Front Page Titles (by Subject) CHAPTER III.: the measure here recommended is a necessary complement of the law of germinal, year xi. - 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 III.: the measure here recommended is a necessary complement of the law of germinal, year xi. - 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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the measure here recommended is a necessary complement of the law of germinal, year xi.
I beg the reader to observe that the combination which has been discussed in the preceding chapter, relative to a gold currency, ought not to be represented as, in any degree, the negation of the law of the year 11. It is, on the contrary, its complement, the necessity of which has been demonstrated by experience. The object which the minister of finance, Gaudin, had in view, and which the legislator decided resolutely to carry out, was to prevent all dispute between private individuals relative to the value of a gold currency in francs, or, in other words, in pieces of silver, since the law has defined the franc to be a weight of silver agreed upon once for all. The means employed was a legislative fixation, which should be conformable to the commercial value of the two metals, in their relation the one to the other. The adversaries of Gaudin, as may be seen by the reports of Berenger, vainly objected that this fixation by the law appeared superfluous, and cited some States where gold circulated simultaneously with silver without difficulty, without any intervention from the legislative or administrative authority. The majority of the Council of State, and afterwards the Tribunal of the Legislative Body, both of which deliberated very maturely, thought that, to insure the parallel circulation of gold and silver coins, a fixation by law of the relation existing between the two metals was the best course to follow.
It was well known, and Gaudin knew it perfectly, as the reports emanating from him prove, that the relation of the value of the two metals is mobile; it has not ceased to vary more or less since the origin of civilisation. It was well understood that if gold, for example, fall in value in relation to silver, so as to be no longer worth fifteen and a half times its weight of that metal, the proportion recognised in the year 11, the consequence is, that it will become superabundant in the circulation, and that silver, on the contrary, will gradually disappear; since the natural tendency of debtors can never fail to be, to make their payments with the cheapest commodity: just as in the case in which gold should acquire a superior value to that which it possessed previously, gold would disappear. Phenomena of this kind have been observable in all times and in all countries. Gold and silver, like all other commodities, shun the markets where they are not taken for their full value, and flow towards those where they meet with better terms; consequently, it was well understood, and it is intimated in twenty passages of the documents which served as the preparation for the law, as well as in the exposé des motifs, that whenever a reciprocal change between the two metals should be manifested,* the gold currency should undergo a modification.
But the elements were wanting necessary for determining the extent of the change of the reciprocal value between the two metals, which might derange the monetary mechanism, as it was then agreed upon, and which might be of a nature to prevent the parallel circulation of gold and silver coins. It was not then thought necessary to say,—there shall be a recoinage whenever the relation of 1 to 15½, which now exists between the two metals in the market, and which is for the present given as the basis of the fabrication of the gold coinage, shall have been modified one per cent, or two, or three, or more or less. It was understood, and in that we have a proof of the good sense which is one of the qualities of the legislature, that it was left to experience to decide. It was agreed that they should wait until the signal was given by events: the word is Gaudin's, as may be seen in his first report. He trusted to the intelligence of future governments, to their good faith, and public spirit, for comprehending the language of events.
It is thus that it was left undetermined, in the system of the law of the year 11, by any positive sign, when the day would come for recoining the gold pieces, and changing the proportion of metal which corresponds with a franc. It is this indeterminateness which furnishes the excuse, or pretext, for the tolerance with which gold is now treated, as if it continued to be worth 15½ times its weight in silver,—a tolerance which falsifies our monetary system, and which threatens to open the door to the inconvenience and injustice which I have attempted to explain.
The measure which has been indicated in the preceding chapter has for its object to put an end to this deplorable indeterminateness, while still remaining faithful to the idea adopted by the legislator in the year 11,—that there should always be a legal fixation of the relative value of gold and silver, but also never forgetting the engagement which was at the same time entered into by the legislator when he said, in his expos4 des motifs, that the monetary system of France would henceforth offer “a guarantee for the fulfilment of commercial transactions and the conservation of property which we do not see” (they could say so in the year 11) “in the monetary legislation of any other people,”
[*]I have already remarked above that the fact resulted from the very context of the law.