Financial Legislation and its Limitations. 



39 



of corn, or in gold^^ for instance. In other words, subjects have 

 ahvays been permitted to ''contract themselves out" of the 

 habitual legal' tender material of repayment. Governments have, 

 however, presumed to say that the debtor could take liberties 

 with the creditor to the extent of paying him in either silver or 

 gold at a fixed ratio in case there was no express contract to the 

 contrary. 



Modern legislation upon creditor's and debtor's relations may 

 be said to have begun in 1774, when the English government 

 enacted that silver should only be a legal tender, by count of 

 coins, up to twenty-five pounds; but that was in case there was 

 no contract between the debtor and creditor. And in 17^8 it 

 stopped coining silver altogether. These steps towards a gold 

 basis were rendered necessary by the broadening of the modern 

 market. Thus was enacted what practice had already con- 

 secrated. Shortly before that, in 1797, the suspension of specie 

 payments by the Bank of England on account of the Napoleonic 

 wars occurred. Resumption was not effected until 1821, a 

 longer period of "restriction" than was endured in the United 

 States after the Civil War. After 1821, gold came into general 

 circulation in England as a result of previous legislation. 



In France it was attempted, in 1785, by the French minister 

 Calonne, to bring the two metals simultaneously into circulation, 

 when the ratio of I5>^ to i was adopted; and that legislation 

 was reenacted under the Directorate of 1803, so that gold was 

 brought into circulation under the bimetallic law in France, at the 

 end of the last century, and under the monometallic law, in 

 England, at almost the same time. 



The United States adopted bimetallism at the founding of the 

 government. Gold came more and more into use, and finally 

 by the " crime of 1873," i^ was made the sole standard, more 

 than half a century later than in England; and about the same 

 time that standard was introduced into numerous other countries. 

 It is now in course of adoption in the Orient; so that it may at 



""In 1896 it was common in the Eastern states of the United States to 

 draw up contracts with a clause for payment in gold, in view of the 

 prevalent fear of the country " going over to silver." 



The English 



government 

 early changed 

 outright from 

 the silver to 

 the gold 

 standard. 



The French 

 and United 

 States govern- 

 ments intro- 

 duced gold 

 into the stand- 

 ard on a parity 

 with silver. 



Recently, the 

 movement 

 towards the 

 single gold 

 standard is 

 become world- 

 wide. 



