, and to the Government 
 of France, and other States. 
 
 The use made of such erroneous estimate is to support 
 the proposed wholesale acceptance of silver here, with- 
 out limit of amount (or source), not upon trial, not as an 
 experiment, not as a measure to induce European nations 
 to come forward and join us in a settlement, but as a per- 
 manent establishment based on unilateral faith, a final 
 committal quite independent of anything Europe may in 
 the future actually do to disappoint the confidence, so 
 widely professed, in what Europe is going to do. 
 
 Now in this matter a mistake would mean mischief. 
 For these States together could, if the United States made 
 it profitable for them, quietly absorb all the gold now 
 in the United States, leaving us on a silver basis and with- 
 out hope of a permanent ratio. 
 
 We will, therefore, examine the supposition and en- 
 deavor to ascertain what inference is warranted in the 
 premises. 
 
 I aver that the Government that issued such coins, 
 and by its laws maintains them at a fictitious value, 
 relatively to gold, finds in them no real guarantee beyond 
 their metal value, present or prospective. That is all they 
 are really " worth " to the Government. For the differ- 
 ence between their metal value and their face value, they 
 have a credit value. This the Government can destroy or 
 maintain. The Government maintains that credit. Thus 
 full legal tender silver coin to the face value of near a 
 
230 MEASURES IN AID OF DEMONETIZATION. 
 
 thousand million dollars is kept at par, at this nominal 
 value, in the Latin Union, Holland, and Germany. 
 
 But suppose the way to be opened to these Govern- 
 ments to sell out their silver stock at an advance, or at 
 the present price. As matters stand they cannot sell 
 without lowering the price. But the supposition we are 
 analyzing is, that the situation is changed so that they 
 can sell out. And the object of the inquiry and of the 
 conclusion which I have stated to be preposterous, is to 
 show their loss would be enormous, arid therefore there 
 is not even a possibility that it would be incurred. It 
 would in fact appear, from such reasoning, that no induce- 
 ments America can offer will draw European silver across 
 the sea ! 
 
 Now I find such a sale could be made, in the supposed 
 case mentioned, without any true pecuniary loss at all, 
 except a slight percentage for expenses freight, insurance, 
 etc., between Europe and New York. 
 
 Taking the case of the Bank of France, this supposition 
 implies that she would receive 190 million dollars of gold 
 instead of 190 millions' worth of silver, coined at a face 
 value of 250 millions. 
 
 This coin is in use as a deposit for bank notes. How 
 large an issue could be based on gold, which is the chief 
 standard rnetal, the only international money of the West- 
 ern Hemisphere ? Evidently, if the Government so wished, 
 the convenience or advantage of maintaining the existing 
 figures of monetary stock could be attained with gold as 
 well as silver, and thus indemnity for any apparent loss 
 
EFFECT ON THE GOLD PRICE OF SILVER. 231 
 
 be easily given to the Bank. The actual value of the gold 
 would serve as security for not less an amount than the 
 nominal value of the silver. 
 
 Where, then, is the loss ? It does not exist. 
 
 With caution which in some cases may be superfluous, 
 I again remind the reader that this supposition with which 
 the advocate of " unlimited and unconditional silver " seeks 
 to disarm objection is merely supposition, or rather a series 
 of suppositions; supposed cases, however, which every 
 business man must fairly face if he wishes to deal com- 
 petently with the subject. 
 
 Now the supposition that a great demonetization or sale 
 could take place without depressing the gold price of silver 
 is one which demands extreme effort in order to be real- 
 ized, and only the extreme measures proposed to Congress 
 could for a time compass the result of maintaining silver 
 at its price in such event. Here then is the strength of the 
 case against demonetization. And here is shown the radi- 
 cal difference between extreme pro-silver measures and 
 moderate pro-silver measures, to be adopted by Congress. 
 
 Europeans can be depended upon to recognize that 
 such cashiering of silver coin, if undertaken in Europe on 
 a large scale (as it was, for example, by Germany), in the 
 absence of extreme measures here, would defeat the object 
 in view to the extent of not keeping up the gold price of 
 silver. 
 
 At the same time it is a plausible view that if other 
 countries are buying up silver, demonetization might be 
 
232 MEASURES IN AID OF DEMONETIZATION. 
 
 proceeded with so gradually as to make the substitu- 
 tion of gold for silver productive of no immediate loss. 
 
 It may be taken for granted, gold being the accredited 
 " standard " of the western nations, that there is an anti- 
 silver party in each important country of Europe, except- 
 ing perhaps Holland and Spain. Of such a party in its 
 dormant state it may be said, they would like, if they could, 
 to see the work of demonetizing silver completed, each in 
 its own country, but not in other countries. Opposed to 
 them there is in each country a silver party, with its va- 
 rious respective degrees of strength, and such party would 
 endeavor to defeat any further acts of demonetization, 
 and, on the contrary, to promote joint action of nations to 
 restore silver, so that existing laws excluding silver may be 
 repealed. 
 
 We are investigating the anti-silver side, the gold party's 
 side of an account of the effect of a pro -silver measure 
 adopted at this time by one nation alone. Such a measure 
 facilitates demonetization in other countries : 
 
 so far as it enlarges the employment for silver, 
 or raises the price of silver. 
 
 If its upward ' push ' be slight, it tends to enable de- 
 monetization to proceed gradually without loss, because 
 the supposed pro-silver measure will prevent a fall in the 
 price of silver. If its upward push be great, it makes it 
 more profitable to demonetize. For those who insist upon 
 regarding a mere liquidation or closing out of an account 
 as a loss, it is cheaper or less expensive. This estimate 
 
EFFECT IN THE FUTURE. 233 
 
 thus supposed to be made of what is profitable, or cheap, 
 refers to the past. 
 
 To illustrate : Silver being at, let us say, 72 cents to the 
 dollar, America takes measures which bring it where it 
 fluctuates from 85 to 90. That enables a Treasury to 
 melt and put on the London market, and export 
 to Asia and Africa, say, 20 millions a year of 5 -franc 
 pieces, at an advance of, say, 20 per cent, on what the 
 silver in them was worth before. Now, these 20 millions 
 are only 1 J per cent, of the silver money of Europe (count- 
 ing change), and only 8 per cent, of the silver stock reg- 
 ularly held by the Bank of France as deposit to secure its 
 notes. This sale would be very profitable, looking merely 
 to the past. 
 
 How is it as to the future ? If silver is going higher, 
 this sale will not seem so profitable. It will seem a loss, 
 not of actual property, but of possible profit. 
 
 I now give a brief glance to the forces which prevent 
 acts of demonetization. 
 
 As I have abundantly set forth on other pages the 
 interest of each nation in Europe is that stable parity 
 be established between the money-metals, and hence 
 in the true account-keeping of national interests acts of 
 demonetization are injurious to the State. The policy 
 proposed in the Conference of 1878 was right right 
 for each nation. The gold party are wrong in each nation. 
 The silver party are right. 
 
 But this was true in 1873, 1876, 1878, 1881, and has 
 been true ever since. And yet the Silver Question is still 
 
234 MEASURES IN AID OF DEMONETIZATION. 
 
 the Silver Question ! Error once in the saddle is slow to 
 dislodge. Prejudice, dogmatism, and the inertia of na- 
 tions make a mighty combination. The silver party are 
 not yet in control so as to bring Germany and England 
 to meet the requirements of other nations. And mone- 
 tary policy is exposed to all the hazards of politics. 
 
 At the same time there is a peculiarity of monetary 
 politics which has its favorable as well as its unfavorable 
 side. With such a risky subject the odds are in favor of 
 doing nothing. And Europe has done nothing important 
 in the way of demonetization since May 16, 1879, when the 
 sale of the German stock of thaler-bullion was stopped. 
 
 It may be of interest to refer in postscript to a peculiar 
 effect of the extent of the rise of silver supposed to be pro- 
 duced by a measure taken by one nation without guarantees 
 from others. There is a maximum price here for silver, that 
 is, 100 cents on the gold dollar (at 15.98 to 1). It cannot go 
 beyond that. This maximum is fixed by the existence of our 
 silver dollars, which would bear down any influences which 
 might tend to make the silver worth more than the gold 
 dollar. As silver approaches the maximum, the profit of 
 demonetization becomes greater, but the motive for de- 
 laying such action becomes weaker. 
 
 For example, let us suppose that Europeans think there 
 is a good chance that America will raise silver from 
 72 cents to 1 dollar (15.98 to 1). They would natu- 
 rally wait for a rise before selling. To induce them to 
 wait till the rise reaches 90 there is the gain of 18 points 
 on 72, or 25 per cent. For the balance of the possible 
 rise, the " pull," the argument in favor of waiting, is only 
 10 points on 90, or 11 per cent. So the inducement to 
 wait after silver reaches 90 is less than half what it was at 
 the start. 
 
APPENDIX. 
 
 THE ANTI-SILVER MOVEMENT AND ITS 
 REVERSAL. 
 
 235 
 
THE ANTI-SILVEK MOVEMENT AND ITS 
 KEVEKSAL. 
 
 A DOCUMENTARY CHEONICLE. 
 
 I. 
 
 INTRODUCTORY 
 
 The documents of proof and justification hereinafter re- 
 printed should be regarded in perspective as connected 
 with the events now to be stated in brief ; for if thus seen 
 they assume their true positions relatively to each other. 
 They will also be found in harmony with these fundamental 
 truths 
 
 That the joint acts of nations in breaking up an 
 established parity between the two parts of the world's 
 money owed their origin to mistake, to the mis-education 
 of public opinion, rather than to the self-interest of any 
 class. With error everywhere prevalent among the learned, 
 the actual adoption of anti-silver measures came as a 
 product of organized agitation and of political management. 
 It is upon these same lines that the concurrent repeal of 
 anti-silver laws in various nations is to be attained : first, 
 education the conversion of proficient advisers of public 
 opinion in the several countries and in aid of this, agita- 
 tion, organized agitation, and all the political management 
 that can be brought to bear. Of such management ' inter- 
 national strategy ' is the highest form. 
 
 237 
 
238 APPENDIX. 
 
 THE SUCCESSIVE STEPS IN THE OUTLAWRY OF SILVER. 
 
 The Conference of 1867 at its seventh session adopted 
 unanimously the following resolutions : 
 
 The Conference expresses the hope that the measures taken 
 by the governments of the different states to modify their 
 monetary system, in conformity with the basis laid down by 
 the Conference, may end in diplomatic conventions. 
 
 As soon as answers shall be received from the different 
 states to the communication officially made to them of the 
 labors of the Conference by the French government, that 
 government, in accordance with the answers that may be re- 
 ceived, will call a new Conference, if necessary. 
 
 The following paragraph was also adopted, except as to 
 the date, the United States voting for the date May 15 and 
 Great Britain for June 1, 1868 : 
 
 It is desirable that answers should be received before the 
 \5th of February next. 
 
 The first overt act of Government following upon these 
 recommendations was a Franco-Austrian Preliminary 
 Treaty of July 3, 1867, as to the 8-florin piece. In the 
 Scandinavian countries a movement was at once set on 
 foot, which finally culminated in the Report of the Swedish 
 Monetary Commission (published in 1871), and in the 
 several successive steps taken to reduce the legal position 
 of silver in the Scandinavian Union, definitively estab- 
 lished by the Treaty of Sweden and Denmark, of Decem- 
 ber 18, 1872. The Treaty of Accession of Norway was 
 of date October 16, 1875. 
 
INTRODUCTORY. 239 
 
 No action of great moment followed in other countries 
 until after the Franco-Prussian war, when, by the Act of 
 December 4, 1871, the new German Empire assumed the 
 sovereign right of coinage, established a gold unit (the 
 " mark ") at 15^ to 1, and stopped the mintage of silver. 
 The act of July 9, 1873, completed the provision for the 
 new Imperial gold money with silver change, and provided 
 for the retirement, melting, and sale of the existing silver 
 coin of the German States. The German silver sales 
 reached a total of about 140 millions of dollars' worth. 
 They were stopped on May 16, 1879, leaving about 150 
 million thalers full legal tender in Germany. 
 
 In France a Treasury Order of September 6, 1873, limi- 
 ted the amount of silver to be accepted by the Mint, and 
 thereafter a limited coinage of quotas was agreed upon, 
 from time to time, by the States of the Latin Union. In 
 France silver mintage was stopped in 1876. 
 
 In Holland the Act of June 6, 1875, suspended the 
 mintage of silver for private account, and established a 
 gold coinage. 
 
 In the United States a Bill to ' discontinue the silver 
 dollar ' was presented in Congress in January, 1868. It 
 was also proposed to reduce the gold coins, one Bill 
 making the half eagle of equal weight with the 25-franc 
 piece, another with the sovereign. These subjects, how- 
 ever, were then doubly removed from actuality, the money 
 of the country being chiefly paper, in which gold was at a 
 premium, while silver again was at a premium above gold. 
 Two years later a measure discontinuing the silver dollar, 
 
240 
 
 APPENDIX. 
 
 which had been maturely prepared by Treasury officials, 
 was recommended to Congress by the Secretary. The Act 
 was finally passed and approved February 12, 1873. 
 
 THE RATIO SINCE 1870. 
 
 The annual average ratio of Silver Bullion to Gold 
 Money in London is given by various authorities as fol- 
 
 lows : 
 
 Silver to Gold. 
 
 1869-70 15.60 to 1 
 
 1871 15.50 
 
 1872 15.64 
 
 1873 15.93 
 
 1874 16.13 
 
 1875 16.63 
 
 1876 17.80 
 
 1877 17.19 
 
 1878 . 17.96 
 
 1879 
 
 18.39 
 
 Silver to Gold. 
 
 1880 18.00 to 1. 
 
 1881 18.24 
 
 1882 18.27 
 
 1883 18.65 
 
 1884 18.63 
 
 1885 19.39 
 
 1886 20.78 
 
 1887 21.10 
 
 1888 21.98 
 
 1889.. . about 21.50 
 
 The lowest figure in 
 
 Silver to Gold. 
 
 1876 . . . 20.17 to 1. 1888 
 
 Silver to Gold. 
 
 22.65 to 1. 
 
 The Silver Dollar of the United States stands at the ratio 
 to gold of 15.98 * to 1. Its bullion value was 70 cents 
 (0.70574), at the lowest figure yet reached 41f pence to 
 the ounce "standard" in London in 1888, equivalent to a 
 ratio of 22.65 to 1. 
 
 * Or rather, 15.988372095023093023, but usually called 16. 
 
II. 
 
 THE WORK OF THE CONFERENCE OF 1867. 
 REPORT OF MB. DE PARIEU. 
 
 At the eighth and last session, Saturday, July 6, 1867, 
 on invitation from His Imperial Highness, Prince Jerome 
 Bonaparte, the President of the Conference, M. de Parieu, 
 the Vice-President, read the following report : * 
 
 Monseigneur and Gentlemen .' 
 
 In the month of December last, when the French gov- 
 ernment communicated the International Convention of 
 the 23d December, 1865, to the States here represented, 
 and called their attention to the grand idea of monetary 
 uniformity, those communications Avere at first received 
 with a certain hesitation in some particulars. We have 
 been, perhaps, too long accustomed to consign many gen- 
 erous ideas, sustained only by common sense, to the region 
 of dreams, leaving them to be buried by prejudice and the 
 blind consideration of the immutability of existing facts. 
 We all know that every enterprise of general interest re- 
 quires a spirit of unity in its aims and principal means of 
 accomplishment. 
 
 There were many points in the monetary question so 
 difficult that they caused divisions in the doctrines and 
 the views of the past. 
 
 The idea of monetary uniformity long languished in 
 the aspirations of poets and economists. The members of 
 
 *As given in translation accompanying Mr. Kuggles's Keport. 
 
242 APPENDIX. 
 
 the Convention of the 23d of December, 1865, encouraged 
 by the success of their labors, warmly welcomed the prac- 
 tical idea of their extension ; and on witnessing the success 
 of the monetary union concluded between France, Belgium, 
 Switzerland, and Italy, notwithstanding the false situation 
 caused by the forced circulation of paper in one of the 
 States, it was hard for the government that had presided 
 over the Conference of 1865 to refrain from asking the 
 support of the world for a more extended monetary uni- 
 formity. 
 
 The Minister of Foreign Affairs has told you how much 
 the imperial government was pleased at the eagerness of 
 all the sovereign States of Europe and of the government 
 at Washington in sending delegates to the Conference pro- 
 posed to them. In giving to the assembly a president 
 whose great name, exalted position, manifest impartiality, 
 and decided sympathy for monetary uniformity have given 
 our discussions a brilliancy and importance that we could 
 not expect from our own resources, it has complimented 
 you more highly than could be done by words, and has 
 thanked you all, men distinguished for diplomatic merits, 
 economical science, or technical experience in the mone- 
 tary art, for the earnest welcome you have given to the 
 ideas you were called together to examine. 
 
 What was the precise object of your Conference, the 
 nature of the questions it was to expound? 
 
 This, gentlemen, was the first object of your reflections, 
 and upon it the success of your meeting depended. The 
 government of the Emperor might prepare the studies, but 
 it could not fix the terms. 
 
 Monetary science is vast ; many of its problems are de- 
 bated by philosophers. Not one could be avoided. Ap- 
 peals were to be made to reality, the only solvent of such 
 
WORK OF THE CONFERENCE OF 1867. 243 
 
 problems, and the one of particular importance in the 
 subject now before us for consideration. 
 
 At the Trade Conference of 1864, in Frankfort, it was 
 truly said, " monetary questions are more practical than 
 all others." 
 
 The chief question for examination was the monetary 
 standard. 
 
 On this subject you are aware that the world is divided 
 between three different systems the gold standard, the 
 silver standard, and the double standard. It was indis- 
 pensable to know which of these forms would furnish the 
 most desirable and permanent basis for a monetary unity. 
 
 Governed by these considerations, you have agreed upon 
 a series of questions as the basis of your labors, on the 
 report of a committee of seven members, in the formation 
 of which all the systems had been equitably represented. 
 
 This ' questionnaire,' to adopt a neologism of our admin- 
 istrative language, you unanimously adopted in the follow- 
 ing terms : 
 
 " 1st. What is the best way to realize monetary unity 
 by the creation of an entirely new system independent of 
 existing systems, and in that case what should be the basis 
 of that system ; or, by the combination of present sys- 
 tems, taking into consideration the scientific advantages 
 of certain types, and the number of nations that have al- 
 ready adopted them ? In the latter case, what monetary 
 system ought to be chiefly considered, with the reserve of 
 any improvement that might be made in it ? 
 
 " 2d. Can identities or partial assimilations of monetary 
 types be now constituted on a large scale by adopting the 
 silver standard exclusively ? 
 
 " 3d. On the other hand, can that result be reached by 
 adopting a gold standard exclusively ? 
 
244 APPENDIX. 
 
 " 4th. Could a similar result be obtained by adopting 
 the double standard, and fixing in all the nations the rel- 
 ative value of gold and silver ? 
 
 " 5th. In case of a negative response to the preceding 
 questions, is it possible or expedient to establish identity 
 or partial assimilation of monetary types on a large scale 
 with a silver standard, leaving each state the liberty of 
 preserving its gold standard ? 
 
 " 6th. Is it possible and useful to establish identity or 
 partial assimilation of monetary types on a gold basis, 
 leaving each state the liberty of preserving its silver 
 standard ? 
 
 " 7th. In case of affirming one of the two preceding 
 questions, would the internationality of the coin adopted 
 as a common standard be a sufficient assurance of its con- 
 tinued circulation in each state, or would it be necessary 
 to stipulate a certain limit in the relation between the 
 value of gold and silver, or to provide for the case in which 
 international coins would run the risk of being expelled 
 from circulation in any of the contracting states ? 
 
 " 8th. For the success of monetary unity is it necessary 
 to constitute an identical unity of metallic composition 
 everywhere with similarity of weight and denomination, 
 and what basis is to be adopted ; or is it enough to con- 
 stitute common types of a common denominator as high 
 as multiples of 5 francs for gold ? 
 
 " 9th. In case gold is adopted as an international metal, 
 would it be useful for the types of that coin adopted by 
 the Monetary Convention of the 23d of December, 1865, 
 to be completed by new types of 15 and 25 francs for the 
 sake of unity and in the spirit of reciprocity ? In this 
 case what should be their dimensions ? 
 
 " 10th. In case of affirmative to questions three or six, 
 
WORK OF THE CONFERENCE OF 1867. 245 
 
 would it be useful to regulate silver or copper coins by 
 common obligations as to their composition or standard, 
 their limit in payment, or the amount of their issue ? 
 
 " llth. Would it be proper to fix certain means of con- 
 trol to insure the exact coinage of the common types of 
 the international money ? 
 
 " 12th. Besides the immediate practical possibilities al- 
 ready discussed, would further discussions of general 
 principles be desirable to spread over Europe the assim- 
 ilations already effected or hereafter to be realized in re- 
 spect to money? " 
 
 Although no idea of exclusion has entered into this 
 " questionnaire," it is remarkable that its discussion dur- 
 ing five sittings has suggested no serious addition ; on the 
 contrary, the 10th and llth questions you have put off, 
 although the principle of measures of control has been 
 judged indispensable to the success of the monetary con- 
 ventions, and the 12th question was left undecided. 
 
 The decisions of the Conference, as a whole, have been 
 regulated by the dominant desire that any future monetary 
 legislation shall result, as far as practicable, in diplomatic 
 conventions between different states, to secure them against 
 their own inconstancy. It is the evident interest of the 
 states to secure the political advantages of the assimila- 
 tion of their monetary types by the reciprocal circulation 
 of their coins. 
 
 You did not think the reciprocal circulation in public 
 banks, as resolved upon in 1865, completely answered the 
 aspirations for a monetary uniformity ; and, contrary to 
 some reserves found in your minutes, you thought legal 
 currency ought to be considered the last word in the ten- 
 dencies to unity. 
 
 The nine first questions of your sittings are comprised 
 
246 APPENDIX. 
 
 in three formulas too abstract to be discussed, and I will 
 reduce them to their simplest form of expression. 
 
 The whole world agreeing upon the benefits to be de- 
 rived from monetary unity, but the difficulties and delays 
 of effecting it being very apparent, the question is, How 
 can it be. effected ? By the creation of a new monetary 
 system established a priori, or by strict adhesion to exist- 
 ing systems, or simply by bending them, so to speak, and 
 perfecting them hereafter ? 
 
 Such was the triple problem proposed for your solution. 
 
 All of your states, except Belgium, have agreed not to 
 propose a new system, lest such an undertaking might in- 
 definitely delay the desired monetary assimilation. 
 
 A new system would have probably been founded upon 
 the adoption of a decimal gold piece of a certain weight 
 as a unity. You do not say that such a regularity could be 
 attained without difficulty, however beautiful it might be 
 in theory, and without disturbing inveterate habits found 
 in the attachment to the silver franc, almost a copy of the 
 old French livre tournois. 
 
 Instead of seeking a system new in all its parts, you 
 have preferred to adopt that of the Monetary Convention 
 signed at Paris on the 23d of .December, 1865, and which, 
 being now adopted by Borne and Athens, seems by a for- 
 tunate coincidence to reunite the greater portion of the 
 countries in which, at the close of ancient history, civili- 
 zation by various modes had marked out the perimeter of 
 its first empire. 
 
 The close union of this system, in its silver coins, with 
 the metrical weights, whether the coins be considered as a 
 distinct standard or as small change, and the 72,000,000 
 of people that use it and are attached to it, have made you 
 regard it as a centre of assimilation around which the ef- 
 
WORK OF THE CONFERENCE OF 1807. 247 
 
 forts of other nations might cluster with probabilities of 
 success. But you did not look upon the system as fixed 
 and perfect. 
 
 You rightly thought it capable of contraction or exten- 
 sion ; that, though the unit was called a franc here, a lira 
 there, and a drachma elsewhere, still a greater latitude was 
 possible, particularly in regard to the unit value. 
 
 Most of the civilized nations have a monetary unity above 
 a franc in value, the piastre, the thaler, the ruble, and the 
 dollar, four pieces similar in origin and name, are nearly, 
 the quadruple or quintuple of the unit adopted in the 
 convention of 1865. 
 
 If the German and Dutch florins and the Spanish crowns 
 differ less from the franc, on the other hand the wealthy 
 British civilization places its monetary unit much higher 
 in value. 
 
 Though the small Roman state has converted its scudo, 
 similar to the piastre and dollar, into francs, we can hardly 
 hope that larger and more populous states will immedi- 
 ately adopt all the monetary unities we have reported in 
 the convention of the 23d of December, 1865. You have, 
 therefore, thought proper to suggest a single unit as a 
 common denominator, borrowed, from the system of the 
 convention, around which the other unities should circu- 
 late. 
 
 If silver had been adopted for the unitary basis, all 
 other systems might have been assimilated to the franc as 
 a common denominator. But could the silver franc have 
 been the pivot of equations, commensurabilities and coin- 
 cidences desired in the monetary systems we would like to 
 make universal for the benefit of exchange, trade, travel, 
 financial, statistical, and scientific operations ? To a cer- 
 
248 APPENDIX. 
 
 tain extent, this was the chief question for your delibera- 
 tions. 
 
 Here the laws that brought the precious metals into 
 contact with the wealth of communities, and which have 
 twice given a monetary system to the universe, came into 
 consideration. The rule of these laws was broken by the 
 great historic catastrophe that separated ancient from 
 modern civilization by an intermediate period of poverty 
 and barbarism, but now strikingly reproduced after a lapse 
 of nearly eighteen centuries. 
 
 In the time of Augustus, when gold had gained the as- 
 cendancy in money circulation, the Roman poet exclaimed : 
 
 J3ra dabant olim ; melius nunc omeii in auro est, 
 Yictaque concedit prisca moneta novae. 
 
 From the middle ages to our day, the revolution that 
 Ovid mentions incompletely, for he omits silver, has lain 
 quiet, till it breaks out now with renewed strength and pe- 
 culiar mineralogical, industrial, and commercial circum- 
 stances. No new invasion of barbarism can reverse its 
 course in Europe, where silver first took the place of iron 
 and copper, and where silver is now displaced by gold. 
 
 In most of the civilized nations of Europe and America 
 the latter metal has become the principal instrument of 
 circulation, because its portability and density particularly 
 recommend it as the material for monetary unity. When 
 the convention of the 23d September, 1865, closed, three 
 of the associate states wished gold to be the choice of the 
 convention. Even in the last century, a learned man of 
 Germany, where so many grand ideas originate, declared 
 that gold was destined to become the bond of the mone- 
 tary systems of the universe. 
 
 By a most singular coincidence, Avhen only two out of 
 
WORK OF THE CONFERENCE OF 1867. 249 
 
 twenty states had gold for a standard, your conference 
 decided upon it for the standard, with silver as a transitory 
 companion ; and this was done because the double stand- 
 ard was necessary in certain states that were used to it, 
 or where silver was the exclusive standard. 
 
 This valuable unanimity on a question so important, 
 tending to perfect the monetary system of the convention, 
 of 1865, will certainly influence public opinion, and cer- 
 tain men in the interior of states who may have retained 
 any doubt on the question. 
 
 In thus adopting gold as a basis for the desired union, 
 it was only in a common denominator above the franc that 
 it was possible to realize the useful equations and fre- 
 quent coincidences in the systems to be brought together ; 
 for, in gold coins, the very minute differences could not be 
 distinguished with precision by the process of coinage, 
 and already the mere distance of five francs may be some- 
 times difficult to express sufficiently in the external form 
 of the monetary disks. 
 
 The weight of five francs in gold of nine-tenths fine- 
 ness, the standard which was unanimously approved, and 
 also one of the conditions of the convention of 1865, then 
 appeared to be the proper denominator for the basis of 
 the desired assimilation between the monetary systems of 
 the twenty states represented. 
 
 You are aware that the coins of the union of 1865 are 
 already grouped around this denominator. 
 
 For example, it was shown how near the type of 25 
 francs came to the pound sterling, the half-eagle of 5 dol- 
 lars, and a piece adopted by the Vienna conference to 
 represent the value of ten florins. This type of 25 francs, 
 especially recommended in the conference by the repre- 
 sentatives of Austria and of the United States, has been 
 
250 APPENDIX. 
 
 unanimously accepted by the states that voted in the dis- 
 cussion of question nine, but on optional conditions. 
 
 Your opinions were more divided, in fact equally, in re- 
 gard to the utility of recommending at present a gold 
 piece of 15 francs, the approximate equation of 7 florins 
 of the Netherlands and South Germany, and of 4 thalers 
 of North Germany. But, without recommending this 
 type, as you did that of 25 francs, you nevertheless agreed 
 that, if circumstances rendered it proper, it would be open 
 to no serious objection in itself, unless it might be in the 
 delicacy of the process for coining it distinctly. 
 
 The eventual extension of the types of gold coins would 
 necessitate, a, fortiori, for the states that desired it, correla- 
 tive latitude in the forms of their silver coins, the interna- 
 tionally of which is of less importance. 
 
 Such, gentlemen, are the simple but instructive and 
 plain bases that you have thought proper to accept as a 
 sort of siege to the citadel of monetary diversity, the fall 
 of which you would like to behold, or, at least, to grad- 
 ually destroy its walls, for the benefit of the daily increas- 
 ing commerce and exchanges of every description among 
 the different members of the human family. 
 
 The desire of not detaining you longer, gentlemen, after 
 a session of three weeks, is my apology for the imperfec- 
 tion of this hastily written digest, which is made in the 
 hope that some decision may be reached by the middle of 
 February, 1868, or at least some instructive steps taken 
 by the governments that have sent you to this Conference. 
 
 If the germs of our collective, enlightened, and benevo- 
 lent aspirations, freed from the unpleasant compensations 
 that sometimes attend the most seductive reforms, in 
 which we are all animated by the true spirit of civilization 
 and modern progress, shall come to fructify around you, I 
 
WOEK OF THE CONFERENCE OF 1867. 251 
 
 hope, gentlemen, you will pleasurably recall the honorable 
 memories of the part you have taken in these delicate 
 scientific discussions, with the satisfaction of their joint 
 pursuit, under a presidency so memorable, and with a 
 facility and harmony as perfect as that of delegates from 
 a single nation in its ordinary deliberations. 
 
 E. DE PARIEU, 
 Vice-President of the International Monetary Conference. 
 
III. 
 
 THE GERMAN COMMERCIAL CONVENTION 
 
 OF 1868. 
 
 One hundred and nineteen German cities were repre- 
 sented in this Convention. The organization of the earlier 
 llandelstag has been kept up by a Permanent Committee of 
 fifteen, of which Dr. Adolf Soetbeer, of Hamburg, whose 
 literary activity in monetary matters began in 1846, was a 
 prominent member. The following resolution was pre- 
 sented by him as Official Reporter on the question of the 
 Standard at the first session, and was debated at length 
 and adopted at the following session. It will be apparent 
 upon consideration of the resolutions, that that basis of 
 public favor which made it possible for the German Par- 
 liament in 1871 and 1873 to establish the Gold Standard, 
 was largely the artificial product of an ably-directed, per- 
 severingly-pursued, literary agitation which disseminated 
 among the business men throughout Germany an enthu- 
 siasm for the principles identified with the name of Dr. 
 Soetbeer and with the Conference of 1867. 
 
 RESOLUTION ADOPTED. 
 
 Inasmuch as the measures recommended by the First 
 German Commercial Convention, in Heidelberg, May, 
 1861, and by the Third Commercial Convention, in Frank- 
 Extract from the Report of the Proceedings of the Fourth German 
 Commercial Convention (Handelstag} held at Berlin between the 20th and 
 23d October, 1868. Reprinted from the Document of the Conference of 
 1878. 
 
 252 
 
THE GERMAN COMMERCIAL CONVENTION. 253 
 
 fort-on-the-Main, September, 1865, for the purpose of 
 securing monetary unity in Germany, have not met with 
 earnest attention or practical acceptance at the hands of 
 the German Government, and as there are no signs that 
 such attention or acceptance will be accorded to them ; 
 and inasmuch as a plan of a Universal International Mon- 
 etary Union on the basis of the Gold Standard has been 
 elsewhere adopted with zeal, and is being pursued with 
 perseverance ; and especially inasmuch as the proceedings 
 of the International Monetary Conference which met in 
 Paris in the year 1867, in which also the Plenipotentia- 
 ries, of Prussia and of other German States took part, 
 have now been made known, the German Commercial Con- 
 vention in its present fourth assembly pronounces itself 
 to the following effect : 
 
 1. The speedy attainment of a practicable monetary 
 unity in all German States is now, as formerly, regarded 
 as exceedingly important and desirable. 
 
 2. As far as the special scheme of the future unified 
 German monetary system is concerned the propositions 
 for a unified reckoning by marks (thirds of a thaler), the 
 Silver Standard being retained, which was abandoned by 
 the Conventions of 1861 and 1865, are withdrawn, and, 
 on the contrary, the following recommendations are made : 
 
 3. Monetary unity, and at the same time such a general 
 monetary reform as befits the age, can be brought about 
 by the adoption, at the same time, by all the German 
 States of the Single Standard with full application of 
 the Decimal System, in pursuance of the principles recom- 
 mended by the International Monetary Conference of 
 Paris in its report of the 6th July, 1867. 
 
 4. As far as relates to the future German monetary sys- 
 tem after the adoption of the Gold Standard, special notice 
 
254 APPENDIX. 
 
 is directed to the proposition to introduce unit of value 
 and of account equivalent to the Gold five-franc piece 
 with its decimal multiples and its division into 100 shil- 
 lings, or to adopt for a unit of account the gulden as the 
 tenth part of a principal Gold Coin identical with the 
 25-franc piece, and divided into 100 kreuzers. 
 
 The Commercial Convention, in presenting a collection 
 of written opinions concerning the transition to the Gold 
 Standard, and the proceedings of the present meeting, pe- 
 titions the August Presidency of the North German Con- 
 federation, as well as the August Governments of Bavaria, 
 Wurttemberg, Baden, and Hessen, without delay to take 
 appropriate measures in order that a uniform monetary 
 system of the kind before mentioned may be agreed upon, 
 and as soon as possible be laid before the North German 
 Diet and before the Legislatures of the South German 
 States for their acceptance in constitutional form, in order 
 that, if by any means it be practicable, the monetary re- 
 form may take effect, at the latest, on January 1, 1872, at 
 the same time with the new System of Weights and Meas- 
 ures, which already has been published as law in the 
 States of the North German Confederation, the early 
 adoption of which in the South German States is also 
 strongly to be desired. 
 
 The Permanent Committee is herewith authorized to 
 adopt such measures as may be necessary to further the 
 object of the pending resolution. 
 
IV. 
 
 THE PKOPOSALS OF THE UNITED STATES 
 BEFOKE THE CONFEBENCE OF 1878. 
 
 At the second session, on the 16th of August, the Com- 
 missioners of the United States submitted the two follow- 
 ing propositions : 
 
 I. 
 
 It is the opinion of this Assembly that it is not to be 
 desired that Silver should be excluded from Free Coinage 
 in Europe and the United States of America. On the con- 
 trary, the Assembly believes that it is desirable that the 
 Unrestricted Coinage of Silver, and its use as Money of 
 Unlimited Legal Tender, should be retained where they 
 exist, and, as far as practicable, restored where they have 
 ceased to exist : 
 
 II. 
 
 The use of both Gold and Silver as Unlimited Legal- 
 Tender Money may be safely adopted. 
 
 First. By equalizing them at a relation to be fixed by 
 international agreement ; and 
 
 Secondly. By granting to each metal, at the relation 
 fixed, equal terms of Coinage, making no discrimination 
 between them. 
 
 The following third proposition was prepared and held 
 Extract from the Report of the American Commission. (Page 213.) 
 
 255 
 
256 APPENDIX. 
 
 in reserve, awaiting the development of the views of the 
 
 Conference : 
 
 III. 
 
 " The Delegations here present agree to recommend to 
 their respective governments that, by the free coinage of 
 silver at a relation to be agreed upon, or provisionally, 
 through extended coinage upon government account and 
 the accumulation of silver bullion in public treasuries, they 
 make a concerted effort to restore silver to its function as 
 money of full power." 
 
 At no time during the further proceedings did the in- 
 terest of our mission appear to require the presentation of 
 this proposition. 
 
 At the seventh and concluding session, on the 29th of 
 August, the following reply to the propositions submitted 
 by the Delegates of the United States was offered on be- 
 half of the majority of the European Delegates : 
 
 The Delegates of the European States represented in 
 Conference wish to express their sincere thanks to the 
 Government of the United States of America for having 
 procured an international exchange of opinion upon a sub- 
 ject of so much importance as the monetary question. 
 
 Having maturely considered the proposals of the rep- 
 resentatives of the United States, they recognize : 
 
 I. 
 
 That it is necessary to maintain in the world the mone- 
 tary functions of Silver as well as those of Gold, but that 
 the selection for use of one or the other of the two metals, 
 or of both, simultaneously, should be governed by the spe- 
 cial position of each State, or group of States. 
 
THE PROPOSALS OF THE UNITED STATES. 257 
 II. 
 
 That the question of the restriction of the Coinage of 
 Silver should equally be left to the discretion of eacli 
 State, or group of States, according to the particular cir- 
 cumstances in which they may find themselves placed, 
 and the more so, in that the disturbance produced during 
 the recent years in the Silver market has variously affected 
 the monetary situation of the several countries. 
 
 III. 
 
 That the differences of opinion which have appeared, 
 and the fact that even some of the States which have the 
 Double Standard find it impossible to enter into a mutual 
 engagement with regard to the free coinage of Silver, ex- 
 clude the discussion of the adoption of a common ratio 
 between the two metals. 
 
 Contemporaneously with the presentation of this paper, 
 individual expressions of opinion were offered by several 
 of the Delegations, which may be seen in the journal ac- 
 companying this report. 
 
 To this declaration of the European Delegates, the 
 Delegates of the United States rejoined with the following 
 statement of their views, with which the formal proceed- 
 ings of the Conference terminated : 
 
 In response to the address of the representatives of the 
 European States, the representatives of the United States 
 desire, on their part, to express their thanks to the 
 European States for accepting their invitation and con- 
 sulting with them upon a subject of so much importance. 
 
 The representatives of the United States regret that 
 they cannot entirely concur in all that has been submitted 
 
258 APPENDIX. 
 
 to them by a majority of the representatives of the Eu- 
 ropean States. 
 
 They fully concur in a part of the first proposition, viz., 
 that " It is necessary to maintain in the world the mone- 
 tary functions of silver as well as those of Gold," and 
 they desire that ere long there may be adequate co-opera- 
 tion to obtain that result. 
 
 Thev cannot object to the statement that " the selection 
 for use of one or other of these two metals, or of both 
 simultaneously, should be governed by the special posi- 
 tion of each State ; " but if it be necessary to maintain the 
 monetary functions of the two metals as previously de- 
 clared, they respectfully submit that special positions of 
 States may become of secondary importance. 
 
 From so much of the second proposition as assigns as a 
 special reason for at present restricting the Coinage of 
 Silver " that the disturbance produced during the recent 
 years in the silver market has differently affected the 
 monetary situation of the several countries," they respect- 
 fully dissent, believing that a policy of action would re- 
 move the disturbance that produced these inequalities. 
 
 In regard to the third and last proposition, they admit 
 that " some of the States which have the Double Stand- 
 ard," or, as they prefer to say, use both metals, "find 
 it impossible to enter into a mutual engagement for the 
 free Coinage of Silver." 
 
 They as representatives of the United States, have come 
 here expressly to enter into such an engagement. The 
 difficulty is not with them, and, wherever it may be, they 
 trust it may be soon removed. They entirely concur in 
 the conclusion drawn from this state of the case that it 
 " excludes the discussion of the adoption of a common 
 
THE CONFERENCE OF 1881. 259 
 
 ratio between the two metals " if the nations are not ready 
 to adopt a policy to uphold it. We remain upon ours ; 
 the European States upon theirs. 
 
 R. E. FENTON. 
 
 W. S. GROESBECK. 
 
 FRANCIS A. WALKER. 
 
 S. DANA HORTON. 
 
 V. 
 THE CONFERENCE OF 1881. 
 
 DECLARATIONS OF FRANCE AND THE UNITED STATES. 
 
 Mr. EVARTS, on behalf of the Delegates of France 
 (Magnin, Dumas, De Normandie, and Cernuschi), and of 
 the United States of America (Evarts, Thurman, Howe, 
 and Horton), read the following Declaration : 
 
 The Delegates of France and of the United States, in 
 the name of their respective Governments, make the fol- 
 lowing Declarations : 
 
 1. The depreciation and great fluctuations in the value 
 of silver relatively to gold, which of late years have shown 
 themselves, and which continue to exist, have been, and 
 are, injurious to commerce and to the general prosperity, 
 and the establishment and maintenance of a fixed relation 
 of value between silver and gold would produce most im- 
 portant benefits to the commerce of the world. 
 
 2. A convention entered into by an important group of 
 States, by which they should agree to open their mints to 
 free and unlimited coinage of both silver and gold, at a 
 fixed proportion of weight between the gold and silver 
 
 From the Document of the Conference, page 502. 
 
260 APPENDIX. 
 
 contained in the monetary unit of each metal, and with 
 full legal tender faculty to the money thus issued, would 
 cause and maintain a stability in the relative value of the 
 two metals suitable to the interests and requirements of 
 the commerce of the world. 
 
 3. Any ratio, now or of late in use by any commercial 
 nation, if adopted by such important group of States, 
 could be maintained ; but the adoption of the ratio of 15 
 to 1, would accomplish the principal object with less dis- 
 turbance in the monetary systems to be affected by it than 
 by any other ratio. 
 
 4. Without considering the effect which might be pro- 
 duced toward the desired object by a lesser combination 
 of States, a convention which would include England, 
 France, Germany, and the United States, with the con- 
 currence of other States, both in Europe and on the 
 American continent, which this combination would assure, 
 would be adequate to produce and maintain throughout 
 the commercial world the relation between the two metals 
 that such convention should adopt. 
 
 KESOLUTION FOR ADJOURNED MEETING IN 1882. 
 
 The Conference, considering that in the course of its 
 two sessions it has heard the speeches, declarations and 
 observations of the delegates of the States hereinafter 
 enumerated ; 
 
 Germany, Austria-Hungary, Belgium, Denmark, Spain, 
 The United States, France, Great Britain, British India, 
 Canada, Greece, Italy, The Netherlands, Portugal, Bussia, 
 Sweden, Norway, and Switzerland ; 
 
 Considering that the declarations made by several of 
 the delegates have been in the name of their governments; 
 
 That these declarations all admit the expediency of 
 
THE PROPOSED CONFERENCE OF 1883. 261 
 
 taking various measures in concert, under reservation of 
 the entire freedom of action of the different governments ; 
 
 That there is ground for believing that an understand- 
 ing may be established between the States which have 
 taken part in the Conference ; 
 
 But that it is expedient to suspend its meetings ; 
 
 That, in fact, the monetary situation may, as regards 
 some States, call for the intervention of their governments, 
 and that there is reason for giving an opportunity at 
 present for diplomatic negotiations ; 
 
 Adjourns to Wednesday, 12th April, 1882. 
 
 YI. 
 THE PROPOSED CONFERENCE OF 1882. 
 
 COPY OF AN IDENTICAL NOTE SENT TO THE VARIOUS POWERS 
 BY THE GOVERNMENTS OF FRANCE AND OF THE UNITED 
 STATES, MARCH 31, 1882. 
 
 PARIS, March 31, 1882. 
 
 The International Monetary Conference which was con- 
 vened at Paris last year, upon the invitation of France 
 and of the United States, and in which the Government 
 of was represented, adjourned to meet 
 
 the 12th of April, 1882. 
 
 In making this decision at the session of July 8, 1881, 
 the Delegates anticipated that, before the date thus fixed, 
 the Governments represented in the Conference would be 
 able to prepare solutions of the questions involved, with 
 a view to the conclusion of an international convention, 
 the terms of which should be discussed and determined 
 by the Conference. 
 
262 APPENDIX. 
 
 This anticipation lias been, in part, realized. From all 
 the information which has been received, it appears that 
 in a large number of States the question has continued to 
 be the subject of earnest consideration and that various 
 plans have been under discussion, with the object either 
 of re-establishing the free coinage of silver money, or of 
 restoring to the metal silver its proper international value 
 by enlarging its use as coin. Up to the present time, 
 however, these investigations do not appear to have pro- 
 duced conclusions sufficiently positive to serve as a basis 
 for formal deliberations of the Conference. 
 
 Hence, in the opinion of the Government of the United 
 States, in conformity with the view entertained by various 
 other Governments, notably by those of Germany, Hol- 
 land, and Italy, there would be no sufficient advantage in 
 reopening the discussions of the Conference at present. 
 
 In this situation, the Governments of the United States 
 and of France are of the opinion that it would be desirable 
 to defer the convocation of the Conference, subject to a de- 
 termination, on the part of the States interested, of the date 
 for its reassembling, the same to take place within the pres- 
 ent year. 
 
VII. 
 
 FOBEIGN COINS AS LEGAL TENDEE AND THE 
 POLICY OF UNION. 
 
 In all cases where communities which have maintained 
 independent Coinage Systems have come into union with 
 each other, or into subjection one to another, a conflict of 
 coinages must naturally ensue, and the settlement of such 
 conflict must naturally offer analogies both with the jarring 
 of the money systems of independent nations and with that 
 monetary pacification which is the aim of international 
 contract. 
 
 For instance, the monetary arrangements arising out of 
 the consolidation of the Eoman Empire, or, later, out of 
 that of the royal power of France, and that of the United 
 Kingdom of Great Britain, must offer such analogies, while 
 the partial and desultory coinage legislation of the Holy 
 Boman Empire of the German Nation in past centuries, 
 and in its turn the speedy monetary unification of the new 
 German Empire of to-day, would offer similar points of 
 resemblance and of instruction. 
 
 In the Document of the Monetary Conference of 1878 
 is given a list of Coinage Treaties, the result of researches 
 which enabled me effectively to characterize the policy I 
 had so long sought to promote. 
 
 The possible future monetary treaty of the chief Western 
 Powers, contemplated by the advocates of the policy 
 adopted by the United States in the law of February 28, 
 1878, under which the Conference was convoked, differs 
 
 NOTE. From the Document of the Monetary Conference of 1878. 
 
 263 
 
264 APPENDIX. 
 
 in an essential point from treaties of which history offers 
 an example. Such treaties have, it is believed, invariably 
 had for their object a Fusion of Currencies or Mutuality 
 of Legal Tender ; the coins struck in one country were to 
 receive legal currency in another ; and this interchange- 
 ability of coins was the main object of the treaty. 
 
 This general object may have implied the purpose, or 
 carried with it the result, that a certain metal or certain 
 metals should become or remain material of coinage in the 
 contracting countries, and may have included the obliga- 
 tion of each party to maintain by appropriate laws the 
 legal-tender character of such coined metal. 
 
 But it was the coining and not the metal : it was the 
 subdivision and the stamping of the material, and not the 
 material itself, that offered the motive of the contract. 
 Indeed, until the middle of this century, it appears to have 
 been taken for granted perhaps unconsciously, but in any 
 case by general consent that the two metals would remain 
 Money ; that they would retain an international currency 
 as material for Money sufficient to guarantee their general 
 status. Gold might be excluded here from formal rights 
 of legal tender, and there silver might seem ostracised, 
 but there was no combined effort to exclude silver, and the 
 nations which would not admit gold as compulsory legal 
 tender furthered its use as a trade coin. 
 
 With the outlawry of silver in Europe comes a new order 
 of events, and to that new order of events the proposed 
 amendments of law were adapted. The advocates of the 
 policy adopted by Congress dealt with the material, not 
 with the stamping of its subdivisions. 
 
 The object of this policy would be fully met by a treaty 
 which should merely guarantee the equality of the metals 
 before the law. Under such a treaty the contracting 
 
FOREIGN COINS AS LEGAL TENDER. 265 
 
 parties might each retain undisturbed their national coins ; 
 their mutual engagement would relate merely to the use of 
 the two metals as full legal-tender at the same ratio. 
 This implies that in making such coins, uniform freedom 
 should be granted to the private individual to have such 
 metal coined ; and that the same charge, or absence of 
 charge, for mintage, should obtain in the contracting na- 
 tions ; and that at the same time full legal-tender power 
 should be appropriately secured by each contracting 
 country to its own coins thus struck. 
 
 An examination of the history of Coinage Confedera- 
 tions, will reveal that their disadvantages or deficiencies 
 arose either, 1st, from this extra-national legal currency 
 of coins, which was their primary object ; or, 2d (when 
 they contemplated the concurrent use of the two metals), 
 from an extra-federal demand for gold at a silver price 
 higher than that assigned to the metal in the federal Coin- 
 age System. 
 
 These disadvantages which inhered in all European 
 Monetary Unions actually formed are believed to be ex- 
 cluded from that which the United States has proposed 
 to the nations for discussion. It i& not essential, nor is 
 it an important practical object of this policy that extra- 
 national legal currency of coins should be included in the 
 contract ; while the union contemplated is so large that, so 
 far as probabilities can be calculated, its tranquillity could 
 not, under any circumstances which this generation is war- 
 ranted in anticipating, be disturbed by an extra-federal 
 demand for gold. 
 
VIII. 
 
 THE ROYAL COMMISSION ON GOLD AND SIL- 
 VER, 1886-1888. 
 
 EXTRACTS FROM THE FINAL REPORT, Nov. 6, 1888. 
 
 PAKT I. Signed by all the members of the Commission. Lord HERSCHELL, 
 Sir JOHN LUBBOCK, Bart., M. P. ; Mr. J. W. BIRCH, Hon. C. W. FREE- 
 MANTLE, C. B. ; Sir T. H. FAEREE, Bart. ; Kt. Hon. LEONAED H. COURT- 
 NEY, M. P. ; Rt, Hon. Sir Louis MALLET, C. B. ; Rt. Hou. A. J. BAL- 
 FOUE, M. P. ; Rt. Hon. HENRY CHAPLIN, M. P. ; Sir D. BALFOUE, K. C. 
 S. I. ; Sir W. H. HOULDSWOETH, Bart., M. P. ; Mr. SAMUEL MONTAGU, 
 M. P. 
 
 SEC. 186. " It must be borne in mind that in the case of 
 other commodities the effect of changes in the supply and 
 demand is both more marked and more immediate. These 
 commodities are generally produced for the purpose of 
 consumption at an early date or within a comparatively 
 short period. The supply at any time available for the 
 market, or capable of being placed on it at short notice, is 
 therefore a very important element in the process by which 
 its value is fixed. 
 
 " The precious metals on the other hand are but to a 
 slight extent consumed, and the available supply consists 
 of the accumulations of previous years. 
 
 "It follows, therefore, that in their case a diminution or 
 an increase in the new supply is of less importance than 
 in the case of consumable articles, and that an increase or 
 diminution in demand has also a smaller effect. The im- 
 portant consideration with regard to them at any one 
 
 NOTE. From a circular of the Bimetallic League. 
 
 266 
 
moment is rather the relation between the total stock then 
 in existence and the then existing demands upon it." 
 
 SEC. 189. "Looking, then, to the vast changes which 
 occurred prior to 1873 in the relative production of the 
 two metals without any corresponding disturbance in their 
 market value, it appears to us difficult to resist the con- 
 clusion that some influence was then at work tending to 
 steady the price of silver, and to keep the ratio which it 
 bore to gold approximately stable." 
 
 SEC. 190. "Prior to 1873 the fluctuations in the price of 
 silver were gradual in their character, and ranged within 
 very narrow limits. The maximum variation in 1872 was 
 fd., and the average not quite T 5 g-d., while in 1886 the 
 maximum was 2 T 9 ^d., and the average nearly IJd. It has 
 not been, and indeed hardly could be, suggested that this 
 difference can be accounted for by changes in the relative 
 production or actual use of the two metals." 
 
 SEC. 191. "The explanation commonly offered of these 
 constant variations in the silver market is that the rise or 
 depression of the price of silver depends upon the brisk- 
 ness or slackness of the demand for the purpose of remit- 
 tance to silver-using countries, and that the price is largely 
 affected by the amount of the bills sold from time to time 
 by the Secretary of State for India in Council. 
 
 " But these causes were, as far as can be seen, operat- 
 ing prior to 1873, as Avell as subsequent to that date, and 
 yet the silver market did not display the sensitiveness to 
 these influences from day to day and month to month which 
 it now does." 
 
 SEC. 192. "These considerations seem to suggest the ex- 
 istence of some steadying influence in former periods, 
 which has now been removed, and which has left the sil- 
 ver market subject to the free influence of causes, the full 
 
268 APPENDIX. 
 
 effect of which was previously kept in check. The ques- 
 tion, therefore, forces itself upon us : Is there any other 
 circumstance calculated to affect the relation of silver to 
 gold which distinguishes the latter period from the earlier ? 
 
 "Now undoubtedly, the date which forms the dividing- 
 line between an epoch of approximate fixity in the relative 
 value of gold and silver and one of marked instability, is 
 the year when the bimetallic system which had previously 
 been in force in the Latin Union ceased to be in full opera- 
 tion ; and we are irresistibly led to the conclusion that the 
 operation of that system, established as it was in countries 
 the population and commerce of which were considerable, 
 exerted a material influence upon the relative value of the 
 two metals. 
 
 "So long as that system was in force we think that, 
 notwithstanding the changes in the production and use of 
 the precious metals, it kept the market price of silver ap- 
 proximately steady at the ratio fixed by law between 
 them, namely 15^ to 1. 
 
 SEC. 193. "Nor does it appear to .MB a priori unrea- 
 sonable to suppose that the existence in the Latin Union 
 of a bimetallic system with a ratio of 15 to 1 fixed be- 
 tween the two metals should have been capable of keeping 
 the market price of silver steady at approximately that 
 ratio. 
 
 " The view that it could only affect the market price to 
 the extent to which there was a demand for it for currency 
 purposes in the Latin Union, or to which it was actually 
 taken to the mints of those countries is, we think, falla- 
 cious. 
 
 " The fact that the owner of silver could, in the last 
 resort, take it to those mints and have it converted into 
 coin which would purchase commodities at the ratio of 
 
ROYAL COMMISSION ON GOLD AND SILVER. 269 
 
 of silver to one of gold, would, in our opinion, be 
 likely to affect the price of silver in the market generally, 
 whoever the purchaser and for whatever country it was 
 destined. It would enable the seller to stand out for a 
 price approximating to the legal coin and would tend to 
 keep the market steady at about that point." 
 
 PART II. Signed by six members of the Commission. Lord HERSCHELL, 
 Sir JOHN LUBBOCK, Bart., M. P.; Mr. J. W. BIRCH, Hon. C. W. FREE- 
 MANTLE, C. B.; Sir T. H. FARRER, Bart.; lit. Hon. LEONARD H. COURT- 
 NEY, M. P. 
 
 SEC. 9. " However much opinions may differ as to the 
 extent of the evil arising from the increased difficulty which 
 a fluctuating exchange interposes, we do not think its reality 
 is open to question." 
 
 SEC. 101. " There cannot be two opinions as to the very 
 serious effect which the continued fall in the gold price of 
 silver has had on the finances of the Government of India." 
 
 SEC. 102. " We are fully impressed with a sense of the 
 difficulties which surround the Indian Government, and of 
 the serious questions to which any proposed additional tax 
 must give rise. It is not only the embarrassment which 
 has already been caused to the Government of India that 
 has to be borne in mind, but the impossibility of foresee- 
 ing to what extent those embarrassments may be increased, 
 and their difficulty augmented, by a further depression in 
 the value of silver." 
 
 SEC. 107. "We think that in any conditions fairly to be 
 contemplated in the future, so far as we can forecast them 
 from the experience of the past, a stable ratio might be 
 maintained if the nations we have alluded to* were to ac- 
 
 *The United Kingdom, Germany, the United States, and the Latin 
 Union. 
 
270 APPENDIX. 
 
 cept and strictly adhere to bimetallism, at the suggested 
 ratio. We think that if in all these countries gold and 
 silver could be freely coined, and thus become exchange- 
 able against commodities at the fixed ratio, the market 
 value of silver as measured by gold would conform to that 
 ratio, and not vary to any material extent." 
 
 SEC. 119. "Apprehensions have been expressed that if 
 a bimetallic system were adopted gold would gradually 
 disappear from circulation. If, however, the arrangement 
 included all the principal commercial nations, we do not 
 think there would be any serious danger of such a result. 
 
 "Such a danger, if it existed at all, must be remote. It 
 is said indeed, by some, that if it were to happen, and all 
 nations were to be driven to a system of silver monomet- 
 allism, the result might be regarded without dissatisfac- 
 tion. 
 
 "We are not prepared to go this length, but at the same 
 time we are fully sensible of the benefits which would ac- 
 crue from the adoption of a common monetary standard 
 by all the commercial nations of the world, and we are 
 quite alive to the advantage of the adoption by these na- 
 tions of an uniform bimetallic standard as a step in that 
 direction." 
 
 PART III. Signed by the other six members of the Commission. Ut. Hon. 
 Sir Louis MALLET, C. B.; Bt. Hon. A. J. BALFOUR, M. P. ; Et. Hon. 
 HENBY CHAPLIN, M. P. ; Sir D. BARBOUR, K. C. S. I. ; Sir W. H. HOULDS- 
 WORTH, Bart., M. P. ; Mr. SAMUEL MONTAGU, M. P. 
 
 SEC. 28. "We think that the above remarks upon the 
 evils affecting both the United Kingdom and India, if taken 
 in connection with the more detailed statement in Part I 
 of the Report, will sufficiently indicate our view as to their 
 nature and gravity ; and that they are largely due to the 
 
ROYAL COMMISSION ON GOLD AND SILVER. 271 
 
 currency changes which have taken place in the years im- 
 mediately preceding and following 1873. 
 
 "We think that too much stress cannot be laid upon 
 the novelty of the experiment which has been attempted 
 as the result of the above changes. That experiment 
 consists in the independent and unregulated use of both 
 gold and silver as standards of value by the different na- 
 tions of the world. 
 
 " We are strongly of opinion that both Metals must con- 
 tinue to be used as standard money ; the results of using 
 them separately and independently since 1873 have been 
 most unsatisfactory, and may be positively disastrous in 
 the future. 
 
 " It cannot be questioned that until 1873 gold and silver 
 were always effectively linked by a legal ratio in one or 
 more countries. 
 
 " It is equally indisputable that the relative value of the 
 two metals has been subject to greater divergence since 
 1874 than during the whole of the 200 years preceding 
 that date, notwithstanding the occurrence of variations in 
 their relative production more intense and more prolonged 
 than those which have been experienced in recent years." 
 
 SEC. 29. " In 1873-74 the connecting link disappeared, 
 and for the first time the system of rating the two metals 
 ceased to form a subject of legislation in any country in the 
 world. 
 
 " The law of supply and demand was for the first time 
 left to operate independently upon the value of each metal ; 
 and simultaneously the ratio which had been maintained, 
 with scarcely any perceptible variation, for 200 years, 
 gave place to a marked and rapid divergence in the rela- 
 ative value of gold and silver, which has culminated in a 
 change from 15^ to 1 to 22 to 1." 
 
272 APPENDIX. 
 
 Proposed Remedy. 
 
 SEC. 30. " It appears to us impossible to attribute the 
 concurrence of these two events to a merely fortuitous 
 coincidence. They must, in our opinion, be regarded as 
 standing to each other in the relation of cause and effect. 
 
 " We cannot, therefore, doubt that if the system which 
 prevailed before 1873 were replaced in its integrity, most 
 of the evils which we have above described would be re- 
 moved ; and the remedy which we have to suggest is sim- 
 ply the reversion to a system which existed before the 
 changes above referred to were brought about ; a system, 
 namely, under which both metals were freely coined into 
 legal tender money at a fixed ratio over a sufficiently 
 large area. 
 
 " The effects of that system, though it was nominally in 
 force only within a limited area, were felt in all commer- 
 cial countries, whatever their individual systems of cur- 
 rency might be ; and the relative value of the two metals 
 in all the markets of the world was practically identical 
 with that fixed by the legislation of the countries forming 
 the Latin Union. 
 
 "As regards the possibility of maintaining such a sys- 
 tem in the future, we need only refer to the conclusion at 
 which our colleagues have arrived in Sec. 107, Part II. 
 (see above), and with which we entirely agree." 
 
 SEC. 34. " No settlement of the difficulty is, however, in 
 our opinion, possible without international action. 
 
 " The remedy which we suggest is essentially interna- 
 tional in its character, and its details must be settled in 
 concert with the other Powers concerned. 
 
 " It will be sufficient for us to indicate the essential feat- 
 ures of the agreement to be arrived at, namely 
 
ROYAL COMMISSION ON GOLD AND SILVER. 273 
 
 (1) Free coinage of both metals into legal-tender 
 money ; and 
 
 (2) The fixing of a ratio at which the coins of either 
 metal shall be available for the payment of all debts 
 at the option of the debtor." 
 
 SEC. 35. " The particular ratio to be adopted is not, in 
 our opinion, a necessary preliminary to the opening of 
 negotiations for the establishment of such an agreement, 
 and can, with other matters of detail, be left for further 
 discussion and settlement between the parties interested. 
 
 " We, therefore, submit that the chief commercial na- 
 tions of the world, such as the United States, Germany, 
 and the States forming the Latin Union, should in the first 
 place be consulted as to their readiness to join with the 
 United Kingdom in a conference, at which India and any 
 of the British Colonies which may desire to attend should 
 be represented, with a view to arrive, if possible, at a com- 
 mon agreement on the basis above indicated." 
 
 SEC. 36. " We have indicated what appears to us to be 
 the only permanent solution of the difficulties arising from 
 the recent changes in the relative value of the precious 
 metals, and the only solution which will protect this and 
 other countries against the risks of the future." 
 
 Certain remedial suggestions of t/ie authors of Part 11 
 are reprinted on page 26. 
 
IX. 
 
 THE STRENGTH OF THE ENGLISH SILVER 
 PARTY. 
 
 The gist of the report presented in Paris lies in the 
 following : 
 
 BIMETALLIC LEAGUE. 
 
 " The object of the League is to urge upon the British 
 Government the necessity of co-operating with other lead- 
 ing nations for the establishment, by international agree- 
 ment, of the free coinage of gold and silver at a fixed 
 ratio." 
 
 President, HENBY H. GIBBS. 
 Chairman of General Council, H. E. GEENFELL. 
 
 Vice Presidents : 
 
 The list of nearly 200 Vice Presidents is not reprinted here, as their 
 names will be found among the prominent names in the Deputation of 
 May 30. 
 
 Trustees of Guarantee Fund, HENKY H. GIBBS, S. SMITH, M.P., ABBA- 
 HAM HAWOBTH, KOBEBT BABCLAY, GILBEET BEITH. 
 
 Executive Council: 
 
 Chairman, EOBEET BABCLAY, Manchester. 
 John A. Beith, Manchester. F. B. Forbes, London. 
 
 Thomas Bell, Whickham (Co. Dur- H. T. Gaddum, Manchester. 
 
 ham). Kobert Gladstone, Liverpool. 
 
 Et. Hon. Henry Chaplin, M.P. C. W. Gray, M.P. 
 
 Henry Coke, Liverpool. Edward H. Greg, Manchester. 
 
 Geo. B. Dewhurst, Manchester. H. E. Grenfell, London. 
 
 Geo. Handasyde Dick, Glasgow. J. H. Gwyther, London. 
 
 John S. Dods, Manchester. E. A. Hague, Manchester. 
 
 E. L. Everett, Ipswich. Frank Hardcastle, M.P., Bolton. 
 
 Frederick J. Faraday, Manchester. Ralph Heaton, Birmingham. 
 J. C. Fielden, Manchester. John Holliday, Manchester. 
 
 274 
 
BIMETALLIC LEAGUE. 
 
 275 
 
 Sir W. H. Houldsworth, Bart., 
 
 M.P. 
 
 Isaac Hoyle, M.P., Manchester. 
 Henry Lathbury, Manchester. 
 Samson S. Lloyd, London. 
 Capt. F. C. Loder-Symonds, Far- 
 
 ingdon. 
 
 Charles Macdonald, Manchester. 
 SirH. M. Meysey-Thompson, Bart. 
 Samuel Montagu, M.P., London. 
 John Muir, Glasgow. 
 Samuel Ogden, Manchester. 
 
 Hon. Treasurer, ABRAHAM 
 
 James Parlane, Manchester. 
 
 A. D. Provand, M.P., Manchester. 
 
 J. F. S. Kolleston, Leicester. 
 
 Edward Sassoon, London. 
 
 I. Seligman, London. 
 
 T. H. Sidebottom, M.P., Manches- 
 ter. 
 
 T. C. Taylor, Batley. 
 
 John Thomson, Manchester. 
 
 William Westgarth, London. 
 
 Thomas Willson, Ryde, Isle of 
 Wight. 
 
 HAWORTH, Manchester. 
 
 Bankers: BANK OF ENGLAND, Manchester; CHARTERED BANK or INDIA, 
 
 AUSTRALIA, AND CHINA, Hatton Court, London, E. C. 
 Secretary, HENRY MCNEIL, F.S.S., Haworth's Buildings; 5 Cross street, 
 
 Manchester. 
 
 Central Agricultural Committee: Offices, 2 Princes street. Great George 
 street, Westminster, S. W. ; Hon. Sees. , RICHARD DAWSON and A. WES- 
 TON JARVIS, M.P. 
 
 Hon. Secretaries: 
 
 London, Carl Von Buch, M.A., 11 
 Queen Victoria street, E. C. 
 
 Glasgow, Wm. Ewing, 7 Royal 
 Bank Place. 
 
 Bradford, J. M. McLaren, Canal 
 Road. 
 
 Bolton, Lewis Haslam, Ravens- 
 wood. 
 
 Blackburn, JohnHargreaves, High- 
 er Bank. 
 
 Batley, T. C. Taylor, Sunny Bank. 
 
 Ipswich, R. L. Everett, Rushmere. 
 
 Brecon, W. S. Miller, Forest Lodge. 
 
 Chorley, A. C. Smethurst, Char- 
 nock House. 
 
 Newcastle-on-Tyne and District 
 
 (Industrial Organizations), J. J. 
 Harris, 83 Northbourne street, 
 Newcastle-oii-Tyne. 
 
 Oxfordshire and Berkshire, Cap- 
 tain F. C. Loder-Symonds, Hin- 
 ton Manor, Faringdon, Berks. 
 
 Walsall, W. H. Duignan. 
 
 Southport, S. Hardmaii, 191 Lord 
 street. 
 
 Congleton, A. C. Conder, Bath Vale 
 Mill. 
 
 Birmingham, Frederick Ash, Snow 
 Hill. 
 
 Bristol, J. H. Howell, Castle Green. 
 
 Swansea, Frederic S. Bishop, Glan- 
 rafon. 
 
THE SILYEE DEPUTATION 
 
 THE MAEQUIS OF SALISBURY, KG., 
 
 PRIME MINISTER, 
 
 AND TO 
 
 THE EIGHT HON. G. J. GOSCHEN, M.P, 
 
 CHANCELLOR OF THE EXCHEQUER, 
 May 30, 1889. 
 
 The Eight Hon. HENKY CHAPLIN, M.P., introduced the 
 
 deputation. 
 
 Duke of Richmond and Gordon, 
 
 K.G. 
 
 Duke of Portland. 
 Duke of Manchester, K.P. 
 Duke of Abercorn. 
 Marquis of Abergavenny, K.G. 
 Earl of Crawfor.d and Balcarres. 
 Earl of Coventry. 
 Earl of Radnor. 
 Earl of Londesborough. 
 Lord Basing. 
 Lord Burton. 
 Lord Hindlip. 
 Lord Castletown. 
 Rt. Hon. Sir H. J. Selwyn Ibbet- 
 
 son, Bart., M.P. 
 Sir John Puleston, M.P. 
 J. Addison, Q.C., M.P. 
 R. G. Webster, M.P. 
 G. W. Balfour, M.P. 
 Sir Robert Jardine, Bart., M.P. 
 W. J. Beadel, M.P. 
 G. H. Bond, M.P. 
 Samuel Smith, M.P. 
 Isaac Hoyle, M.P. 
 Col. The Hon. F. C. Bridgman, 
 
 M.P. 
 
 G. H. Finch, M.P. 
 Sir W. H. Houldsworth, Bart., 
 
 M.P. 
 
 Sir Rainald Knightley, Bart., M.P. 
 Sir E. A. H. Lechmere, Bart,, M.P. 
 Sir Lewis Pelly, K.C.B., K. C.S.I., 
 
 M.P. 
 
 276 
 
 Earl of Erne, K.P. 
 
 Earl Stanhope. 
 
 Earl Maiivers. 
 
 Earl Amherst. 
 
 Earl of Yarborough. 
 
 Earl Fortescue. 
 
 Lord Willoughby de Broke. 
 
 Lord Walsingham. 
 
 Lord Cheylesmore. 
 
 Lord Rowtou. 
 
 S. Williamson, M.P. 
 
 Lt.-Col. Sandys, M.P. 
 
 T. Milvain, M.P. 
 
 T. Fieldeii, M.P. 
 
 J. Corbett, M.P. 
 
 W. Pomfret Pomfret, M.P. 
 
 Leonard Lyell, M.P. 
 
 Lord Henry Bruce, M.P. 
 
 Sir R. H. Paget, Bart., M.P. 
 
 H. Seton-Karr, M.P. 
 
 E. P. Mulhallen Marum, M.P. 
 
 Samuel Montagu, M.P. 
 
 Rt. Hon. E. Heneage, M.P. 
 
 Frank Hardcastle, M.P. 
 
 Win. G. Mount, M.P. 
 
 A. Weston Jarvis, M.P. 
 
 Hon. J. S. Gathorne Hardy, M.P. 
 
 W. W. B. Beach, M.P. 
 
 Admiral R. C. Mayne, M.P. 
 
 A. D. Provand, M.P. 
 
 Ed. Hardcastle, M.P. 
 
 H. H. Howorth, M.P. 
 
 T. Roe, M.P. 
 
 Marquis of Granby, M.P 
 
THE SILVER DEPUTATION. 
 
 277 
 
 J. W. Maclure, M.P. 
 Sir J. E. Dorington, Bart., M.P. 
 Col. Saunderson, M.P. 
 J. Kankin, M.P. 
 George Howell, M.P. 
 C. W. Gray, M.P. (Chairman Cen- 
 tral Chamber of Agriculture). 
 Major Kasch, M.P. 
 J. C. Lawrance, Q.C., M.P. 
 A. K. Heath, M.P. 
 Colonel Eyre, C.B., M.P. 
 Baron Dimsdale, M.P. 
 J. Bazley- White, M.P. 
 F. S. W. Cornwallis, M.P. 
 
 Sir Koper Lethbridge. K. C.S.I., 
 
 M.P. 
 
 Marquis of Carmarthen, M.P. 
 F. Seager Hunt, M.P. 
 H. Knatchbull-Hugesseu, M.P. 
 Sir E. Birkbeck, Bart,, M.P. 
 J. Pinkertoii, M.P. 
 T. H. Sidebottom, M.P. 
 Hon. G. N. Curzon, M.P. 
 M. J. Stewart, M.P. 
 W. E. M. Tomlinson, M.P. 
 Col. Cornwallis West, M.P. 
 P. A. Muntz, M.P. 
 W. Sidebottom, M.P. 
 T. K. Tapling, M.P. 
 
 DELEGATES FKOM CHAMBERS OF AGRICULTUEE. 
 Banbury, W. J. Warner. Sir F. F. Fowke, Bart. 
 
 Berks and Ox, Wm. G. Mount, M. George Stratton, J.P. 
 
 P. (Chairman). 
 Capt. Loder Symonds. 
 J. Thursby. 
 Thos. Wells. 
 Geo. Adams. 
 Arthur Harvey Thursby. 
 Bucks, Baron F.de Rothschild, M.P 
 Viscount Curzon, M.P. 
 Col. Liebert Goodall. 
 Col. R, Purefoy Fitzgerald. 
 Hon. Egerton Hubbard, M.P. 
 W. J. Whitehouse Griffin. 
 W. H. Grenfell. 
 Canterbury, W. Nethersole. 
 Cirencester, H. J. Marshall. 
 Cowbridge, J. S. Gibbon. 
 
 Gloucestershire, B. St. John Ackers. 
 
 J. P. Sargeaiit. 
 
 W. Priday. 
 
 Hertfordshire, Baron Dimsdale, 
 
 M.P. 
 
 Kendal, W. H. Wakefield. 
 Leicestershire, J. F. L. Rollestone 
 
 (President). 
 
 Alderman T. Wright. 
 
 Thomas Nuttall. 
 
 R. F. Martin, J.P. 
 
 H. Clough Taylor. 
 
 W. Thorpe. 
 
 Lincolnshire, Earl of Yarborough. 
 
 A. R. Heath, M.P. 
 
 Col. Eyre, C.B., M.P. 
 
 J. C. Lawrance, M.P. 
 
 J. M. Richardson. 
 
 R. H. Ellis. 
 
 Theodore Trotter. 
 
 Mai'Mone, J. Bazley-White, M.P. 
 
 F. S. W. Cornwallis, M.P. 
 
 R. A. Hamilton Seymour. 
 
 Thomas Powell. 
 
 Capt. J. R. Isherwood. 
 
 Herbert Ellis. 
 
 Frank Woodham. 
 
 W. S. Forster. 
 
 Monmouthshire, Henry Williams. 
 
 Norfolk H. M. Upcher. 
 
 M. P. Squirrell. 
 
 Notts, W. N. Nicholson. 
 
278 
 
 APPENDIX. 
 
 Sevenoaks, W.H. Cronk (Chairman). 
 
 Shropshire, W. T. Topham. 
 
 Somersetshire, G . Troyte Bullock. 
 
 Suffolk (East), Koger Kerrison. 
 
 K. L. Everett. 
 
 Rev. J. F. A. Hervey. 
 
 A. Harwood. 
 
 Suffolk (West), Duncan Parker 
 
 (Chairman). 
 Swindon. Howard Horsell. 
 
 Tunbridge Wells, W. Boper. 
 
 Worcestershire, T. B. Woodward 
 (President). 
 
 T. H. Crane. 
 
 Yorkshire ( West Riding}, W. Lips- 
 comb (President). 
 
 Charles Clay (Vice-President). 
 
 Percy Tew, J.P. 
 
 George Newton. 
 
 CHAMBERS OF COMMERCE. 
 
 Liverpool. Henry Coke (of David Sassoon & Co.), President of the 
 Liverpool Chamber of Commerce and Director of the Mersey Docks and 
 Harbor Board. Robert Gladstone (of Ogilvy, Gillanders & Co., Liver- 
 pool, London, Calcutta, and Rangoon), Director of the Liverpool Cham- 
 ber of Commerce and Chairman of East India and China Trade Section. 
 Hugh Lyle Smyth (of Ross, T. Smyth & Co., Corn Merchants). 
 
 Birmingham. P. Albert Muntz, M.P., President of the Birmingham 
 Chamber of Commerce. Henry W. Elliott (of Elliott's Metal Coy., Lt.), 
 Chairman. J. William Tonks (of T. & J. Bragg, Australian and Indian 
 Trade), Vice-Chairman. Ralph Heaton (of the Mint), Birmingham. 
 Fredk. Ash (of Sutton & Ash, Iron Merchants). T. B. Chantrill (of 
 Chantrill & Co., Russian Trade). W. Wyley Lord (of J. C. & W. Lord, 
 Indian and South American Trade). Fredk. Blood (of Fredk. Blood 
 & Co.). 
 
 Bolton. Frank Hardcastle, M.P. James Booth, J.P., Vice-President. 
 Fredk. W. Briscoe, Secretary. 
 
 Xjeith. R. C. Munro Ferguson, M.P. (at the special request of the 
 Chamber). 
 
 LABOR ORGANIZATIONS. 
 
 United Textile Factory Workers' 1 
 
 Association. 
 Northern Counties' Amalgamated 
 
 Association of Weavers. 
 
 Weavers' Association, Preston . . 
 
 Blackburn and District Power 
 Loom Weavers' Association. 
 
 Bury Operative Weavers' 1 Associa- 
 tion and also the Bury Trades 
 Council. 
 
 James Mawdsley, Chairman. 
 Thomas Birtwistle, Gen. Sec. 
 David Holmes, President. 
 W. H. Wilkinson, Secretary. 
 Joshua Barrows, Organizing Sec. 
 Luke Park, Secretary. 
 A. H. Cottam, President. 
 George Barker, Secretary. 
 Samuel Hardman, Secretary. 
 
THE SILVER DEPUTATION. 
 
 279 
 
 Amalgamated Association of Oper- 
 ative Cotton Spinners. 
 
 Do. Bolton Provincial 
 
 Do. Oldham Provincial . 
 
 Oldham Provincial Card and Blow- 
 ing Room Operatives. 
 
 Manchester and Salford 
 Council. 
 
 Wright Wood. 
 
 James Kobinson. 
 
 J. T. Fielding, Secretary. 
 
 E. Mellor, President. 
 
 Tlios. Ashton, Secretary. 
 
 George Silk, Secretary. 
 
 Trades 
 
 Newcastle and Oateshead Trades 
 
 Council. 
 Bradford Trades Council. 
 
 Wolverhampton Trades Council. 
 Hyde and District Trades Council. 
 Stalybridge Trades Council. 
 
 Southport Trades Council . 
 Preston Trades Council . 
 
 M. Arrandale, President. 
 
 C. Scholes, Treasurer. 
 
 George D. Kelly, Secretary. 
 
 E. Girling, President. 
 
 J. J. Harris, Secretary. 
 
 R. Bower, President. 
 
 S. Shaftoe, Secretary. 
 
 W. F. Mee, Secretary. 
 
 W. Day. 
 
 Samuel Fildes, President. 
 
 W. Bancroft, Secretary. 
 
 W. H. Carr, President. 
 
 S. Sidebottom, Secretary. 
 
 W. Morland. 
 
 J. Naylor, President. 
 
 T. W. Carlisle, Secretary. 
 GENERAL. 
 
 Lord Alwyn Compton ; Lord Algernon Lennox ; Hon. Algernon Eger- 
 ton; Sir Henry Hoare, Bart.; Lt.-Gen. R. H. Keatinge, V.C., C.S.I.; 
 Lt.-Gen. Sir Andrew Clarke, G.C.M.G., C.B., C.I.E.; Sir Leppel H. 
 Griffin, K. C.S.I.; Sir Hector M. Hay; Sir Henry Half or d, Bart.; Sir T. 
 C. Hope, K.C.S.I., C.I.E. (late Public Works Member of Viceroy's Coun- 
 cil in India); Sir James Allport; Sir G. K. Rickards, K.C.B.; Rt. Hon. 
 Sir Louis Mallet, C.B.; Sir Rivers Thompson, K.C.S.I. (late Lt.-Gov. 
 Bengal); Sir Seymore Blane ; Sir H. Meysey-Thompson, Bart.; Sir George 
 Sitwell, Bart.; Sir Edward Sladen ; Col. Sir W. D. Davies, K.C.S.I. (late 
 Financial Com., Punjab); Hon. Sydney Greville; Henry H. Gibbs; H. 
 R. Grenfell; Hon. G. Cuthbertson; Professor Foxwell, M.A.; Jacob 
 Wilson; H. E. Busted, C.I.E. (late Assay Master, the Mint, Calcutta); 
 J. Burnaby Atkins; Rev H. F. Burnaby ; G. Beaumont; Major Craigie 
 (Sec. Central Chamber of Agriculture); Moreton Frewen; E. P. Squarey 
 (President of the Institute of Surveyors): E. A. Cazalet; Col. Morland 
 Button ; J. H. Jefferies ; John Musgrave (Chairman Whitehaven Joint 
 Stock Bank, Chairman Whitehaven Harbour Trustees, Chairman Solway 
 Junction Rail way), Whitehaven; J. Henderson; Capt. Loder Symonds ; 
 H. Maule ; H. J. Marshall ; Rev. E. Penwarne-Wellings (Sinclairs); H. 
 
280 APPENDIX. 
 
 Frost ; Agnew Pope (Proprietor BriUxh Trade Journal}; W. J. Moore ; 
 Donald Nicol, Argyllshire ; C. D. Field (late Judge of the High Court, 
 India); George Hollings ; Herbert B. Praed (Banker, 189 Fleet Street, 
 E.G.); W. J. Topham; K. H. Pinhey ; George Stratton; Major-General 
 Trevor; G. S. Sutherland; W. H. Grenfell (High Sheriff of Bucks); G. 
 W. Allen, C.I.E.; George Cadell ; S. B. L. Druce ; J. Longworth ; J. D. 
 Kees; J. D. Ward; Henry Hoare ; A. P. Sinnett; Major-General Sir W. 
 Moore; A. C. Tupp (Bengal Civil Service); J. H. Manners Sutton, New- 
 ark; Geo. Handasyde Dick (of Geo. Handasyde Dick & Co., Glasgow, 
 Manchester, and Bombay); Geo. Bull, Burton-on-Trent ; Jas. T. Calvert, 
 Sunderland ; Colonel E. Bond, Chepstow ? Jas. Hy. Howell (of Llewellyn 
 & James), Bristol ; Edward Langley, Bath ; Ben. Elmy (of Elmy & Co.), 
 Congleton, Cheshire ; W. J. Humfreys, Hereford ; C. M. Hutton Kiddell 
 (of Samuel Smith & Co., Bankers), Newark ; W. H. Duignan (of Duigiian 
 & Elliott, Chairman of the Cannock Agricultural Co., Limited), Walsall: 
 Ely Andrew (Chairman of J. Andrew & Sons, Limited), Ashton-upon- 
 Lyne ; Kichard Dawson (late M.P., Leeds); H. Mallaby Deeley, Chester; 
 Kichard Shaw ; Joseph Lees (of Lees Brothers, Limited, Cotton Spinners), 
 Oldham ; Wm. Green, Birmingham ; Councillor J. C. Laird, New-Castle- 
 upon-Tyne ; K. W. Granville Smith $ Edwd. W. Wrigley (of. Lees& Wrig- 
 ley, Cotton Spinners), Oldham ; Richard Williamson (of Williamson & 
 Sons, Ship-owners), Maryport ; H. Watson (of Rt. Watson & Sons, Lim- 
 ited, Manufacturers), Oswaldtwistle ; A. W. Byron, Chesterfield ; Alfred 
 Hickman (Ironmaster and Colliery Owner), Wolverhampton ; T. F. Firth, 
 Heckmondwike (Vice-President of the Associated Chambers of Com- 
 merce); W. J. Cuthbertson, Annan, N.B.; Stephen Cocker (of Welch & 
 Cocker, Cotton Manufacturers), Preston; Lewis Halsam (of John Halsam 
 & Co., Bolton and Manchester, Cotton Manufacturers); W. R. Moss 
 (Director of Crosses & Wink worth, Ltd.), Bolton; John P. Halliwell 
 (Cotton Manufacturer), Darwen; James Eckersley (of Davies & Ecker- 
 sley, Bleachers, Adlington, Lancashire) ; W. S. Miller (Alderman of Bre- 
 conshire), Brecon ; George Whittaker (Cotton Manufacturer), Aecrington ; 
 James Pertwee, Chelmsford ; James Christy, Chelmsford ; William H. 
 Goodwin, The Ferns, Lugwardine, Hereford ; Francis C. Clark, Win- 
 chester. 
 
 LONDON. 
 
 Edward Sassoon (of David Sassoon& Co.); James Greig(of A. Blockey, 
 Greig & Co., Discount Brokers); Hermann Schmidt (Discount Broker); 
 Henry C. Hayter (of Hayter & Hayter, Woollen Manufacturers); Wm. 
 Westgarth (of W. Westgarth & Co.), Chairman of Australian Trade Sec- 
 tion of the London Chamber of Commerce ; Oscar von Ernsthausen (for- 
 merly of Ernsthausen & Co., London and Calcutta); F. Eisenlohr (of 
 Ernsthausen & Co., London and Calcutta); E. Howley Palmer (of Dent 
 
THE SILVER DEPUTATION. 281 
 
 Palmer & Co.). Director of the Bank of England: Keuben Sassoou ; 
 Alfred L. Cohen : Ernest Noel; J. V. L. Wells (of J. W. Laud & Co.) ; 
 Thomas Haiibury (late Bower, Hanbury & Co., Shanghai); Neptune 
 Blood, Stock Exchange ; R. S. Gundry ; W. Stewart Young, and at Hong- 
 Koiig ; J. T. Denniston, Secretary Mexican Railway Company ; Wm. 
 Paterson (of Paterson & Simons, and at Singapore), Chairman of the 
 Chartered Bank of India, and of the London, Paris, and American 
 Bank, Vice-Chairmaii of the India and China Section of the London 
 Chamber of Commerce ; J. Howard G-wyther (Managing Director, Char- 
 tered Bank of India, Australia, and China); W. W. Cargill, Director of 
 New Oriental Bank Corporation ; L. R. C. Boyle, ditto ; G. H. Tod- 
 Heatly, ditto ; R. T. Rohde (New Oriental Bank Corporation); E. De 
 Wael (of G. Allard. Banker); Ernest Seyd ; S. Ezekiel (of Messrs. David 
 Sassoon & Co.); C. von Buch ; A. L. Capput ; W. G. Cuthbertson ; J. R. 
 Tennant ; Wm. Barclay ; Col. C. H. T. Marshall ; Henry May ; Hon. G. 
 T. Maitland. 
 
 MANCHESTER. 
 
 John A. Beith (of Beith, Stevenson & Co., Manchester and Glasgow, 
 Director, Manchester Chamber of Commerce, and Director of the Mersey 
 Docks and Harbor Board); Win. Thos. Rothwell ; H. T. Gaddum (of H. 
 T. Gaddum & Co., Silk Merchants, &c.); H. Lathbury (of Lathbury & 
 Co.); John Holliday (of Farbridge, Holliday & Co., of Manchester, Glas- 
 gow, Hong Kong, Shanghai and Manila, Director of the Manchester and 
 County Bank); J. S. Dods (of Dods, Ker & Co., and Calcutta); F. J. 
 Faraday; Samuel Ogden (of S. Ogden & Co., Chairman of the Old 
 Silkstone arid Dodworth Coal and Iron Co., Director Manchester Chamber 
 of Commerce); James Whitehead ; Chas. Macdonald (of Macdonald, 
 Miller & Co., and late President of the Bombay Chamber of Commerce); 
 Ed. H. Greg (of Robt. Greg & Co., Cotton Spinners and Manufacturers); 
 A. C. Smethurst ; Alexander C. Carus ; Henry McNiel. 
 
 BLACKBURN. 
 
 L. Wilkinson, of Wilkinson & Son, Cotton Manufacturers; Richard 
 Shaw, of R. & J. Shaw, Cotton Manufacturers ; E. J. Ainsworth, of J. 
 Ainsworth & Sons, Cotton Manufacturers ; Thos. Longworth, of Solomon 
 Long worth & Sons, Cotton Spinners and Manufacturers ; Arthur Long- 
 worth, ditto ; John Hargreaves, Cotton Manufacturer ; Jonas Hindle, of 
 Edw. Briggs & Co. , Cotton Spinners, of Blackburn and Padiham ; J. H. 
 Hartley, of Hartley Bros., Cotton Spinners, Blackburn and Preston ; 
 Robert Clayton, of H. & T. Clayton, Cotton Manufacturers ; Rich. 
 Greenwood, of Greenwood Bros., Cotton Manufacturers; Wm. Kay, of 
 Wm. Kay, Sons, Cotton Waste Dealers ; and others. - 
 
X. 
 
 THE MONETARY CONGRESS OF THE FRENCH 
 EXPOSITION (1889). 
 
 OFFICIAL DELEGATES. 
 
 ENGLAND. Delegates of the British Government : Hon. 
 C. W. Frementle, C. B., Deputy Master of the Mint, and 
 G. H. Murray, Esq., of the Treasury. 
 
 ARGENTINE REPUBLIC. Delegate Extraordinary of the 
 Argentine Republic : M. Pellegrini, Vice-President of the 
 Republic ; and Delegate of the Argentine Commission, M. 
 Leon Walls. 
 
 BELGIUM. Delegate of the Belgium Commission : M. 
 Georges de Laveleye, Editor of the Moniteur des interests 
 materiels. 
 
 BOLIVIA. Delegate of the Bolivian Government : M. 
 Felix Avelino Aramayo. 
 
 BRAZIL. Delegate of the General Brazilian Commis- 
 sion at the Exposition : M. Eduardo da Silva Prado. 
 
 CHILI, Delegate of the Government of Chili : M. Car- 
 los Morla Vicuna, Secretary to the Legation of Chili in 
 France. 
 
 DENMARK. Delegate of the Government : M. Levy, 
 Director of the National Bank of Copenhagen. 
 
 DOMINICAN REPUBLIC. Delegate of the Government : 
 M. Isidore Mendel, Ex-President of the Chamber of Com- 
 merce of Santo Domingo, and Ex-President of the Com- 
 mercial Bank of Santo Domingo. 
 
 SPAIN. Delegate of the Spanish Commission at the 
 Exposition : Don Juan Navarro Reverter, Engineer, De- 
 
 282 
 
MONETARY CONGRESS. 283 
 
 puty in the Cortez, and M. Joaquin Lopez Puygcerver, Ex- 
 Minister, the Deputy in the Cortez. 
 
 GREECE. Delegate of the Greek Commission at the Ex- 
 position : M. Antoine Ylasto. 
 
 HOLLAND. Delegate of The Netherlands Commission : 
 M. J. Freiwald, President of the Executive Netherlands- 
 Committee at Paris. 
 
 ITALY. Delegates of the National Italian Committee : 
 MM. L. Luzzatti, Deputy of the Italian Parliament, and 
 Gentili di Giuseppe, Count of Fantoni. 
 
 JAPAN. Delegate of the Government of Japan : M. 
 Count Tanaka, Minister Plenipotentiary of Japan to Paris.. 
 
 MEXICO. Delegates of the Government of Mexico : MM. 
 Antonio del Castillo, Engineer, and Gilberto Crespo. 
 
 MONACO (Principality). Delegate of the Government : 
 M. Jolivot, Member of the Council of State. 
 
 SALVADOR (Republic.) Delegate : M. S. Badel. 
 
 About 175 names were on the list of members of the Con- 
 gress. 
 
 LIST OF CONGRESSES, 
 
 Held under the auspices of the Ministry of Commerce, Industry, and 
 Colonies, at the Universal Exposition of 1889, with date and dura- 
 tion. 
 
 Accidents to Workmen, Sept. 9-14. Bibliography of Mathematical Sci- 
 
 JSroiiautics, July 31 to Aug. 3. ences, July 16-26. 
 
 Agriculture, July 3-11. Blind, for the Amelioration of the 
 
 Alcoholism (study of questions rel- Condition of, Aug. 5-8. 
 
 ative to), July 29-31. Carrier-Pigeon Fanciers, July 31 to 
 
 Anthropology, Criminal, Aug. 10-17. Aug. 3. 
 
 Anthropology and Archaeology, Celestial Photography, . 
 
 Prehistoric, Aug. 19-26. Chemistry, July 29 to Aug. 3. 
 
 Architects, June 17-22. Chronometry, Sept. 2-9. 
 
 Baking and Bread Making, June 28 Colonies (study of questions relat- 
 
 to July 2. ing to), . 
 
284 
 
 APPENDIX. 
 
 Commerce and Industry, Sept. 22- 
 28. 
 
 Dentistry, Sept. 1-7. 
 
 Dermatology and Syphilography, 
 Aug. 5-10. 
 
 Dwellings (Cheap), June 26-28. 
 
 Electricians, Aug. 24-31. 
 
 Ethnographical Science, . 
 
 For the Protection of Works of Art 
 and Monuments, June 24-29. 
 
 Geographical Sciences, Aug. 6-12. 
 
 Homo3opathy, Aug. 21-23. 
 
 Horticulture, Aug. 16-21. 
 
 Hydrology and Climatology, Oct. 
 3-10. 
 
 Hygiene and Demography, Aug. 
 4-11. 
 
 Instruction, Primary, Aug. 11-19. 
 
 Instruction, Secondary and Higher, 
 Aug. 5-10. 
 
 Instruction, Technical, Commer- 
 cial, and Industrial, July 8-10. 
 
 Intervention of the State in Con- 
 tracts of Labor, July 1-4. 
 
 Intervention of the State in Emi- 
 gration and Immigration, . 
 
 Intervention of the State in the 
 Price of Food, July 5-10. 
 
 Irrigation, Sept. 22-27. 
 
 Joint Stock Companies, June 12-19. 
 
 Life-Saving, June 12-15. 
 
 Mechanical Appliances, Sept.16-21. 
 
 Medical Jurisprudence, . 
 
 Medicine, Mental, Aug. 5-10. 
 
 Medicine, Veterinary, Sept. 19-24. 
 
 Methods of Construction, Sept. 9- 
 14. 
 
 Metrology, Sept. 19-25. 
 Mines and Metallurgy, Sept. 2-11. 
 Monetary, Sept. 11-14. 
 Officers and Non-Commissioned Of- 
 ficers of Fire Brigade, Aug. 27-28. 
 Otology and Laryngology, Sept. 
 16-21. 
 
 Peace, . 
 
 Photography, Aug. 6-17. 
 Physical Exercise in Education (for 
 
 the encouragement of), 15 
 
 to . 
 
 Popular Traditions, . 
 
 Profit-Sharing, July 16-19. 
 
 Property, Industrial, Aug. 3 . 
 
 Property, Real, Study of the Trans- 
 fer of, Aug. 8-14. 
 Property, Rights of, in Works of 
 
 Art, July 25-31. 
 Psychology, Physiological, Aug. 
 
 5-10. 
 
 Public Charities, July 28 to Aug. 4. 
 Relief Work in Time of War, July 
 28 to Aug. 4. 
 
 River and Harbor, Oct. 7 . 
 
 Sabbath Observance, . 
 
 Society of Literary Men, June 17- 
 27. 
 
 Statistics, . 
 
 Stenography, Aug. 4-11. 
 Stores, Co-operative, Sept. 8-12. 
 Therapeutics, A.ug. 1-5. 
 Trades Unions, July 11-13. 
 
 Unification of Time, . 
 
 Women (Works and Institutions 
 
 of)- 
 Zoology, Aug. 5 . 
 
APPENDIX TO CHAPTEK VII. 
 
 CURRENCY PROPOSALS OF D. RICARDO. 
 
 From " OBSERVATIONS on some passages in an article in the Edinburgh Re- 
 view, on the depreciation of paper currency ; also suggestions for se- 
 curing to the public a currency as invariable as gold, with a very 
 moderate supply of that metal." (1808.) 
 
 For the reader's convenience I have italicized passages 
 which state the author's views about silver. 
 
 I will also give an outline of the system of money then 
 in force. 
 
 The legal ratio was 15.21 to 1. Gold and silver coin 
 were unlimited legal tender, but above 25X silver was legal 
 tender, not by tale but by weight. The stock had long 
 consisted of gold which, at that ratio, was the " cheaper 
 money" with a small amount of worn and defaced change. 
 As a provisional measure, the coinage of silver had been 
 stopped by act of Parliament in 1798, just after the sus- 
 pension of specie payments. 
 
 " Let the Bank of England be required by Parliament to 
 pay (if demanded), all notes above 20, and no other, at 
 their option, either in specie, in gold standard bars, or in 
 foreign coin (allowance being made for the difference in 
 its purity) at the English Mint value of gold bullion, viz., 
 31.17s. 10 one-half d. per ounce, such payments to com- 
 mence at the period recommended by the committee. 
 
 The privilege of paying their notes as above described 
 might be extended to the Bank for three or four years after 
 such payments commenced, and if found advantageous, 
 might be continued as a permanent measure. Under 
 such a system the currency could never be depreciated 
 below its standard price, as an ounce of gold and 31. 17s. 
 W^d. would be uniformly of the same value. By such 
 regulations we should effectually prevent the amount of 
 small notes from being withdrawn from circulation, as no 
 
 285 
 
286 APPENDIX. 
 
 one who did not possess to the amount of <20 at least of 
 such small notes could exchange them at the Bank, and 
 even then bullion, and not specie, could be obtainecl for 
 them. Guineas might, indeed, be procured at the mint 
 for such bullion, but not till after the delay of some weeks 
 or months, the loss of interest for which time would be 
 considered as an actual expense, an expense which no one 
 would incur whilst the small notes could purchase as much 
 of every commodity as the guineas which they represent. 
 Another advantage attending the establishment of this 
 plan, would be to prevent the useless labor which, under 
 our system previously to 1797, was so unprofitably ex- 
 pended on the coinage of guineas, which, on every occa- 
 sion of an unfavorable exchange (we will not inquire by 
 what caused), were consigned to the melting-pot, and, 
 in spite of all prohibitions, exported as bullion. It is 
 agreed by all parties that such prohibitions were ineffect- 
 ual, and that whatever obstacles were opposed to the ex- 
 portation of the coin, they were with facility evaded. 
 
 An unfavorable exchange can ultimately be corrected 
 only by an exportation of goods, by the transmission of 
 bullion, or by a reduction in the amount of the paper cir- 
 culation. The facility, therefore, with which bullion 
 would be obtained at the Bank cannot be urged as an ob- 
 jection to this plan, because an equal degree of facility 
 actually existed before 1797, and must exist under any 
 system of bank payments. Neither ought it to be urged, 
 because it is now no longer questioned by all those who 
 have given the subject of currency much of their consid- 
 eration, that not only is the law against the exportation of 
 bullion, whether in coin or in any other form, ineffectual, 
 but that it is also impolitic and unjust ; injurious to our- 
 selves only, and advantageous to the rest of the world. 
 
 The plan here proposed appears to me to unite all the 
 advantages of every system of banking which has been 
 hitherto adopted in Europe. It is in some of its features 
 similar to the banks of deposit of Amsterdam and Ham- 
 burg. In these establishments bullion is always to be pur- 
 chased from the Banks at a fixed invariable *price. The 
 same thing is proposed for the Bank of England ; but in 
 
EXTRACTS FROM RICARDO'S WRITINGS. 287 
 
 the foreign banks of deposit they have actually in their 
 coffers as much bullion as there are credits for bank money 
 in their books. Accordingly there is an inactive capital 
 as great as the whole amount of the commercial circula- 
 tion. In our Banks, however, there would be an amount 
 of bank money under the name of bank notes as great as 
 the demand of commerce could require. At the same time 
 there would be more inactive capital in the bank coffers 
 than that fund which the Bank should think it necessary 
 to keep in bullion to answer those demands which might 
 occasionally be made on them. It should always be remem- 
 bered, too, that the Bank would be enabled, by contract- 
 ing their issues of paper, to diminish such demands at 
 pleasure. In imitation of the Bank of Hamburg, who pur- 
 chase silver at a fixed price, it would be necessary for the 
 bank to fix a price below the Mint price, at which they 
 would at all times purchase, with their notes, such gold 
 bullion as might be offered to them. 
 
 The perfection of banking is to enable a country, by 
 means of a paper currency (always retaining its standard 
 value), to carry on its circulation with the least possible 
 quantity of coin or bullion. This is what this plan would 
 effect. And with a silver coinage on just such principles, 
 we should possess the most economical and the most invaria- 
 ble currency in the world. The variations in the price of 
 bullion, whatever demand there might be for it on the Con- 
 tinent, or whatever supply there might be poured in from 
 the mines in America, would be confined within the prices 
 at which the Bank bought bullion and the Mint price at 
 which they sold it. The amount of the circulation would 
 be adjusted to the wants of commerce with the greatest 
 precision ; and if the Bank were for a moment so indis- 
 creet as to overcharge the circulation the check which the 
 public would possess would speedily admonish them of 
 their error. As for the country Banks, they must, as now, 
 pay their notes, when demanded, in Bank of England notes. 
 This would be a sufficient security against the possibility 
 of their being able too much to augment the paper circu- 
 lation. There would be no temptation to melt the coin, 
 and consequently the labor which has been so uselessly 
 
288 APPENDIX. 
 
 bestowed by one party in recoining what another party 
 found it their interest to melt into bullion would be effect- 
 ually saved. The currenc} T could neither be clipped nor 
 deteriorated, and would possess a value as invariable as 
 gold itself, the great object which the Dutch had in view, 
 and which they most successfully accomplished by a sys- 
 tem very like that which is here recommended. 
 
 From " Proposals for an Economical and Secure Currency ; with Observa- 
 tions on the Profits of the Bank of England as they regard the public 
 and tbe proprietors of bank stock." Second edition. London, 1816. 
 
 SECTION III. 
 
 While a standard is used, we are subject to only such a 
 variation in the value of money as the standard itself is 
 subject to ; but against such variation there is no possi- 
 ble remedy, and late events have proved that, during 
 periods of war, when gold and silver are used for the pay- 
 ment of large armies distant from home, those variations 
 are much more considerable than has been generally 
 allowed. This admission only proves that gold and silver 
 are not so good a standard as they have been hitherto 
 supposed that they are themselves subject to greater 
 variations than it is desirable a standard should be sub- 
 ject to. They are, however, the best with which we are 
 acquainted. If any other commodity less variable could 
 be found, it might very properly be adopted as the future 
 standard of our money, provided it had all the other qual- 
 ities which fitted it for that purpose ; but w r hile these 
 metals are the standard, the currency should conform in 
 value to them, and whenever it does not, and the mar- 
 ket price of bullion is above the mint price, the currency 
 is depreciated. This proposition is unanswered, and is 
 unanswerable. 
 
 Much inconvenience arises from using two metals as a 
 standard of our money ; and it has long been a disputed 
 point whether gold or silver should by law be made the 
 principal or sole standard of money. In favor of gold it may 
 be said, that its greater value under a small bulk eminently 
 qualifies for a standard in an opulent country ; but this 
 
EXTRACTS FROM RICARDO 7 S WRITINGS. 289 
 
 very quality subjects to greater variations of value during 
 periods of war or extensive commercial discredit, when it 
 is often collected and hoarded, and may be urged as an 
 argument against its use. The only objection to the use of 
 silver as the standard is its bulk^ which renders it unfit for 
 the large payments required in a icealthy country; but this 
 objection is entirely removed l)y the substituting of paper 
 money as the general circuTation medium of the country. 
 Silver, too, is much more steady in its value, in consequence 
 of its demand and supply being more regular / and as all 
 foreign countries regulate the value of their money by the 
 value of silver, there can be no doubt that, on the whole, 
 silver is preferable to gold as a standard, and should be 
 permanently adopted for that purpose. 
 
 SECTION IV. 
 
 In the next session of Parliament, the subject of cur- 
 rency is again to be discussed ; and, probably, a time will 
 then be fixed for the resumption of cash payments, which 
 will oblige the Bank to limit the quantity of their paper 
 till it conforms to the value of bullion. * * * 
 
 If the Bank should be again called upon to pay their 
 notes in specie, the effect would be to lessen greatly the 
 profits of the Bank without a correspondent gain to any 
 other part of the community. If those who use one and 
 two, and even five-pound notes, should have their option 
 of using guineas, there can be little doubt which they 
 would prefer ; and thus, to indulge a mere caprice, a most 
 expensive medium would be substituted for one of little 
 value. 
 
 Besides the loss to the Bank, which must be considered 
 as a loss to the community, general wealth being made up 
 of individual riches, the State would be subjected to the 
 useless expense of coinage, and on every fall of the ex- 
 change, guineas would be melted and exported. 
 
 To secure the public against any other variations in the 
 value of the currency than those to which the standard 
 itself is subject, and, at the same time, to carry on the 
 circulation with a medium the least expensive, is to attain 
 
290 APPENDIX. 
 
 the most perfect state to which a currency can be brought, 
 and we should possess all these advantages by subjecting 
 the Bank to the delivery of uncoined gold or silver at the 
 mint standard and price, in exchange for their notes, in- 
 stead of the delivery of guineas ; by which means paper 
 would never fall below the value of bullion without being 
 followed by a reduction of its quantity. To prevent the 
 rise of paper above the value of bullion, the Bank should 
 be also obliged to give their paper in exchange for stand- 
 ard gold at the price of =3 17 's. per ounce. Not to give 
 too much trouble to the Bank, the quantity of gold to be 
 demanded in exchange for paper at the mint price of 3 
 17 s. 10J'/., or the quantity to be sold to the Bank at 3 
 17s. should never be less than twenty ounces. In other 
 words, the Bank should be obliged to purchase any quan- 
 tity of gold that was offered them, not less than twenty 
 ounces at 3 17s. per ounce,* and to sell any quantity 
 that might be demanded at 3 17s. 10^7. While they have 
 the power of regulating the quantity of their paper, there 
 is no possible inconvenience that could result to them from 
 such a regulation. 
 
 The most perfect liberty should be given, at the same 
 time, to export or import every description of bullion. 
 These transactions in bullion would be very few in num- 
 ber, if the Bank regulated their loans and issues of paper 
 by the criterion which I have so often mentioned namely, 
 the price of standard bullion, without attending to the ab- 
 solute quantity of paper in circulation.'!* 
 
 * The price of 3 Us. here mentioned, is, of course, an arbitrary 
 price. There might be good reasons, perhaps, for fixing it either a little 
 above or a little below. In naming 3 27s. I wish only to elucidate the 
 principle. The price ought to be so fixed as to make it the interest of the 
 seller of gold rather to sell it to the bank than to carry it to the mint to 
 be coined. The same remark applies to the specified quantity of twenty 
 ounces. There might be good reason for making it ten or thirty. 
 
 t / have already observed that silver appears to me to be the best adapted for 
 the standard of our money. If it were made so by la'W, the Sank should be 
 obliged to buy or sell silver bullion only. If gold be exclusively the stand- 
 ard, the Bank should be required to buy or sell gold only ; but if both 
 metals be retained as the standard, as they now by law are, the Bank 
 should have the option which of the two metals they would give in ex- 
 change for their notes, and a price should be fixed for silver rather under 
 the standard, at which they should not be at liberty to refuse to purchase. 
 
XI. 
 
 ME. GOSCHEN'S PEOPOSALS, WITH AN INTEO- 
 
 DUCTOEY STATEMENT CONCEENING THE 
 
 PEOGEESS MADE IN ENGLAND. 
 
 Mr. Gosclien's Proposals, as set forth in his address 
 before the London Chamber of Commerce, December 2, 
 1891, embody the first actual Governmental step forward 
 made since the last International Conference (18812). 
 They are, however, only a renewal of the conditional 
 offer communicated on the part of the Gladstone Govern- 
 ment to the Conference in Paris in 1881 (see pp. 21, 
 71-2, 297), and it may therefore seem that after all 
 no progress has been made in these ten eventful years. 
 But this inference, however plausible, would be a 
 mistake. 
 
 A brief analysis will outline the decade's progress in 
 the practical politics of silver, and show that in spite of 
 appearances " the world does move " in this respect. 
 
 First we must take account of a retarding influence, 
 which in detail comes home to every one's personal ex- 
 perience, but which few take the trouble to appreciate 
 as applied on a grand scale, to the conduct of nations. 
 Our great project of getting silver remonetized in Eu- 
 rope has its theoretical side ; opening a vista for argu- 
 ment of almost limitless extent. The subject is in fact 
 so extensive that, if dealt with excursively in a pedantic 
 
 291 
 
292 APPENDIX. 
 
 spirit, it may be made to resemble a morass of problems 
 with lakes here and there that have no bottom. What 
 the outcome may be for those who would sound all 
 depths is suggested by the well-known saying that 
 couples the currency with love and religion as the fa- 
 vorite path by which feeble or overwrought minds fall 
 into lunacy. 
 
 On the other hand, our project of joint action of na- 
 tions is practical, a project of action. It is action on a 
 large scale, it is true, a union not of individuals, nor of 
 corporations, but of nations. Still it is only joint action 
 to obtain a common benefit. To bring it about, requires 
 of course a certain effort. Brains and will must be 
 bent to the work, trouble must be taken, travelling be 
 done, the peculiar interests of various countries studied, 
 the " personal equation " of their controlling forces 
 learned, and conversations must go on in the several 
 languages required, etc., etc. All this is within the 
 means at hand. The agents can be put in the field, pro- 
 vided existing powers and resources are employed to 
 that end. 
 
 But initiative is necessary ; if a thing is to be done, it 
 will not do itself ; some one must do it. This " some one " 
 ought to be a government for who else will take the 
 trouble? If the governments do not all rush forward 
 to transact the necessary business of establishing their 
 silver syndicate, then one or more of them must begin 
 the work, and maintain it consistently, and upon that 
 the history of the decade will depend. 
 
MR. GOSCHEN'S PROPOSALS. 293 
 
 Now there lias been no such persevering initiative ! 
 
 In 1878 the United States did indeed take the lead by 
 Act of Congress, and its proposals were made to dele- 
 gates of the nations and recommended by arguments 
 which, I may be allowed to say, were not unequal to 
 the occasion. Important events occurred in sequence. 
 In 1879 Germany stopped her sales of silver, and in 1881 
 France joined us in calling another Conference in Paris 
 to promote joint action for free coinage of silver. Eng- 
 land and Germany having offered substantial aid on 
 condition that the others should open their mints, the 
 Conference was postponed, looking to the prosecution of 
 the project through personal negotiation, which should 
 prepare a practical scheme and get it agreed to at least 
 provisionally or partially, in which case the Confer- 
 ence might be reconvoked, for such further discussion as 
 might be needed, or for purposes of ratification. 
 
 That scheme has never been devised ! Why not ? 
 The obvious reason is that at this point, in 1882, the 
 United States Government suddenly dropped the subject ! 
 
 As the Resolutions of the Conference will indicate (they 
 are reprinted on pp. 260-1-2), it was expected that in- 
 formal conferences of proficient representatives, meeting 
 in the different capitals where they could talk directly 
 with men in power, and with the frankness of privacy 
 discuss new points as they arose, would be productive of 
 results which were in fact lacking to a formal Confer- 
 ence of Delegates in which speeches were in order, and 
 which^as^it met only in one place, could be convenient 
 
294 APPENDIX. 
 
 only to a few persons, and could not remain long in ses- 
 sion awaiting discussions by letter between nonprofi- 
 cient officials remote each from the other. 
 
 But the expectation was never brought to the test of 
 reality, for the United States suddenly abandoned the 
 project altogether. 
 
 The result may be easily imagined. France lapsed 
 into her former indifference. After this ground had 
 been taken by the Great Powers who had invited the 
 others to join, no lesser Power could move, for to do 
 that was to invite a rebuff, and no Power can afford to 
 be careless in matters relating to its financial standing. 
 
 What were the individuals in Europe who took an in- 
 terest in silver, to do ? As the only champions left in 
 Europe of the project thus indefinitely postponed by the 
 nation which had proposed it, they were, so to speak, 
 turned out into the swamp to debate the Silver Question 
 on general principles. It was under these circum- 
 stances that it came to pass that in England the Silver 
 Movement remained so long in the academic stage* 
 Some incidents of this situation I have satirized under 
 the name of " Bemuddleism," as will appear on page 160. 
 In time, however, the unsteadiness of the money 
 metals brought its revenges. The Government was 
 finally moved to call a Royal Commission to investigate 
 a Depression of Trade and Industry (1884-6), which had 
 been aggravated, admittedly I might say, by the non- 
 adoption of the project to restore Silver as Money. 
 Later, the subject grew rapidly into notice with the 
 
MR. GOSCHEN'S PROPOSALS. 295 
 
 Commission on Gold and Silver appointed in 1886. The 
 outcome of the latter (Nov., 1888), being in substance 
 favorable to silver, the time drew near when the Silver 
 Party in England were at length enabled to exercise 
 themselves in the evolutions of practical politics. 
 
 Of their efforts, Mr. Goschen's attitude, assumed De- 
 cember 2d, 1891, is one result, the first overt result, so 
 to speak. It was evidently a preordained move in their 
 campaign that the Tory Government should (upon war- 
 rant of public opinion) be induced to march forward to 
 the position assumed by the Liberal Government in 
 1881. To be sure, neither Mr. Gladstone nor his lieu- 
 tenants had made sign that they felt committed by what 
 happened in 1881. Indeed, the incident of 1881 had 
 quite passed from memory, and its significance was ig- 
 nored by those who remembered the bare fact. So far 
 as the Liberal party chiefs were concerned, tHe efforts 
 made by the Liberal silver men to interest them in the 
 Movement had all along failed. But education was go- 
 ing on, and the "record" promised the Liberal an ad- 
 vantage in any constituency interested in silver (see 
 page 317) an advantage which the Conservative could 
 not allow them to retain. 
 
 The result, then, was an achievement of the Silver 
 Party, a matter of management. 
 
 The future, likewise, is a matter of management. 
 The advantageous position gained is a fulcrum for 
 leverage, to push farther. Here, then, is progress, 
 and in this direction for the future lies the "way out"! 
 
ME. GOSCHEN'S PEOPOSALS. 
 
 EXTRACTS FROM THE SPEECH OF THE CHANCELLOR OF THE EX- 
 CHEQUER ON THE METALLIC RESERVE OF THE BANK OF ENG- 
 LAND AND A METHOD OF INCREASING IT BY THE ISSUE OF ONE- 
 POUND NOTES, BEFORE THE LONDON CHAMBER OF COMMERCE 
 
 ATA SPECIAL GENERAL MEETING DECEMBER 2, 1891. SIR JOHN 
 LUBBOCK, M.P., IN THE CHAIR, AND ABOUT 750 PERSONS 
 PRESENT. FROM THE LONDON " TIMES," DEC. 31, 1890. 
 
 You will observe I have made no allusion to the 10s 
 notes. I took such pains as I could to ascertain 
 whether the 10s notes would or would not be acceptable 
 to the community at large, and the result I arrived at 
 was this that they would be extremely unpopular in 
 most parts of the country, but that there was one part 
 of the country Lancashire where they would value 
 the 10s notes, not entirely on account of the note itself, 
 but because of its being, at all events, some recognition 
 of silver performing a part in the currency. It is from 
 that point of view that they value the 10s note. It 
 would not have increased the use of silver much, for it 
 would have been necessary to hold only a very small 
 portion of silver against these notes if they were issued. 
 It was however considered a valuable recognition, and in 
 telling you that I feel that I could not recommend, after 
 the evidence I have had, the adoption of 10s notes, at all 
 events until we have had very considerable experience of 
 the 1 notes : at the same time my dropping that part of 
 my plan must not lead any one to suppose that I recede 
 in any way -from the position which I have always 
 maintained of being anxious to see the use of silver 
 extended as far as it was possible to be done under our 
 existing system. I have done what I could to increase 
 
 296 
 
MR. GOSCHEN'S PROPOSALS. 297 
 
 the use of silver. There is a section in the country who 
 are showing a growing interest in the silver question 
 that cannot be ignored. 
 
 They may ask this : If you will not do what we want 
 namely, make any real forward movement in estab- 
 lishing a parity between gold and silver if you will not 
 do that yourselves as a Government, would you do what 
 you could in conference with other Governments to pro- 
 mote the use of silver in those other countries by offer- 
 ing as much as you can do without an abandonment of 
 your own principles? Well, I think that that is a 
 demand that may be made now, but which has not been 
 made for the first time. It was made in 1881, and at 
 that time a Monetary Conference was held, at which Sir 
 Charles Fremantle and another gentleman represented 
 this Government, and they were authorized to make 
 this declaration to the Conference : That if the Mints of 
 France, the United States, and other countries were 
 open to the free coinage of silver, the Bank of England 
 should be asked to act upon that portion of the Bank 
 Charter Act which enables it to hold a portion of its 
 bullion in silver. The Bank acceded at that time to 
 that request, and the result was a letter, which I will 
 read, from the Secretary to the Treasury to the Bank of 
 England. It was as follows : 
 
 TEEASUEY CHAMBEES, July 1, 1881. 
 GENTLEMEN : 
 
 I am directed by the Lords Commissioners of Her 
 Majesty's Treasury to acknowledge the receipt of your 
 letter of the 30th ultimo, in which you state that the 
 Bank Court see no reason why an assurance should not 
 be conveyed to the Monetary Conference at Paris, if the 
 Treasury think it desirable, that the Bank of England, 
 agreeably with the Act of 1844, will be always open to 
 
298 APPENDIX. 
 
 the purchase of silver, provided that the Mints of other 
 countries return to such. rules as would ensure the con- 
 version of gold into silver and silver into gold. 
 
 My Lords are of opinion that such an assurance is de- 
 sirable, provided always that it be understood that the 
 silver-using countries are to permit a free coinage of 
 silver ; and, as they note the opinion of the Bank Court 
 that the exercise of that power by the Bank would not 
 involve a risk of infringing the principle of the Act of 
 1844, they have communicated a copy of your letter to 
 the Secretary of State for Foreign Affairs, and have re- 
 quested him to convey to the Monetary Conference the 
 intimation that the Bank of England, agreeably with the 
 Act of 1844, but under the condition which you describe, 
 will be open to the purchase of silver. 
 I have, &c., 
 
 (Signed) F. CAVENDISH. 
 
 The Governor and Deputy Governor 
 of the Bank of England. 
 
 This was the letter which was sent in 1881 from the 
 Treasury to the Bank of England, and at that time the 
 Government of India further suggested that if these 
 countries would agree to open their Mints to silver, 
 India would agree that so long as that system was main- 
 tained, she, too, would keep her Mint open to silver. 
 Those were practically the only two things which this 
 country could offer. I believe another point was 
 mooted, namely, whether the legal-tender limit could 
 be raised from 2 to 5, but I have no accurate 
 information on that point. What I have got to say is 
 this, that so far as the Government of 1881 went, we 
 might safely go again if the necessity arose. I know 
 there is considerable stir and anxiety upon the part of 
 other countries. I know there is considerable desire 
 for a conference. I am anxious for the increased use of 
 silver, and personally I am speaking without com- 
 
ME. GOSCHEN'S PROPOSALS. 299 
 
 nmnication with my colleagues or the Bank of England 
 on the subject I have been always anxious to see the 
 use of silver extended as far as it could be done com- 
 patibly with our general arrangements. I have stated 
 this, and have stated it without knowing whether the 
 Bank of England hold at present the same opinion that 
 they held then ; but I was anxious, as great interest has 
 been expressed on this matter, to show how far I con- 
 sider personally the Government might be able to go. 
 And do not let it be thought that if such an arrangement 
 were carried out, and the Bank of England were to hold 
 a portion of their reserve in silver, on the express condi- 
 tion that other countries would keep their Mints open 
 for silver as Avell as gold, it would be in any way in con- 
 tradiction to the policy we all desire to see followed, that 
 the stock of bullion in the Bank of England should be 
 largely increased, because, by the adoption of free mint- 
 age in other countries, the pressure upon our stock of 
 gold would be considerably avoided. The pressure upon 
 our stock of gold naturally has been increased and inten- 
 sified when other countries passed to a monometallic 
 system instead of a bimetallic system. Therefore, there 
 is no contradiction whatever in saying that on that con- 
 dition, but, let it be fairly understood on that condition 
 only, I do not see why the Bank of England might 
 not be invited to repeat such a declaration as that of 
 1881. 
 
 * -X- & & -X- * -X- 
 
 Now I want you to understand this probably you 
 understand it, but I want the public to do so that the 
 Government as a government have no power to force any 
 particular kind of circulation on the country. The let- 
 ters I have received about the supply of silver, for 
 example, have been innumerable. 'Why don't you let 
 
300 APPENDIX. 
 
 us have more silver? ' Good heavens, I wish every one 
 would take as much silver as possible, considering the 
 enormous profit the Exchequer makes by it. We have 
 untold sums at the Bank of England and at the Mint 
 waiting to be circulated, anxious to travel [laughter], 
 but they are not invited. I do not know who the per- 
 sons are who do not extend the invitation to these silver 
 coins to pay a visit to the country ; but at all events 
 some of those who spread the circulation of the country 
 all of them have got far more power to determine 
 what circulation there shall be in the country than the 
 Government. 
 
XII. 
 
 A TEACT ON SILYEE POLICY. 
 
 DISTRIBUTED BY THE PARLIAMENTARY SILVER COMMITTEE 
 TO MEMBERS OF PARLIAMENT (APRIL, 1891). 
 
 The paramount issue is whether stable parity of 
 silver and gold is or. is not a great interest of the British 
 Empire. 
 
 Of course we think the affirmative is true, and 
 indeed obviously true. We think that the importance 
 of that interest is above and beyond all local preference 
 or petty convenience as to yellow metal or white, or 
 light or heavy, and as England is the leading centre of 
 international trade and international investment, we 
 believe that here is the spot where that truth ought to 
 be recognized. How, then, does the case stand? How 
 far is our affirmative recognized V 
 
 I find the difference of opinion a difference mainly of 
 degree, not of kind. The chief point unsettled is how 
 much it is worth ivhilefor England to do in order to obtain 
 the benefits of stable parity. 
 
 Between the anti-silver policy looking to demonetiza- 
 tion and the pro-silver policy looking to remonetization, 
 the choice is made. England is in favor of the Eestora- 
 tion of Silver. Only as to the quota of action to be 
 furnished in England the United Kingdom's share in 
 the sum of co-operation required there are differences 
 of opinion. 
 
 So far as the point of principle is concerned, that has 
 been admitted by the Government of the United .King- 
 dom. Its representation at the International Monetary 
 
 301 
 
302 APPENDIX. 
 
 Conference of 1881 had that effect. England was in 
 favor of the Kestoration of Silver. I refer not merely to 
 the attitude of India as presented by Sir Louis Mallet 
 and Lord Eeay. The communication by Sir Charles 
 Fremantle to the effect that the Bank of England would 
 hold silver bullion against its notes up to the legal limit 
 (one part of silver to four of gold), in case free coinage 
 of silver should be resumed by other countries, was a 
 recognition on the part of the Government of its interest, 
 and of its faith in the practicability of the measures pro- 
 posed for the maintenance of parity, and that its interest 
 was an important interest. I have further been informed 
 that it was understood at the time, though not formally 
 offered, that parliamentary authority would be asked 
 and obtained, in case of need, to raise the legal-tender 
 limit of English silver coin. The object of the offer 
 made was to induce France and the United States to 
 establish free coinage. 
 
 Are our friends fully aware of this ? I fear they are 
 not. To ensure attention I bring to your notice the 
 accompanying letter (page 317), in which no less an 
 authority in the Government of the United Kingdom 
 than the Lords Commissioners of Her Majesty's Treasury 
 will be found to have stated the point very clearly. 
 
 Unfortunately the quota of co-operation thus offered 
 on the part of the United Kingdom was not regarded as 
 sufficient to warrant the other Powers in undertaking 
 the measures needed to establish the desired parity. 
 
 Then came the establishment of your League. What 
 was its object ? It was established with a practical end, 
 namely, to bring about such co-operation of the United 
 Kingdom as should be needed, an end to be attained by 
 the obvious means of enlightening public opinion as to 
 the degree of its importance. These offers already made 
 
TRACT ON SILVER POLICY. 303 
 
 were of course to be kept in validity. In marking out 
 in its platform what was believed to be the proper quota 
 for the United Kingdom, the League assigned no limit. 
 They were for free coinage of silver, asking no less from 
 England than from the United States and France. Such 
 then was the task assumed by the League. 
 
 But little time elapsed after its foundation before 
 events began to force themselves upon public attention 
 which justified its views in a very practical way. The 
 depression of trade and industry in Great Britain 
 attained such depth as to necessitate a Koyal Commis- 
 sion of inquiry, which in time gave way to a Royal 
 Commission on Gold and Silver. 
 
 What was the result of all these years of discussion 
 in which the League bore its share ? The minimum 
 result is to be found in the admission on the " gold side " 
 (so called) of the Royal Commission ; the maximum is 
 to be found on the " silver side." Of the latter I need 
 only say their ground was the ground of the League ; 
 that the degree of importance they assigned to this 
 interest of the Empire was a very high one, and it 
 was urged that diplomatic initiative of Her Majesty's 
 Government be brought to bear to push joint action of 
 nations to restore silver to general free coinage (Part 
 III., section 36). 
 
 In estimating the attitude of the "gold side" of the 
 Eoyal Commission account must naturally be taken of 
 the strategic bearings of their position. Predispositions 
 and presumptions, as well as prejudices, were in favor 
 of inaction. Nothing was easier than to shrink from "a 
 leap in the dark " without realizing that this leap was 
 after all but a step from a bed to a carpeted floor. It 
 was thus in spite of all temptations that they were 
 willing to do what they did, and that was nothing less 
 
304 APPENDIX. 
 
 than to undertake a certain initiative in favor of 
 silver. 
 
 What were the avowed objects in view ? I find the 
 purpose avowed to " relieve tension of the present situa- 
 tion." I also find the purpose avowed to prevent " an 
 apprehended further fall in silver," and to keep its 
 " value, relatively to gold, more stable." Here are pur- 
 poses in sympathy with our own. But is there not, 
 beyond and behind all this, implicitly present, though 
 not avowed in plain terms, the very practical and diplo- 
 matic idea that if the joint action so recommended be 
 set on foot, free coinage of both metals in other nations, 
 and hence parity of the money metals, will be the result? 
 I find that very practical and diplomatic idea to have 
 been entertained in manner and form as set forth in 
 the sequel to this paper. 
 
 I speak here seriously of what is suggested as well as 
 of what is incisively avowed. I see in these suggestions 
 the shadows of coming events, the arrival of which it is 
 the business of reformers to hasten. The " London 
 Times " states editorially to-day that " free coinage in 
 the United States would fix the ratio all over the world," 
 and yet you can remember the day when men were 
 called " lunatics " in London for saying that Great 
 Britain, France, and the United States together could 
 accomplish that same result. But I have seen all along, 
 from the very inception of the struggle against and for 
 silver, the desire that some other nation should establish 
 parity between the money of England and the money of 
 India has been a potent factor in the expression of 
 opinions as well as in their formation. 
 
 What then were the actual proposals made on the 
 " gold side " of the Eoyal Commission ? They lie in 
 part within and in part outside of the range of the 
 
TRACT ON SILVER POLICY. 305 
 
 proposals made in 1881 to the representatives of the 
 nations in Paris. 
 
 First, I mention their recommending English initiative 
 to bring about concerted action of nations. This is beyond 
 the position taken in 1881, for that position was taken 
 not on the initiative of England, but upon the invitation 
 of two other Powers. Thus we see the Royal Commis- 
 sion in effect unanimously recommended that the Govern- 
 ment should initiate a movement (of one or the other kind) 
 and actively promote joint action of nations. But while 
 in respect to initiative this goes beyond the attitude of 
 1881, still, at the same time, the " gold side " of the 
 Eoyal Commission by their statement of detail held 
 themselves, in a sense, within the limit of 1881, because 
 they seriously speak of using, I will not say a threat, 
 but a recognized possibility, of stopping the coinage of 
 silver in India, as an inducement to other Powers to 
 act. 
 
 Their proposition " for relief of the tension of the 
 existing situation " goes quite beyond the propositions 
 of 1881. They propose small notes based on silver, 
 issued either by the Treasury or the Bank, as a measure 
 to be taken independently, a quota to be offered volun- 
 tarily, without demanding from other nations a quid, pro 
 quo. 
 
 In fine I ascertain that Lord Herschell and his col- 
 leagues stood in this position. 
 
 They repudiate the demonetization policy. On the 
 contrary, they desire the Restoration of Silver to its 
 former general legal equality with gold provided it is 
 accomplished by other nations, with only limited co- 
 operation from England herself. 
 
 What is their upper limit of co-operation ? 
 
 I fix it as follows : 
 
306 APPENDIX. 
 
 They were willing (see page 28, C)* that full legal- 
 tender bank notes should be based on silver, in replace- 
 ment of gold, to a limited amount (one part of silver to 
 four of gold). (This means that, let us say, four million 
 sovereigns are exported and so-and-so many million 
 ounces of silver are imported.) 
 
 2. They indicate a willingness (see page 27, A) that the 
 silver coinage should be increased. (Something ha& 
 been done in this line, and thereby a profit of nearly a 
 million sterling registered by the Treasury.) 
 
 3. They also indicate a willingness (see page 27, B) 
 that the legal-tender limit of the silver coin be raised, 
 
 4. They recommend an issue of small notes based on 
 silver bullion. (See page 29, D.) (That might be in- 
 tended in part to take the place of the proposition as to 
 the Issue Department bullion.) 
 
 5. The proposed attitude of the Ministry referred to, their 
 favorable disposition and initiative in promoting joint 
 
 action ivith other nations, may be held to have all these 
 views as its background. (See passages italicized on 
 pages 26-32.) 
 
 The next well-marked stage of possible active co-opera* 
 tion above these is the acceptance of a limited amount of 
 silver coin as full legal tender in England. This, I 
 assume, they reject, and of course a fortiori they reject 
 free coinage of silver in England. (See page 30 and 
 author's note.) 
 
 It is important to note, however, that there is a wide 
 range for give and take between the last-mentioned stage 
 of co-operation and the former. In each there is a. 
 question of amount. 
 
 I find nothing in the principles of public policy laid 
 
 * These page references are to the Appendix of the Tract, which is 
 not reprinted. 
 
TRACT ON SILVER POLICY. 307 
 
 down by Lord Herschell and his colleagues on the gold 
 side which should prevent their consenting that the 
 figures be raised to some extent. 
 
 For example, a relaxation of the present statutory bar 
 to the proportion of silver bullion to be held in the Issue 
 Department would be regarded in other countries as of 
 first [importance. Suppose the law were relaxed, and 
 silver in the Issue Department should be allowed not in 
 the proportion of one to four, as at present, but as one 
 to three or one to two. What harm would that do (from 
 the point of view of the Commissioners) either to the 
 Bank or the public ? None at all ! With silver " as 
 good as gold " in Paris and in New York such a holding 
 could bring no risk of suspending gold payments, and 
 the maintenance of gold payments is the main point in 
 view. If a silver fifth was safe in 1844 when there was 
 no treaty and no identity of ratio between Paris and 
 New York, why should not a silver third be safe with 
 New York and Paris bound in alliance and uniformity ? 
 
 I may also repeat here my statement that if the power 
 of the Crown should be fully used by the Treasury to 
 further that Restoration of Silver which Lord Herschell 
 and his colleagues recognize as "the right direction," 
 the holding of silver coin in England could be enor- 
 mously increased without parliamentary action. 
 
 The questions you addressed me, then, as I define 
 them, refer to the pro-silver movements recommended 
 by Lord Herschell and his colleagues, going beyond, as 
 well as including, the propositions of 1881. 
 
 I frankly say I am unable to see why the League 
 should not, upon proper occasion, impress upon the 
 Ministry and Parliament that the action thus recom- 
 mended is but the minimum imposed by its duty upon 
 the Government. I recall also that this position is nat- 
 
308 APPENDIX. 
 
 urally strengthened at the present time by the fact that 
 the "tension" referred to has again asserted itself in 
 unequivocal form. 
 
 In reference to the Royal Commission's view concern- 
 ing the "tension of the present situation," in 1888, it is 
 important to realize that the Baring crisis, though it 
 came two years later, is corroboration absolute. 
 
 Of course this means no palliation of the business 
 mistakes that led to the crisis, whether made in Argen- 
 tina or in London. Bod driving is bad driving, ivhatever 
 the color of the horse. Financiering can be reckless, 
 whether its monetary instrument be gold, or silver, or 
 paper, or the several kinds of money together, under 
 divers conditions. 
 
 But in last November Buenos Ayres and London, and 
 then in sympathy with London, all financial nerve-centres 
 of the world, felt a " tension " of a particular kind. 
 There was a tension which full compliance with the 
 recommendations of the Commission would have allayed, 
 an intense desire and need of laying hold, not merely of 
 capital, but of cash, and not merely of cash, but of a 
 particular kind of cash the yellow kind. If the world's 
 entire stock of money had been available where the 
 pressure was hottest, there would have been elasticity 
 instead of rigidity. It was this rigidity which sharpened 
 the crisis, a crisis " whose gravity no fertile imagination 
 could exaggerate," as Mr. Goschen has authoritatively 
 observed, " a crisis which risked the supremacy of Eng- 
 lish credit, risked the transfer of business to other cen- 
 tres." 
 
 From this point of view it is plain that it would have 
 been well for the City of London if the advice of the 
 Royal Commission had been adopted by the Government 
 at once in 1888 and after. 
 
TRACT ON SILVER POLICY. 309 
 
 As for the future, the abnormal monetary conditions 
 maintained by the doctrinaire anti-parity laws now in 
 force are a standing danger. Of this the City is notified 
 every time a little gold leaves the Bank. The notifica- 
 tion may not be fully understood, but it is there. 
 
 While, then, the crisis owed its existence to bad busi- 
 ness, its gravity in London was due, in important mea- 
 sure, to bad laws, to laws which had created an artificial 
 rigidity, a sort of lop-sided and top-heavy system, whose 
 purely gratuitous excrescences of the doctrinaire order 
 enhance the normal risks of business. So this pet of the 
 doctrinaires, the policy of preventing parity of moneys, 
 has its revenges. When will the lesson be learned the 
 lesson presented by the spectacle of last November, 
 "money" at 7 per cent in London, with a prospect of 
 widespread ruin that would have devastated the land 
 but for that rare phenomenon, a loan in specie from the 
 Bank of France, and yet at the same time millions sterling 
 worth of specie were lying idle in Bombay and Calcutta, 
 " money " being a drug there at less than 2 per cent ! 
 
 Further light may be thrown on the situation if we 
 inquire what would be the effect to-day if the gold in 
 Argentina could be brought to Europe, its place being 
 taken by new silver coin of equal value. There are 
 11,000,000 (gold) dollars' worth of gold there at least, 
 so I am informed by a member of the Argentine Com- 
 mittee mostly in the form of foreign coin. 
 
 What would be the effect of the transfer? It would 
 take a load off the silver market, and a load off the 
 gold market, and the banks would feel as if rain were 
 descending after drought. 
 
 And yet there are naive casuists who maintain the 
 Argentine crisis has nothing to do with the silver and 
 gold question ! 
 
310 APPENDIX. 
 
 POSTSCRIPT. 
 
 Sir David Barbour's review of the Indian silver 
 trouble (in his financial statement) is a renewal of testi- 
 mony, from a former member of the Eoyal Commission, 
 of most grave effect. It raises the question of the further 
 demonetization of silver ; it marks the present as a turn- 
 ing point in history. No co-operation being given as yet 
 in Europe to second the late Act in relief of silver 
 passed in Washington, it is not strange that the future 
 should look dark in Calcutta. The silver that Kournania 
 sold last summer is represented by a surplus in New 
 York, still operative in cutting down the proceeds of 
 Indian taxation ! And how is it with the increasing 
 gold accumulations in Russia ? What of the promise of 
 gold payments in Austria-Hungary, and gold payments 
 in Persia? If such things are done or promised, why 
 not then in India, seeing that America refuses free coin- 
 age for silver ? 
 
 Sir David Barbour sees that the United States defi- 
 nitely refuse to make changes in their monetary system 
 which would bring about an agio on gold or an undue 
 efflux of it from the country. Having refused this from 
 the start, and maintaining that refusal under conditions 
 which now cut off all chance of yielding the refusal 
 has already gone so far that candidates marked out for 
 the coming Presidential contest are regarded as pledged 
 against the free coinage of silver (unless, of course, in 
 union with Europe) the alternatives left for the Indian 
 Finance Minister's consideration seem to be only the 
 following : 
 
 Either the pro-silver recommendations of the Eoyal 
 Commission shall be adopted by the English Govern- 
 ment (and by Parliament where necessary), and a co- 
 
TRACT ON SILVER POLICY. 311 
 
 operative movement of nations to restore silver set on 
 foot 
 
 Or events will take their onward course toward the 
 rejection of silver and adoption of gold in India. 
 
 And then perhaps in China ? 
 
 The consequences would be very serious, as Sir David 
 Barbour recognizes. Most serious ! Still, the situation 
 is created not by India, but by the refusal of those in 
 Westminster upon whom action is incumbent, to give 
 sequence to the recommendations of a Koyal Commis- 
 sion which made its Eeport more than two }^ears ago, 
 after more than two years' study. 
 
 But who is to suffer the terrible consequences that 
 would follow a new series of fluctuations in the ex- 
 changes, and a new series of imperious drafts upon that 
 stock of gold which the city of London now watches 
 with such anxious eyes ? Who can siijfer more than Eng- 
 land ? 
 
 In 1878, when, during the Premiership of Lord Beacons- 
 field, Mr. Goschen attended the Conference on Silver 
 and Gold convoked by the United States Government at 
 Paris, his testimony was given to the importance of 
 stopping the demonetization movement. It was then a 
 publicly recognized interest of England to do this. Ger- 
 many was then selling silver, and in other nations efforts 
 were making to set new sales on foot. Germany stopped 
 her sales not long after, and no sales were undertaken 
 elsewhere. If Mr. Goschen's monitions in 1878 had this 
 effect, is not the same tendency to be followed now? It 
 would seem to be all the more justified "by the tension 
 of the present situation." 
 
 I am in position to recall certain facts which bear 
 rather closely upon that point. I refer to bright hopes 
 that flourished, I had reason to think, in the hearts of 
 
312 APPENDIX. 
 
 leading men in those days, hopes which since have 
 shown themselves nil. One hope was, that " poor 
 nations " would take more silver, so that " rich nations " 
 might use gold without suffering any disadvantage ! 
 Another hope was, that " other countries " would estab- 
 lish free coinage of silver, that they would establish 
 Parity by a new Monetary Union, without England's 
 doing anything more than to maintain silver in India. 
 
 These hopes to-day seem very naive ; there is sim- 
 plicity about them which it is difficult to associate with 
 grave and potent men. But they were very firmly held, 
 and were, I believe, most effective in determining the 
 attitude of governments in the early stages of discus- 
 sion. 
 
 Now experience throws strange light upon these illu- 
 sions. I observe that it is the so-called " poor " coun- 
 tries that get rid of silver money. The Bank of England 
 would have been only too happy to get the gold that 
 Eussia received for silver sold in 1890. And yet Russia, 
 whose official unit is the silver rouble, and whose paper 
 regime indicates monetary weakness, would have been 
 classed in 1878 among those nations predestined not to 
 take gold. Instead of that her stock is becoming a 
 large one. I have spoken of Eoumania having ex- 
 changed silver for gold, and of the gold in Argentina ; 
 and as I speak of Argentina, so I might speak of Brazil, 
 and of other countries beside. 
 
 As for other countries establishing free coinage, they 
 have been waiting for many years for the English Gov- 
 ernment to recognize England's interest in joining them 
 in that great work of common benefit. I should sup- 
 pose late events would put a quietus upon the expecta- 
 tion that they will perform that task without England's 
 co-operation. That expectation cannot reasonably sur- 
 
TRACT ON SILVER POLICY. 313 
 
 vive the gold loan made in 1890 to the Bank of England 
 by the Bank of France. 
 
 In general the mistakes that are made on these points 
 in 1891 and after, are likely to receive attention they 
 have hitherto missed. The pardon they could hitherto 
 look to will hardly be accorded in the future. 
 
APPENDIX OF THE TRACT. 
 
 THE ISSUE OF ENGLISH FULL LEGAL-TEN- 
 DEE NOTES ON A DEPOSIT OF SILVEK 
 BULLION, OFFEEED BY ME. GLADSTONE'S 
 GOYEENMENT TO OTHEE NATIONS TO 
 INDUCE THEM TO ESTABLISH FEEE 
 COINAGE OF SILYEE. 
 
 EXTRACT FROM "EETURN, PARIS MONETARY CONFERENCE, 
 1881," ORDERED TO BE PRINTED BY THE HOUSE OF 
 COMMONS, AUGUST 19, 1881. 
 
 TWELFTH SESSION. 6th July 1881. 
 
 Mr. Magnin [the Finance Minister of France] pre- 
 sided, and there were present the delegates of 
 
 Austria-Hungary, Portugal, 
 
 Belgium, Bussia, 
 
 Denmark, Sweden, 
 
 Germany, Norway, 
 
 Great Britain, British Switzerland, 
 
 India, United States of 
 
 Greece, America, and 
 
 Italy, France. 
 The Netherlands, 
 
 * * # * * # 
 
 Mr. Fremantle read the following declaration : 
 DECLARATION OF THE DELEGATE OF GREAT BRITAIN. 
 
 In pursuance of the announcement made to the Con- 
 ference at last Saturday's session, I have the honor of 
 making the following communication on behalf of my 
 Government : 
 
 314 
 
OFFER BY MR. GLADSTONE'S GOVERNMENT. 315 
 
 The United States Minister at London, in the course 
 of a conversation with Her Majesty's Secretary of State 
 for Foreign Affairs, having expressed an opinion that it 
 would be possible to arrive at an agreement between the 
 other Powers on the monetary question if (inter alia} the 
 Bank of England should agree to exercise the powers 
 conferred on it by the Bank Charter Act of 1844 (7 & 8 
 Yict. c. 32, ss. 2 and 3), and if the Treasury would put a 
 question to that effect to the bank directors, Lord Gran- 
 ville applied to that department, and through that chan- 
 nel obtained a reply from the bank directors. In this 
 reply the bank declares its readiness to exercise the 
 power above mentioned, on condition that the Mints of 
 other nations revert to the observance of rules ensuring the 
 exchange of gold for silver, and of silver for gold, at a legal 
 rate* 
 
 Her Majesty's Government, having subsequently 
 learned that Mr. Lowell's action was in no way the re- 
 sult of instructions from his Government, did not deem 
 it proper to follow up the declaration of the Bank of 
 England by communicating it to the Conference through 
 its delegate. 
 
 A similar proposal having, however, within the last 
 few days been submitted by the Ambassador of His 
 Majesty the King of Italy at London, on behalf of his 
 Government, Her Britannic Majesty's Government has 
 promptly given it the respectful reception it will always 
 accord to the representations of one of the great Powers 
 of Europe. 
 
 I have, therefore, the honor of laying on the table of 
 the Conference the exact words used by the Bank of 
 England in the above-mentioned communication : 
 
 * Not italicized in the original. 
 
316 APPENDIX. 
 
 "The Bank Charter Act permits the issue of notes 
 upon silver, but limits that issue to one-fourth of the 
 gold held by the bank in the issue department. 
 
 " The purchase of gold bullion is obligatory and un- 
 limited, the purchase of silver bullion is discretional 
 and limited, the distinction being enforced by the neces- 
 sity of paying all notes in gold on demand. 
 
 " The reappearance of silver bullion as an asset in 
 the issue department of the Bank of England would, as 
 is understood by the Foreign Office letter, depend en- 
 tirely on the return of the Mints of other countries to 
 such rules as would ensure the certainty of conversion 
 of gold into silver and silver into gold. The rules need 
 not be identical with those formerly in force ; the ratio 
 between silver and gold, and the charge for mintage, 
 may both or either of them be varied, and yet leave un- 
 impaired the facility of exchange, which would be indis- 
 pensable to the resumption of silver purchases by a 
 bank of issue whose responsibilities are contracted in 
 gold. 
 
 " Subject to these considerations, the Bank Court are 
 satisfied that the issue of their notes against silver, 
 within the letter of the Act, would not involve the risk 
 of infringing that principle of it which imposes a positive 
 obligation 011 the bank to receive gold in exchange for 
 notes, and to pay notes in gold on demand. 
 
 "The Bank Court see no reason why an assurance 
 should not be conveyed to the Monetary Conference at 
 Paris, if their Lordships think it desirable, that the 
 Bank of England, agreeably with the Act of 1844, would 
 be always open to the purchase of silver under the condi- 
 tions above described." 
 
EXTEACT FKOM EXPLANATOEY COEEESPOND- 
 
 ENCE.* 
 
 ORDERED PRINTED AUG. 27, 1881. 
 
 TREASURY to BANK OF ENGLAND. 
 
 (11,504/81.) 
 
 Treasury Chambers, July 1, 1881. 
 GENTLEMEN, 
 
 I am directed by the Lords Commissioners of Her 
 Majesty's Treasury to acknowledge the receipt of your 
 letter of the 30th ultimo, in which you state that the 
 Bank Court see no reason why an assurance should not 
 be conveyed to the Monetary Conference at Paris, if the 
 Treasury think it desirable, that the Bank of England, 
 agreeably with the Act of 1844, will be always open to 
 the purchase of silver, provided that the Mints of other 
 countries return to such rules as would ensure the 
 conversion of gold into silver and silver into gold. 
 
 My Lords are of opinion that such an assurance is 
 desirable, provided always that it be understood that the 
 silver-using countries are to permit a free coinage of 
 silver ;f and, as they note the opinion of the Bank Court 
 that the exercise of that power by the Bank would not 
 involve a risk of infringing the principle of the Act of 
 1844, they have communicated a copy of your letter to the 
 Secretary of State for Foreign Affairs, and have requested 
 him to convey to the Monetary Conference the intimation 
 that the Bank of England, agreeably with the Act of 1844, 
 
 * Five pages are omitted here. 
 f Not italicized in original. 
 
 317 
 
318 APPENDIX. 
 
 but under the condition which you describe, will be open 
 to the purchase of silver. 
 
 I have, <fec., 
 
 (Signed) F. CAVENDISH. 
 The Governor and Deputy Governor 
 of the Bank of England. 
 
 The further pages of the Appendix of the Tract are 
 here omitted. Their titles are as follows : 
 
 THE PRO-SILVER RECOMMENDATIONS OF LORD HERSCHELL AND HIS 
 COLLEAGUES ON THE " GOLD SIDE" OF THE ROYAL COMMISSION, 
 BOTH INCLUDING AND ADDITIONAL TO THE QUOTA OF CO-OPERA- 
 TION OFFERED TO OTHER NATIONS BY MR. GLADSTONE'S GOV- 
 ERNMENT IN 1881. 
 
 EXTRACTS FROM THE FINAL REPORT OF THE ROYAL COMMISSION 
 ON GOLD AND SILVER 
 
 The citations are from the Report of the " gold side " 
 of the Eoyal Commission, sections 134, 135, 136, 137, 138, 
 and are accompanied with a comment which seeks to 
 bring out a veiled intent ascribed to the " Gold " mem- 
 bers to promote the Restoration of Silver to general 
 legal equality with gold by means of furthering the 
 action of other nations, with only a limited quota of 
 co-operation from England itself. 
 
 EXTRACT FROM AN EDITORIAL ARTICLE IN THE "LONDON TIMES," 
 JANUARY 20, 1891. 
 
 EXTRACTS FROM SIR DAVID B ARBOUR'S FINANCIAL STATEMENT 
 
 FOR 1891-92. 
 
XIII. 
 SILVEK AND THE ENGLISH ELECTIONS. 
 
 I. MEMORIAL or THE LEADERS OF THE NORTHERN OPERA- 
 TIVES. 
 
 The Legislative Council of the United Textile Fac- 
 tory Workers Association on Silver issued the follow- 
 ing declaration at the close of November, 1891 : 
 
 The Council of this Association have for a considerable period given 
 much attention to the effect upon the permanent interests of the textile 
 industry of this country of the demonetization of silver, and consequent 
 absence of a par of exchange between gold and silver moneys. The 
 conclusion they have come to, which has been much strengthened by 
 the events of the last twelve months, is that the prosperity of the trade 
 in some branches probably its very existence is involved in the ques- 
 tion. In the interest, therefore, of the operatives and others employed 
 in the textile industry whom they represent, and whose well-being the 
 Association has specially to safeguard, a clear duty is imposed upon them 
 which they cannot and must not evade. That duty is to press by every 
 legitimate means in their power upon those who have or seek any par- 
 liamentary influence the imperative necessity of insisting that Govern- 
 ment and Parliament should at once seriously grapple with the evils of 
 our present monetary system, and take such immediate steps as shall 
 ensure the recognition of silver as standard money throughout the Brit- 
 ish Empire and between this and other nations. Whatever other ques- 
 tion of importance may be before the country, the urgent need of this 
 reform demands that it shall be promptly dealt with, and it is pressed 
 upon this Council that they should, without loss of time, inform you 
 that the circumstances connected with the trade and with the well-being 
 of those employed in it render it imperative that the whole force po- 
 litical and moral of the industrial classes of this country shall be exer- 
 cised to promote it to successful conclusion. 
 
 319 
 
320 APPENDIX. 
 
 II. COBBESPONDENCE WITH CANDIDATES AT THE EOSSENDALE 
 
 ELECTION. 
 
 The following is an extract from the Manchester Cou- 
 rier of January 21, 1892 : 
 
 THE CURRENCY QUESTION. 
 
 The following correspondence has been passed between Mr. F. Birt- 
 wistle, Secretary of the United Textile Factory Workers, and the two 
 candidates : 
 
 UNITED TEXTILE FACTORY WORKERS, EWBANK CHAMBERS, 
 17, ST. JAMES' STREET, ACCRINGTON, January 6, 1892. 
 
 DEAR SIR, I beg to enclose a circular which, by instruction of our 
 Legislative Council, has been sent to members of Parliament and candi- 
 dates in the textile districts of the North of England. 
 
 The currency question is of vital importance to this district, and it 
 will give great satisfaction to a large number of our members in the 
 Rossendale division if we can advise them that, if returned to Parlia- 
 ment, you will give your support to the movement for the recognition 
 of silver as standard money throughout the British Empire and between 
 this and other nations. Yours faithfully, T. BIRTWISTLE. 
 
 Sir Thomas Brooks. 
 
 CRAWSHAW HALL, RAWTENSTALL, January 13, 1892. 
 
 DEAR SIR, Owing to so many engagements I regret I have been 
 unable to reply to your letter earlier. Any movement which would be 
 a real benefit to the commercial and industrial interests of the United 
 Kingdom I would do anything in my power to aid, but the question to 
 which your letter refers is such an abtruse question, and so involved in 
 technical difficulties, that I have not yet had an opportunity of study- 
 ing it so much as I should wish. I have observed, however, that this 
 is a question to which Mr. Chaplin, Minister of Agriculture, has devoted 
 and is devoting considerable attention, and also that Mr. Goschen him 
 self regards it in a favorable light, and I feel sure that the result of 
 their considerations will be to produce a plan which will mitigate, if not 
 obviate, the present difficulties surrounding the matter, and to this end 
 I shall be very glad to give my support. Yours truly, 
 
 THOMAS BROOKS. 
 T. Birtwstle, Esq. 
 
SILVER AND THE ENGLISH ELECTIONS. 321 
 
 UNITED TEXTILE FACTORY WORKERS, EWBANK CHAMBERS, 
 17, ST. JAMES' STREET, ACCRINGTON, 15th January, 189 i. 
 
 DEAR SIR, I am much obliged for your favor of the 13th instant, 
 from which I am glad to note that you appreciate the difficulties attend- 
 ant on our present system of monetary laws, and that you will support 
 the application to them of an effective remedy. 
 
 There is every reason to believe, from their public observations, 
 that several members of the present Government regard favorably the 
 remedy advocated by our United Textile Factory Workers Association 
 and many other organizations, but we have found, from long experi- 
 ence that, however evidently desirable a reform may be, it is frequently 
 necessary to bring some moral pressure upon whatever Government 
 may be in power, and also on Parliament, in order to make sure that they 
 will take prompt action. 
 
 We should therefore like to be able to assure our members in the 
 Rossendale division that, if returned, you will press on Government 
 and Parliament the views we support as necessary to our welfare, viz., 
 the necessity of arranging for the opening of the leading Mints of the 
 world for the free coinage of silver as well as gold at a fixed ratio. Our 
 members will expect some information from us on this point, and I hope 
 you will put us in a position to inform them that you are prepared to 
 do so. Yours faithfully, T. BIRTWISTLE. 
 
 Sir Thomas Brooks. 
 
 CRAWSHALL HALL, RAWTENSTALL, January 19, 189?. 
 
 DEAR SIR, In further reply to your letter, although I am wishful to 
 support your views, and think, if I am returned to Parliament, that I 
 can be of some service in promoting them, you must kindly excuse my 
 pledging myself further until I have had an opportunity of learning 
 more on such an important subject. Believe me, yours sincerely, 
 
 THOMAS BROOKS. 
 T. Birtwistle, Esq. 
 
 UNITED TEXTILE FACTORY WORKERS, EWBANK CHAMBERS, 
 17, St. James' Street, Accrington, January 20, 182. 
 
 DEAR SIR, I am in receipt of your favor of yesterday, and note you 
 wish for further time for studying the currency question, but that in the 
 meantime we are to take it that you are desirous of supporting the views 
 advocated by our association on the subject, and that if returned to Par 
 liament you would devote some service to promote them. Yours 
 faithfully, T. BIRTWISTLE. 
 
 Sir Thos. Brooks. 
 
XIV. 
 
 DEMONETIZATION IN GEKMANY AND IN 
 AUSTEIA-HUNGAKY. 
 
 An Act of the German Keichstag introduced by Count 
 Caprivi November 7, 1891, and passed in February, 1892, 
 authorizes the Government to retire the " Dollars of the 
 Union," one-thaler and two-thaler pieces coined in Aus- 
 trian Mints under the Coinage Treaty of Vienna of 1857. 
 The total amount so coined was 31,115,849 thalers. Of 
 these about 25,000,000 are estimated to be in circulation 
 in Germany, equivalent in face value to 17,500,000 of our 
 dollars. There are various plans in view for the opera- 
 tion so contemplated, one of them being the acceptance, 
 under arrangement supplementary to the new Commer- 
 cial Treaty, of a part of the sum by Austria-Hungary, 
 where the thalers are legal tender for 1| gulden. 
 
 The long-debated plans in Austria-Hungary for 
 resumption of specie payment or establishing parity 
 between the paper money, silver coin, and gold coin of 
 the dual empire have lately assumed more definite form 
 through the appointment and deliberations of Austrian 
 and Hungarian Imperial Commissions, which have not 
 yet closed their labors. The eventual adoption of a 
 Gold Unit of Coinage is regarded as nearly certain, and 
 it is generally understood that this measure will necessi- 
 tate a considerable acquisition of gold from other coun- 
 tries, and also a considerable demonetization and sale of 
 silver now in use as coin. 
 
 324 
 
BY THE SAME AUTHOK. 
 
 SILVER AND GOLD, and their Eelation to the Problem of Resumption. 
 ("Cincinnati : Robert Clarke & Co., 1876.) [Presented as a printed depo- 
 sition to the Congressional Monetary Commission of 1876.] New edition, 
 January, 1877, 200 pp. ; with Appendix containing papers on 
 
 The Laissez-faire theory and Iwan Possoschkow, &c., and reprint of 
 
 An ADDRESS TO CONGRESS against the Bland Bill, Dec., 1876. 
 
 Monetary Malaria, or the Health of Nations, 1877. 
 
 The MONETARY SITUATION. (Cincinnati: Robert Clarke & Co., May, 
 1878.) Being an Address before the American Social Science Associa- 
 tion, and containing also as Appendix papers on The Prussian Anti-Silver 
 Theory, and its origin in an historical error.- General Restoration of Sil- 
 ver, a condition precedent to successful cancellation of paper money 
 (1877). A Vindication of the practicability of Bimetallic Union (1877). 
 
 SPEECHES IN THE INTERNATIONAL MONETARY CONFERENCE or 1878, and 
 DOCUMENTS presented. In " Proces-Verbaux," or Report [original in 
 French] of the Proceedings of the Conference, etc. (Paris : Imprimerie 
 Nationale, Nov. 1878, folio.) Ditto in English Translation in THE DOC- 
 UMENT or THE CONFERENCE OF 1878. (Washington : Government Print- 
 ing Office, July, 1879. 918 pp., 8vo. & 4to.) This volume comprises 
 also the two following Titles. 
 
 HISTORICAL MATERIAL FOR THE STUDY OF MONETARY POLICY (518 pp.) 
 Consisting chiefly of documents illustrating the monetary history of 
 France, England, and the United States (of which many are printed for 
 the first time from MSS., and others for the first time translated), com- 
 piled and edited as a partial DOCUMENTARY HISTORY OF MONETARY POLICY; 
 and 
 
 CONTRIBUTIONS TO THE STUDY OF MONETARY POLICY (125 pp.). Con- 
 sisting of Historical and Doctrinal Essays and a Bibliography of Money, 
 and including the Essay next hereinafter named. 
 
 THE POSITION OF LAW IN THE DOCTRINE OF MONEY, and other papers. 
 (London : 1882.) La Monnaie et la Loi. Traduction par Emile de 
 Laveleye. (Paris: Guillaumin et Cie., May, 1881.) Das Geld und das 
 Gesetz nebst Rede iiber das Interesse der Vereinigten Staaten an der Sil- 
 berfrage. Uebersetzung von E. Koch. Koln : Heiniann, August, 1881.) 
 
 Sir Isaac Newton and England's Prohibitive Tariff upon Silver Money ; 
 an open letter to Prof. W. S. Jevons. (Cincinnati : March, 1881.) 
 
 DlSCOURS PRONONCES ET DOCUMENTS PRESENTES DANS LA CONFERENCE 
 
 MONETAIRE INTERNATIONALE DE 1881. In Proces-Verbaux. (Paris : Im- 
 primerie Nationale, August, 1881, (folio.) [Also separate edition, 77 pp. 
 folio.] Ditto in English Translation : Report of Proceedings of Confer- 
 ence of 1881. Blue-Book. (London: Spottiswoode, September, 1881, 
 folio), and published by Department of State (Washington : November, 
 1881) ; also in German Translation. Published by the German Govern- 
 ment. (Berlin: 1882.) 
 
 SILVER AS AN INTERNATIONAL QUESTION. An Address to Congress ; 
 being a letter written in response to a request of Hon. A. H. Buckner, 
 of Missouri, Chairman of the Committee of the House of Rep's, on Cur- 
 rency and Banking. (Washington, Feb., 1885.) 
 
REASONS FOB SUSPENDING SILVER COINAGE. An Address delivered in 
 response to the invitation of the Executive Committee of the NATIONAL 
 COMMERCIAL CONVENTION, at its meeting in Atlanta, Georgia, May 21, 
 1885. Also Extracts printed by the New York Board of Trade and 
 Transportation, July, 1885. 
 
 The British Standard of Value : an Address before Section F. (Eco- 
 nomic Science and Statistics) of the British Association for the Advance- 
 ment of Science, Sept., 1885, with Appendix, of documents now first 
 brought to notice, including Monetary Keports of JOHN LOCKE, and of 
 SIR ISAAC NEWTON, (1701-2, Editio Princeps, privately printed, from MSS. 
 found by the author of the address). Extracts read by a member of the 
 Committee, and Abstracts printed for distribution. 
 
 Ought the National Banking System to be abolished ? {Norih Am. 
 .Be., Sept., 1885.) 
 
 THE INTERNATIONALLY or THE SILVER QUESTION. An. Address prepared 
 at the invitation of the Executive Committee of the American Bankers' 
 Association, for its meeting at Chicago, September 24, 1885. (Bankers' 
 Pub. Assoc!, New York, 1885.) 
 
 A Chapter on Monetary Policy. (N<>rt,1i Aincr/cati Iterieir, December, 
 1885.) 
 
 SILVER : AN ISSUE OF INTERNATIONAL POLITICS. An Address to Con- 
 gress, March, 1886. (Cincinnati: K. Clarke & Co., 1886.) 
 
 THE BANKING COMMUNITY AND THE SILVER QUESTION. An Address 
 delivered at the Annual Convention of the American Bankers' Associa- 
 tion, Aug. 21, 1886, at Boston. (In Report of Convention, American 
 Bankers' Pub. Assoc.) 
 
 Silver before Congress in 1886. ( Quart. Journal <>f Economic*. Boston : 
 Ellis, Oct., 1886.) . 
 
 THE SILVER POUND and ENGLAND'S MONETARY POLICY since the RESTO- 
 RATION ; together with the HISTORY OF THE GUINEA, illustrated by Con- 
 temporary Documents. 300 pp. (London : Macmillan & Co., 1887.) 
 
 MONETARY HISTORY AND MONETARY JURISPRUDENCE : an Address before 
 Section F. (Economic Science and Statistics) of the British Association 
 for the Advancement of Science, Sept., 1887. Printed in " the Currency 
 Question before the British Association," published by the Bimetallic 
 League. (Manchester, 1887.) 
 
 Remarks upon Silver as Standard Money in England, at an interview 
 with the members of the Board of Directors of the Manchester Chamber 
 of Commerce, at a called meeting, Nov. 2, 1887. (Stenographic report 
 printed for the use of the Directors.) 
 
 THE UNITED STANDARD : Answers to the Questions of the ROYAL COM- 
 MISSION ON GOLD AND SILVER, Feb., 1888. (Appendix to Final Report, 
 Oct. 1888. Blue-Book.) 
 
 THE PARITY OF MONEYS as regarded by Adam Smith, Ricardo, and Mill. 
 An open Letter answering a question of a Member of the ROYAL COM- 
 MISSION on Gold and Silver. By Amicus Curiae. London, June, 1888. 
 Also read before Section I. (Economic Science and Statistics) of the 
 American Association for the Advancement of Science, Aug. 20, 1888. 
 (London: Macmillan & Co., 1888.) 
 
 OBSERVATIONS au Congres Mone'taire de 1'Exposition en reponse a MM. 
 Levasseur et Du Puynode. Sept. 13, 1889. (Paris: Guillaumin & Cie.) 
 
 INSTRUMENTS OF VALUATION. An Address before the American Met- 
 rological Association. Washington, April 22, 1890. (Report of Proceed- 
 ings.) 
 
RECENTLY ISSUED, 
 
 Large 8vo, 314 pp., cloth, $4.00. 
 
 THE SILVER POUND 
 
 AND 
 
 ENGLAND'S MONETARY POLICY SINCE 
 THE RESTORATION, 
 
 TOGETHER WITH THE 
 
 HISTORY OF THE GUINEA, 
 
 ILLUSTRATED BY 
 
 CONTEMPOKARY DOCUMENTS. 
 
 LONDON : 
 MACMILLAN AND Go. 
 
 1887, 
 
 (Opinions of the 9?ress. 
 
 THE ACADEMY [London Weekly], July 30, 1887. 
 
 Mr. Dana Horton commands a peculiarly respectful attention as the 
 most learned and one of the ablest champions of a cause in favour of 
 which so much ability and learning are now enlisted. The historical re- 
 search and the dialectical acumen by which he is distinguished are con- 
 spicuously manifested in the work before us. Monetary history a field 
 neglected by most economists has been cultivated by Mr. Horton with a 
 rare diligence. His labours have been rewarded by the discovery of hid- 
 den treasures. 
 
 ****** 
 
 Misinterpreted history is not the only idol of the market-place which 
 Mr. Horton undertakes to clear away. The prepossession against a fixed 
 par between silver and gold is largely due to an erroneous theory con- 
 cerning the relation of law to the value of money. 
 
 ****** 
 
 At many other points the bimetallist leader attacks successfully the 
 mono-metallist intrenchments. Nor can it reasonably be denied that he 
 has carried at least the outworks of those defences all the loose mass of 
 unfounded prejudices by which it has been sought to bar even the ap- 
 proach to a consideration of the subject. It is another question whether 
 he makes much impression on the interior lines of defence occupied by 
 picked champions. 
 
 From the WESTMINSTER REVIEW, September, 1887. 
 
 A work of original historical investigation. Considering the dryness of 
 the subject to all but experts, it is written in a style remarkably inter- 
 esting, and even picturesque, as well as vigorous. Much historical infor- 
 mation, which we believe to be practically new, is brought to light. We 
 decline to express any opinion as to the bearing of this new information on 
 the main question ; but undoubtedly it is important, and must be taken 
 
WESTMINSTER WORLD ATHEN^UM STATIST. 
 
 into account by experts. * * * As we said, the work is chiefly historical ; 
 but a valuable feature is the author's examination of the theories which 
 he detects underlying and controlling monetary legislation. The lessons 
 of history, as the author reads them, are clearly brought out and vigor- 
 ously insisted on. 
 
 From THE WOELD [London Weekly], July 13, 1887. 
 
 A BOOK WORTH HEADING. * * * The position is so critical that we have 
 invariably made a point of calling the attention of our readers to all pub- 
 lications bearing on the question of currency, which seemed deserving of 
 special notice. We deem it, therefore, to be simply our duty to briefly 
 notice Mr. Dana Horton's latest work. After all that has been said and 
 written on the silver question, it might seem almost impossible to pro- 
 duce a work which takes fresh and novel departures, and approaches and 
 treats the subject in an original and striking manner ; but in this respect 
 Mr. Dana Horton has undoubtedly and admirably succeeded. 
 
 * * * * * * 
 
 It is positively refreshing to read this last treatise of Mr. Horton, and 
 we feel certain that no thoughtful and reflecting mind can study ' ' The 
 Silver Pound" without becoming not only himself convinced of the ab- 
 solute correctness of the principles advocated, but without feeling him- 
 self, as an honest and useful man, called upon to sow these principles 
 broadcast. 
 
 From THE ATHENAEUM [London Weekly], August 20, 1887. 
 
 While, therefore, we share Prof. Jevons's high opinion of Mr. Horton's 
 ability, and rank him " quite apart from the ordinary bi-metallists," we 
 do not think that Mr. Horton has shown that Locke's judgment on the 
 question before us differs from what we previously believed it to be ; but 
 his readers may heartily thank Mr. Horton for the interesting and valua- 
 ble historical investigation of which he has given them the benefit. 
 From THE STATIST [London Weekly], July 30, 1887. 
 
 It would be a mistake not to recognize that the writer is a student and 
 scholar of rare worth. He is simply a gold mine of information regarding 
 monetary history. No matter what the country is which has had such a 
 history, Mr. Horton is at home in that history, has studied every mate- 
 rial fact that can be ascertained, has dug up long-forgotten documents, 
 and has, in fact, made it possible for the present generation, to compre- 
 hend past monetary arrangements, and the circumstances in which they 
 arose, unlike as these circumstances may have been to those of the pres- 
 ent time. 
 
 The present book constitutes a chapter of the history which much re- 
 quires to be written. 
 
MAIL MONEY MORNING POST COURIER. 
 
 For students, also, Mr. Horton's nice distinctions of the different 
 meanings of the word Standard itself, and of other terms in monetary 
 discussions, will be most useful. We should have liked the book better, 
 of course, if it had not been written from a bi-metallist point of view 
 (though Mr. Horton's bi-metallism, be it observed, is by no means of the 
 Cernuschi type) ; but this difference of opinion ought not to prevent us 
 "from acknowledging the really great value of the work to the student 
 and the scholar. 
 
 From the DUBLIN EVENING MAIL, August 3, 1887. 
 
 Taken as a good historic statement of an intricate subject, the history 
 of our British monetary system and its modifications up to the present 
 time, we can cordially recommend this work. 
 
 MONEY : A JOURNAL FOR INVESTORS AND SPECULATORS, AND REVIEW OF 
 THE MONEY MARKET [London Weekly^ August 17, 1887. 
 
 It would be difficult to conceive a more exhaustive contribution to the 
 great monetary question of the age than this historical inquiry the out- 
 come of painstaking researches by the greatest living authority on the 
 subject. * * * Such a work as this is an invaluable aid to the attain- 
 ment of a right conception of the pros and cons of the question at issue. 
 It is a masterpiece, and will be regarded, not only at the present junc- 
 ture, but for all time to come, as a standard work on our monetary policy. 
 From THE LONDON MORNING POST, August 1, 1887. 
 
 Ample justification for the prevailing ignorance as to the point of the 
 dispute that is now raging in financial circles is contained in the first 
 words of Mr. Horton's book, in which he gives nine definitions of 
 " Standard" (in the monetary sense of the term) these being only 
 " some of the various meanings attached to the word." 
 
 From the MANCHESTER COURIER, July 29, 1887. 
 
 There is probably no one on either Continent who can speak with 
 greater authority on the currency question than Mr. S. Dana Horton. 
 * * * This history -of English money is of a more exhaustive and com- 
 plete character than any hitherto published. * * * Its publication 
 comes at a most opportune moment, when the Koyal Commission on 
 Gold and Silver is sitting, and when the thinking minds of the country 
 are exercised to get a solution of the national monetary and commercial 
 difficulties we are suffering from ; and Mr. Horton's book clears away 
 much of the obscurity which has hampered a clear understanding of 
 many important points, and furnishes a mass of information which 
 demands the careful study of all who desire to be well informed on the 
 subject. Indeed, the appearance of this book marks a new stage in the 
 currency controversy. Hitherto the literature on the subject has been 
 fragmentary. 
 
DAILY TELEGRAPH MANCHESTER GUARDIAN. 
 
 This book, for the first time, places the whole controversy before the 
 public in a complete form, giving theory as well as practice its proper 
 place. 
 
 From tlie London DAILY TELEGRAPH, July 13, 1887. 
 
 There is matter for some painful reflection just at present in "The 
 Silver Pound," a sketch of England's monetary policy since the Restora- 
 tion. It deals with the traditions and virtues of good money at a mo- 
 ment when our Mint has put forth a coinage which, so far as image and 
 superscription go, is a disgrace to an artistic age, and a sorrow to numis- 
 matists. 
 
 ******* 
 
 As such the volume cannot hope to interest everyone ; but to the in- 
 itiated, who appreciate the rivalry of precious metals, and comprehend 
 the fine perplexities of single and double standards, dual money and el- 
 der systems, the author's researches must prove attractive. A History 
 of the Guinea follows, and concludes what bears all the appearance of 
 being a careful and erudite treatise on these difficult and complex sub- 
 jects. 
 
 /'"rom THE MANCHESTER GUARDIAN, /September 3, 1887. 
 
 Mr. Horton has brought to light some most important facts which will 
 undoubtedly expand our views as to the importance and the true objects 
 of monetary legislation. 
 
 In no other direction, probably, are the teachings of history so fatally 
 neglected as in that of monetary legislation. The Act of 1816, by which 
 for the first time in this country or anywhere else gold alone was made 
 the sole standard of value, seems to be accepted by many as the final ex- 
 pression of the wisdom taught by all previous experience. It was, in 
 truth, a great experiment, the lessons of which we are just beginning to 
 understand. 
 
 From THE MANCHESTER GUARDIAN, October 8, 1887. 
 
 That the best book which has appeared in our times on English mone- 
 tary history should have been written by an American is, at first sight, 
 not creditable to English economists. But there is a justifying explana- 
 tion. In the United States currency questions have for many years been 
 "living issues" in consequence of the existence of inconvertible war 
 paper money from 18G2 to 1878, and the importance of arranging for the 
 return to a specie basis after the war was ended. The situation was, in 
 fact, not unlike that in which our forefathers stood during and after the 
 Napoleonic wars. It is natural, therefore, that the more studious of 
 American writers upon the problems immediately before them should have 
 turned their attention to English experience for teaching and guidance. 
 ****** 
 
 To readers on this side the Atlantic this work is doubly valuable. It 
 
GUARDIAN BEACON CHRONICLE SPECTATOR HERALD. 
 
 appears at a time when circumstances are rapidly forcing into prominence 
 a currency problem in this country, and it sets forth precisely the kind of 
 information which is absolutely indispensable to a clear understanding of 
 it, at least on its historical side. 
 
 From THE MANCHESTER GUARDIAN, October 11, 1887. 
 The whole book will be read by all who occupy their minds with one 
 of the most important, perhaps the most important, of the economic 
 questions of our day. 
 
 From THE BEACON, Boston, Maw., Sept. 10, 1887. 
 
 Mr. Morton's " Silver and Gold" was published in 187H by Robert 
 Clarke & Co. at Cincinnati : lie made weighty contributions to the Inter- 
 national Monetary Conferences of 1878 and 1881, where he represented 
 the American Government with consummate ability, to the confusion of 
 the European inono-metallists ; and now he publishes " The Silver Pound, 
 and England's Monetary Policy since the Restoration," together with the 
 History of the Guinea. * * * 
 
 It is extremely desirable that Congress, the members of the administra- 
 tion, bankers, politicians, and students should read and master this noble 
 monograph. * * * 
 
 And even a mono-metallist will not wish to take leave of it without pay- 
 ing a tribute of hearty admiration to the distinguished author, now un- 
 questionably the greatest of "all American publicists. 
 
 From THE FINANCIAL AND COMMERCIAL CHRONICLE [New York Weekly'], 
 
 October 1, 1887. 
 
 A very interesting volume. * * * It may turn out that Mr. Horton's 
 book is timely in a wider sense than at first appeared. In any view, the 
 sitting of the Royal Commission made the moment of its issue very op- 
 portune. 
 
 From the SPECTATOR, September 1st, 1887. 
 
 Mr. Dana Horton, in a very elaborate style, and with a still more elab- 
 orate array of historical research, delivers an attack on the gold standard. 
 
 From THE GLASGOW HERALD, November 3, 1887. 
 
 A very important addition to the literature of currency, and it should 
 be carefully studied by all who desire to understand that complicated 
 question. 
 
 From the SATURDAY REVIEW [London Weekly}, Nov. 19, 1887. 
 The case is now being argued as it ought to be, and thoroughly rea- 
 soned out, and we may hope, though scarcely expect, that the Commission 
 will come, in their Report, to a definite conclusion. * * * Mr. Horton in- 
 
SATURDAY REVIEW GRAPHIC. 
 
 sists * * * inasmuch as gold was legally rated to silver under the mon- 
 etary administration of Locke and Newton' both metals were equally 
 money of the country. Mr. Horton says : 
 
 Not only in England, but generally, silver was the standard. Both 
 metals were money, but the fixed money, the rating money, so to speak, 
 was silver ; the rated money was gold. 
 
 Sir Robert Peel was, no doubt, misinformed. * * * Mr. Horton 
 enumerates nine different senses of the word standard. * * * Ap- 
 plying these definitions to Holland [it appears that] Holland has, at one 
 and the same time, (5) a silver standard, (6) a silver arid gold standard, 
 (7) a silver standard, (8) a gold standard, (9) a limping standard, accord- 
 ing to the sense in which we use tin- word. No wonder that the argu- 
 ments pro and con in the monetary controversy fall often <} tort et <'/ tra- 
 vers, and that the arguers are mostly at cross-purposes with each other. 
 The knights of the fable persist in looking some at the gold, some at 
 the silver, side of the shield. * * * Mr. Horton concludes that there 
 is a monetary solidarite between the nations, and a necessity pressing 
 upon each of them to establish an accord on the principles and practice 
 to be followed ; and he has much to say on the responsibility of England 
 for the present dislocation, and her paramount interest in leading the 
 way to a reasonable adjustment. * * * The whole book is well worth 
 study, both by those who agree with Mr. Horton's conclusions' and by 
 those who dissent from them. Both classes of readers will find much 
 that is new to them, and much matter for reflection, and the quotation 
 from Nicholas Oresme's tractate De mutationibus monetarum (1382) with 
 which he concludes may well conclude our article : 
 
 Se aucum doncques pour amour de verite enquei-re, vouldroit contre- 
 dire a icelles ou escripre contre, bien sera, mais se j'ai mal parle porteige 
 tesmognage du mal avec raison, affin qu'il ne soit veu pour neant et de 
 sa singuliere voulente temerairement condemner ce que bonnement ne se 
 peult impugner ne contredire. 
 
 [If any one for the love of truth to be sought out shall desire to con- 
 tradict these pages or to write against them, it is well. But if I have 
 spoken ill let him bring evidence of the wrong, giving his reason, so that 
 it be not seen that for naught and out of mere wilfulness one rashly con- 
 demns that which cannot rightfully be impugned or contradicted.] 
 
 From tJie London GEAPHIC, April 28, 1888. 
 
 The "Silver Pound" is regarded as the most authoritative book on 
 this subject ever written. 
 
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