The Milan exchange. (Milan, Gibson County, Tenn.) 1874-1978, 1878-02-07
THE MONETARY PROBLEM.
A Review of the Financial Legislation of
t the Nineteenth Century.
From the Chicago Tribune


From the Chicago Tribune.l
A review of the legislation by other civil
IZed nations since 1900. with regard to the
monetary standards, will throw the light of
facts upon the debate now in progress in the
United States. The first country to legislate
about the standards was France. The law
OF March %, 1909, made the silver fve-franc
piece the monetary standard, provided for
the coinage of both gold and silver at the
ratio Of 10 l-2 to l, and stipulated that, if the
force of circumstances made it necessary to
change the proportion, the gold coins only
should be changed. Under this law, France
coined until 1850 three times as much silver
as gold.
In 1916 England adopted gold as the
standard Of coinage, and Holland, in the
same year, made silver its standard. In
1870 Holland returned to the gold standard.
Sardinia in 1926, and Belgium in 1882, made
the French law their own. During these
changes by other nations, the German States
/ nel0 last TO the silver standard. This diver
/ slty OF action added great deal to the sta
/ bIllty OF the bullion market. The colonies
OF England did not follow the Mother COun-
/ try, but retained the silver standard. This
was true, and remains so, of the East Indies,
/ as wei as China and the rest of Asia. The
usage of the East Indies was made legal by
law of 1885, expressly declaring silver to be
the standard of the country. The Dresden |
Money Conference of 1888 regulated the
money of the South German States on the
silver basis.
/ In 1888, gold was freely coined in Holland. !
The Netherland Bank then declared against |
gold on account OF its inferior stability, and
IN lS4o the coinage of gold was suspended. |
In lS4F, after much opposition from the |
Chambers, gold was demJnetized.
la lS4S, gold was discovered in California. |
Holland, after adopting the silver standard, |
threw large amounts OF gold on the market. |
| The Belgians at the same time put gold out |
of circulation, and Switzerland placed itself |
under the French system, without its pro- |
visions with regard to the coinage OF gold. !
A great movement took place in the eX- |
change of the new gold for the silver coins
of France, Belgium and Italy, which were |
exported as silver bullion TO Asia. This |
acted (D to keep gold and silver steadier |
than under any monometallic system, and |
(2) TO stimulate trade between Europe and
Asia. Silver became scarcer and scarcer in
France and neighborinE countries. More
and more gold was coined, and the silver
five-franc pieces were changed into Indian
rupees.
At this time the German States united on
the Vienna Money Convention of january
81, 1857. The silver standard was the one
established by the Vienna Congress although
Austria had strenuously proposed the gold
standard; but the Vienna Convention allow
ed the coinage of gold trade coins. These
were crowns-hfty of which should be equi-
valent TO pound of fine gold-and half
crowns. The experience of Belgium at this
period offers striking instance Of the dam
gerOus Inconvenience of a single standard.
The merchants, manufacturers, capitalists,
and tradeSmen of that country experienced
the greatest annoyance, and suffered consid-
cradle loss from the fact that silver was the
only metal coined in that country, although
all around it, and in the closest connection
with it, were nations using gold and silver.
After great debate and disturbance the coin
age of gold was resumed in 1860.
The next important monetary event was
the Latin Union, organized Dec. %, 1860, by
France, Belgium, Italy, and Switzerland,
which, later, were joined by Greece. Its
original purpose was TO regulate the issue of
subsidiary coins in each State, and to give
the coins of each of the member States free
circulation in all the other States of the
Union. But in 1873 Belgium asked and OBJ
tanned the right of suspending or limiting
the coinage of the full le@a-tender five
frame pieces, and in the annual meeting of
1874 the coinage of the tive-franc pieces was
limited for all the members of the Latin
Union. Every year the delegates of the
Latin Union meet and fix the amount Of sill
Yer to be coinedhy each State. But the gold
and silver coins still circulated in these
countries side by side, and are coined on the
basis of ID 12 to l.
just before the war of 1866 this was the
condition of the standards in Europe: Eng
land had the gold standard. Its dependen-
ces the silver standard. The Latin Union
had the double standard, with limited
coinage of silver. France, according to the
law of 1903, had nominally only the silver
standard; but in all these most Of the cir
culation was gold, although the amount of
silver coined and in circulation was large.
The countries under the Vienna Conyen
ton had the silver standard, with gold
trade money, which had not been coined to
a large amount.
The war of 1866 put an end to the Vienna
Convention.
The German money-reform," which be- ,
gan in 1871, and ended in 1878 with the de-
mOnetiZation of silver, was undertaken by
the Government without any intention of
making gold the single monetary standard !
of the country. The Government stated its
purpose distinctly to be to form an Imperial ,
coin currency in place of the confused and
clashing currencies of the various States,
and to use for this purpose a part of the
French indemnity. But the Government
was carried along by the Imperial Diet into ,
the decentralization of silver. The laws
efleciing this were the enactment of Dec. 4,
1871, authorizing an Imperial gold coinage
and preparing for the withdrawal of legal |
tender silver from circulation, and that Of
July 9, 1873, providing for the issue Of a sub I
id larry silver Imperial currency, and giving ,
the Imperial Government the powers neces-
sarv to demOnetiZe silver. The Imperial | I
Government under this authority has de- '
monetized part of the old silver currency, {
but the largest part of the silver has not
been demOnetiZed or withdrawn, and re- !
mains in circulation as legal tender.
Fully to comprehend the meaning of these
facts, we must remember that between 1850
and 1850 Californian and Australian gold
flooded Europe. The action of France in ,
adhering to its standard at this crisis was
most important. The silver coins of France
were expelled by the cheaper gold, which
came into general circulation. France turns
aside to a great extent the danger Of dis
turbance Of the money standards, never
more serious than then, and through its OPP
position to the attempts to demOnetiZe gold
saves the bullion market from the most dam
gerous fluctuations.
Between 1860 and 1870, the Latin Union
was founded on a bi-metalic basis. The de-
mOnetization of silver begins to be talked OF
in France. The representative of Austria in
the negotiations which were to have con-
Quoted it into the Latin Union eXerted his
influence in favor of these efforts to demon
etize silver. The FrancO-German war fol-
lows. After 1870 we see the German Reich
stag force the Government to accept the eX-
elusive gold standard. Slowly, and step by
step, with a continually sinking silver
market, the Government proceeds. The
member of the Latin Union Immediately
limit their silver coinage. The value of sill
yer sinks extraordinarily low, till the ratio
of silver to gold has sunk from 15.5 to ] to
10 to l. Finally, the silver market begins to
recover. Production has nothing TO do with
this turn: that is still against the price of
silver; it is induced only by commercial con-
dtions and legislative regulations. In re-
citing this history of European coinage laws,
Suess shows that with these fluctuations
public and private property fiuctuates.
Great damage is done without much good to
any one. The uncertainty has become
general calamity, which the recent improve
ment in the silver m9 It has but partially
bettered. Person me greatest experience
in monetary matters, such rs Suess and Ger
nuschi, and bodies of the rank of the Liver
pool Chamber of Commerce, unite in calling
for an international Congress to regulate the
standards. If that is not feasible, silver
should be made the standard with concur
rent coinage of gold.
in England they are adopting a
horseshoe made of cowhide, and known