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• Translator's Preface
• Section I.: Preliminary Observations.
• Chapter I.: The Question Stated
• Chapter II.: Preliminary Observations On the Rise of Prices Which Has Characterised the Last Few Years.
• Section II.: An Appeal to Some of the Fundamental Notions Upon the Nature and Characteristics of Money.
• Chapter I.: What We Ought to Understand By Value and Price.—twofold Definition of Money.—the Standard Or Fineness of Money.
• Chapter II.: Of the Meaning of the Word Standard.— the Metal-standard Is That From Which Is Derived the Monetary Unit.—the Two Ideas Standard and Monetary Unit Imply Each the Other.
• Chapter III.: Of the Character of Exchanges As Affected By the Invention of Money —how the Rise and Fall of the Precious Metals Are Manifested In the Course of Trade.—phenomena of the Rise and Fall In Commodities.
• Chapter IV.: On the Possibility of Conferring the Quality of Standard Upon Two Metals At Once.
• Chapter V: Of the Meaning of Certain Words Specially Applicable to Money and the Precious Metals.—price, Value, Premium, Dearness, Cheapness
• Section III.: Of the Present Production of Gold and Its Outlet.
• Chapter I.: Of the Increase In the Present Production of Gold As Compared With the Past —the Extended Coinage of Gold Which Has Followed.
• Chapter II.: Diminished Coinage of Silver In France—gold Is Already At a Discount In Comparison With Silver.
• Chapter III.: Extraordinary Exportation of Silver From the Civilised Countries of the Western World Towards India and China —to What Extent It Is Likely to Continue.
• Chapter IV.: France Serves Temporarily As a Parachute to Retard the Fall of Gold.
• Chapter V.: Whether the Extraordinary Production of Gold Ought to Be Considered As an Ephemeral Accident.—the Crushing of the Quartz Veins —mines In Siberia and Elsewhere.
• Section IV.: On the New Outlet That May Be Expected For the Production of the New Gold Mines, and Whether It Will Be In Proportion to the Extent of This Production.
• Chapter I.: Of the Outlet Afforded By Those Countries Which At Present Have Evidently an Insufficient Proportion of Metal In Their Currencies.
• Chapter II.: Of the Increase of Gold Money Which May Arise From the Development of Business, and the Increase of Population.—of Wear and Tear.—of Hoarding.—of Shipwrecks.
• Chapter III.: On the Employment Which Habits of Luxury May Offer to the Gold of the New Mines.
• Chapter IV.: Conclusion of the Preceding Chapters.—the Fall of Gold Very Probable, If Not Inevitable, In Relation to All Other Commodities.
• Section V.
• Chapters I. to V.: On the Part Assigned to Gold In the Monetary Legislation of France.
• Section VI.: Consequences of the Fall In the Value of Gold.
• Chapter I.: A General Distinction Between Those Private Incomes Which Will, and Those Which Will Not Be Affected. of a Certain Collective Loss Which the People of France Will Suffer.
• Chapter II.: Of the Sufferings and Difficulties Which Will Accompany the Transition.
• Chapter III.: On the Gain Which Would Result to Certain Classes of Persons, and to Society, From the Fall In Gold. the Saving to the State From the Payment of the Dividends On the Public Debt.
• Section VII.: Of the Measures to Be Taken to Avert the Evil Effects of the Fall of Gold.
• Chapter I.: Case of a State Like England, Where Gold Is the Standard, and Where There Is No Other Money But Gold.
• Chapter II.: Case of a State Such As France, Where There Is a Silver Standard, But Also a Gold Currency.
• Chapter III.: The Measure Here Recommended Is a Necessary Complement of the Law of Germinal, Year XI.
• Chapter IV.: On Some Inconveniences Inherent In the Combination, Respecting a Gold Currency, Recommended In This Work.
• Chapter V.: Of a Plan Recommended For Maintaining the Parallel Circulation of Silver and Gold.
• Chapter VI.: Of the Resolutions of a Commission Appointed By the Minister of Finance In Mdccclvii.
• Chapter VII.: Of Various Acts Which the Legislation of the Ancient Regime Upon Money Treated As Crimes, and With Regard to Which Some Persons of Our Day Propose to Establish Penalties. —selecting, and Melting; Trade In Coins; Exportation.
• Chapter VIII.: Of a Different Solution Which Has Been Recommended, and Which Would Consist In the Adoption of a Gold Standard.
• Chapter IX.: Appreciation of the System Which Consists In Adjourning Indefinitely the Legislative Solution.

CHAPTER IV.

france serves temporarily as a parachute to retard the fall of gold.

It is at first sight surprising that a production of gold so vast, so colossal as that which has been just described, in comparison with all that has been seen previous to our day, should not have produced a greater fall of gold relatively to the other precious metal. The surprise redoubles if we take into account the enormous increase that has taken place in the demand foT silver in the European market, or, more properly speaking, in the whole Western World, for exportation to the East. But here a powerful cause has intervened to retard temporarily the fall of gold. France is a market which has hitherto offered to the gold of the new mines an indefinite outlet, on the basis of one kilogramme against 15½ silver; for the foreigner who owes a Frenchman a certain number of francs, that is to say, a certain number of times 4½ grammes of silver, acquits himself legally in paying him the same number of times 29 centigrammes of gold, a quantity 15½ times smaller. As to the bullion merchant who wants to exchange his gold for silver, he obtains it on nearly the same terms, for, beyond the quantity indicated by the relation of 1 to 15 J, he has only to pay the premium, and of necessity up to this moment it has been but slight, and must continue so some time longer, for a reason easy to perceive. So long as much silver remains in France, persons residing there who may receive coins of this metal, will think themselves fortunate to exchange them for gold at a small premium beyond the relation established by the law of the 7 Germinal year 11, because in the payments which they have to make they could not compel their creditors to take them for more than the proportion of gold indicated by this law, viz., 1 against 15½.

Such is the actual effect of the provisions of the law of the 7 Germinal, year 11. We will not at present inquire whether the intention of the legislator was, that under the circumstances which now present themselves, this comparative value of gold and silver should be maintained;- it is a subject to be hereafter discussed. But the truth is, that so long as the provisions of the law of the year 11, on this point, are allowed to remain, and so long as France shall continue to offer great masses of silver, the merchant will find it easier to barter his gold in that country for the other metal, on terms which will deviate little from those prescribed in the year 11. It follows, also, whilst this state of things lasts, that it will be impossible, at London, Brussels, Hamburg, or even at New York, or any other great centre of commerce, for gold to fall much below 15½ times its weight in silver. It is from the same reason that if, at any moment, when the price of corn tended strongly to decline, a Paris merchant bought in the open market all the corn brought to him at 20 francs the hectolitre, it would be impossible that at the market of Saint Denis the quotation should greatly deviate from the same price. But the aspect of affairs will be very different from the day when the movement which at present attracts the silver of France, shall have led to the exportation from our territory of nearly all our five-franc pieces, and when, consequently, this money shall have become so rare as to render it impracticable, or even difficult to exchange a kilogramme of gold against 5½ kilogrammes of silver. From that moment the fall in gold will be rapid. In a word, if, down to the present time, the immense production, of which Australia and California have been the theatre, has not produced a greater fall in the value of gold, it is France which is the cause. It is she that has retarded the depreciation of gold. She plays, in relation to this metal, the part of a parachute, and she plays it at her own expense; she will understand it well when the great fall occurs; but then it will be too late.

That the premium on silver should have reached even 4 per cent., under the circumstances in which the trade in the precious metals is placed, seems to me to indicate the force with which gold tends towards a depreciation; and they who argue from the slightness of the premium, that there is little ground for anticipating any great future change, seem to me to fall into a singular error.

We know that what is now to be seen taking place in silver, occurred a few years previously in gold. Gold was at a premium in the French market; at the same time that the coinage of this metal had fallen to an insignificant sum, and the amount which had been in circulation in France was escaping abroad. The returns of the-Custom-House show that from the 1st January, 1816, to the 1st January, 1839, the exportation of gold exceeded the importation by 541,000,000 francs (£21,640,000), without counting that which travellers carried with them. During this period, the relative value of gold remained nearly fixed at 15¾ times that of silver, instead of the proportion of 15½, indicated by the law of the 7 Germinal, year 11. Now 15| in relation to 15½, represents only a deviation of 1½ percent.* Such a slight divergence from the legal proportion, sufficed, however, to cause the disappearance of gold from the circulation, and to lead to the exportation of the larger portion of it. This proves how small a difference suffices to effect the displacement of the precious metals.

[*]In this interval, the value of gold never rose above 15 80/100 or 15 81/100, excepting during a part of 1829, and the four following years, 1830–1–2–3. It may be concluded, at least for the last four years, that the agitations in France were the cause of this rise. In times of alarm, there is usually an extraordinary demand for gold, owing to the facility with which it can be concealed.