288 



FINANCES OF THE UNITED STATES. 



and silver, and tliat value to be as 1 to 15$, 

 Germany often* her prayers for your success. 

 She will not herself return to the free coinage 

 of silver, but she will kindly hold 2,500 tons of 

 old silver thalers, worth now about 77 per 

 cent of their face value in gold, until, in accord- 

 ance with your own theories, by your free 

 coinage of silver, yoxi will place so much of 

 that metal into new channels of circulation, or 

 into strong vaults, that its price will be en- 

 hanced, and a fixed relation of equal value be- 

 tween gold and silver will be secured, and 

 when that time comes we will unload our sil- 

 ver upon you in exchange for your gold, at a 

 profit of 23 per cent, and we are now prepared 

 to discuss the details of the execution." 



The delegates of Great Britain then followed, 

 saying that for more than sixty years the mon- 

 etary system of the United Kingdom had been 

 on gold as a single standard ; that this system 

 had satisfied all the needs of the country, with- 

 out giving rise to those disadvantages which 

 had shown themselves elsewhere and under 

 other monetary regulations. The Government 

 of her Majesty could not therefore take part in 

 a conference as supporting the principle of the 

 double standard; but the representatives at 

 London, of the United States, having declared 

 that the powers represented at the conference 

 reserved to themselves entire liberty of action 

 after the discussion, the Government of her 

 Majesty considered that it would be lacking in 

 consideration toward friendly powers to per- 

 sist in its refusal to send a delegate from the 

 United Kingdom. Thus he bad come, and he 

 stood ready to furnish any information desired 

 concerning the laws on the monetary system 

 of England, but he was not permitted to vote 

 upon any proposition which might be submitted 

 to the conference. Subsequently he presented 

 to the conference a communication from the 

 Bank of England to the British Government, 

 setting forth to what extent the bank could aid 

 the proposed league of countries for the reha- 

 bilitation of silver. The communication was 

 submitted on account of a declaration of the 

 Italian Government of the conditions on which 

 it would enter such a league, and was in these 

 words : 



The Bank Charter Act permits the issue of notes 

 upon silver, but limits that issue to one fourth of the 

 gold held by the bank in the issue department. 

 _ The purchase of gold bullion is obligatory and un- 

 limited, the purchase of silver bullion is discretional 

 and limited, the distinction being enforced by the ne- 

 cessity of paying all notes in gold on demand. 



The re-appearance of silver bullion as an asset in 

 the issue department of the Bank of England would, 

 as is understood by the Foreign-Office letter, depend 

 entirely on the return of the mints of other countries 

 to such rules as would insure the certainty of conver- 

 sion of gold into silver, and silver into gold. The 

 rules need not be identical with those formerly in 

 force ; the ratio between silver and gold, and the 

 charge for mintage, may both or either of them be 

 varied and yet leave unimpaired the facility of ex- 

 change, which would be indispensable to the resump- 

 tion of silver purchases by a bank of issue whose re- 

 sponsibilities are contracted in gold. 



Subject to these considerations, the Bank Court are 

 satisfied that the issue of their notes against silver, 

 within the letter of the act, would not involve the 

 risk of infringing that principle of it which imposes 

 a positive obligation on the Dank to receive gold in 

 exchange for notes, and to pay notes in gold on de- 

 mand. 



The Bank Court see no reason why an assurance 

 should not be conveyed to the monetary conference at 

 Paris, if their lordships think it desirable that the 

 Bank of England, agreeably with the act of 1844, 

 would be always open to the purchase of silver under 

 the conditions above described. 



The proposition of the Bank Court was a 

 worthy rival to that of the delegates of Ger- 

 many. In substance it proposed to accumulate 

 silver in its vaults worth, in gold, considerably 

 less than its face value, so long as other coun- 

 tries than Great Britain would "leave unim- 

 paired the facility of exchange " by which it 

 could at any time obtain gold therefor, par for 

 par, at a handsome profit. 



Notwithstanding the dispiriting responses of 

 the two great powers, Germany and Great 

 Britain, the conference proceeded to the dis- 

 cussion of the following questionnaire which 

 had been prepared for it by a committee of its 

 own body : 



1. Have the diminution and the great oscillations 

 which have taken place in the value of silver, chiefly 

 within the last few years, been hurtful or not to com- 

 merce, and consequently to general prosperity ? 



Is it desirable that the relation of value between the 

 two metals should possess a high degree of stability ? 



2. Should the phenomena referred to in the first 

 part of the preceding question be attributed to increase 

 in the production of silver, or to acts of legislation ? 



3. Is it or is it not probable that, if a large group 

 of states should agree to the free ana unlimited mint- 

 age of lawful coins of the two metals, with full legal- 

 tender faculty at a uniform ratio between the gold and 

 silver contained in the monetary unit of each metal, a 

 stability in the relative value of these metals would be 

 obtaine'd, which, if not absolute, would at least be very 

 substantial ? 



4. If so, what measures should be taken to reduce 

 to a minimum the oscillations in the relative value of 

 the two metals ? 



For instance : 



1. Would it be desirable to impose upon privileged 

 banks of issue the obligation to receive, at a fixed price, 

 any gold and silver bullion which the public might 

 o'flerl 



2. How could the same advantage be secured to the 

 public in countries where privileged banks of issue 

 do not exist ? 



3. Should coinage be gratuitous, or, at least, uni- 

 form, for the two metals in all countries ? 



4. Should there be an understanding that interna- 

 tional trade in the precious metals should be left free 

 of all restraint ? 



5. In adopting bi-metallism what should be the 

 ratio between tHe weight of pure gold and of pure 

 silver contained in the monetary units ? 



On these propositions a long discussion en- 

 sued, eliciting much valuable information, but 

 it seemed to be generally conceded that with- 

 out the co-operation of the two great powers, 

 which had been conspicuous in declining all 

 propositions with a view of countenancing any 

 purpose on their part of returning to a double 

 standard, the convention must ultimately fail 

 of its purpose. As indicating more definitely 

 the purpose of France and the United States, 



