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It will be noticed that the amount of gold ing the profit into the public Treasury, getting coin and bullion held by the Treasury bas in- for about $88 in gold enough bullion to make creased during the year about $15,000,000; 100 silver dollars of standard weight. Already, silver dollars $21,000,000, and United States to November 1, 1881, there have been coined notes $10,000,000. The increase of gold coin from silver bullion thus purchased more than arose mainly from an order of the Treasury 100,000,000 silver dollars, of which there reDepartment, under which gold coin was re- mained in the Treasury, as before stated, abont ceived from depositors in exchange for silver $66,000,000, the remainder being in active certificates, redeemable only in silver dollars. circulation. Under existing law the coinage Such was the demand for certificates in ex- of these dollars must continue at a rate of not change for gold, that on November 1st almost less than $2,000,000 per month, and, as all the entire amount of silver dollars held by the further issues have recently returned to the Treasury was represented by outstanding cer- Treasury, it would seem that the limit of cirtificates, and in consequence the order was re- culation of these coins has practically been voked, the law not permitting an issue of such reached. Hereafter they must accumulate in certificates in excess of the coin held for their the vaults of the Treasury, to be represented in redemption. At that time there were of these circulation either by certificates issued thereon, certificates outstanding $66,327,670, an increase thus steadily inflating the paper circulation of in three months of about $15,000,000. As these the country with certificates actually worth, as certificates are redeemable, as stated, only in sil- before stated, only the value of the coin they ver dollars, which are worth in intrinsic value represent, or the dollars will remain in the only about eighty-eight per cent of the gold coin Treasury to the exclusion of gold coin, and bereceived, there has been an apparent advantage come the only currency with which payment to the department in these transactions of about of public dues can be met, or the redemption twelve per cent on the amount issued, the Gov. of United States notes be made. In either ernment having by these transactions trans- event there is but one result foreshadowedferred to private parties at par the ownership the reduction of the currency of the country of the silver dollars. But the certificates are to the standard of the silver dollars, and the also receivable by the department in payment exclusion of gold coin from circulation. This of all public dues, at the par of gold, the trans- cloud in the financial horizon has not arisen actions of the country being conducted on a unexpectedly. Foreseeing it, Congress emgold basis, and the certificates, as well as the bodied, in the act of February 28, 1878, authorcoin they represent, consequently, for the izing the coinage of the standard silver dollar, present, circulate at a gold valuation, and will a provision directing the President of the Unitdoubtless continue to do so as long as there ed States to invite the Governments of the soare no more of them afloat than can be conven- called Latin Union, and such other European iently used in payment of public dues. The nations as he might deem advisable, to join the certificates are not legal tender in private trans- United States in a conference to adopt a comactions, and when there comes an excess of mon ratio between gold and silver for the purthem beyond the amount needed in public pay- pose of establishing internationally the use of ments the holders can have no redress but to bi-metallic money and securing fixity of relaaccept in their stead the silver dollars which tive value between those metals. The Latin they represent, and which the Treasury is Union referred to consisted of France, Belgium, obliged to hold for their redemption. The dol- Switzerland, and Italy. Under a treaty the lars thus received are a legal tender for all pur- Union had issued silver and gold coins from poses, and in time, if the coinage of them con- its respective mints at the ratio of 154 of siltinues imperative, must furnish the basis of ver to 1 of gold, but, on account of the great value for the circulation of the country, and depreciation in the value of silver, it had been that basis then will be in accordance with the compelled to suspend such coinage, to avoid intrinsic value of the coins, not with the ficti- driving the gold coins from circulation. The tious value at which they now circulate. Were invitation to join the United States in the prothe coinage of silver dollars unrestricted, as in posed conference was accepted by the Union the case of gold coins, the circulation of the and by several other states, and the conference country would at once fall to the silver basis, was held in Paris, in August, 1878. The dele as the holders of silver bullion could have the gates from the United States requested those same converted into dollars worth for circula- invited to pronounce upon the two following tion as much as so many dollars in gold, though propositions: containing but eighty-eight per cent of value, while the holders of gold bullion would find to be desired that silver should be excluded from free

1. It is the opinion of this assembly that it is not more profit in selling the same for commercial coinage in Europe and the United States of America. or other purposes at market rates. But hold- On the contrary, the assembly believe that it is deers can not have silver bullion converted into sirable that the unrestricted coinage of silver, and its a lawful equivalent in weight of silver dollars, use as money of unlimited legal tender, should be for the Government purchases the silver bul- retained where they exist, and, as far as practicable, lion at the best rates obtainable, and manufact- restored where they have ceased to exist.

2. The use of both gold and silver as unlimited leures the coins only on its own account, turn- gal-tender money may be safely adopted: first, by

equalizing them at a relation to be fixed by interna- erland, respectively, announced at once imtional agreement; and, secondly, by granting to each portant reservations on their part. metal, at the relation fixed, equal terms of coinage, making no discrimination between them.

The delegates from Germany stated that These propositions were discussed, but did tity of gold found its way into the treasury of

between 1865 and 1870 a considerable quannot become the subject of eral vote. The English and French delegates prepared an an

the German Empire, and that the Government swer to be made by the European to the Ameri- lish its monetary system upon the basis of a

took advantage of the occasion to firmly estabcan delegates, which was adopted, as follows: The delegates of the European states, represented in a very advanced state; that almost 1,747,

gold standard, and that this reform was now to the Government of the United States for having 000,000 marks had been struck in gold coin, procured an international interchange of opinion upon while 1,080,000,000 marks in silver coin of a subject of so much importance as the monetary ques- earlier mintage had been demonetized, the last tion.

of the operations amounting to 44,000,000 Having maturely considered the proposals of the representatives of the United States, they recognize :

marks. They also stated that there still re1. That it is necessary to maintain in the world the mained in Germany at most only 500,000,000 monetary functions of silver, as well as those of gold, marks in silver thalers, and declared that this but that the selection for use of one or the other of reform had sensibly bettered the condition of the two metals, or of both simultaneously, should be governed by the special position of each state or group although they considered the monetary system

the monetary circulation in Germany; but, of states.

2. That the question of the restriction of the coin- of Germany as established upon solid foundaage of silver should equally be left to the discretion of tions, still they had not failed to recognize the each state or group of states, according to the particu- import of the fall of silver which had since ocplaced, and the more so in that the disturbance pro- curred, and, to relieve the Latin Union from duced during the recent years in the silver market has the apprehension that half.a billion more of variously affected the monetary situation of the sev- marks in old silver thalers would be thrown eral countries.

upon the market as silver bullion, Germany 3. That the differences of opinion which have ap; bad, in May, 1879, resolved to suspend its peared, and the fact that even some of the states which sales of silver, and they had not since been reinto a mutual engagement with regard to the free coin- sumed. The delegates, however, recognized age of silver, exclude the discussion of the adoption of without reserve that a rehabilitation of silver & common ratio between the two metals.

was to be desired, and, that it might be atNotwithstanding that the proposition of the tained by the re-establishment of a free coin. United States was declined with thanks, in age of silver in a certain number of the most which expression even some of the nations hav- populous states represented at the conference ing a bi-metallic currency joined, though their of these states, to that end should adopt as a interest in maintaining a fixity of value in the basis a fixed relation between the value of gold ratio between the two metals would seem at and that of silver. Nevertheless Germany, least to have been as groat as that of the United whose monetary reform was already so far States. Here, for some time, the matter rest- advanced, and whose general monetary situaed, but the continued depression in the price of tion did not seem to call for a change of syssilver and a threatened stringency in monetary tem so vast in scope, did not find herself in a affairs, kept the subject under discussion, and position, so far as she was concerned, to conin February, 1881, the Governments of France cede the free coinage of silver. Still, having a and the United States extended a joint invita- disposition to assist the other powers which tion to the European nations to take part in a might unite for the purpose of a free coinage conference between the powers chiefly inter- of silver at a fixed ratio with gold, Germany ested in the question of establishing the use of would agree for a period of some years to gold and silver as international money. abstain from all sales of silver, and during

The conference was to examine and adopt, for the another period of a certain duration would purpose of submitting the same to the governments pledge itself to sell annually only a limited ment, by means of an international agreement, of the quantity, so small in amount that the general use of gold and silver as bi-metallic money, according market would not be glutted thereby. It would to a settled relative value between these two metals. also engage to eventually retire from circula

The conference assembled in Paris, April tion 27,750,000 five-mark gold-pieces, thus giv19, 1881, and delegates were present from ing to silver a greater field for circulation at Austro-Hungary, Belgium, Denmark, Greece, home; and it would, perhaps, melt down and Italy, the Netherlands, Portugal, Russia, Swe recoin 172,000,000 old five- and two-mark den, Norway, Spain, Switzerland, United States silver-pieces at a ratio between the two metals of America, and from France. The delegates of about 1 to 15$, whereas at present the ratio from Germany, Great Britain, British India, is 1 to 14. Canada, Denmark, Portugal, Russia, Greece,

This remarkable proposition, stripped of all Austro-Hungary, Sweden, Norway, and Switz- technical verbiage, was as if Germany shonld

say: “Gentlemen of the other powers, belierSce Bi-Metallic STANDARD, P. 60. At the hazard of ing you to be in earnest in your proposition to ne slight repetition, further proceedings of the Bi-Metallio Conference are bere inserted and considered. -ED. establish a fixed relative value between gold

**

and silver, and that value to be as 1 to 155, Subject to these considerations, the Bank Court are Germany offers her prayers for your success. satisfied that the issue of their notes against silver, She will not herself return to the free coinage risk of infringing that principle of it which inposes

within the letter of the act, would not involve the of silver, but she will kindly hold 2,500 tons of a positive obligation on the bank to receive gold in old silver thalers, worth now about 77 per exchange for notes, and to pay notes in gold on decent of their face value in gold, until, in accord- mand. ance with your own theories, by your free should not be conveyed to the monetary conference at

The Bank Court see no reason why an assurance coinage of silver, you will place so much of Paris, if their lordships think it desirable that the that metal into new channels of circulation, or Bank of England, agreeably with the act of 1844, into strong vaults, that its price will be en would be always open to the purchase of silver under hanced, and a fixed relation of equal value be- the conditions above described. tween gold and silver will be secured, and The proposition of the Bank Court was a when that time comes we will unload our sil- worthy rival to that of the delegates of Gerver upon you in exchange for your gold, at & many. In substance it proposed to accumulate profit of 23 per cent, and we are now prepared silver in its vaults worth, in gold, considerably to discuss the details of the execution."

less than its face value, so long as other counThe delegates of Great Britain then followed, tries than Great Britain would "leave unimsaying that for more than sixty years the mon. paired the facility of exchange" by which it etary system of the United Kingdom had been could at any time obtain gold therefor, par for on gold as a single standard ; that this system par, at a handsoine profit. bad satistied all the needs of the country, with Notwithstanding the dispiriting responses of out giving rise to those disadvantages which the two great powers, Germany and Great had shown themselves elsewhere and under Britain, the conference proceeded to the disother monetary regulations. The Government cussion of the following questionnaire which of her Majesty could not therefore take part in had been prepared for it by a committee of its a conference as supporting the principle of the own body: double standard; but the representatives at 1. Have the diminution and the great oscillations London, of the United States, having declared which have taken place in the value of silver, cliefly that the powers represented at the conference within the last few years, been hurtful or not to comreserved to themselves entire liberty of action merce, and consequently to general prosperity! after the discussion, the Government of her two metals should possess a high degree of stability!

Is it desirable that the relation of value between the Majesty considered that it wonld be lacking in 2. Should the phenomena referred to in the first consideration toward friendly powers to per- part of the preceding question be attributed to increase sist in its refusal to send a delegate from the in the production of silver, or to acts of legislation ? United Kingdom. Thus be bad come, and he of states should agree to the free and unlimited mintstood ready to furnish any information desired age of lawful coins of the two metals, with full legulconcerning the laws on the monetary system tender faculty at a uniform ratio between the gold and of England, but he was not permitted to vote silver contained in the monetary unit of each metal, a upon any proposition which might be submitted stability in the relative value of these metals would be to the conference. Subsequently he presented sbtained, which, if not absolute, would at least be very to the conference a communication from the 4. If so, what measures should be taken to reduce Bank of England to the British Government, to a minimum the oscillations in the relative value of setting forth to what extent the bank could aid the two metals ?

For instance: the proposed league of countries for the reha

1. Would it be desirable to impose upon privileged bilitation of silver. The communication was banks of issue the obligation to receive, at a fixed price, submitted on account of a declaration of the any gold and silver bullion which the public might Italian Government of the conditions on which offer? it would enter such a league, and was in these public in countries where privileged banks of issue

2. How could the same advantage be secured to the words:

do not exist ? The Bank Charter Act permits the issue of notes

3. Should coinage be gratuitous, or, at least, uniupon silver, but limits that issue to one

fourth of the form, for the two metals in all countries?

4. Should there be an understanding that internagold held by the bank in the issue department. The purchase of gold bullion is obligatory and un- tional trade in the precious metals should be left free

of all restraint ? limited, the purchase of silver bullion is discretional and limited, the distinction being enforced by the ne- ratio between the weight of pure gold and of pure

5. In adopting bi-metallism what should be the cessity of paying all notes in gold on demand.

The re-appearance of silver bullion as an asset in silver contained in the monetary units ? the issue department of the Bank of England would, On these propositions a long discussion enas is understood by the Foreign-Office letter, depend sued, eliciting much valuable information, but entirely on the return of the mints of other countries it seemed to be generally conceded that withsion of gold into silver, and silver into gold. The out the co-operation of the two great powers, rules need not be identical with those formerly in which had been conspicuous in declining all force; the ratio between silver and gold, and the propositions with a view of countenancing any charge for mintage, may, both or either of them be purpose on their part of returning to a double varied and yet leave unimpaired the facility of ex- standard, the convention must ultimately fail tion of silver purchases by a bank of issue whose reo of its purpose. As indicating more definitely sponsibilities are contracted in gold.

the purpose of France and the United States,

Mr. Evarts, in behalf of the delegates of those circulation in all the countries named would two countries, submitted, on the last day of the materially enhance its value, though perhaps session, the following declaration :

it might check its depression, and the country The delegates of France and of the United States, would soon have a currency based upon silver in the name of their respective governments, make whose dollar would be of even less value than the following declarations :

the present one, leading to complications, not to 1. The depreciation and great fluctuations in the say repudiation and dishonesty. value of silver relatively to gold, which of late years have shown themselves, and which continue to exist,

The question of the future coinage of the have been, and are, injurious to commerce and to the country is at best fraught with many serious general prosperity, and the establishment and main- difficulties, and there is but little hope that the tenance of a fixed relation of value between silver and further session of the convention as proposed gold would produce most important benefits to the

can give us relief. Silver is not coined to-day commerce of the world.

2. A convention, entered into by an important by any European power without restrictions, group of States, by which they should agree to open and this country can not well give it unrestricttheir mints to free and unlimited coinage of both sil- ed coinage here, without making our ports the ver and gold, at a fixed proportion of weight between dumping-grounds for all the silver of Europe the gold and silver contained in the monctary unit of each metal, and with full legal-tender faculty to the

now waiting for a market. On the other hand, money thus issued, would cause and maintain a sta- an entire cessation of silver coinage by the bility in the relative value of the two metals suitable United States, and a complete return to the to the interests and requirements of the commerce of single standard of gold, would likely be folthe worid.

lowed by like action in self-protection by all 3. Any ratio, now or of late in use by any commercial nation, if'adopted by such important group of the European powers, thus for ever barring states, could be maintained; but the adoption of the silver from circulation except as a subsidiary ratio of 151 to 1 would accomplish the principal ob- coin for making change, a result, it is believed, ject with less disturbance in the monetary systems to which would temporarily, at least, seriously be affected by it than any other ratio.

4. Without considering the effect which might be disturb the monetary affairs of the world. produced toward the desired object by a lesser combi

In any future discussion concerning the circunation of states, a convention which should include lating medium of a country, the use of checks England, France, Germany, and the United States, in making payments will doubtless be conwith the concurrence of other states, both in Europe sidered as an important factor. In this country and on the American Continent, which this combination would assure, would be adequate to produce and especially has the use of checks for such purmaintain throughout the commercial world the rela- poses been extensively employed, reducing, to tion between the two metals that such convention that extent, the necessity for money of any should adopt.

kind for circulating purposes. After the conference had held but thirteen In the London "Banker's Magazine" for sessions, upon the suggestion of the two Gov- November, Mr. Pownall estimates the perernments of France and the United States at centages of receipts of coin, notes, and checks, whose instance it was convened, it was ad- in several European localities, as below, to journed to April 12, 1882. In submitting the which has been added those of New York city, proposition of adjournment, M. Denormandie, as stated by the Comptroller of the Currency: å delegate of France, said:

We can not disguise from ourselves that the obserFations just now submitted to you tend to nothing New York. less than to establish, at least virtually, that nothin London has been done here but an imperfect, useless, and Edinburgh empty work.

Country banks in 261 places. Had the proposition submitted by Mr. Evarts on behalf of France and the United States Additional statistics published by the Compbeen accepted, even as a unanimous expres- troller of the Currency show that of $52,118,sion of the opinion of the conference, it is very 185, received by 1,895 banks outside of the prindoubtful if it would have received the sanction cipal cities of the United States, 81.7 per cent of the United States Government. The chief was in checks. In the large cities the receipts embarrassment under which the Government in checks were over 90 per cent. Such an exhas labored in the coinage of silver since 1878, tensive use of checks in business must neceshas been the lack of intrinsic value in silver; sarily diminish largely the necessity of actual eighteen ounces being hardly equal in value to money for circulation. one ounce of gold, although by law sixteen It will be noticed that there were outstandounces of it are declared to be equal to one of ing about $5,000,000 of gold certificates. These gold, and any proposition looking to further certificates were issued upon deposits of gold, reducing this lawful equivalent would hardly and are redeemable on presentation in that be sustained. Should the proposition obtain, metal. Under a decision, or at least with the however, all our present silver dollars would consent of the Treasury authorities, national be undervalued and would either be melted banks have counted these certificates as part down for bullion or shipped from the country of their lawful reserve, though they are not There is not much reason to believe that the legal tender, and are receivable by the Govcoinage of all the silver which could be used in eroinent only in payment of duties on im

VOL. XXI.-19A

LOCALITIES.

Coin,

Nctes.

Checks,

55 • 78 .55 1.57 15.20

.65 2.04 12.67

8.63 11.94

9S.SO 97.23 86.78 89.90 72.86

Dublin..

ports. The further issue of these certificates will find much favor in Congress. There is a was suspended by an order of the late Secre- strong feeling throughout the country that the tary Sherman, in December, 1878, just before policy of the Government in banking on its the resumption of specie payments, and, though own credit is one to be restricted, not exconsiderable demand has existed for them, the panded, and that its entire extinction should order for their discontinuance has not been be kept in view, that the Government may, as revoked. The objection to their issue seems soon as practicable, be divorced from all finan. to be that the banks, in such an event, would cial operations not necessary to the conduct of use them for a reserve, thus forcing the Gov- its ordinary business. ernment to store the coin for their redemption. During the year ending November 1, 1881, The Government is required by law to issue there was redeemed or purchased of 6 per cent silver certificates upon deposit of silver dollars, bonds $39,644,400; of 5 per cents, $68,146,150; and to hold the deposit or its equivalent, and of 6s and 6s, continued at 3} per cent, as hereif the policy is objectionable in one case it cer- inafter explained, $16,179,100-an aggregate of tainly is in the other. There seems to be, $123,969,650, making an annual saving herehowever, some sentiment in favor of the Gov- after in interest of $11,374,814.50. In addiernment's holding coin and issuing certificates tion to these transactions the Secretary of the thereon for circulation, and, while a paper cur- Treasury reduced the annual interest to 3} per rency thus issued is safe for the holders, such cent on $178,055,150 of 6 per cents and $401,a line of policy is contrary to the long-estab- 504,900 of 5 per cents, without specific authorlished usages of the Government, and creates ity of law, the bill for refunding the bonds in a central money power with which, perhaps, question, which passed both Houses of Congress, no European government would trust its ex- having been vetoed by the President. As thé ecutive officers.

vetoed bill contained provisions believed to be In other ways the Government is also doing somewhat inimical to the national banks, the a business strikingly analogous to that of bank- character of the legislation proposed becomes of ing. To redeem the legal-tender notes of the importance as indicating the plan and strength United States, after January 1, 1879, upon their of the attack likely soon to be made upon the presentation at the office of the Assistant Treas- existence of such banks as the time approaches urer, at New York, as required by the re- for the renewal by Congress of their charters. suinption act of 1875, the Treasury accumu- Under the provisions of the original banking lated $95,500,000 in gold coin by the sale of acts of February 25, 1863, and June 3, 1864, bonds, and held an additional amount, accrning national banks were authorized to reduce their from surplus revenues, to meet any probable de- circulation and to withdraw their security inand for the redemption of the notes, of which bonds only upon surrendering their notes to there were outstanding $346,000,000. The the Comptroller of the Currency for cancellalaw fixed do limit on the fund which should be tion, the amount of security bonds, however, held for this purpose, but Mr. Sherman, who not to be reduced to less than $30,000, nor one was Secretary of the Treasury when the act third of the capital stock paid in. Any bank, went into effect, decided that, after setting however, going into liquidation for the puraside of the cash in the Treasury enough to pose of winding up its business, could withmeet in full the amounts due public disbursing draw its security bonds upou depositing with officers, and the funds held by the Treasury the Treasurer of the United States legal-tenin the nature of trusts, and an amount sufficient der notes sufficient to redeem all its circulation. to meet all matured bonded debt and interest, As the notes of the national banks circulated there should be held about $138,000,000 tó without restriction in all parts of the country, meet the redemption of the outstanding notes, no sudden withdrawal of them from circulation, being about 40 per cent of their amount, and in the methods provided, was possible. Subsethis policy has not been materially changed by quently, under the provisions of the fourth sechis successors. It is argued that, as there is tion of the act of June 20, 1874, any national no probability that demand for payment of all bank desiring to withdraw its circulating notes, the trust funds, matured bonds, and interest in whole or in part, might, upon deposit of lawwill be made at once, the reserve might be con- ful money with the Treasurer of the United siderably reduced without detriment or dan- States in sums of not less than $9,000, take up ger. The legal-tender notes are asserted to its security bonds, the amount of such bonds be no more of a demand obligation than are or deposit, however, not to be reduced below matured bonds, and the other items against $50,000. which a reserve of 100 per cent has been set Under the provisions of this section a bank Aside. Reducing the reserve on the other could in a day lock up in the Treasury lawful demand obligations to 40 per cent of their money to a large proportion of its circulating amount, and the cash in the Treasury could be notes. Thus a bank with $250,000 in circulareduced nearly $64,000,000, or, excluding the tion could place in the Treasury $210,000 in $26,000,000 of fractional silver held by the lawful money and withdraw all but $50,000 of Treasury and unavailable in making payments, its security bonds, leaving to the Treasurer of about $38,000,000. It is questionable, how- the United States the duty of redeeming its over, if any proposition to reduce the reserve notes to the extent of the deposit, wbenever

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