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the 
 
 GOLD DISCOVERIES, 
 
 AND EFFECT THEREBY PRODUCED ON THE 
 RELATIVE VALUE OF 
 
 SILVER AND GOLD, 
 
 \f *'* Vo 
 
 WITH REASONS FOR THE PROPOSAL 
 TO MAKE THE DIVIDEND IN THE PUBLIC 
 FUNDS PAYABLE THE 
 LAST DAY OF MARCH, JUNE, SEPTEMBER, 
 AND DECEMBER. 
 
 BY 
 
 WILLIAM RAY SMEE, ESQ., E.S.A. 
 
 PRICE 6 D - 
 
 LONDON: 
 
 MANN NEPHEWS, CORNHILL. 
 
6ei i Ci |/vA CX A 
 
 i&h. 
 
 O “5 
 
 O fAA ** 
 
 BHIGHTON I PRINTED BY E. LEWIS, STEAM PRINTER, 126, ST. JAMES’S STREET, 
 
PEEEACE. 
 
 The following essay, a summary of which was 
 printed in the proceedings of the Society of 
 Antiquaries the year it was read, a few copies of 
 which have been privately circulated, is now for 
 the first time published. It was written before 
 the Australian Gold was known in England. In 
 May, 1851, Mr. Hargreaves announced the exist¬ 
 ence of a large tract of gold fields from the foot 
 of Bill Hill, in Australia, and before the end of 
 that month the first Gold was shipped of the value 
 of £800. On the 2nd of September, 1851, this 
 great news arrived in London, and was on the 
 20 th of September confirmed. The very large 
 amount of Gold which Australia still yields has 
 placed a tension upon the argument, which must 
 have destroyed it had the reasoning been not 
 intrinsically sound. It is probable that the Aus¬ 
 tralian gold fields alone have already produced as 
 much gold as all Europe received from the reign 
 of Charles II. to the date of the Californian Gold 
 discoveries, that is <£200,000,000. Yet the price 
 of Silver in bars when this essay was written 
 was 5s. 1 Jd. per oz., and is now 5s. £d. per oz., 
 
2 
 
 exactly the same as it was in 1847, prior to the 
 discovery of Californian Gold. 
 
 It is almost certain this question of the relative 
 values of silver and gold will force itself upon 
 the consideration of the Governments of Europe 
 in the course of the present century. Some 
 accidental accumulation of, or some large demand 
 for one of the precious metals may create a 
 temporary disturbing influence, but for the 
 reasons given in this essay it need not give 
 any alarm, for the evil will only be temporary. 
 
 The Government of France has wisely taken 
 advantage of the increase of the supply of Gold 
 to introduce a gold currency (thus reversing 
 the action of the Government of Holland, in 
 1851), which should gradually replace the silver 
 one, and gold being more portable is generally 
 preferred. But in the eastern parts of Europe 
 not only gold and silver but likewise copper are 
 exceedingly scarce. Silver roubles, even in the 
 neighbourhood of Moscow, the most wealthy capital 
 of the East of Europe, are by no means plentiful, 
 and a few years ago in Vienna paper money was 
 issued in the place of copper money of the value 
 of 6d. 
 
 Ho proper judgment can at present be formed 
 on this subject without being aware of the pro¬ 
 portion of the precious metals that exist in the 
 
3 
 
 immense amount of Bullion held by the Bank of 
 France ; and the Governor of that Establishment, 
 with that courtesy for which the French are so 
 justly celebrated, at the writer’s request, sup¬ 
 plied the exact facts, and they assuredly reflect 
 much credit on the management. The Gold now 
 in the Bank of France is considerably in excess 
 of the Silver. 
 
 Yet it is at this time when the Stock of the 
 Precious Metals is greater than it ever has been 
 in Europe. When the reserve of Bullion during 
 the last three years in the Banks of England 
 and France is, when taken together, large beyond 
 precedent, that a statesman of genius and Chan¬ 
 cellor of the Exchequer, invites public attention 
 to a proposal to diminish the gold in the sovereign 
 one grain; that is to say, to make 1,230 new 
 sovereigns of the value of 1,220 old ones, and 
 in fact to change by legislative enactment the 
 relative value of Gold and Silver. 
 
 Without doubt, should the different Govern¬ 
 ments of Europe agree to issue a gold coin of 
 the same weight and fineness, which should pass 
 current and be a legal tender out of the country 
 in which it is issued for exactly the same as it 
 passes current in its own country, whether that 
 gold coin be the English Sovereign or the French 
 Napoleon, no difference will arise in the measure 
 
4 
 
 of value, provided all existing engagements are 
 met with the old money, or its equivalent. ~ Sup¬ 
 posing the gold in the English Sovereign was 
 made to correspond in every respect with a 
 Napoleon, of the value of 16s., then 5,000 of the 
 new coin would equal 4,000 of the present one, 
 and a Stock proprietor who has now 1,000 
 sovereigns in the Public Funds, would require 
 that sum changed to 1,250 of the new gold coin, 
 and then he would receive under the new stand¬ 
 ard of measure, exactly the same half-year’s 
 dividend as at present. 
 
 In like manner, if the Chancellor of the Ex¬ 
 chequer reduces the Sovereign one grain, very 
 nearly 2d—for the sake of the argument say 
 exactly 2d—then the National Debtholder ought 
 to have the £1,000 he now holds in the funds 
 increased to £1,008 6s. 8d., that his half-year’s 
 interest may continue the same. This reasoning 
 applies to all contracts, to the payment of rents, 
 and to the gold given in exchange for bank notes. 
 
 It is obvious that any change in the gold coin 
 can be equitably carried out, only the immense 
 temporary confusion it will impart into all sorts 
 of commercial transactions renders it imperatively 
 necessary that the same should be done only 
 after serious consideration. 
 
 It must be borne in mind that an order in 
 
5 
 
 paper on London frequently commands the pre¬ 
 mium on Gold, plus the expense of conveying 
 the Gold. A Draft at sight, drawn in Paris by 
 the writer on London, was sent by the hanker in 
 Paris, in whose favor it was drawn, not to London, 
 hut to Vienna; from whence it was sent to Berlin, 
 then to St. Petersburg, then to Eotterdam, and to 
 London, in all these cities cancelling debts, and 
 almost certainly sold in every case at a higher 
 price than the same amount in gold coin, 
 because it represented gold, and because there 
 was no expense in the transit. It is manifest the 
 marketable value of that draft in these different 
 continental cities entirely depended on the 
 quantity and fineness of the gold in the coin 
 for which the order was given. Therefore it is not 
 only the Sovereign that would he depreciated by 
 a diminution in the gold, but all the paper orders 
 for Sovereigns, the amount of which weekly all 
 over the world cannot be accurately estimated— 
 and which is probably not less than £100,000,000 ; 
 and if 2d. only is taken out of the Gold, and 
 not compensated for the transactions in only one 
 week would give a loss of £800,000 to those 
 who have to receive the money. 
 
 The reserve of the Precious Metals held by 
 the Government of the United States is about 
 100,000,000 dollars, and it is probable the 
 
6 
 
 relative proportions of the two metals are not 
 very different from the Bank of France. 
 
 All that would appear to he desirable to 
 accomplish in reference to the Gold Coinage, is 
 that the Merchant should find it less profitable to ' 
 export 1000 ounces of Gold coin fresh from the 
 Mint, supposing they can he procured, than 
 the same amount in Bar Gold. But it is 
 absolutely necessary he should be allowed to 
 export the coin when he either cannot obtain, or 
 it does not suit his purpose to send the Bar Gold, 
 and that the difference in the value ought not to 
 be greater than the charge for coinage, which 
 should be as small as possible—limited to its 
 actual cost,—and be by international arrangement 
 the same in all the European Mints. This is the 
 more evident because the Coin, as issued from 
 the Mint, never can improve, and is always in 
 process of deterioration, which must render the 
 Sovereigns that have been in circulation less 
 profitable under ordinary circumstanees to melt 
 than Bar Gold, even should the existing system 
 of Coinage remain unchanged. 
 
POSTSCRIPT. 
 
 The above was written by the third 
 week of August, and before most of the able 
 correspondence in the Times on this subject had 
 appeared, but as it has a view of its own, is 
 designedly left untouched. It would have been 
 printed immediately, only the author intended 
 to bring before the Bank Court in September, 
 at the half-yearly meeting for the declaration 
 of the dividend, a monetary proposal closely 
 allied with the subject of this essay, and 
 which it was thought might be mentioned here, 
 and this compelled the publication to be kept 
 back until the same was made. 
 
 One of the greatest evils in England is the 
 abuse of the system of Credit. Tradespeople 
 cannot on quarter day obtain the payment of 
 their bills, and those in needy circumstances 
 are frequently so harrassed that they are obliged 
 to leave off business. This is greatly augmented 
 by the fact of there being every three months, 
 two quarter days instead of one. Rents are 
 due the 25th of one month, and the Dividends on 
 the Public Funds at the Bank of England are not 
 
8 
 
 paid until after the 5th of the following month. 
 The receipts being in every quarter so many days 
 in arrear of the payments. Now the welfare of 
 trade, and the proper circulation of money, 
 require that the Dividends on the Govern¬ 
 ment Stocks should he due and paid the 
 very same day, that rents and other quarterly 
 payments have to he mad#*; that, in fact, there 
 should he a return to the ancient custom in 
 England, and that there should he made by 
 statute four quarter days in the year, and that 
 these might he :— 
 
 The last day of March, 
 
 The last day of June. 
 
 The last day of September. 
 
 The last day of December. 
 
 One advantage from this change would be 
 that the householder would have in the quarter 
 commencing in January, ninety days ; that com¬ 
 mencing in April, ninety-one days; July, ninety- 
 two days; October, ninety-two days. Now he is 
 forced to put up with great inequalities : the 3rd 
 quarter has ninety-seven days, and the 4th only 
 eighty-seven. It is curious to trace how there 
 became two quarter days every three months. For 
 several centuries, indeed, from time immemorial, 
 there were four quarter days in the year, and 
 
9 
 
 not eight. These were great feasts, mentioned 
 in the old statutes, as 
 
 The Annunciation of the Blessed Virgin, or 
 Lady Day—25th March. 
 
 The Nativity of St. John the Baptist—24th June. 
 The Feast of St. Michael the Archangel—29th 
 September. 
 
 St. Thomas the Apostle — 21st December, but 
 afterwards altered to Christmas Day, the 
 25th December. 
 
 When the Act came into operation for 
 regulating the commencement of the year, and 
 for correcting the calendar now in use, (24 
 George II., cap. 23,) eleven days were left out, 
 and the 3rd September, 1752, became September 
 14th. But it was enacted, “ that nothing in this 
 present Act contained shall extend or be construed 
 to extend, to accelerate or anticipate the time of 
 payment of any rent, annuity, or sum of money 
 whatever,” and accordingly the days of payment 
 at the Bank, which had been the 25 th March, 
 24th June, 29 th September, and 25th December, 
 were changed to the 5th January, 5th April, 
 5th July, and 10th October (at present the 
 5th October.) But leases continued to be granted 
 and rents were made payable on the old quarter 
 days, so there became two quarter days every 
 three months instead of one, and the days for the 
 
10 
 
 payment of money were by custom placed before 
 the receipt. It appears very desirable that this 
 inconvenient arrangement should cease, and that 
 the days for payment of rents and the receipt of 
 dividends should be the same, and that on the 
 morning of the 25th March the Fundholder 
 can receive the money for dividends he has 
 to pay away in the afternoon for rent. This 
 is an important monetary question. About 
 £26,600,000 are thus distributed by the Bank of 
 England in the year, an average of £6,650,000 
 each quarter ; and until this distribution is made 
 there is much monetary inconvenience, great 
 pressure for money, and the quarterly bills of the 
 . Fundholders are left unpaid. But the poorer 
 shopkeeper with little credit must meet his 
 quarterly engagements, must pay his rent, or 
 fail. 
 
 It is therefore most earnestly recommended 
 the Legislature should restore the ancient 
 order of things, and it depends upon how this is 
 done whether it will involve any expense. 
 
 The Fundholder, who, by the proposal, will be 
 paid his Dividend on the 31st of March, obtains 
 it six days earlier than at present. He can now 
 in no case obtain it before the 6th of the following 
 month; but as it becomes due the 5th, it may be 
 a legal question whether the payment on the 31st 
 
11 
 
 of March gives the interest five or six days before 
 it is due. If five days—then as he is only 
 entitled to receive at the time of payment all the 
 Interest due and no more—the Interest for every 
 £100 stock would be for the six months five days 
 short, which amounts to lOd.; so that instead 
 of £1 10s. he would have £1 9s. 2d. This would 
 be the only alteration required. The following 
 half-year would contain the full six months, and 
 the £1 10s. would be due. Thus a diminution of 
 the dividend of £2 15s. for every £100 interest 
 for the first six months only is all that would be 
 required, a diminution less than is sometimes made 
 by the difference in a large or small Income 
 Tax. This alteration would apply for the whole * 
 National Debt to two half years—one ending 
 the 5th of January, and the other the 5th of 
 April—and the financial arrangement would be 
 complete. 
 
 With respect to rents; those now payable on 
 the 25th of December, 25th of March, and 24th 
 of June, would, if made due on the last day of 
 December, March and June, be received six days 
 later. In this case, the tenant who quits the last 
 day of the month, will have to pay the additional 
 six days rent. But as the rent of the September 
 quarter is not due till the 29th, in that quarter he 
 will have to pay only one day’s additional rent. 
 
12 
 
 Thus the Legislature can carry this desirable 
 change without loss to the Landowner or to the 
 State, a change of greater importance and more 
 closely connected with the prosperity of trade 
 than is at first sight apparent. 
 
 22 nd September, 1869 . 
 
London, March, 1851. 
 
 Dear Sir Henry Ellis, 
 
 The supply of gold now coming from California, 
 the probable amount that will come, and the 
 effect that must thereby be produced on the 
 standard of value in Europe, are questions very 
 frequently discussed ; and perhaps I may be 
 pardoned for briefly stating a few facts relative 
 to the past in connexion with this question, 
 which although known to many, may not be 
 generally uninteresting. 
 
 The proportion that gold bears to silver at 
 the present time in France, where gold and 
 silver are both legal tenders, is 15 T ^y w to 1; but 
 in England, where silver does not circulate as a 
 legal tender for sums greater than £2, and where 
 practically the standard is exclusively a gold 
 one, the proportion of gold and silver coin is as 
 
 1 4 1 5 9 f n 1 
 
 Ii Tooo T0 1 ‘ 
 
 Now, Has this been the usual proportion be¬ 
 tween gold and silver? and, Will this proportion 
 remain with any degree of fixity? are the 
 
 a 2 
 
4 
 
 questions which it is the object of this paper to 
 consider. 
 
 From the earliest periods of history gold has 
 not only been more valuable than silver, but 
 the relative proportion of these metals to each 
 other has varied; sometimes this variation has 
 been very great, particularly when occasioned 
 by temporary causes, such as war, intestine com¬ 
 motion, or the arbitary decrees of an absolute 
 monarch. 
 
 Of all the sources whence gold and silver 
 were derived before the discovery of America 
 the mines of Egypt appear to have been most 
 productive. As these supplies fell off from 
 exhaustion, from foreign invasion, or from 
 domestic anarchy, those of the Greeks and their 
 colonies rose to importance. 
 
 Herodotus (b.c. 450) states that in the time 
 of Darius, the son of Hystaspes, the value of gold 
 to that of silver was 13 to 1. 
 
 Plato, who flourished fifty years after Hero¬ 
 dotus, asserts, in his Hipparchus, that the value 
 of gold to that of silver was 12 to 1. 
 
 From a transaction in the expedition of the 
 younger Cyrus against his brother Artaxerxes 
 it is probable that the proportion of gold to 
 silver was then Ilf to 1. 
 
According to Menander, about 300 years b.c., 
 gold was to silver in Greece 10 to 1. 
 
 In Rome, gold coins were first struck 207 
 years before Christ, and in its 547th year the 
 proportion of gold and silver bullion was 14-j-f- 
 to 1. 
 
 In the conditions which the Romans made 
 with the Etolians, gold to silver was, as in 
 Greece, 10 to 1. 
 
 There is a passage in Suetonius, which I give 
 as literally as possible, and which, whilst it shows 
 the proportion of gold to silver in Gaul, esta¬ 
 blishes the fact that silver was absolutely neces¬ 
 sary to a Roman army, as we cannot suppose so 
 great a general as Caesar parting with gold, 
 except for sufficient reasons :— 11 He neither ex¬ 
 hibited moderation in the capacity of governor of 
 a province, nor in the administration of his office 
 at Rome. For, as some have testified in their 
 records, he received money in Spain from the 
 proconsul and from his friends, (money) which 
 had been procured by beggarly means, for the 
 purpose of lightening his debt; and he plundered 
 in a hostile manner certain cities of the Lusita- 
 nians, although they did not disparage his com¬ 
 mands, and (although) they opened their gates at 
 his approach.” 
 
u In Gaul he pillaged the shrines and temples 
 of the gods, which abounded with gifts; he 
 overthrew cities, more frequently for the sake of 
 plunder than for the purpose (of punishing them) 
 for a fault; whence it came to pass, that he had 
 abundance of gold, and that he divided into 
 pounds (gold), offered for sale at the price of 
 three thousand sesterces, i. e ., 3 sestertia, i, e ., 
 7Jibs, of silver (per lb.) of gold.” 
 
 Silver had, for several centuries previous to the 
 reign of Justinian, held in general the proportion 
 of 10 to 1 of gold, when gold suddenly rose, and 
 silver became 14f to 1. This was perhaps owing 
 to the inroads of the barbarians in the fifth century, 
 who happened to throw themselves on a country 
 in which the chief gold mines were situated. 
 Thus the Asturian gold mines, which long had 
 averaged 1,000,000£ per annum, were ruined by 
 the invasion of the Yisigoths, and have never 
 been opened since. 
 
 In the reign of Claudius, according to Tacitus 
 and the younger Pliny, it was thought proper to 
 limit the fee of an advocate to 10,000 sesterces; 
 this legal fee in another place being called 100 
 aurei, it follows that gold was to silver as 12J to 
 1, and this proportion continued until the reign 
 of Alexander Severus. 
 
7 
 
 In the reign of Constantine the Great, how¬ 
 ever, the value of gold was much diminished, 
 being to silver as 10 J to 1, and about 60 years 
 afterwards the value of gold increased, being 14-| 
 to 1. 
 
 There does not appear to be any correct infor¬ 
 mation of the proportionate value of gold to silver 
 during those periods usually known as the dark 
 ages. In England the price seems to have been 
 fixed by the king. 
 
 “ At a very early period,” says Euding, “the 
 “ exclusive privilege of purchasing the precious 
 “ metals was claimed by our monarchs; ” in 
 return for which, says the Secretary of the Eoyal 
 Mint Commission, 1849, p. 35, “ they seem always 
 “to have been ready, and indeed to have held 
 “ themselves bound, to purchase all bullion that 
 “ might be offered them at prices which it was 
 “ part of their prerogative to fix. For instance, 
 “whereas up to 1464 the merchant had received 
 “ for his lb. of standard silver bullion, 30$., less by 
 “ 3 d. and 9<£ (seignorage and coinage expenses) 
 “ or 29s., Edward IY. in that year ordained and 
 “ proclaimed that the merchant for his lb. stan¬ 
 dard silver should receive 33s., which was in 
 “ fact the thenceforward current value of the lb. 
 “of silver, 37s 6d., less 4s 6d. for seignorage and 
 
8 
 
 “ coinage.” Similarly, in the indenture of 1548, 
 it is recited, that “the king hath advanced the 
 “ valuation of fine gold of the fineness of 24 carats 
 “ to 485. per oz.” 
 
 There seems also to have been very stringent 
 laws for the purpose of preventing the exportation 
 either of silver or gold. 
 
 “In 1382 to 1398,” says Euding, “the laws 
 “which forbad the carrying of bullion or money 
 “ out of the kingdom were so strictly enforced, 
 “that when a bill of exchange was drawn by 
 “ Nicholas Luke, merchant of the Society of 
 “ Guinigi, or his associates in foreign parts, in 
 “ favour of John Clerevans, archdeacon of Suffolk, 
 “ the King’s special license was necessary to per- 
 “ mit it to be paid there, and this was granted 
 “ only on condition that no bullion nor money 
 “ of gold and silver should be carried out under 
 “pretence of the said license, under pain of for- 
 “ feiture.” 
 
 The subjoined account of the current value of 
 gold and silver according to the Mint Indentures, 
 as given in the Mint Eeport of 1849, may be 
 interesting. 
 
Mint Indentures. 
 
 Date. 
 
 Silver. 
 
 Gold. 
 
 
 1344 
 
 1*108333 
 
 15* 
 
 
 1345 
 
 J J 
 
 13*16666 
 
 Edw. III. - 
 
 1346 
 
 1*116666 
 
 9 y 
 
 
 1347 
 
 1*1625 
 
 14* 
 
 
 1352 4 
 
 1*25 
 
 14* 
 
 Hen. IY. - 
 
 1412 
 
 1*5 
 
 16*6666 
 
 Edw. IY. - 
 
 f 1464 
 
 I 1465 
 
 1*875 
 
 >> 
 
 20*8333 
 
 22*5 
 
 
 1526 
 
 2*25 
 
 25*125 
 
 Hen. YIII. - 
 
 1543 
 
 2*4 
 
 28*8 
 
 1 
 
 [ 1547 
 
 
 
 Edw. YI. - 
 
 f 1549 
 ( 1550 
 
 4*8 
 
 34* 
 
 Mary 
 
 1553 
 
 3* 
 
 36* 
 
 
 r 1572 
 
 3* 
 
 36* 
 
 
 1576 
 
 
 
 Elizabeth. 
 
 1577 
 
 1582 
 
 3*0125 
 
 }} 
 
 36*093759 
 
 >> 
 
 
 1593 
 
 
 
 
 .1601 
 
 3*1 
 
 33*5 
 
 
 r 1604 
 
 4*125 
 
 Nil. 
 
 Janies I. - -) 
 
 | 1605 
 | 1612 
 
 Nil. 
 
 3*1 
 
 40*5 
 
 40*916666 
 
 
 1623 
 
 19 
 
 41* 
 
 Charles I. - - | 
 
 ( 1626 
 [1626 
 
 3*275 
 
 3*1 
 
 44* 
 
 41* 
 
 Charles II. - 
 
 1670 
 
 
 
 
 r 1718 ) 
 
 
 
 George I., II., III. 
 
 ! t0 
 
 3*1 
 
 46*725 
 
 1 
 
 11815 J 
 
 
 
 George III. 
 
 1816 
 
 3*3 
 
 )> 
 
 Xing Henry VIII., in the thirty-fourth year 
 
 of his reign, began first to debase the silver coin. 
 
10 
 
 In the thirty-sixth year he put 6 oz. fine silver 
 to 6 oz. of alloy; and in the thirty-seventh year 
 put 4 oz. fine silver and 8 oz. alloy ) and Edward 
 VI., in the fifth year of his reign, again debased 
 the silver coin by putting 3 oz. fine and 9 oz. 
 alloy. 
 
 During this time comparatively little alteration 
 was made in gold coins, and the proportion between 
 gold and silver was, in 
 
 36 Hen. YIII. 
 
 37 Hen. YIII. 
 
 3 Edw. YI. 
 
 4 Edw. YI. 
 
 5 Edw. YI. 
 
 6 t 9 t to 1. 
 5 to 1. 
 5 5 t 0 
 4i to 1. 
 
 9 3 9 4 f n i 
 
 *"755 LU ±m 
 
 Lord Liverpool, in his letter to the King, 
 gives these proportions, but I cannot think 
 they are right, although Euding follows him, 
 for King Edward YI. made his shillings and half 
 shillings 8 oz. fine and 4 oz. alloy, smaller monies 
 being 4 oz. fine and 8 oz. alloy, whilst in 1553 
 the King made sixpences only 3 oz. fine and 9 oz. 
 alloy, and for groats and smaller monies, 4 oz. 
 fine and 8 oz. alloy. 
 
 This caused the greatest possible confusion in 
 trade; commercial transactions could hardly be 
 carried on, and Parliament enacted, 5th and Cth 
 
11 
 
 Edw. YI. chap. 19., “that no person, under 
 “heavy penalties, should exchange any coined 
 “gold or coined silver at a greater value than 
 “the same was or should be declared by His 
 “ Majesty’s proclamation to be current for within 
 “ his dominions.” 
 
 It was, however, soon discovered that no effec¬ 
 tual remedy could be applied to the evils then 
 existing, but a total reformation of the coins of 
 the realm, and in the last year of Edward YI. 
 the proportion became ll-g-lr to 1. With the 
 exception of this period there does not appear 
 any sudden alterations in the proportionate value 
 of gold and silver. 
 
 18 Edw. HI. 
 
 - 
 
 1914844 
 xn 2 5 4 0 3 
 
 H 2 17 5 
 
 to 1. 
 
 to 1. 
 
 
 
 iJ -2 5 4 0 3 
 
 20 Edw. III. 
 
 - 
 
 11 1637 
 
 ii 2865 
 
 to 1. 
 
 27 Edw. III. 
 
 - 
 
 H-g-TT 
 
 to 1. 
 
 13 Hen. IY. 
 
 - 
 
 io m 
 
 to 1. 
 
 4 Edw. IY. 
 
 - 
 
 1115 1 
 
 li 955 
 
 to 1. 
 
 18 Hen. YIII. 
 
 - 
 
 11 5 9 
 
 to 1. 
 
 6 Edw. YI. 
 
 - 
 
 11151 
 
 - Li TT5T 
 
 to 1. 
 
 43 Eliz. 
 
 - 
 
 I n 5 614 
 
 - LL, 5 9 2 1 
 
 to 1. 
 
 2, 3 James 1. 
 
 - 
 
 1 9 8 7 6 
 1Z '5 9 2 1 
 
 to 1. 
 
 9 James 1. 
 
 
 1310739 
 
 to 1. 
 
 
 - L °2 9 0 6 5 
 
 17 James I. 
 
 - 
 
 1Q2059 
 10 T 9IT 
 
 to 1. 
 
 3 Charles II. 
 
 - 
 
 14-3 3 1 
 
 to 1. 
 
12 
 
 It thus appears that from the second of James I. 
 inclusive, to the fifteenth of Charles II. the rise 
 in the value of gold compared with silver was 
 great and rapid, being nearly 33 per cent.; and 
 great inconvenience both to the government and 
 to the people was felt by the changes in the value 
 of these metals, which could not be avoided, as 
 gold was exported. 
 
 On the 1st September, 1647, the Lords and 
 Commons passed an ordinance that diminished 
 silver coins might be received in payments for a 
 limited period, at the rate of 4s. 10^. per oz. 
 
 Little dependence, however, can be placed on 
 the real proportionate value of gold and silver 
 by its market price. 
 
 Mr Lowndes, who was Secretary of the Trea¬ 
 sury in 1695, in his essay written for the amend¬ 
 ment of silver coins, says, “ Guineas and half 
 “ guineas were first coined by Charles II., and 
 “ were ordained to go at the rate of 20s. for the 
 “ guinea, and 10s. for the half guinea, but I do 
 “ not remember that they ever passed at so little 
 “ as the prices which were then set upon them. 
 “At this time the guinea runs for 30s., whilst 
 “the 5s. piece has only risen to 6s. 2 \d., so that 
 “ proportionally with silver the guinea should be 
 “only 24s 10J., but it apparently runs for about 
 
13 
 
 “ 5 s. more, so that in the time that the silver in 
 “a crown is risen about one-fifth part, the gold 
 “ in a guinea is risen in a much greater proportion, 
 “namely, a complete one-third part. And this 
 “ advance can be attributed to nothing but the 
 “ present badness of our silver coins, which are 
 “ so exceedingly counterfeited and dipt, that the 
 “common people will take guineas almost at any 
 “rate rather than stand the hazard and vexation 
 “ of the silver monies now current.” 
 
 Mr. Francis, in his History of the Bank of 
 England, remarks of this period, “ the coins 
 “ had been diminished by clipping and filing; 
 “many of the shillings contained only 3 d. in 
 “silver, an enormity attributed to the gold- 
 “ smiths, who appear to have been rather sharp 
 “traders; counterfeit coins had also been clipped 
 “ and filed, that they might pass the more 
 “ readily.” 
 
 George I. lowered by proclamation the value 
 of the guinea, which was then passing current at 
 21^. §d. to 215., although it was originally issued 
 at 205.; thus practically increasing the value of 
 the coin 5 per cent., making the proportion of 
 gold to silver 15 r V j 4 7 0 - to 1. 
 
 Thus the whole rise in the value of gold coin 
 from the 1 James I., i.e. in 111 years, was 39|-|- 
 per cent. 
 
14 
 
 w 
 
 There was no change in the preceding values 
 of gold and silver until the year 1817, when the 
 lb. of silver which for nearly two centuries, i.e ., 
 since 1626, had been coined into 62 shillings, was 
 coined into 66 shillings of the same standard of g 
 fineness, but smaller in weight. 
 
 The following is given on the authority of 
 Mons. Tarhe : 
 
 In France, under— 
 
 Charles le Chauve - 
 
 12 
 
 to 
 
 1 . 
 
 Phillipe le Bel 
 
 10 
 
 to 
 
 1 . 
 
 1888 - 
 
 10f 
 
 to 
 
 1 . 
 
 End of 15th century 
 
 12 
 
 to 
 
 1 . 
 
 1609 - 
 
 12 
 
 to 
 
 1 . 
 
 Henry IV., Lewis XIII., a 
 
 
 
 
 little more than - 
 
 13* 
 
 to 
 
 1 . 
 
 Louis XIV., XV., to 1726 
 
 14 « 
 
 to 
 
 1 . 
 
 
 16* 
 
 to 
 
 1 . 
 
 
 11 
 
 to 
 
 1 . 
 
 
 12 
 
 to 
 
 1 . 
 
 
 13 
 
 to 
 
 1 . 
 
 1726, fixed at a little less 
 
 
 
 
 than - 
 
 14 * 
 
 to 
 
 1 . 
 
 1775 - 
 
 14| 
 
 to 
 
 1 . 
 
 1785 - 
 
 16* 
 
 to 
 
 1 . 
 
15 
 
 since which time no price has been fixed on gold, 
 and it has taken its market value. 
 
 Silver coins were a legal tender conjointly with 
 gold until 1774, when the former was declared 
 not to be a legal tender for any sum exceeding 
 25/. 
 
 I find, by the Report of the Bullion Com¬ 
 mittee, that from the middle of 1773, when the 
 reformation of the gold coin took place, till about 
 the middle of the year 1799, two years after the 
 suspension of the cash payments of the Bank, 
 the market price of standard gold remained stea¬ 
 dily uniform at the price of 3/. 17s. 6d., with the 
 exception of one year, when it was 3/. 18s.; but 
 it was stated in the Lords Committee in 1797 by 
 Mr. Newland, that the Bank had frequently been 
 obliged to buy gold higher than the Mint price, and 
 on one occasion had given as much as 4/. 8s. for 
 it. But the price of standard gold in bars during 
 the whole period of twenty-four years which 
 elapsed from the reformation of the gold coin to 
 the suspension of the cash payments by the Bank 
 never was, never for any length of time, mate¬ 
 rially above the Mint price. 
 
 Again, it is important to observe, that the rise 
 in the market price of silver in this country, 
 which has nearly corresponded to that of the 
 
16 
 
 market price of gold, cannot, in any degree be 
 ascribed to the scarcity of silver, for the import¬ 
 ations of silver have of late years been nnsually 
 large, while the ordinary drain for India and 
 China has been stopped. 
 
 The Bullion Beport gives the following propor¬ 
 tions of the value of gold and silver in 1810, 
 when all Europe was at war: 
 
 Amsterdam 
 
 - 14-6 3 . 
 
 X1 10 0 
 
 to 
 
 1. 
 
 Hamburgh 
 
 1 4 8 3 
 
 to 
 
 1. 
 
 Paris 
 
 - 1 5 6 5 
 
 i0 T2 9 
 
 to 
 
 1. 
 
 Cadiz 
 
 Ifi 45 
 
 1 u Too 
 
 to 
 
 1. 
 
 Lisbon 
 
 If) 2 6 
 
 - LJ TOO 
 
 to 
 
 1. 
 
 Naples 
 
 1 4 7 5 
 li TOO 
 
 to 
 
 1. 
 
 Genoa 
 
 1 ft 3 5 
 i0 Too 
 
 to 
 
 1. 
 
 Leghorn - 
 
 14 3 2 
 li T00 
 
 to 
 
 1. 
 
 Venice 
 
 14 3 5 
 Ii Too 
 
 to 
 
 1. 
 
 Palermo - 
 
 - 15 
 
 to 
 
 1. 
 
 America - 
 
 - 15-r^ 
 
 to 
 
 1. 
 
 Lord Liverpool, in his letter to the King, lays 
 it down as a maxim, that as silver coins are most 
 convenient for the payment of troops, war must 
 have a tendency to raise the price of silver; and 
 N. M. Bothschild, in his evidence in the Com¬ 
 mittee on the Bank of England Charter, 24th 
 July, 1832, states, “ standard silver is about 59 d. 
 “ per oz.; it changes from day to day. Silver has 
 
17 
 
 “ been 60^., but the importations haye been large, 
 u and silver is lowered Id. per oz. When great 
 u importations take place from South America, 
 “ silver falls; and gold, in proportion to silver, is 
 “nowhigher than it used to be, because there is 
 u not so much importation of gold as silver. Gold 
 11 is preferred for every army before silver, and the 
 u proportionate price is no object, as it is more 
 “ portable. Gold was from 3 to 4 and 5 per cent. 
 “ premium when the Emperor of Eussia made war 
 11 in Poland lately. Again, Eussia, in the war with 
 u Turkey, caused the price of gold to be 2 to 3 per 
 u cent, premium.” Such were the opinions of this 
 eminent financier. It would appear that during 
 the last war gold and silver were excessively 
 scarce in this country. 
 
 In 1799 the Bank of England found it neces¬ 
 sary to caution the public to be upon their guard, 
 and invariably to weigh all gold coins that might 
 be offered, for much gold then in circulation 
 had, by unlawful means, been reduced in its 
 value; and hence, says Euding, “the diminish- 
 il ing of the gold coins had been very little checked 
 u by what Lord Mahon styled 1 the very trou- 
 u 1 blesome Chinese fashion of weighing each 
 u piece.’ ” 
 
 In 1805 the want of silver coin in Ireland was 
 
 B 
 
18 
 
 so distressing, that the Governor and Company 
 of the Bank of Ireland were under the necessity 
 of issuing tokens for the small sums of fivepence 
 and tenpence; the reverse had either “ Bank 
 token fivepence,” or “ Bank token tenpence.” 
 
 A rise of 10 per cent, in the current value of 
 the dollar took place in 1811; and during the 
 war silver was so scarce that the Bank were 
 obliged to issue large quantities, gold being 51. 
 per ounce; and this notwithstanding the Act 
 51 Geo. III. c. 127, commonly known as Lord 
 Stanhope’s Act, which made it a misdemeanor 
 to pay or receive the current gold coin of the 
 realm at a greater value than the current value 
 of such coin. 
 
 When the Prussian and Austrian armies were 
 in motion last autumn there was a great demand 
 for silver ; there was also a demand for gold, but 
 the demand for the former in this country was 
 the greatest, and silver rose in price. 
 
 It appears to me that large armies require both 
 gold and silver ; silver is more convenient for the 
 payment of the troops, but gold is carried and 
 must always be carried for the purpose of changing 
 into silver, because it is comparatively far more 
 easy of transit. 
 
 An army of 100,000 men could hardlv require 
 
19 
 
 less than 10/. per man per month; and assuming 
 a four months’ campaign in a foreign country 
 the money required to be provided would be 
 4,000,000/. Now, as the value of silver is only 
 3/. per lb., it follows that 4,000,000/. sterling of 
 silver would weigh 600 tons, whereas the same 
 amount in gold would weigh but 40 tons. 
 
 But even gold is sometimes too heavy for rapid 
 transit, and generals of armies have not un- 
 frequently taken precious stones for the purpose 
 of changing into money; and this power of 
 turning jewels into money has sometimes been of 
 incalculable importance to the possessors. The 
 Emperor Maximilian, being hard pressed for 
 money, in 1508, sent to England a famous jewel 
 belonging to the dukes of Burgundy, which he 
 pawned to Henry YII. for 50,000 crowns of 
 gold; in 1848 many of the French aristocracy 
 fled from Paris so suddenly that they had time 
 only to take a few jewels with them, upon 
 which the capitalists of London willingly 
 made advances, and the market for the 
 sale of precious stones changed from Paris to 
 London. 
 
 I am therefore disposed to differ with Lord 
 Liverpool, and to consider that large armies 
 require both gold and silver. For although 
 
 b 2 
 
20 
 
 silver is necessary for the payment of troops, 
 gold is required as being more easy of transit. 
 Csesar doubtless changed bis gold for silver at 
 to 1, because silver was absolutely required, but 
 be probably did not change all bis gold at that 
 rate. Upon consideration it will be evident, 
 modern warfare cannot materially alter the rela¬ 
 tive value of silver and gold. 
 
 The present standard of gold coin is 22 carats 
 fine and 2 alloy, and has continued so from the 
 year 1670. Formerly gold in a manufactured 
 state was obliged to be of exactly the same fine¬ 
 ness as the coin; many persons suppose it to be 
 the same now ; and this belief is strengthened by 
 standard silver being the same as the coin; the 
 cause of the alteration is not unworthy of notice. 
 By the Act 24 Geo. 3, cap. 63, duties were placed 
 on all gold and silver wrought plate, either 
 manufactured in Great Britain or imported. On 
 gold a duty was placed of 8s. for every oz. troy, 
 and on silver 6 d., and 37 Geo. 3, cap 90, imposed 
 additional duties of 8s. on every oz. of gold troy, 
 and on silver Qd. 
 
 In the following year the watchmakers made a 
 representation to Mr. Pitt, that people would no 
 longer buy watches, that they either used their old 
 watches or went without them, that the watch- 
 
21 
 
 makers were entirely ruined, and that now even 
 to take off the duties imposed by the Acts of 
 1784 and 1797 would he of little value, for their 
 repeal would not sufficiently benefit the manufac¬ 
 turers, to enable them to continue their business. 
 
 By the Act, 9th March, 1798, these duties were 
 repealed with regard to watch-cases, and on the 
 21st June, 1798, another Act was passed, lowering 
 the standard of gold used for manufactures, 
 from 22 carats and 2 alloy, to 18 carats fine and 
 6 alloy. 
 
 The preamble of this Act is, u Whereas it 
 “ would be for the advantage of the manufactures 
 u of gold in this kingdom, that gold of an inferior 
 u standard to what is now allowed by law should 
 u be permitted to be used for the same.” It 
 then authorizes the Goldsmiths’ Company to 
 assay and mark such manufactured gold. 
 
 I believe this Act did not diminish the total 
 quantities used in manufactures of gold, because 
 the increased demand thereby created, more than 
 compensated for the increased amount of alloy 
 put into the gold. 
 
 I cannot altogether agree in an able paper read 
 before the statistical Society, December, 1850, 
 by Mr. Danson, on the quantity of gold and silver 
 supposed to have passed from America to Europe 
 from its discovery to the present time. For, 
 
22 
 
 admitting the quantities of gold and silver raised 
 in the mines to be as stated by him, yet it does 
 not seem probable, for many reasons, that even 
 so large a sum as two-thirds of this amount has 
 come to Europe. The fair deduction from his 
 facts appears to me to he that from the discovery 
 of America to the present time— 
 
 The silver sent to Europe was 760,000,000 
 „ gold „ „ ,, 300,000,000 
 
 there being two and a half times more of silver 
 than gold. Now even this large amount does not 
 give the total increase of the precious metals in 
 Europe during this period. 
 
 Yery large supplies of gold have during the 
 last twenty years been produced from the Ural 
 Mountains. For several centuries, in addition 
 to the produce of the silver mines in Europe, silver 
 has been extracted from lead. James I. King of 
 Scotland, in 1424, in his first parliament, enacted 
 that all mines yielding three halfpennies of silver 
 out of a pound of lead were declared the property 
 of the king. 
 
 “ Gif ony myne of gold or silver be fundin in 
 u ony lordis landis of the realme, & it may be 
 u previt that thre half pennyis of silver may be 
 “ fynit out of the pund of leid, the lordis of Par- 
 u liament consentis that sic myne be the Kingis, 
 “ as is usual of other realmes.” 
 
23 
 
 Macpherson in his Annals of Commerce, says, 
 in 1704, of the Governor and Company of the 
 Mine Adventurers of England, “ that this com- 
 “ pany went on in a prosperous manner, adding so 
 “many new shares as made the whole number 
 “amount to 6,012, purchasing fresh mines, and 
 “ raising vast quantities of lead, copper, litharge, 
 “ from which they made a great deal of red lead, 
 “ and from the lead they extracted considerable 
 “ quantities of silver .” 
 
 And this process of extracting silver from lead 
 cannot have been uncommon, as this company, 
 for five years from the date of the charter, went 
 on imposing on the proprietors-by false and sham 
 calculations of their profits, by purchasing lead 
 and litharge from other people’s mines, declaring 
 them to be digged from the company’s mines, 
 buying also the silver extracted from other men’s 
 lead, and getting it to be coined in the King’s 
 Mint as coming from the company’s mines. 
 
 “ A considerable quantity of silver,” says 
 M‘Culloch, “ is now obtained from lead, the ex- 
 “ pense of its extraction having been materially 
 “ diminished by the invention of improved pro- 
 “ cesses. It is believed that of 55,000 tons of 
 “lead raised in Great Britain, about 25,000 tons 
 “ yield 8 oz. per ton of silver. Supposing this 
 H estimate to be correct, the entire produce of 
 
24 
 
 u silver will be 200,000 oz., which at 5s. per oz. 
 “ will be 50,000/. per annum.” 
 
 My belief is, that from the period of the reign 
 of Charles II. the silver added to the previous 
 stock in Europe has been three times greater than 
 the amount of gold, although it can only be an 
 estimate, that the silver has been 600,000,000/. 
 and the gold 200,000,000/. 
 
 In 1816 and 1817 there was a large silver coin¬ 
 age, in accordance with the principles laid down 
 in Lord Liverpool’s letter to the King. The 
 pound of silver was coined into 66 shillings in¬ 
 stead of 62 shillings, and the profit was 365,900/.; 
 from whence it follows that 5,671,000/. sterling 
 of silver was in active circulation at that time in 
 Great Britain. 
 
 Since this coinage in 1816, it would appear that 
 about 100,000,000/. of gold has been coined, and 
 about 15,000,000/. silver. There is little reason 
 to suppose that any material amount of the silver 
 coinage has been melted. In 1819 gold fell to 
 3/. 17s. 10 \d. per oz.; and since that time the 
 market price of silver has never equalled the 
 price at which it circulates as co^n ; on the con¬ 
 trary, much of the gold coin has been melted 
 and exported. Assuming, therefore, that only 
 20 per cent, of the silver coinage has been either 
 lost or sent to the colonies, whilst 40 per cent. 
 
25 
 
 of the gold coin has been, in the same period, 
 melted and exported, it follows, that at this time 
 the amount of coin actually in circulation in Great 
 Britain is— 
 
 Gold - 60,000,000/. 
 
 Silver - 12,000,000/* 
 
 The foregoing facts have shown that there has 
 been very little proportionate variation in the 
 values of gold and silver since the reign of 
 Charles II., who authorized only the circulation 
 of the new standard or crown gold, the price of 
 gold being then 44/. 10s. per lb., and the price 
 of silver 62s. per lb.; and, as I have before men¬ 
 tioned, in 1718, the gold was raised five per cent., 
 by making the pound circulate as a guinea, 
 whilst the silver remained at 62s. per lb. till 
 1817, when it was made current at 66s. 
 
 Now, during this period of 180 years, immense 
 supplies of silver and gold have been either sent 
 to Europe or raised from mines, and these great 
 supplies have not practically operated on the rela¬ 
 tive values of the'precious metals. During this 
 period paper money has added to the circulation 
 of all the kingdoms of Europe, and prior to this 
 period paper money was almost if not quite un- 
 
 * The wear and tear of gold coin is estimated to be 4 per cent, in 
 100 yeais. 
 
26 
 
 known. England and the great nations of 
 , Europe have in this 180 years been both con- 
 I vulsed with revolutions and impoverished by 
 / wars, yet the market value of gold and silver has 
 I proportionately remained much the same; and 
 though the kingdoms of Europe have contracted 
 debts of so colossal a magnitude, that the annual 
 amount required to pay the interest is greater 
 than the cost of former wars, yet the value of 
 -1 gold and silver is on the whole unchanged. 
 
 The rich men of the present day, men who 
 have large payments to make on account of their 
 business transactions, never see gold or silver or 
 bank notes for the purpose of making these pay¬ 
 ments. Cheques in their case supply all that 
 gold and silver and bank notes formerly did, and 
 yet the value of gold and silver remains the 
 same. In the early ages of history, when com¬ 
 merce was limited, gold and silver fluctuated in 
 value. The stores of these metals were small, 
 when compared with those of our day. An 
 addition of 10,000,000 to the existing stock of 
 precious metals . when the whole of that stock 
 was under 100,000,000, has necessarily a very 
 different effect when, according to Galatin, the 
 existing stock is at least 2,000,000,000. 
 
 It is then probable that an increase in the 
 present large supply of the precious metals would 
 
27 
 
 alter their proportionate values, paper money, 
 bankers’ deposits, and national debts, all taken 
 together, have failed to do so ? 
 
 Much of the gold now produced by the Cali¬ 
 fornian diggings is coined in the United States, 
 and supplies the place of some of their small paper 
 money. During the last fifty years the American 
 mines have probably supplied 260,000,0007. of 
 silver, and 150,000,000^. of gold, and yet the 
 large discrepancy in the quantities has had no 
 appreciable effect on their value. 
 
 If, therefore, California supplied only gold, 
 there is no reason to suppose that the propor¬ 
 tionate value of gold and silver would be changed, 
 because the supply of silver would not he stopped; 
 gold would be produced in more nearly the same 
 proportions as silver; and even if gold were 
 found for a series of years in greater quantities 
 than silver, yet as silver has not changed in value, 
 although it has been so found for a series of 
 years, and that too nearly in the proportion of 
 3 to 1, it is but fair to infer that the law that 
 has obtained for silver will hold good for gold. 
 
 The large supplies of silver have had the effect 
 \ of in creasing the use of silver; any large supply 
 * \ of golcTaiso would nave the effect of increasing 
 its use, and of making it a medium of circulation 
 in places where gold is now unseen. 
 
 IhJi *> <V>vsr*\A2 c ' ,SU -_L 
 
28 
 
 No amount of reasoning would have told the 
 people of Charles II. : ’s reign that an increase of 
 6.00,000,000 of silver and 200,000,000 of gold 
 would have produced hardly any proportionate 
 difference between the metals; hut the fact is so, 
 and therefore it may confidently he predicted 
 that the necessarily gradual production and cir¬ 
 culation of Californian gold will operate in the 
 next half century in precisely the same way as 
 the last. 
 
 It is, therefore, with great regret that I have 
 seen so acute a people as the Dutch changing 
 their gold for silver. I believe the policy of 
 that measure to be permanently had for the 
 nation that adopts it, and temporarily mis¬ 
 chievous for Europe, as it alters the usual course 
 of events without sufficient reason. 
 
 I believe gold cannot be permanently plentiful 
 in Europe without silver being the same. Any 
 increase of gold, however large and rapid, will, 
 amongst other results, supply the means to obtain 
 silver. Some of the new gold will he employed 
 to work silver mines, which now, from the want 
 of capital, are laying wholly unproductive, and 
 some will he used to pay for improved and new 
 chemical methods to obtain silver. 
 
 But should experience show this view to he 
 incorrect, that, after a lapse of several years, the 
 
29 
 
 relative values of the precious metals have altered, 
 then it is probable that the ultimate, although 
 not the immediate change, will be, all other things 
 remaining the same, a decrease in the value of 
 silver ; for, whatever made gold plentiful will 
 diffuse it, and that diffusion will provide the 
 means to procure silver, and this, in the long run, 
 must somewhat more than counterbalance the 
 increase of gold. Eut I wish to place on record 
 my conviction that the probabilities are all in 
 favour of no appreciable change, and at the 
 commencement of the next century, in the year 
 1901, the relative values of gold and silver will 
 be as they have been during the last 30 years. 
 
 I remain, 
 
 S>Cj 
 
 My dear Sir Henry, 
 
 Yours very sincerely, 
 WILLIAM EAY SMEE. 
 
 Sib, Heney Ellis, 
 
 Secretary, 
 
 Society of Antiquaries, 
 
 Somerset House.