the Editor of the Srm,—In a recent number of the Reoue des Dewe Mendes is an article on the
France (Lo simple et lo double etalon.) single and double standard of money in As this is in fact an essay upon the dept ciation of Silver, an examination of the arguments of ® writer 20 distinguished in political economy as its author, Mr. Michel Che: cannot fail to interest usin China, Like everybody who writes on currency questions, Mr, Chevalier loses no time in giving a inition from Ariatotle—of what money is; and lixe all ite about silver, he refers to China.
of course right, but Mr. The '"arch-secular standard only, or, if it has, it nearer the mark to say that in the standard of What is the legal I am not prepared to ty, but the atate of things to which Mr. Chevalier objects, certainly exists in copper cash are exchangeable
of the day, nearly the proposed 8 silver Lope inf the Emr rate by Ble. Geudiu' in the fiat yours of the ation that silver, and not copper, is the Hepublic, Should it appear upon examin-standard of money in China, it is very far from being a "simple" standard, soeingthat the purity and weight of sycee taels differ in one province from thatin every other. As shoes of sycee are not of uniform weight and purity, they do not possess the qualities of money as defined by Aristotle and under-tiaod in later ogee, The ample process of allowing the relative value of two metals, circulating side-by-side, to be determined by the unfettered operation of the law of supply and demand has some advantages over the opposite plan of ouring to regulate or fix it by enactments; notably, that of th y.of circulation desired by Mr, Wolowaki, The disadvantages, however, arising from the waste of time and annoyance caused by the constant chafferring about the pettiest transactions to dear to the Chinese, far outweigh them in the eyes of Western nations.
Mr. Chevalier states that there is but one legal standard for money in France, the franc weighing 5 grammes of silver, nine-tenths Sng, vhich was fixed by the law of the your XI.; the directors of the mint, however, were authorized to coin 20 and 40 frano pieces, on the basis of one kilo-gramme of gold being equal to 15} of silver, etch 900 fine. As the Bank of Franco, coins, then worth Jess 10} to 1, Me. jon years ago, paid its notes in the gold Chevalier's position is not very cleatly established, since, if silver were the only legal tender, it is hard to see why any one metal, wh m they could ha manded should have received the depreciated
silver, But, ting that the legal standard of Trans is single and of aliver, Bir, Chevalier: wishes it changed to gold. He attributes: the: depreciation' in silver to excessive production alone, considers that the value of this metal will. continue to decline until it reaches zero, and recommends France to lose no time in disburdening herself of property placed im s0 precarious a position, conjuring up us of his country being forced to take worthless mineral as a medium of exchange for her valuable products.
Were his promises sound, and his advice likely to be followed, the consequences would be disastrous to those holding invest-in countries where the circulation and likely to remain, silver, and an attempt to examine into the matter may not be considered a waste of time.
Mr. Chevalier is quite panic stricken about the supply of silver, and has entirely failed to take into account the question of id. probable that if he had 0 he would have been all the more d. The present state of the demand of the metal. On all hands is a desire to get rid of it, and to substitute gold. Some two months ago, I adduced in your.columns evidence to show that the decline in the value of silver must be owing ina much greater degree to the quantity thrown out of consumption by the German coinage operations than to the production of the Nevada mines. Subsequently arriving m brought avast quantity of calculations and mates bearing upon the question, do not in any important degree the conclusions that might be drawn from those evidences, which were taken from recognized authorities. Mr. Chevalier abstains from the free use of figures to support his conclusions, The production of commencement of the century to 1866 remained nearly stationary, barely adequate to the demands of reulation; from the latter date to the end of last year the increase of reduction above the previous average just thirty millions sterling, whilst the amount of demonetized German silver is about eighty millions. It is therefore, that the depreciation is owing in far groater degree to the cessation of demand th: ase of supplies to ti at the same time it must be borne in mind that of late the production of gold, by which the value of silver is measured, has en decreasing. There is no warrant for supposing that the production of gold wil ever increase; the la range is suppered. to contain "auriferous quartz veins of unexampled richness, and the jentific appliances available. for its extraction hi improved pari pass with thos The bugbear of speedy supplies of reduced to reasonable. dimension remains to be considered the future position of demand. In this connection the probable action of France is of the greatest moment, If France proceeds to demonetize silver, the value of the metal would suffer a further depreciation, It is difficult to estimate with precision the amount of silver coin current in France, but the correspondent of the Times put it recently at $2. mill there is besides, 20.
France: upon th resumption. of specie payments a mud larger sum would be qual to 100 millions the ent note
sterling. The Bank of France, holding over 70 millions sterling of treasure, is obviously i ion to resume specie Payment without further delay; but its action is probably hampered by the limits imposed upon the coinage of silver by the Latin Union, In a former letter I regarded as probable that the French would adopt a single gold standard. In spite of the support of so eminent an economist as Mr: Chevalier, it does riot seem that hi your. The highest Suancial authority in France, Me. Wolowski, is in favour of retaining the existing arrangements, which would have the effect of making silver the only standard for coin in France; since in obedience to the well-known currency law (Grst noticed by Aristophanes), that of two coins of like denomination but of different intrinsic values, that which has least value will be current." Everybody would pay in silver, and gold would be exported. The Bank of France could not be compelled to cash its notes in anything but aliver, and it would doubtless sell its 60 millions of gold at a handsome profit and purchase silver. Should, however, the French legislature make gold the sole legal standard, it will, of course, have to purchase the demonetized silver from the holders, which would entail a heavy national loss, all the heavier because the demonetized metal would atill further depress the silver markets of the world, and demand would be diminished by the operation, Mr. Chevalier speaks of the disadvantage to a country in being isolated from its neighbours in the matter of currency, This disadvantage is somewhat soutimental and, at any rate, until France the exact standard of an English
jo made towards international uniformity great progress is likely of currency. But the retention of the Silver standard will not in any way affect internal commercial transactions, and external will easily adjust themselves to the changing values of the precious metals, If an article de Paris will sell in London for £1 sterling, the manufacturer will sell his draft on London for, any, 28. francs tend of 25 francs, For imports ho will to demand 28 france for what formerly cost 25. It is dificult to see in what particular the national wealth would be depreciated. Mr. Chevalier pictures to himself France inundated with her old 5 frane pieces, of which he supposes large quantities to exist in the Levant and the Far East (these latter have long since been consigned to the melting pot), and with new pieces, of full weight and fine ne! coined to imitate those of native origin, the same way as Spanish dollars are ated for China, If the former returned, it may be presumed that Frenchmen would have to give a fair equivalent for them, and no more than a fair equivalent, since there is nothing to oblige Frenchmen to sell their producta for 5 grammes of silver, 900 fine, now, because they did so ten years ago; they are at liberty to demand as much more for their wares as will make the difference in value of the metal. In fact, if what is called the balance of trade should be in their favour, they will able to import as much more of the depreciated metal as will counterbalance its decline in relative to gold, that is, if they prefer it to merchandise as an import, There is, in fact, no more reason why five-frane pieces of full value should be imitated abroad than when. silver was higher in value, 25 grannies of silver, 900 fine, will altaya be worth 25 grammes of silver, 900 fine; the only inducement to do #0 at any time could be the very 3 mall refit on minting, the charge for which is only 3-10ths, per cent. in France. In Chins, a Spanish fine silver w a sycee tael of 568 grains silver, 925 fine. Mexican dollars are now al a premium of some eight per cent, or more above their melting point, thereby offering a sufficient motive for their manufacture elsewhere than in a Mexican mint.
Tu changing the national standard, the French would have a very difficult. subject to deal with, the National Debt. It is unnocessary to enter into it here, further than to remark, that by retaining a silver standard the national indebtedness is diminished, as far as the external creditors are concerned, by the amount of the depreciation in silver, Whilst, in ewe of change to gold, the nation could not reap the benefit of the fall, without incurring the reproaches
Text read from the printed page and cleaned; old type leaves the occasional error.