TIIK FAiniKi; AND Till-: CURKKXCY. of)? 



gold went out of the country, and we were on a silver basis, 

 although nominally the basis was bimetallic. 



The fact was that silver and gold refused to remain per- 

 manently at any ratio in any country. The law had no effect 

 on the "ratio, excej)t when debts were to bo paid. The com- 

 mercial importance of England, in the meantime, so increased 

 that there was frequent occasion for the payment of very 

 large sums, upon which the saving of one-fourth or one-half 

 of one per cent was an object. The half of one per cent on 

 $100,000 is $500. Of course all debts w^ere paid in the cheap- 

 est metal for the time being, which led to constant friction 

 in the mercantile classes; and partly to get rid of this incon- 

 venience and bickering, England, in 1810, after some years of 

 experiment, made gold the standard and the only legal tender 

 for debts above $10. That law has never been changed. It 

 was enacted for the benefit of the trading and manufacturing 

 classes, has always been acceptable to them, and did not 

 interfere with the use of silver in the small transactions of the 

 masses. No economist has noted that the use of silver seriously 

 decreased in consequence of the act, or that its price, as com- 

 pared with gold, fell. In fact, it did not, the ratio of silver to 

 gold remaining just as it had been, gently fluctuating about 

 fifteen and a half to one in all commercial countries. 



In 1834 the United States, partly in the hope of increasing 

 the "home market" for gold, which was then believed to exist 

 in large quantities in the southern states, changed the ratio 

 from fifteen to one to sixteen to one. Our silver was now 

 overvalued, wuth res[)ect to the European market, and in two 

 or three years all our silver had disappeared, even to the dimes 

 and half dimes, and its place was taken by gold which came 

 back from Europe. For small change we were reduced to 

 Mexican and other foreign silver which had become too much 

 worn to circulate in its own country, and was bought uj) 

 cheaply by speculators, shipped to this country, and put into 

 circulation at its face value. This was the silver used in all 

 rural districts up to the time of the Civil War. All elderly per- 

 sons w^ill remember the squabbles as to whether the "pillars" 

 could be seen on the pieces. If they could be seen the piece 



