Report to the Department of State by Samuel B. Ruggles, delegate from the United States in the International Monetary Conference at Paris, 1867
Paris, November 7, 1867.
On the 4th of October last, the undersigned transmitted to the Department of State duplicate copies duly corrected and verified of the Procès-Verbaux, or official reports, of the eight successive séances, or sessions, of «The International Monetary Conference», at Paris, terminating on the 6th of July last.
The government of France, at the request of the conference, undertook the duty of transmitting to the different nations, through their delegates in the conference, copies of these official reports. The general features of the plan of monetary unification agreed to by the conference have been already reported to the Department of State. Briefly repeated, they are as follows :
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, 1612.9 milligrams, to be the unit, with its multiples. (The weight of the present gold dollar of the United States is 1671.8 milligrams. The value of the excess over the five-franc gold piece, 58.9 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 unanimously 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 18 ¼ cents; in the sovereign, 4 ¼ 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 next, 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 is now distinctly presented for consideration and decision to the governmental authorities of the United States, executive and legislative.
The communication from the Department of State to the undersigned, of the 30th of May last, empowering him, within the limits therein stated, to represent the United States in the conference, directed him not only to report its proceedings and conclusions, but to add such «observations as might seem to be useful». He therefore respectfully submits the following 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.
1. 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, Lubec 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 :
États-Unis (United States of America)
Sweden and Norway
Their aggregate population, European and American, a little exceeds three hundred and twenty millions. The population of the dependencies of these nations in Asia is estimated at one hundred and ninety millions. 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 twenty francs, of five francs, and of one 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 ½ 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 pagan Asiatics had fixed the ratio at only 4 to 1, which great exaggeration of silver they were furthermore induced to continue by a treaty in 1858, 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 ½ 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, will 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 and 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 singuar 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.
2. There is good reason to believe that the disparity in the representation of the two continents was not occasioned by any want of consideration for the nations of Central and South America, but solely by want of time to reach them with formal invitations. The consequence was that the United States, being the only transatlantic country represented, its delegate is erroneously mentioned in the official report as the «sole representative of the transatlantic countries». He begs to state that he did not profess or seek in any way to represent any nation but the United States. The conference is repeatedly mentioned in the official report as embracing «all the sovereign states of Europe and the government at Washington» ; but if that implies that the United States assumed any authority to speak for any other of the nations of either of the two Americas, it was not warranted by any act of the undersigned.
Wholly disclaiming any wish to exceed the limits of his proper authority, he would nevertheless venture respectfully to suggest for the discreet consideration of the government at Washington, whether it would not be desirable for the United States, either singly or in co-operation with France, to invite the early attention of the independent American nations of Spanish or Portuguese origin, now nine or ten in number, to the proposed plan of monetary unification, in the hope that the whole of the western hemisphere may he brought into line in this onward march of modern civilization.
The long array of states in Central and South America, which for brevity may be classed among the «Latin» nations, now embraces in the aggregate a population of more than thirty millions of inhabitants, enjoying an oceanic commerce with the United States, Great Britain and France (the three great coining nations), exceeding yearly two hundred millions of dollars, and above all, possessing the larger portion of the grand trunk of the broad metalliferous mountain range stretching from Cape Horn to the Arctic ocean. Our own gold and silver bearing, snow-clad Sierra Nevada and Rocky mountains are only the offspring and off-shoots of the Sierra Madre, itself a prolongation of the Cordilleras, first yielding up their metallic treasures to the Spanish nations planted by Cortez and Pizarro. Speaking the languages of Spain and Portugal, these «Latin» races of the two Americas approach, to say the least, in general culture and intelligence, some of the Teutonic and Slavonic races represented in the conference.
In view of the continental importance of securing the early and cordial co-operation of these neighboring nations, the government of the United States will be gratified to learn that the extensive and rapidly improving empire of Brazil, so favorably known by its well-directed patronage of industry and science, although not directly represented in the conference, nevertheless enjoyed the opportunity of fully participating in the preliminary examinations of the international committee on weights and measures and coins, composed largely of members selected from the commissioners from the numerous nations represented at the Universal Exposition. Of that committee Señor de Porto Allegri, the regularly commissioned representative from Brazil, was not only a member, but actually the president of the subcommission on uniform coinage. In that capacity he carefully presided over its deliberations and united in its general resolutions, copies of which have been heretofore transmitted by the undersigned to the Department of State, and which will be found to be fully in harmony with the plan or basis proposed by the conference.
3. 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 Saint 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 difference from those of Europe or the United States, as to render the task of unification seriously difficult on their part. The gold doubloon or «doublon», 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» reports that 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 Chill 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 one hundred francs, which would render them at once equivalent to the double-eagle (or twenty dollars) 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 in halves and quarters would supply for the people of Spanish America one convenient coin, equivalent to fifty francs, or an eagle of the United States, or two British sovereigns; and another coin, equivalent to twenty-five 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 twenty soles; each of them being nearly equivalent to the double-eagle.
The 20 «mil-reis» 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 twenty-five francs, with such subdivisions and multiples as convenience might require.
4. The importance of including the whole of the western hemisphere in the work of unification is still more evident when we consider its intermediate position on the globe, as a connecting link or stepping-stone between western Europe and eastern Asia, and the dominant fact that the two Americas already furnish the larger portion of the gold and silver of the world. The comparatively moderate quantities found on the eastern continent, hardly suffice for the necessary consumption in the arts in the populous parts of Europe. The mines of Russia yield annually but little more than fifteen millions of rubles ($ 12,000,000), of which more than two-thirds are painfully extracted from eastern Siberia, north of the sixtieth parallel of latitude, in ground frozen eight months of the year, and far remote from any adequate supply of food. There is no probability of any large or disturbing influx of gold into western Europe from that distant quarter of the globe.
The course of the monetary currents through middle and eastern Asia is instructively indicated by recent statistical returns from Russia, showing that of the gold and silver coin sent in 1865 from Russia overland into China, through the international entrepôt of Kiachta, 3,876,184 rubles were in silver, and only 327,979 rubles in gold.
Of the large gold product of Australia, exceeding in some years sixty millions of dollars, portions are sent to Calcutta, Canton, and other oriental ports, and the residue principally to London. The sovereigns of Australia, bearing the head of Queen Victoria, finely struck, have recently been made a legal tender throughout the British empire.
A portion of the gold of California and of Nevada has now began to find its way directly to China, in the Pacific steamers, by a line shorter by at least eight thousand miles than the circuitous route hitherto pursued by the way of Panama, the Atlantic ocean, the Mediterranean, the Red sea, and the great Indian ocean. So marvelous indeed are the facility and the economy already afforded by this new line, in connection with the land and ocean telegraphs, that the London banker, with one hand, and within thirty-six hours, may order his correspondent at San Francisco to ship gold to Canton directly across the Pacific, requiring from twenty to twenty-five days, and with the other may telegraph to his correspondent in Ceylon to send to China by the mail steamer from that island, in ten or twelve days, the necessary advices of the shipment. The « inexorable law of cheapness » will soon render permanent this strange geographical inversion, by which the money of the Pacific slope of the western world is sent westward to find the markets of the east.
5. The proposed unification of gold will necessarily involve the expense of recoinage only by the nations not already measuring their money in francs. No recoinage will be needed in France, Belgium, Switzerland or Italy, to which have been recently added the Pontifical States and Greece, the whole embracing a population exceeding seventy-two millions. Every other nation has a different coinage, no two of them being alike. It could not be reasonably proposed that these united nations, with seventy-two millions of people, should call in and recoin all their gold, to conform its weight and value to the coinage of any other separate nation, with a population much inferior in number, and especially with a much smaller amount of actual coinage.
On this point it became necessary to examine the statistics, so far as the United States, Great Britain, and France, the three great coining nations, were concerned. Gathered exclusively from official documents, they will be found condensed in the «Note» or written argument in favor of the twenty-five franc coin, submitted by the undersigned in behalf of the United States, and printed as an appendix to the sixth séance, at page 91.
For more convenient reference, the figures are now repeated, as follows :
|I.||The gold coinage of the United States in the fifty-seven years from
1792 to 1849, next preceding the outburst of gold in California in 1849, was
In the next two years, 1849 and 1850
In the next fifteen years, 1851 to 1866
|II.||The gold coinage of Great Britain in the thirty-five years from its
reform, in 1816, to 1851, was £ 96,021,151, or
In the fifteen years from 1851 to 1866, £ 91,047,139, or
|III.||The gold coinage of France in fifty-eight years, from 1793 to 1851,
was, in francs, 1,622,462,580, or
In the fifteen years under the empire of Napoleon III, from 1851 to 1866, in francs, 4,938,641,490, or
|Total coinage by the three nations before 1851 :
By the United States
By Great Britain
|From 1851 to 1866 :
By the United States
By Great Britain
The preceding summary does not include the gold coinage of Australia, full statistics of which the undersigned hopes to be able soon to furnish. The value of the gold produced in the year 1865 in Australia was $ 43,686,665; in New-Zealand, $ 11,133,370. He also proposes to add to this statement reliable statistics of the gold coinages of the other principal coining nations of Europe, and especially of Spain, Prussia, Austria and Russia; but for the present purpose the preceding comparison of the three nations may suffice. It points clearly to the following results :
The amount coined by the United States having been $ 845,536,591, if two-thirds shall be deducted for the portion recoined in Europe or used in the arts, the amount remaining which would require recoinage would not exceed, in round numbers, $ 300,000,000. It is true that a portion of the coin of the United States exported to Europe is sent without recoinage to Germany and other continental nations, for the use of their people emigrating to the United States. But if we allow $ 200 per capita (which, including women and children, would be a large estimate) for 150,000 emigrants, it would amount only to thirty millions of dollars. In view, moreover, of our large importations of foreign merchandise, with our temporary disuse of gold for domestic purposes, even the estimate of $ 300,000,000 may be too large. The recoinage, however, of the whole amount would cost, at one-fifth of one per cent. (the rate ascertained by experience), only $ 600,000.
The amount of gold now in actual circulation in France, Belgium, and Italy, is estimated by M. de Parieu, and other distinguished economists of Europe, at 7,000,000,000 of francs, or $ 1,400,000,000. The amount in circulation in the residue of continental Europe would probably carry the total to $ 1,800,000,000. To suppose that the seventeen nations, from the Atlantic to the Volga, would or could unite in recoining such an amount, and in abandoning every vestige of the monetary portion of the metric system, merely to adopt the existing coinage of the United States, with only $ 300,000,000 outstanding, would be preposterous indeed.
The proportion of the total amount of British gold coinage ($ 935,341,450 in fifty years) now in circulation, is variously estimated from £ 80,000,000 ($ 400,000,000) to £ 100,000,000, ($ 500,000,000), mainly in sovereigns, many of which are now so much worn as to be reduced in actual value to twenty-five francs. A considerable amount of British gold must have been imported into France, to enable her to coin the $ 987,728,298 in the fifteen years from 1851 to 1866. If $ 500,000,000 yet remains outstanding in Great Britain, the cost of its recoinage at one-fifth of one per cent., to effect the proposed unification, would be covered by a million of dollars.
It will be borne in mind that this expense of recoinage by the several nations is to be incurred but once for all, while the incessant remeltings and recoinages under the present system by the mints of different nations are a constant and needless diminution of the monetary wealth of the world. The burden principally falls on the nations, like the United States, which export gold needing to be recoined, the value of which abroad is reduced precisely by the cost of its recoinage.
If the total expense of the necessary recoinage throughout the world to accomplish the proposed unification were even to reach two millions of dollars, it would be speedily reimbursed in the saving of further recoinages, brokerages and exchange. Without attempting at the present time accurately to estimate these savings in detail, (more properly the duty of an experienced commercial committee), we may safely assume that they would amount yearly to several millions of dollars.
It is stated by an eminent and experienced banker in Europe, that there are now scattered through its different nations and along their frontiers at least five thousand money changers (including their employees), who gain their living by changing the gold of the various countries of the world. If there are but two thousand, earning yearly an average of one thousand dollars each, it would amount to two millions of dollars yearly, which the world ought to save and would save by the proposed unification, not to mention the vexatious loss of time in calculating fictitious rates of exchange, and the large additional saving in the future product of gold.
The estimate of $ 1,400,000,000 as the gold circulation of France, Italy and Belgium, will not be regarded as exaggerated when we consider the heavy drain of silver from France during the last fifteen years, in connection with the fact that its silver coinage from 1795 to 1851 had amounted to 4,457,595,345 francs, or $ 891,519,069. Of this large amount, at least $ 750,000,000 are said to have been exported within the last fifteen years, principally to the East Indies, leaving the amount of silver now in circulation, in France, not exceeding $ 150,000,000.
The coinage of silver at the royal mint of Great Britain in the ten years from 1857 to 1866, both inclusive, was only £ 3,677,182, or $ 18,385,910. The total coinage of silver in France during the reign of the present Emperor, in the fifteen years from 1851 to 1866, was only 215,561,101 francs, or $ 43,112,180. The silver coinage of France, Great Britain, and the United States, from 1851 to 1866, was, in round numbers, only $ 117,000,000, against a gold coinage, in the same period, of $ 2,108,000,000.
So severe, indeed, had become the destitution of small silver coin in 1865, that the treaty of the 23rd of December, of that year, authorizing the issue of silver of denominations less than five francs, reduced its standard about seven per cent. (from .900 fine to .835 fine), to prevent its further disappearance. At the same time, it limited the amount to be coined in France to 239,000,000 francs, or $ 47,800,000.
Fortunately for France and the commercial world, the surplus gold of the United States was at hand during these fifteen years, ready to be recoined. Steadily filling the immense vacuum caused by this great export of silver, it now invigorates every branch of industry in France.
The monetary movement in these fifteen years on the waters of the globe signally illustrates the power of the oceans not to divide but to unite the continents in a common «solidarity». Subdued by steam to the use of man, they are now incessantly ministering to the wide-spread monetary necessities of the human race. It needs but a glimpse of their statistics to map out the great oceanic monetary currents. Within that brief period, only the dawn of the opening auriferous era, we discern a mass of gold, in the aggregate exceeding $ 500,000,000, moving across the Atlantic from the United States; another and still larger volume of $ 833,000,000 pouring out from Australia upon the surrounding oriental waters, and at least one-half finding its way to London over the Indian ocean, the Mediterranean and the Atlantic; another golden mass of $ 620,000,000 crossing the British channel into France, while the great countercurrent of $ 565,000,000 of silver, largely derived from France, is seen flowing out of England and up the Mediterranean on its way to the ever-absorbing East.
6. While we see the gold of the United States largely diminished by export to other nations, it should be considered, that its present product may rapidly and largely increase under the stimulating influence of the Pacific railway and its branches (the main line being now in vigorous progress), penetrating our metalliferous interior and greatly facilitating and encouraging our mining industry by the cheap and expeditions carriage, not only of machinery, but of food in large quantities, both from the Pacific slope and the fertile valley of the Mississippi. With these superadded facilities, our rate of product of gold for the next fifteen years, to say the least, can hardly diminish. At only $ 60,000,000 yearly (the average rate for the last fifteen years), our product in the next fifteen years will add to the gold of the world $ 900,000,000. It certainly is not impossible, nor very improbable, that this amount may be considerably exceeded. It was in view of the large and inevitable addition to our gold product, that the undersigned deemed it necessary to insist in the conference, in behalf of the United States, that the work of monetary unification, with its consequent recoinage, must be accomplished «now or never».
The interesting theme of the future development of the trade and power of the two Americas on the Pacific, an ocean as yet almost unoccupied, would open a field of view quite too large for exploration on the present occasion. Confining our examination to their mining industry, it is enough to say, that by the natural increase of their population, incessantly swelled by immigration from overcrowded Europe, at least 130,000,000 of inhabitants, under governments more or less united or confederated, will be found, at the end of the next fifty years, in possession of the whole line of the gold and silver-bearing Cordilleras and their branches from Bering’s straits to the confines of Patagonia. Their incalculable masses of treasure, now comparatively dormant, but then brought actively out to light, will be counted indifferently by dollars and by francs. We need but to look calmly and clearly ahead to perceive and to feel, that it has already become, not only the privilege, but the solemn duty of the United States and of all the nations of the western hemisphere, custodians, under the irresistible logic of events, of so large a portion of the money of the world, to secure the uniformity of its coinage, for no narrow «inch of time», but for the unnumbered ages yet to come.
Above all, let us never forget that the two Americas are Christian members of the great family of nations, and that the unification of money may be close akin to other and higher objects of Christian concord. We cannot wisely or rightfully remain in continental isolation. Integral portions of the mighty organism of modern civilization, let us ever fraternally and promptly take our part in the world-wide works of peace.
7. The present heterogeneous condition of the coinages of Europe was originally and primarily caused by the downfall of the Roman empire. The widespread rule of Augustus and his successors embraced a population of various races, estimated at its zenith at one hundred and twenty millions. His vigorous arm suppressed the private coinages of the leading Roman families under the republic. The coin of his government bore «the image and superscription of Caesar» throughout the wide extent of the empire. Authoritative alike on the Jordan and the Thames, the far-reaching imperial edict regulated the money of Judea, and restrained the rude coinage of the barbarous tribes of Britain.
It is true that the imperial money, subject, like all human things, to the fundamental law of demand and supply, largely fluctuated in value during the first four centuries, but its coinage remained directly or indirectly subject to the central authority until the final wreck and disintegration of the empire.
By that momentous event, western Europe was strewed with fragments from the Mediterranean to the Baltic, and the wall of Britain. The monetary fabric, once so firmly united, shared the fate of the empire. Petty chieftains, seizing the political debris, built up petty states, lay and ecclesiastic, by hundreds on hundreds, each of them claiming, and most of them exercising, the sovereign power of coining money. Pre-eminently was this the case in that portion of Europe now called «Germany», which bears even yet on its motley political surface, and still more strikingly on its diversified coinage, the marks of the great disintegration. Even the most powerful of the German emperors seemed unaware of the necessity of centralizing and regulating the coinage of money. In 910 we find Otho the Second, of the great and then dominant Saxon line, granting licenses to the Archbishop of Strasburg and the bishops in its vicinity, to exercise this high function of sovereignty.
Nor was this mingling of God and mammon confined to Germany. Before the extinction of the Heptarchy, similar powers had been vested in the Archbishops of Canterbury and York, while France was annoyed for centuries with the varying coinages, not only of petty feudal sovereigns, but of abbots and other ecclesiastics of high and low degree, perhaps quite as fit for the trust as the ignorant princes at their side. The cabinets of coins in Europe are filled with the heterogeneous issues of mediaeval France and modern Germany.
There may now be seen at the mint of the United States, in Philadelphia, specimens of the coinages, not only of the royal houses of Germany, but of the secondary dukedoms and minor principalities of Brunswick, Nassau, Hesse-Cassel, Mecklenburg, Anhalt, Bernburg, Oldenburg, Reuss, Lippe, Saxe-Weimar, Saxe-Gotha, Saxe-Coburg, Saxe-Meiningen, Schwartzburg, Hohenlohe, Hohenzollern and Waldeck; some of them ruling populations of less than one hundred thousand souls.
8. For this fragmentary state of things there could be but one remedy. The disintegrated political and monetary world must be reintegrated; and this has been the tedious task of the last ten or twelve centuries. During this long interval of reconstruction, the scattered members of the once united monetary organism have been slowly coming together. Hundreds of petty sovereignties have been already extinguished or consolidated, giving place to large and efficient nations.
The fusion of the seven little kingdoms of the heptarchy in the undivided realm of England; the conjunction, in Spain, of the crowns of Castile and Arragon; the consolidation of the provinces of France, and consequent extinction of feudal rule and feudal coinage; the union of the three kingdoms in the British islands; all becoming centres of monetary reform, in which discordant coinages have been melted into unity; the recent conjunction of the fragmentary portions of the Italian peninsula, incoherent and jarring for centuries; the unifying operations now in vigorous progress in northern Germany; and above all, the advent and progress of the great empire of Russia, emerging from Asia and steadily moving into eastern Europe, have all converged to one grand monetary result – the diminution in number of the coining nations, enabling them all at last to meet face to face in general and friendly conference, as they have just done for the first time in the history of man.
It is true that a cluster of smaller principalities with mimic sovereignties may yet remain in Germany, portions of a more numerous group, whose multifarious and multitudinous silver coinages had been so long the annoyance and pest of every traveler through central Europe; but recent events give reason for hope that a confederation, if not the political unity, of their intelligent populations, which may utter a common voice for a common money, will not be much longer postponed.
9. From this hasty sketch of the coinages of Europe, we may point with just satisfaction to the historical contrast furnished by the United States of America.
The thirteen colonies which first occupied that portion of the North American continent extending southwardly from the great chain of lakes nearly to the Gulf of Mexico, brought with them, or soon adopted, the « pound » as their unit of money. The twenty silver shillings which they coined, being reduced in weight, were not equal in value to the pound sterling of the parent country. The pound of some of the colonies was not worth in silver more than three dollars and thirty-three cents, measured in the present money of the United States. In others it was worth only two dollars and fifty cents. The natural attachment of the colonists to the traditions of the parent country, nevertheless induced them to retain the inconvenient and absurd subdivisions of shillings, pence and farthings, with their three differing divisors.
Several of the colonies coined silver money of small denominations, with subdivisions in copper, until the restoration of Charles the Second to the throne of England. A royal order issued by his authority, about the year 1660, strictly prohibited any further coinage by the colonies, as the usurpation of a sovereign power. Their coinages consequently ceased or greatly diminished until the outbreak of the American Revolution, in 1775, after which various coins were issued by the several «States» claiming to be sovereign, until the final adoption of the dollar as the coin of the United States. To comprehend clearly that important event, we must briefly revert to the history of the «pound».
The money pound of England is of French origin. Charlemagne, crowned «Charles Augustus, Emperor of the West», in the year 800, sought, like his imperial predecessor, the first Augustus, to unify the money of his empire. With that view he ordained that the French livre, or pound weight of silver, should constitute the monetary livre, or pound of money. This livre, carried across the channel into England by William of Normandy, was imposed by him as Conqueror on the English people. The «Tower pound», actually containing a pound weight of silver, bears date in 1066, the year of the Conquest. The word, however, failed long ago to possess any truthful significance, for the money pound has been steadily dwindling in weight for the last eight centuries, until the twenty shillings into which it is now divided actually contain less than one-quarter of a pound of pure silver.
On the recognition by England, in 1783, of the political independence of the United States, their then existing political organization, «The Congress of the Confederation», deemed it proper, also, to throw off the monetary yoke of pounds, shillings, pence, and farthings. On the 6th of July, 1785, this continental Congress unanimously passed the memorable monetary ordinance reported by the «grand committee of thirteen», of which Rufus King, one of the wisest and most far-seeing of the statesmen of America, was a member. Not only did it omit in any way to recognize the pound, but it distinctly brought in and established the dollar, as the permanent monetary unit of the United States. Its precise weight was fixed by a subsequent ordinance, passed on the 8th of August, 1786, which further provided for the issue of a gold coin of ten dollars, to bear the impress of the eagle, which imperial emblem had been selected in 1782, in view of the national sovereignty then clearly discerned in the future. What was far more important, the ordinance expressly provided that the dollar should be decimally divided.
This cardinal monetary reform preceded, by at least six years, the establishment of the «metric system» of France, with the consequent decimalization of its coin in 1792, under which the ancient «livre» of Charlemagne, dwarfed and shrunk in its long life through the vicissitudes of ten centuries, disappeared from the world.
The government of the United States has lost no opportunity of commending the metric system to the admiration of its people and of the civilized world. By a recent act of Congress, passed on the excellent report of Mr. Kasson, in the House of Representatives, supported with learning and ability by Mr. Sumner, in the Senate, its use has been actually legalized throughout the American Union. But the dominant historic fact will forever remain, that the previous step, among the first if not the earliest of the authoritative measures for decimalizing the money of the world, was taken by our young republic, just emerging from its cradle.
Nor did the services and the example of the United States in the cause of monetary unification stop with the ordinance of 1786. A further and far more comprehensive measure was adopted in 1789, in substituting, in place of a loose political confederation, a nation, with a government throwing the mantle of a common sovereignty over the States and the peoples then united, with the transcendent and exclusive power to establish one uniform coinage for the whole. The great monetary clause in the national Constitution — the most important act of political conjunction which history records — with a sublime forecast of the geographical expansion of the nation then brought into being, is condensed and crystallized in the few brief words, «no state shall coin money», firmly and forever establishing the monetary unity and the monetary sovereignty of the continental republic, from ocean to ocean.
10. The first Napoleon, looking down on the world from the rock of St. Helena, declared that what Europe most needed was «a common law, a common measure, and a common money». This solemn utterance was a legacy not alone to Europe, but to the whole family of nations. It was in 1821, the very year of his disappearance from the world, that the American Secretary of State, John Quincy Adams, submitted to the Congress of the United States his celebrated report, pointing out the incalculable advantages of a common measure and a common money, «to overspread the globe», in his own comprehensive language, «from the equator to the poles». With clear political sagacity, he saw and said that the object could only be accomplished «by a general convention of nations, to which the world shall be parties», and «in which the energies of opinion must precede those of legislation». It certainly was the first official proposition for a general monetary convention, known in civil history.
More than forty years elapsed before that memorable proposition was carried in any way into practical effect. It is true, that some of the states of Germany had met in a monetary convention in January, 1857, which fixed the values (for purposes of their local Zollverein) of the gold crown, the silver thaler and the silver florin; but no general assembly of nations, by delegates duly accredited, was ever held, in which the question of general monetary unification was openly discussed, until the International Statistical Congress at Berlin, in September, 1863. To that body, composed largely of representatives from governments, an elaborate report was presented by a committee of delegates from fourteen nations, mainly prepared by Mr. Samuel Brown and Professor Leone Levi, of London, both favorably known by their valuable labors in the «International Decimal Association». It recommended the decimalization of the pound sterling, but proposed to retain the pound itself as the monetary unit. It further proposed, that «in respect to silver coins, the dollar reduced in value to five francs, the florin made equal in value to two and one-half francs, and the franc itself, should also be retained as units; and that all of them should be decimally divided.»
It is gratifying to add, that a large and influential party in England, embracing many of its most eminent and intelligent merchants and bankers, (and especially the late Sir William Brown, of Liverpool), have strongly advocated, for several years, the decimalization of the pound sterling.
The above-mentioned report coming up for discussion in the congress at Berlin, the undersigned, as the delegate from the United States, objected to the adoption of the four units, and expressly on the ground, among others, that it would tend to preserve the double standard of gold and silver, and thus prolong the vain attempt to fix by legislative enactment the values of two different metals, in their nature necessarily mutable, and governed only by the fundamental law of demand and supply.
In the course of the discussion, a suggestion was made by Dr. Farr, registrar general of the United Kingdom, and one of the most distinguished of the British delegates, that the gold dollar of the United States should be made equal to one-fifth of the British sovereign; to which it was answered, in behalf of the United States, that both the British sovereign and the United States half-eagle of five dollars should be reduced to the value of twenty-five francs, and thereby unify at once the gold coinage of the three nations. The difference of opinion on this point between the delegates of Great Britain and those of the United States and of other nations, led the Congress to adjourn without deciding the question.
It would not be just to leave this portion of the subject without acknowledging the valuable aid rendered by delegates from other countries in sustaining the proposition for unifying at once the gold of the three nations, and pre-eminently by the Count d’Avila, the well-known financier and delegate from Portugal (now minister at Madrid), who ably supported, at the Berlin congress of 1863, the plan of triple unification, and with still greater efficiency in the recent conference, the proposition of the United States for the issue by France of the new gold coin of twenty-five francs.
As a part of the history of monetary unification it is proper also to add, that the present Chief Justice of the United States, while Secretary of the Treasury, practically proposed, in his annual report to Congress in 1862, to unify the coinage of the English races by reducing the value of the half eagle of the United States to that of the British sovereign, which would have required a reduction in the half eagle of 13 ½ cents. His forcible exposition of the advantages of such a step is still more applicable to the wider measure of unification now proposed by the international monetary conference, requiring a further reduction of only four cents.
It must, however, be evident that such a conjunction of the coinages of the United Kingdom and of the United States, embracing a population in Europe and America not exceeding seventy millions, would have brought the conjoined monetary system of the two nations into perpetual antagonism with the system or systems of the European continent, now embracing a population of two hundred and fifty millions – not to mention the possibility, not very far remote, of ultimately bringing the populous nations of eastern Asia, with their four or five hundred millions, into one common world-embracing system, to remain united while modern civilization shall endure.
11. On the 23rd of December, 1865, the governments of France, Belgium, Switzerland and Italy made the quadripartite monetary treaty, the text of which is given in full, as an appendix to the second séance of the conference, at page 27. A translation is herewith transmitted.
With profound respect for the distinguished negotiators of the treaty, several of whom were also members of the conference, we may, nevertheless, assert that its principal value is geographical, in fusing into a single mass, for monetary purposes, the large and important portion of Europe embraced within the boundaries of the four nations, since enlarged by the adhesion of the Pontifical States and of Greece. By this brilliant and masterly consolidation, the gold of Europe is already unified throughout one broad, unbroken belt from the Atlantic ocean to the eastern limits of the Grecian archipelago, constituting an extensive and attractive nucleus, around which the coin of the remaining nations of Europe may readily cluster. Opening wide an unobstructed path through Europe for American coin, it now needs only a brief law of Congress, fixing the weight of the gold dollar at 1612.9 milligrams, to establish a permanent line of monetary unity spanning the Christian world from San Francisco to the confines of Constantinople.
The treaty is, moreover, of primary importance in prescribing and defining, with scientific precision, the weight, diameter, quality, and «tolerance» of the coin thus unified. On the other hand, it contains provisions which are wholly inadmissible in a general basis of monetary unification for the nations of the world. They are the following :
1. In including silver in the coin to be unified, thereby rendering it necessary to fix a permanent ratio between the values of gold and of silver.
2. In limiting the amount of silver coin, of denominations less than five francs, to six francs, per capita, for the population of each nation.
3. In prohibiting the issue of any gold coin of an intermediate denomination between ten francs and twenty francs, or between twenty francs and fifty francs, a prohibition which would prevent the issue not only for the twenty-five franc coin required by the interests of the United States and other nations, but of a fifteen-franc gold coin, which may soon become necessary in unifying the coinages of Germany and, perhaps, of Holland. It is enough to add that the conference, in view of these provisions, did not adopt the treaty as the fundamental basis of their plan of unification.
12. The double standard was legally established in France by the well-known law of 7th Germinal, an XI (March 28, 1803), which fixed, or, more properly speaking, sought to fix the ratio of silver to gold at 15 ½ grams of silver to 1 gram of gold. The power of a legislative body thus to fix a ratio of values has been for the last seventy years the cherished belief of many economists of France. It was probably in deference to their opinions that the recent act of the Corps Législatif ratifying the treaty of December, 1865, studiously declared that the law of 7th Germinal «was not repealed», and this in face of the treaty itself, which authorized the issue in France alone of 239,000,000 of silver francs, at a standard reduced from .900 fine to .835, about seven percent., and that, too, for the very reason that silver had actually become more valuable by seven per cent. than the rate of 15 ½ to 1 fixed by the law of 7th Germinal.
The practical reduction of the ratio directed by the treaty was, in fact, a distinct and most instructive admission, in the most solemn form known to nations, that any act of mere legislation, seeking to fix a «double» standard, is, alike in its nature and in its very terms, fallacious, illogical and impossible. No formal legislative act was needed for repealing the law of 7th Germinal, for it had been already effectually repealed in fact, by the natural and irresistible increase in the value of silver in obedience to the superior and overruling law of demand and supply.
The vital element in the double standard is the legal right which it gives to a debtor to pay his debt, at his option, in either of the two metals; in other words, rendering both «a legal tender». in view of this, the treaty of 1865, permitting this large silver coinage of reduced standard, declared it not to be a legal tender between individuals for sums exceeding fifty francs, and so far repudiated the theory of a double standard.
The Congress of the United States have also virtually abandoned the ratio which it had sought to fix by legislation. The act of 1853 directs all subdivisions of the dollar thereafter to be coined to be reduced (not in standard, as in the four nations, but) in weight, about seven per cent.; and also declares such subdivisions not to be a legal tender for any sum exceeding five dollars.
The total coinage of silver dollars by the United States in the last seventy years falls short of five millions of dollars, nearly all of which have disappeared from circulation. But the total coinage of the subdivisions has exceeded $ 131,000,000, of which nearly the whole of the portion coined before 1853 has also disappeared. In view of these facts, submitted by the undersigned to the conference (3rd séance, page 37), he felt justified in claiming and insisting that the double standard now existed in the United States only in form, and not in fact.
The establishment of the single standard exclusively of gold is in truth the cardinal, if not the all-important feature of the plan proposed by the conference, relieving the whole subject, by a single stroke of the pen, from the perplexity, and indeed the impossibility, of permanently unifying the multiplicity of silver coins scattered through the various nations of Europe. It is a matter of worldwide congratulation, that on this vital point the delegates from the nineteen nations represented in the conference were unanimous – not excepting France itself, so strongly wedded by its national traditions to a double standard.
13. It will be seen by the report of the discussions (6th séance, pages 79 to 82), that the subject of the «common denominator», or unit of gold, elicited a considerable difference of opinion. A denominator or unit equivalent to and equiponderant with the existing gold five-franc coin of France was actively supported by the United States, and by Austria, Russia, Switzerland, Portugal, and other nations. The delegates from Great Britain and from Sweden urged, in preference, a denominator or unit of ten francs.
The question was finally decided by a formal vote by ayes and noes, on a roll-call of the nations, which resulted in a large majority in favor of the denominator or unit of five francs – thirteen (13) nations voting in its favor, and two (2), Great Britain and Sweden, in favor of the ten francs. The delegates from Prussia, Baden, Bavaria and Wurtemberg, abstained from voting, mainly in view of existing stipulations in local monetary conventions, which temporarily embarrassed their action.
On all these questions, the interests of monetary unification were materially advanced by the publication at Paris of the concise but admirable letter from the Hon. John Sherman, senator in Congress from the State of Ohio, a copy of which has been already communicated to the Department of State, but which for more convenient reference is now transmitted herewith in duplicate, with its French translation.
His opinions are unmistakably expressed in the following extracts :
«As the gold 5-franc piece is now in use by over sixty millions 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.
«In England, many persons of influence, and different Chambers, are earnestly in favor of the proposed change in the 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 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.»
In connection with the propositions so clearly stated, it should be borne in mind that the change proposed in the weight of the dollar might be made, if necessary, so far prospective as to permit most of the private contracts now existing to mature. In point of fact, no practical inconvenience was experienced from the act of Congress of 1834, which reduced the weight of the gold dollar more than five per cent.
14. It is due to the British delegates, Mr. Thomas Graham, master of the royal mint, and Mr. Rivers Wilson, of the British treasury, to acknowledge their personal intelligence and liberality in the conference. They voted in favor of the single standard, and other important propositions, but were compelled, under the strictly limited instructions from their government, formally to state to the conference (5th séance, page 64) 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.»
The plan proposed by the conference has been formally transmitted to the British government and will probably be referred, for careful consideration and report, either to a royal commission or a parliamentary committee. This will afford sufficient time, on the one hand, for the advocates of the existing system of pounds, shillings, pence, and farthings, and on the other, for the friends of decimalization and the slight reduction assimilating the sovereign to the continental systems of Europe and America, to take the necessary measures to develop and render effective the matured opinion of the British people. We surely may indulge the hope, that the practical and clear-headed Anglo-Saxon race, now so widely diffused, through different quarters of the globe, abandoning narrow prejudices and worn-out traditions, may be found cordially agreeing on a common money for the use of civilized man.
15. The efforts made in behalf of the United States, in the necessary interviews with the imperial authorities, including the Emperor in person, to induce the government of France to issue a gold coin of 25 francs, to «go hand-in-hand throughout the civilized world, in perfect equality with the half-eagle of the United States and the sovereign of Great Britain», have been fully reported to the Department of State in former communications. There was some reason to fear that such a coin might be regarded as approaching too nearly in size the existing «Napoleon», or 20-franc coin. If that were so, it would enhance only the more the sense which must be entertained of the liberal and conciliatory course actually pursued by the imperial government.
At the 5th meeting of the conference, the Prince Napoleon (Jérôme), at the special instance of the Emperor, and to mark his lively interest in the proposed monetary unification, entered upon the duties of the presidency, which had been discharged with signal ability by M. de Parieu. At the next meeting the question of the coinage of the 25-franc gold piece became the subject of serious discussion, during which Mr. Graham, of the British delegation, after expressing his opinion that a coin either of 25 francs or of 15 francs would inconveniently approach in size the existing coin of 20 francs, inquired whether the government of France «really proposed to issue a coin of 25 francs»; to which it was answered by the prince president, with the courtesy which peculiarly and uniformly characterized his conduct of the presidency, that «if France consulted only her individual convenience, she would see no necessity for issuing the new coin; but for the purpose of facilitating the work of unification, she would make the concession requested by the United States»; adding, moreover, that «the new coin would also promote the convenience both of England and of Austria». The delegate from Spain, the Count Nava de Tajo, thereupon stated that it would also accommodate Spain. The question was then put formally to vote, on which the issue of the 25-franc coin was unanimously recommended, Prussia, Baden and Wurtemberg abstained from voting, mainly for the local and temporary reasons above referred to.
It is proper to add, that in the repeated interviews on the subject of this important concession by France with Monsieur Rouher, the Chief Minister of State, he uniformly manifested his cordial and respectful regard for the government and the people of the United States, and his earnest desire to harmonize the monetary systems of the two nations.
16. To prevent any misapprehension on either side of the Atlantic, it should be distinctly understood that the conference do not propose, nor was any proposition or suggestion made in that body, or elsewhere, to the knowledge of the undersigned, 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 every nation will continue to 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 twenty-five francs for the international use and convenience of those two important powers, and by which the ten florins of Austria are made precisely equal in weight and value to the twenty-five 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 «25 Francs, 5 Dollars, 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», have been entrusted to the undersigned for delivery to the President, to the Secretary of State and to the Secretary of the Treasury of the United States. A fourth specimen, presented to the undersigned, may be used when necessary for the further illustration of the subject.
The diameter of this international coin is 24 millimeters, exceeding a little that of the present half-eagle of the United States, and 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. The counterpart, when issued by the United States, will doubtless bear the proper national emblems, and especially the national monetary motto, «in god we trust».
Should the present effort of the nations of the earth to unify their coin be crowned with success, this specimen medal, the first-born offspring of the International Monetary Conference, bearing its conjoint inscription of «dollars and francs», with its «millésime» or date of issue, will possess an enduring historic value, in recording the commencement of the new monetary era with the precious and indissoluble union of the coinage of the eastern and the western continents.
In closing this communication, the undersigned respectfully begs leave to testify his grateful sense of the steady support in the discharge of his official duty which he has received from the Department of State, and of the cordial co-operation, at Paris, of General John A. Dix, the Minister Plenipotentiary of the United States.
Samuel B. Ruggles
to : Hon. William H. Seward, Secretary of State, etc., etc., etc.
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