xjo THE POPULAR SCIENCE MONTHLY, 



CHANGES IN THE EELATIYE YALUE3 OF THE 

 PRECIOUS METALS. 



By Hon. DAVID A. WELLS, LL. D., D. C. L. 

 ECONOMIC DISTURBANCE SERIES, No. VI. 



THE Economic Distuebances Resulting feom Recent Changes 

 IN THE Relative Values of the Precious Metals. — Not- 

 withstanding the great attention that has been given to this subject in 

 recent years — with its almost interminable resulting publications and 

 public and private discussions — there is probably no other one eco- 

 nomic or fiscal problem concerning which there is so little comj^rehen- 

 sion on the part of the general public, or so little agreement as to 

 causes and results among those who have made it a matter of special 

 investigation.* It is of the first importance, therefore, for the under- 

 standing of the past involved economic disturbances, that a clear and 

 succinct statement of what has happened should be presented, and 

 such a statement it is now proposed to attempt. 



For many years prior to 1873 the bullion price of silver remained 

 very nearly constant at from 60 to 61 pence per ounce on the London 

 market, while the market ratio of gold to silver, or the ratio according 

 to which gold and silver could be interchanged, was limited in Lon- 

 don, from 1851 to 1872 inclusive, to a range of variation of from 1 to 

 15-19 {the minimum) in 1859 to 1 to 15*65 (the maximum) in 1872.f 



In 1873 the new German Empire — recognizing the importance of 

 having a monetary system better suited to her advanced industrial and 

 commercial situation than that which she then possessed, and also the 

 desirability of having a uniform coinage throughout the numerous 

 small states that had come to be included under an Imperial Govern- 

 ment — took advantage of the command of a large stock of gold, that 

 had accrued through the payment by France of an enormous war in- 

 demnity,J to effect reform. An exceedingly miscellaneous system of 

 coinage and currency — consisting of seventeen varieties of gold money ; 

 sixty-six different coins of silver, possessing full legal-tender powers 

 and constituting (in 1870) 65*7 per cent of the entire circulation ; forty- 

 six kinds of notes issued by thirty-five different banks, besides state 

 paper money of various kinds to the extent of 7*5 i)cr cent of the cir- 



* " It has been my experience, that about nine men out of ten, oven of those who 

 might be expected to have some definite views upon the subject, when asked their opinion 

 upon the expediency or necessity of adopting a bimetallic monetary system, will reply, 

 Oh, that is a very important question, but I do not pretend to understand it.' " — Edward 

 Atkiksom, British Association Proceedings, 18S7. 



f Pixley and Abcll's " Tables," London. 



X The amount in gold which France paid to Germany directly was $54,000,000 ; but 

 in addition there were French bills of exchange which gave Germany a title to gold in 

 places like London, on which such bills were negotiated. 



