UNIFICATION  OF  GOLD  AND  SILVER  COINAGE

 

 

Evils of a diversity in the systems of weights, measures and coin – Advantages of a simple universal system – Movement for monetary unity – Monetary convention – Observations of Mr. Beckwith, Mr. Ruggles and Senator Sherman on the treaty – Propositions by Mr. Kennedy adopted by the Committee – International Monetary Conference – Argument favoring a 25 franc-coin – Professor Levi’s speech – Report of Delegation from Great Britain – Report of Royal Commission – Views of M. Chevalier – Opinions expressed in the United States, and the proposed legislation – Conclusion

 

The inconveniences and losses arising from the great diversity of systems of weights, measures and coins among the chief nations of the earth have long been felt and acknowledged, but they are becoming greater and more evident with the constantly increasing facilities for international communication, by which the people and the commodities of remote regions are brought into constant and close contact.  The collections in the department of weights, measures, and coins of the Paris Exposition comprised no less than 36 different systems of weights, based upon 36 different units; 67 different systems of measures, based upon 62 different units; and 35 different standards of gold and silver coin belonging to 18 different monetary systems, based upon 18 different units or measures of value.

 

ADVANTAGES  OF  A  UNIVERSAL SYSTEM

 

The numerous benefits to be derived from a universal system, simple and uniform, in place of this great incongruity and disorder, are not always present to the minds of those who are not occupied with the study of this subject.  They may be grouped under the heads of educational, economic and scientific, and commercial.  Some of the advantages under each of these heads will be noted.

 

EDUCATIONAL

 

The nature and relations of numbers, together with the systems of weights, measures and coins, belong to the elementary studies of children in common schools.  They are the rudiments or beginnings of knowledge taught by all nations, of every-day-use through life, and nothing more generally useful or necessary is subsequently learned even by those who live to be venerable philosophers and statesmen.  But however indispensable this part of knowledge is, no common school undertakes to teach more than a part of it.  So many systems without any common or connecting principle, or with so many different principles of evolution, cannot be mastered and retained in the mind without long study and great efforts.  It is practically impossible for the great portion of the people to acquire a complete knowledge of the many different systems, and, indeed, it is rare to find those who acquire and retain any permanent knowledge of the systems of any one country.  The incoherent and illogical systems are difficult to remember, and the recollection of them becomes dim and uncertain, if not frequently revived.

If the systems of all countries were effectively resolved into one, based upon a decimalized unit, this entire branch of useful knowledge would come within the easy comprehension and reach of every child, and the time required to learn and understand it would be many times less than is now necessary for the incongruous systems of any one country.

 

ECONOMICAL  AND  SCIENTIFIC

 

The subject becomes more interesting, if not more important, in its connection with the studies of the more advanced student.  No one can acquire a thorough, or even a respectable knowledge of political and social science without an easy familiarity with the various systems of weights, measures and values.  The relation of labor to capital, for example, is a subject which at present attracts serious attention in all civilized countries, and an intelligent inquiry involves the study of social and industrial organizations, and the products of labor and skill of many kinds in many countries.  These investigations cannot be made useful, comparisons cannot be drawn, and instructive results be attained without a knowledge of the numerous systems.

The science of economics is, for the most part, based upon statistics, and the study of a wide range of statistics is impossible without the use of the keys which unlock them and render them intelligible.  But so great is the labor of conversion of numerous systems into the one system of appreciation most familiar and easy to the mind, that foreign statistics, to a very great extent, as they are presented to us, are but approximations and rough estimates embracing many errors.  The advantages of a uniform system of measures and values in collecting and diffusing useful knowledge in this department are obvious.  They are specially evident to those who have been led to study the Exhibition and learn the lessons taught by the products and statistics of various countries.  They will be evident to the readers of the reports on the Exposition.  The labor of preparing the present report and of deducing conclusions would have been greatly lessened if the statistics of various countries had been presented in one uniform system of weights and values.  Its accuracy and its value would also have been greatly enhanced.

 

COMMERCIAL

 

The numerous and intelligent body of men engaged in commerce in all countries are familiar with the importance of a uniform system of measuring quantities and values.

Commerce is the exchange of products; quantity and value are elements of exchange, and conversions of quantities and values from one system to another, or rather from all systems into the one most habitual to the individual, and in which his appreciations will be most accurate is the endless labor of the merchant.  To find the equivalent of one quantity in another system of expressing quantities, or of one value in another monetary system, by conversion, is indeed considerable labor, and if the data or elements of the computation do not previously exist in the mind the attempt will generally end in a resort to formulas or to tables used mechanically and without understanding them.  Much time is lost in such computations, and the labor often necessitates the employment of experts at high salaries.  All such difficulties operate as hindrances to trade and commercial expansion.  Witnesses examined before the Royal Commission stated that the smaller manufacturers and traders of Great Britain are deterred from engaging in foreign transactions by the difficulties attendant upon a diversity of weights and measures, and by the difficulty of calculating exchanges and of remitting small sums from one country to another.  Commercial statements, invoices and lists of prices expressed in the moneys of foreign countries are not readily intelligible in England or in the United States.  The adoption of an international uniform monetary system would facilitate and lead to the extension of the money-order system to foreign countries, by which the remittance of small sums could be made at will by the people.

Monetary systems are theories for measuring and computing values, and exist chiefly in matters of finance and account.  Coin is but the material expression of parts of those systems, made to pass from hand to hand as measures of value in exchange of products and property, and whenever the monetary systems are harmonized corresponding changes in coin will naturally follow.

Among the most useful things which have become nearly universal among the nations are the numerals of the Arabs and the alphabetic letters of the Romans.  A conviction of the benefits of these unities is felt in every industry, every profession and occupation, every branch of science, art and literature, and a like conviction of the importance and necessity of a universal system of weights, measures and values is growing in the public mind, in the mind of the whole civilized world; it spreads with the increase of commerce the exchange of ideas, and the diffusion of knowledge.

A movement so universal, so peaceful and harmonious, and so desirable, is not likely to cease nor diminish, but to augment in force and velocity.  The inequality of the movement hitherto is remarkable.  Several countries have entirely abolished their ancient incongruous systems and adopted the metrical-decimal system, which though not perfect is thought by many to be the best that has yet been found.

Numerous other countries have adopted portions of this system, while Great Britain and the United States have legalized the two sections relating to weights and measures, rendering the use of them permissible.  The monetary section makes the slowest progress.  To this branch of the subject the attention of the governments participating in the Paris Exhibition was particularly invited by the Emperor of France, which resulted in the formation of an International Committee at Paris in 1866, and an International Conference in 1867.

The following extracts from the reports and documents show the nature of the inquiries and discussions of the Committee and the Conference, the result of their labors, the subsequent action of Congress, the movements in England, and the present state of the subject.

 

MONETARY  UNITY

 

The subject of monetary unity is appropriately introduced by Baron de Hock as follows :

The inconveniences which result from the diversity of monetary systems exceed even those growing out of the diversity of the systems of weights and measures.  These are confined to the trouble and loss of time occasioned by the tedious calculations required to pass from one system to the other; still the objects which are weighed or measured continue the same, and may be made use of anywhere.  In the case of coin, on the contrary, besides similar calculations of allowance which are necessary, the objects themselves – that is, the coins – lose a portion of their value in passing from one country to another.

It cannot be doubted that the universal unification of coins, by creating a common medium of circulation, constitutes one of the most effective means for the development of general commerce.  Such a medium, adopted by every State and individual, saves the loss of time and the trouble caused by the computation to which it is constantly necessary to resort to ascertain the precise value of the different coins; it reduces to a minimum the rate of exchange, that painful burden to commerce; it obviates the losses from exchange of money, to which the arts and manufactures and, not less, travellers are subject; it increases the utility of money, and thereby even its value; it diminishes the needs of circulation, and tends finally to an immediate and radical cure of the crises which spring up in commerce by the accumulation of money at one point and its absence at another.

The idea of a unification of the coins is so elevated and the purpose so useful that, whenever a favorable situation renders its adoption possible, no progressive people, desirous of entering upon the great and fruitful road of universal commerce, can remain indifferent or reject it, unless from motives of the last importance [1].

At the preparatory conference relative to the establishment of an international system of measures, weights and coins, held at the Palace of Industry in Paris, May, 1866, Mr. Le Play stated the object of the meeting as expressed in the notice.  During the Exhibition of 1855 a special committee, of which many persons present were members, considered the means of simplifying the operations of international commerce by the adoption of a common system of weights and measures.  The conference caused the formation of societies for that special purpose in many countries, particularly in England.  Many of these societies expressed the desire to revive the question at the Universal Exhibition of 1867.

At the second session, Mr. Le Play, Commissioner General of the Exhibition, introduced Mr. Leone Levi, professor of King’s College, Cambridge, as a delegate of the metrical committee of the British Association for the Advancement of Science, and the International Association for obtaining a uniform decimal system of measures, weights and coins.  Mr. Leone Levi then read the following note :

Universal exhibitions have shown that much remains to be done to facilitate international communications, and among the chief wants is a common system of measures, weights and coins.

This want was greatly felt at the International Exhibition of 1851, and on its close the London Society for the Encouragement of Art, Industry and Commerce informed the government that it would be well to consult with neighboring nations to see if measures could not be taken to hasten the adoption of a uniform system for the entire world.

At the Universal Exhibition of Paris in 1855, the juries and committees of the different countries, to the number of two hundred, signed a declaration that one of the best ways to promote industry would be to adopt a universal system of weights and measures.

At the London Exhibition of 1862, a like report was made by the juries of different kinds, particularly that of chemistry.

Other international and scientific assemblies, recently held, have expressed the same opinions.  The International Statistical Congress, at Brussels in 1853, Paris in 1855, Vienna in 1859, and Berlin in 1863, found great difficulty in reconciling the differences of unity, giving the statistical facts of different countries.  Different societies, such as the British Association for the Advancement of Science and the Academy of St. Petersburg, have expressed their opinions upon the advantages to science of uniformity in scientific communications.  And finally, after the Paris Exhibition, a special international association was founded to obtain the adoption of a decimal system of measures, weights and coins.  Certain legislative measures of considerable importance have been taken for the same purpose.

A committee was formed in 1862 in the House of Commons to consider the practicability of a simple and uniform system of weights and measures, to be applied to foreign commerce as well as to domestic trade, and upon its report the legislature declared the metrical system to be a law.  The adoption of decimal coins has also been considered by the legislature, and the discussion of the subject has progressed.

The German states have also found the necessity of unity in their weights and measures, and after two official conferences at Frankfort in 1862 and 1865, they concluded to favor the metrical system.  Many other states, such as Spain, Portugal and Italy, have taken similar steps, and by a treaty relative to coins, recently concluded between France, Belgium, Switzerland and Italy, those states have formed a monetary union.  The United States have lately undertaken the same subject.  An inquiry has been instituted, and a bill has been introduced into Congress for the adoption of the metrical system.  Yet there remains much to be done to complete the work, for there is not only a difference in the national systems of measures, weights and coins, but there are local and customary measures that embarrass trade and complicate international reckonings.  The great difficulty is in a practical application; and the best way to overcome this is to exhibit the measures, weights and coins in use in different countries at the Universal Exhibition of 1867, and to settle it when the committees having the consideration of the subject meet in Paris.  This is suggested as the best plan.

For these reasons, the International Association to obtain a uniform decimal system of measures, weights and coins, and the metrical committee of the British Association for the Advancement of Science have instructed me to agree with the Commissioner General upon the means of realizing an exhibition, under the auspices of the Commission of the Universal Exhibition for 1867, comprising the following articles :

1.  A collection of weights and measures, their multiples and submultiples, and every legal weight and measure used for any purpose.

2.  Two collections to show both sides of all the current coins of last government issue, with specifications of pure metals in them of gold, silver or copper, and their size, weight, &c.

3.  All official documents on the subject, and particularly every report of legislative committees in regard to a change in the weights, measures or coins of the countries.

The two associations desire, moreover, that an international conference be formed for the Exhibition of 1867, composed of competent persons in a scientific, industrial and commercial point of view, to study the objects and documents exhibited, so as to adopt as soon as possible a uniform decimal system for every country.  These conferences might also consider analogous questions of a more scientific nature, and of interest to the progress of civilization.

Mr. Leone Levi added, that the association to obtain a uniform system of weights and measures, instituted after the London Exhibition of 1855, had decided, after much inquiry, to encourage the use of the metrical system, because it was founded on nature, and was the most scientific and generally known.

Mr. Mathieu stated that the Bureau of Longitudes, with which he was connected, had printed the bill in English, with the translation and the comparative table of weights and measures.  If the decimo-metrical system of weights and measures were adopted as an international system, the trouble among the scientific men of all countries about the unities of different nations and provinces, in commercial relations, would be avoided.  The bill mentioned by Mr. Mathieu, as introduced into the House of Commons, is a happy step toward the desired result.

The following is a translation of the treaty concluded December, above referred to by Mr. Levi :

 

MONETARY  TREATY  BETWEEN  FRANCE,  BELGIUM,  ITALY  AND  SWITZERLAND

 

Article 1.  Belgium, France, Italy and Switzerland unite to regulate the weight, title, form and circulation of their gold and silver coins.  No change is made for the present, in legislation, relative to copper coins for the four countries.

Art. 2.  The high contracting parties bind themselves not to coin, or permit to be coined, any gold other than in pieces of 100, 50, 20, 10, and 5 francs in weight, title, tolerance and diameter, as follows : All these coins shall be of the fineness or title of .900, with a tolerance of two thousandths above or below the legal standard.  The tolerance in weight shall be for the 100 and for the 50 franc pieces, one thousandth above or below; for the 20 and 10 franc pieces, two thousandths; for the 5 franc pieces, three thousandths.  The weights and diameters are these :

100 francs, weight 32.258.06 grams, diameter 35 millimeters; 50 francs, weight 16.129.03 grams, diameter 28 millimeters; 20 francs, weight 6.451.61 grams, diameter 21 millimeters; 10 francs, weight 3.225.80 grams, diameter 19 millimeters; 5 francs, weight 1.612.90 grams, diameter 17 millimeters.

The different states will receive all the above coins when not worn to one-half per cent., or the devices effaced.

Art. 3.  The contracting governments bind themselves not to coin, or permit to be coined, silver pieces of 5 francs, except in the following weight, title, tolerance and diameter : The weight of each 5-franc piece shall be of twenty-five grams; its tolerance in weight, three thousandths; its fineness, .900; its tolerance in title two thousandths; and its diameter thirty-seven millimeters.

They will receive the above pieces at par, unless reduced one per cent. by wear, or the device is worn off.

Art. 4.  The high contracting parties will coin hereafter pieces of 2 and 1 franc, 50 and 20 centimes, only under the following conditions of weight, title, tolerance and diameter : The fineness of these pieces shall be of .835; their tolerance of title, three thousandths; their tolerance of weight, five thousandths for the first two, seven thousandths for the 50-centime piece, and ten thousandths for the 20-centime piece.  Their weights and diameters as follows : 2 francs, weight 10 grams, diameter 27 millimeters; 1 franc, weight 5 grams, diameter 23 millimeters; 50 centimes, weight 2.50 grams, diameter 18 millimeters; 20 centimes, weight 1 gram, diameter 16 millimeters.

The above pieces shall be recoined by the respective governments when reduced by wear, or when their devices shall have become effaced.

Art. 5.  Pieces of 2 and 1 franc and of 50 and 20 centimes of a different coinage from the above, shall be withdrawn from circulation by the 1st of January, 1869.  This term is extended for the pieces of 2 and 1 franc, issued in Switzerland, by the law of January, 1860.

Art. 6.  The silver coins authorized in article 4 shall be a legal tender privately to the sum of fifty francs.  The nation issuing them shall receive them in any amount.

Art. 7.  The public banks of each of the four countries will receive the coins of article 4, to the sum of 100 francs, in payment to said banks.  The governments of Belgium, France and Italy will receive the Swiss 2 and 1 franc pieces of 1860, under the same conditions, as equivalent to the coins of article 4, and under the reservation relative to wear.

Art. 8.  Each of the contracting governments binds itself to receive from banks or individuals the small coins they have issued, and return the equivalent in current coin (gold or 5-franc silver pieces), provided the sum presented be not less than 100 francs.  This obligation shall extend two years beyond the expiration of this treaty.

Art. 9.  The high contracting parties agree not to issue a greater amount of these 2 and 1 franc, 50 and 20 centime pieces of article 4, than six francs for each inhabitant.  The amount thus fixed in accordance with the last census and the presumed increase of population is fixed at


For Belgium
For France
For Italy
For Switzerland

Francs  

32,000,000
239,000,000
141,000,000
17,000,000

Exclusive of the above sums the different governments can issue of coins already in circulation in the following proportions : France, in 50 and 20 centime pieces, by the law of May 25, 1864, 16,000,000; Italy, in 2 and 1 franc, 50 and 20 centime pieces, by the law of August 24, 1862, 100,000,000; Switzerland, in 2 and 1 franc pieces, by the law of January 31, 1860, 10,500,000.

Art. 10.  Hereafter the date of issue shall be stamped on all the gold and silver coins issued by the four governments.

Art. 11.  The contracting governments shall give the quantity of their issue of gold and silver coins every year, the amount collected for melting, and make a general annual report of the proceedings.  They shall likewise give notice of important facts in regard to the circulation of their issues.

Art. 12.  Any other nation can join the present convention by accepting its obligations and adopting the monetary system of the Union in regard to gold and silver coins.

Art. 13.  The execution of the reciprocal engagements contained in the present convention is left to the high contracting powers, who bind themselves to pass laws for the purpose as soon as possible.

Art. 14.  The present convention shall remain in force till the 1st of January, 1880.  If it be not repealed a year before the expiration of that term, it shall remain in force for an additional period of 15 years, and so on, until repealed.

Art. 15.  The present convention shall be ratified, and the ratifications exchanged at Paris, within six months, or less time, if possible.

 

EXTRACTS  FROM  THE  REPORT  OF  THE  COMMITTEE,  APPOINTED  IN  FRANCE,  TO  EXAMINE  A  BILL  RELATIVE  TO  THE  TREATY

 

A monetary disturbance has existed in France for several years, caused by a variety of circumstances.

Our monetary system has two standards for its basis :

In the first place, the silver franc, of the weight of five grams, and of .900 fineness, is the monetary unity by the law of the 7 Germinal, year XI; and the 20-franc gold piece, weighing 6.451, of .900 fineness, by article six of the same law, 7 Germinal, year XI, is the legal equivalent of the franc multiplied by 20.  That law, fixing our present monetary system, reckoned a kilogram of pure silver at 222 francs 22 centimes, and one of pure gold at 3,444 francs 44 centimes; which makes the difference in value of the two metals in the proportion of 1 to 15 ½.  Can this relation remain fixed, or is it modified by circumstances ?  It has been stationary for nearly one-half a century.  Silver was the usual money; gold, in small quantities, was at a premium.  About the year 1835, by reason of improvement in refining, the 5-franc silver pieces of the earliest coinage were hunted up and melted to extract the gold they contained.  Yet the relation between silver and gold continued the same.  But the discoveries of gold in Russia, California and Australia, between the years 1846 and 1850, brought gold abundantly into the European markets.  The metal fell in value, and 5-franc silver pieces were more than ever sought for.  The government took note of this, and a committee was appointed in 1850 to investigate it.  Thiers was its chairman.  The political troubles of the time prevented action.  The difference of value of the two metals increased, and speculators began to buy up the smaller silver coins.  Two other circumstances hastened the disappearance of silver from circulation : the loss of our silk-worms and the American civil war compelled us to buy silk and cotton from the East to keep our factories going; and, as silver is more valued in those distant lands, we had to pay for the imports in silver, having no produce to exchange for them.  And there was yet another reason to make silver more valuable : the improvement in the circumstances of our laboring classes increased the necessity of small coin for change.  A committee in 1857, and another in 1861, were commissioned to investigate the subject.  It was shown that the yield of silver and gold from the New World, from the time of its discovery to 1846, was as two to one; whereas the yield now was three of gold to one of silver.  It was also shown that silver 5-franc pieces had almost entirely passed out of circulation; that out of 214,463,000 francs in small coin, issued since the year XI up to 1864, there remained 160,000,000 in circulation; and that the last issues of 43,000,000, made since January 1, 1856, were immediately absorbed by speculation.  The fact was serious.

To increase the weight or fineness of our gold coins, in order to restore the equilibrium of value between the two monetary standards, was almost impossible, on account of the vast amount of gold in circulation.  It would have been a great expense to the State, without considering other inconveniences.  The greatest want was of small change.  10 and 5-franc gold pieces had supplied the place of silver 5-franc pieces.  The bill of May 25, 1864, proposed to withdraw all the 2, 1, 1/2 and 1/5 franc pieces of .900 fineness from circulation, and to issue the same coins of .835 fineness.  These new pieces, considered merely as change money, were to be taken only in amounts of 20 francs and less, between private individuals, but good for any amount in the public banks.  The right of making and circulating was reserved to the state.  This seemed to be the proper remedy, as speculation would not disturb the alloyed small coin.  The legislature liked the plan, but modified it by issuing only 50 and 20 centime pieces of .835 fineness.  The reasons for this are given in Mr. Gouin’s report.  There were two dominant ideas : one was a determination not to alter the franc of .900, the expression of our monetary unity; the other was to see if the alloy of .835 would be acceptable to the people.  This was wise; it answered for the present, and reserved something for the future; and so the bill was made a law.

A two years’ trial has shown that the new coins of .835 have been welcomed by the public.  Speculators have pounced upon the 2 and 1 franc pieces and bought them out of circulation, except those worn so much there is nothing to be made out of them.

Now is the time to resume the labor of 1864, and satisfy the public that complain of the scarcity of change, and such is the object of the bill now submitted to your consideration.  It proposes to extend the law of May 23, 1864, to the 1 and 2 franc silver pieces.  The proposition is sustained by a convention concluded with the three nations nearest to France that have adopted the French monetary system.  The advantages of a single monetary system for all nations need no discussion.  Besides the convenience to border countries and travellers, it facilitates commerce by giving a common and certain measure to currency.  It is a consequence of free trade and that instinct that prompts people to unite their interests by commerce and industry.  We hope soon to see uniformity of weights everywhere, and we believe France will set the first example to all other nations.

We have therefore given, as a principle to be examined in detail, our complete approbation to the convention, and the bill which is the result of it.

A question of another nature arose in the committee : As the two monetary standards have long been a source of annoyance, why did we not adopt gold as the only standard, like England and many other nations, and thus settle it definitely at once ?  The committee was not in favor of it.  We certainly cannot say what the future may have in store for us, but nobody can say but what the measure may be soon adopted; it is too soon yet.  Though theory and logic may be for a single standard, facts show that the double standard offers great advantages in practice.  The two help each other, and in times of crises one serves as a balance to the other.  The use of both metals, moreover, facilitates our commercial relations with other countries, by allowing our merchants a choice of the coin best suited to the stranger.  Does a difference of the value between the two metals, of late years, give a sufficient cause for such a radical reform ?  If silver is preferred today, the preference may change by the discovery of vast silver mines, or a great reflux of silver from the East by reason of the sale of our manufactures in those countries.  The proposed law prudently confines itself to present necessities, without pretending to look for the future.

The committee, in all its deliberations, has kept one idea in view : by the declaration preliminary to the law of 7 Germinal, year XI, the franc of five grams weight and .900 fineness is the point of departure, the foundation of our entire monetary system.  As soon as it is reduced to .835 it disappears, and would not its reduction be in violation of the above law ?  It might also cause some confusion in our foreign trade.

The objection was fully considered, if the legal franc ceased to exist, would the fact be due to the new law ?  The 1-franc pieces are gradually disappearing, owing to the difference of value between gold and silver.  The 1-franc pieces now in circulation are so much worn they hardly have the intrinsic value of the new .835 pieces.  True, the government could coin more of .900, but speculation would soon remove them from circulation.  The new law, then, does not cause the harm.  It existed before, and the law alleviates it.  It is not just to say the franc will have ceased to exist in its material expression when the new law comes into force.  It will still preserve its expression in the 5-franc silver piece, its fifth multiple, which is retained in our monetary system, though becoming scarce, and circulates freely in the three countries that joined France in the convention of the 23rd December, 1865.

However, as legislation ought to be precise in these matters, we have endeavored to make the text of the new law as plain as possible by introducing two amendments.  The first calls the 2 and 1 franc, the 50 and 20 centime pieces change-money, which is their true character.  The second declares it no violation of the law of 7 Germinal, year XI, which makes the franc the basis of the French monetary system.  Thus, all doubts and false interpretations are removed.  The new 1-franc piece, of less value and of restricted circulation, is created by necessity.  The old franc is retained as money of account, and as the normal measure of gold and silver, in conformity to law.

 

OBSERVATIONS  BY  MR.  BECKWITH  ON  THE  TREATY

 

Mr. Beckwith, the United States commissioner general to the Paris Exposition in a letter to the Hon. William H. Seward, Secretary of State, under date of Paris, July 17, 1866, makes the following observations upon the treaty :

It results from these proceedings that a uniform system of coinage is established in the four countries named – uniform as regards the unit, the metallic standards and the value of the pieces to be coined.  Each country retains the double standard of gold and silver with the relative value of 1 to 15 ½.

The composition of gold coin remains in the proportion nine parts of fine gold to one of alloy, and the coinage of gold is restricted to pieces of the value of 100 francs, 50 francs, 20 francs, 10 francs and 5 francs.

The composition of the silver 5-franc pieces remains in the proportion of nine parts fine silver to one of alloy; but the composition of silver coin of smaller values is reduced from .9 to 835 parts fine silver to 165 parts of alloy, a reduction in value of about 7 per cent.

The coinage of this class is restricted to pieces of the value of 2 francs, 1 franc, 50 centimes and 20 centimes, and limited in amount to six francs per head of population, which should give 32,000,000 francs for Belgium, 239,000,000 francs for France, 141,000,000 francs for Italy, and 17,000,000 francs for Switzerland.

This inferior money is a legal tender between individuals to the amount of 50 francs in a single payment, and receivable for dues to the government without limit.  It follows from these measures that the unit of the monetary system (1 franc of the standard of .9) will cease to be coined; but it retains a nominal existence; it remains money of account and is still the unit of the monetary system, and the measure of all values, though it has no material existence except in its multiples, of which the quintuple or 5-franc piece is the smallest coin.

The reduction in the value of small silver coin brings the standard of this class in harmony, I believe, with the small silver coin of the United States, under the law of 1850.  If this be so, the metallic standards both of the gold and silver coin of the United States are now in harmony with those of the four countries named, and the standards being in harmony and the systems all decimal, it only remains to harmonize the coin in order to produce reciprocal circulation.  For this purpose a common unit does not appear to me to be necessary.

However numerous the monetary systems and different their units, if they are all decimal and their standards of coin alike, it is only necessary that the pieces coined in each be in harmony with their own system to produce the uniformity required for circulation in common, provided that the unit of each monetary system be capable of expression in the multiples and sub-multiples of the other systems.

These approximations are much easier of attainment than unity.  No substitution of the units of one country for those of other countries need be made; very slight modifications of existing units and standards, with decimalization, would produce a common measure of values, and assimilate all the principal monetary systems in the manner required for the reciprocal circulation of coin.  Modification is the easiest method of reforms.

Coining a unit of one system would then be of necessity coining at the same time a multiple or sub-multiple of the unit of all the other systems, and the pieces struck in conformity with each system would bear the same relations to the coins of the other systems that the several pieces of any one system bear to each other.

Neither is it of moment what names may be given to coins in different countries, nor how numerous their varieties or various their values, because they will all be aliquot decimal parts of harmonious systems, the coin of each being referable to its own unit, and referable with equal facility to the multiples or sub-multiples of the units of the other systems.

In like manner a small change in the standard of British gold coin from .916 to .900 would complete the unity of standards of gold coin, since the whole civilized world nearly, except England, has adopted the standard of .900 fine.

Our gold dollar, for example, is equal to 517 French centimes; a reduction of 17 centimes (3 p.c.) would leave it an exact multiple of the French unit, or franc, and the equivalent of five francs.  A reduction of 22 centimes (1 p.c.) in the value of the British unit or sovereign would leave it a multiple of the franc, and the equivalent of 25 francs, and consequently a multiple of the dollar, and the equivalent of five dollars.

Modifications of this kind are not difficult : they are common.  They produce little inconvenience to the public; they do not disturb business, nor trench upon prejudices; they come into use almost imperceptibly, and in this case would leave the unit of each national system – those great traditional measures of value so deeply rooted in every mind – in effect undisturbed, with their various mottoes, emblems and effigies, and with all the impregnable habits of thought, and even the superstitions which cluster around them.

The tenacity with which nations and peoples hold to their ancient measures of value is remarkable, and whether it springs from a principle or a prejudice, it is a fact so firmly fixed that it is difficult to eradicate; nor is it worth the labor, or even desirable, if a common language of values can be otherwise attained.

 

OPINION  OF  MR.  S.  B.  RUGGLES

 

Before the meetings of the international committee for examining the question of a uniform coin had commenced, Mr. Ruggles, delegate from the United States, was enabled, through the introduction of Monsieur Michel Chevalier, senator of France, who took much interest in the subject, to confer fully with M. de Parieu, vice-president of the Conseil d’État, and one of the two representatives of France in negotiating the monetary convention of 23rd December, 1865.  He suggested to M. de Parieu the expediency, and, indeed, urged the necessity, of modifying that portion of the treaty which prohibits either of the four nations who had made it from issuing gold coin of any denominations but those of 5, 10, 20, 50 and 100 francs.  This necessity is obvious at once from the fact that the gold coin most in ordinary seen in the United States is the half-eagle of $ 5, which, with a slight diminution, could be readily reduced to 25 francs in value.  This coin, when exported to France, in order to be readily and generally current, there finds itself side by side with some well-known French coin of like weight, diameter and value. The propriety of this suggestion, de Parieu not only admitted at once, but expressed his belief that the treaty might be modified by the four nations, in thirty days to meet the necessities in this respect of the United States.

Similar suggestions were made to M. Rouher, chief minister of state, and his attention was directed to the fact that the Congress of the United States, in recently authorizing the issue of one of our smaller coins, had given to it a precisely even metric weight and metric diameter (being five grams in weight and two centimeters in diameter), thereby scattering widely through the pockets of the American people the means of studying the metric system by specimens of the meter and its derivative the gram, constantly visible.

Mr. Ruggles afterward suggested to the Emperor that France could coin a piece of gold of 25 francs, to circulate side by side on terms of absolute equality with the half-eagle of the United States and the sovereign, or pound sterling, of Great Britain, when reduced, as they readily might be, precisely to the value of 25 francs.  The Emperor then asked : «Will not a French coin of 25 francs impair the symmetry of the French decimal system ?»  To which it was answered : «No more than it is affected, if at all, by the existing gold coin of five francs; that it was only the silver coins of France which were of even metric weight, while every one of its gold coins, without exception, represented unequal fractions of the meter.»

It was also stated to the Emperor that an eminent American statesman, Mr. Sherman, senator from Ohio, chairman of the Finance Committee of the Senate of the United States, and recently in Paris, had written an important and interesting letter, expressing his opinion that the gold dollar of the United States ought to be and readily might be reduced by Congress, in weight and value, to correspond with the gold five-franc piece of France.

The letter of Mr. Sherman, addressed to Mr. Ruggles, dated the 18th May, 1867, is as follows :

Letter from Senator Sherman to Mr. Ruggles

«My dear Sir :

Your note of yesterday, inquiring whether Congress would probably, in future coinage, make our gold dollar conform in value to the gold five-franc piece, has been received.

There has been so little discussion in Congress upon the subject, that I cannot base my opinion upon anything said or done there.

The subject has, however, excited the attention of several important commercial bodies in the United States, and the time is now so favorable, that I feel quite sure that Congress will adopt any practical measure that will secure to the commercial world a uniform standard of value and exchange.

The only question will be, how this can be accomplished.

The treaty of December 23, 1865, between France, Italy, Belgium and Switzerland, and the probable acquiescence in that treaty by Prussia, has laid the foundation for such a standard.  If Great Britain will reduce the value of her sovereign two pence, and the United States will reduce the value of her dollar something over three cents, we then have a coinage in the franc, dollar and sovereign, easily computed, and which will readily pass in all countries; the dollar as five francs, and the sovereign as 25 francs.

This will put an end to the loss and intricacies of exchange and discount.

Our gold dollar is certainly as good a unit of value as the franc; and so the English think of their pound sterling.  These coins are now exchangeable only at a considerable loss, and this exchange is a profit only to brokers and bankers.  Surely each commercial nation should be willing to yield a little to secure a gold coin of equal value, weight and diameter, from whatever mint it may have been issued.

As the gold five-franc piece is now in use by over 60,000,000 of people, of several different nationalities, and is of convenient form and size, it may well be adopted by other nations as the common standard of value; leaving to each nation to regulate the divisions of this unit in silver coin or tokens.

If this is done, France will surely abandon the impossible effort of making two standards of value.  Gold coins will answer all the purposes of European commerce.  A common gold standard will regulate silver coinage, of which the United States will furnish the greater part, especially for the Chinese trade.

I have thought a good deal of how the object you propose may be most readily accomplished.  It is clear that the United States cannot become a party to the treaty referred to.  They could not agree upon the silver standard; nor could we limit the amount of our coinage, as proposed by the treaty.  The United States is so large in extent, is so sparsely populated, and the price of labor is so much higher than in Europe, that we require more currency per capita.  We now produce the larger part of the gold and silver of the world, and cannot limit our coinage, except by the wants of our people and the demands of commerce.

Congress alone can change the value of our coin.  I see no object in negotiating with other powers on the subject.  As coin is not now in general circulation with us, we can readily fix by law the size, weight and measure of future issues.  It is not worth while to negotiate about that which we can do without negotiation, and we do not wish to limit ourselves by treaty restrictions.

In England, many persons of influence and different chambers of commerce are earnestly in favor of the proposed change in their coinage.  The change is so slight with them that an enlightened self-interest will soon induce them to make it; especially if we make the greater change in our coinage.  We will have some difficulty in adjusting existing contracts with the new dollar; but as contracts are now based upon the fluctuating value of paper money, even the reduced dollar in coin will be of more purchasable value than our currency.

We can easily adjust the reduction with the public creditors in the payment or conversion of their securities, while private creditors might be authorized to recover upon the old standard.  All these are matters of detail to which I hope the commission will direct their attention.

And now, my dear Sir, allow me to say in conclusion that I heartily sympathize with you and others in your efforts to secure the adoption of the metrical system of weights and measures.

The tendency of the age is to break down all needless restrictions upon social and commercial intercourse.  Nations are now as much akin to each other as provinces were of old.  Prejudices disappear by contact.  People of different nations learn to respect each other as they find that their differences are the effect of social and local custom not founded upon good reasons.  I trust that the Industrial Commission will enable the world to compute the value of all productions by the same standard, to measure by the same yard or meter, and weigh by the same scales.

Such a result would be of greater value than the usual employments of diplomatists and statesmen.»

This letter was received by the committee with lively interest, and with the approbation of the Imperial Commission was ordered to be published in French and English.

 

MR.  KENNEDY’S  PROPOSITIONS  ADOPTED  BY  THE  COMMITTEE

 

Previously to the 23rd of March the international committee had taken no steps to discuss the subject of uniform weights, measures and coins, their attention up to that time having been mainly given to the erection and arrangement of the pavilion in the interior garden of the Exposition for the actual exhibition and comparison of the weights, measures and coins of the respective nations represented in this universal concourse.

The subject of a uniform coin did not actually come into discussion, either in the international committee or the sub-commission on coins, until early in the month of May.

On the 8th of June Hon. John P. Kennedy, who had been added to the committee, submitted seven resolutions, which, with the remarks introducing them, were subsequently adopted by the committee in substance, and almost literally, and were made the basis of its report.  These resolutions, as adopted by the committee, translated, are as follows [2] :

The committee, considering that the adoption of a uniform system of coins presents advantages of convenience and economy in the regulation of international exchanges so evident, that it commends itself to every enlightened government; considering, furthermore, that such a measure cannot be realized without the sacrifice by many peoples of their old and customary instruments of trade, and that their interest requires this change should be gradual and continuous, and therefore that the first steps of the transformation should be as simple as possible and disembarrassed of all incidental complication, therefore submits the following propositions :

1st.  The first condition to be fulfilled is the adoption of an identical unity in the issue of their gold coins by the different governments interested in the question.

2nd.  It is desirable that such coins should everywhere be struck at the standard of nine-tenths.

3rd.  It is desirable that every government should introduce among its gold coins at least one piece of the same value as a piece in use among other interested governments, so that there may be a point of common contact in all the systems, and therefore each nation should endeavor gradually to assimilate its monetary system with that which may be chosen as a uniform basis.

4th.  The series of gold coins now used in France having been adopted by a large portion of the people in Europe, is recommended as a basis of the uniform system desired.

5th.  Considering that the most important of the monetary units, by a fortunate and accidental circumstance, can be adapted to the French gold piece of five francs, by slight changes, that piece would be most suitable as a basis for a monetary system; and coins struck upon that basis would become the multiples of that unity as soon as the convenience of interested nations would permit.

6th.  It is desirable that the different governments determine that the coins struck by each nation, in conformity with the uniform system proposed and agreed upon, should pass as legal tenders in all those countries.

7th.  It is very desirable that the system of two different monetary standards should be abolished wherever it still exists.

8th.  It is very desirable that the system of decimal numeration should be universally adopted, and that the coins of all nations should be of the same standard and form.

9th.  It is desirable that governments should agree to adopt common measures of control, so as to secure the integrity of coins in their issue and in their circulation.

The international committee on uniform weights and measures and  coins agreed with the preliminary study of the question, took into consideration not only what is theoretically and abstractly possible, but what is commercially and financially practicable.  The subsequent duty of fixing a common coin as the monetary unit required an international conference, composed of representatives duly accredited from the various nations, and vested with diplomatic powers.

 

INTERNATIONAL  MONETARY  CONFERENCE

 

The delegates to the monetary convention had expressed in the name of their governments a desire to see the Union, as yet restricted to four countries, become the germ of a union more extended, and of the establishment of a general monetary circulation among all civilized states.

A copy of the text of the monetary convention was forwarded by the French government to the government of the United States with an invitation to participate in an international monetary conference to be held in Paris in June, 1867, during the progress of the Universal Exhibition.  The object of this conference was declared to be to call out an interchange of views and discussion of principles; to seek for the basis of ulterior negotiations.

In accordance with this invitation the Hon. Samuel B. Ruggles, who was then in Paris as United States commissioner to the Universal Exposition, was specially authorized to represent the government of the United States in the conference.  The proceedings of this conference, and of the preliminary international committee on uniformity of coinage, organized by the imperial commission of the Universal Exposition, were fully reported from time to time by Mr. Ruggles to the State Department, and were followed by a very elaborate and interesting report upon the whole subject.  This report, in addition to a full discussion of monetary unification, contains valuable statistics and information upon the amount of gold and silver in circulation; upon the coinage of the principal nations, and upon the weights and fineness of gold and silver coins and the relative value of gold and silver.  Extended extracts from the reports have, therefore, been made.

On the 17th of June, 1867, the invited nations, 19 in number, responded by sending 32 duly accredited delegates, and the International Monetary Conference met for the first time at the hotel of the Department of Foreign Affairs, under the presidency of his excellency Marquis de Moustier, the minister for foreign affairs.  There were eight successive sessions, terminating on the 6th of July, 1867, at which the whole subject was discussed at length, and full reports and arguments were presented [3].

In opening the labors of the conference, the president said :

The approximations which the late commercial reforms have brought between the economic interests of nations ought to result in causing to be appreciated more earnestly than in past time the advantages which would be derived from the unification of coinages.  To substitute instead of the variety of monetary types actually in use, metallic coins struck in accordance with uniform regulations, and placed beyond any variations of exchange, would, in effect, be to remove one of the most serious obstacles to the development of international relations.  Thus, when in 1865 the delegates of France, Belgium, Italy and Switzerland had succeeded in forming between those countries a real monetary union, the thought of a more extended association naturally presented itself to their intelligence; thence came the right of accession opened to other countries by a special clause in the convention of December 23, 1865; thence the wish put forth by the commissioners, that studies should be undertaken, in concert, among all civilized states on the question of uniformity of coinage.

No period could be more favorable to the realization of this wish than that of the Universal Exposition; the government of the Emperor hastened to avail of it, and the acceptance which various governments have pleased to extend to these overtures has shown that the importance of the problem to be solved was universally recognized.

The dispositions thus manifested from the outset are so much the more precious, as it was impossible to dissemble the difficulties of the task which the members of the conference have to accomplish.  Those difficulties are of diverse nature, and to remove them it is important, beyond all, that each state, in view of the great interest it seeks to satisfy, should seek, without exclusive opinions, the best solution.

The French government is, moreover, pleased, gentlemen, to recognize in the choice of yourselves, on the part of your government, a fresh pledge of the solicitude which, abroad as well as in France, is entertained upon the question submitted to the conference.  A study of such delicacy and so complex could not be confided to an assemblage which could present a more complete combination of knowledge required either in the conduct of great affairs, in the management of important financial institutions, or in technical operations.

Reports and written arguments were presented during the sessions by M. de Parieu, Baron de Hock, and Mr. Samuel B. Ruggles.  Extracts from these reports are embodied in these pages.

 

PLAN  OF  MONETARY  UNIFICATION  AGREED  TO  BY  THE  CONFERENCE

 

The following are the general features of the plan of monetary unification agreed to by the conference :

1.  A single standard, exclusively of gold.

2.  Coins of equal weight and diameter.

3.  Of equal quality (or titre), nine-tenths fine.

4.  The weight of the present five-franc gold piece, 1,612.90 milligrams, to be the unit, with its multiples.  The weight of the present gold dollar of the United States is 1,671.81 milligrams.  The value of the excess over the five-franc gold piece, 58.91 milligrams, slightly exceeds 3 ½ cents.  To encourage the reduction of the United States half-eagle and of the British sovereign to the value and weight of 25 francs, the conference recommended the issue of a new coin of that weight and value by France and the other gold-coining nations.  The reduction in value of the half-eagle would slightly exceed 17 ½ cents; in the sovereign, 4 cents.

5.  The coins of each nation to continue to bear the names and emblems preferred by each, but to be legal tenders, public and private, in all.

The conference further requested the government of France to invite the different nations to answer, by the 15th of February, 1868, whether they would unite in placing their respective monetary systems on the basis indicated by the conference, as above stated; and after receiving their answers, to convene, if necessary, a new or further conference.

A further resolution of the conference recommends that the measures of unification which the nations may mutually adopt be completed, as far as practicable, by diplomatic conventions.

By these proceedings and official reports, the whole question of monetary unification was distinctly presented for consideration and decision to the governmental authorities of the United States, executive and legislative.

By a communication from the Department of State of the 30th May, empowering Mr. Ruggles to represent the United States in the conference, he was directed not only to report its proceedings and conclusions, but to add such observations as might seem to be useful.  He therefore submitted an additional report, mainly explanatory of the grounds taken in the conference in behalf of the United States, but embodying statements which may possibly facilitate to some extent the examination of the subject by the government and others.

 

EXTRACTS  FROM  THE  REPORTS  OF  MR.  RUGGLES

 

All the independent sovereignties of Europe, with the possible exception of some small portions of northern Germany, were represented in the conference by delegates duly accredited.  The delegates from Prussia appear on the roll as representing that power only, but from the fact of their repeatedly abstaining from voting on certain questions in the conference without the consent of the Confederated States, they were practically considered as representing all the states and communities of northern Germany now confederated with Prussia.  There were no separate delegates from the kingdom of Saxony, or either of the Hanseatic cities of Hamburg, Bremen, Lubeck or Frankfort.  There were separate delegates from Baden, Wurtemberg and Bavaria.  None of the nations west of the Atlantic were represented, except the United States of America.

The nations appearing by delegates in the conference were entered alphabetically on the roll, in which order they voted.  A copy of the roll is hereto subjoined.  Including Sweden and Norway as one, they were nineteen in number, being : Austria, Baden, Bavaria, Belgium, Denmark, Espagne (Spain), États-Unis (United States of America), France, Great Britain, Greece, Italy, Pays-Bas (Holland), Portugal, Prussia, Russia, Sweden and Norway, Switzerland, Turkey, Wurtemberg.

Their aggregate population, European and American, a little exceeds 320,000,000.  The population of the dependencies of these nations in Asia is estimated at 190,000,000.  There were no separate delegates from any portion of the West or the East Indies, not even from Australia which had been separately and conspicuously represented in the International Statistical Congress, at London, in 1860, and which still plays a part so important in furnishing gold to British India and other oriental countries.

It is, indeed, specially noticeable in the reported discussions of the conference how little account was made of that populous quarter of the globe in estimating the world-wide advantages of a common money; and this omission has become more worthy of remark from the circumstance that information reached Paris, soon after the adjournment of the conference, that measures were in actual progress, at Peking, for striking, for the use of the immense population of China, coins of the weight and value respectively of 20 francs, of 5 francs and of 1 franc, bearing on their face the head of the Chinese Emperor, thereby assimilating the money of the Celestial Empire to that of Europe.

The interesting fact is stated in a historical report (recently published by a member of the British embassy) of the money of Japan, that it possesses a coinage of gold and silver in some essential features resembling that of France, particularly in a double standard, under which the ratio of silver to gold is fixed at 13.1 to 1.

It appears that, in ignorance of the actual relative values of the two metals in our Atlantic world (of 15 or 16 to 1), these Asiatics had fixed the ratio at only 4 to 1, which is a great exaggeration of silver; they were furthermore induced to continue by a treaty in 1853, under which they were rapidly despoiled of their gold in large quantities by some of the traders from Christian nations.  The partial correction of the mistake in 1860, by raising the ratio to 13.1 to 1 (if any ratio fixed by governmental regulation be admissible at all), shows an advance of intelligence in this distant region, inspiring the hope that, in due time, at least a portion of eastern Asia may be brought within a world-embracing and world-protecting belt of monetary unification.

The British colonies in continental North America, recently consolidated by imperial authority in the Dominion of Canada, were represented in the conference only as a part of the British empire by the delegates from the United Kingdom.  That young but rising power, though remaining in form a colonial dependency, now possesses, under the 91st section of the act of the imperial Parliament of the 29th of March, 1867, the sovereign and exclusive legislative authority to regulate its own currency and coinage already much assimilated to the decimal system of the United States.  The deep interest in the success of the pending measure of unification manifested by Mr. Bouchette and other intelligent Canadian officials, who were at Paris to superintend the exhibition of the products of their country, affords ground for believing that the general conclusions, and the basis now proposed by the conference, ill-command the ready assent and co-operation of that active and interesting portion of the North American continent.

Of the Mohammedan nations, the Ottoman empire was represented in the conference by his Excellency Djemil Pacha, its ambassador extraordinary and plenipotentiary to the court of France.  With him was associated the Colonel Essad Bey, the military director of the Ottoman academy in Paris, who had, moreover, officially represented his government in the preliminary international committee on uniform weights, measures and coins in which body he had manifested a marked desire that the proposed monetary reform might include the coinage of Turkey.  At a later stage of the conference his Excellency Mihran Bey Duz, member of the Grand Council of Justice and director of the mint at Constantinople, whose early arrival had been unexpectedly retarded, appeared and took his seat as a member.

The ambassador to France from Persia (sometimes called the «France of Asia»), a personage of singular intelligence, had also manifested a lively interest in the proposed monetary reform, but had been obliged to leave Paris on the eve of the first meeting of the conference.  It is worthy of notice that the standard of the gold coin of Persia is .900 fine, being the same as that of the United States, while that of Turkey is still higher, being .915 fine.  The principal gold piece of Persia is worth 22.27 francs; that of Turkey 22.48 francs.

The clear and comprehensive vision of the far-seeing advocates in Europe of monetary unification has fully discerned the grandeur of uniting the two hemispheres in one common civilization.  M. Esquirou de Parieu, vice-president of the Conseil d’État of France, who presided with eminent wisdom and dignity over the conference at several of its most important meetings, declares, in one of his learned and luminous monetary essays, now lighting the path of the Older World, that a monetary union of western Europe and the transatlantic nations would possess an incontestable importance.  Above all, he adds, it would produce a grand moral effect.  As if foreseeing with the eye of prophecy a continental if not a world-wide solidarity for the dollar, founded historically on the past, he adds, the Americans can never regard their dollar as a merely national coin, after having borrowed it from their neighboring Spanish colonists.

As a matter of historic truth, Spain itself had borrowed the dollar from Austria, during their union under the common empire of Charles the Fifth.  The Joachim’s thaler, first coined in the silver mines of the Bohemian valley of St. Joachim (or James), is the great ancestor, in fact, of the American dollar.  In purity of origin and length of lineage it must surely suffice to satisfy the most aristocratic tastes of modern Europe.

Nor is there any such diversity in the coinages of the Central and South American nations, or differences from those of Europe or the United States, as to render the task of unification seriously difficult on their part.  The gold doubloon (sometimes denominated in the monetary tables the quadruple pistole) of New Granada, of Bolivia and of Chili, are each .870 parts fine; that of Mexico .870.5; that of Peru .868.  The French Annuaire of Ecuador at .875.  Their money values, in the existing dollars of the United States, are reported by the director of the mint of the United States as being, for New Granada, $ 15.61; for Chili and Bolivia, $ 15.59; for Peru, $ 15.58; for Mexico, $ 15.52.

The full and perfect measure of Hispano-American unification would be attained by increasing the weight of all these doubloons to 100 francs, which would render them at once equivalent to the double-eagle (or $ 20) of the United States, or to four British sovereigns (when reduced as now proposed), and current, without recoinage, brokerage, or other impediment, throughout the world.  This enlarged doubloon divided into halves and quarters would supply for the people of Spanish America one convenient coin, equivalent to 50 francs, or an eagle of the United States, or two British sovereigns; and another coin, equivalent to 25 francs, or a United States half-eagle, or one British sovereign.  Mexico has already a gold coin of 20 pesos, finely executed; and Peru has a gold piece of 20 soles; each of them being nearly equivalent to the double-eagle.

The 20 milreis of Brazil, now worth $ 10.85, would probably be conformed to the plan proposed for Portugal, the parent country, by the Count d’Avila, her experienced and able delegate in the conference, by the issue of a gold coin equivalent to 25 francs, with such subdivisions and multiples as convenience might require.

 

ARGUMENT  FAVORING  A  TWENTY-FIVE-FRANC  COIN

 

At the sixth sitting of the conference, on the 28th of June, Mr. Ruggles presented a written argument in favor of the issue of a 25-franc gold piece by France.  He says :

If it be objected that such a piece, not containing an even number of grams, would impair the symmetry of the metric system, it need only be stated that France has not, and never has had, a gold coin containing an even number of grams.  The relation in value between silver and gold having been fixed by law at 15 ½ to 1, it became impossible to establish a decimal relation between the two metals; or, in other words, between the number of francs which represent only silver, and the number of grams in the coins of gold.  This legal relation of 15 ½ to 1 is itself fractional and must be doubled and carried to 31 to make even numbers.

The franc is simply a monetary word, which expresses five grams of silver nine-tenths fine.  It is the French monetary unity.  Gold having value of 15 ½ times greater than silver, it requires 155 francs each of 5 grams of silver (say 775 grams) to buy 50 grams of gold, or 155 grams of silver to buy 10 grams of gold.  As 31 is the smallest even number of this relation, 31 is the smallest number of francs which can be represented by a piece of gold having an even weight of grams.  No enlightened government would consent to confine its gold coinage to pieces of 31 francs and its multiples.  We therefore perceive that France has made complete abstraction of metrical weight in its gold coins, not one of which weighs an even number of grams.

The gold piece of 5 francs weighs
10
20
50
100

1.6129
3.2258
6.4516
16.1290
32.2581

grams

The proposed 25-francs piece would weigh 8.0645 grams, and, in fact, would more nearly approach an even metrical weight than any French gold piece now existing.

This relation of 15 ½ to 1 is practically prescribed by the French law, which enacts that 155 (5 × 31) pieces of 20 francs, being 3,100 francs, shall weight 1,000 grams, or one kilogram; but the same ratio would exist between 124 (4 × 31) gold pieces of 25 francs, which would also contain 3,100 francs, and would also weigh one kilogram.

The United States have never attempted to fix a decimal weight for their gold coins, although they were among the first to adopt a decimal monetary system.  The present gold dollar weighs 25.8 grains troy, which is about equal to 1,672 milligrams, and exceeds the metrical weight of the French 5-franc piece about 58.9 milligrams.

A gram of gold nine-tenths fine is equivalent in round numbers to 30 pence English, or 60 cents of the United States.  Consequently, 58.9 milligrams taken from the dollar would reduce it about 3.5 cents, or 29.5 milligrams taken from the half eagle of five dollars would reduce it 1.75 cents, being about 3.4 per cent. 

It is needless to expatiate on the comparative merits of a decimal, a duodecimal or a binary system, for the reason that the decimal system has become a fixed fact in a large portion of the civilized world, rendering any change practically impossible.  In like manner the unification of the coinage of the world has become a question of a nature more practical than scientific in character, chiefly falling within the domain of commerce and finance.

To prevent any misapprehension on either side of the Atlantic, it should be distinctly understood that the conference did not propose, nor was any proposition or suggestion made in that body, or elsewhere, to abandon the use in any way of the word dollar or sovereign or thaler, or florin, or ruble, for any other local denomination of money, or in any way to substitute the word franc for any or either of them.  By the proposed unification, all those terms will be practically rendered synonymous or mutually convertible, but nation will use the names with the local emblems it may prefer.

That such will be the case is now fully evident from the fact that since the adjournment of the conference in July last, a preliminary treaty has been signed by accredited representatives from France and Austria, providing for the issue of a gold coin of the weight and value of 2 ½ francs, for the international use and convenience of those two important powers, and by which the 10 florins of Austria are made precisely equal in weight and value to the 25 francs of France, the coin of each nation to be stamped with the head of its respective emperor.

A specimen or medal in gold, showing the weight and diameter of the proposed coin, with its reverse inscribed «Or. Essai monétaire» encircling 25 francs, 10 florins, 1867, has been already struck by order of the government of France, a duplicate of which was recently delivered at Paris to the Emperor of Austria.

A similar specimen or medal in gold has also been struck, inscribed on its reverse 5 dollars, 25 francs, 1867, three duplicates of which, with the proper official letters from M. Dumas, senator of France and President of the Commission on coins and medals, were entrusted to Mr. Ruggles for delivery to the President, to the Secretary of State, and to the Secretary of the Treasury of the United States.  A fourth specimen was presented to the distinguished delegate.

The diameter of this proposed international coin is 24 millimeters, exceeding a little that of the present half-eagle of the United States, amid that of the sovereign of Great Britain, while the medallion of the Emperor, in bold relief, on the face of the coin to be issued in France, distinguishes it at once from the ordinary Napoleon of 20 francs, which is only 21 millimeters, in diameter.

 

PROFESSOR  LEVI’S  SPEECH  ON  THE  PROPOSITION  OF  TAKING  THE  FIVE  FRANC  AS  A  BASIS  OF  INTERNATIONAL  COINAGE [4]

 

With great deference to the proposal of the committee, and much as I agree in the principle therein embodied, I must be allowed to express that it seems to me quite inexpedient and impracticable to take the piece of five francs in gold as the unit of the monetary system for all countries, because it is too small as a gold coin, very easily lost, too costly to produce, much more subject to wear and tear and diminution in value, and too small for large transactions of commerce and finance.  In England the introduction of this piece as a unit would be impossible.  But it may be taken as a sub-multiple.

It has been suggested that the five-franc piece in gold is very nearly the fifth of the pound sterling, and that it might be made identical.  But the value of the pound is 25.22 and not 25 francs.  To reduce the value of the pound to 25 francs, we should have to reduce its weight of gold from 7.322 grams to 7.258 grams; whilst, according to the proposition which we have just passed, to make the gold coinage nine-tenths fine, the pond would become heavier in weight by .0182.  We have now some 80,000,000 to 100,000,000 sovereigns in circulation.  From 1856 to 1866 only, there were issued 49,200,000 sovereigns.  If a new pound were coined of 25 francs exactly, the same would have to circulate together with the old pound of 25.22, but the difference between the two would be so slight that we should constantly mistake the one for the other.  It was said that government might declare the value of the pound now in circulation at 25 francs, because in effect it is somewhat lighter in weight, and if necessary a seigniorage might be charged.  But allowing all this, such difference would not reach 22 centimes on each pound; and if the government should declare the pound 25 francs, which is worth more, the bullion merchants would soon buy it for exportation.  And how would old debts and old transactions be affected by such a change ?  Two pence per pound would have to be given in each case where contracts are pending on the old coinage; and the labor of altering all the books and accounts for that difference would be still more inconvenient, as it is small and in a manner indefinite.

If, therefore, I cannot see my way to approve of the suggestion of reducing the pound to 25 francs, it would be useless for England, and from an international point of view, that France should coin a piece of that sum, which otherwise would not be required in France.  Nor does it seem that the maintenance of the pound is likely to lead to the decimalization of the British coinage.  The only scheme proposed for that based on the pound sterling is that which contemplates the division of the pound into 1,000 mills instead of 960 farthings, but serious obstacles attend the carrying out of the scheme.  The first is the necessity of altering seriously all the copper coinage, including the penny, which is an old unit in the kingdom, and some of the silver coins also.  Change the penny, and what shall be its equivalent for penny postage, penny toll, and all the taxes and all the wages regulated by that coin ?  Four mills would be too little; five mills too much.  Any change in the name of the copper coinage is necessarily attended with great difficulty.  A still greater defect of the pound and mill scheme is that many of the coins which this new system would introduce have no distinct equivalent in the coins already in existence.  They would stand alone and unchangeable, except with a sacrifice of fractions in every transaction.  Another defect is the undeniable fact that with three decals counting always by thousands, no great facility of calculation, no great economy of time, no great conciseness of expression, would in fact be attained.  The number of figures required in the present system to express all the sums from one penny to 10 shillings is 250; in the pound and mill scheme it is 335.  It would be easier, moreover, especially as it is more familiar to us in England, to conceive the idea embraced in 17 shillings 11 pence than in 895 mills.

Possibly the liability to errors also is even less in the present system than in the other.  The only recommendation of that scheme is the maintenance of the pound.  But though bankers and merchants confine their attention to that unit, dealing as they do with large transactions, the government could not overlook the penny, and could not ignore the interests of the millions whose daily transactions might be seriously deranged by such a change.  A better mode of arriving at a decimal and international system of coinage, it sees to me, is that England should take the 10-franc piece as a unit, and divide it into 100 pence of the current coin; especially since, in reality, the penny is intrinsically, if not nominally, equal in value to the 10-centime piece [5].  What would be the difficulty of her issuing such a coin which as suggested might be called a ducat, and a ten penny piece as the tenth part of it ?  Being altogether a new coin it will be easy to issue it of the new alloy, and nearly all the existing coins would continue untouched.  It would certainly be better that the shilling and the half sovereign should be withdrawn, because they would be too like the 10 pence and the 100 pence; but otherwise no change would be caused in any of the coins in use.  Should the 10-franc piece be found too small as a unit, we may easily have a larger unit in a piece of 100 francs, or of the value of nearly four pounds sterling.  For France, the unit of 10 francs in gold would be very convenient, as it would perfect her decimal system, and would improve her money of accounts by taking a unit ten times larger than the franc.  The United States would have to double their dollar, but the value of everything is now greater than it was some time ago.  We find in England that the halfpenny and the farthing are but little used, since we have to pay a penny now for what we paid a halfpenny before, and the experience of the United States will be the same.  What we should aim at, is the adoption of one and the same unit by all nations; a unit with subsidiary coins alike everywhere.  We must remember that all questions of prices, wages, fares, &c., are generally by such subsidiary coins as the franc, the penny, &c.  Unless we want uniformity in these we effect no real reform.  Now, by adopting the 10 francs we have all this absolutely, and therefore I commend it to the earnest attention of the conference.  I have much pleasure in announcing that the Chambers of Commerce, the International Decimal Association, and the Metric Committee of the British Association, have all decided that great advantage would result by the adhesion of Great Britain to the principles of the monetary convention concluded December 23, 1865, between France, Italy, Switzerland, and Belgium, by article 12, of which convention the right of accession is, under certain conditions, reserved for other states.  I apprehend that the British government could not authorize her representatives at the Monetary Conference held at the Ministry of Foreign Affairs to make any engagement on this question, because it has not yet been discussed by the nation; but I do not doubt that the resolutions of this and the other conference will have a great influence on public opinion in England, and that, animated by the most sincere friendship for France and for the great sovereign who so wisely presides over her destinies, and most desirous to be united by material, moral, and intellectual bonds with all nations, England will applaud and accept with pleasure the propositions which we may adopt with a view to introducing uniformity in the coinage of all countries.

 

REPORT  BY  THE  DELEGATES  FROM  GREAT  BRITAIN [6]

 

May it please your lordships, we have the honor to lay before you the minutes of the proceedings of the recent International Monetary Conference which we were instructed to attend on behalf of her Majesty’s government.

The invitation to the conference emanated, as your lordships are aware, from the French government, and its object was stated to be the discussion of the means by which a complete or partial uniformity might be established between the various monetary systems at present in existence in the countries of Europe and in the United States of America.

The convention of December 23, 1865, concluded between the governments of France, Belgium, Italy and Switzerland, which established an identity in the weight and fineness of the coins of those countries, as well as in the conditions under which they might be manufactured and pass current, was especially indicated as a basis for the deliberations of the conference; the right of joining the convention having by the 13th clause been reserved to all other countries which might be prepared to adopt its provisions.

The necessity for an understanding between the governments of those four states originated in the alteration of the relative value of the precious metals occasioned in recent years by the influx of gold from the newly discovered fields of California and Australia, and the disturbing effect thereby created upon the currencies of those countries which had adopted a double standard.

The law under which the system of the double standard operates in France assumes the hypothesis of an arbitrary relation of value between silver and gold in the proportion of 15 ½ to 1 and, although no doubt this proportion was exact at the period when the law was passed (1803), it has been considerably modified by the cause above mentioned, which, during the last fifteen years, has thrown upon the market of the world gold to the extent of £ 340,000,000 in excess of the provision requisite for sustaining the proportion contemplated by the French law.

In France, and in Belgium, Italy and Switzerland, where the French system has been adopted, and where, consequently, each of the precious metals is a legal tender, it naturally followed that gold gradually displaced silver as an instrument of exchange, and that the latter almost entirely disappeared from circulation.

The inconvenience occasioned by this state of things was principally felt in the scarcity which it created in the smaller denominations of currency, for which gold is inapplicable, and which are indispensable in the ordinary transactions of life, and some attempts at a remedy were made in Switzerland and Italy, and subsequently in France, by increasing the proportion of alloy in some of the smaller silver pieces, thereby reducing them to the position of subsidiary or token coins.  The legislation in the three countries was, however, not unanimous, and differed in some essential particulars, while in Belgium no alteration of any kind was attempted.

Under these circumstances, overtures were addressed by the government of the country last mentioned to the French government, suggesting a joint examination by France, Belgium, Italy and Switzerland, of the difficulties which had arisen, and of the remedies to be applied.

The proposal was accepted, and has resulted in the convention of December 23, 1865.

The convention maintains the double standard, fixing the proportion of pure metal in the case of the gold coins of 20, 10, and 5 francs, and of the silver coin of 5 francs at nine-tenths with one-tenth of alloy, as heretofore, but reducing the proportion of fineness in the silver coins below 5 francs from .900 to .835, these subsidiary coins being only made a legal tender to an amount not exceeding 50 francs (the same limit as that fixed in the case of the English silver token coinage).

Uniformity of coinage is established by the convention among the countries that are parties to it, but the obligation of accepting reciprocally the coins struck by the different governments is confined to the public treasuries.

Although the causes which led to this convention were of a special nature, nor are we aware that the promoters of it contemplated any ulterior extension of its principles, the union of so considerable a section of the population of Europe seems at once to have given rise to the expectation that it might be made the means of ultimately realizing the idea, which has been a subject of speculation at various times, of a universal monetary confederation.

That project has now been officially adopted by the French government, and it was for the consideration of it in common that the recent conference was convoked.

Before coming to a decision upon the advisability of accepting the invitation, your lordships had carefully to consider the grounds upon which the participation of her Majesty’s government in the proposed inquiry could be justified, and the position which should be assumed by their representatives in the event of their deciding that the proposal should be accepted.

Upon the one hand, the inconvenience experienced by some of the countries of the continent owing to the abstraction of silver from circulation, to which we have alluded, has not been felt in England, whose currency is based upon a gold standard, and where, ever since 1816, silver has occupied a subordinate position, the coins of that metal being of the nature of tokens, and only legal tender to the extent of 40 shillings.

Moreover, the currency adopted by the convention of December, 1865, and avowedly recommended as the model for imitation, being based upon the decimal system, offered so wide a divergence from that in operation in this country, which, whatever differences of opinion may exist as to its theoretical perfection, adapts itself well to the requirements of the nation, that a transition from one system to the other, with its many attendant difficulties and disadvantages, or even any sensible modification of our system in the direction of that contained in the provisions of the convention of December, 1865, could only be contemplated on the strongest grounds of expediency.

Upon the other hand, the advantages to be derived from international uniformity of currency, admitting such a consummation to be feasible, were too obvious to be overlooked, and of too vast an interest not to warrant many sacrifices for their attainment; and it was well known that the subject had already attracted a considerable share of public interest in this country, while the interest evinced in the project by the French government, and the anxiety expressed by them for the co-operation of this country, would naturally carry due weight in influencing the determination of her Majesty’s government.

Upon a review of these considerations your lordships decided that it would be proper that her Majesty’s government should be represented at the conference, but that their delegates should be instructed to abstain from any act or opinion that might appear to pledge her Majesty’s government to the adoption of any particular course of action, and that their mission should be confined to a general consideration of the questions that might be brought forward.

The conference was attended by representatives from twenty different states [7], and with the exception of the Austrian commissioner, Baron von Hock, who immediately after the termination of the conference negotiated on the part of his government, and signed a preliminary treaty of adhesion to the convention of December, 1865, none of our colleagues appeared to have received more ample authority than that which we possessed.

Under these circumstances we felt little hesitation, notwithstanding the reserve imposed upon us by your lordships, in recording our votes upon most of the resolutions submitted to the consideration of the assembly.

We proceed at once to state the several propositions which, with more or less agreement, but in all cases after minute discussion, were affirmed by the conference, and which your lordships will doubtless consider worthy of attention, as embodying the authoritative opinion of the representatives of so many countries, and such various systems of currency, as to the most desirable form of monetary union, and as to the most practical means of accomplishing it.

1.  The first question which engaged the attention of the conference was whether it were desirable to seek among existing systems one which could be adopted, in its integrity or with modifications, for the proposed international coinage, or whether an entirely new system should be devised.

Whatever the theoretical advantages or perfections which the latter plan might appear to afford – by allowing, for instance, of the creation of a system based upon a gold decimal unit – it was obvious that the acceptance of such a suggestion was inadmissible in practice, owing to the fundamental changes that it would necessitate.  The conference, therefore, had no difficulty in affirming the proposition that monetary unification may be most readily attained by the adjustment of existing systems, taking into consideration the scientific advantages of certain types and the number of the populations by which they have already been adopted, nor in indicating the system of the convention of December, 1865, as that which might be examined with the greatest advantage.  It was understood, however, that this resolution involved no opinion upon the subject of the standard, which was reserved for subsequent and separate discussion, and that it was only intended to imply, with regard to the convention itself, that its relative completeness, its subordination to the metrical system and the large number of the population (72,000,000) that had already adopted it, recommended it generally as a nucleus for the further development of the principles of an international coinage.

It should be mentioned that in the early part of the present year the Papal government joined the convention of 1865, and that in the month of April last, a law was passed in Greece by which the currency of that country has been remodeled upon the provisions of the convention.

2.  An inquiry for the purpose of determining the proper standard to be adopted in any general system of coinage might have been expected to elicit much diversity of opinion in an assembly where the three systems of a gold standard, a silver standard and a double standard were represented, and the unanimous declaration of the conference in favor of a single and a gold standard may be considered as one of the most important features in the deliberations of the conference.

The importance of the decision will be better appreciated when it is borne in mind that only two of the states represented – viz., Great Britain and Portugal – possess exclusively a gold standard, and that the question of the relative advantages of a single or double standard – which in France has been much contested – was, as lately as May last, examined in that country by a government commission, composed of eminent economists, who pronounced by a majority of voices in favor of maintaining the double standard.  We annex a copy of their report.

The difficulties to which the adoption of a gold standard would be likely to give rise in the countries possessing a silver standard during the period of transition, formed naturally the next subject for consideration, and the conference expressed the opinion that the silver standard might be maintained as a transitory arrangement until such time as gold should become the principal instrument of circulation.

3.  With the view of facilitating and accelerating the transition from a silver to a gold currency, it was thought advisable to add a recommendation that care should be taken to fix the relative value of the two metals at such a proportion as would permit the free introduction and maintenance of gold [8].

4.  It was resolved that a common unit should be adopted for the gold coinage possessing identity of fineness.

The standard of fineness was recommended to be 0.900, i.e., 9 parts fine to 1 alloy, and, although differing from the proportion in use in our mint, which allows eleven-twelfths fine and one-twelfth alloy, we saw no reason to prevent us from joining in the recommendation of the other commissioners, considering that the proportion of nine-tenths is not only that which was adopted by the convention of December, 1865, but is the almost universal rule in the mints of Europe and in the United States, and has even been recently introduced in the coinage of silver dollars at the Hong Kong branch of her Majesty’s mint.

The chief recommendation of the proportion of eleven-twelfths consists in the superior hardness of the alloy; but the advantage which it affords in that respect over the coins of nine-tenths fineness is of no considerable importance.  At the same time, to guard against any misapprehension, we thought it right to qualify our vote by the explanation that the adoption of the standard of nine-tenths could only be introduced in England in the event of a recoinage.

5.  The renunciation of the principle of a currency based on a standard of silver seemed to imply and necessitate the adoption of a common unit of higher value than at present prevailing in countries not possessing a gold standard, and the piece of 5 francs was that which, in spite of individual objections, found favor with the majority of the commissioners.

Exception was taken to it by some of the members for the practical reason of its insignificant dimensions, and upon the more theoretical ground that it does not perfectly harmonize with the decimal system.

We shared this opinion, and were prepared to have suggested as preferable a 10-franc piece, which would not only be free from these drawbacks, but would be more likely to be acceptable in England, which is accustomed to the higher unit of the sovereign.

A new British coin having the same quantity of gold as the 10-franc piece, with the same proportion of alloy, would be within that of 8 s. in value.  Such a piece could be legally introduced into circulation as an additional member of the present coinage, provided it was issued as a token coin for 8 s., and made a legal tender to a limited amount only, such as £ 4.  It could have inscribed upon it 10 francs, in addition to its current value of 8 shillings [9].  This coin would become the unit of computation, the new pound, or metrical pound, or it might be made the tenth part of a new metrical pound, if a denomination of higher value were demanded.  We would thus become possessed of an international coin.

The scheme of coinage which it would be the means of suggesting is one resting upon the penny reduced four per cent. in value, and would include a silver piece of 10 such pence, in addition to the gold piece of 100 pence.  The ultimate adjustment of the European and American coinages contemplated would present :

In the French coinage : 1 franc divided into 100 centimes.

In the American : 5 francs ($ 1) divided into 100 cents.

In the British : 10 francs (gold florin, one metrical pound, or one-tenth of a metrical pound) divided into 100 pence; with the addition, if desired, of 100 francs (one metrical pound, £ 4 sterling) divided into 1,000 pence.

Such a coin as the gold 8 s. piece could be produced without expense, owing to the seigniorage of 3 d. which it would yield as a token, and the piece could be made sufficiently distinctive by giving it a plain edge.  For the issue of such a piece there is the precedent of the silver florin, which was devised to represent the pound and mill system, and to bring that system under the notice of the public.  The 8 s. piece proposed would represent the metrical system founded upon the penny, which has always been a rival with the former in general estimation, and which seems entitled to equal consideration at the hands of government.  The issue of such a piece, while it brought the metrical system of coinage into notice, would not be conclusive as to the ultimate adoption of that system, but would leave it possible to advance in such a course, or to recede from it at any time without embarrassment.

We may mention that M. de Jacobi, the representative of Russia, threw out the suggestion that the objections to the 5-franc piece on account of its small size might be obviated by the introduction of platinum as the metal of which it should be composed, observing that a supply in sufficient quantities could be obtained from the Russian and South American mines, and that the disadvantages formerly presented by the difficulties of working it had been, in a great measure, removed by recent improvements.

By a subsequent vote, in which we did not feel called upon to join, an innovation was recommended in the principle of the convention of 1865, which limited the reciprocal obligation of accepting the coins of the Union to the public treasuries, by a proposal that the common coin of 5 francs should be made a legal tender throughout the countries which might unite in a monetary convention.

6.  The next proposition, viz., whether the proposed system should include a coin equivalent to 25 francs, offered considerations of more special interest to the English delegates, inasmuch as it indicates what at present at all events, is believed by many persons to be the only probable method by which an alliance may be effected between the English monetary system and that adopted under the convention of December, 1865, by so large a portion of the continent of Europe, and which will, no doubt, receive a still wider extension.

Indeed, as we had occasion to point out, the 25-franc piece is by no means a necessary ingredient or consequence of the scheme recommended by the conference, and was avowedly proposed and supported chiefly in the hope of securing the adhesion of Great Britain, to which, on account of her large monetary circulation, the activity and extent of her commercial transactions, and the influence which they exercise in every foreign country, a natural importance was attached.

At various stages of the discussions the question of equalizing the pound sterling with 25 francs of French gold was brought forward by different members of the conference, with no undue depreciation of the difficulties which must be encountered in carrying the alteration into effect, but with a generally expressed conviction that these difficulties were in no way insurmountable.

The English sovereign contains 123.274 grains troy, including one twelfth of alloy; that is to say, 113.002 of fine gold, equivalent to a weight in French grams of 7.322.

A gold piece of 25 francs would contain 7.258 grams of pure gold, besides one-tenth of alloy, representing a difference in favor of the English coin of 0.064, or 64 milligrams, and an excess of pure gold in the English over the French coin of .878 per cent., equal to, as nearly as possible, 22 centimes, or, speaking roundly, 2 d.

The process of assimilation would therefore consist in diminishing the value of the pound sterling by 2 d., and substituting for the present sovereign a coin (reduced in fineness to .900) which would exactly correspond in value with the proposed French gold piece.

The mode by which the process might be effected was freely debated, and opinions were expressed that the existing sovereigns might be maintained in circulation by taking advantage of the loss of weight by wear allowed by law, and which permits a divergence of .774 grains or .628 per cent. (1 ½ d. nearly) from the exact weight; but we felt it our duty to declare our opinion that such an expedient would be considered inadmissible in England, and that we were satisfied that so essential a change could only be carried out at the cost of a recoinage of our whole gold currency, variously estimated at from £ 80,000,000 to 120,000,000.

It was allowed that the sovereign might continue to be divided as at present, into 20 shillings; but it is obvious that, unless the sovereign were divided into 25 francs, small progress would be made towards a general unification of coinage.  Now the division of our pound into 25 would be found inconvenient in circulation, and would soon lead in all probability, to the issue of a 20-franc piece to supersede the former.

We do not feel called upon in the present report to enter into any discussion upon this question, which would doubtless form the subject of serious consideration hereafter, should her Majesty’s government determine to institute an inquiry into the possibility of associating this country in the system of international coinage recommended by the Paris conference.

We confine ourselves to reporting the earnestness with which the proposition above mentioned was pressed upon our attention, and with which the hope was expressed that it would be made the subject of mature consideration by her Majesty’s government.

Our attention was directed to a small variation in the weight of the sovereign proposed upon other grounds.  It is well known that all gold brought to the mint is returned in the form of sovereigns without deduction or charge; and there is no doubt that our practice is correct in principle for the metal which, like gold, is adopted as the measure of value.  But it is at the same time undeniable that some additional value is imparted to the metal by the work applied to it in coining, and a small charge to cover, or partially cover, the mint expenses is on that account generally imposed upon coin in the countries of the continent, under the name of brassage.  In France the charge thus borne by the holders of bullion amounts to 6 francs 70 centimes on a kilogram of gold, which is coined into 155 Napoleons, or 3,100 francs, being equivalent to 4.32 centimes on a 20-franc piece.  The system of free mintage has also, since 1853, been abandoned in the United States, where, in addition to the charge for refining, a charge of one-half per cent. (50 cents on $ 100) is now taken upon all gold brought for conversion into coin.  A small mint charge does not appear to be complained of anywhere.  The charge acts usefully for the preservation of the coin, by removing any inducement to melt it down for any ordinary technical purpose, or even to supply bullion to foreign mints.  We have reason to fear, from what we learned from professional members of the monetary conference, that the British gold coinage is liable to suffer heavily in this way.  London is the entrepôt for the precious metals from which other countries draw their supplies.  Now, gold may be procured from London either in the form of bars or sovereigns, at the same price; while to the foreign purchaser, if a mint contractor, sovereigns offer the following advantages : The assay may be safely relied upon, the gold is already alloyed with copper, and, more than all, the suitability of the metal for coining is insured.  Further, sovereigns are taken by number, and the aggregate weight may be as nearly as possible correct.  But that is not true of the weight of individual pieces, which, from the unavoidable imperfection of manufacture, are some heavy and some light within a certain small range, recognized as the tolerance in coining.  There is reason to believe that large masses of new British sovereigns are occasionally treated so as to separate out the heavy pieces, and these are disposed of as bullion; while the lighter pieces, which may still be all of legal weight, are preserved and put into circulation.  This fact will not surprise those persons who are aware of the small margin of profit upon which bullion transactions are often conducted.

A small mint charge on the British sovereign thus appears to be called for, as the necessary means of the preservation of the coin, while the measure is further recommended as an equitable re-payment to the country of the cost of coinage.

Although this question of the introduction of a mint charge into our system of coinage was only incidentally considered by the conference, we have thought it desirable to mention it somewhat prominently, in consequence of the notice which it has occasionally attracted in this country, and the importance which it would doubtless assume as an element of discussion in the consideration of any scheme involving a re-coinage of the gold currency.

We must state that the adoption of the 25-franc piece was warmly supported by Mr. Ruggles, the representative of the United States, who informed the conference that his government attached much importance to the coinage by France of pieces of that denomination.

Mr. Ruggles made the important statement that the United States were prepared to re-coin the whole of their gold, with a view of remodeling their system upon the basis of the convention of December, 1865; and that notwithstanding the serious loss which such a proceeding would entail, involving a diminution of no less than three per cent. in the value of their gold circulation, a far greater proportion than that involved in the proposed conversion of the English sovereign, they looked to reciprocal advantage beyond the coinage of a 25-franc piece, which would exactly correspond with the half-eagle.

7.  Considerable difference of opinion was expressed upon the proposal that a piece of 15 francs should be included in the recommendations of the conference.  The object of the suggestion was to see the creation of a coin nearly identical in value with 7 florins of Holland or South Germany, and 4 thalers of Prussia, as an inducement to those countries to adopt a coin representing denominations of their own currency, but which would be interchangeable with a French 15-franc piece.

In common with several of our colleagues we abstained from voting upon this question, respecting which no final decision was taken.

8.  Having thus enunciated principles for the construction of an international monetary system, the conference added an expression of their opinion that it would be convenient, and in accordance with the idea of union sought to be established, that the governments of such states as might decide and introduce modifications in their system of coinage based upon an adoption of those principles, should as far as possible, make any measures to be taken for that purpose the subject of diplomatic conventions.

9.  At the final meeting of the commissioners, his Imperial Highness Prince Napoleon, the president of the congress, expressed to them the anxiety of the French government for a practical and early realization of the scheme embodied in the recommendations of the conference, and encouraged them with considerable earnestness to communicate to their respective governments the hope which the imperial government entertained that in those countries whose circumstances might render their immediate or complete adhesion to the proposed system impossible, some inquiry might, at all events, be forthwith instituted for the examination of its merits and of its adaptability to their own systems and their own peculiar requirements.

His Imperial Highness accordingly proposed that an early date should be fixed by which the several governments should be invited to come to some decision as to the course which they might consider it advisable to adopt, and that their views should be then communicated to the French government, who would examine, upon a review of the several opinions expressed, whether a further combined consideration of the question would be desirable.

We expressed our disinclination to indicate any fixed period within which it could be expected that the English government would be able to announce a final decision upon so difficult amid momentous a question, but stated that in the event of the feeling of time conference being in favor of accepting the suggestion of the president, we could only desire that a sufficiently long delay should be named to admit of Parliament having an opportunity, should it think proper to do so, of discussing amid pronouncing an opinion upon the subject.  With this view we suggested the 1st of June, 1868, as a date by which her Majesty’s government might possibly be in a position to make some official communication of their views and intentions.

The anxiety, however, expressed by Prince Napoleon for an earlier consideration of the matter, was shared by the majority of the conference, who fixed the 15th of February, 1868, as the date by which the governments should be invited to make known their intentions to the government of the Emperor.

It will be for her Majesty’s government now to determine whether any special inquiry should be established into the results of the deliberations of the conference, and, if so, what form the inquiry should assume.

Your lordships will, no doubt, consider that such an investigation is properly due to the intrinsic importance of the question, as well as to a consideration of deference to the earnest interest with which its development from theory to practice has been advocated by the French government, under whose auspices the conference was assembled, and which has expressed so cordial a desire for the further co-operation of this country.

The appointment of a royal commission was made February 18, 1868, by the Queen.

The commission had power to call before it, or any five members, such persons as are regarded as  better informed of the truth in the premises, and was required to report in writing, as soon as reasonably could be, the proceedings and opinions.

This commission reported on the 15th of July, 1868 [10], adversely to the reduction of the value of the pound to that of 25 francs, and also to the adoption of a gold coin of the value of 25 francs, to be substituted for the sovereign.  The report says : The reduction of the value of the pound would disturb all existing obligations and would cause many and serious difficulties, and further, that the measure is, after all, only a partial measure; and although advocated by some witnesses as good in itself, and as a step to further assimilation, the objects sought for by the witnesses connected with the trade and with the scientific bodies of this country would not be fully attained by anything less than a complete assimilation of the currencies of different countries.

Several witnesses who took this view deprecated any change unless a complete assimilation of currency of moneys of account as well as of coins was made.

 

VIEWS  OF  M.  CHEVALIER

 

At the conclusion of the reading of the report by Baron de Hock at the third sitting, June 27, 1867, M. Michel Chevalier, offered some observations on propositions four and five.  He expressed the opinion that the monetary unit should only be a branch of the general weights and measures, which is the metric system, the essence of which was to have the whole subordinate to the meter.  The coinage ought not to stand on an independent basis, and, notwithstanding the accidental and happy circumstance that the most important monetary unit may be adapted to the piece of five francs in gold by means of very small changes, he considered that it would be best to change radically all the monetary system, and to adopt everywhere as a unit a weight of gold of 5 or 10 grams at .900 fine.  The speaker was convinced that the English, faithful guardians at all times of the fineness of their coins, would refuse to lower the pound sterling to 25 francs.

M. Feer-Herzog was in favor of accepting the piece of 5 or 10 grams if he had any hope that it would become the universal coin; but experience has shown that monetary units are not artificially created.  The franc owes its easy adoption to its similitude to the ancient livre tournois, and the attempt made in Germany, in 1857, to create a common gold coin of a metric weight has proved a complete failure.

M. Michel Chevalier said that it was doing injustice to human intelligence to think that it was incapable to abandon old habits, but in reality we would return to the old practice by giving back to money its true significance, an exact weight, as the words pound and mare prove.

The views of M. Chevalier were further expressed in a letter to the Journal des Débats in which he discussed the monetary question then before the International Conference.  That discussion was cited as follows by the Paris correspondent of the London Economist :

He admits that, though there is much to be said in favor of the French one franc piece in silver, there is no chance of a silver standard being adopted, gold having, he says, obtained the preference of the greatest number of States.  The English, he continues, are very determined on this point; they will have gold pieces, nothing but gold.  Silver, with them, is only employed to make up sums, and silver pieces are of a nominal value superior to their real one.  The Americans appear to be not less determined in favor of gold pieces; and Portugal has the same sentiment.

Having said this, he shows briefly the objections, scientific and practical, to maintaining both silver and gold standards, inasmuch as it is impossible to keep up a fixed proportion in the value of the two metals.  Then he examined the proposition which has been made to reduce slightly the value of the English sovereign (by about 2 d.) and the United States five-dollar gold piece, in order to make them equal to 25 francs French, and to coin 25-franc gold pieces in France.  But he doubts that the English would consent to such a measure. They are rigorous, says he, on the chapter of money.  They shrink from no sacrifice to maintain their money perfectly intact; they make it a point of honor so to do, and they are right.  Besides, he doubts that the French gold coin, which is now of 20 francs, with subdivisions of 10 francs and 5 francs, possesses a character which imposes it on the adoption of other nations.

And these are his reasons : The metrical system is now in favor everywhere.  But unfortunately the French gold piece is out of the pale of the metrical system.  In respect to this system, a piece like that of 20 francs, which weighs 6.451 grams and an indefinite fraction, is as absurd as the pound sterling, the gold dollar, the eagle, or half-eagle, the doubloon, the German crown, and any other gold piece which circulates.  The English are as much justified in recommending for universal unity the pond sterling, or the Americans the dollar, or the Spaniards the doubloon, as the French are in recommending the 5-franc piece, or the 20-franc piece, or the 25-franc piece in gold.  The great economist therefore advises that from respect for the metrical system, the French should abandon their gold pieces.

He observes that by so doing they would prove the reality of their faith in that system, faith without works being dead.  Nevertheless, he does not deny that if the International Commission should resolve on placing the English pound sterling, the United States half-eagle, the imperial of Russia, and an Austrian gold piece of 10 florins, on a level with a French gold coin of 25 francs, it would be a progress compared with the existing state of things.  We, however, he adds, should feel regret at the reform not being made more complete and more rational at stopping halfway when it was possible to go the whole distance.  Modern, he remarks in conclusion, like progress so much that they may confidently be called on to make an effort when an important and definitive amelioration has to be effected.

From the above it appears that leading political economists of France were earnestly averse to the recommendation of the international committee of the Paris Exposition in favor of the substitution of the weight of the French five-franc piece of gold for that of the United States gold dollar.  Their opposition was based on the unmetrical character of the proposed monetary unit.

 

OPINIONS  EXPRESSED  IN  THE  UNITED  STATES

 

The views of Mr. Ruggles in respect to the coinage of a 25-franc piece have not found ready acceptance by the scientific men of the United States who have given the subject thoughtful investigation.  The great objection to the system of unification proposed by Mr. Ruggles is that it is not metrical – in other words, that the coins of the denominations and values proposed do not have simple relations as to weight with the gram, which is the unit of weight of the French metrical system.

The gold coin of France is not metrical; it has no simple relation to the metric unit of weight.  In changing the coinage of the world, metrical unity is one of the first considerations.  If we first obtain metrical harmony, unification of coins will follow.  The gold coin of the United States is much more nearly metrical than the gold coin of France.  The three-dollar gold piece of the United States weighs 5.015 grams, and the, other coins are in proportion.  By reducing the weight this small fraction, and making the three-dollar coin weigh exactly five grams, a simple metrical relation will be established.  The German crown has an exact simple relation; it contains 10 grams of pure gold.

The silver coin of France has simple relations to the gram, and is therefore metric.  The ratio of value of silver to gold adopted by France (viz., 15 ½ to 1) is an undesirable one; it causes silver coin to be underrated, instead of being overvalued, as it should be, it being above the average market rate (15 ¾) for the past 14 years, or since the discovery and working of the rich gold regions of California and Australia.  The ratio of 15 to 1 originally adopted for the coinage of the United States in 1790 is a more satisfactory ratio, being below the market rate during the past 150 years, and being very simple for purposes of computation.

 

PETITION  TO  CONGRESS  FROM  THE  AMERICAN  STATISTICAL  ASSOCIATION

 

The petition of the American Statistical Association, adopted at its meeting in Boston in the year 1867, and presented in both houses of Congress, respectfully asks attention to the following propositions, and requests that the principles involved in them may be incorporated in any law that may be adopted in respect to the metrical system of weights, measures and coins :

First.  That the American Statistical Association earnestly favors the speedy practical adoption by the people of the United States of the metrical system of weights and measures; the system of which the meter, the liter and the gram are respectively the units of length, of capacity and of weight, and the use of which, by act of the last (the 39th) Congress, has been rendered permissible in the United States in the making of contracts, and has been necessitated by the requirements of several branches of industry.

Second.  That our coinage should have simple relations as to weight with the unit of weight of the metrical system, the gram.

Third.  That the standard as to fineness of our coinage, whether of gold or silver, should continue as now, nine-tenths of fine metal to one tenth of alloy.

Fourth.  That in the opinion of this association no widely-extended and permanent uniformity as to coinage can be secured through the adoption by our government of any system which is in conflict with the principles above mentioned.

Fifth.  That the weight in grams and the fineness of the coins hereafter to be issued should be legibly stamped thereon prior to issue.

Sixth.  That the changes required for converting our existing coinage into a metrical one are so slight that the recoinage of the existing coins of the United States would be unnecessary; that the difference between the existing coinage and that proposed, especially as regards gold coins of less denomination than $ 10, is very considerably less than the deviation now allowed to the mint, which is one-fourth of a grain for the gold dollar and the quarter eagle, and one half of a grain for the half eagle, the eagle, and the double eagle.

Seventh.  That, in pursuance of the foregoing, the gold dollar should contain 1 ½ grams of fine gold, or its equivalent, 1 2/3 grams of standard gold (nine-tenths fine), and that other gold coins should be in proportion [11].

Eighth.  That the silver half dollar and the smaller silver coins hereafter to be issued should contain of fine silver at the rate of 22 ½ grams to the dollar, or their equivalent, 25 grams of standard silver (nine tenths fine) [12].

Ninth.  That the gold coinage, as above described, should be made legal-tender in payment of sums of all amount; and that the silver coinage should be subsidiary, and admitted as legal-tender to an amount not exceeding $ 10 in any one payment [13].

 

REPORT  OF  SENATOR  SHERMAN

 

In the Senate of the United States, June, 1868, Mr. Sherman made the following report [14], to accompany Senate bill No. 217 :

The following documents have been referred to the Committee on Finance :

1st.  S. 217, in relation to the coinage of gold and silver.

2nd. S. 412, to promote uniformity of coinage between the moneys of the United States and other countries.

3rd.  The proceedings of the International Monetary Conference, held at Paris in June, 1867.

4th.  The report of Samuel B. Ruggles, esq., delegate from the United States in the International Monetary Conference at Paris, November 6, 1867.

5th.  Sundry memorials relative to changes in our system of coinage. 

These documents present to the Committee on Finance the interesting question of international coinage, and in considering them we necessarily inquired :

1st.  Whether the object proposed was of sufficient importance to justify a change in the coinage of the United States.

2nd. Whether the plan proposed by the Paris conference was the best mode to accomplish the end desired.

3rd.  What legislation was necessary on the part of the United States to adapt our coinage to the plan proposed.

4th.  What provision should be made for existing public and private contracts.

Your committee, after a partial consideration of these questions, direct that the bill first named be reported with amendments, supported by the following report, and that Mr. Morgan, of the same committee, be authorized to submit a report adverse to the bill, and that these reports be printed, and that the bill be postponed until next session, with a view to elicit a fuller discussion by the people of the several questions embraced in the bill.

The importance of a common monetary standard among commercial nations has always been conceded.  It has been the hope of philosophers and statesmen and the demand of writers on political economy for centuries, but has been as strongly opposed by the jealousies of locality and the interests of rival nations.  Commerce and peace have steadily approximated different standards of exchange towards each other, while local interests and war have as steadily diverged them from each other.  In all ages local and generally despotic authority has endeavored to make more money out of a given amount of gold and silver by clipping or alloy, while the general laws of trade and commerce have soon after reduced the current value of the money as it was reduced in weight and fineness.  Formerly, not only each nation, but each province, duke, bishop or municipality, made its own separate and distinct coin, often of the same name but different values.  The effort to unitize the different moneys of a nation was but a part of the process by which the modern nations of Europe have been formed, and in this process the original money was debased in a remarkable way.  The pound sterling of England was, at the time of William the Conqueror, equivalent to a pound weight of silver.  It is now 3 oz. 12 dwt. 16 grs.  The German florin was originally a gold coin, worth about $ 2.40.  It is now a silver coin, worth about 40 cents.  The French livre originally contained a pound of silver, worth about $ 18.50.  It is now worth about 19 cents.  The Spanish maravedi in the year 1220 was worth $ 3.20 of our money.  It is now worth about a quarter of a cent.  The result of these changes has been to secure to all parts of each leading nation a common unit of money of fixed value.  The pound sterling is the unit in Great Britain; the franc in France, Italy, Switzerland and Belgium; the florin in South Germany; the thaler in North Germany; the dollar in the United States, and various other units in other nations.  These units are purely arbitrary, based upon local law, and diverse in weight, value and alloy.  They are, in some nations, of gold only; in some, of silver only; and in some a compound standard of gold and silver, and differing materially in the amount of alloy, and in the relative value of the two metals.

For local purposes it is not very material which metal is the standard nor of what weight and fineness the standard may be, if only it is of fixed and invariable value, for the value of property and all internal commerce adapts itself to the intrinsic value of the gold and silver in the prescribed standard.

The inconvenience of different standards of value arises mainly in foreign commerce, in the exchange of commodities among nations.  The intercourse between modern Christian nations is now more intimate and exchange more rapid than it was between provinces of the same country 200 years ago.  The annual trade between the United States and Great Britain is now greater in bulk and value than the aggregate annual trade between all the nations of Europe 200 years ago.  The same reasons for adopting an international standard of value now exist as induced the American colonies less than 100 years ago, to abandon their diversified standards of value, and adopt as a common unit the American dollar.  Every advance toward a free exchange of commodities is an advance in civilization.  Every obstruction to a free exchange is born of the same narrow despotic spirit which planted castles upon the Rhine to plunder peaceful commerce.  Every obstruction to commerce is a tax upon consumption; every facility to a free exchange cheapens commodities, increases trade and production, and promotes civilization.  Nothing is worse than sectionalism within a nation, and nothing is better for the peace of nations than unrestricted freedom of intercourse and commerce with each other.  No single measure will tend in this direction more than the adoption of a fixed international standard of value, by which all products may be measured, and in conformity with which the coin of a country may go with its flag into every sea and buy the products of every nation without being disconcerted by the money changes.

This has been the wish of American statesmen since the revolutionary war.  The Spanish milled dollar was adopted as the basis of our coinage before the Constitution was framed, and with the hope, expressed by Mr. Jefferson, that it would lead to an international unit.  Mr. Hamilton and Mr. Gallatin each desired the same result, but the French war postponed all efforts in that direction.  Mr. John Q. Adams, in his remarkable report to Congress of February 22, 1821, upon the kindred but more comprehensive subject «the uniformity of weights and measures», says :

This system approaches to the ideal perfection of uniformity applied to weights and measures, and, whether destined to succeed or doomed to fail, will shed unfading glory upon the age in which it was conceived and upon the nation by which its execution was attempted and has been in part achieved.

If man upon earth be an improvable being; if that universal peace, which was the object of a Sayvior’s mission, which is the desire of the philosopher, the longing of the philanthropist, the trembling hope of the Christian, is a blessing to which the futurity of mortal man has a claim of more than mortal promise; if the spirit of evil is, before the final consummation of things, to be cast down from his dominion over men and bound in the chains of a thousand years, the foretaste here of man’s eternal felicity, then this system of common instruments to accomplish all the changes of social and friendly commerce will furnish the links of sympathy between the inhabitants of the most distant regions; the meter will surround the globe in use as well as in multiplied extension, and one language of weights and measures will be spoken from the equator to the poles.

Several efforts have been made by negotiation to secure uniformity of coinage, especially with Great Britain.

In 1857, in compliance with an act of Congress, passed upon the report of the Committee of Finance of the Senate, Professor Alexander was sent as a special commissioner to that country to secure a unity of coinage between the two countries, but, after various conferences, the mission failed from an indisposition of the English government to modify their pound, shilling, and pence.

In his report of December, 1862, Mr. Secretary Chase invited the attention of Congress to the importance of uniform weights, measures and coins, and recommended that the half eagle of the United States be made equal to the gold sovereign of Great Britain in weight and fineness.

The Berlin International Statistical Congress, held in 1863, composed of representatives of 14 countries, and at which the United States was ably represented by Mr. Ruggles, agreed to the following resolution :

1st.  That the Congress recommends that the existing units of money be reduced to a small number; that each unit should be, as far as possible, decimally subdivided; that the coins in use should all be expressed in weights of the metric system, and should all be of the same degree of fineness namely, nine-tenths fine and one-tenth alloy.

2nd.  That the different governments be invited to send to a special congress delegates, authorized to consider and report what should be the relative weights, in the metrical system, of the gold and silver coins, and to arrange the details by which the monetary system of different countries may be fixed according to the terms of the preceding propositions.

This led to the recent Paris conference and to the adoption by Congress, in 1866, of several measures for the use of the metric system of weights and measures.  At the Paris conference 19 nations were represented, governing a population of 320,000,000 European and American, and 190,000,000 Asiatic.

The conference agreed with great unanimity upon the plan hereafter stated, and the delegates from the United States were active and influential in harmonizing conflicting views and in securing the result arrived at.  Upon the first part of their inquiry, your committee therefore conclude that the object proposed is of the highest importance, constantly sought for at every period of the government, and that the United States is fully committed to its support if the plan proposed is practicable and just.

Aside from the general advantages which we will share with the civilized world in attaining a uniform coinage, there are special reasons why the United States should now adopt the system.

The United States is the great gold-producing country of the world, now producing more than all other nations combined, and with a capacity for future production almost without limit [15].  Gold with us is like cotton, a raw product.  Its production here affects and regulates its value throughout the world.  Every obstruction to its free use, such as the necessity of its recoinage when passing from nation to nation, diminishes its value, and that loss falls upon the United States, the country of production.

2.  The United States is a new nation, and therefore a debtor nation.  By placing ourselves in harmony with the money units of creditor nations, we promote the easy borrowing of money and payment of debts without the loss of recoinage or exchange, always paid by the debtor.  This is necessarily so where the debt is payable abroad, and if payable here the creditor discounts the exchange and difference in coinage in advance.

3.  The technical rate of exchange between the United States and Great Britain, growing out of the different nominal values of coin, is a standing reproach which can only be got rid of by unifying the coinage of the two countries, when both the real and technical rate of exchange will be at par with only such slight variations as will indicate the course of trade.

4.  Gold is now demonetized as a currency, and the great bulk of it in the United States is now held in the treasury, so that it is not possible to select a time when this great international change of coinage could affect the interests of our people less.  From inquiries made of the officers of the mint, we find that the cost of reminting the present coin would be less than one-twentieth of one per centum.  The fineness of the proposed coin being the same as the old, there would be no assay, and the cost of the change would not be perceptible to the holder of time coin, and scarcely so to the government.

The second inquiry of your committee was whether the plan proposed by the Paris conference was the best mode to accomplish the end desired.

It proposes :

1.  A single standard, exclusively of gold.

2.  Coins of equal weight and diameter.

3.  Of equal quality or fineness nine-tenths fine.

4.  The weight of the present five-franc gold piece to be the unit.

5.  The coins of each nation to bear the names and emblems prepared by each, but to be legal tenders public and private in all.

1.  The single standard of gold is an American idea, yielded reluctantly by France and other countries, where silver is the chief standard of value.  The impossible attempt to maintain two standards of value has given rise to nearly all the debasement of coinage of the last two centuries.  The relative market value of silver and gold varied like other commodities, and this led first to the demonetization of the more valuable metal, and second to the debasement or diminution of the quantity of that metal in a given coin.  In a short time the cheaper metal would, by a diminished supply, become the dearer metal, and then it would be debased and cheapened in the same way.  This process repeatedly occurred in Europe, and has twice occurred in the United States within the life of the present generation.  By the act of June 28, 1834, our gold coin was reduced from 270 grains of standard gold to 258 grains or 4.4 per centum, in order to make it correspond with the market value of silver.  In consequence of the discovery of gold in California that metal was cheapened, and silver became relatively more valuable and was hoarded or exported.  To avoid this the weight of our silver coin was reduced by the act of January 21, 1853, from 206 grains of standard silver to 192 grains, or 6.7 per centum.

This subject early excited the attention of financiers.  Mr. Gorham, in his report of May 4, 1830, as Secretary of the Treasury, forcibly says :

Amidst all the embarrassments which have surrounded this subject since the adoption of metallic standards of property, it is remarkable that governments have so tenaciously persevered in their effort to maintain standards of different materials, whose relation it is so difficult to ascertain at any one time, and is so constantly changing; and more especially when a simple and certain remedy is within the reach of all.  This remedy is to be found in the establishment of one standard measure of property, only.  The evil of having two or more standards arises, as already observed, from the impossibility of so fixing their relative values by law that one or the other may not, at times, become of more value in market than estimated by regulation; and, when this happens, it will be bought and sold according to its market value, regardless of the law.

The proposition that there can be but one standard in fact is self-evident.  The option of governments charged with this duty is therefore between having property measured sometimes by gold and sometimes by silver, and selecting that metal which is best adapted to the purpose for the only standard.  Why the latter course has not been universally adopted it is not easy to explain, unless it may be attributed to that prevalent delusion which seeks to secure the possession of gold and silver by restraining their exportation, and avoiding the payment of debts rather than improving the public economy by giving every facility to it.

The opportunity is now offered to the United States to secure a common international standard in the metal most valuable of all others best adapted for coinage, mainly the product of our own country, and in conformity with a policy so constantly urged by our statesmen, and now agreed to by the oldest and wealthiest nations of the world.  Surely we should not hesitate for trifling considerations to secure so important an object.

The equal weight and diameter of coins will guard against adulteration and counterfeiting, and will familiarize our people with the metric system of weights and measures.  This system is already used in some of our coins, and is permitted by our laws, and will, by gradual means, become adopted as the only international system.

The provision made that each nation shall retain its own emblems, will not impair the ready currency of coin, but will induce care in coinage.  The fineness proposed is the present standard of the United States, an important consideration in recoinage, as no new assay will be required.

All the provisions of the plan proposed are in harmony with the American system of coinage.  They are either already adopted or may be without inconvenience.  The only point upon which a diversity of opinion may arise is as to the unit of value, and here the chief difficulty was not as to what particular quantity of gold was the best unit, but upon what quantity all the nations represented could agree.  The unit recommended is the existing 5-franc gold piece, 620 of which weigh a kilogram.

For the reasons that induced the adoption of this unit of value, reference is made by your committee to the report of Mr. Ruggles.  They may be summed up as follows :

1.  The coin proposed is the smallest gold coin in use, and therefore the most convenient unit of value.

2.  It approximates more nearly to existing coinage of the great commercial nations than any other proposed.  The dollar reduced 3 ½ cents at the mint becomes the unit of value, and its decimal divisions and multiples enable us to retain all our well-known coins, both of gold and silver.

A very slight reduction of the English sovereign makes it conform to the multiple of the dollar and franc, so that five francs are a dollar, and five dollars are a sovereign, or a half-eagle.  The same unit is easily adapted to existing coinage of other nations.

3.  The franc is already in use by 72,000,000 of the most industrious and thrifty people of Europe : France, Belgium, Italy, Switzerland and Holland (sic !).

4.  The actual gold coinage in francs from 1793 to 1866 was $ 1,312,220,814, while the gold coinage in dollars during the same period was $ 845,536,591, and in sovereigns was $ 935,341,450, thus showing that in France alone the existing gold coinage on the proposed standard is greater than upon any other that could be adopted.

It must be remembered that the great body of our coin and bullion has been exported, and is now in foreign coin; that a large part of the balance is held in the treasury, and that less gold is in actual circulation in the United States than in any other great commercial nation.  It is unreasonable, in view of these facts for the United States to demand that our dollar, composed of 1,671.81 milligrams of gold, should be the standard of value.  As the nation most interested in international coinage, we should be ready to yield something to secure that object.  By the plan proposed we yield nothing except the very small reduction of the weight of our standard, and without any other change in our coins, multiples, divisions, devices, or alloy.

5.  France, whose standard is adopted, makes a new coin similar to our half-eagle.  She yields to our demand for the sole standard of gold, and during the whole conference evinced the most earnest wish to secure the co-operation of the United States in the great object of unification of coinage.  Her metric system is far the best yet devised and is in general harmony with our own, while Great Britain has refused even to negotiate with us for unity of coinage, and maintains the most complex system of weights, measures and coinage now in use among Christian nations.  The decimal system, the basis of all our computations, she rejects, and adheres to the complex division of pounds, shillings and pence, which we rejected with colonial dependence.

These reasons induce your committee to earnestly urge the adoption by the United States of the general plan of the Paris conference.

What legislation is necessary on the part of the United States to adapt our coinage to the plan ?

On this point your committee have consulted the Secretary of the Treasury and the director of the mint.  The bill herewith reported is the result of this conference, and is all that is needed to secure the object proposed.  The provisions in regard to silver coinage are urged by the director of the mint to secure harmony between the present market value of gold and silver; but this coinage can be regulated hereafter by the varying values of the two metals and without disturbing the sole legal standard of value for large sums.  The general provisions of existing law relating to coinage are preserved.

What provisions, if any, should be made for existing contracts ?  Shall they be discharged in the money made a legal tender at the date of the contracts or in the money provided for by this bill ?

In determining this question, a distinction must be made between public and private debts.  All private contracts are made in view of the power of Congress to regulate the value of coins.  This power has been repeatedly exercised by Congress, and in no case was any provision made for enforcing existing contracts in the old rather than the new standard.  All property and contracts may be affected by legislation, but it is not presumed that in the exercise of its legislative power Congress will be controlled by either the debtor or creditor, but only by the general good.  To continue a distinction between the old and the new coin in the payment of private debts would result in great inconvenience, while making the new coin a legal tender for all debts after a reasonable time would enable our citizens to conform the great body of their contracts to the new standard.  Such has been the practice not only in the United States but in other countries, where from time to time the standard of coin has been changed.  Such was the principle adopted in the passage of the present legal-tender act which if made applicable only to future contracts would have bankrupted a large portion of the active business men of the country, whose business compelled them to contract debts.

It must be remembered that all private debts are now on the basis of legal-tender notes, of far less intrinsic value than the proposed coin.  The depreciation of legal-tenders had the effect to diminish the value of all debts and the property of all creditors to the extent of the depreciation, and is only justifiable by the highest considerations of national safety.  The resulting process of returning to specie basis will be far more severe on the debtor class.  The depreciation of the burden of debt is a loss to a class generally benefited by the increased value of fixed property, and better able to bear the diminution of their capital, but an increase of the burden of the debt to the debtor class, by the payment of coin instead of depreciated paper money, often produces absolute ruin without fault in the debtor.  All contracts are now on the legal-tender basis.  Every private creditor would now take the new coin, and would be largely benefited by the changed medium of payment.  The small relief of the debtor by the slightly diminished standard of coin will tend to that degree to lessen the unavoidable hardship to him of a return to specie payment.  This relief would be especially just on the payment of long bonds issued by railroads and other corporations during or since the war, which were almost uniformly sold for depreciated paper money.  Your committee therefore conclude, that as to all private debts or contracts, the only provision necessary in this bill is to postpone the operation of its legal tender clause for a reasonable time after the passage of the act.

Does not a different principle prevail as to public debts ?  As to public debts, the contract of loan is the only law that ought to affect the creditor until his debt is fully discharged.  Congress, as the authorized agent of the American people, is one party to the contract, and it may no more vary the contract by subsequent acts than any other debtor may vary his contract.  As to the public creditor, no legislative power stands between him and the exact performance of his contract.  Public faith holds the scales between him and the United States, and the penalties for a breach of this faith are far more severe and disastrous to the nation than courts, constables, and sheriffs can be to the private debtor.  These penalties are national dishonor and inability to borrow money in case of war or public distress, and the ultimate result is the sure and speedy decline of national power and prestige.  When changes in our coin were made in 1834 and 1853, the United States had no public debt of any significance and the precedents then made do not apply to the present time.  Now the public debt is so large that a change of 31 per cent. in the value of our coin is a reduction of the public debt of $ 90,000,000.  So much of this debt as exists in the form of legal-tender notes will be received and disbursed as money, and as its value for some time will be less than the new coin no provision need be made for it, but for so much of the debt as is payable, principal or interest, in coin of a specific weight and value provision ought to be made for its exact discharge in that coin or its equivalent in the new.  Your committee, therefore, propose an amendment to that effect.

Your committee have been led to inquire whether, if the United States adopt the plan of the Paris conference, it will be adopted by other nations so as to accomplish the object proposed, of an international currency, of universal circulation throughout the civilized world.  Upon this point we have the most satisfactory assurances.  Since the Paris conference it has been adopted by Austria, and will, in all human probability, be adopted by the North German Confederation.  A strong party in Great Britain, including many of her ablest statesmen, and the great body of her commercial classes, has urged the adoption of the plan, even in advance of the United States, and they concur in the opinion that, if adopted by the United States, Great Britain will be induced by her interests to modify her sovereign to the international standard.  We have the highest authority for saying that Canada stands ready to adopt the plan the moment it is adopted by the United States.  Different representatives of the South American States say those States will readily adopt it; so that upon Congress now rests the fate of a measure that, according to the opinion of eminent American statesmen, will shed unfading glory upon the age of its adoption, that will give to international law an international coinage, and will lead to a vast extension of the objects of international law common to Christian and civilized nations, thus binding the whole family of man by the same ties that are uniting and consolidating neighboring states.  Your committee recommend the adoption of this measure with certain amendments, with the conviction that it will not only promote the local interests of the United States, but will subserve the general interests of all the nations who have already or may hereafter join in its adoption.

 

REPORT  OF  SENATOR  MORGAN

 

Mr. Morgan, from the Committee on Finance, United States Senate, submitted the following report, to accompany Senate bill No. 217 :

In June last, while the Universal Exposition was in progress, an international monetary conference was held in Paris, under the presidency of the French minister for foreign affairs.  Delegates from the several European nations were present.  Mr. Samuel B. Ruggles represented the United States, and his report on the subject has been communicated to Congress, through the Department of State.  From this it appears that a plan of monetary unification was there agreed upon, the general features of which are :

1.  A single standard, exclusively of gold.

2.  Coins of equal weight and diameter.

3.  Of equal quality, nine-tenths fine.

4.  The weight of the present 5-franc gold piece to be the unit, with its multiples.  The issue by France of a new coin of the value and weight of 25 francs was recommended

5.  The coins of each nation to continue to bear the names and emblems preferred by each, but to be legal tenders, public and private, in all countries.

Senate bill 217 is designed to carry into effect this plan.  Its passage would reduce the weight of our gold coin of $ 5 so as to agree with a French coin of 25 francs.  It determines that other sizes and denominations shall be in due proportion of weight and fineness; and that foreign gold coin, conformed to this basis, shall be a legal tender, so long as the standard of weight and fineness are maintained.  It requires that the value of gold coins shall be stated both in dollars and francs, and also in British terms, whenever Great Britain shall conform the pound sterling to the piece of $ 5.

It conforms our silver coinage to the French valuation, and discontinues the silver pieces of one dollar, and five and three cents, and limits silver as a legal-tender to payments of $ 10.  The 1st of January, 1869, is fixed as the period for the act to take effect.

The reduction which this measure would effect in the present legal standard value of the gold coin of the United States would be at the rate of $ 3.0 in the hundred and the reduction in the legal value of our silver coinage would be still more considerable.

A change in our national coinage so grave as that proposed by the bill should be made only after the most mature deliberation.  The circulating medium is a matter that directly concerns the affairs of every-day life, affecting not only the varied, intricate, and multiform interests of the people at home, to the minutest detail, but the relations of the nation with all other countries as well.  The United States has a peculiar interest in such a question.  It is a principal producer of the precious metals, and its geographical position, most favorable in view of impending commercial changes, renders it wise that we should be in no haste to fetter ourselves by any new international regulation based on an order of things belonging essentially to the past.

Antecedent to any action by Congress on this subject we should carefully consider :

I.  The effect which the present abundant production of the precious metals, especially of gold, and the probable great increase in the supply, as mining facilities are improved and more generally applied, will have upon the purchasing power of these metals.

II.  The question of preserving such a relation between gold and silver as will retain the latter metal in free circulation, and continuance of the coinage of such denominations of silver as will serve to encourage American commerce with Mexico and with South American and Asiatic nations.

III.  The choice of a standard of unification which, all things considered, shall be least objectionable on account of fractional weights and intricacy of calculations.

IV.  Of delaying action until the Paris plan has been adopted by the commercial powers of Europe, and accepted by those nations on the western continent with whom we have commercial relations or at least until their intentions in this regard are more fully known.

V.  Should not a period when the public mind is calm, more so than now, on the subject of monetary affairs, and when the national debt has become less formidable, be chosen for initiating a change.

VI.  The advisability of further popular discussion of the subject, to the end that the business as well as general public shall fully understand on what grounds so important a reduction in the value of our monetary unit, the dollar, is based, and the further advocacy of the merits of our own, so that, should any existing system be accepted, ours shall be more fully considered in that connection.

Uniformity in coinage and also in weights and measures has been the pursuit of ages.  Speculative systems have been advanced, only to be given up when subjected to practical tests but the idea has never been abandoned.  Nor was the recent occasion the first in which our government has been recommended, and that, too, with some urgency, three quarters of a century ago, by the minister of that country, to adopt the French system of weights, measures, and coinage.  But Congress, both then and since, has properly exercised great caution on a subject so full of complications.  And the question of international unification yet remains an open one, balanced between the facilities it would afford to foreign commerce and the evils it would introduce into our domestic affairs.  The adoption of some satisfactory and comprehensive plan, one to be adopted because it shall best subserve the interests of all, and not because it is or is not an existing one, may become desirable.  If so, Congress will then be ready to take part in effecting such a measure.  At present, however, there are questions of a very practical nature relative to the precious metals that begin to reveal themselves, and will soon press home upon us, which largely outweigh in importance the more theoretical one of assimilating all metallic circulations.  Our situation as a commercial nation makes it prudent that on this, as on every question affecting home interests, we should remain free to mould our policy to meet occasions as they arise, following such course as shall appear best suited to develop our great, almost limitless, natural resources, increasing by gentle means the stream of commerce, but forcing nothing, rather than to hamper ourselves by international engagements or arbitrary regulations.  An error now in fixing the values of gold and silver would injure this nation far more than any other.  We may safely trust to the natural laws of commerce for the correction of any evils from which we have suffered.  We have paid our seigniorage, we have met the demand for foreign exchange, but who shall say that the course of trade in the next ten years may not make an American city, New York or San Francisco, the center of exchange, and confer upon us the advantages so long enjoyed by European capital ?  Certainly no other nation can so well afford to wait.

The movement proposed in the bill appears to be in the wrong direction.  The standard value of gold coin should be increased, brought up to or own, rather than lowered.  The reason must be obvious.  Authorities unite in the conclusion that a fall in the value of the precious metals in consequence of their rapidly increasing quantity, is inevitable.  M. Chevalier recently estimated that the present yield of gold amounts, in 10 years to about as much as the entire production during the 356 years which intervened between the date of the discovery of America and the year 1846 when the mines of California were found; and Mr. Cobden concluded that unless the cardinal rule of commerce, that quantity governs price, which applies infallibly to all other commodities, loses its force when gold is concerned, this continued and great increase must be followed by a reduction in its value.

Ross Browne, in his recent report, says that the time is not far distant when the price of the precious metals, as compared with other proceeds of human labor, must fall.  They are now increasing more rapidly than is the demand for them, and at the present rate of increase they would soon have to fall perceptibly; but the production will become much greater than it is.  The vast improvements that have been made both gold and silver mining, within the last 20 years, are applied only to a few mines.  If all the argentiferous lodes of Mexico, Peru and Bolivia, known to be rich, were worked with the machinery used at Washoe, their yield would really flood the world.  New deposits of silver will be found, and innumerable rich lodes on the Pacific slope of the United States, not yet opened, will be worked with profit.

The present enhanced prices of commodities and labor, the world over, measure, to some extent, time increasing quantity and consequent depreciation in the value of precious metals, and clearly indicate the direction the change is taking.

The creditor, public and private, will be affected by this tendency, and while he must abide a depreciation which proceeds from natural causes, he may properly insist that artificial evils shall not be superadded.

Of the increased production of gold the United States supplies more than half, and when the lines of railway now pushing across the Continent shall penetrate the gold-bearing mountains and valleys of California and Oregon, and the western territories, mining improvements will be powerfully supplemented.

The American continent, too, produces four-fifths of the silver of commerce.  The mines of Nevada have already taken high rank, and Mexico alone supplies more than half the world’s grand total.  Our relations with the silver-producing people, geographically most favorable, are otherwise intimate.  Manifestly our business intercourse with them can be largely increased, a fact especially true of Mexico, which, for well-known political reasons, seeks the friendliest understanding.  This must not be overlooked.

These two streams of the precious metals, poured into the current of commerce in full volume, will produce perturbations marked and important.  Other countries will be affected, but the United States will feel the effect first and more directly than any other.

The Pacific railway will open to us the trade of China, Japan, India and other oriental countries, of whose prepossessions we must not lose sight.  For years, silver, for reasons not fully understood, has been the object of unusual demand among these Asiatic nations and now forms the almost universal medium of circulation, absorbing rapidly the silver of coinage.  The erroneous proportion fixed between silver and gold by France, and which we are asked to copy, is deluding that country of the former metal.  Our own monetary system, though less faulty, is not suitably adjusted in this respect.  The silver dollar, for instance, a favorite coin of the native Indian and distant Asiatic, has well-nigh disappeared from domestic circulation, to reappear among the eastern peoples, with whom we more than ever seek close intimacy.  As they prefer this piece we would do well to increase rather than discontinue its coinage, for we must not deprive ourselves of the advantages which its agency will afford, and it would be useless to send dollars to Asia inferior in weight and value to its well-known Spanish and Mexican prototype.

Mr. Ruggles says that nearly all the silver coined in the United States prior to 1858 has disappeared.  A remedy is not to be found in the adoption of a system that undervalues this metal, for that commodity, like any other, shuns the market where not taken at its full value to find the more favorable one.  It is a favorite metal, entering into all transactions of daily life, and deserves proper recognition in any monetary system.

It is said that, to promote the intercourse of nations with each other, uniformity of weights, coins and measures of capacity is among the most efficacious agencies.  Our weights, coins and measures now correspond much more nearly to the English than to the French standard.  Our commerce with Great Britain is nine times greater than with France, and if the former does not adopt the Paris system of coinage – and we have no assurance that she will – the United States would certainly commit a serious error in passing this bill.  No argument is needed to enforce this.  And what of the rising communities ?  A properly adjusted coinage would stimulate commerce with those great parts of the Continent lying south and southwest of us, with the West Indies, and the countless millions of trans-Pacific countries.  We stand midway on the thoroughfare of traffic between these two widely-separated races.  Our railways, canals, our natural highways, and merchant marine, may be made to control their carrying trade.  But here, as everywhere else, as well-adjusted coinage becomes a wand of power in the hand of enterprise.  Tokens are not wanting to mark the favor in which the United States are now held in China.  The usual honor recently conferred by that government upon a citizen of this country was not alone because of his fitness as a ambassador at large, but was a mark as well of a friendly disposition towards this country.  Future harmony of intercourse is red too by their adoption as a text-book in diplomatic correspondence of a leading American authority on international law.  Much might also be said about the growing partiality of Japan towards this country; but it is enough that the recent opening of certain ports indicates an enlightened change in the policies of these two old empires, of which commerce, especially our own, is availing itself.  There is nothing, indeed, in our foreign policy to create suspicion in the minds of the cautious statesmen of Asia.  We are non-aggressive; our vast domain leaves no motive for conquest; but, on the other hand, our fertile, unpeopled territory invites settlers, and our mines and the demand for labor on the Pacific slope are rapidly drawing thitherward from Asia an increasing tide of emigration, aiding not only in peopling that region, but in establishing closer relations as well between individuals as a more liberal commerce between the nations.

Referring to the third inquiry, it may be asked, should a new standard be adopted; is the French system more suitable for us than our own ?

Doubtless the French system embraces all the great and important principles of uniformity which can be applied to weights and measures (and coins as well), but it is not yet complete.  It is susceptible of many modifications and improvements.  And it is not inconsistent with the respect held toward so exalted a power as France, briefly for us to examine somewhat more closely certain features of this question.  We are producers; France, Belgium, Switzerland and Italy (who have adopted the system), are non-producers of the precious metals, and, therefore, while adding little to the common stock of material for metallic currency, are not affected like us by an increase in gold and silver.  Nor are they likely to be influenced as we are to be, by other coming changes.  Neither is there anything in the financial or commercial status of France which entitles her monetary scheme to a preference over all others in fixing a common coinage, unless, in itself, it is superior to all others.  This, in a practical sense, is not the fact.  Writers represent it as surrounded with difficulties, and an eminent French author calls it the worst of all systems.  Its basis is arbitrary, and the ratio it observes between gold and silver – 1 of gold for 15 ½ of silver by weight, but 1 to 14.38 in value – is a confession of the erroneousness of the plan.  In theory, her coinage is metrical, and yet it is said that France has not, nor never has had, a gold coin containing an even number of grams; or, practically, it is unmetrical.

The bill proposes 1,612.9 milligrams, or 24.89 grains, for the gold dollar.  If adopted and we should still give to our silver dollar a weight and value equal to the Mexican dollar, 416 grains, we should establish a ratio of value of gold to silver of 16.71 to 1, while 15 to 16 is as high as it would be safe to go, and where, indeed, our own standard places it.  If we consent to reduce our gold dollar, as proposed by the Paris conference, to 24.89 grains, we could not possibly coin a silver dollar that would be of any use to us in commerce, for we should increase rather than diminish the weight of the gold dollar.

On the subject of the French monetary unit Mr. Dunning, superintendant of the United States assay office in New York, a competent authority, says :

The present weight of the gold 5-franc piece is not justified by any scientific reasons better than the mathematical accident that 620 of them weigh exactly a kilogram, a circumstance which has not the slightest practical importance.  The fact is, this fractional and inconvenient weight, which the world is invited to adopt, was not fixed by the French themselves by design, but as the unavoidable result of a false theory.

Further, that after having fixed the ratio of gold as 15 ½ to 1, and having adjusted the weight of their silver coins in integral numbers, they were compelled to accept for the 5-franc gold piece the interminable decimal resulting from the division of 25 grams by 15.5, viz. 1.61290322580645.  The awkwardness and inconvenience of this weight, he adds, can be best shown by giving the weight of a few of the gold coins of France, Great Britain, and the United States, as they will be if the proposed unit is adopted (see accompanying tables).

Mr. Dunning recommended for consideration a monetary unit of 1,620 milligrams, for which he claims greater facility of making calculations than that proposed by the conference, and that it is also a compromise between the French and English coin weights, and would require a reduction on our own dollar of half a cent less than by the plan proposed in the bill.  Mr. Dubois, assistant assayer of the Philadelphia mint, concurs in the views of Mr. Dunning.

Other considerations aside, it may be said that until the leading nations represented at the Paris conference shall adopt a plan of unification, Congress may very properly decline to act; for anticipatory legislation, while disturbing relations existing between debtor and creditor, would accomplish no practical end.  Mexico would not be partial to the French system, and Canada cannot be expected to accept it until its adoption by England.  Unification to be desirable must be universal.  Unless its advantages are palpable to commercial peoples of Europe, occupying contiguous territories, and whose intercommunication is constant, it cannot be of serious moment to us, to whom the change would be of but comparative usefulness.

It has been argued as a reason for the early passage of a law to unify coinages, that commercial transactions with Europe would be facilitated thereby; and also that citizens of our country, in visiting Great Britain and the continent, would be spared losses and annoyances if we possessed uniformity.  But it should be recollected that, in all large commercial transactions, gold coin is accounted by weight and not by tale, proceeding more speedy and equally just; and of the moneys used abroad by travellers from this country, probably more than 90 per cent. is carried in bills of exchange, a mode much safer and more convenient to the traveller, and which would be continued even if the bill became a law.  The British delegates at the Paris meeting stated that, until it should be incontestably demonstrated that the adoption of a new system offered superior advantages, justifying the abandonment of that which was approved by experience and rooted in the habits of the people, the British government could not take the initiative in assimilating its money with that of the nations of the continent.

A period of suspension of specie payment like the present, it has been stated, is a favorable one for inaugurating the change proposed by the bill.  But the juncture is one marked by great differences of opinion in respect to the question of circulation, return to specie payments, and the public finances as a whole.  A change in the value of coinage would but add to the embarrassments of the situation, and it may be remarked incidentally that the reduction of the legal value of the dollar would injure largely to the benefit of speculators in gold and hoarders of the precious metals, a fact that might seriously prejudice the measure in public estimation.

If the nation were comparatively free from debt, Congress might with more propriety consider the question of changing the legal standard of coin; but one effect of reducing it as now proposed would be to deprive the public creditor of nearly $ 100,000,000 of his rightful due.  In the estimation of the committee such a proposition ought not to be entertained by Congress.  It is proper here to say, that the delegate, Mr. Ruggles, who favors unification, has at no time thought it just to lower the value of our coin without making proper allowance to the holder of the several forms of national obligations.

To be acceptable a change in our coinage must be a thing of clearly obvious advantage and proceed from the people.  There has, however, been no popular expression in favor of the proposed plan, nor, indeed, any voluntary action in that direction whatever on the part of financial men, either in this country or elsewhere.  If there has been any complaint in regard to our monetary system the fact has not come to the knowledge of your committee.  On the other hand, certain scientific bodies in our country have already protested against any ill-considered change in the American dollar.  Our coinage is believed to be the simplest of any in circulation, and every way satisfactory for purposes of domestic commerce; it possesses special merits of every-day value, and should not, for light reasons, be exchanged where the advantages sought to be gained are mainly theoretical, engaging more properly the attention of the philosopher than the practical man.  The instincts of our people lead them to believe that we are on the eve of important business changes, and we may therefore safely hold fast for the present to what experience has proven to be good, following only where clear indications may lead, and a future of great prosperity opens to our country.  The war gave us self-assertion of character, and removed many pediments to progress; it also proved our ability to originate means to ends.  Its expensive lesson will be measurably lost if it fails to impress upon us the fact that we have a distinctive American policy to work out, one sufficiently free from the traditions of Europe to be suited to our peculiar situation and the genius of our enterprising countrymen.  The people of the United States have been quick to avail themselves of their natural advantages.  The public lands not only, and the mines of precious metals, but our political institutions, have likewise powerfully operated in our favor, and will continue to do so with increasing force.

Unification of the coinage, like all similar questions, should be taken up without bias and considered on the broad ground of national interest.  At the proper time, when the country is restored to a normal financial condition, and the public ask a change in this regard, it may be well to appoint a commission of experts, carefully to consider the question in its various bearings.  Reflection and further observation here and elsewhere may suggest the foundations for a better and more enduring system than the one now proposed, which in the nature of things is but a provisional one.  Permanency is equally important with uniformity in our coinage.

John Quincy Adams, who spent several years in studying the question of uniformity in weights and measures and incidentally in that of coinage – indeed, the latter cannot be separated from the other two – says :

If there be one conclusion more clear than another, deducible from all the history of mankind, it is the danger of hasty and inconsiderate legislation upon weights and measures.  From this conviction, the result of all inquiry is, that, while all the existing systems of metrology are very imperfect and susceptible of improvements, involving in no small degree the virtue and happiness of future ages; while the impression of this truth is profoundly and almost universally felt by the wise and powerful of the most enlightened nations of the globe; while the spirit of improvement is operating with an ardor, perseverance, and zeal, honorable to the human character, it is yet certain that, for the successful termination of all these labors, and the final accomplishment of the glorious object, permanent and universal uniformity, legislation is not alone competent.  All trifling and partial attempts at change in our existing system, it is hoped, will be steadily discountenanced by Congress.

In this conclusion, which applies with even greater force to coinages, a fact fully recognized by Mr. Adams himself, the committee may safely now unite.

For the reasons herein set forth it is respectfully recommended that the bill be not now passed into a law.

 

MR.  DUNNING’S  SUGGESTIONS [16]

 

Mr. George F. Dunning, superintendent of the United States assay office in New York, in a letter to Mr. Dubois, of the Philadelphia mint, February 8, 1868, expresses his views as given below.  In forwarding this letter to Senator Morgan, Mr. Dubois expresses his hearty concurrence :

1.  The present weight of the gold 5-franc piece is not justified by any scientific reasons better than the mathematical accident that 620 weigh exactly a kilogram, a circumstance which has not the slightest importance.  The fact is, this fractional and inconvenient weight, which the world is now invited to adopt, was not fixed upon by the French themselves by design, but as the unavoidable result of a false theory.  The famous coinage law of the 7th Germinal An XI attempted to make a double standard, and to fix the ratio of gold to silver as 1 to 15 ½.  Then having very sensibly adjusted the weights of their silver coins in integral numbers, 5 grams for the franc, and 25 grams for the 5-franc piece, they were compelled to accept for the 5-franc gold piece the interminable decimal resulting from the division of 25 grains by 15 ½, viz. : 1.61290322580645.

2.  The awkwardness and inconvenience of this weight can best be shown by giving the weight of a few of the gold coins of France, Great Britain, and the United States, as they will be if the proposed unit is adopted :

Denominations of coins Existing weigth of gold, .900 fine Proposed weight adopting 1,612.9 mg for monetary unites Equivalents in troy weight
French coins mg mg grains
5 francs
25 francs
100 francs
1,612.903
8,064.516
32,258 065
1,612.903
8,064.516
32,258 065
24.8909
124.4545
497.8179
British coins      
4 shilling piece
sovereign
5 sovereigns
1,627.196
8,064.516
40,679.899
1,627.196
8,064.516
40,679.899
24.8909
124.4545
622.2724
United States coinage      
dollar
half eagle
eagle
double eagle
1,671.812
8,359.060
16,718.121
33,436.242
1,671.812
8,359.060
16,718.121
33,436.242
24.8909
124.4545
248.9088
497.8179
       
1,000 francs – French
1,000 dollars – United States
1,000 pounds sterling
322.5806
1,671.8121
8,135.9797
322.5806
1,671.8121
8,135.9797
4,978.1795
24,890.8975
124,454.4875

3.  The following table shows the weight of the same denominations of coin, &c., by adopting 1,620 milligrams instead of 1,612.9 for the monetary unit :

 

Denominations of coins Existing weigth of gold, .900 fine Proposed weight adopting 1,620 mg for monetary unites Equivalents in troy weight
French coins mg mg grains
5 francs
25 francs
100 francs
1,612.903
8,064.516
32,258 065
1,620
8,100
32,400
25
125
500
British coins      
4 shilling piece
sovereign
5 sovereigns
1,627.196
8,064.516
40,679.899
1,620
8,100
40,500
25
125
625
United States coinage      
dollar
half eagle
eagle
double eagle
1,671.812
8,359.060
16,718.121
33,436.242
1,671.812
8,359.060
16,718.121
33,436.242
25
125
250
500
       
1,000 francs – French
1,000 dollars – United States
1,000 pounds sterling
322.5806
1,671.8121
8,135.9797
324
1,620
8,100
5,000
25,000
125,000

4.  It will be noticed that the proposed unit of 1,620 milligrams [17] has the merit of offering to Great Britain an even compromise of the difference between her present coinage and that of France instead of a reduction of the British gold coins of 0.87 per centum to make them equal to the French coins.  The unit of 1,620 milligrams exactly splits the difference, requiring an increase of the French coins of 0.44 per centum, and a diminution of 0.44 per centun in the British coins.  This difference is so slight as hardly to call for any legal adjustments of existing contracts in either country; and while in the United States such an adjustment will doubtless be required, the proposed unit of 1,620 makes the reduction of our coins almost one-half per centum less than would be effected by the unit of 1,612.9.  The exact difference as shown by the above tables is 42 of one per centum.

5.  There is another very important advantage offered by the unit of 1,620 milligrams, which you and all who have to do with mint calculations will appreciate.  I allude to the facility of making calculations.  I will not attempt to exhibit the difficulties in calculating value from the standard weight when the relation is expressed in such interminable decimals as must result from the adoption of the unit 1,612.9.  But you will see at a glance the facility of dealing with the unit of 1,620.   The weight of 1,000 francs, or $ 200, or £ 40, at 1,620 milligrams to the dollar, would be 324,000 milligrams.  These values are readily deduced from the weight, as will be seen by the following examples :

 

France United States Great Britain
Milligrams
÷ 9 =
÷ 9 =
÷ 4 =

324,000
36,000
4,000
1,000

Milligrams
÷ 9 =
÷ 9 =
÷ 20 =

324,000
36,000
4,000
200

Milligrams
÷ 90 =
÷ 90 =

324,000
3,600
40

The above divisions are performed mentally without difficulty, and the rule of calculation is exceedingly simple.  It is not at the mint alone, nor chiefly, that this facility of calculation will be appreciated.  The transactions in coin and bullion the world over will be simplified by it.  The experts at the mint can soon adapt themselves to any system, however complicated; but for the convenience of commerce the relation of weight to value in the coins of the world ought to be simple.

6.  If the troy system of weights is to be continued in this country and Great Britain, it will be immensely important that the monetary unit expressed in milligrams should be easily convertible into troy weight.  A glance at the tables given above will show the discrepancy between the unit of 1,612.9 and the troy system, and also the beautiful and almost marvelous harmony effected by the unit of 1,620 milligrams.

7.  I trust, however, that Mr. Sherman’s bill will contain a section making the use of the French system of weights obligatory in all the mints of the United States.  This change would seem to be almost a necessary part of the plan of monetary unification of the world’s coinage; and it would certainly be a judicious method of partially familiarizing the country with the metrical system, the universal adoption of which, even if not perfect, is so devoutly to be wished.

 

BILL  INTRODUCED  BY  MR.  KELLEY

 

In the House of Representatives, July 21, 1868, Hon. William D. Kelley, of Pennsylvania, introduced a bill designed to promote the establishment of an international metrical system of coinage.  It was read twice and referred to the Committee on Coinage, Weights and Measures [18].  It proposes unification upon the decimal-metrical basis, and, as the whole bill is short and concise, it is here given entire :

Whereas certain nations of Europe have adopted and have proposed to the rest of the world a coinage which was originally based upon that system of weights known as the metrical, but which, under the influence of circumstances, has departed from its intended character; and whereas there is an assured expectation that this character of simple relationship to metrical weights will be ultimately returned to; and whereas the coinage of the United States can be brought into exact conformity with metrical weights by a change in its value, amounting to less than one-third of one per centum in the case of gold coins : Therefore,

Sec. 1.  Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the gold hereafter coined by the United States shall contain, for each dollar of denominational value, one and one-half grams of pure gold, and shall weigh, for each dollar, one and two-thirds grams, the proportion of alloy being thus kept as one to ten.

Sec. 2.  And be it further enacted, That such coins shall be legal tenders in payments arising from contracts made at any time after the first of January, eighteen hundred and sixty-nine, and that in case of all other payments, including those from the United States to its creditors, one thousand and three dollars of this new coinage shall be the legal equivalent of one thousand dollars of the old coinage of the United States, such being their actual relative values.

Sec. 3.  And be it further enacted, That such coins shall have stamped upon them, in addition to other devices, their weight in grams and the inscription, nine-tenths fine.

Sec. 4.  And be it further enacted, That the silver half dollars, and all smaller silver pieces, hereafter to be coined, shall consist of standard silver, nine-tenths fine, and shall be of the weight of twenty-five grams for each dollar of denominational value; and shall have their weight and fineness legibly stamped upon them; and shall be legal tenders for the payment of all sums not exceeding ten dollar.

The provisions of the foregoing bill are in accordance with the views of Mr. B. Elliott.

 

VIEWS  OF  MR.  B.  ELLIOTT

 

At the meeting of the American Association for the Advancement of Science at Chicago, in 1867 and 1868, Mr. E. B. Elliott, of Washington, D.C., read a paper upon «The Metrical Unification of International Coinage», in which was advocated, if any immediate change should be deemed necessary, the adoption of gold coins, which should have very simple relations with the gram, the metric unit of weight.  The proposed French coinage did not have this simple relation, whereas the present weight of our own gold coins is almost strictly metrical, the variation being only about three mills in the dollar.

He also called attention to the important fact that the principal gold coins of the United States, Russia, Spain, and certain states of Central America, were so nearly metrical (giving the exact numerical relations in each case) that a change in the laws making them strictly so would prove only a nominal change, no recoinage being necessary.  He also called attention to the fact, of still higher interest, that in 1857, all Germany and Austria adopted a strictly metrical coinage of gold, by establishing the Union crown and half-crown – the former containing precisely ten grams and the latter five grams of fine gold.  These several countries, which may be called countries of metrical coinage, have a population of about 200,000,000, a number greatly exceeding the population of the countries following the gold coinage of France, with its complex and cumbrous relations to the metric unit of weight, the gram.  He alluded also to the fact that several of the most prominent scientific men of France and Belgium – among others the eminent M. Chevalier – were earnestly opposed to retaining the existing coinage of those countries, simply on the ground of its want of harmony with their beautiful system of weights and measures.

These views of Mr. Elliott are exemplified by the following tabular exhibit of the relations of the existing and proposed systems of coinage :

 

Example of existing and proposed systems compared

Existing United States system closely approximates to the metrical system Metrical system, should be adopted System which it is thought should not be adopted

9/10 of pure metal to 1/10 of alloy

standard gold – legal tender in payment of all amounts
ratio of value of gold to silver
standard silver – fractional legal tender only in payment of small amounts
$ 3 = 5.015 g
± 14 ⅞ to 1
$ 1 = ± 24 ⅞ g
$ 3 = 5 g
15 to 1
$ 1 = 25 g
$ 3 = 30/31 of 5 g = 4.8387 g
± 14 ⅜ to 1
23.2 g

The fineness of both the gold and the silver coins in each of the abovementioned systems is the same, namely 9/10 of pure metal to 1/10 of alloy.  The ratio of gold to silver assumed in each of the above cases is a safe one, being below the market rate, and consequently rendering the silver coins of greater nominal value (expressed in gold values) than their actual market values.  This is as it should be.  The relative market value of gold to silver for the past 14 years has averaged 15 ⅜ to one.

The second case – that of the metrical system – is obviously the most simple as regards the relation of the weight of the coins to the metrical unit of weight, the gram, as also in relation to the relative market values of gold and silver.  The third case is the least simple of the three cases.  Five dollars being the limit in the first case, and ten dollars in the second and third.  The simplicity of the German standard compared with others is still more clearly shown by the succeeding table

 

Comparison of German and other standards

Coins Present content of pure gold in g Proposed content of pure gold in g
metric French British
Three Union crowns of Germany
Twenty United States dollars
One hundred French francs
One thousand British pence
Four British pounds or sovereigns
Four Spanish doubloons each of 10 escudos
Five Russian half-imperials
30.0000
30.0926
29.0323
30.5099
29.2895
30.1932
29.9935
30
30
30
30
30
30
30
29.0323
29.0323
29.0323
29.0323
29.0323
29.0323
29.0323
29.2895
29.2895
29.2895
29.2895
29.2895
29.2895
29.2895

CONCLUSION

 

In conclusion, the various systems and modifications discussed in the foregoing pages may be succinctly compared.

Upon the necessity and advantages of establishing a uniform system of money of account and coins, and upon the adoption of a single standard of gold 9/10 fine, there appears to be a general unanimity of opinion.  The question to be decided then is : what system in the abstract is the best ? or which of the proposed systems shall be adopted ?

There is no doubt that by disregarding the existing systems and looking at the subject theoretically, a complete and universal decimal-metrical system could be devised that would be far more complete and satisfactory than any yet proposed; but as it would be practically impossible for the nations to unite upon such a theoretically perfect system, at least for a couple of generations, the best way is to arrive at unification by approximations, modifying the existing systems as little as possible, consistent with harmony, and thus avoiding great changes in value of moneys of account and in coin.

There are now three prominent systems of unification proposed :

1st.  That of the Paris conference, embodied in the bill introduced by Senator Sherman.

2nd. The system introduced in the Senate by Senator Morgan.

3rd.  The system embodied in the bill introduced in the House of Representatives by Hon. W. D. Kelley.

The system of the Paris conference requires the United States gold dollar to be diminished in weight from 1.671812 gram to 1.612903 gram, or 3.52 per cent., this being equivalent to $ 3.52 in value on every $ 100.  Neither the gross weight of the coin nor the weight of the fine gold in the coin have either simple or convenient relations to the gram, and an interminable complex fraction is required to express the weight decimally.

The second system or that suggested by Mr. Dunning and Senator Morgan, requires the dollar to be reduced in weight to 1.620 gramn, or 3.10 per cent. being $ 3.10 in value on every $ 100.  The fraction in this case is not interminable, and the weight is much more simply expressed than in the first system; and, moreover, it has simple relations with the troy weights and can be easily converted from terms of one system into those of the other.

A third system requires the dollar to be reduced in weight to just one and two-thirds (1.666666) gram or of 1 per cent., being equivalent to thirty cents ($ 0.30) in value on every $ 100.  This may be called a metrical system; for, according to it $ 3 in gold would weigh exactly 5 grams, and $ 6 would weigh 10 grams, and $ 10 16 2/3 grams.  The proposed modifications of existing weights and the percentage of change, not only of the dollar, but of the franc and of the pound, are shown and compared in the annexed table.

 

APPENDIX : RELATIVE  VALUES  OF  GOLD  AND  SILVER

 

From statements by Pliny it appears that in the Roman coins the value of gold to silver was as 5,760 to 336, or as 17 7 to 1; but this was not the relative value in bullion, which appears to have been as 14 i to 1.  This ratio did not long continue.  About 189 B.C. the Romans coincided with the Greeks in estimating the value of gold compared with silver as 10 to 1.

Upon Cæsar’s return to Rome with the spoils of war, gold became so abundant that its value, compared with silver, fell to the ratio of 750 to 100, or 7 ½ to 1.  This, however, was a transient depression in the value of gold, for, in the time of Claudius, about a century later, the value of gold had advanced so that its ratio to silver became as 12 ½ to 1.  This ratio appears to have been preserved through the reigns of Nero and Galba, and during the interval between Galba and Alexander Severus, or more than 150 years.

Under Constantine the Great the value of gold had receded, as compared with silver, to the ratio of 10 ½ to 1; but 60 years after Constantine the value had increased to 14 to 1.

In a statement by Herodotus of the revenues of Darius, the son of Hystaspes, he proceeds upon the supposition that the value of gold to silver was as 13 to 1.  It is supposed that the value of gold did not long continue to be so high in Greece, for Plato, 50 years after Herodotus, asserted the ratio to be as 12 to 1.  Gold had at that time a lower value in Persia than in Greece.  The ratio in Persia appears to have been as 11 to 1.

Gold afterwards became so plentiful in Greece that its value was estimated, compared with silver, as 10 to 1.  This was about 341 years B.C.  It is supposed that the value of gold, compared with silver, continued to be as 10 to 1 for 170 years after the death of Alexander.

When guineas were first coined in 1663 the value of fine gold, compared with that of fine silver, was rated in the English mint at 14 221/682 to 1.  Guineas were then coined as 20 shilling pieces, but were afterwards made current as 21 shilling pieces.  In 1805 the relative value of fine gold to fine silver was as 15 2859/13640 to 1, and in mints of several other countries it was rated still higher [19].

The following tabular statements show the ratio or value of gold to silver at different periods down to the present time :

 

Relative values of gold and silver at different periods

 

Period

Henry III – 41st year
Edward III – 18th year, commencement of gold coinage
Edward III – 18th year, July 9
Edward III – 20th year
Edward III – 27th year
Henry IV – 13th year, silver coin debased
Edward IV – 4th year
Henry VIII
Elizabeth (old standard)
Elizabeth (new standard)
James I – 2nd and 3rd years (old standard)
James I – 2nd and 3rd years (new standard)
James I – 9th year
James I – 9th year
James I – 17th year
James I – 17th year


9
12
11
11
11
10
11
11
10
10
12
12
13
13
13
13

Gold to silver

51/191
14844/25403
1175/25403
1637/72865
151/955
190/573
151/955
59/220
5614/5921
617/682
876/1703
186/1703
10739/29063
248/775
2059/5921
118/341

 

Hunt’s Merchants’ Magazine for August, 1863, contains the following table, which covers a portion of the period given above, and shows the relative value of gold to silver at various periods from 1344 to 1863, as indicated by the prices paid by the mint in London :

 

1344
1349
1356
1401
1421
1464
1465
1470
1482
1509
1527
1543
1545
1546
12.475
11.141
11.286
11.350
10.527
10.331
11.983
11.446
11.429
11.400
11.455
12.000
10.714
10.000
1547
1549
1552
1553
1560
1600
1604
1626
1666
1717
1816
1849
1852
1863
11.400
11.250
11.186
11.198
11.315
11.100
12.109
13.431
14.485
15.209
15.209
15.632
15.371
15.069

Mr. E. B. Elliott, of Washington city, has kindly furnished the following data on this interesting subject to Commissioner Browne.  The annexed tabular statement has been prepared by him with great care, and differs in some respects from that of the Merchants’ Magazine :

 

Ratios of the market value of gold to silver, in London, for the 70 years from 1760 to 1829,

inclusive, and the 26 years from 1841 to 1866, inclusive – in all, 96 years

 

1760 to 1789 (30 years)
1790 to 1809 (20 years)
1810 to 1819 (10 years)
1810 to 1819 (10 years)
1820 to 1829 (10 years)
1830 to 1840 (11 years)
1841 to 1848 (8 years)

14.50
14.90
15.50
15.50
15.80

15.83

Prior to the opening of the gold mines of California and Australia

 

Discovery of gold fields in California, 1848.

 

1849 to 1852 (4 years)

15.60

Transition period

1853 to 1858 (6 years)
1859 to 1862 (4 years)
1863 to 1864 (2 years)
1865 to 1866 (2 years)

15.34
15.34
15.37
15.46

Since the opening of California and Australian gold fields, average 15.38 to 1

 

Simplest, and probably most convenient, mint ratio of gold to silver, 15 to 1; present United States mint ratio of gold to fractional silver, 14.88 to 1; United States mint ratio of gold to silver dollar (circulation limited because overvalued), 16 to 1; British mint ratio of gold to silver, 14.28 to 1; French mint ratio of gold to silver 5-franc piece (circulation limited because undervalued), 15.5 to 1; French mint ratio, gold to debased smaller silver coinage, 14.38 to 1.

The ratios since 1859 were deduced from the semi-monthly quotations of the price per ounce of silver bars in London, published from time to time in the journal of the Statistical Society of London.  From 1841 to 1848 the values adopted were computed from data furnished by Mr. William Newmarch in a valuable paper read by him before the London Statistical Society and published in the journal of that society.  From 1760 to 1829, inclusive, the values were taken from the funding system of Mr. Jonathan Elliott, which forms part of the executive documents of the second session of the 28th Congress.  For the 11 years, 1830 to 1840, inclusive, there is a lapse in the information furnished; but it is deemed safe to assume the ratio for this period as 15.8, the ratio of the periods just prior and subsequent to the interval.

It will be observed that with the discovery and working of the California and Australian gold fields the relative value of gold to silver fell from an average of 15 ⅞ for the eight years 1841-48, just prior to this event, to an average of 15 ⅜ for the 14 years 1853-66, which followed the transition period of four years 1849-52.



[1]      Extracts from the report of Baron de Hock.

[2]      Vide Rapports et Procès-verbaux du Comité des Poids et Mesures et des Monnaies, p. 18, and for the resolutions submitted by Mr. Kennedy, p. 49.

[3]      The proceedings of the conference were fully reported in an official volume, entitled Conférence Monétaire Internationale, Procès-verbaux, Paris, Imprimerie Impériale, 1867.  A translation accompanied by translations of other documents and letters relating to this subject was transmitted to Congress, and was published (vide Ex. Doc. No. 14, 40th Congress, 2nd session).

[4]      This speech, and the following report by the delegates from Great Britain, of the doings of the international monetary conference, are extracted from the official Report of the International Conference on Weights, Measures and Coins, held in Paris, June, 1867, and «Report on the International Monetary Conference, &c.,» presented to the House of Commons by command of Her Majesty, in pursuance of their address, dated March 9, 1868. London, printed by Harrison & Sons. Page 75.

[5]      If issued in the first instance as a subsidiary coin or token, the gold ducat might be declared by law to be of the value of 100 pence, notwithstanding the slight difference in relation to their nominal value.  Should, however, the coin and the decimal system founded upon it find favor with the public so as to justify the government in declaring it a primary unit, then its relation to the sovereign would be regulated by tariff according to its intrinsic value.

[6]      Report, addressed to the Lords Commissioners of the Treasury, by the Master of the Mint and Mr. C. R. Wilson, on the International Monetary Conference, December 2, 1867, signed by Sir Thomas Graham and C. Rivers Wilson.

[7]      Austria, Baden, Bavaria, Belgium, Denmark, United States, France, Great Britain, Greece, Italy, Netherlands, Portugal, Prussia, Russia, Spain, Sweden and Norway, Switzerland, Turkey, Wurtemberg.

[8]      The English ratio at present is 14.28; the United States ratio is 14 ½ for subsidiary silver; the French ratio is 14.38 for subsidiary silver.  W. P. B.

[9]      It would be better to stamp such a coin 100 pence rather than 8 s.  W. P. B.

[10]    Vide Blue Book-Report from the Royal Commission on International Coinage, together with the minutes of Evidence and Appendix.

[11]    The weight of the existing gold dollar, when new, is slightly (only about three-tenths of one per cent.) in excess of the proposed metrical dollar, the former containing of fine gold 1.505 grams, or of standard gold (nine-tenths fine) 1.672 grams; an excess of about 5/1000ths of a gram, or 8/100ths of a grain, and which is about one-third of deviation allowed the mint.

[12]    The existing legal-tender silver 5-franc piece of France contains 25 grams of standard silver (nine-tenths fine), or 22.5 grams of fine silver, the same as herein proposed.  Our existing fractional and subsidiary silver coins are somewhat smaller than the above, about one-half of one per cent., containing of standard metal at the rate of 24.86 grams to the dollar, instead of 25 grams, the difference being inconsiderable.

[13]    It will be observed that the proposed silver coinage has precisely 15 times the weight of the proposed gold coinage of the same denominations.  The market equivalent is, and for the past 60 years has been, greater than this, the value of gold relatively to silver having averaged for the past 14 years 15 ½ times that of silver.  Hence, by the above propositions, silver is overvalued, as according to the experience of all commercial nations, it should be.  But, to prevent the silver from driving the gold from circulation, it is necessary, as proposed, that the silver should be legal-tender only in payment of sums of small amount.  The limit in the United States is now five dollars; in England 40 shillings (about $ 10).

[14]    Senate report No. 117, 40th Congress, 2nd session.

[15]    See reports of Mr. Ruggles and J. Ross Browne.

[16]    Appended to the report of Senator Morgan.

[17]    The exact equivalent of 1,620 milligrams is in troy grains 25.0004; discarding this fraction of it involves a discrepancy in calculations of only one cent in $ 600, or 1/600th of one per cent.

[18]    40th Congress, 2nd session, H. R. 1445.

[19]    Vide «A Treatise on the Coins of the Realm», in a letter to the King.  By Charles, Earl of Liverpool.  Oxford, 1805.  4to.

 

 

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