CURRENCY. 



239 



ton and a few other centres. Since gold is only 

 necessary for international transactions, the 

 reserve should be concentrated, and not'scat- 

 tered among the banks. The gold contents of 

 the dollar ought to be changed so as to make 

 the half-eagle equal in value either with the 

 pound sterling or the French twenty-franc 

 piece, i. e., the dollar to contain either 22.6 or 

 22.4 grains of pure gold. The former standard 

 would have more immediate effect to facilitate 

 commercial calculations and exchanges ; but 

 the latter might induce the commercial world 

 to adopt the five-dollar piece as its units of 

 value, and induce England to reduce the gold 

 contents of the sovereign and half-sovereign 

 two pence in the pound, thus establishing the 

 much-desired simple relation between the Amer- 

 ican, English, and Continental currencies, while, 

 in the mean time, the American coins, when 

 taken in trade for the English, would be pre- 

 served from the melting-pot, being less valua- 

 ble. Prof. Jevons did not think that any coun- 

 try besides the United States would call for a 

 very great supply of gold at present. Russia, 

 Italy, Austria, Turkey, and other states bur- 

 dened with a depreciated paper currency, are 

 plainly not in a condition to coin much gold. 

 France has already a larger accumulation than 

 any other country. The Scandinavian king- 

 doms have converted their silver reserves into 

 gold, and will not increase their gold currency 

 further. England needs only the regular yearly 

 increment to her gold currency, which is really 

 only about half what the reports represent. 

 While Germany, while still constantly absorb- 

 ing gold, has already coined the largest part of 

 the new gold currency required. 



Secretary of the Treasury Sherman, in a 

 speech delivered in Ohio, in August, prophe- 

 sied that within 12 of the 17 months still 

 intervening before the resumption act goes 

 into force, if the same progress were made 

 in that direction as had been observable since 

 the inauguration of President Hayes, the spe- 

 cie basis would be attained. In mentioning 

 the two modes of resumption that of con- 

 tracting the currency, and that of accumu- 

 lating a coin reserve he regretted that the 

 resumption act, which authorized the issue 

 of 4 per cent., 4J per cent., and 5 per cent, 

 bonds for coin at par, did not also permit the 

 issue of bonds for currency a measure which 

 Congress refused to accede to for fear of over- 

 contraction. " The process of selling (bonds) 

 for United States notes need not go far before 

 the mere fact that they (legal tenders) are re- 

 ceivable for bonds would bring them up to 

 par in coin, and that is specie payments." 

 Under the act of January, 1875, authorizing 

 the issue of national bank notes, and the re- 

 tirement of four-fifths their amount of Fed- 

 eral notes, nearly $29,000,000 national bank 

 notes have been issued, and $22, 905, 700 green- 

 backs retired. The volume of the circulating 

 currency has been reduced by $57,170,000 

 United States notes on deposit in the Treas- 



ury, and by nearly $50,000,000 of cash reserve 

 in the banks, besides what the law requires 

 them to hold. The simplest way of arriving 

 at a specie basis was by issuing bonds bear- 

 ing the lowest rate of interest that would 

 maintain them in ordinary times at par, in ex- 

 change for legal - tender notes. The way 

 which Congress had sanctioned that of hold- 

 ing a coin reserve in the Treasury could, how- 

 ever, be accomplished, and should before the 

 limit fixed, January 1, 1879, since our country, 

 which is the greatest producer of precious 

 metals in the world, can supply alone the ne- 

 cessary silver and gold, while the balance of 

 trade is in our favor, and constantly increasing. 

 A joint resolution of Congress, passed Au- 

 gust 15, 1876, authorized a monetary commis- 

 sion, consisting of Senators Jones of Nevada, 

 Bogy, and Boutwell, Representatives Gibson, 

 Willard, and Bland, and, as experts, W. S. 

 Groesbeck and Francis Bowen, to collect evi- 

 dence on the questions of the remonetization 

 of silver and the resumption of specie pay- 

 ments, directing them to inquire : 



1. Into the change which has taken place in the 

 relative value of gold and silver ; the causes there- 

 of; whether permanent or otherwise; the effects 

 thereof upon trade, commerce, finance, and the pro- 

 ductive interests of the country, and upon the stand- 

 ard of value in this and foreign countries. 



2. Into the policy of the restoration of the double 

 standard in this country ; and, if restored, what the 

 legal relation between the two coins, silver and 

 gold, should be. 



3. Into the policy of continuing legal -tender notes 

 concurrently with the metallic standards, and the 

 effects thereof upon the labor, industries, and 

 wealth of the country. 



4. Into the best means for providing for facilitat- 

 ing the resumption of specie payments. 



The majority report, signed by Messrs. 

 Jones, Bogy, Willard, Bland, and Groesbeck, 

 ascribed the variations in the relative values 

 of silver and gold, which attained their widest 

 divergence in July, 1876, to the following 

 causes : 1. The demonetization law of Ger- 

 many in 1871, and those of the United States 

 in 1873 and 1874, and of the Scandinavian 

 Union in 1874; the limitation of the coinagt 

 of silver in France, Belgium, Switzerland, and 

 Italy, in 1874, and the suspension of silver 

 coinage in Holland and Switzerland in 1875, 

 and in France in the summer of 1876, and the 

 proposals of the Spanish and Dutch Govern- 

 ments to demonetize silver. 2. A temporary 

 interruption in the demand for silver in the 

 East. 3. The increase in the production of 

 silver from the discovery of new mines in the 

 United States, and the exaggerated reports of 

 the extent of these discoveries, together with 

 the general ignorance of the fact that nearly 

 half of the products of the Comstock lode con- 

 sists of gold. 4. The demand in Germany for 

 gold to replace bank notes, recalled to the 

 amount of 130 million dollars. 5. The act of 

 the United States Congress in 1875, ordaining 

 the resumption of payments in gold in the be- 

 ginning of 1879. 



