jjiLijiji 3 1924 013 775 311 5fcuJ fotk l»tate C|oUcgc of Agriculture 3it (QatneU UttiuetHttB i ■jifij'i.iv' m THE BLAND BILL GROUNDS^ ITS ALLEGED DISHONESTY, ITS IMPERFECTIONS, ITS FUTURE BY HENRI CERNUSCHI Author of "BIMETALLIC MONEY PARIS i'UBLISHED BY THE AUTIIOfe 7, Avenue Velasquez, Pare Monceau 1878 Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924013775311 IDENTICALNESS OF FRANCS, POUNDS STEELING, AND DOLLAES. BY HENRI CEENUSCHI. Me. Etabts, the American, Secretary of State, has just addressed to the representatives of the United States abroad a circular, in which he begs them to invite the G-overnments to which they are accredited to join the United States in a monetary conference. The problem which the conference would have to solve is twofold. 1st. To have in all countries the same legal ratio between the weight of the gold monetary unit, and the weight of the silver monetary unit ; / 2ndly. To have in all countries, thongfi under different denomina- tions, identical coins. It seems to us that the object would be attained if an international compact sanctioned the following measures : — .' • France will replace her present gold money by a 25-franc piece exactly the same as the pound sterling ; — the 5 -franc silver pieop will be left untouched. England will have a 4-Bhilling silver piece exactly the same as the 5-franc piece ; — the gold pound sterling will be left untouched. The United States will replace their present gold money by a 5-dollar piece exactly the same as the pound sterling ; — their silver dollar will be exacily the same as the 5-franc piece. In all -three countries gold and silver will be admitted to mintage without restriction of quantity, and will be legal tender without restriction of amount. It will be seen that were this international compact concluded, France and the United States would coin gold pounds sterling like England ; England and the United States would coin 5-franc silver pieces hke Franae. In all three countries there would be seen in circulation English gold and silver pieces, French gold and silver pieces, American gold and silver pieces. The gold piece would be at once a pound sterling, — 25-francs, — 5-dollars ; the silver piece would be at once 5-francs, — 4-shillings, — 1-dollar. It would be perfect, absolute, international bimetallic monetary identity. . By resuming the mintage of silver simultaneously with France and the United States, England secures immediately with the entire world a ■par of exchange as fixed as if only gold everywhere circulated. The rupee immediately recovers the value in gold it possessed before 1878. The Aiglo-Indian Treasury, now so seriously affected by reason of ' the famine, will no longer be burdened with the three million pounds sterling which it has yearly been losing since 1^74 on the exchange between the rupee (silver) and the sovereign (gold). For the French public the reform is very a,dvantageous, though it casts on the Treasury the expense of reooinage, and the loss resulting therefrom, as twenty-two centimes more gold will have to be put into the new 25-franc piece than there are in twenty-five francs of the type to be abolished. But by means of this recoinage what benefits for France! The two-and-a-half milliards of silver francs which she possesses have at present only an indigenous and fictitious value. Put in the crucible, the 5-lranc piece loses more than a tenth of its legal value. It will no longer lose anything if the international compact is signed ; and it will even be worth more than it was worth before 1871. Five pieces of 5-francs did not then make up a pound sterling, there were twenty-two centimes short ; they will make it up if the agreement is concluded. In short,' the French public will gain, by the rehabilitation of silver thus effected, much more than the Treasury will expend in the recoinage of gold. The 20-franc piece was necessarily of odd weight (6.425 grammes) ; ■ the 25-franc piece will necessarily be of odd weight. That was, and will be, of no consequence. What is of consequence is the not tam- pering with the 5 -franc silver piece, which is of the even weight oJF 26 grammes, and which is the basis of the French monetary system in its Relations with the metric system. By coining a 5 -dollar gbld piece of the value of the pound ster- ling, the United States will have to reduce the weight of the dollar to 25^ grains. This reduction Mr. Sherman, the Secretary of the Treasury, himself proposed in 1875, and the Senate agreed to it. As regards the silver dollar, equal to the 5-franc piece, the reform is, as it were, half realised. All the half-dollar pieces coined since 1873 are each exactly equal to half a 5-fi:anc silver piece. The only thing, therefore, will be to let the silver dollar be freely minted at double the weight of the present half-dollar. The French, English, aiid American legislators once agreed, the two metals will really Be but one metal from the legal and monetary stand-point, and the legislators of other countries will eagerly give their adhesion to the franc-pound-dollar system. Germany, indeed, may hesitate. She has sold, at a heavy loss, half her silver ; she will, perhaps, choose to persevere in her gold mono-metallism to the end. Let her do as she likes. The union of the gi-eat States on the Atlantic seaboard will nevertheless render her this service, that she will be able, to get minted without any loss at Pans, London, Philadelphia, the 120 or 150 milUon thalers she still holds. Paeis, May, 1878. THE BLAMD BILL In 1876, Mr. Richard Bland, of the State of Missouri, intro- duced into the House of Representatives at Washington a bill providing for 4foe i-ecowniwg of %© silver dollar. Af-t# ia^uiry, repoi^ts, disotissions, and amendtnents, this bill h^ become law. There, teoweyer, had been so mudh Mk of the MmA Bi'll feefore it became kw that .the few sitseJl: contiwuesto be effled the Bland ""BiM . Has this Bland ^M any grounds, is rt 'dis?honest, is it peiieet, and what mil be its future? It is quite a legal inquiry, *to be determined by the eyidfince, and what a nature of ev^idence I Wothingbut kws : American 3^axWs, French laws, German laws, 'English and Indian laws. I. ITS (BROTNDS. The first monetary law of the United States was passed in 1792. It is bimetallic : silver and gold are admitted to mintage without restriction of quantity, and are legal tender jjftljhQif^t ,resti;iction -oS a.mount. sThe silver dollar .weighs ^teeQ,tiioes as ^iuch ,?is the ^gold dollar. This law renfiaAns in (force 'till -1834. Inrl'834 ^ ,pe;«' monetary law ; bimetallism is faaiul^lped, hut at ,1^ instead of 1^. The silver^olkr wqigjisps :pi,uQh ^s 16 gold dollars (or, to be precise, .1^.98). Xh\^ law^remiains ijjif^^ till 1873. — 4 - In 1803 the French legislator, while substituting franes for livres, maintains the old bimetallism at 15 1/2 (the silver franc weighs 15 1/2 franes gold). Until 1871 the German legislator adheres to his old silver monometallism. In 1 81 6 the Enghsh legislator, preparing for the withdrawal of paper money, institutes gold monometallism, and attributes to silver the subsidiary function of small change. In 1835 the British Indian legislator rejects gold and adopts silver monometallism. What has resulted from this conflicting legislalion? The triumph of the. strongest. The strongest was France. Alway.« a creditor of other countries, France became the great emporium of the monetary metals. Her bimetallic law attracted to her, at one time gold to be exchanged for silver, at another silyer to be exchanged for gold. That exchange was always effected on the legal footing of 15 1/2, with a slight premium to the profit of those asked to efTect it, that is to say, to the profit of the French. Reacting on the whole face of the earth, in England, Ger- many, the coast of Africa, America., Asia, without excepting Japan as soon as Japarj was opened up; everywhere, in short, the bimetallic law of France settled the relative value of the two metals ; everywhere one weight of jiold and' 15 1/2 of silver had the same value. The United Stales, like, other countries, constantly un- derwent the ascendancy^ of the French law. Debtors ra- ther than creditors of Europe, they had to pay rather than receive. What metal did they prefer to export? The one which they had no longer an interest to coin at home; gold until 1834, silver afterwards; Under the bimetallic system at 15, instituted in 1792, the - 5 - Americans had a right indeed to take gold to their mint, but it* was fb their interest ndt' to take it. Gold beifiig' 'worth only 4 5 of silvef'tihdfer the American law, and being Worth iS 1/2 under the "French liJw, they gained 3 per cent by converting their '^ilMintb francs rather than dollars.' Gold dollars, therefore, did Hot eirculate,' "but only silver dollars.** Just the reverse 'iindef' the bitnetalHc system at 10, inaugurated in 1834. The Americans had a right, indeed, to* get their silver minlM at home, and a right to employ it for payments in specie, but it was to their intefest not to' exercise those rights. Silver being worth the fifteen-and-a-half part of its weight in gold under thfe' Trehch law, and being worth dnly ohe sixteenth iinder the American law, the Americans gained 3 percent by converting their silver into francs rather than dollars: "All' the' silvef, therefore, was exported, and not a s'ingle white dollar has circulated in America since 1834. All of a sudden, in December, 1871 , the German legislator issued that famous and pernicious law, the operation of which was destined to introduce derangement and confusion into the monetary affairs of the entire world . Neglecting the coun- sels of the best native publicists, and docile to' tile teaching of a group of French economists most in repute, the German legislator from a silver-monometallist beccime a gold-'m'oHo- nietallist. He was consequently bent on withdrawing the while money from circulation, exporting it, and selling' It at any price in order to obtain gold ingots and manufacture yellow money. At this news, what should the French legislator have done, and what did he do? He'had a choice between two great courses : either abruptly' to' stop coining gold or to continue if more actively than ever. 'By abruptly stopping it, he would liaive caused so enormous a fall in silver that'the Ger- — 6 — man legislator, terrified, would have abandoned his pro- gramme; by continuing it more actively than ever, silver would have retained all its old value. Just as France had formerly absorbed the Californian gold by giving silver in exchange for it, she could now have absorbed the German silver by giving gold in exchange for it. There would now have been rather more silver at the Bank of France and rather less gold ; but the five-franc silver pieces would have^ be^n worth, even beyond the frontiers, quite as much as the five-franc gold pieces. The French legislator hesitated, was wanting in resolution, and acted timidly ; he devised a half-measure : restricted'min- lage. The door of the Mint shall be neither open nor shut, it shall behalf open (1874,1875,1876). Only a fixed quantity of silver shall be coined every year. This limited mintage allowed Germany to pour into France a large portion of her silver, but the fall in that metal was not arrested ; it could not be. Ingots have an intrinsic value only because all comers have a right to get them converted without any restriction into money. But ingots which remain on the market without possibility of mintage have no longer an in- trinsic value(legaland fixed value); theybecomemerchandise, an article of exportation varying in price like copper or zinc. After three years' experience the French legislator thought better of it, gave up restricted mintage, and did not have a single crown more coined ; but without demonetising, without withdrawing the silver francs from circulation, without be- coming the adept of monometallism, without pledging the future. It was a very sensible thing to do. The French legislator had not yet thought of restricting the coinage before the monometallic fever had already crossed the Atlantic; the American legislator by 1873 had made his sub- mission to monometallism. The monometallic law of January, 1873, passed almost unnoticed, and it is even alleged not to have been regularly voted. — 7 — However this may be, the German Government had not yet taken action, silver kadnotyet fallen in value, and no silver dollar was incirculation when in January, 1873, thesilverdollar wa§ outlawed. Without motive,, without interest, led away by the fashion of the moment, the legislator gratuitously set aside the possibility by which the American public might have subsequently profited, of coining their bars of silver, in case that mintage became advantageous through any modification of tlie French law. That contingency indeed was about to occur, and did occur when France suspended liberty of mint- age. If the law of 1 873 had not existed, the coinage of silver dollars would have recommenced spontaneously in '1874. But it is time, high time, for the monometallic doctrine to be called on to render an account : What good has monometallism done Germany ? The Ger- man Government has sold a great deal of silver ; it has thereby lost a hundred million of francs, and it has still an enormous mass of silver to export. The 400 millions of silver marks it has coined as subsidiary currency have only a Ger- man value; outside Germany they would lose 1 5 or 20 per cent. What good has monometallism done France ? There exist in France-rmore than two milliards of francs in silver crowns. This money circulates at par within the country, because it is legal tender, and because France has nothing to pay to the foreigner ; but in the world's market these crowns are worth only what the ingot is worth ; and were France to become a debtor to other nations, gold francs would be at a premium, the situation would be serious, and the losses beyond calcu- lation. What good has monometallism done England? The Anglo-Indian Government is yearly losing three million pounds sterling on the exchange of silver rupees for gold sovereigns. What good has monometallism done Austria, Russia, South America, and other countries? All are suffering from the disappearance of the old monetary par at 15 1/2 be- tVeeri gold and silver, 'a par which 'w&.'§ perma;rienf' alid universal throuah the saluteffy irifluence^bf French bimetal- hsm. What good, especially, has monometallism done the United States ? The United States discovered that the silver of tttei'r mines has ho longer an Outlet in Europe, nor eteri at ho'fhe; they discovered that thel-e is not enoofgh' gold in thewdrtd to take the place of the old silver which is circulating in Eiiro'pei, in Asia, and in South America ; they discovered th^t by becoming slaves to mohometaUism, they could neVer resume specie payments ; they discovered that, with allits triuiiiphs and all its pride , monOifletallism is alw'a^s impotent, always unrealisable, always disastrous, always inhuman. Then, shaking off the dust of prejudices, the American Congress rose up and the tbimetallic bill, the Bland Bill, became law. 11. ITS ALLEGED DISHONESTY. The State may contract an internal debt, and it may con- tract an external debt. The infernal debt is that the interest of which is stipulated as payable'in Hatiortal money at the national treasury. The external debt is that the iritefet of which is stipulated as payable in foreign money in foreign markets. ' The English debt, the French' debt, apbrtion of the Spanish debt, the Austrian debt, etc., are internal debts. To a large extent, the Russian, Spanish, Austrian, Hungarian, Chihan, and other debts are external debts. The United States of America had at first external debts. Their present debt is entirely an internal debt, stipulated to be payable in dollars. The bondholders residing in Europe cannot cash their coupons in Europe ; they must either have them cashed at New York or sell them to the mOn6y changers. • — 9 — ,,On^the cntigue of(Yas; passed , by tjie House and the Senate, did President Hayes object, and send it back to Congress to undergo the ordeal of a frpsh d^pisioij,? ,This veto was foreseen. .The Secrelf^ry to the Treasury bad zealously promoted the sale of the 4 per cents, for the conver- sion of the 6 per cents. He had drejidedi the BJajid '^il\A& capable of slopping the sale of the .% per. cents., and.in public lelters he had expressed the opinion that the United States would act better in paying the bondholders, in gold.. , j The President was thus pledged. The yelo was signed on the 28th February last, but the very same-day the Blan4,Bill was passed a second time, in i the House by 196 yeas to 73 nays, in the Sena^ by k6 yeas to \9nays, thfU is to say,, in both Houses by more than the two- thirds, majority required by the Constitution to override the.presidential veto. , Two years' parliamentary discussion, more than a hundred speeches delivered in the Senate and the House on the silver question, the deliberate sacrifice of the conversion of the 6 per cents, into 4 per cents,, a final vote Mhich musters 4 96 representatives, out of 269 and 73 senators out of 92— there; seems enough here to prove that the charge of dis- honesty brought against the American Congress is un- founded. But what is the bearing of the Bland Bill as regards Europe? , , ,, " We ourselves believed in. monometallism, " say, the United States; " and we ourselves proscribed silver., (Law of 1873). But monometallism has proved pernicious, and we revive our old bimetaUic system, the system of Washing- ton and Hamilton. It is true tha^, the issue oi' the silver dollar may inflict injury on Europe, but tiiis may easily be prevented. Let Europe resume the /coining of silver, and silver will no longer be falling, and the allegedi.spoliation will enci in smoke, and the advantage there will be in coin- ing silver will be enjoyed by Europe as well as by us. " • As to England, in partipulai-, what fault can she find with the United fStaies ? She coins gold sovereigns at London, the United .Estates coin gold dollars- s^^e coins silyer nipees at ^Calcutta and Bombay, the United States coin, silver dollars. But the English legislator, by his twofold monometallism, rpqjntains between gold and silver a legal antagonism as irra- tipjial as it is noxious, whereas the American. legislator, by his;binaetallism, establishes between |he two metals a legal parity as rational as it is advantageous. The two legisla- tors are both Anglo-Saxons, but the American is here more logical and more practical than the Englishman. III. ITS IMPERFECTIONS. , Biqaetallism, as established by the Bland Bill, is not the perfect bimetallism practised by France up to 1^74. In f^rance, any possessor of silver or gold had a right to get his metal converted into._coin without limit of quantity. In, the United States the possessor of gold^alone has, this right, an.ji the mintage of silver is exclusively confined to the Stat^. Agreeably to the provisions of the Bland Bill, the State will expend every month at least two or at most four millions of dollars in purchasing silver ingots on its own, account, which it will itself put into circulation. Whether by buying other ingots, or by meeting no matter what liability. Thus, for the gold dollar : automatic mintage, that is to say , free to all comers and unlimited. The State coins, . but is not proprietor of the coins it, makes, and. the importance ^^f the monetary stocfe in circulation, in.no way depends on if. Old or new, all gold has. right of mintage^., thuscpined, tjf|e dollars, spring as it. were direct from the mines pf pivers, issued by ^nature itself; the ofiic^l^ st,am.p fil^ests.its wei'^^t aijd fineness. Before mintage it,5iva,s necessaryjo. weigh and tes^yths iag^h'J^ii ^^^ h.o>vjnai^Xj(iolla,ps,|t wejghei^;,- gft^r mintage it suffices to count small ingots, each of which — 14 — weighs exactly one dollar, jQve dollars, or ten dollars. It is owing to automatic mintage that the metal coined cannot be worth more than the metal not coined. 25 . 80 grains of gold 9..10thsfine are worth a dollar, before as after mintage.. All good and safe money is money of automatic issue ; such are to-day the pound sterling, the mark, the gold franc, the gold florin, and the rupee. But for the silver dollar^ the mintage is not automatic : it is limited and monopolized by the State. It is not silver that is money, but only coined silver; hence uncoined silver is worth less than coined silver. For some years another silver dollar- has been coined in the United States, which is not legal money at home, is called the trade dollar, and is eixported to China, where it passes, as the Mexican piastre passes. China is monometaUic in a rudimentary way ; silver has legal monetary value there but no coin is minted ; in making payments ingots and bits of ingots are weighed. The trade dollar weighs 420 grains 9-10ths fine, that is, 7 1/2 grains more than the old dollar just restored by the Bland Bill, which weighs only 412.50 grains. Now the tradedollars, the 420-grair) dollars, are worth less in America than the 412.50 dollars. Why? Because they are not legal tender : because the Slate does not receive them in payment of taxes : because they cannot be converted into hghter dol- lars, into legal 412.50 dollars, because they have no other value than that of the ingot. It is thus evident that the legal silver dollar is not a natural issue; like the paper dollar, it is an arbitrary issue. The difference between the paper dollar and the silver dollar consists in the fact that the material of which the paper dollar is made has no legal value outside the United Stales, whereas the material of which the silver dollar is made has a legal monetary value in India and all Asia. If India and all Asia could ever be gold-monometallic, and withdraw from silvet the legal functiori of money, the 412 1/2 grains of the silver - - 15 - dollar, notwithstanding the eagle with which it is adorned, would have scarcely any value either in Asia or Europe. The monetary system now governing the United States reminds us of that which France had during the years 1874, 1875, and 1876 : both gold and silver legal tender without limit of amount, automatic mintage of gold and limited mintage of silver. This system France has abandoned ; how is it that the United States have adopted it ? In 1876, France saw that all the European nations and the United States had become monometalhsts , she saw that silver continued falling, and that Germany continued sending her demonetised silver to the Paris mint, ^vhich gave it back coined in five- franc pieces, still unlimited legal tender in France ; she saw that her silver circulation already exceeded two milliards of francs, and she paused ; she suspended, but only for a time, the coining of silver. Quite different was the si- tuation o*f the United States at the beginning of 1 878. Not a silver dollar in circulation, a moderate quantity of gold, and a good deal of paper money. Desirous of resuming specie payments, the United Stales were anxious to do their utmost to get the silver from their mines recognised as monetary metal, and Ihey calculated that by giving the signal for the bimetallic reaction they would find powerful adherents in Europe, especially as France had only suspended the mint- age of silver without definitively binding herself to monome- tallism, and as monometallism, through the disasters it pro- duces, is constantly increasing the -number of its adversa- ries. Men of action, the Americans resolved to act and resume without delay the mintage of silver. Should they at once have instituted complete bimetallism and adopted for silver, as for gold, free, unlimited, automatic mintage? No, Ihey could not do so. We have ourselves maintained this thesis viva voce before the United Stales Monetary Commission sitting at Washington (1). (I) See Nomisma 07- Legal Tender, 1877 j New York, Appleton ; Paris, Ouillaumin, — 16 - , , Before this commission, composed .of Sfenators and Repre- sentatives, we stated that if free, unlimited, automatic mint- age were resumed by the United States without a previous uiiderstanding w;ith Europe,, the demonetised, German silver wpald immediately take ship for Philadelphia to get Gon- yerted.info legal American money. The paying power of the gold dollar not being by law greater than the paying power of the silver dollar, it is certain that every holder of gold dol- lars, whether a bank ot(\ private indiyidual, would =give them up for a small profit, in exchange for silyer, dollars peered on German accouiit. All the gold dollars, alithefArae- rican gold, wQuld be rapidly sent to Eiirope, jifst a§ all, tjie ^ijyer was after the law of 1 834. It would be, making a veri- table golden bridge for Germany, that is", for the sole respon- sible author of the falLof silver. Suddenly deprived.of gold^ the Federal Government would be irhmediately forced to pay the bondholders exclusively in silver dollars ; so sudden a change would cause a serious crisis in the market for American stocks in Europe, and would lead to the return of all American bonds to the United States. Then, the United States once left without gold , having no longer but silver, and silver not being coinable in Europe, the exchange between New York and European markets would be exposed to the terrible and ruinous shocks which are inevitable between two countries if the metal of which their money is made is not alike, JWitness the fluc- tuating and uncertain rateiof exchange between India (silver money) and England (gold money). The United States acted wisely ; they would not, without having concerted with Europe, give themselves up to the au- tomatic mintage of silver. They know very well that by hmited and monopolised mintage the public treasury is cer- tain to make a profit. That profit, it is true, is only made once — when the ingot is bought. If the government after- wards indiscriminately pays and receives the dollars it has manufactured, it realises no profit by this, but, such as it is, the profit obtained on the manufacture is an abhorma) profit. The United States know this, and they ask notKing "belter -17 - than no longer to make it, to anandon this provisional situa- tion they have assumed pending something better. This something better is the international treaty which will esta- blish automatic bimetallism oh both sides of the Atlantic. French bimetallism is at 15 1/2; the silver franc weighs 15' 1/2 gold francs. ' The Americah bimetallism restored by the Bland' Bill' is at 16; the silv^er dollar weighs' 16 gold dollars. '' ' " ' ' '' ' ■ . " ; ■ In ' order to substitute the proportion 15 1/2 for the pro- portion 1 6; the United Stfe'fes must either have 'reduced from 412.50 grains to 399.90 the Weight of the old silver dollar, bt failed from 2'5 . 80 to 25 .'61'; the weight of the gold dollar. " TorSisethe weight of the' gold dbllar, that is, to dihiiriish the "paying' power of gold at the vdry time silver 'has' fallen in value, wohld have seeiied paradoxical, especially as eill the ^61d dollars m^st 'have been melted down in ordei- to make heavier' 6ne^s. Such an operation mfght have been agreed to, if, by agreeing to it, internationcil bimetalhsm were realized ; but it could hot be thought of on' the occasion of a limited mintage bill for silver. ' '; ' ' '' Dirhinish the weight of the silver dollar I But the mono- metaHisIs would then haVe exclaimed 'against confiscation. *'Not only are the bondholders paid in silver, but dollars lighter' than the dollars stipulated are given thein." ' This discrepancy between the Washington 1 6 and the Paris 15 1/2 givi^s the greatest delight to certain mohbnletallists, who, finding no corisblation for the failure, the- proved impo- tence of monometallism, would like MraetalKsm to have 'the ^ame fate'.' They' flattei- themselves that' 'the 'conflict between thb'1 5 1 /2 and the 1 6 will be so obstinate that E'uropeians and Americans will be unable to come to an understanding. Calculations equally false and malignant. Whenever the International Congress meets it will easily agree on the commbn ratio of weight propei" to 'iadopt between gold and silver. - 18 — IV. ITS FUTURE. The President shall invite the European governments to join the United States in a Conference " to adopt a common " ratio as between gold and silver, for the purpose of estab- " lishing internationally the use of bimetallic money, and ' ' securing fixity of relative value between those metals ; such, ' ' conference to be held at such place as may be mutually ' ' agreed." This provision is in the Bland Bill ; it has been passed by the United States Congress. Let us remember the international conference held at Paris in 1867. Every European and also the Washington Cabinet were represented at it. M. de Parieu directed its proceedings. That conference could not lead to any treaty, but it pronounced with only one dissentient, Holland, for gold monometallism. There are members of that conference who have since become bimetallists ; there are members who have remained monometallists, who detest the Bland Bill, who would give anything to make the fresh conference fail, and who question its competency, alleging that the relative value of the two metals cannot be the object of a discussion. What I The conference of 1 867 could raise against silver that prolonged war-cry to which the German legislator and the American legislator himself have only so readily re- sponded, and the conference of 1878 has no right to propose for the ratification of legislators a general treaty of peace between gold and silver? Nevermind; assume that the' wishes of the monometalhsts are listened to, that the con- ference miscarries, and that peace is not concluded. What would be the future ? As yet, after four year§' continuous sale, the German Go- vernment has only sold half of the silver it has to sell. How long a time will it want to sell the other moiely ? In any — 19 — case the German Empire will have to issue a large loan to cover the enormous deficit occasioned by the monomelalfic •innovation. France will be unable to put in force again her bimetallic law at 1 S 1 /2 ; if she resumed mintage at 15 1/2 the United States, governed by their law at 16, would immediately stop manufacturing silver dollars, and silver would be exported from America to France, as happened for the same reason from 1834 to 1874. France, therefore, will not coin, and the United States will end, even if they keep to limited mint- age, by having an abundant silver circulation. Silver will drive away gold, and de facto they will be silver-mono- metallists, as before 1834. In short, Europe will no longer coin anything but gold, the United-States and Asia will have only silver money. Several economists, especially in England, fancy that, the German silver once sold, all will go right, that ihings will settle themselves, and that the exchange between the countries paying in gold and the countries paying in silver will naturally resume the nearly absolute fixity it possessed before 1 873. It is a great mistake. Before 1 873, the relative value of gold and silver, and con- sequently the exchange between all nations, was regulated by the French bimetallic law. France was the Clearing-House which steadied and liquidated at the fixed par of 1 5 1/2 the exchange operations of the entire world. There were a few little oscillations, indeed, above or below 15 1/2, but why?' Because French bimetallism could not give the perfectly mathematical and precise results which can only be secured by international bimetaUic legislation. Just as nature is said to abhor a vacuum, it may be said to abhor fixity of exchange when the monetary metal is not the same on both sides. Without a written law, without a bimetallic law in France, without an international bimetallic law, thie relative valueof gold and silver will be almost as fluc- tuating as the relative value of iron and copper, or coffee and f Pfl The gold-money nations at home and the . silver-money — 20 - V V nations at home will pay with facility, with rapidity, without fear of spending for exchange more than the' transport of money would cost. But between the gbld-moiil^y nation? and the silver-money nations payments will be difficult;' slow, always liable to heavy losses.' " If gold is sent to thfe' countries which only use silver money, what Will they do' with it ? If silver is sent fo the countries which only use gold money; what will they do with it? In both cases it is n6t paying-mbney that is received, it is merchandise to be sold. ' Bartef is almost resuscitated. If the International Conference does not regulate the affair, the human race will no longer enjoy but half of the benefits "of that adniirable legislative invention : money. ■ ■ . -, A diplomatic conference is not an Academy; it should draw up a treaty ,'^ it has not to discus's doctrine's. The' theorfetical question should be settled before the conference opens. Let USSettleit. ■■ • • ■ '■ ■' ■ > ^' : ;,-;i Money is the legal value which serves for valuing and paying all other values. All other 'Values, are merchandise] Which is valued, offered, demanded, boiight and sold, cheap or dear, for a price, that is for a pertain number of monetary units : francs, pounds; dollars, fete. Whereas all other producers realise profits or losses according to the price at which their produce is sold, the producers of money (the owners of mines) realise profits or losses according as the sum of money bxpended in extraction is greater or less than the sum of money extracted; Their produce not being merchandise, not being for sale, but being riattirally money, the producers of money do not and cannot compete with each other. '~ ■ Silveris merchandise in England, but not in India, where it is money. Gold is merchandise in India, biit not* in England, where it is tfioney: If gold and silver are money in kll countries, if their issue is automatic without limit of quantity, if they are legal tender without limit of amohnt, if the weight of the gold monetary unit and the Weight of the silver monetary unit are everywhere at the same legal ratio, neither gold nor silver will ariy where bfe either bought or sold. - 21 — Everywhere the gold ingot and Ihe silver ingot will be them- selves a sum of money, and people do not sell a sum of maoney for a sum of money. Gold and silver are homogeneous in all their molecules, susceptible of refining, fusible, capable of alloy and of gra- duated fineness, incorruptible, indestructible, malleable, di- visible, recognisable, handleable, and, taken together (even better than separately) of a production always sufficiently regular and usefully increasing. Quality and quantity gua- ranteed, not by local governments as in the case of paper mo- ney, but by universal nature, this is why legislators of all na- tions have created with gold and silver the legal value which it is compulsory to accept in payment for all other values, that is, money; and (his is why the material gold and silver is he only one "which can be at Ihe same time national monetary material and international monetary material. The paying power of the monetary unit is less the greater the existing monetary mass; it is greater the less that mass. But that one metal should be extracted more cheaply thari the olher, that at one point there should be very productive gold or silver mines, at another very poor gold or silver mines, all this affects the producers of money (the mine owners), but in no way affects the paying power of the monetary unit, whether it be gold or silver. Aristotle says : " Money is not in nature ; it is in law." It is the legislator, the legislator alone, who institutes money, as well monometallic as bimetallic, and even paper money. If money remained merchandise, it would have no legal value, no paying power, it would not be legal tender, and the invention of money would still remain to be made. The broker is the intermediary of the merchants, but is not a merchant ; money is the intermediary of merchandise, but is not mer- chandise. The bimetallic theory can boast the authority of Sir Isaac Newton. When the English Government, in 171 7, asked him why gold and silver flow into one country rather than ano- ther, Sir Isaac Newton, who was then Master of Ihe London Mint, replied that it was solely because the legal ratio be- tween the weight of gold money and the weight of silver — 22 — mofliBy is differenl in diflerent counlries. Hq added Ibat if the legal ratio were uniform on the Continent, iii Englajiiolji and in India Ihere could no longer be a^y tent^tutign to e^r- port one in«ial rather than another- flie biraelallic thesry can appeal to exfjerienee, Notwithstanding the extraordipafy changes which have happened in the relative prodyotioii of gold and silver, the relative value of the two metals had uevef varied as long as the Freneh biflietallie law at 15 1/2 re^ mained in foree. Every State steo^aJd be left free to ad; as i-t likes as i^ganls money of limited, monopofeftd issue. The eoaferenee there- fore will not have to consider «ither paper paoaey or saa^ change ; it will consider only automatic money. What uniform ratio is it expedient to esteiblish legally be^ tween the weight of ihe gold franc and the silver franc, the gold pound sterling and (he .silver pound sterling {4 crowns), the gold mark and the silver mark, the gold tlorin and the silver florin, the gold dollar and the silver dollar, the g@|d rupee and the silver rupee? The ratio resulting froei the price at which S'ilver is now selling in the Lon:don market cannot be adopted. Ttoatpriide varies every day, and the variations have only one cause, the legislaliire persecution of whidi siker is the vietim. The ,dis- cussion can only turn on the Frewh i15 4/2 aad tfae Americain 1'6. The most equitable, most rational ratio, is without doubt, 15 1/2. Everywhere this ratio of value between the two metals had not varied for almost a century when the monotnetallists came and ittlroduoed confusion. But for them 15 1/2 would still hold good, iijlmost theeufrety of the contracts of long date now in force in both hemi- spheres : annuities, pensions, mortgages, -rents, -r^ilwaf and Other bonds, Europea®, North and South American, and Indian loans, have been stipulated as paycd)le, principal and interest, some in .gold, others in silver, olhers aga,in in bimetallic money, all in the absolute certairtty that liie ratio 'between the paying powei- of igold and 'the -paying - 23 — p©)^&r d silver would continue to be the same as here- tofore : 151/2. If the ratio is changed, wrong is done to a whole world of debtors and a whole world of creditors. Nearly ail the coins circulating in the Continental States are at is 4/2. (1) The German thaler itself represents at 49 1/2 exactly 3 gold marks. What coin exists at 1 6? Not one would exist if a month ago the mintage of silver dollars had not commenced iu the United State. Nothing is easier than for the United Slates to give up the 16 and adopt the 15 1/2; they have only to abandon the silver dollar of 412 1/2 grains and coin one of 399.90. They could also retain the silver dollar at 412 1/2, and melt down the gold dollar of 25.80 grains in order to make others at 26.61 ; but this re- coinage would cost the treasury about 3 percent, on the amount of dollars now existing, for in exchange for every dollar of 25.80 grains, it would have to give a dollar of 26.61. What will England and India prefer ? They Avill be in- different. England possesses only gold money. Let her adopt 18 1/2 or 16, the new silver crowns will be a httle healvier or a little lighter, but that will be th(! affair of the individuals who bring metal to the mint to be coined ; it will not be the affair of the government that coins. , The same reasoning vice versd in India for the gold 10 -rupee pieces, which the go- vernment will agree to coin on the public account. Germany must prefer 15 1/2 to 16. As we have already said, the silver thaler is exactly at 1 5 1 /2 as compared with the gold mark, and if 15 1/2 prevails, Germany can let the enormous quantity of thalers she still possesses circulate for an indefinite time. (1) Money is at 15 1/2 in Italy, in Belgium, in Switzerland and in Greece (they are the States which with France compose the Latin Union) , it is also at 15 1/2 in Spain, in Roumania, and in most of the South American States; The 15.60 of Holland, the 15.45 of Austria, the 15.57 of Japan are so near 15-1/2 that the difference ^s immaterial. Russia is at 15.32. Portugal has long been gold-monometallic like England. Scandinavia, the only country to follow the example of Germany, has demonetized silver. The other States have only suspended the mintage of it. Italy, Austria, Russia.Greece, Japan, and to a great extent South America are under the paper money system, but retain metallic reserves, have certain payments made in metal, and more or less are always coining. And France, and Ihe Latin Union? jThey can, abide 1 decision of the others. If the 1 S 1/2 is retained, heither Fra| nor the Lalin Union have to takeiany step.* If the adopted, they will not meddle with the 5-franc piece, wt weighs exactly 23 gramiges; theywjll decret the remint] of the gold coin. The present 20-franc piece weighs 6. grammes ; to cornjspond with the one sixleenih ratio, it she weigh only (i.25. By this remintage the holders of the] coins will'have a bonus of about 60 centimes on every 20-fr| piece, a bonus which they can receive with the greater, sal faction inasmuch as it will cost nothing either to the Statj their fellow-countrymen. The 1f» 1/2 or the 16 once settled, the conference will to deliberate on the subject of the expense of mintage, should bear this expense? TheState which coins or ped who have metal coined? If Ihe expense is charged |p| jailer, what shall be the maximum rate to be levieiw shall the charge be levied on the quantity or weight ^qf I metal or on Ihe amount of the sum coined, whatever! nretal? These are questions which are not without impf ance, but the exarainatioir of which we may defer. April, 1878. Paris. —Printed 1* E. BriSre,257,iae Saint-Honor J. I'll I, i|!