CURRENCY, BIMETALLIC. 



279 



Imports Oold' 



consequently, by Gresham's law, the cheaper 

 gold drove out the dearer silver. This took 

 place on a large scale, and from 1852 to 1864 

 France imported $680,000,000 of gold, and ex- 

 ported $345,000,000 of silver. After 1865 the 

 monetary policy of France is connected with 

 that of the Latin Union, which was formed in 

 that year, and of which France was the leading 

 state. 



The silver that France discarded was most- 

 ly sent to India and the East. In fact, Ori- 

 ental countries have always had a seeming- 

 ly unsatisfied demand for silver. The semi- 

 civilized people of these countries, with their 

 insatiate passion for 

 ornament, deck their 

 women and children 

 with all the silver dec- 

 orations their wealth 

 will buy. A silver- 

 smith goes about from 

 house to house, melting 

 up coins, and making 

 ornaments for the in- 

 mates. India, more- 

 over, with a population 

 of 237,000,000, has no 

 small demand for sil- 

 ver as a medium of ex- 

 change, or money. A 

 semi - civilized nation 

 will always use the 

 least valuable metal, 

 silver, because the arti- 

 cles commonly bought 

 and sold will be of com- 

 paratively small value. 

 With Eastern nations, 

 therefore, trade is car- 

 ried on chiefly by silver 

 payments. From 1854 

 to 1867 the shipments 

 of silver to India were 

 abnormally large, for 

 unusual reasons, and so 

 all the surplus of silver 

 discarded by France 

 found a market, and 

 thereby India saved sil- 

 ver at that time from 



an impending fall in value. The accompanying 

 chart will show the movement of silver to India, 

 from 1852 to 1882. Since 1867 the balance due 

 to India has fallen off, because of an increase 

 of remittances from India to London. Indian 

 taxes are levied in silver, and so the India 

 Council in London draw bills of exchange on 

 this amount of taxes. The taxes due from 

 India to London, the interest on her debts, 

 pensions, etc., have increased the sum to be 

 paid by India to $75,000,000 in 1876, and to 

 this extent shipments of silver from London 

 have been obviated. That is, India Council 

 bills, when sold, save the shipment of silver 

 from the West. Therefore, when any further 

 attempts after 1870 were made to give up sil- 



ver, India was unable to import as much as she 

 did from 1854 to 1867, and could not as then 

 hold up the value. But it will be seen by the 

 chart that imports of silver into India fell off 

 some years before the fall in the value of silver 

 (since 1872). 



Germany, after the consolidation of the em- 

 pire at the close of the Franco-Prussian War, 

 decided to establish a uniform currency in all 

 her states. Furnished with $50,000,000 of 

 gold from France, and with the means given 

 her by the indemnity paid by France, she accu- 

 mulated from England, and elsewhere, enough 

 gold to warrant her in making a great change 



SURPLUS OF IMPORTS OVER EXPORTS OF GOLD AND 

 .SILVER INTO BRITISH INDIA, 1855-1882, 



Imports Silver 



Ratio Qold to Silver 



in her coinage from silver to gold. With $23,- 

 000,000 of old gold coins, and a new amount 

 of $414,000,000 (the additional sum coined to 

 1880), a single gold standard was established. 

 This was accomplished by a temporary bimetal- 

 lic currency by the act of Dec. 4, 1871, which 

 created a gold coin of full legal-tender value at 

 a ratio of 15| : 1 with existing silver coins; 

 and the coinage of large silver coins was dis- 

 continued. The ,act of July 9, 1873, continued 

 the policy by establishing a single legal stand- 

 ard of gold, and a subsidiary coinage of silver, 

 overvalued about 11 per cent., after the prin- 

 ciple of that of the United States. The silver, 

 which formerly constituted the sole medium of 

 exchange, was ordered to be withdrawn. In 



