It is well known that the proportion which had existed between the production of gold and of silver since the discovery of the New World, has been largely disturbed by the working of the auriferous deposits of California and Australia. M. Soetbeer, a modest and intelligent economist of Hamburgh, has collected a multitude of curious 8. Production der edlen Metälle. VON SOETBEER. Berlin: 1865. 4. Revue Contemporaine. Articles on In-returns on this subject, from which we externational Coinage, by M. DE PARIEU: published in 1858, 1860, 1861, and 1865. Paris. 5. Eighth Report of the International Association for obtaining a uniform decimal system of measures, weights, and coins. London: 1865. 6. Decimal Coinage. By FREDERIC HENDRIKS. London: 1866. 7. Rapport adressé à S. M. l'Empereur par M. le Ministre des Finances sur un Projet de Loi relatif à la Convention Monétaire passée entre la France, la Belgique, l'Italie et la Suisse. 14th Avril, 1866. CHANGES have been effected since the year 1860 in the monetary legislation of several foreign countries, and especially of the Western States of continental Europe, which deserve a more careful attention than they have yet received from British political economists, who have for the last century taken so prominent a part in the progress of monetary science. These changes, which have been accompanied by a movement in public opinion, and by a vast deal of discussion on the altered condition of the currency of the world, affect many important interests in a manner which we shall now endeavour to explain, with the aid of a careful examination of the works of foreign writers on this subject, and of the debates which have taken place this very year in the parliamentary assemblies of France, Italy, Belgium, and Switzerland. The leading points we wish to explain relate, first, to the internal legislative modifications of the currency in these countries, which have resulted from the vast importations of Californian and Australian gold; secondly, to certain international arrangements which have been engrafted on these legislative measures, and have actually constituted in Europe what may be termed a Münz verein, or monetary union, having France for its centre; and lastly, to the feasibility of a more extended application of the same principle to the great monetary systems of the world, and more particularly to that of Great Britain, as one of the chief producers, consumers, and distributers of the precious metals. tract the two following statements : In 1800, the value of the gold produced stood to that of the silver in the proportion of 28 to 72 upon a total of 10,813,400l. In 1863, the value of the gold produced stood to that of the silver in the proportion of 67 to 33 upon a total amounting to 38,444,8137. This new proportion, eminently favourable to the greater diffusion of gold, has existed from 1849 to the present time, with slight variations; and, in the last fifteen years, the quantity of gold thrown into circulation amounts to 340 millions sterling more than would have been produced under the proportions of the previous metallurgical production. The effect of this great change in the relative production of gold and silver has certainly not been confined to a reduetion in the price of gilding or in other applications of gold to manufactures. It has also brought about a complete perturbation in the monetary system of those States which had made both metals a legal tender, including the United States, France, Spain, &c. Gold having become more common than silver, has been substituted for that metal as the habitual instrument of exchange; and as, on the other hand, the East has absorbed all the silver thus set at liberty in exchange for the silk, the tea, and the other Eastern commodities we import into Europe, the double standard has become in fact purely nominal, and gold is now the principal current money of all these countries. But as silver is an indispensable part of the monetary system to effect minor payments in small change, the circulating medium has been rapidly deranged in the countries in which the double standard still nominally exists.* Great Britain, being *One of the reasons, for which the French cling rapid disappearance of silver and the enormous into the use of the double standard, in spite of the crease of gold in their circulation, is that the silver standard is connected with the French decimal system of weights. The French franc is a weight, representing in silver five grammes, and may be used for the purpose of weighing a letter or any other article. This circumstance connects it with the whole metrical system. This argument may have its value in the mathematical or theoretical view of the subject, but it appears to us to be of no practical importance, and the utility of applying coins to be measures of weight is diminished by the fact that exempt by reason of her own gold and système de monnaies d'appoint en argent à paper currency from the inconvenience cours limité et avec une proportion d'alliage which has thus been felt elsewhere, may re- suffisante pour ne pas permettre de les exporter gard these circumstances with indifference. avec profit, a été depuis un demi-siècle pratiqué Yet there have been times when this counavec un grand succès en Angleterre, et étendu try too has suffered from similar embarrass-plus tard aux Etats Unis, au Portugal, à la ments, arising not from any excess in the Suisse, et à l'Italie.' (Rapport, &c., p. 3.) production of gold, but from other causes affecting the price of silver, and the Acts of Parliament of 1773 and 1816 successively established our gold coinage as the sole standard of the currency, and reduced the coinage of silver to its true character of mere tokens or counters for change, to borrow an expression used by Lord Liverpool in the House of Lords in 1816. By the Act 56 Geo. 3. c. 68, which regulated the new silver coinage, the pound troy of silver was coined into 66s. instead of 62s., and the difference of 48. retained as a seignorage (amounting to six per cent.); so that bullion must rise so much above the Mint price, before coin could be brought on a par with it. In other words, to prevent the silver being melted in case of rise of value, the silver for which the gold sovereign may be exchanged would not in reality purchase the quantity of gold contained in the sovereign; but the inconvenience which might have arisen from this debasement of the intrinsic value of the shilling, was provided against by restricting to forty shillings the use of silver as a legal tender. The change in the proportion of the production of the precious metals could only have affected the monetary system of Great Britain, if the price of silver in bars had become equal to the price of our silver coin; but the profit on silver in bars has never reached that which is artificially bestowed upon the silver coinage by the Act of 1816. The nature and effect of this operation is described in the following terms in the Report of the French Minister of Finance to the Emperor: Ces Commissions ont appelé l'attention du Gouvernement sur le procédé adopté par divers Etats pour conserver l'argent en concurrence avec l'or, dans la circulation monétaire. Ce procédé consiste à établir, entre l'or et l'argent monnayé, un écart de valeur monétaire moins considérable que celui qui est le résultat de leur valeur commerciale; l'argent ainsi rehaussé est émis sous la forme de monnaie d'appoint, dont le concours est limité de manière à en pouvoir remplacer, dans les grands payements, soit l'or, soit les monnaies d'argent supérieures. Le their own weight is liable to be diminished by detri tion, and is therefore not strictly accurate. See Mr. Wellesley Pole's excellent speech, deHvered May 30, 1816, on the introduction of the Silver Coinage Bill. (Parliamentary Debates, xxxiv. p. 916.) The States which have suffered from this disturbance of their monetary system, caused by the excess of gold, have not, as yet, thought it expedient to adopt the entire principle of our own currency; they have imitated it partially, but none of them has altogether abandoned the double standard. The United States of America, by an Act of Congress of 1853, reduced the weight of the half-dollar in silver from 206 grains to 192 grains, and that of the quarter-dollar from 1031 to 96. The Continental States of Europe, whose numeration is based upon the franc, found themselves in a position of greater difficulty. For the United States, whose monetary unit is represented to be in gold and silver by the dollar (equal to rather more than one-fifth of the English pound), supplied the wants of the community in small change by a somewhat depreciated coinage of half-dollars and quarterdollars, corresponding to our florins and shillings, whilst the dollar itself, the basis of numeration and of value, remained unaltered. But in the countries in which the monetary unit is extremely low in value, as the French franc, less than our shilling, and the Spanish real, of a still lower denomination, it was impossible to issue an abundant supply of small silver coin, without some modification of the intrinsic value of the piece of money on which the whole currency and numeration of the country is based. difficulty seems at present to have prevented Spain from taking any measures in this direction; and it has long been a subject of hesitation and discussion in France, and in the three countries adjacent to France, which, from political traditions or mercantile convenience, have adopted the French monetary system, established in a part of Italy and in Belgium under Napoleon I., and more recently introduced into the rest of Italy and into Switzerland. This Some writers in these countries have boldly recommended the complete, or all but complete, adoption of the British system. M. de Parieu, a Vice-President of the French Council d'Etat, defended this course with great ability and firmness in several articles published by the Revue Contemporaine," between the years 1858 and 1865; and M. Levasseur took nearly the same view in his were published in 1858, in opposition to the arguments of M. Michel. Chevalier, who maintained, at that time, that in conformity with the French Law of An XI, gold should cease to be in France a legal tender. Recherches sur la Question de l'Or,' which | Paris in the months of November and December 1865, and led to a Convention between the Four States, which is now before us. The Commissioners of France, Belgium, Italy, and Switzerland agreed to adopt the standard already introduced by the Italian Mint in the coinage of silver small pieces; and Switzerland engaged so far to modify the system she had adopted in 1860 as to withdraw from circulation in a few years the coins she had issued at 8ths. These conditions having since been ratified by the respective legislatures of the four contracting States, the uniform result of the monetary arrangements of these countries may be stated in the following terms: Of the four States which have adopted the franc as the basis of their currency and it may here be added that the Grand Duchy of Luxemburg has followed their example-Switzerland was the first to modify in practice the intrinsic value of the silver coins in use. This innovation was made by the Federal Law on the 31st January, 1860, and as Switzerland had only adopted the French system in 1850, the novelty of the experiment seemed to embolden her to complete it. Her immediate object was, however, to prevent her small silver coinage from flowing out of the country, and for this purpose she imitated the example of the United States of America; but as she could not preserve her unity of value in the sil-ness. ver franc, as the Americans had done in their dollar, the Swiss Government took the fivefranc piece as the standard silver coin, and resolved that the smaller coins of two francs, one franc, and fifty centimes, should be struck below the standard; thus, while the five-franc piece continued to be struck of 900 ths of fineness, the minor coinage was reduced to ths. Italy adopted the same course as Switzerland by the Law of the 24th August, 1862, but she did not proceed so far in the depreciation of the standard of small coin; she reduced it only to 35ths, or about the intrinsic value of our shillings minted under the regulations of 1816, and of the half-dollars and quarter-dollars now struck in the United States. France hesitated at first to follow the example of her neighbours, but by the law of the 25th May, 1864, she too adopted the principle of the Italian coinage, and reduced her standard to 5ths, but only for the small pieces of fifty centimes and twenty centimes. Belgium was still more undecided, although M. Nothomb had advised her, as early as the year 1861, to follow the example of Switzerland, and had even pointed out, with singular perspicacity, that this measure would lay the foundation of a common monetary system between France, Belgium, Switzerland, and perhaps Italy. The Belgian Government, however, took the highly judicious step of proposing that a monetary conference should be held between the States whose currency is based on the franc. This conference was held in FOURTH SERIES. LIVING AGE. VOL. III. They retain the double standard of gold and silver, represented by gold coins of 20 francs, 10 francs, and 5 francs, of the former weight and value, and likewise by the silver five-franc piece of ths of fine 900 1000 They depreciate or lower the silver coins of 2 francs, 1 franc, 50 cents., and 20 cents., to be struck hereafter to 8ths instead of 200 ths of fineness. 1000 Waiving the difference in the denomination and the value of the coins affected, and the substitution of a lowering by alloy instead of a lowering by weight, this system is identical in principle with that of the United States; and it secures to the contracting States the maintenance of a permanent supply of small silver coin, even if gold were hereafter to become more abundant in relation to silver than it is at present. These are in fact the same advantages we have ourselves derived from the British Act of Parliament of 1816; but in the countries associated by this Convention, these advantages are combined with the retention of the double standard, on the basis of the proportion of 1 to 15, which was adopted by the French Law of the 7th Germinal, An XI, as the legal relation of gold to silver. The most important innovation introduced by the Monetary Convention, which was signed in Paris on the 23rd December, 1865, by the representatives of France, Belgium, Switzerland, and Italy, is the principle of establishing a legal and official system of monetary union upon mutual concessions in the currency of four countries in which the metallic circulation had previously been imperfectly assimilated. The pro * The Commissioners were M. de Parieu and M. Pelouze for France; M. Fortamps and M. KreglinItaly; MM. Kern and Feer Hergez for Switzerland. ger for Belgium; MM. Artam and Pratolongo for 38. ceedings of the Monetary Conference, which have been printed in Belgium in the appendix to the Bill brought in to give effect to the terms of the Convention of the 23d December, show that the Commissioners of the four States adopted with eagerness and enthusiasm a plan designed to extend the circulation of the gold and silver coinage of their respective nations over the whole territory of the Four States, on equal terms, without reference to the Mint in which they were struck, or the effigy they bore. Their intention was that from Antwerp to Brindisi travellers should pay their way in the same coin, without any of the risk or inconvenience of national exchanges, and that this coin should have precisely the same value over this wide extent of European territory, whether it bore the effigy of free Helvetia, the head of Victor Emmanuel or of Napoleon III., or of the two successive Kings of Belgium. M. Michel Chevalier, a well-known French economist, whose name can never be mentioned on this side of the Channel without respect, as he was one of the chief promoters of the French Commercial Treaty, proposed to the Commission on weights, measures, and coin, which sat in London in 1862, a monetary alliance between Great Britain and France, in the shape of gold coinage, bearing on one side the effigy of Queen Victoria, and on the obverse that of Napoleon III. In making this suggestion, M. Chevalier renounced the predilection he had previously expressed in favour of an exclusive silver standard, on the ground that the recent discoveries of gold had made the value of that metal subject to far more depreciation and fluctuation than silver, and that permanence of value is a condition of the first importance to the standard of currency. The negotiators of the Convention of the 23d December took a still broader view of the principles of monetary union. Their object was that the gold and silver coinage of the four countries should be identically the same in weight, size, and value, though each country should issue money stamped with its own distinctive emblems, and even though the name of the coin should not in all cases be the same, inasmuch as the Italians prefer to retain the familiar appellation of lira for that which the other three nations call a franc. The first Article of the Convention is expressed in the following terms: Belgium, France, Italy, and Switzerland constitute a Union in relation to the weight, standard, dimensions, and value of their coined money of gold and silver.' The design of the Conference, and more especially of its President, M. de Parieu, who was, we believe, the author of the draft which was adopted after sundry amendments, was to establish this unity of coinage in essentials, leaving to each State as much liberty and independence in the detail of the coinage as were not incompatible with the general scope of the project. The four contracting States did not go so far as to make it compulsory on their respective subjects or citizens to receive gold and silver coins minted abroad. But the treasuries of the four States bound themselves to receive these monies, without distinction, in payment of the public dues; and although they are not yet made strictly legal tenders between man and man in each of the countries respectively, it is hoped and anticipated that use and public convenienee will speedily remove all difficulty on this score. Indeed, practically the gold napoleon and the silver five-franc piece, wherever struck, have long been received, indiscriminately, in the ordinary transactions of life, throughout the countries where the decimal monetary system of France prevails, and even in Spain and a great part of Germany. The amount of small coin of the depreciated standard to be struck by each State is fixed by the Convention at six francs per head of the population; and as we have in the last fifty years struck about 16,000,000l. in shillings, for the use of the United Kingdom and a portion of our own colonies, the proportion of six francs per head is not immoderate. No change has been introduced in the legislative provisions respecting the lower coinage, which consists in France and Italy of an alloy of copper, and of nickel in Belgium and Switzerland. The parties to the Convention of the 23rd December agreed to leave it open to any other State to join the Union on the same terms. No express addition has yet been made to it; but the Pontifical Government promulgated an Edict on the 16th June, 1866, by which it virtually adopts the system of the Monetary Union, with the exception that the Pope reserves the right of striking and issuing certain coins, which are not included in the terms of the Convention, viz., a piece of 2 lire and fifty cents., which does not exist in France, and a piece of 25 cents., which is substituted at Rome for the piece of 20 cents. adopted by the Union. This Pontifical Edict has, however, the merit of laying down with precision, in its first Article, the fundamental doctrine of the value of the franc in gold, 900 00 on which the whole superstructure of the Convention rests. It states, The new monetary unit of the Pontifical States is founded on the value of 5 grammes of silver and 0.32258 of gold, both at a standard of ths, and it takes the name of the Lira Pontificia.' It is not improbable that some of the States, contiguous to the countries already included in this Convention, will gradually adopt the same system, and this without the intervention of the causes which, under the First French Empire, extended the monetary system of France far beyond the present boundaries of that country; for many of the territories which were then annexed to France by the conquests of Napoleon, have never entirely lost, or discarded, the use of the French monetary system; and the sense of mutual convenience in personal intercourse and in commercial transactions might easily revive it. thaler, the Austrian florin, and the South German florin, are represented by the fol-lowing equations: = 4 Prussian thalers 6 Austrian florins 7 S. German florins. The French Convention with Belgium, Italy, and Switzerland, which has just been more fully described, is another important addition to the principle of uniformity, since it has linked together 68,000,000 of souls, by the use of the same coinage, extending from Brest to Constanz, and from Antwerp to Tarentum, under the terms of the Convention of the 23rd December, published in England by M. Hendriks, in the pamphlet cited at the head of this article. The same principle has, to a certain extent, been acted upon by the British Government in the proclamations of February 3, 1866, giving to sovereigns minted in Australia legal currency in this country. The result of all these changes has been to dimin which previously existed in the world; to reduce them to five or six leading denominations; and to render the public more sensible of the advantages and convenience which would arise from a further introduction of the principle of a uniform coinage, or of a coinage which could be converted and interchanged by the application of fixed and uniform principles. These views have been ably expressed upon a recent occasion by M. Louvet, a member of the French legislative body, in a report drawn up by him on June 13, 1866. The tendency of modern civilisation, with its lines of railway extending over and across the frontiers of many States, and its lines of telegraph bringing into direct communication countries lying at the opposite extremities of Europe, and even of the globe, is to create great common interests, irrespective of national and local differences. And it is obvious that all the operations of trade, and the exchange of money, would be greatly faciliated by the reduction of the representatives of weight, quantity, and value to a common form, or by the adoption of some principles which would make the conversion Having thus shown in what manner 68,000,000 of the inhabitants of the conti-ish the innumerable variations of money, nent of Europe have solved the difficulty of reducing their monetary circulation to a common standard, by this remarkable Convention, which subjects their respective gold and silver coinage to certain fixed and uniform rules, and even determines the relative proportion of their issues of small coin, we shall now proceed to consider the scheme of a more extended union, which has been mooted by several writers, and discussed in the French press, as one of the ulterior results of the Convention of the 23rd December. It is certain that some progress has been made, since the commencement of the present century, in drawing nearer together the monetary systems of the world. Several States which still retain their own distinct unit of value, and which have not adopted the French metrical system, have nevertheless proceeded so far as to divide their dollars, florins, drachmas, &c. on the decimal scale, which is a step in the right direction, and a great convenience in calculation. This has been done in Sweden, Turkey, Portugal, Austria, Greece, the Netherlands, and Spain, countries including 211,000,000 of inhabitants. To these Mexico may be added since the French occupation; and the relation of the rupee of India to the English sovereign also affords facilities for decimal arithmetic. The monetary Convention which was concluded in 1857, between Austria and the German States, brought under one system 70,000,000 of inhabitants, whose coins and units of value are distinct, but have been rendered mutually convertible by a simple process: thus the three leading coins of Germany, the Prussian The necessity of establishing a common tariff for the transmission of telegraphic despatches through different countries, has not been without effect upon the question of international coinage and numeration. Thus the Telegraphic Convention between France and almost all the States of Contiwhich was signed at Paris, on the 17th May, 1865, nental Europe, adopts the franc as the monetary The 30th Article of this treaty adds that the tariff of basis of international tariffs for telegraphic messages. messages between any two points in the dominions of the contracting States, is to be so adjusted, that always to be some multiple of the half-franc. the charge on every despatch of twenty words is |