Part 4

The relations which the metals have borne to each other since the discovery of the New World will appear from the following:

Table showing the relative values of gold and silver in the various countries of the world from the discovery of America to 1680.

---------------------------------------------------------------------- A. D.| Ratio. | Authorities. ---------------------------------------------------------------------- | | 1497 | 1 to 10.70 | Spain. Reign of Isabella. Edict of Medina. Local. 1500 | 1 to 10.50 | Germany. Adam Riese's Arithmetic. Local or | | doubtful. 1551 | 1 to 11.17 | Germany. Imperial mint regulations. Arbitrary or | | local. 1559 | 1 to 11.44 | German Imperial mint regulations. 1561 | 1 to 11.70} | France. Mint regulations. 1575 | 1 to 11.68} | 1623 | 1 to 11.74 | Upper Germany. Mint regulations. 1640 | 1 to 13.51 | France. Mint regulations. Transition period. 1665 | 1 to 15.10 | France. Mint regulations. 1667 | 1 to 14.15 | Upper Germany. Mint regulations. Doubtful. 1669 | 1 to 15.11 | Upper Germany. Mint regulations. 1679 | 1 to 15.00} | France. Mint regulations. 1680 | 1 to 15.40} | | | ----------------------------------------------------------------------

Table showing the ratio of silver to 1 of gold from 1687 to the demonetization of silver by Germany and the United States and the closing of the Mints to its free coinage.

---------------------------------------------------------------------- Year. | Ratio.|| Year. | Ratio.|| Year. | Ratio.|| Year. | Ratio. -------+--------++-------+--------++-------+--------++-------+-------- 1687 | 14.94 || 1721 | 15.05 || 1755 | 14.68 || 1789 | 14.75 1688 | 14.94 || 1722 | 15.17 || 1756 | 14.94 || 1790 | 15.04 1689 | 15.02 || 1723 | 15.20 || 1757 | 14.87 || 1791 | 15.05 1690 | 15.02 || 1724 | 15.11 || 1758 | 14.85 || 1792 | 15.17 1691 | 14.98 || 1725 | 15.11 || 1759 | 14.15 || 1793 | 15.00 1692 | 14.92 || 1726 | 15.15 || 1760 | 14.14 || 1794 | 15.37 1693 | 14.83 || 1727 | 15.24 || 1761 | 14.54 || 1795 | 15.55 1694 | 14.87 || 1728 | 15.11 || 1762 | 15.27 || 1796 | 15.65 1695 | 15.02 || 1729 | 14.92 || 1763 | 14.99 || 1797 | 15.41 1696 | 15.00 || 1730 | 14.81 || 1764 | 14.70 || 1798 | 15.59 1697 | 15.20 || 1731 | 14.94 || 1765 | 14.83 || 1799 | 15.74 1698 | 15.07 || 1732 | 15.09 || 1766 | 14.80 || 1800 | 15.68 1699 | 14.94 || 1733 | 15.18 || 1767 | 14.85 || 1801 | 15.46 1700 | 14.81 || 1734 | 15.39 || 1768 | 14.80 || 1802 | 15.26 1701 | 15.07 || 1735 | 15.41 || 1769 | 14.72 || 1803 | 15.41 1702 | 15.52 || 1736 | 15.18 || 1770 | 14.62 || 1804 | 15.41 1703 | 15.17 || 1737 | 15.02 || 1771 | 14.66 || 1805 | 15.79 1704 | 15.22 || 1738 | 14.91 || 1772 | 14.52 || 1806 | 15.52 1705 | 15.11 || 1739 | 14.91 || 1773 | 14.62 || 1807 | 15.43 1706 | 15.27 || 1740 | 14.94 || 1774 | 14.62 || 1808 | 16.08 1707 | 15.44 || 1741 | 14.92 || 1775 | 14.72 || 1809 | 15.96 1708 | 15.41 || 1742 | 14.85 || 1776 | 14.55 || 1810 | 15.77 1709 | 15.31 || 1743 | 14.85 || 1777 | 14.54 || 1811 | 15.53 1710 | 15.22 || 1744 | 14.87 || 1778 | 14.68 || 1812 | 16.11 1711 | 15.29 || 1745 | 14.98 || 1779 | 14.80 || 1813 | 16.25 1712 | 15.31 || 1746 | 15.13 || 1780 | 14.72 || 1814 | 15.04 1713 | 15.24 || 1747 | 15.26 || 1781 | 14.78 || 1815 | 15.26 1714 | 15.13 || 1748 | 15.11 || 1782 | 14.42 || 1816 | 15.28 1715 | 15.11 || 1749 | 14.80 || 1783 | 14.48 || 1817 | 15.11 1716 | 15.09 || 1750 | 14.55 || 1784 | 14.70 || 1818 | 15.35 1717 | 15.13 || 1751 | 14.39 || 1785 | 14.92 || 1819 | 15.33 1718 | 15.11 || 1752 | 14.54 || 1786 | 14.96 || 1820 | 15.62 1719 | 15.09 || 1753 | 14.54 || 1787 | 14.92 || 1821 | 15.95 1720 | 15.04 || 1754 | 14.48 || 1788 | 14.65 || 1822 | 15.80 ---------------------------------------------------------------------- Year. | Ratio. || Year. | Ratio. || Year. | Ratio. || Year. | Ratio. -------+--------++-------+--------++-------+--------++-------+-------- 1823 | 15.84 || 1836 | 15.72 || 1849 | 15.78 || 1861 | 15.50 1824 | 15.82 || 1837 | 15.83 || 1850 | 15.70 || 1862 | 15.35 1825 | 15.70 || 1838 | 15.85 || 1851 | 15.46 || 1863 | 15.37 1826 | 15.76 || 1839 | 15.62 || 1852 | 15.59 || 1864 | 15.37 1827 | 15.74 || 1840 | 15.62 || 1853 | 15.33 || 1865 | 15.44 1828 | 15.78 || 1841 | 15.70 || 1854 | 15.33 || 1866 | 15.43 1829 | 15.78 || 1842 | 15.87 || 1855 | 15.38 || 1867 | 15.57 1830 | 15.82 || 1843 | 15.93 || 1856 | 15.38 || 1868 | 15.59 1831 | 15.72 || 1844 | 15.85 || 1857 | 15.27 || 1869 | 15.60 1832 | 15.73 || 1845 | 15.92 || 1858 | 15.38 || 1870 | 15.57 1833 | 15.93 || 1846 | 15.90 || 1859 | 15.19 || 1871 | 15.57 1834 | 15.73 || 1847 | 15.80 || 1860 | 15.29 || 1872 | 15.63 1835 | 15.80 || 1848 | 15.85 || | || | -------+--------++-------+--------++-------+--------++-------+--------

By the foregoing table it will be seen that in the three hundred and seventy-five years from 1497 to 1872 the maximum separation of the metals was only as 1 to 16.25--notwithstanding the widest divergencies during that long period in the yield of the two metals from the mines. It will be observed that all the later quotations are from the London market, but it is a significant fact that in France, where, by the law of 7 Germinal, An XI, (1803,) free coinage was permitted to both metals, at the ratio of 15-1/2 of silver to 1 of gold, for a period of seventy years, and until the coinage of silver was limited, there was at no time the slightest variance from that relation.

When silver was deprived of the full money function, and all the money-work of society was placed on gold, the metals began to separate. The following table shows the degree of that separation from year to year:

Table showing the ratio of silver to 1 of gold since the demonetization of silver by Germany and the United States, and the closing of all mints of the western world to its free coinage:

1873 15.92 | 1882 18.19 1874 16.17 | 1883 18.64 1875 16.59 | 1884 18.57 1876 17.88 | 1885 19.41 1877 17.22 | 1886 20.78 1878 17.94 | 1887 21.13 1879 18.40 | 1888 21.99 1880 18.05 | 1889 22.10 1881 18.16 |

The foregoing figures show that it is only since the legislative proscription of silver by Germany and the United States, and the closing of all the European mints to its coinage, that any material change took place in the ratio between the two metals, which conclusively demonstrates that the present divergence in the relative values of the two metals is directly due to the legal outlawry of silver and not to natural causes.

Not only has the concurrent use of the two metals as money had the sanction of all time, but the approval of the greatest minds of history, and, when not blinded by self-interest, the approval of practical and experienced financial minds. So well recognized is this fact that I need only cite a few instances of such approval.

Alexander Hamilton said:

To annul the use of either of the metals as money is to abridge the quantity of circulating medium, and is liable to all the objections which arise from a comparison of the benefits of a full with the evils of a scanty circulation. (Report to Congress, 1791.)

Thomas Jefferson, in a letter to Hamilton, indorsed this view, saying:

I return you the report on the mint. I concur with you that the unit must stand on both metals. (Letter to Hamilton, February, 1792.)

In his "Recherches sur l'or et sur l'argent," 1843, Leon Fanchet said:

If all the nations of Europe adopted the system of Great Britain, the price of gold would be raised beyond measure, and we should see produced in Europe a most lamentable result. The Government can not decree that legal tender shall be only gold, in place of silver, for that would be to decree a revolution, and the most dangerous of all, because it would be a revolution leading to unknown results (qui marcherait vers l'inconnu).

In a memoir read before the French Institute in 1868, M. Wolowski said:

The suppression of silver would bring on a veritable revolution. Gold would augment in value with a rapid and constant progress, which would break the faith of contracts and aggravate the situation of all debtors, including the nation. It would add at one stroke of the pen at least three milliards to the twelve milliards of the public debt.

In a debate in the French Senate on January 28, 1870, Senator Dumas eloquently pleaded for caution in dealing with a subject of such farreaching importance as the demonetization of one of the money metals. He said:

Those who approach these questions for the first time decide them at once. Those who study them with care hesitate. Those who are obliged practically to decide doubt and stop, overwhelmed with the weight of the enormous responsibility.

The quantities of the precious metals which are now sufficient may become insufficient, and we should proceed with great prudence before we diminish that which constitutes a part of the riches of the human race. Sometimes gold takes the place of silver. Sometimes silver takes the place of gold. This keeps up the general equilibrium. Nobody can guaranty that the present vast production of gold will continue. The placers are found on the surface of the earth, and may be exhausted by the very facility of working them. Silver presents itself in the form of subterranean veins. Science may contribute to accelerate its extraction. In presence of the unknown, which dominates the future, we should practice a prudent reserve.

Before a French monetary convention in 1869 testimony was given by M. Wolowski, by Baron Rothschild, and by M. Rouland, governor of the Bank of France.

M. Wolowski said:

The sum total of the precious metals is reckoned at fifty milliards, one-half gold and one-half silver. If, by a stroke of the pen, they suppress one of these metals in the monetary service, they double the demand for the other metal, to the ruin of all debtors.

M. Rouland, governor of the Bank of France, said:

We have not to do with ideal theories. The two moneys have actually co-existed since the origin of human society. They co-exist because the two together are necessary, by their quantity, to meet the needs of circulation. This necessity of the two metals, has it ceased to exist? Is it established that the quantity of actual and prospective gold is such that we can now renounce the use of silver without disaster?

Baron Rothschild said: