Front Page Titles (by Subject) CHAPTER I.: case of a state like england, where gold is the standard, and where there is no other money but gold. - On the Probable Fall in the Value of Gold: The Commercial and Social Consequences which may ensue, and the Measures which it invites
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CHAPTER I.: case of a state like england, where gold is the standard, and where there is no other money but gold. - Michel Chevalier, On the Probable Fall in the Value of Gold: The Commercial and Social Consequences which may ensue, and the Measures which it invites 
On the Probable Fall in the Value of Gold: The Commercial and Social Consequences which may ensue, and the Measures which it invites. Translated from the French, with preface, by Richard Cobden, Esq. (New York: D. Appleton and Co., 1859).
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case of a state like england, where gold is the standard, and where there is no other money but gold.
Such, then, is the perspective which presents itself to the inhabitants of a certain number of States, and particularly of France and England. Simultaneously with the fall of gold, there will be a period of great suffering for a very large number of interests worthy of consideration and sympathy, a period full of danger to the tranquillity even of States, and to the regular progress of society. In England, an inflexible law seems to warrant these hardships and sufferings. In France, which is threatened with the same danger, we find a legislation which was matured half a century ago, an intelligent, honest legislation, in the name of which the aggrieved interests might loudly protest, and declare that in them a sacred right had been denied and violated. In these circumstances what ought to be done?
In the countries where gold is the monetary standard, as in England, it is not easy to indicate what should be done; it may even he contended that there is no ground for doing anything. Yet, even in England, some persons have put forth the advice that the standard should be altered, and that silver should be substituted for gold. They ground their opinion primarily upon the plea of principle, in maintaining that gold having ceased for an interval of time, which may possibly be rather long, to satisfy the essential condition of having a value relatively stable, it thereby loses its aptitude for the functions of money.
A change in the standard is a serious act, to which we have no right to resort till after the gravest deliberation, and until we are well assured that we have reason and justice on our side, as well as the highest and most legitimate public interests. Still, the substitution of one precious metal for another, for the important attribute of a standard, would be far more easy to justify in the case of abandoning the metal which was threatened with or had already experienced a gradual fall, than if it were proposed, as has been done by some persons in France, to divest of the quality of the standard a metal which preserves a relatively stable value, to bestow it upon another, the value of which is undergoing a fall. Still, a change of standard, even under the circumstances in which gold would be replaced by silver, in England, at the present time, would be open to very serious objections. Debtors of every kind, to whom this substitution would necessarily be prejudicial, would say, not without justice, that if it be true that in the present state of the law, as regards the standard, a fall in the value of gold must turn to their advantage, it is equally true that a rise, if it had taken place, would have been to their detriment, and to the benefit of their creditors: if fate has decided in their favour, it is for their creditors to submit, as they should them-selves have done in the opposite event: and, they might add, have not there been periods in the modern history of England when the debtor has had to suffer from the rise in gold, either by comparison with its past value, or by comparison with the paper money which he, the debtor, had received when he borrowed in the period from 1797 to 1821, and which he has since the latter date had to repay in gold? and has not this been attended with precisely the same result as if the theory of a rise in the precious metals had been realised? If, in these circumstances, they had demanded a change in the monetary system of the country, they would certainly not have been successful. By the same reason, may they say, there would be no ground now for entertaining the remonstrances which the creditor might offer on the occasion of a depreciation in gold.
An argument which, in the eyes of the public authorities of England, will weigh with great force, and incline the balance towards the maintenance of the present standard, is furnished by the enormous amount of the public debt, the annual interest of which amounts to about 28 millions sterling, or 700 millions of francs. It is a burden which, whilst it remained nominally the same, would, in fact, be alleviated to the extent of one half to the taxpayer, provided that the present standard were preserved whilst the value of gold had fallen in the above proportion; and, in effect, when once the fall in the metal was accomplished, it would be as easy, on this assumption, to pay two pounds sterling of taxes as one pound at the present time. A less decided reduction of the heavy burden of the national debt, would, in all probability, be a powerful argument with such an assembly as the parliament, which leans naturally in the direction where relief may be had for the contributors to the revenue, and which in the present case would have powerful reasons for justifying such a course.
With regard, however, to this advantage, which it would be warranted in strict right to claim for the taxpayer, parliament ought to weigh the mass of inconveniences, and even of perils, which must necessarily result from the maintenance of a currency in a decided course of depreciation. I have indicated what are the changes which a fall in the metal, of which money is made, might occasion to a multitude of interests. It ought, I think, to be enough to kindle the emotions of even a statesman possessed of the firmness which distinguishes peculiarly the governments and people of England. But yet, it would be easy to add to the generalities which I have already presented, other facts springing from the social life and habits of England. The part performed by the British funds is very extended. Consols are the investment of a mass of capitals which are worthy of the particular solicitude of the legislator. The funds, which are held by trustees, or under the guardianship of the Court of Chancery, and which constitute the fortune of a multitude of minors, are all placed in the public funds, or on mortgage, which amounts to the same thing; I mean, runs the same risk. The endowments of a multitude of churches, schools, hospitals, and valuable institutions of all kinds, are also invested in the public funds. In a great number of cases, the fortunes which a father leaves to his younger children are represented by sums of money charged upon his estate, the interest of which the oldest son discharges. The number of persons who live upon life-incomes, or who have already made payments with a view of some day securing one, is very considerable in England. Life assurance, with a view of securing to a person a certain income in case of such or such an eventuality, is practised by the English to an extent of which we have no idea in France. The consequence is, however, clear. Under these various forms, and even under others, myriads of existences would be troubled; the very foundation of property would be assailed in the mode of its partition among children; habits worthy of encouragement, such as assurances of lives, with their multiplied combinations, would be destroyed. The custom of making investments in the public funds, which is eminently favourable to the credit of the State, and at the same time tends to perpetuate prudence among the people, would be deprived, during a considerable lapse of time, of the advantage which it now offers of guaranteeing for the future a certain degree of comfort,—thus necessarily weakening, if it did not destroy, this motive to accumulate. Taking into account the whole of these circumstances, and the discouragement which would be thrown upon habits which are so favourable to society, and even to the British treasury, there is enough to make parliament pause even when in presence of the temptation which an effective reduction of the public debt could not fail to exercise.*
[*]These considerations, among others, are presented with great force by Mr. James Maclaren, in the work which I have already cited.