THE 
 
 FALL IN THE GOLD PRICE OF SILVER 
 
 THE CLOSING OF THE FRENCH MINT. 
 
 HENRY HUCKS GIBBS. 
 
 1892. 
 
 LONDON: 
 
 EFFINGHAM WILSON, Royal Exchange. 
 MANCHESTER: 
 
 J. E. CORNISH, 1G, St. Ann’s Square. 
 
 PEICE THREEPENCE. 
 

 
 
THE 
 
 FALL IN THE GOLD PRICE OF SILVER 
 
 AND 
 
 THE CLOSING OF THE FRENCH MINT. 
 
 HENRY HUCKS GIBBS. 
 
 1892. 
 
 LONDON: 
 
 EFFINGHAM WILSON, Royal Exchange. 
 MANCHESTER: 
 
 J. E. CORNISH, 16, St. Ann’s Square. 
 
^ \ \ Cj> 
 
 \ ^ O. c > V 
 
 jL 0-a 
 
 
PREFACE. 
 
 The following Paper arose from a statement printed in The 
 Times of February 1st, 1890, that the fall in the price of 
 Silver was the cause and not the effect of the closing of the 
 French Mint to that metal. 
 
 I asserted, and I think I show in this Paper, that it was the 
 effect, and that it could not have been the cause ; or, to speak 
 more exactly, that the law under which, until September, 1873, 
 a fixed and definite price of 6'34554 francs, less a small 
 discount, had been given for the ounce standard fine, 
 just as 77/10| was and is given here for the ounce of 
 standard Gold, necessarily maintained the price of silver,' and 
 that it was impossible that the price should have fallen as it 
 did, but for the restrictions then and afterwards placed upon 
 the delivery of the coin, and for the final exclusion of silver 
 from the Mint. 
 
 A writer in The Times thought, and it will be seen that 
 M. Sudre, of the Paris Mint, then expressed the same view, 
 that the fall of the price of Silver having begun from other 
 causes, the new restrictions imposed by the Mint gave it but 
 a slight help on its downward w r ay ; but the point on which 
 I insist in these pages is, that those restrictions were the sole 
 cause and instrument of each successive decline in price, and 
 that the several falls in price precisely corresponded with 
 each decline in the value of the sum payable by the Mint. 
 
 I show that time after time in former years the price has 
 fluctuated more and fallen more than it did in the period in 
 
4 
 
 question, and that no project of closing the Mint to Silver y 
 known to have been suggested; and that the course which] 
 the French Authorities pursued was one which needed no; 
 other real inducement than the excessive “ inflow of SilvJ 
 from Germany into the French Mints. 
 
 There was indeed a fall of price, as there had often been] 
 in previous years, before any interference had taken place; 
 with the normal operation of the law of 1803, viz., from. 
 60*25d. in April, 1872, to 59*75d. in May, 1873—that is tel 
 say, a gradual decline over a period of thirteen months, 
 to the extent of ^d. per ounce. It is true also that appre4 
 hension of what would follow if the Mint were to be closed,! 
 caused the price to fall nearly another ^d. in the ensuing 
 three months; but when the suspension of the Mint law 
 really began, under the decree of September 6th, 1873, the 
 price fell another Id. by December 30th in that year, and 
 declined pari passu with the further suspension, both fluctu¬ 
 ating violently and falling rapidly when the Mint was finally 
 closed in 1876 and the barrier which prevented further fall 
 was broken down. 
 
 I show that as the price of Silver, like that of all other 
 commodities, must fluctuate with the Supply of it and the 
 Demand for it, so the open Mint in France acted as a per¬ 
 petual demand at a fixed price would act, and that accordingly 
 the price here could never fall below what the seller believed 
 was the equivalent of the frs. 6*34554 which he would get 
 in France. 
 
 I show that the grounds of the seller’s belief must lie in 
 his estimate of the value in sterling of his draft on Paris if 
 he should send his Silver to the French Mint, and that he 
 would necessarily compare the price so obtainable with the 
 price offering in the English market, and accept no price here 
 that should be lower than he could get by sending his Silver 
 abroad. 
 
5 
 
 ; Accordingly I give a table (p. 17) showing the English 
 ' price that should correspond to the fixed price at the Paris 
 Mint according to several quotations of Paris exchange; and 
 ^another (p. 22), showing the actual quotations of price and 
 Exchange ; also a chart, showing the lines of price and of 
 exchange where they approximate and where they diverge, 
 
 : and where on two occasions they appear to have actually 
 grossed, the first being in 1848, during the revolutionary 
 period, and the second in the last months of 1873, owing to the 
 incertainty of exchange and the greater uncertainty of the 
 lue-date and consequent amount of discount on the Mint 
 Certificates (bons de monnaie), 
 
PREFACE TO THE SECOND EDITION. 
 
 No preface would be needed for this Second Edition of ^ 
 Essay, but that I have been told that it may not have been U\y I 
 understood by some of its readers ; and in particular I 
 that Dr. Giffen, in a note to one of his articles lately reprint^ 
 says that “ having done his best ” he has 4 ' been unable to 
 follow my reasoning.” If then he has been at fault, ft 
 seems not wholly improbable that others not familiar with 
 the operation of the Foreign Exchanges, and with the general 
 principles which govern buyers and sellers, may have also 
 found some difficulties in it, and these I have now endeavoured 
 to lighten. The reasoning is not faulty, I am very sure of 
 that; and neither Dr. Giffen nor anyone else has attempted to 
 point out any error either in the premisses or in the conclusion. 
 But my mode of expression may have been too hard for some 
 of the babes and sucklings of commerce, who may yet have 
 really desired to follow the problem to its solution, and I have 
 therefore carefully revised it, making no material change, but 
 bettering the arrangement. 
 
 I will here, in the shortest possible form of words, set down 
 the main facts, leaving my readers to supply the reasoning for 
 themselves. It will cause them no great strain on their 
 mental powers. 
 
 Until 1873 the French Mint coined Silver for all comers, 
 giving a certificate, or voucher, for 200 francs per kilo¬ 
 gramme, due in ten days. 
 
 Anyone in England could send his kilogramme of Silver 
 to Paris, sure of receiving the sterling equivalent of 200 
 francs, less 10 days’ discount, at the exchange of the day. 
 
 Or—he might sell it for less. 
 
 The import of Silver into England exceeded the export 
 during the thirteen months beginning with April, 1872, 
 but not so much as in former years; nor did the price fall 
 as much during that time as it had fallen in former years. 
 
But in September, in order, as M. Sudre says, to arrest 
 the inflow of Silver from Germany into the French Mint, 
 the closure of the French Mint began. The due date of 
 the vouchers was postponed, increasing of course the 
 deduction for discount, and diminishing the amount of 
 cash obtainable for the kilogramme of Silver. 
 
 The Mint Authorities, as time went on, by successive 
 decrees further postponed the due dates of the vouchers, 
 until in 1876 those issued had no less than 19 months 
 to run; the amount of discount for cash payment 
 increasing accordingly. 
 
 The English holder could during all those years still send 
 his Silver to Paris and draw at the current exchange 
 for the net amount remaining, receiving its equivalent in 
 English sterling. 
 
 Or—he could sell it for less. 
 
 In fact the minimum English price varied, and had during 
 the whole time varied exactly with the discount and 
 exchange. 
 
 Was its fall, or was it not, consequent on the increased 
 discount, i.e., on the partial closure of the Mint ? 
 
 In 1876 the French Mint closed its doors to Silver. 
 
 The English holder of Silver had then no minimum price 
 of which he was certain, to set off against the offers of his 
 buyers; and the price therefore fell, and continued to 
 fall, as supply overpassed the diminished demand. 
 
 Was then that fall, or was it not, consequent on the closing 
 of the French Mint ? 
 
 In other words, Did the open Mint for both metals, at a 
 fixed ratio, with legal tender for the coins, afford a 
 minimum below which the price of neither metal could 
 go? 
 
 If these questions are answered in the negative, it will be 
 interesting to learn what did produce the effects related, 
 and how it did it. 
 
8 
 
 At present we have only the fact, which no one denies, that 
 the authorities of the Mint took certain action which 
 necessarily reduced the cash value in France of the Mint 
 voucher, and the assertion of some monometallists that 
 that had little or no bearing on the English price. 
 
 If the questions are answered in the affirmative, the open 
 Mint in France and the certain price paid by it for 
 Silver, in other words the Bimetallic law, was a potent 
 factor in maintaining a steadiness of price of the metal. 
 Yet I fear that Dr. Giffen will continue to aver that it was 
 not; and to point to Chapter VI. of his book as con¬ 
 clusive proof of his assertion. And why ? His argument 
 requires a Bimetallism of its own, which no Bimetallist 
 ever desired and no State ever enacted: a system under 
 which Gold and Silver must of necessity be in concurrent 
 circulation, and where the State engages to give either 
 for the other; and he easily shows that it did not exist, 
 and consequently could neither raise, lower, nor maintain 
 the price of Silver. 
 
 But the law of 1803 prescribed neither of those two 
 
 things—the one an impossibility and the other a folly_ 
 
 but limited itself to prescribing the weight of the coins 
 that it would issue, and declaring them legal tender. 
 The open Mint, under those circumstances, produced the 
 results given above. 
 
 What effect the premium on Gold had on the foreign price 
 of silver is shown in the following pages. It was solely 
 a matter of export and of international balances. In the 
 French markets it had practically no effect at all. No 
 salesman had then, or has now, two prices, a price when 
 paid in Gold, and another when paid in Silver. 
 
 HENRY H. GIBBS. 
 
 Aldenham House , nr. Elstree , Herts , 
 
 November, 1892. 
 
 
THE 
 
 FALL IN THE GOLD PRICE OF SILVER 
 
 AND 
 
 THE CLOSING OF THE FRENCH MINT. 
 
 ; What were the causes of the steadiness of the price of 
 Silver in the London market during the first seventy years of 
 the present century ; of the slight decline which took place at 
 various times during that period, and again in the years 1872 
 and 1873 ; of a marked decline in the price during the last 
 three months of 1873 ; of its continuing its downward course 
 at certain intervals down to the middle of 1876; and then, 
 as if all sustaining power had been lost, of its fluctuating 
 hither and thither like that of any other commodity ? 
 
 What, again, were the causes which impelled the French 
 Government to suspend, partially at first, and then wholly, 
 the operation of their Mint laws in respect to Silver ? 
 
 It has been asserted that the former phenomena were the 
 cause of the latter; that the heavy fall of the price of Silver 
 in London compelled the French to have recourse to that 
 unprecedented action in self-defence. 
 
 It is the purpose of this paper to show that no such heavy 
 fall existed until the French Mint price had been altered; 
 that no fall at all had taken place but what was to be 
 accounted for by the natural course of trade, and had frequently 
 and to a greater extent occurred in former years ; and that 
 therefore it was certain that the successive steps taken by the 
 French Mint authorities were the cause and not the effect of 
 the successive falls in the quoted price in London. 
 
10 
 
 In order to obtain the precise data which should confute or' 
 corroborate this view, I requested Sir Charles Fremantle to 
 ascertain from the Mint authorities in France what had been 
 their exact course of action in 1872-3, and how far the 
 material fall in the price of Silver corresponded in its dates 
 with the successive limitations of the accustomed freedom 
 of coinage. The following memorandum by M. Sudre, dated 
 the 10th February, 1890, was the first response. 
 
 Memorandum. 
 
 “ The importation of Silver Bars, coming chiefly from Ger¬ 
 many, commenced in the course of the year 1873, when the 
 minting of 5-franc pieces in France reached, in round figures, 
 the sum of 155 million francs. 
 
 In these circumstances, the following measures were taken 
 to arrest the inflow of Silver Bullion to the French Mints:— 
 
 6th September, 1873. Decree of the Minister of Finance, 
 enacting that, until further order, the Mint Warrants (or 
 Certificates) delivered by the Mints of Paris and Bordeaux 
 should not represent a larger daily manufacture of 5-franc 
 pieces than the amount of 280,000 francs. 
 
 Two months afterwards, 17th November, 1873, a further 
 decree of the Minister, limiting to 150,000 francs the maximum 
 daily minting of 5-franc pieces. 
 
 Dating from 1874, and down to 1876, a conference of 
 Delegates of the Latin Union fixed the amount of 5-franc 
 pieces which might be coined by each of the States. 
 
 France was set down for 
 
 In 1874 . 60,000,000 
 
 1875 . 75,000,000 
 
 1876 . 54,000,000 
 
 1877 . 27,000,000 
 
 but the receipts during the first half of 1874 were so con¬ 
 siderable that in the month of July, 1874, the due dates of 
 the Warrants (bons de monnaie) were postponed to the month 
 of April, 1875. 
 
11 
 
 In the month of June, 1875, the due dates reached the 
 31st December, 1876, and thereafter the Warrants were 
 m delivered during the year 1877 at the rate of 75,000 francs a 
 
 day. 
 
 Finally, at the time of the closing of the Mints to the 
 I receipt of Silver Bullion, in virtue of the law of the 5th 
 - August, 1876, the due dates of the Warrants extended to the 
 I 13th December, 1878.” 
 
 This document gave me, in part, the information which I 
 required, but not the whole of it. I wished to know not 
 only what restriction was placed on the quantity of Silver to 
 be coined, but the successive due-dates that had been fixed in 
 1873 for the Mint certificates. Restrictions of quantity would 
 impede the immediate turning one's bullion into money (the 
 rule being, I suppose, “ first come, first served ”), and thus 
 would tend of course to lower the price of bullion. But they 
 are not precisely the same as the postponement of the due- 
 dates of the Mint certificates (echeances des bons de monnaie), 
 though the latter would be a natural concomitant of the 
 former. 1 
 
 We know that the law of the French Mint , is analogous to 
 our law (of 1844), 2 Here we receive through the Bank of 
 
 There is no intrinsic difference in the effect of thTli^uIon of coina^d 
 the postponement of the due-date of the bons de monnaie; the differenceis only 
 m the power of the remitter to make his calculation. The limitation of the 
 quantity to be coined gives him no idea when he or any particular bringer of 
 Silver to the Mint will be served; but the due-date of the bans de monnaie 
 enables him at once to calculate his loss of interest, i.e., the discount he has to 
 pay, and the precise sum in cash which will be at his disposal. 
 
 * A passage in a leading article of the Times of August 13th, 1890, in describing 
 what the writer thinks are the mischievous follies of the Silver Pill of the 
 United States Congress, which came into operation on that day, gives uncon- 
 
 tlTfo^. 7Tv aCCUraCy> thG be ' lring ° f the ACt ° f 1844 ’ exce P fc that 
 
 the foil} of the United States is limited to the purchase of 4,500,000 ounces a 
 month, while our folly, if folly it be, imposes no limits on itself, His words arc — 
 
 theJn^dSt2 he r PrindPal pr ° visions of thU> «““*•**» Act, which compels 
 the United States Government to buy a certain commodity. Silver, and hold it, 
 
12 
 
 England vouchers called Bank Notes for the gold brought uM 
 less an allowance representing the interest which would be 
 lost in waiting one’s turn at the Mint, and the brokeraJH 
 which one would have to pay. In France one receives a| 
 certificate called a bon cle monnaie for the full coin value of 
 the specie brought in, less Mint charges, but payable in coin« 
 normally ten days from the date of import. This bon de 
 monnaie was paid into one’s bankers, and was, of course, dis- I 
 countable, the discount at 8 per cent, for ten days amountiJM 
 to fr. '005215 per ounce, diminishing pro tanto the cash : 
 value. The discount necessarily increased and the cash 
 value decreased accordingly with each successive postpone-1 
 ment of the echeance (due-date). 
 
 It appeared that in July, 1874,. the foheances had already \ 
 been carried to April, 1875—that is to saj, with a nine \ 
 months’ delay. This cannot have been the first of such : 
 measures; and what I especially desired to know was, in ' 
 wbat month and year the eclieances of the bons de monnaie I 
 were first postponed, and to how distant a date; and by what 
 successive steps (specifying both the date and the length \ 
 of postponement) the 'ech'eances reached the nine months j 
 of 1874 and the nineteen months of 1875. 
 
 It was precisely the data before July, 1874, that I wanted, ] 
 rather than those after that date, and I wished especially to 
 ascertain whether the postponement of the echeances had 
 begun as early as May, 1873; and I learned from a second • 
 memorandum to be quoted presently that they had not. 
 
 M. Sudre, in his covering letter dated 28th March, 1890, , 
 attributed the action of the French Government mainly to 
 
 issuing in the meantime to the sellers Warrants which the public are compelled 
 to receive as money.” p 
 
 Mutatis mutandis they would run thus 
 
 coZlT”,eE,rf Tr " 0 ' 1 " 11 Prmisi0, "' <>f tllis ™m»kable Act [of 1844] which 
 ~ ^f!' Sh °°Bank cf England, to bny a certain 
 
 [Notes] which the n hl h ° "* ““"time to the sellers Warrants 
 
 [Notes] which the public are compelled to receive as money.” 
 
13 
 
 the fall in the price of Silver, which lie said had already 
 taken place before 1873. Where had it fallen, and in what 
 was the fall measured ? 
 
 I Surely not in France, nor measured in francs; for it is 
 ■Conceivable that in the absence of alterations of the eclCeances 
 of the bans de monnaie , or of limitations of the quantity to be 
 |coined. any man who could by law demand 200 francs from 
 the Mint for his kilogramme of Silver would be content to 
 take 199 or any less quantity from any buyer. Just as it is 
 | inconceivable that an English holder of a like quantity of 
 Silver would take less than 60d. an ounce for it, so long as 
 he could send it to Paris for coinage and have 200 francs put 
 to his credit without delay, and as long as the exchange at 
 ; which he could draw for them in this market would give him 
 | that result. 
 
 [ Ik seemed certain, then, that it was in this country, as the 
 central mart for Silver, that the fall is supposed to have taken 
 place; and I have to inquire whether it did fall, and if it did, 
 whether the fall was abnormal, what it was that caused it, 
 and whether it was that, or, if not, what else, that influenced 
 the action of France. To take this latter point first. I 
 believe that a reasonable fear was the cause of the action of 
 France; fear, not on the part of the holder of Silver, who had 
 nothing to fear while the law remained intact, but on the part 
 of the Government and Mint authorities, who feared—not 
 without reason—that they would be overwhelmed with the 
 work of coinage. Perhaps also there may have been in some 
 minds a fear that the Gold would depart from the country as 
 it had done before, though no one had then been the worse 
 for it, and though each napoleon that went away left 20 silver 
 francs behind it, plus an agio. 
 
 Fear caused certain administrative measures to be taken, 
 and these, when taken, made the heavy fall which afterwards 
 occurred possible. Added to this fear was the very natural 
 
14 
 
 jealousy of Germany, and the reasonable indisposition to 
 make the demonetisation of her Silver easy to her, and at the 
 same time burdensome to France herself. 
 
 The other points, namely, the amount, character, and 
 causes of the fall of Silver in England, shall be dealt with 
 later on. 
 
 The second memorandum, above referred to, was as 
 follows:— 
 
 Memorandum. 
 
 “During the years 1871 and 1872 the imports of Silver 
 Bullion destined to be converted into 5-franc pieces were, one 
 might almost say, nil. It was only following upon the fall 
 which occurred at the end of 1872 in the price of Silver on 
 the London Market that the imports of this metal began to 
 flow into the French Mints. Up to the date of the Ministerial 
 decree of the 6th September, 1873, no legal limit was placed 
 upon the due-date (ecMance) of the Warrants, and the coinage 
 took place in accordance with the resources which the 
 Directors of the Mints had at their disposal. The total for 
 1873 was in round figures 155 millions of francs—that is to 
 say, one of the largest coinages since the beginning of the 
 century. 
 
 Dating from the decree of the 6th September, 1873, the 
 Warrants were only issued at the rate of 280,000 francs for 
 each working day ; then, by the decree of the 7th November 
 of the same year, this figure was reduced to 150,000 francs. 
 
 It is thus solely by reason of the application of the 
 provisions contained in these two decrees that the due-dates 
 of the Warrants came to be postponed in July, 1874, for nine 
 months, and afterwards to a still more distant date. 
 
 Thus the restrictions placed upon the due-dates of the 
 Warrants date solely from the decree of the 6th September, 
 
15 
 
 1873 a decree of which the tenour was indicated in my letter 
 of the 10th February last. Before that no measure was taken 
 with this end in view by the French Government.” 
 
 R The foregoing memorandum sufficiently answered my ques¬ 
 tions, and enabled me to deal with the allegations of the writer 
 in The Times of February 1st, 1890. 
 
 I My thesis was that the French law of 1803 necessarily 
 gave approximate stability to the price of Silver in Gold- 
 Jusing countries, and that when the law was finally suspended 
 the price of Silver fluctuated just as the price of other com- 
 gmodities would do. 
 
 I The allegation on the other side is, that the French law 
 , had nothing to do with it, being wholly without effect, that 
 1 Silver had fallen long before there was any change in the law, 
 
 1 and that its fall was the cause of the change in the law. The 
 | Times, commenting on this, said that this statement, if true, 
 was conclusive of the whole controversy. 
 
 It will not be difficult to show that, though there is a small 
 [ portion of apparent truth in the statement, it does not at 
 all dispose of my contention, but on the contrary serves to 
 elucidate its accuracy. 
 
 The questions then which I have to discuss are : Did Silver 
 fall between April, 1872, and September, 1873, and to what 
 point did it fall ? What was the character and cause of the 
 fall ? and how did the suspension of the law, which began at 
 this latter period, affect its further fall ? 
 
 Before answering them, let me compare the position of 
 Silver in France with the position of Silver in this country. 
 In France the position was this : For a kilogramme of Silver 
 900 fine one could always be sure of 200 francs (less mintage) 
 payable on the nail in hons de monnaie (Mint certificates) 
 due in cash ten days after date of import, and of course 
 discountable at a banker’s. Now. a kilogramme of 900 fine 
 
16 
 
 is equal to 31‘28179 standard ounces (?J$ fine)—( a 
 kilogramme=32T50727 oz.). 
 
 One ounce standard, therefore, was coined into frs. 6-39349' 
 
 less Mint charges '75 per cent. *04795 
 
 frs. 6-34554 
 
 rom this must be deducted ten days’ discount on 
 
 the bon de monnaie . *0052 l l 
 
 frs. 6-34033 
 
 Therefore when a holder of Silver in France could get in cash 
 frs. 6-34033 per ounce, by sending his Silver to the Mint, it 
 is inconceivable that he would sell it to a silversmith or to any 
 one else for a less sum—say for frs. 6*250; just as it is incon¬ 
 ceivable that an English holder of a bar of standard Gold, who 
 can get £3. 17s. 9d. per ounce from the Bank of England 
 would sell it to a goldsmith or to any one else for £3. 17s. 8d. 
 or other less sum. 
 
 The position of Silver in England was this: For it, and 
 for no other commodity purchaseable or saleable in this 
 market (I exclude Gold as being itself the measure of value) 
 was there a perpetual buyer at a fixed price always at hand. 
 The holder of the metal could send it to France to be 
 coined, and the bon de monnaie would be on a definite day in 
 the hands of his correspondent, on whom he would draw 
 selling his draft on ’change, and thus converting his Silver 
 into English sterling. Can any one believe that he would 
 sell his silver to a silversmith or to any one else in the English 
 market for any sum less than that which he could get for his 
 draft ? 
 
 What would that sum be ? Frs. 6-34033 is the gross 
 amount whi ch he as a remitter of an ounce of Silver to 
 
 ' In England there are no Mint charges on gold, but the discount for payment 
 on the nail and the charge for agency are provided for by the fixed allowance of 
 l$d. per ounce, the difference between the Mint price and the 77s. 9d. payable 
 by the Bank. 
 
17 
 
 Paris would have there in cash at his disposal; and this, 
 at the exchange of 25* *2215 (par), would produce in London 
 60*332d., 1 less transport and insurance charges, * of 1 per 
 cent, on the declared value = about *100, and less * per cent, 
 for agency in Paris = about *300 more ; in all *400, leaving 
 59*932d. net. Thus an ounce so coined— 
 
 When 
 
 Will produce 
 
 Deduct for 
 
 
 Net 
 
 Exchange is at 
 
 in London, 
 d. 
 
 Transport, &c. 
 
 d. 
 
 Proceeds. 
 
 25*2215 (par) 
 
 60*332 
 
 *400 
 
 59*932 
 
 about 5/- 
 
 25*35 (gold point) 
 
 60*026 
 
 *400 
 
 59*626' 
 
 25*40 
 
 59*908 
 
 *400 
 
 59*508 
 
 - „ 4/11* 
 
 25*45 
 
 59*790 
 
 *400 
 
 59*390 
 
 25*50 
 
 59*673 
 
 *400 
 
 59*273 
 
 
 25*55 
 
 59*556 
 
 *400 
 
 59*156 
 
 ■ .. 4/11* 
 
 25*60 
 
 59*440 
 
 *400 
 
 59*040 
 
 25*65 
 
 59*324 
 
 *400 
 
 58*924" 
 
 - „ 4/11 
 
 25*70 
 
 59*209 
 
 *400 
 
 58*809j 
 
 25*75 
 
 59*094 
 
 *400 
 
 58*694' 
 
 
 25*80 
 
 58*980 
 
 *400 
 
 58*580 
 
 - h 4/10* 
 
 2585 
 
 58*866 
 
 *400 
 
 58*466 
 
 25*90 
 
 58*752 
 
 *400 
 
 58*352' 
 
 
 25*95 
 
 58*639 
 
 *400 
 
 58*239 
 
 ■ „ 4/10* 
 
 26*— 
 
 58*526 
 
 *400 
 
 58*126 
 
 The precise amount of English sterling will of course depend 
 upon the exchange (as is the case with all debts due from one 
 country to another, and payable by draft), and the above table 
 shows what that amount would be as exchange varied. The 
 higher the exchange, i.e ., the more of the minted francs each 
 pound sterling absorbed, the less would be the net proceeds. 
 It is obvious, therefore, that the smallest rise in the exchange, 
 unless balanced by special demand for the metal, should 
 operate adversely on the London price of Silver. It was 
 impossible, then, that while the law remained intact, any 
 lessening of demand or increase of supply (from whatever 
 
 1 Excluding the deductions for mintage, discount, and transport, the ounce 
 standard coined at the Paris Mint would produce in London, exchange being 
 at par, 60'838d., or, say, 60§d. 
 
 * See on p. 22, a table of actual exchanges and Silver prices. 
 
18 
 
 source 1 ) could cause any one to be willing to take less for 
 his ounce of Silver than 59*932d. so long as exchange 
 remained at par. 
 
 While there was Gold in France and no impediment to its 
 transmission, it would be impossible that exchange should 
 rise above “Gold point” 2 (which is normally 25*35); b ut 
 if there were no Gold there, and none obtainable elsewhere 
 by way of arbitrage there might be nothing for the moment 
 to prevent the price of Silver here from falling in propor¬ 
 tion as the exchange might happen to rise, supposing the 
 balance of trade to continue increasingly adverse to France 
 It has been said that there were times when there wag 
 no Gold in France. This assertion is of course not to 
 be taken literally, but only as a hyperbolical expression 
 of the fact that Gold was not at such times in active circula¬ 
 tion in the pockets of the people. But it is not the Gold so 
 circulating and used in the daily purchase of necessaries of 
 life which in that relation affects foreign exchanges, but the 
 Gold which forms a part of the reserves of Banks, or others 
 That this last was both existent in the country and easily 
 obtainable, has been, I think, abundantly demonstrated • but 
 whether the contrary was true or not at other times, it was 
 certainly not true in 1873, for there was an agio on Gold 3 and 
 
 1 The first sale of Silver from Germany in London was in October, 1873 
 
 * When the exchange reaches such a point that it is cheaper to remit Gold 
 than to buy bills, it is said to be at “ Gold point.” Thus, suppose it to cost less 
 than fin. 25-35 to send the equivalent in Gold of one sovereign from Paris to 
 London, it is obvious that no one will give 25 35 for a bill of exchange on 
 London. If there were no Gold to send there might conceivably be no limit to 
 the rise of the exchange. If there were Gold to send, but an agio on it, the rise 
 of the exchange above «* Gold point” should be proportionate to that agio. 
 
 3 The agio on Gold or Silver in a bimetallic country, where the measure of 
 value is alternately at the option of the payer a fixed weight of either Gold or 
 Silver, merely represents the premium which the buyer may be willing to pay 
 for acommodity which cannot be legally demanded in discharge of a dSbt It 
 has been said that the agio shows the failure to maintain the legal ratio It is 
 on the contrary the proof of its continuing intact; being the acknowledgment 
 
19 
 
 there could not be an agio on a non-existent or non-available 
 substance. Besides, one cause of the alarm in France (evinced 
 in some degree by that agio) is said to have been that her 
 Gold was leaving and would continue to leave her. It could 
 not leave her if it was not there. Certainly, therefore, it was 
 there, and whether in general circulation or not would serve 
 (which is the point I desire to emphasize) to check the rise of 
 the exchange above the Gold point, whatever that might be, 
 and thus prevent the fall of Silver beyond the price corre¬ 
 sponding to the exchange on the 6*34033 francs per ounce. „ 
 
 I say “ whatever that might be,” because the “ Gold point ” 
 itself fluctuates slightly in correspondence with the agio (if 
 there is an agio) on the metal. 
 
 All that the open Mint in France could do was to give 
 6-34554 francs for an English ounce Standard, which is re- 
 of the Bimetallic Law, which gives the debtor the choice 
 of the two metals at that ratio, and enables him to demand a reduction of the 
 actual amount of the debt if he gives up the privilege of choice. . 
 
 The quotations of agio on gold and silver bullion and on gold coin for 
 December, 1871 and 1872, and for February, 1873, are as under:— 
 
 On Gold. 0“ Silver. 
 
 In B&r. * In Coin. In Bar. 
 
 Highest, Lowest. Highest. Lowest. Highest. Lowest. 
 
 Dec. 1871—15 o/oo ... 15 o/oo ... 16 o/oo ... 8* o/oo ... 36 o/oo ... 36 o/oo 
 
 Dec. 1872-14 o/oo ... 11* o/oo ... 9| o/oo ... 6| o/oo ... 17* o/oo ... 13* o/oo 
 
 Feb. 1873-11* o/oo ... 10* o/oo ... 6* o/oo ... 2 o/oo ... 16 o/oo ... 10 o/oo 
 
 When gold bullion is required for export the agio on bullion may exceed that 
 
 on coin to the extent of 670 per mille, which is the Mint charge for coining Gold. 
 
 The quotation of a considerable agio on both metals at the same time is 
 probably accounted for by the fact that prices were reckoned in inconvertible 
 paper, though it would appear that irrespective of the reckoning in paper there 
 might be a simultaneous agio on both metals in the event of both being 
 required for export to gold and silver using countries at the same moment. The 
 agio on bar is the more intelligible, because coin alone could be demanded. Thus 
 there is at this moment (November, 1892) an agio on bar gold in England, the 
 price being £3. 18s. Od., or even £3.18s. 0*d. 
 
 It should be further noted that the quotations of silver bullion represent the 
 « nominal agio,” but as this metal is still quoted at a premium or discount on 
 the basis of the old “ commercial tariff,” as it is called, the real agio should 
 probably be about 7* o/oo less in each instance. 
 
20 
 
 dnced, after deducting discount, to 6-34033 francs; and if 
 6-34033 francs an ounce is worth in this country less than 
 59-932 pence an ounce, the price may fall accordingly to the 
 sum in pence which those francs may be worth, unless the 
 English demand sustains it. 
 
 At the period in question, i.e., between April, 1872, and 
 September, 1873, the demand did so far sustain it, that it 
 never practically fell below the point where the operation of 
 the French Mint would have come into play—never reached 
 the impassable 1 barrier which that Mint had set up. 
 
 To come now to the questions above stated on p. 15: Did 
 Silver fall during that period from the par price of 59-932d.? 
 Certainly it did; the first notable downward change taking 
 place on the 15th October, 1872. Natural causes would affect 
 silver, as they would all other commodities, whether for rise 
 or fall; but to the fall, inasmuch as the demand was perpetual 
 and at a fixed price, there was a limit formed by that fixed 
 Mint price and the exchange at which it (or any larger price 
 obtainable in the market if there was an agio on Silver) could 
 be converted into sterling; and below that limit there could 
 be no material fall. 
 
 Let us see whether those natural causes were such as would 
 lower the price of Silver in 1872-3. 
 
 Had there been a great increase of imports or a great 
 falling off in the demand for exports for coinage or for the 
 arts, there might have been cause for a decline down to the 
 French Mint price; but the following table (extracted from 
 Pixley & Abel’s circular) will show that the excess of imports 
 
 ' The barrier u impassable, wherever it may stand at any given moment; 
 but ,t may shift its place (by centimes, as the exchange rises or falls) from hour 
 to hour; f exclude, however, this element of speculation on the part of buyer 
 and seller, and say that no man would sell his Silver for a less price than he 
 believed he could or should get by sending it to Paris and dntwing for the value 
 m francs at the Quoted exchange. 
 
21 
 
 was less in 1872 than it had been in five of the preceding 
 years ; less in 1873 than it had been in two of them (during 
 which the price had been : Lowest, 60£d.; highest, 62d.), and 
 that the average of 1872-3 was only £1,400,000 higher than 
 in 1866, when the prices were 60§d. lowest, 62d. highest. 
 
 Imports of Total Excess of 
 
 Silver. Exports. Import. 
 
 1862— £11,763,000. .£10,091,460.. 
 
 1863— 10,888,130.. 8,263,011.. 
 
 1864.— 10,827,300.. 6,264,004.. 
 
 1866.— 6,980,000.. 3,698,068.. 
 
 1866. — 10,778,000.. 2,366,626.. 
 
 1867. — 8,020,000.. 642,912.. 
 
 1868. — 7,716,420.. 1,635,642.. 
 
 1869. — 6,730,000.. 2,362,943.. 
 
 1870. — 10,649,000.. 1,579,473.. 
 
 1871. — 16,620,000.. 3,712,473.. 
 
 £1,661,640 
 
 2,626,119 
 
 4,573,296 
 
 3,381,942 
 
 8,412,374) 
 
 7,377,088 > Average, £7,290,080. 
 6,080,778] 
 
 4,367,057 
 
 12*807^627 } Avera g e i £11,438,627. 
 
 Average Excess.. . . £6,135,425 of Imports over 10 years. 
 
 1872. —£11,140,600.. £5,654,451.. £5,486,049 
 
 1873. — 12,302,220.. 2,497,676.. 9,804,644 
 
 Average Excess... .£7,645,346 over two years. 
 
 The following table (p. 22) shows the actual exchanges (short 
 maximum rate) from April, 1872, to September, 1873, and 
 the actual prices of Silver in London; also, in the last column, 
 the price (calculated from the data on page 17) which 
 a consignment to the French Mint should be expected, at 
 the given exchange, to secure to an'English holder. 
 
22 
 
 Date. 
 
 Exchange 
 
 (Prom 
 
 Lutyen's 
 
 List.) 
 
 Actual Price 
 in 
 
 London. 
 
 Net Price 
 obtainable bj 
 sending to tin 
 French Mint 
 
 Profit per 02. 
 
 e 
 
 1872 April 19 
 
 25-37| 
 
 S. d. 
 
 5 0-25 
 
 s. d. 
 
 4 11-567 
 
 Pence. 
 
 May 3 
 
 25-37* 
 
 5 0-125 
 
 4 11-567 
 
 
 „ 24 
 
 25-50 
 
 5 0-125 
 
 4 11-273 
 
 
 June 7 
 
 25-50 
 
 5 00625 
 
 4 11-273 
 
 
 „ 28 
 
 25-45 
 
 5 0-125 
 
 4 11-390 
 
 
 July 5 
 
 25-45 
 
 5 0-125 
 
 4 11-390 
 
 
 „ 30 
 
 25-65 
 
 5 0-125 
 
 4 10-924 
 
 
 Aug. 2 
 
 25-85 
 
 5 0-125 
 
 4 10-466 
 
 
 „ 20 
 
 25-70 
 
 5 0-063 
 
 4 10809 
 
 
 Sept. 17 
 
 25-70 
 
 5 0-375 
 
 4 10-809 
 
 
 „ 27 
 
 25-60 
 
 5 0-438 
 
 4 10-040 
 
 
 Oct. 15 
 
 25-70 
 
 5 0 
 
 4 10-809 
 
 
 Nov. 1 
 
 25-77^ 
 
 4 11-813 
 
 4 10-637 
 
 
 „ 19 
 
 25-72* 
 
 4 11-25 
 
 4 10-751 
 
 
 Dec. 6 
 
 25-70 
 
 4 11-625 
 
 4 10-809 
 
 
 „ 31 
 
 25-60 
 
 4 11-75 
 
 4 11-040 
 
 
 1873 Jan. 10 
 
 25-60 
 
 4 11-813 
 
 4 11-040 
 
 
 „ 28 
 
 25-60 
 
 4 11-875 
 
 4 11-040 
 
 
 Feb. 11 
 
 25-55 
 
 4 11-875 
 
 4 11-156 
 
 
 „ 25 
 
 25-45 
 
 4 11-813 
 
 4 11-390 
 
 
 Mar. 11 
 
 25-50 
 
 4 11-813 
 
 4 11-273 
 
 
 „ 25 
 
 25-47£ 
 
 4 11-875 
 
 4 11-331 
 
 
 April 8 
 
 25-50 
 
 4 11-75 
 
 4 11-273 
 
 
 „ 29 
 
 25-50 
 
 4 11-75 
 
 4 11-273 
 
 
 May 9 
 
 25-45 
 
 4 11-75 
 
 4 11-390 
 
 
 „ 27 
 
 25-60 
 
 4 11-438 
 
 4 11-040 
 
 
 June 6 
 
 25-65 
 
 4 11-438 
 
 4 10-924 
 
 
 „ 17 
 
 25-67* 
 
 4 11-25 
 
 4 10-867 
 
 
 „ 20 
 
 25-67* 
 
 4 11-313 
 
 4 10-867 
 
 
 „ 27 
 
 25-60 
 
 4 11-313 
 
 4 11-040 
 
 
 July 1 
 
 25-60 
 
 4 11-313 
 
 4 11-040 
 
 
 „ 4 
 
 25-60 
 
 4 11-313 
 
 4 11-040 
 
 
 „ 8 
 
 25-60 
 
 4 11-313 
 
 4 11-040 
 
 
 „ 11 
 
 25-60 
 
 4 11-313 
 
 4 11-040 
 
 
 „ 15 
 
 25-60 
 
 4 11-313 
 
 4 11-040 
 
 
 „ 22 
 Aug. 8 
 
 25-60 
 
 4 11-375 
 
 4 11-040 
 
 
 25-52* 
 
 4 11-188 
 
 4 11-214 
 
 •026 =-04% 
 •214 = -36% 
 •518= -88% 
 
 „ 12 
 
 25-52* 
 
 4 11 
 
 4 11-214 
 
 ii 2C 
 
 25-47* 
 
 4 10-813 
 
 4 11-331 
 
 Sept. 12 
 
 25-47* 
 
 4 11-125 
 
 4 11-331 
 
 •206 = -33% 
 
 Dec. 30 
 
 25-42* 
 
 4 10 
 
 4 11-449 
 
 1-449 = 2-5% 
 
23 
 
 The question, To what point did it fall? is answered 
 by the above Table; and it will be seen that down to 
 the end of July, 1873, the price in no case fell below 
 the point indicated by the exchange—did not even fall 
 so low as that point, the demand sufficing to keep it on a 
 somewhat higher level. Had the demand been greater or 
 the supply less, it might of course have risen to any point, 
 and in any case if the exchange had been more favourable 
 the open Mint would have maintained the price; but however 
 little the demand and however great the supply, it could not 
 have fallen materially below the exchange point while the 
 Mint remained open. 
 
 What was the character and cause of the fall ? It was in 
 no respect abnormal;' for such as it was, it was much less 
 than had frequently happened in former years. I add a 
 table of prices from 1827 to 1850:— 
 
 Lowest 
 
 Prices of Silver 
 
 Year. 
 
 Lowest. 
 
 1827 
 
 .59*c2. 
 
 1828 
 
 .59* 
 
 1829 
 
 .59* 
 
 1830 
 
 .59* 
 
 1831 
 
 .60 
 
 1832 
 
 .59* 
 
 1833 
 
 .58f 
 
 1834 
 
 ..59* 
 
 1835 
 
 .59* 
 
 1836 
 
 .59| 
 
 1837 
 
 .59 
 
 1838 
 
 .59| 
 
 London from 1827 to 1850. 
 
 Year. 
 
 Lowest. 
 
 1839 . 
 
 .60 d. 
 
 1840 . 
 
 . 60 * 
 
 1841 . 
 
 .59f 
 
 1842 , 
 
 .59* 
 
 1843 , 
 
 .59 
 
 1844 . 
 
 .59* 
 
 1845 . 
 
 .58* 
 
 1846 , 
 
 .59 
 
 1847 , 
 
 .58* 
 
 1848 . 
 
 .58* 
 
 1849 
 
 .59* 
 
 1850 
 
 .59* 
 
24 
 
 Thus'it will be seen that during that period of twenty-four 
 years there was a fall— 
 
 in 1 year of l£d. beneath the par price. 
 
 2 years „ 
 
 1 ^- 
 
 
 3 years „ 
 
 ld. 
 
 
 1 year „ 
 
 id. 
 
 » 
 
 3 years „ 
 
 Id- 
 
 » 
 
 2 years „ 
 
 fd. 
 
 » 
 
 4 years „ 
 
 id. 
 
 » 
 
 4 years „ 
 
 
 » 
 
 In the year 1848 the price of Silver, possibly owing to 
 political disturbances, had fallen to l^d below the par price; 
 but neither then nor at any other period when the fall was 
 almost as great did we hear of any project for closing the 
 Mint to Silver. Whereas during the whole period of 
 thirteen months, beginning with April, 1872, the total fall was 
 but id., and |d. more in the three months ending August, 1873. 
 
 There could be no question about the cause of the rapid 
 fall after September, 1873, when restrictions were placed on 
 the coinage, and the discount from the cash value having 
 been before that date for ten days only, reached by successive 
 postponements of the due date no less a time than nineteen 
 months. 
 
 But the restrictions were imposed in September; and how 
 then, came it to pass that the fall below exchange point 
 began in August, and that on the 8 th of that month the price 
 was a few hundredths lower than the exchange would warrant ? 
 This fall was insignificant, viz. -026d. in the oz., or less than 
 75 V of a penny, a fraction at which no sale or quotation would 
 be made, and which would be counterbalanced by a rise in 
 the exchange of about 1 centime, the variations in the quoted 
 rate being never less than 2 ^ centimes. The exchange varies 
 every moment, and it is impossible to say that the quoted 
 prices correspond exactly in point of time with the quoted 
 
25 
 
 [exchange. The exchange may have been a point higher at the 
 particular moment when the Silver quotation was given or 
 the sale made, so the divergence was more apparent than real. 
 It was not till the 12th August that the fall, *214d. 
 below the price which the exchange should indicate, 
 insignificant as that fall was, deserves any notice, inasmuch 
 as it can hardly be accounted for by the above con¬ 
 sideration. Coming events cast their shadows before, 1 and 
 there were rumours in abundance as to the intended action of 
 the French Government. It is obvious, therefore, that when 
 those rumours began, no holder of Silver could be certain that 
 they would not at once be converted from rumour ihto facts, 
 or feel sure that he would at once receive coin for his bullion. 
 Such a holder might then well have been willing to abate his 
 pretensions, and take a shade less for his Silver than its ship¬ 
 ment to Paris would produce in normal times; and this the 
 holder of a bill of lading for Silver, who could only sell for 
 forward delivery, would be certain to do. 
 
 We may conclude, then, that is wholly incredible that a 
 trifling and often experienced fall of Id. from the par price of 
 Silver in England should have so frightened the French 
 authorities as to cause them to take the steps which led to 
 the final closing of the Mints to Silver. 
 
 There was a very sufficient cause for the limitation of the 
 coinage of Silver. The French War Indemnity had been 
 fixed at £200,000,000 sterling to be paid to Germany, and as 
 Germany had determined to demonetise Silver, it was to be 
 expected that the greater part of the'Silver which the Indemnity 
 would enable her to set free, would come to the Paris Mint 
 for coinage. France had already coined in 1873 5-franc 
 
 1 Thus, between the 8th and 25th April, 1890, the price of Silver rose 
 4d. an oz. on the assumption that some measures might be taken in the 
 United States as to the increased coinage of Silver; whereas a Bill dealing with 
 the subject was not framed until June, and did not come into force until the 
 13th August. 
 
26 
 
 pieces to the amount of about six million sterling, an amount 
 only exceeded in 1834 and 1849, and greater by about 
 five millions than the average of the previous ten years 
 There may well, therefore, have been hesitation to coin the 
 undefined but unquestionably large amount of Silver which 
 the action of Germany would almost certainly have thrown 
 
 upon the Paris Mint. 
 
 It is clear, then, that the real cause of the restriction 
 and suspension of Silver coinage in 1873-5 was not the 
 insignificant fall of the price of the metal in London (itself 
 caused by the restriction), or any fears of economic dis¬ 
 turbance consequent on a supposed diminution of its 
 permanent value in the world, but the in-pouring of Silver 
 from Germany which overtaxed the powers of the French 
 Mint, and compelled it, as might have been expected, to 
 lessen its output. It is abundantly clear, also, that by that 
 suspension and the cessation of the fixed Mint price, the price 
 of Silver in London was driven from its moorings and 
 suffered to drift hither and thither, and finally fall as low 
 as increased supply and diminished demand could send it. 
 
 I think I have now disposed of the allegation that the 
 great fall in the price of Silver was the cause and not the 
 effect of the closing of the French Mint, by showing (1) that 
 such fall in Silver as occurred prior to August, 1873, was well 
 within the limits of variation, which a bimetallic money law 
 not only permits, but assumes, where there is substantial 
 alteration in the circumstances of international supply and 
 demand, 1 (2) That if the o peration of the law of 1803 was 
 
 JtfSTis 6 S2STS2KT th ? an a ? ustment bet ^en the two money 
 
 both metals is that acting in fc of a free colna £ e law applied to 
 
 ordinary commercial motives it 1 "°%? T, ay ’ but throu g h th e pressure of 
 opens the way to their 5?*" eX ! ent ° f the Variations a ^ 
 
 like the governor oi aZm engine ^ 0thers ’ 
 
 action, but it cannot check them until thevhSn lj ; re & ularit y of 
 
 ease as in the other thnmrh a ? begin to show themselves. In one 
 
 uniformity which for all pra^ical purposes*incomplete! 116 UDi,0rmit * we ««* 
 
I not sufficient to prevent this fall, it was only because the price, 
 I notwithstanding the fall, was always above that which the 
 I French Mint at the existing exchange could offer to the 
 English holder, and (3) that such fall as did take place was 
 • far too insignificant 1 to cause the French Government to 
 K contemplate the limitation of their coinage of Silver, whereas 
 f- they had ample reasons for their act in the unprecedented 
 ‘ influx of Silver from Germany, which, under the then condi- 
 I tion of the law, was a forced import, onerous to their Mint 
 r and profitable to Germany. 
 
 I may admit that there is a theoretical possibility that there 
 I might be no Gold in France, and that consequently there 
 t might be no “ Gold point ” at which the rise of the exchange 
 I must cease; but practically it is a vain imagination. The only 
 f need of Gold is to rectify, from time to time, and instantly, a 
 I rising exchange—an exchange unfavourable to France ; but 
 f the absence of Gold could only have any permanent effect 
 on the value in England of the frs. 6-34033 per ounce on 
 ( the assumption that there is no recuperative force in France, 
 that her land has lost its productive power, and her people 
 their genius for commerce. Surely it is a commonplace of 
 Political Economy, that the effect of an unfavourable exchange, 
 i.e., of an excess of imports over exports, is to stimulate pro¬ 
 duction and export, and bring about a more favourable course 
 of exchange. That the absence of Gold should of necessity 
 prevent the development of commerce, and the maintenance 
 of an average equality of exchange, is incredible, and con¬ 
 trary to all commercial experience. 
 
 I have said above that the rise and fall of the money price 
 of Silver in the market must depend on natural causes. 
 These can be stated in three words, “Supply and Demand.” 
 
 1 The fall was but £d. per ounce, as I have said above, and at no time within 
 that twelvemonth could Silver bought in England have been remitted to France 
 for coinage without incurring a loss, owing to the high exchange. 
 
28 
 
 Nothing else can affect price, whether of commodities in 
 general or of the precious metals in particular. No human 
 laws can affect it except through the medium of those 
 joint forces. Man can regulate supply, and man can check 
 or foster demand. If the supply exceed the demand the 
 price will fall. If the demand exceed the supply the price 
 will rise. If we may conceive the supply as constant 
 but the demand variable, the price will fluctuate; as it 
 will also do if the demand is constant but the supply variable 
 If, however, the demand is not only constant but constant at' 
 a fixed price, the variation in the price in the case of con¬ 
 sumable commodities (supposing such constant demand to be 
 possible) would be unlimited in an upward direction and 
 only limited in the case of the precious metals by the power 
 of re-melting coin into bar when bar is needed; 1 but in a 
 downward direction the price must be absolutely limited by 
 that offered by the creator of a perpetual demand. It i s 
 Demand and Supply that govern the price, but in the case of 
 an open Mint the demand is constant. 
 
 That word Demand has been a stumbling-block to some 
 inquirers. They have imagined that it meant or implied a 
 demand for Silver coin on the part of the people, who, as 
 they rightly aver, have now, or can have, as much Silver coin 
 as they desire and can pay for. But it is a.demand not of 
 the people for coins, but of the State for Silver to be coined. 
 The State says to the people : “Here is the Mint; its doors 
 are always open. Bring all,the Silver you will, it can never 
 have enough.” That is a much more potent kind of demand 
 than the fitful craving prompted by the needs of commerce. 
 
 It is not indeed a demand on the part of the public, for no 
 man having a bar of Silver to sell sells it because he has a desire 
 
 > E.g In this country no one would give more for Silver than a price equal 
 to a ratio of 14 2878 to 1, because he could melt new half-crowns more ad- 
 
 v!w g fTr y: Whl!C m FranCe hG W ° Uld n6Ver give more than the siting 
 
 value of 5-franc pieces. 
 
29 
 
 to possess more Silver coins. He sells it in order to convert liis 
 dead and stagnant capital into a living and active form, to 
 get a better balance at liis bankers’, whereby he can possess 
 himself of as many of the existing Gold and Silver coins as 
 he wants for his daily needs; and very few does he want. 
 The buyer buys his bar of Silver either to export it to the 
 East or to use it in the arts. I have shown that for whatever 
 purpose he wants it he cannot possibly pay less for it, while 
 a law such as the French law of 1803 is in full force, than 
 the equivalent of 200 francs a kilogramme. 
 
 It has been said that the reception of Silver by the Mint is 
 no demand at all, because it is not purchase but merely a 
 return in another form of the same ounce of Silver that is 
 brought to it. 
 
 That seems to me to be mere logomachy. Whether the 
 action is called purchase or no signifies nothing. Of course it 
 only gives you back the Silver that you bring, but the “ other 
 form” in which it returns it is Money. There is nothing 
 mysterious about Money, but it has the unique quality of 
 discharging debt. The Mint takes all the Silver you can 
 bring, and what can Demand do more ? Can it always do as 
 much ? 
 
 Again, it is alleged that, even if it be a demand it cannot 
 be constant because it must fail in the end, as the “ corner ” 
 in copper failed. It is enough to say in answer that any 
 such fictitious demand for a consumable commodity will fail 
 by reason of the difficulty of re-selling; but the Mint demand 
 is, as the other objectors rightly say, only a return of the 
 same commodity in a form which comes amiss to none; and 
 the excess of which is only shown by enhancement of general 
 prices. 
 
 A time might possibly come (though in real life it never 
 did come while the French law of 1803 was in full operation) 
 hhre aanimrerdah demand*—that*. ia» to. say;., the, demand, fox 
 
80 
 
 the arts and for export—would slacken; no more silver plate ! 
 being needed at the price, and no need existing for export to 
 the East. Then the Mint demand, as being the only other 
 outlet for the Silver, would become positively, as it had been 
 negatively, effective; and Silver would flow to silver-coining 
 countries for coinage. The circulating medium, the measure 
 of value, would accordingly increase, prices of all commodities 
 except Gold and Silver, would tend to rise, in other words 
 the precious metals would tend to become depreciated, the 
 demand for them for manufacturing purposes would tend to 
 increase, and the result would be a cessation of the imports 
 to the Mint, and a return to the former state of things. 
 
 HENRY HUCKS GIBBS. 
 
CHART showing the course of the PRICE of PAR SILVER in LONDON and of the SHORT EXCHANGE on PARIS for the Years 184S to 1874. 
 
 [Revised from that Published in “The Fall in Silver,” by the same Author ( 1890).] 
 
The Chart. 
 
 The Exchanges in the second column are those at which 
 the corresponding Prices in the first column might, according 
 to the calculations on page 17, presumably be realised by 
 importing Silver into the French Mint. 
 
 The black line indicates the general course of price; the 
 
 dotted line that of the Exchange. 
 
 It will be observed that in a few cases the price of Silver 
 has apparently fallen below that which the existing exchange 
 would indicate as obtainable. For example: At the end of 
 the year 1848, when cash payments were suspended at the 
 Bank of France, and when all commercial matters were in a 
 disturbed state, the price of Silver fell to 4/11*, the exchange 
 being at 25*30; whereas the price corresponding to this 
 exchange is about 4/llf. It should be added, however, that in 
 this table the charges of transit are calculated as now current, 
 whereas they were certainly higher forty years ago, diminish¬ 
 ing in proportion the net proceeds of a remittance. 
 

 
 
bimetallic league. 
 
 ‘The object of the League is to urge upon the British Government 
 the necessity of co-operating with other leading Nations for the 
 establishment, by International agreement, of the free coinage of 
 Gold and Silver, at a fixed ratio." 
 
 President. 
 
 HENRY H. GIBBS. 
 
 Chairman of General Council. 
 H. R, GRENFELL. 
 
 Vice-Presidents. 
 
 The Duke of Abercorn, C.B. 
 
 The Marquis of Abergavenny, K.G. 
 John Addison, Q.C., M.P. 
 
 George W. Allen, C.I.E. 
 
 Lord Basing. 
 
 Gerald W. Balfour, M.P. 
 
 Sir Thomas S. Bazley, Bart. 
 
 J. Bazley-White. 
 
 William W. B. Beach, M.P. 
 
 The Duke of Beaufort, K.G. 
 
 H. R. Beeton (London). 
 
 Gilbert Beith, M.P. 
 
 Lord Henry Bentinck. 
 
 Lord Charles Beresford, C.B. 
 Commander Hastings Berkeley, R.N. 
 Thomas Birtwistle (Accrington). 
 
 Col. the Hon. F. C. Bridgeman, M.P. 
 Lord Henry Brudenell-Bruce. 
 
 Rev. II. F. Burnaby, M.A. 
 
 Alfred L. Cohen (London). 
 
 The Marquis of Carmarthen, M.P. 
 Lord Castletown. 
 
 C. W. Cayzer, M.P. 
 
 Lieut.-General Sir Andrew Clarke, 
 G.C.M.G., C.B., C.I.E. 
 
 Admiral Sir J. E. Commerell, K.C.B. 
 J. Corbett. 
 
 W. J. R. Cotton (London). 
 
 Rev. Canon Cromwell, M.A. 
 
 Joseph Cowen (Newcastle-on-Tyne). 
 
 The Earl of Crawford and Balcarres, 
 LL.D., F.R.S. 
 
 Alexander Cross, M.P. 
 
 Sir H. F. de -Trafford, Bart. 
 
 The Earl of Ellesmere. 
 
 Lord Elcho, M.P. 
 
 Sir J. Whittaker Ellis, Bart. 
 
 R. L. Everett, M.P. 
 
 The Marquis of Exeter. 
 
 Sir A. Orr Ewing, Bart. 
 
 The Earl of Feversham. 
 
 The Earl Fortescue. 
 
 Thomas Fielden. 
 
 G. II. Finch, M.P. 
 
 Professor H. S. Foxwell, M.A. 
 Moreton Frewen (London). 
 
 Lord Gerard. 
 
 Sir Lepel H. Griffin, K.C.S.I. 
 
 The Marquis of Granby, M.P. 
 
 j. W. Gray. 
 
 Professor E. C. K. Gonner, M.A. 
 sir Edward Green, Bart. 
 
 [I. R. Grenfell. 
 
 W. H. Grenfell, M.P. 
 
 lames Guthrie. 
 
 sir Henry A. Hoare, Bart. 
 
 Lord Claud J. Hamilton. 
 
 L,ord F. Hamilton, M.P. 
 
 ''rank Hardcastle. 
 sir Hector M. Hay, Bart. 
 
34 
 
 Vice-Presidents— continued. 
 
 A. Raymond Heath. 
 
 Right Hon. E. Heneage. 
 
 Sir Alfred Hickman, M.P. 
 
 A. Staveley Hill, M.P. 
 
 Charles Hoare (London). 
 
 Sir T. C. Hope, K.C.S.I., C.I.E. 
 
 Sir W. H. Houldsworth, Bart., M.P. 
 Isaac Hoyle. 
 
 Sir Henry H. Howorth, M.P., K.C.I.E. 
 George Howell, M.P. 
 
 Sir F. Seager Hunt, Bart., M.P. 
 
 Sir Guyer Hunter, K.G'.M.G. 
 
 J. Ilenniker Heaton, M.P. 
 
 Henry Higgs, B.A., LL.B. 
 
 W. Jacks, M.P. 
 
 A. Weston Jarvis. 
 
 A. Johnstone - Douglas (Ruthwell 
 N.B.) 
 
 J. Jordan. 
 
 Lieut.-General R. H. Keatinge, V.C., 
 C.S.I. 
 
 George D. Kelley (Manchester). 
 
 H. Knatchbull-Huge8sen, M.P. 
 
 Lord Knightley, 
 
 J. Boyd Kinnear (Ladyhank, N.B.) 
 Edm. F. Vesey Knox, M.P. 
 
 The Marquis of Londonderry, K.G. 
 Sir J. C. Lawrance. 
 
 Edward Langley (London). 
 
 Sir Edmund A. II. Lechmere, Bart., 
 M.P. 
 
 Elliott Lees. 
 
 The Duke of Leinster. 
 
 Sir Roper Lethbridge, C.I.E. 
 
 Sampson S. Lloyd (London). 
 
 Frank Lockwood, Q.C., M.P. 
 
 Sir Alfred Lyall, K.C.B., K.C.I.E. 
 Leonard Lyell, M.P. 
 
 Cuming Macdona, M.P. 
 
 John Wm. Maclure, M.P. 
 
 Sir Joseph X. McKenna. 
 
 J. II. Manners-Sutton (Newark). 
 Professor James Mavor. 
 
 James Mawdsley (Manchester). 
 
 Sir H. M. Meysey-Thompson, Bart., 
 
 T. Milvain. 
 
 Earl Manvers. 
 
 A. B. Freeman Mitford, M.P., C.B. 
 
 Sir Guilford L. Molesworth, K.C.I.E. 
 John Musgrave (Whitehaven). 
 
 Samuel Montagu, M.P. 
 
 R. Jasper More, M.P. 
 
 Viscount Newark, M.P. 
 
 Ernest Noel (London). 
 
 T. O’Hanlon. 
 
 Edward Ilowley Palmer (London). 
 Herbert B. Praed (London). 
 
 Sir Richard II. Paget, Bart., M.P. 
 
 J. Pinkerton, M.P. 
 
 W. Pomfret Pomfret. 
 
 The Duke of Portland. 
 
 A. D. Provand, M.P. 
 
 Sir John II. Puleston. 
 
 J. Richardson, M.P. 
 
 The Duke of Richmond and Gordon 
 K.G. ’ 
 
 The Earl of Radnor. 
 
 Lord Rowton, C.B. 
 
 Lord Rookwood. 
 
 Major F. C. Rasch, M.P. 
 
 Lord Rendlesham. 
 
 E. M. Hutton Riddell. 
 
 Sir M. White Ridley, Bart,, M.P. 
 Thomas Roe, M.P. 
 
 Sir George Russell, Bart., M.P. 
 
 James Rankin, M.P. 
 
 Col. T. M. Sandys, M.P. 
 
 Sir Albert A. David Sassoon, C.S.I. 
 
 Sir George R. Sitwell, Bart., M.P. 
 Lord Sherborne. 
 
 H. Seton-Karr, M.P. 
 
 Thomas Shaw, M.P. 
 
 T. II. Sidebottom, M.P. 
 
 Samuel Smith, M.P. 
 
 Lord Suffield, K.C.B. 
 
 J. E. Spencer, M.P. 
 
 Hon. Edward G. Stanley. M.P. 
 
 Sir T. Sutherland, M.P., K.C.M.G. 
 Professor J. E. Symes, M.A. 
 
 Capt. C. W. Selwyn. 
 
 W. E. M. Tomlinson, M.P. 
 
 C. E. Howard Vincent, C.B., M.P. 
 Viscount Valentia. 
 
 Professor Robert Wallace. 
 
 Edmund Waller (Gloucester). 
 
 Colonel Cornwallis West. 
 
 Stephen Williamson, M.P. 
 
 The Marquis of Winchester. 
 
 Col. Mildmay Wilson. 
 
 R. Grant Webster, M.P. 
 
 Sir George 0. Wombwell, Bart. 
 
 Caleb Wright, M.P. 
 
 Thomas Wright (Leicester) 
 
 George Wyndham, M.P. 
 
 The Earl of Yarborough. 
 
35 
 
 Trustees of Guarantee Fund. 
 
 HEN - R v H. « BBS i ^| L M ™ 6 4 P & f B ^H« M HAW0 S Tfl, ROBERT 
 
 Executive Council. 
 
 Chairman: ROBERT BARCLAY, Manchester. 
 
 Alexander Adam, Leith. 
 
 John A. Beith, Manchester. 
 
 Thomas Bell, Whickham (County 
 Durham). 
 
 Henry Coke, Liverpool. 
 
 Geo. Handasyde Dick, Glasgow. 
 John S. Dods, Manchester. 
 
 W. E. Dorrington, Manchester. 
 Alfred Emmott, Oldham. 
 
 R. L. Everett, M.P., Ipswich. 
 
 Fredk. J. Faraday, Manchester. 
 
 J. C. Fielden, Manchester. 
 
 F. B. Forbes, London. 
 
 Moreton Frewen, London. 
 
 H. T. Gaddum, Manchester. 
 
 Henry H. Gibbs, London. 
 
 Robert Gladstone, Liverpool. 
 
 C. W. Gray. 
 
 Edward II. Greg, Manchester. 
 
 H. R. Grenfell, London. 
 
 J. H. Gwyther, London. 
 
 E. A. Hague, Manchester. 
 
 Abraham Haworth, Manchester. 
 Frank Hardcastle, Bolton. 
 
 John Hargreaves, Blackburn. 
 
 George C. Haworth, Salford. 
 
 J. R. Hepburn, Manchester. 
 
 John Holliday, Manchester. 
 
 Lewis Haslam, Bolton. 
 
 Sir W. II. Houldsworth, Bart., M.P. 
 
 Henry H. Houldsworth, Manchester. 
 Isaac Hoyle, Manchester. 
 
 J. Arthur Hutton, Manchester. 
 
 Henry Lathbury, Manchester. 
 Sampson S. Lloyd, London. 
 
 Capt. l''.C.Loder-Symonds,Farringdon. 
 Charles Macdonald, Manchester. 
 
 Sir H.^M. Mey$ey-Thomp 80 n, Bart., 
 
 Samuel Montagu, M.P., London. 
 
 W. R. Moss, Bolton. 
 
 Sir John Muir, Bart., Glasgow. 
 Samuel Ogden, Manchester. 
 
 James Parlane, Manchester. 
 
 F. W. Peel, Manchester. 
 
 A. D. Provand, M.P., Manchester. 
 
 J. F. S. Rolleston, Leicester. 
 
 W. T. Rothwell, Manchester. 
 
 Edward Sassoon, London. 
 
 Hermann Schmidt, London. 
 
 C. I. Sassoon, Manchester. 
 
 I. Seligman, London. 
 
 T. H. Sidebottom, M.P., Manchester. 
 
 S. Smith, M.P., Liverpool. 
 
 E. P. Squarey, Westminster. 
 
 Wm. Taylor, Blackburn. 
 
 T. C. Taylor, Batley. 
 
 John Thomson, Manchester. 
 
 Stephen Williamson, M.P., Liverpool. 
 Thos. Willson, Ryde, Isle of Wight. 
 
 Hon. Treasurer. 
 
 ABRAHAM HAWORTII, .Manchester. 
 
 Bankers. 
 
 Bank of England, Manchester. 
 
 Chartered Bank of India, Australia, and China, London. 
 
 Head Offices. 
 
 Haworth’s Buildings, 5, Cross Street, Manchester. 
 
 General Secretary. 
 
 HENRI' MCNIEL, F.S.S. 
 
36 
 
 Parliamentary Committee. 
 
 H. R. Beeton. 
 
 Henry H. Gibbs. 
 
 H. R. Grenfell. 
 
 The Marquis of Carmarthen, M.P. 
 Professor H. S. Foxwell, M.A. 
 Moreton Frewen. 
 
 Sir Guilford L. Molesworth, K.C.I.E. 
 Herbert C. Gibbs. 
 
 W. H. Grenfell. 
 
 J. II. Gwyther. 
 
 Frank Hardcastle; 
 
 Sir W. II. Ilouldsworth, Bart., M.P. 
 Isaac Hoyle. 
 
 George Howell, M.P. 
 
 A. Weston Jarvis. 
 
 S. Montagu, M.P. 
 
 A. Cotterell-Tupp. 
 
 A. D. Provand, M.P. 
 
 R. T. Rohde. 
 
 T. H. Sidebottom, M.P. 
 
 Edward Sassoon. 
 
 H. Schmidt. 
 
 S. Smith, M.P. 
 
 Sir Thos. Sutherland, M.P., K.C.M.G. 
 Sir II. M. Meysey-Thompson, Bart. 
 
 Stephen Williamson, M.P. 
 
 Edm. F. Vesey Knox, M.P. 
 
 Parliamentary and Central Agricultural Committees— 27, Great George 
 Street, Westminster, S.W. 
 
 Hon. Sec.: George Howell, M.P. 
 
 Assistant Secretary: W. R. II. Garland. 
 
 City of 1 
 
 H. R. Beeton. 
 
 F. B. Blake. 
 
 John Nutt Bullen. 
 
 Henry Coke. 
 
 E. de Wael. 
 
 E. F. Duncanson. 
 
 Henry II. Gibbs. 
 
 Herbert C. Gibbs. 
 
 H. R. Grenfell. 
 
 J. Howard Gwyther. 
 
 Sir Hector M. Hay, Bart. 
 
 Henry G. Hayter. 
 
 J. F. Horley. 
 
 Wm. Jackson. 
 
 A. Weston Jarvis. 
 
 W. Keswick. 
 
 Edward Langley. 
 
 Sampson S. Lloyd. 
 
 Hon. Sec.: H. Schmidt, Lombard 
 
 n Committee. 
 
 S. Montagu, M.P. 
 
 E. C. Morgan. 
 
 David McLean. 
 
 J. F. Ogilvy. 
 
 Wm. Paterson. 
 
 A. D. Provand, M.P. 
 
 R. T. Rohde. 
 
 Lieut.-Gen. Richard Strachey, C.S.I. 
 Sir Thos. Sutherland, M.P., K.C.M.G. 
 Edward Sassoon. 
 
 Reuben Sassoon. 
 
 II. Schmidt. 
 
 II. D. Stewart. 
 
 A. Cotterell Tupp. 
 
 A. Von Andr<$. 
 
 Thomas A. Welton. 
 
 A. Zimmern. 
 
 3, George Yard, Lombard Street, E.C. 
 
 Hon. Sec., Glasgow, Wm. Ewing. 
 
 „ Bradford, J. M. McLaren. 
 
 „ Bolton, Lewis Haslam. 
 
 „ Blackburn, John Hargreaves. 
 
 „ Walsall, W. H. Duignan. 
 
 „ Southport, S. Hardman. 
 
 „ Congleton, A. C. Conder. 
 
 „ Bristol, J. H. Howell. 
 
 „ Swansea, Frederic S. Bishop. 
 
 „ Batley, T. C. Taylor. 
 
 „ Ipswich, R. L. Evrbett, M.P. 
 
 „ Brecon, W. S. Miller. 
 
 „ Oxfordshire & Berkshire, Captain F. C. Loder-Symonds, 
 Hinton Manor, Faringdon, Berks. 
 
37 
 
 STATEMENT. 
 
 Until the year 1873 the ratio at which Gold and Silver were 
 interchangeable was steady, because the Mints of France and 
 other European countries were open to all the world for the 
 unlimited coinage of both metals on the fixed basis of 15£ ozs. of 
 Silver to 1 oz. of Gold. 
 
 * It may be stated generally that during the last century the 
 national unit of coinage which constituted the Standard of Value 
 in the principal countries practically rested on both metals, Silver 
 being usually the nominal standard with Gold rated to it, at the 
 discretion of each Government. 
 
 In the United Kingdom, from 1717 to 1816, this system pre¬ 
 vailed, the ratio of Gold to Silver having been fixed at 1 to 15-21. 
 
 In the United States of America the joint Gold and Silver 
 Standard was originally adopted in 1786 with a ratio of 15*25 
 to 1 ; changed in 1792 to 15 to 1, and in 1834 to 16 to 1. 
 
 In 1803 the joint standard, with a ratio of 15$ to 1, was 
 definitively adopted by France, and in 1865 the formation of the 
 Latin Union, ultimately consisting of France, Italy, Belgium, 
 Switzerland, and Greece, extended and confirmed it. 
 
 Owing to this, the par of exchange between Gold and Silver 
 Standard countries kept practically uniform, and Silver, as fully 
 as Gold, performed the functions of money throughout the world. 
 
 * This and the three following paragraphs are from the Note appe 
 f the Royal Commission on Cold and Silver, by the Right Hon. Sir 
 he Royal Commissioners. 
 
 nded to the Final Report 
 Louis Mallet, C.B., ono of 
 
38 
 
 The action of England in 1816, in adopting the single Gold 
 Standard, did not disturb the steadiness of the ratio between the 
 two metals, so long as the Continental Mints remained open to 
 the unrestricted coinage of Silver; but when Germany which 
 had previously had a Silver Standard in 1873 introduced a single 
 Gold Standard the old equilibrium was destroyed, because France 
 and the other Bimetallic countries, in view of the heavy sales of 
 Silver made by Germany, suspended their free coinage. 
 
 This action caused the price of Silver, as quoted in Gold to 
 fall, and it (the Gold price of Silver) has since fluctuated 
 violently, affecting all international exchanges between Silver 
 Standard and Gold Standard countries. In the case of India 
 the Rupee, formerly worth about 2s., has gradually dropped to 
 Is. 3|d. in English money, with increasing uncertainty as to 
 its prospective exchangeable value as against Gold. 
 
 The substitution of Gold for Silver, and the greater amount of 
 exchange work that is in consequence thrown upon Gold, has led 
 to the “appreciation” of that metal, and to a fall in prices of 
 commodities, as measured in Gold, which is everywhere visible and 
 everywhere baneful in its effects upon Commerce, upon Manu¬ 
 facturing and Agricultural industry, and upon the growth of 
 Employment necessary to provide work for our rapidly increasing 
 population. 
 
 Whenever the London Money Market is distressed and per- 
 plexed by the withdrawal of even small quantities of Gold and 
 by apprehensions as to further demands, coupled with serious 
 doubts as to the sufficiency of future supplies of that metal, the 
 necessity of fixing an international ratio between Gold and Silver 
 sous to make both metals available for Bank reserves becomes 
 strikingly apparent. This would provide an adequate supply of 
 ifoney available for international purposes and for the internal 
 transactions of the Kingdom. Grave dangers would thus be 
 averted. 
 
39 
 
 The aim of the Bimetallic League, as already mentioned, is to 
 secure, by international agreement, the opening of the mints of 
 the leading commercial nations to the unrestricted coinage of 
 Silver and Gold at such fixed ratio as may be mutually agreed 
 upon amongst those nations. By this means a Par of Exchange 
 would be secured ; the two metals would again acquire an Inter¬ 
 national character as Money, and would move freely from nation 
 to nation according to the monetary requirements of the various 
 markets, whilst prices and wages in all countries would be 
 adjusted by a uniform Standard. 
 
 Convinced of the evils resulting from existing conditions of our 
 Monetary System, and of the hindrance to Trade and Agriculture, 
 which are largely due to the disturbed relation between Gold and 
 Silver we appeal to everyone for co-operation in carrying out the 
 objects of the League. 
 
 There is every encouragement to press the matter, seeing that 
 the United States of America, France (with the other States of the 
 Latin Union), Germany, and Holland are willing and eager to 
 co-operate. 
 
 These Powers, it is known, will not move without England, 
 and, under an erroneous conception of the advantages of a single 
 Gold Standard, this country has hitherto stood aloof. 
 
 The Final Report of the Royal Commission on Gold and Silver is, 
 however, of a character so favourable to the Cause advocated by the 
 League that the question is now thoroughly ripe for settlement. 
 
 It is advisable, therefore, that the facts of the case may be 
 made widely known throughout the country, in order to bring 
 the force of public opinion to bear upon Parliament and upon the 
 Government, so that England, instead of being a barrier in the 
 way of an International convention, may take her due share in 
 the settlement of a question so vital to the well-being of the 
 
40 
 
 Empire, so essential to the interests of British and Irish Agri¬ 
 culture, and of Commerce everywhere, and to the financial 
 stability of India. 
 
 Any further information concerning the League may be ob¬ 
 tained from the Secretary, Henry McNiel, F.S.S., Haworth’s 
 Buildings, 5, Cross Street, Manchester, who will also acknowledge 
 Subscriptions and Donations. 
 
 The League comprises Ordinary Members and Associate Mem¬ 
 bers, the Annual Subscription of the former being One Guinea, 
 and the latter 2s. 6d. Checpies to be made payable to the Secretary. 
 
 All publications of the League are delivered free to Ordinary 
 and Associate Members. 
 
41 
 
 Extracts from the Final Report of the Royal 
 Commission on Gold and Silver, 1888. 
 
 PART I. 
 
 (Siyned by all the members of the Commission.) 
 
 Sec. 115 —“ The Remedy which has been put before us most prominently, and 
 as most likely to remedy the evils complained of to the fullest extent possible, is 
 that known as Bimetallism.” 
 
 Sec. 186 .—“ It must be borne in mind that in the case of other commodities 
 (than Gold and Silver) the effect of changes in the supply and demand is both 
 more marked and more immediate. These commodities arc generally produced 
 for the purpose of consumption at an early date or within a comparatively 
 short period. The supply at any time available for the market, or capable of 
 being placed on it at short notice, is therefore a very important element in the 
 process by which its value is fixed. 
 
 “ The precious metals on the other hand are but to a slight extent consumed 
 and the available supply consists of the accumulations of previous years. 
 
 “ It follows, therefore, that Tn their case a diminution or an increase in the 
 new supply is of less importance than in the case of consumable articles, and 
 that an increase or diminution in demand has also a smaller effect. The 
 important consideration with regard to them at any one moment is rather the 
 relation between the total stock then in existence and the then existing demands 
 upon it.” 
 
 Sec. 189 .—“ Looking, then, to the vast changes which occurred prior to 1873 
 in the relative production of the two metals without any corresponding dis¬ 
 turbance in their market value, it appears to us difficult to resist the conclusion 
 that some influence was then at work tending to steady the price of silver, and 
 to keep the ratio which it bore to gold approximately stable.” 
 
42 
 
 Sec. 190.—“ Prior to 1873 the fluctuations in the price of silver were gradual 
 in their character, and ranged within very narrow limits. The maximum 
 variation in 1872 was §d., and the average not quite T \d., while in 1880 the 
 maximum was 2ftd., and the average nearly l£d. It has not been, and indeed 
 hardly could be, suggested that this difference can be accounted for by changes 
 in the relative production or actual use of the two metals.' 
 
 Sec. 191 .—“ The explanation commonly offered of these constant variations 
 in the silver market is that the rise or depression of the price of silver depends 
 upon the briskness or slackness of the demand for the purpose of remittance to 
 silver-using countries, and that the price is largely affected by the amount of the 
 bills sold from time to time by the Secretary of State for India in Council. 
 
 “ But these causes were, as far as can be seen, operating prior to 1873, as well 
 as subsequent to that date, and yet the silver market did not display the 
 sensitiveness to these influences from day to day and month to month which it 
 now does.” 
 
 Sec. 192 .—“ These considerations seem to suggest the existence of some 
 steadying influence in former periods, which has now been removed, and which 
 has left the silver market subject to the free influence of causes, the full effect 
 of which was previously kept in check. The question, therefore, forces itself 
 upon us: Is there any other circumstance calculated to affect the relation of 
 silver to gold which distinguishes the latter period from the earlier ? 
 
 “ Now, undoubtedly the date which forms the dividing line between an epoch 
 of approximate fixity in the relative value of gold and silver and one of marked 
 instability, is the year when the bimetallic system which had previously been in 
 force in the Latin Union ceased to be in full operation; and we are irresistibly 
 led to the conclusion that the operation of that system, established as it was in 
 countries the population and commerce of which were considerable, exerted a 
 material influence upon the relative value of the two metals. 
 
 “ So long as that system was in force we think that, notwithstanding the 
 changes in the production and use of the precious metals, it kept the market 
 price of silver approximately steady at the ratio fixed by law between them, 
 namely 15£ to 1.” 
 
 Sec. 193 .—“ Nor does it appear to us a priori unreasonable to suppose that the 
 existence in.the Latin Union of a bimetallic system with a ratio of 15£ to 1 fixed 
 between the two metals should have been capable of keeping the market price 
 of silver steady at approximately that ratio. 
 
 “ The view that it could only affect the market price to the extent to which 
 there was a demand for it for currency purposes in the Latin Union, or to which 
 it was actually taken to the mints of those countries is, we think, fallacious. 
 
 “ The fact that the owner of silver could, in the last resort, take it to those 
 mints and have it converted into coin which would purchase commodities at the 
 ratio of 15£ of silver to one of gold, would, in our opinion, be likely to affect the 
 
43 
 
 • e of silver in the market generally, whoever the purchaser and for whatever 
 country it was destined. It would enable the seller to stand out for a price 
 Approximating to the legal coin, and would tend to keep the market steady at 
 about that point.” 
 
 PART II. 
 
 Signed by six members of the Commission.— 
 
 { 
 
 Lord Herscheli.. 
 
 Sir Jons Lubbock, Bart., M.i\ 
 Mr. J. \V. Bmcri. 
 
 Hon. C. W. Freemaxtee, C.B. 
 
 Sir T. II. Farrer, Bart. 
 
 Rt. Hon. Leonard II. Courtney. M.P. 
 
 gee. Q' _“ However much opinions may differ as to the extent of the evil 
 
 arising from the increased difficulty which a fluctuating exchange interposes,* we 
 do not think its reality is open to question.” 
 
 Sec. 101 .—“There cannot be two opinions as to the very serious effect which 
 the continued fall in the gold price of silver has had on the finances of the 
 Government of India.” 
 
 Sec. 102.—" We are fully impressed with a sense of the difficulties which 
 surround the Indian Government, and of the serious questions to which any 
 proposed additional tax must give rise. It is not only the embarrassment which 
 has already been caused to the Government of India that has to be borne in 
 mind, but the impossibility of foreseeing to what extent those embarrassments 
 may be increased and their difficulty augmented by a further depression in the 
 value of silver.” 
 
 Sec. 107.—" We think that in any conditions fairly to be contemplated in the 
 future, so far as we can forecast them from the experience of the past, a stable 
 ratio might be maintained if the nations we have alluded to* were to accept and 
 strictly adhere to Bimetallism, at the suggested ratio. We think that if m all 
 these countries gold and silver could be freely coined, and thus become exchange¬ 
 able against commodities at the fixed ratio, the market value of silver as measured 
 by gold would conform to that ratio, and not vary to any material extent.” 
 
 Sec. 119 .—“ Apprehensions have been expressed that if a bimetallic system 
 were adopted gold would gradually dispappear from circulation. If, however, the 
 arrangement included all the principal commercial nations, we do not think 
 there would be any serious danger of such a result. 
 
 The United Kingdom, Germany, the United States, and the Latin Union. 
 
44 
 
 “ Such a danger, if it existed at all, must be remote. It is said indeed, by 
 some, that if it were to happen, and all nations were to be driven to a system of 
 silver monometallism, the result might be regarded without dissatisfaction. 
 
 “ We are not prepared to go this length, but at the same time we are fully 
 sensible of the benefits which would accrue from the adoption of a common 
 monetary standard by all the commercial nations of the world, and we are quite 
 alive to the advantage of the adoption by these nations of an uniform Bimetallic 
 Standard as a step in that direction.” 
 
 PART III. 
 
 Signed by the other six members of the Commission 
 
 f S° n - S fr fog 18 Mallet. C.B. Sir I). IUrboi-r. K.C.S.I. 
 i SI- f, n< d J - M.P. sir W. H. Hocldswobth. Bart., M.P. 
 
 Mr. Samcel Montagu, M.P. 
 
 IRt. Hon. Henry Chaplin, M.P. 
 
 •See. 28.—“Wc think that the above remarks upon the evils affecting both the 
 United Kingdom and India, if taken in connection with the more detailed 
 statement in Part I. of the Report, will sufficiently indicate our view as to their 
 nature and gravity; and that they are largely due to the currency changes which 
 have taken place in the years immediately preceding and following 1873. 
 
 “ We think thafc to ° much stress cannot be laid upon the novelty of the 
 experiment which has been attempted as the result of the above changes. That 
 experiment consists in the independent and unregulated use of both gold and 
 silver as standards of value by the different nations of the world. 
 
 “We are strongly of opinion that both metals must continue to be used as 
 standard money; the results of using them separately and- independently since 
 1878 have been most unsatisfactory, and may be positively disastrous in the 
 future. 
 
 “It cannot be questioned that until 1873 gold and silver were always effec¬ 
 tively linked by a legal ratio in one or more countries. 
 
 “ It is equally indisputable that the relative value of the two metals has been 
 subject to greater divergence since 1874 than during the whole of the 200 years 
 preceding that date, notwithstanding the occurrence of variations in their relative 
 production more intense and more prolonged than those which have been 
 experienced m recent years.” 
 
 &c. 29.—“ In 1873-74 the connecting link disappeared, and for the first time 
 the system of rating the two metals ceased to form a subject of legislation in any 
 country in the world. 
 
45 
 
 “The law of supply and demand was for the first time left to operate inde¬ 
 pendently upon the value of each metal; and simultaneously the ratio which had 
 been maintained, with scarcely any perceptible variation, for 200 years, gave 
 place to a marked and rapid divergence in the relative value of gold and silver, 
 which has culminated in a change from 15i to l to 22 to 1.” 
 
 PROPOSED REMEDY. 
 
 Sec. 80.—“ It appears to us impossible to attribute the concurrence of these 
 two events to a merely fortuitous coincidence. They must, in our opinion, be 
 regarded as standing to each other in the relation of cause and effect. 
 
 “We cannot, therefore, doubt that if the system which prevailed before 1873 
 were replaced in its integrity, most of the evils which we have above described 
 would be removed; and the remedy which we have to suggest is simply the 
 reversion to a system which existed before the changes above referred to were 
 brought about—a system, namely, under which both metals were freely coined 
 into legal tender money at a fixed ratio over a sufficiently large area. 
 
 “ The effects of that system, though it was nominally in force only within a 
 limited area, were felt in all commercial countries, whatever their individual 
 systems of curreuey might be; and the relative value of the two metals in all the 
 markets of the world was practically identical with that fixed by the legislation 
 of the countries forming the Latin Union. 
 
 “ As regards the possibility of maintaining such a system in the future, we 
 need only refer to the conclusion at which our colleagues have arrived in Sec. 107, 
 Part II. (see above), and with which we entirely agree.” 
 
 Sec. 84 .—“No settlement of the difficulty is, however, in our opinion, possible 
 without international action. 
 
 “ The remedy which we suggest is essentially international in its character 
 and its details must be settled in concert with the other Powers concerned. 
 
 “ It will be sufficient for us t6 indicate the essential features of the agree¬ 
 ment to be arrived at, namely— 
 
 (1) Free coinage of both metals into legal tender money; and 
 
 (2) The fixing of a ratio at which the coins of either metal shall be avail¬ 
 able for the payment of all debts at the option of the debtor.” 
 
 Sec. 85.—“ The particular ratio to be adopted is not, in our opinion,a necessary 
 preliminary to the opening of negotiations for the establishment of such an 
 agreement, and can, with other matters of detail, be left for further discussion 
 and settlement between the parties interested. 
 
46 
 
 “We, therefore, submit that the chief commercial nations of the world, such 
 as the United States, Germany, and the States forming the Latin Union, should 
 in the first place be consulted as to their readiness to join with the United 
 Kingdom in a conference, at which India and any of the British Colonies which 
 may desire to attend should be represented, with a view to arrive, if possible, at 
 a common agreement on the basis above indicated.” 
 
 Sec. 36.—“ We have indicated what appears to us to be the only permanent 
 solution of the difficulties arising from the recent changes in the relative value 
 of the precious metals, and the only solution which will protect this and other 
 countries against the risks of the future.” 
 
 “ Manchester Guardian ” Printing Works, Blackfriars Street. 
 
.189 
 
 THE BIMETALLIC LEAGUE, 
 
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 27, Great George Street, Westminster, S.W. 
 
 You may enrol me as an *Associate or Ordinary Member 
 of the Bimetallic League. 
 
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 Associate Members, 2s. 6d. 
 
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 (All members 
 
 "Please indicate which membership you desire. 
 
PUBLICATIONS 
 
 rrn o Silver Pound and England’s Monetary History since the 
 Th Restoration together with the History of the Guinea. By 
 I Hon S. Dana Horton. Price 14 - Macmillan & Co., London. 
 a Treatise on Money, and Essays on Monetary Problems. By J. S. 
 A Nicholson, M.A., D.Sc., Professor of Political Economy in Edinburgh University. 
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 The Theory of Bimetallism. By Sir I). Barbour, K.C.S.I., Financial Member 
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