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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.

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.

I will suppose the case of an inhabitant of London, who is possessed at the present time of a certain income, for example, of £ 1,000 sterling. Assuming the event of the fall in the value of gold to have been completely consummated, he will continue to receive, as at present, for every pound sterling composing Ms revenue a metallic disc containing 7 grammes, 318 milligrammes (113 grains) of fine gold, for that is what constitutes the piece called a sovereign, or the pound sterling. But the fall being accomplished, if gold has lost the half of its value, then, in transactions where one piece of gold was previously sufficient, two will be required, so that with the same number of discs the individual in question will only be able to procure in bread, in meat, in all kinds of articles, in every description of gratification, the half of what he would have obtained before this monetary revolution. Thus, in order that he might not be impoverished, in other words, that he might have the same subsistence, it would be necessary that his income should have nominally doubled itself, that it should be £ 2,000 instead of £ 1,000. This observation relative to a person residing in London would apply equally to an inhabitant of Paris, provided we still continue the tolerance, not to say the negligence, by virtue of which gold is unduly circulated on the footing established by the law 7 Germinal, year 11, notwithstanding that events have since overthrown the hypothesis on which, so far as gold is concerned, that law was framed.

It follows, therefore, that if we would particularise the persons who will be more or less deeply affected by the fall in gold, we have only to select those whose income, expressed in monetary units (the pound sterling in England, and the franc in France), will not find itself augmented, naturally and by a self-adjusting process, in exact proportion to the fall, and by the very fact of the fall in gold.

All those persons, whose incomes expressed in monetary units remain the same, would be injured by the change to the extent of the half of their income, all other things being equal. The national creditor is the characteristic type of this class of sufferers.

The proprietor of government stock is in fact the holder of a title by which a certain State engages to pay yearly a given number, agreed upon previously, of francs or pounds sterling; in other words, a well-defined quantity of metal. The current value of the capital of the public funds in each State is regulated by this very quantity; all other things, such as the solvency of the government, the degree of confidence which it inspires, and the abundance of capital upon the market, being equal.

All commodities excepting gold, and every kind of property excepting that of which the income is from the present fixed, as is the case with the government funds, ought, from the moment that the monetary crisis is terminated, to have attained in a gold currency double the price which they are at present worth, upon the supposition, quite arbitrary I admit, of the depreciation reaching fifty per cent. Thus, a house or a landed estate now worth £ 4,000 or 100,000 francs, would then sell for £ 8,000 or 200,000 francs. The hectolitre of corn or of wine, the quintal of iron, or the metre of calico will undergo the same rise, at least if no change conducive to cheapness be introduced into the conditions of their production, or into the relations between the supply and demand. It will be the same eventually with the wages of labour, and with all personal services, whether rendered in the factory or the farm, or from the liberal professions: we are warranted in believing that their value will have doubled.

Thus, as a definitive analysis, the proprietors of lands, houses, and other real estates, manufacturers, merchants, and their auxiliaries of every kind; public functionaries of all ranks; and also those who follow the different learned professions, will all find themselves in the end compensated in the new state of things with advantages equal to those which they now enjoy,—all other things being equal. It is another class of persons, whom we have previously defined in a general way, who would have to submit to a sacrifice in proportion to the fall in the precious metal.

Looking merely to the substitution which would have to be made in the currency of a country like France, where gold is taking the place of silver, that country would experience a sense of very serious disappointment at having exchanged a commodity which has actually a fixed value —its coined silver—for another metal the value of which is declining and must fall one half, according to the supposition which we have made, and which we have adopted solely for clearness of speech and precision of argument. The quantity of silver on which this disastrous exchange had been effected to the 1st January, 1858, was not less than a milliard (£ 40,000,000), which has been bartered for gold at the rate of 15½ kilogrammes of silver against 1 kilogramme of gold. At this rate, France will find at the close of the fall that she has been on an immense scale, almost imitating the trade of a certain sporting individual who, for a wager, passed a morning on London Bridge offering sovereigns to the passengers in exchange for shillings. Assuming that at the point of departure the silver currency of France amounted to 2½ milliards, (£ 100,000,000), this beautiful operation would cost her a very considerable amount, a sum so much the nearer to 1,250 millions (£ 50,000,000) in proportion as the abstraction of her silver had been more rapidly effected; and down to the commencement of 1858, the silver was flowing out of France at a very great speed. It would be more than the above large sum, if the depreciation of gold were upwards of one half, or if, being one half only, the silver currency of France had been at the point of departure upwards of 2½ milliards (£ 100,000,000).

The sum of 1,250 millions (£ 50,000,000) is too large to be lightly sacrificed, and yet it is not the loss which seems to me the most to merit our attention. The great danger and the great evil are the anxieties, the uncertainty, and, finally, the injuries which will fall upon a multitude of interests calling for our consideration by their mass, and for our respect by the justice of their case and the sympathy which it excites.

CHAPTER II.

of the sufferings and difficulties which will accompany the transition.

It is not merely the ultimate result that should be considered: the statesman and the administrator ought also to take largely into account the transition, that is to say, the rather lengthened period which must intervene before gold shall have achieved its fall, and regained almost a stable value; or, it might be more proper to say, the space of time which must elapse before the full effects of the fall in gold shall have been realised in all their bearings. This transition will be an interval painful to pass over, and will be marked by innumerable shocks and sufferings, of which I am about to give a summary idea: it will be the occasion for offering a few details upon the different interests which are likely to be affected by the fall in the value of the precious metal.

During this transition, then, the value of all properties will be subjected to a painful uncertainty, and to injurious fluctuations. It will be still worse for those persons to whom I have already alluded, whose incomes consist of a sum of money (Napoleons or sovereigns) fixed in advance. They will live in a perpetual state of trouble, anxiety, and uneasiness. They will sink by whole sections from their present state to another in which they will enjoy only the half of their previous comforts; reasoning, as I always do, upon the assumption that gold falls to the half of its present value. They will be flung headlong, without rule or measure, down to a lower station, and without ever having the chance of preparation, for it is the very essence of changes of this kind, subjected as they are to many opposing influences, to pursue an irregular and disorderly course. Now, the persons of whom I am here speaking, comprise a very numerous and various class. They are, in the first place, the creditors of the State, of departments, of cities, and of joint-stock companies. To form an idea of the number of persons and families who would be comprehended under this head, it suffices to call to mind that, in England, the capital of the national debt amounts to 20 milliards of francs (£ 800,000,000). I am unable to say what may be the amount of the debts owing by local bodies, and by public companies in the British islands; but I run no risk of deceiving myself in asserting that it is an enormous sum. In France, the capital of the funded debt is nearly 7¼ milliards (£ 290,000,000), deducting the amount belonging to the sinking fund. The number of persons interested, if it were determined by that of the entries in the books, would amount to more than a million.* The departments and the cities owe a very large sum, and the bonds of the railway companies, without speaking of the debts of other companies, rise to a very great amount.

There would be, besides, all the superannuated public servants, from whose salaries had previously been deducted the amount of their pensions, as well as all those who might undergo a similar ordeal up to the time when the law should have fixed a new scale of pensions; all persons who should have lent money for a long term on mortgage; all those who lived upon fixed incomes of long duration; individuals or companies like that of the credit fonder, who were in the receipt of annuities in payment for loans of capital; those who might have invested their property for life; and all those proprietors who might have let their land on long leases. In the latter case, until the metal had found a stable value, long leases, so much advocated by agriculturists, would be a serious evil to the landowner, and thus the monetary crisis would react in a disastrous manner on agriculture, and tend to place it in a retrograde position.

We might add to this list, in a great measure, the multitude of public servants, civil and military. Not that they would be precluded from the hope, under such circumstances, of an augmentation of salary; we may suppose that a time would come, when by successive additions to their pay, they would receive in the number of francs double their present salary; but it is in the nature of things that additions of this kind arrive by a very slow process. This is proved by what we see taking place with regard to many functionaries, even those who enjoy the greatest public esteem, as, for instance, the magistracy. For how many years has the same tale been told them, that they are always on the eve of an increase of their incomes, which are notoriously inadequate, but the morrow never comes. The painful and almost humiliating position of a petitioner for an increase of salary, would have to be again and again submitted to by the government employés, because the force which causes the depreciation in the value of gold, acting only successively, it would be by three or four intermediate steps, with difficulty climbed, that they would have to pass before their salary reached its normal rate. For them, then, there would be a constant anxiety; they would always feel themselves in danger of being left with insufficient means for the subsistence of their families.

There is reason to believe that the administration of the affairs of the country would suffer from this sad condition, moral and material, of the servants of the State. It is natural that they who believe themselves insufficiently rewarded for the pains they bestow, and the services they render, should fall off in their devotion and slacken in their zeal. There may be exceptional cases of individuals who are above these worldly motives; but the majority bow to them, especially after a little time. “We are not justified, after all, in requiring from functionaries all the activity and care which the business of the State demands, if we persist in paying them badly. Inadequate salaries deter numbers of men, who know their own value, from entering the public service, and drive them into private employments. The best of natures may, under such circumstances, become embittered. No one can be more inclined than myself to bear testimony to the disinterestedness of French functionaries. They are, at least, in this respect, upon a par with those of any other nation. But there is no reason why they should be subjected to the temptation which flows from straitened circumstances, and which has perverted the administrative morals of a certain great State which I could mention.

All the liberal professions, such as barristers, physicians, professors of every kind, engineers, architects, and a multitude of agents of every description, would also have to raise, again and again, the amount of their fees, a process which would often endanger their position, which they had flattered themselves to be secure.

For the working classes it would be a trying ordeal. In a certain point of view they may be said to work for fixed salaries; because, in those countries, especially, where population is somewhat dense, the employers of labour resist the increase of wages, which deranges their plans and baffles their calculations. Experience shows that when provisions rise wages are not necessarily raised in the same proportion. Not that an upward movement of wages does not follow a continued dearness of provisions, hut in the majority of employments it follows far behind. The working population are of all classes of society the most dependent, because they are the most necessitous. Being the least able to wait, owing to the pressure of want, they are the more apt to resign themselves to the terms offered them. Hence it is that the benefits which they expect to derive from a rise of wages are only yielded to them after many delays. It were easy to cite examples in proof of this assertion. It has been the subject of remark by Mr. Tooke, in his important work the History of Prices. In his historical inquiry respecting the precious metals,* Mr. Jacob has several remarks in the same sense, and among others he states his opinion that the institution of the Poor-Law, which it is known dates from the reign of Elizabeth, was in England the effect of the changes caused by the fall in the precious metals. This opinion has been recently reproduced by an English writer, Mr. James Maclaren, in a remarkable publication, the title of which even is calculated to excite an interest, and to which I shall again shortly refer.†

The same observation applies to the numerous class of other employés in manufactures and commerce, because these employments are also overburdened. Those only, who by their talents are above the average, would be able to command an immediate increase of remuneration in metallic money; men of capacity, in whatever walk of life, are the exceptions; manufacturing capitalists, or intelligent merchants, are too happy to find them, and neglect no means of retaining them. But it is not with the exceptions, but the masses, that we ought to occupy ourselves.

Landed proprietors would be a privileged class in the midst of this general derangement, inasmuch as the value of land would increase gradually in proportion to the fall of gold, at the same time that the price of provisions, which constitutes their income, would also rise. Yet even they would, during the transition, have their share of care and embarrassment. Their path would be strewn with difficulties every time they had to sell their land; for what was at each instant the legitimate rise, the justifiable increase of price, would be difficult if not impossible to determine with any accuracy. In this article, as with a multitude of others, transactions would assume a gambling character.

It would be easy to cite many investments, at present very much sought after, which would become hazardous, inasmuch as the capital would diminish by a self-acting process, and waste away, so to speak, by a species of consumption. Such investments, so long as the transition lasted, would lose the favour with which they are now regarded. In this category I should include all those which may be termed financial investments, that is to say, those of which not only the capital is valued in money, but which will or may at a given moment be converted into a sum of money fixed or nearly so beforehand, I mean into a weight of metal previously determined with greater or less precision. I have already cited the public funds and railway bonds. Bank shares, and those of similar establishments, partake of the same character. In the countries to which my present statement refers,—and I repeat that it is those which should possess in their monetary system the gold standard, as well as those which should leave things to take their course as if gold were legally invested with that attribute,—the loans of the State, of provinces, and of cities, as well as those of public companies, would, as we have already said, be negotiated, so long as the transition lasted, on harder terms than they had been previously.

But there are grounds for apprehending many other difficulties, political or administrative. It would be necessary to enlarge the budget, for wherever the State appeared as a customer, it would have to pay dearer than formerly. It would, besides, be necessary to increase the salaries of all its employés, civil and military. Even to half satisfy only the just demand of its impoverished functionaries, it would be obliged to call for further contributions from the taxpayers, for how numerous in certain countries, in France for example, are the servants of the State! The augmentation of the budget, assuming it to be considerable, means an aggravation of the public burdens, which excites, even when justifiable, the popular discontent, just in proportion to the degree to which taxation is increased. I believe I run no risk of contradiction, by any politician, in saying that a government which should have to double the taxes in the course of a few years would thereby incur very great perils.

Not but that several taxes could be named, and some of them very productive, which, in the event of a fall in gold, would yield spontaneously an increased revenue, just in proportion to the fall in the precious metal. The duties which adjust themselves to the value of the articles taxed are of this number. This would be the case in France with the registration tax, which is nearly always a percentage on the amount of capital employed in the transaction subjected to the tax. It is the same with the duties on beverages sold by retail. As for the customs duties, those which are levied ad valorem, would afford this natural increase; but in nearly all countries, and especially in France, they are the exception. But such imposts as the land tax, which are expressed by fixed sums of money, would have to be augmented by law, to be made to yield to the treasury a revenue of equal value. Now, is the government of France disposed to present itself before the legislative body to demand the doubling of the land tax, by successive additions extending over ten or fifteen, or even twenty years? Does it believe that such a process would benefit it much, or increase its popularity? and yet to some such measure as this would it have to resort.

Thus the budget would be subjected to a perpetual revision, both in its expenditures and receipts. Every three or four years it would be necessary to re-arrange the tariff of the different imposts; and to fix the rate of all the salaries, from the pay of the soldier and sailor, or that of the rural policeman, or the Custom-House officer, to the income of the prefect, or the marshal of France, the stipend of the great officers of State, and, in all conscience, the civil list of the sovereign himself. It would also be necessary to revise, more or less often, the scale of charges of ministerial officers or agents of every kind, lawyers, barristers, registrars, &c, a class of persons with whom there is no escaping a reckoning, as recent experience has shown.

A similar operation would be necessary with the tariffs of charges which have been fixed for a multitude of companies, such as those of railways, canals, docks, and bridges. In some cases these have been fixed so high, originally, that the companies have not found it necessary to levy the full rates. Of this number, however, we can hardly specify more than those which relate to the freight traffic on the railways; beyond that, as, for instance, for passenger fares, the full charge allowed by law is (in France) levied. It would seem to me only consistent with equity that the fares should be raised from the moment that a state of things, so unforeseen and so uncontrollable, arose as a recognised fall in the value of the metal of which money was made. All these changes of tariffs would be a labour of infinite difficulty for government, and an endless source of discussions with the legislative body.

The endowments and incomes of charitable institutions, which are frequently invested in the public funds, a mode of investment which they are now urged to adopt in preference to all others, would gradually diminish in value, and, to maintain them on their original scale, it would be necessary to resort for assistance to the State, or to the localities.

Optimists will tell us that the inconveniences which have been here indicated as the consequence of an increase of the budget will not be serious, inasmuch as the value of the pieces of money having fallen, the taxpayer will not find himself surcharged if he be only called upon to pay an increased number of pounds sterling, or of francs corresponding simply with the depreciation of the metal. But it must be borne in mind that it is only after a certain lapse of time that the public at large will have familiarised itself with the idea of a depreciation of the currency, and will have become reconciled to the consequence in the form of an increase of taxation. If the rise in every description of property, and in incomes of all kinds, such as salaries, fees, &c, were to be effected uniformly, according to the same gradation, the public intelligence would soon accommodate itself to the change; but matters would take a very different course. It is in the very nature of things, I repeat, that such an event as the fall in gold would be accomplished, so to speak, by jerks, and by very unequal steps as respects the various objects affected. It would be a confused state of things, arising out of the action of accidental causes, which would frequently and unexpectedly arise, and which would baffle all control. To some extent it would be a justification for the instinctive antipathy which the people feel for an increase of taxation, and supply them with arguments which in their minds would have considerable force.

I do not believe I exaggerate in saying that the transition period, which it would be necessary to pass over before the fall had achieved its full effect, and gold had regained a somewhat stable value, would offer features of instability and discontent characteristic of revolutionary epochs. On this subject I shall be excused if I here quote an observation made by Mr. Jacob, in his work on the Precious Metals, when describing the effects of the rise of prices which followed the discovery of the mines of America.

“There is some ground for the opinion,” says he, “that the tendency to increased expenditure (caused by this rise of prices), whilst a large part of the revenue of the crown remained stationary, was one of the causes which gave rise to the civil war under Charles I., the result of which was the loss of that unfortunate prince's life,”*

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.

We have explained, rapidly and incompletely, the deplorable consequences which a fall in the value of gold would entail. It is right to examine whether this revolution would not also present some results of an advantageous character. There is one very easy to comprehend; supposing that the fall of gold be to the half of its value, a proportion that I enounce solely by way of example and for clearness of illustration, it will follow that, at the end of a given time, the raw material of certain articles of luxury, altogether made of gold, will have fallen one-half. Then we shall be able to strike our gold medals at a cheaper rate; the gold snuff-box will be a luxury within the reach of a greater number of purses; and our Cræsuses will be able on their fête-days to adorn their sideboards a little more easily with cups of gold. I say a little more, and that is all; for in these objects the art and design, which form a considerable part of the price, will not have fallen, but the contrary; the fall will be confined to the raw material. Still clearer is it that gilding will not experience a great reduction, for it is not the weight of gold employed in it that constitutes its chief expense. I see no other permanent advantages which a people, free from the burden of a heavy national debt, can hope to derive from this depreciation of gold, after the epoch when the crisis of the transition shall have passed. The advantage is not great, it must be confessed. There are few articles in which a fall to the same extent would not be a greater benefit. What a contrast, for example, with the service that would be rendered to all classes of society by a reduction of one-half in the value of coal or iron, or even of copper or lead! I do not speak of bread or meat, in which a reduction of price to the same extent would produce incalculable effects.

Independently of the facilities which the fall in the value of gold would afford for procuring plate and articles of luxury, into the composition of which this metal enters, a certain compensation must be noticed, which would not be unimportant. Having indicated the classes which would suffer from the fall of gold, it must be added that there would be gainers as well as losers. If the creditor be obliged to give a discharge, on receiving a value smaller than that for which he believed himself assured,—if, for example, the 100 pounds sterling paid to him represent only the enjoyments which he would have previously procured for fifty, he is assuredly a loser; but the debtor benefits to the same extent. The 100 pounds sterling which he will have repaid, will have been procured with one-half less labour or privations. Against the majority of the losses which we have enumerated, there will, then, be a set-off of gain of the same importance. On this point two questions arise, which deserve our attention: the one is whether for society, taken in its mass, there is compensation; and the other, whether equity sanctions the loss which the one suffers, and the gain which the other acquires.

On the first subject, I shall only add a word to the remarks I have already submitted to the reader. Changes which affect deeply, and suddenly, or in a brief interval, a very great mass of interests, are nearly always to be regretted, even when at the same time, and by the same act, a considerable number of persons find themselves deriving advantages. It is for society a perilous trial, especially when the working' population find themselves among the number of the suffering classes; it is, in fact, they to whom patience is most difficult, since they possess the fewest resources. Society would, under these circumstances, have to pass through an ordeal, which, I think, I have justly characterised as revolutionary. If the qualification be just, it enables us to appreciate all the dangers of the transition. With skilfulness, and in a season of tranquillity, a people may pass without disaster through such a trial; but it requires also good fortune. Now, can any one, without presumption, flatter himself that he will possess at any one moment, and enjoy during a succession of years, these three gifts of heaven—tranquillity, skill, and good fortune?

Let us rather insist on the second question, that of equity. It is not without its bearings on the first; for when events are in conformity with right, it is in human nature generally to resign itself to them. On the contrary, indignation and resentment easily take possession of a man when he feels that justice is violated in his person.

Among the results which may be expected to arise from the fall of gold in those countries where this metal forms the sole or the dominant currency, I will recur to one of the most important for the purpose of examining it from an equitable point of view; I return to the case of a proprietor of government stock. Let us suppose the case of an inhabitant of London, living on an income of £1,000 a year from Consols. During and after the depreciation of gold, as well as before, he will receive his 1,000 discs of metal, containing, altogether, 7 kilogrammes and 318 grammes of fine gold; but with this sum he will have only the half of the enjoyments which he possessed previously. Is there or is there not in such a diminution of subsistence anything which can be taxed with spoliation? I do not think there is, in the case of England. For what is the engagement into which that State has entered? By the very fact that England has a gold standard, the creditor to whom the British government owes a pound sterling can claim no more than the quantity of gold, to which the law, once for all, has attached the denomination of a pound, that is to say, 7 grammes, 318 milligrammes. The State is bound to furnish to the creditor for a pound this quantity of metal; it has, strictly, no other obligation. If in paying the British creditor in former times, when the value of gold rose in proportion to other commodities, the government had attempted to deduct from the dividend 2 or 3 per cent, or more, it would have been denounced as an act of spoliation. In the possible case that the mines of Australia, California, and Northern Russia had remained undiscovered till half a century later, and that the productiveness of the old mines had diminished, the English government would not have been justified in reducing the amount of interest, and paying only three-fourths or two-thirds of a sovereign instead of a whole one, under pretext that gold had risen in proportion. The law is the same for the debtors as the creditors. The latter have no claim beyond the quantity of gold which has been agreed upon as forming the pound sterling, if gold, instead of rising, should fall in value. The two parties have run the risk of a variation in the value of gold; and to whichever side the chance turns there is a legitimate profit. Thus, for England, which has the gold standard, strict equity is not violated by the change, unlucky though he be who may prove to be the creditor of the State. There remains, however, a question of social and political propriety on which we shall afterwards offer some observations.

Would the case of France be similar to that of England? Would the former State, by the letter of the law, or in equity, be warranted in profiting by the fall of gold, and paying its debts in a cheapened currency? Can it take advantage of the circumstance, that the 29 centigrammes of gold which in the year 11 were equal to 4½ grammes of fine silver, constituting the franc, appear now for the moment to be of much less value, to pay its creditors in gold? This is a question of good faith, the solution of which, after the statements already submitted, ought not to be very difficult. It would be a violation of justice, because France has a silver standard. In the French currency, silver, according to the preamble to the law of the year 11, is the fixed point, and this fixed point is the guarantee of the equity and honesty of transactions, the security for the preservation of property. Nor is it possible to swerve from this fixed point, without wanting in probity, the rules of which States are bound, even more than individuals, to observe.

If silver had fallen in value, the French government would have been justified in paying its creditors in silver as before. It is in silver that the agreement has been made. The law has declared, once for all, that 4½ grammes of fine silver shall make a franc, neither more nor less. Thus, as was declared by Gaudin, in a passage which I have already quoted more than once:—” He who shall lend 200 francs can at no future time be repaid with less than a kilogramme of silver,* which shall always be worth 200 francs, and never be worth more or less,”

Nobody can say that some day silver may not also undergo a great fall, brought about by a production which should be distinguished by the two following characteristics: of being much greater in comparison with the employments to which it had hitherto been applied, and of being produced under more favourable circumstances, that is, at less cost per kilogramme for the metal obtained. There are strong reasons for thinking that if the United States annexed Mexico, and penetrated further into the regions of Central America, this event would not be of tardy accomplishment, under the auspices of a race so industrious and so enterprising as the Anglo-Saxons,†

It may be doubted, however, whether, unless under circumstances of a most extraordinary character, the change in the case of silver could be so sudden as it has been in that of gold. The nature of the argentiferous deposits, the obstacles they offer to the miners, and the complicated processes by which the metal is abstracted from the ore, combine to reject the hypothesis of a rapid change in the value of silver. Nevertheless, a fall in silver is an event to be anticipated, an event even probable at no very distant date, and it offers to the French government a chance, and the only one, of profiting legally at the expense of its creditors.

Owing to the discovery of the new gold mines, (if those mines should continue to be what they have been up to the present day,) a time will come when a change will come over the British treasury, as If some genii, an enemy of its creditors, had spirited away their dividend warrants, and substituted others of only half their value. Not that the number of pounds sterling due to them as principal, and of which the interest is counted to them every six months, will be diminished; not that the quantity of gold contained in the pound sterling will be lessened; but the British treasury will henceforth draw from the taxpayers' each pound sterling, with as little difficulty to them, as it previously took to pay a half sovereign; and the unlucky fundowners will obtain for the pound only half of the enjoyments which it now procures for them; and yet, in strict right, they will have no reason to complain. As for the French treasury, it will have no right, unless by a flagrant iniquity, to expect any similar profit from the discovery of the new gold mines.

[*]On the 1st January, 1857, the capital of the funded debt amounted to 8,031,992,446 francs (£321,279,700). The interest of the sinking fund amounted to 25,462,159 francs (£1,018,486), which is equal to a capital of about 750 millions (£30,000,000). The number of entries in the great book was 1,028,284. The interest, including that of the sinking fund, amounted to 299,099,242 francs (£11,963,970).

[*]On the Precious Metals, Vol. II., Chap. XX.

[†]Letter to the Chancellor of the Exchequer, on the resolution to which the German States have come to adopt the silver standard, and on some circumstances which render an invariable measure of value of more importance to England than to any other country.

[*]On the Precious Metals, Vol. II., p. 103.

[*]Of the standard of nine-tenths fineness.

[†]I have alluded to this subject in the third volume of my Political Economy, Section III., Chapters I. and II.