Front Page Titles (by Subject) 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. - 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 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. - 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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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.
In the course of this work I have already offered some explanations of the various operations on the currency which the ancient regime punished with the utmost rigour. This scaffolding of penal laws, pronouncing almost in every article the pain of death or the galleys, accompanied with confiscation and fines, generally of enormous amount, was overturned, after the Eevolution, by the precise dispositions of the laws and ordonnances, or implicitly by the effect of the new direction, eminently conformable to reason, as well as to the experience of ages, which the legislation upon money has taken since 1789.
In the opinion of the moderns,—an opinion which has passed into the laws of the great civilised States, gold and silver are commodities which, in exchanges, pass for the value which belongs to them. The trade in these metals is free, like that of other merchandise. A piece of coined money is a certified ingot, as to its weight and fineness,—and the certificate consists in the impressions which it has received. Between this sort of ingot and an ordinary ingot, the difference of value is restricted to the expense which attends the affixing of the certificate, including the previous operation by which the metal is brought to the legal fineness, and these expenses are very trifling. Not only is the trade in the precious metals, whether coined or in ingots, perfectly free in the interior of States; but it has been acknowledged even in countries which have maintained a very restrictive system of international commerce—France is in this predicament,—that the importation and exportation of gold and silver, both in coins and ingots, ought to be perfectly free. Inasmuch as the precious metals, whether coined or not, are merchandise; it follows, that the private individual who has received a piece of money can do with it what he will, and, consequently, can melt it. The only use of it which is interdicted to him is to put it in circulation again after having diminished its weight by “sweating,” or otherwise, because the quantity of metal which it contains is no longer consistent with its impression, and to pass it to another for legal weight would be a deception as to the quantity of merchandise, or, indeed, a sort of forgery of a public document. In a word, the modern doctrine on the subject of money—a doctrine accepted not only in the writings of philosophers, but also in the codes of the great civilised States,—is in almost every way the very opposite of the ideas of the ancient regime.
However, the Moniteur, about a year since, contained an announcement which would seem to indicate that the government considered as still in force the laws and edicts of the ancient regime relative to money, and especially against the following operations:—
Proceedings were actually commenced, at the end of the year 1857, against some of the principal moneychangers of Paris, who resorted, without concealment, to these practices. It is true, that the proceedings were almost instantly suspended; doubtless, because the government, after a more careful inquiry, found that the statements inserted in the Moniteur were very doubtful. But the commission appointed in 1857 by the minister of finance, appears to have been inclined to give some validity to the revived pretensions of the ancient regime, of which the official journal had made itself the echo. It alluded to the point whether the old Draconic laws, which were in existence prior to 1789, were still in force, without solving the question, and it expressed itself in severe terms upon the whole of the operations referred to above; and it has been seen in the preceding chapter that, with regard to some of them, it recommended the enactment of penalties if none already existed. With such tendencies, avowed and patronised by an important commission, a few more observations respecting these operations may not be superfluous.
Let us take successively the acts in question; and first, let us speak of billonage or trihuchage, which we will call by the modern and more simple and significant name of picking or selecting: we will speak of it without separating it from the remelting, which is the object for which the coins are generally selected.
The reader has seen, above, that the “picking,” such as was begun to be practised in France on a large scale, about 1825 or 1830, had for its object to withdraw from the circulation, for profitable use, the pieces of 5 francs, which, owing to the imperfection of the ancient processes both for proportioning the quantity of silver, and for extracting the gold from the ingots of this metal, contained a value superior to 5 francs. We think we have shown that this special case of selecting, dating about thirty years ago, and of which we are now speaking, was not merely an operation licit in itself, but useful to society; and that apart from these accidental and temporary circumstances, and with money well made, that is, where the standard of weight and fineness fixed by law had been observed, the practice of “pieking” would have been impossible; from whence it follows that, if the government wishes to prevent this practice, it has the power of doing so; it has only to take care to fulfil its duty, which is to see that the money is struck in conformity with the law.
Nevertheless, the advocates of the resurrection of the edicts of the ancient regime on the coinage, with the view of justifying the severities which they call for against “picking” and melting the coins, have represented that these operations are nothing less than the perpetration of a robbery, to the prejudice of the State; for, according to them, and one of the organs of this opinion has said as much in round terms, money is in a certain sense public property, from which they draw the logical consequence that a private individual can not touch it without committing a fault or crime. Nay, more, these acts would constitute the crime of treason, inasmuch as they would be a want of respect for the work of the State. Such words have actually been employed.
How, and in what respect, can money be public property? I have exchanged my merchandise, say, for example, the hectolitre of corn, for another commodity, which shall be 100 grammes of silver of nine-tenths fineness, and these 100 grammes consist of four discs of 25 grammes each, commonly called 5-franc pieces. Why should the 100 grammes of silver be public property more than the hectolitre of corn? Is it because the public has need of discs making 100 grammes of metal? But it seems to me that the public has greater need of the corn. Is it because these discs have been by the care of the State made of a certain weight and fineness, and certified as such by the impressions stamped on the obverse and reverse? But the very moderate cost of these operations has been paid to the. directors of the mints who have performed them; the private individual who brought the ingots, from which the discs were produced, to be coined, paid the coiner. Besides, the State has also certified the hectolitre of corn, since it has verified the measure through which the corn has passed. If the piece of money which I carry in my pocket is in a certain sense public property, or the property of the State, there is no form of riches, no species of property which is not in the same predicament; for there is none which does not contribute to the national prosperity, to assure our existence or subsistence, and which has not more or less the guarantee of the State, were it only by the public force and the courts of law which check or prevent deception in the quantity and quality of merchandise. This would be especially true, in a certain sense, of landed property, which, in fact, by the taxation which it supports, may be considered up to a certain point as belonging to the State. Inasmuch as the land pays on an average (in France) the eighth of its revenue for income tax, it may be said to that extent to be the property of the State. If, then, it were finally admitted that money is in a certain sense public property, and that, in consequence, those who receive it in payment are prohibited from disposing of it as they please, the writers who at all times, and under all circumstances, are so fond of appealing to authority, would have no great difficulty in proving that the State is the co-proprietor of every real estate, and that the assent of the government is necessary before any landowner can alienate or even improve his property. This lands us in simple communism. Nor ought it to surprise us, if we commence with a programme in which are inscribed the inventions of the Eegency, the reminiscences of the system of Law, and the ordinances of the worst days of Louis XIV., a prince who, if he exhibited a grandeur of genius and character, was still an unmitigated despot, and one who showed less respect; for the rights of property than any other sovereign who has occupied the throne of France.*
A piece of money in the hands of its owner is his private property as much as his field, his furniture, his food, or his clothing. The holder may cast it into the river; how much more reasonably, then, may he be entitled to select from the hundred 5 franc pieces, which he has in his cash-box, ten pieces to be melted, if such should be his interest or pleasure. It were to subvert all sound doctrines respecting property, to admit that the State retains any right whatever over money, excepting it be to require that it should constantly possess its prescribed weight and value; because, money being a measure, as well as a merchandise, it is the duty of the State to see that it remains in conformity with its type, the same as the metre, or the gramme, or the litre.
As to the imputation of a want of respect for the work of the State, with the best possible intention, I cannot understand it; but it seems to me that they who put forth this grievance would be better employed in considering the respect due to the rights of private property. Are they to be understood to mean that coins ought to be assimilated to public monuments, and that he who degrades them by throwing them into the crucible, deserves the same punishment as the person who should have mutilated a statue in a public place? But there is nothing in common between a piece of money, which is only a certified ingot, and a statue, which the public gratitude may have erected to a great man; the artistic portion is quite an accessory to the coin, and moreover the piece of money is private property, whilst the statue belongs to the community.
But, perhaps, in alleging that to melt the money is to show a want of respect for the work of the State, it is meant that as it bears the effigy of the prince, to destroy that effigy would be an outrage on the sovereign. This view would have the disadvantage of being borrowed from the official doctrines of the evil days of the Eoman Empire, when the Emperor was the object of a hypocritical idolatry, and when the cases of high treason were multiplied indefinitely. But if it be a crime to destroy, by remelting a piece of money, the effigy or the armorial bearings of a prince, it will also be a crime to tear a stamp which shall represent the one or the other; and to be indictable at the assizes, it will suffice to have thrown into the fire an old sheet of stamped paper.
The pieces of money which pass through the hands of the State, are, during the time that they remain in the possession of the receivers, public property, or property of the State. The State has then clearly the right to make such use of them as the public authorities shall have deemed advisable; and thus, for example, after 1825, it might have subjected the 5 franc pieces, with which the public treasuries were gorged, to the operation of refining, and so have secured the profit which has fallen into the hands of the refiners. It may even be observed that the movement of the taxes brought naturally, and without effort, an immense number of pieces of 5 francs into the hands of the agents of the State, whereas the refiners were, and are, obliged to procure them at much expense, and even by the payment of premiums. In this point of view, the operation would have been easier for the State than any one;* but even in the very narrow point of view as to the profits to be derived from the refining of the 5 franc pieces, to extract the small excess of silver, and the minute proportion of gold which, thirty years ago, were left in them, the right of the State does not exclude that of individuals. The one and the other occupy similar ground; they have the same point of departure and the same goal. They co-exist for the same reason, and, under this aspect as under every other, there is no ground for saying that the operation of “selecting” and remelting is a robbery perpetrated to the prejudice of the State.
But it is insisted that, if private individuals are free to select the coins, so as to separate the heaviest for remelting them, the light pieces only will be left, and the currency will be vitiated. To console those persons who feel this apprehension, it is only necessary to remark, that with money properly made, that is to say where the coins shall be in conformity, both as to weight and fineness, with the requirements of the law of the year 11, the speculation of “selecting” and remelting is no longer to be feared, since those who undertook it would assuredly be ruined. There is reason to believe that, at the present time, thanks to the perfection at which the mechanical and chemical arts have arrived, the limits of weight and fineness might be diminished—especially the former,—which would still further tend to render the operation impossible. Doubtless, when the coins have circulated for a long time, they lose a sensible fraction of their weight. The careful experiments of Messrs. Dumas and De Colmont, prove that a 5 franc piece, which has passed from hand to hand for a century, will have lost a gramme and a half, making about 3 centimes; thus the private individual, who wished to export the silver coins after having remelted them, would avoid the old pieces, and would make a selection of those only which were new and almost perfect. In this way, it is true that, if the government has taken no precaution for withdrawing the coins which are worn with time, selecting and remelting will have the effect of leaving only those pieces which are of diminished weight in circulation. But does it follow that, to prevent this process of vitiating the currency, the best mode is to invent new penalties, or to revive the old edicts against “selecting” and remelting?
It is not necessary to resort to the argument that the power of “selecting” and remelting pieces of money is the natural and necessary corollary of the rights of property. Apart from this consideration, however decisive, it would he easy to cite a score of cases in which the operations of “selecting” and remelting are of palpable convenience, and of an evidently legitimate character. A jeweller wishes to make use of some of the silver money in circulation to meet the necessities of his business. It would be unreasonable to interdict him from taking in preference the heaviest coins; and, however much it might be forbidden, he could not be prevented from doing so. The merchant who wishes to discharge a debt abroad with silver specie, will in the same manner prefer the coins which are of full weight, because the foreigner is too shrewd to accept in any other way than by weight the pieces of money that are sent across the frontiers.
In truth, we are dwelling too long on these ideas, which public opinion has already condemned, and which have for ever disappeared from the codes of all civilised States. We know what was the origin in former times of the interdicts levelled against the melting of money, and the “selecting” which usually preceded it. The spirit of cupidity and spoliation dictated that prohibition in times of ignorance, and it was afterwards perpetuated under the financial pressure to which unscrupulous governments have been constantly exposed.
Let us call to mind a remark which has been made, that to prohibit the “selecting” or remelting of coins, became a useless severity from the moment that the exportation of money was permitted. It was thenceforth only necessary to transport the specie across the frontier to be enabled to carry out the remaining process with impunity. There is, then, every kind of motive why the laudable idea of maintaining the integrity of the French coinage, and its conformity with the type determined by the law, should not be diverted into a question of proceeding with rigour against the operations of “selecting” and melting. It is otherwise that it must be realised, and it is in another direction that the problem must be solved. To carry on the government with a penal code, is consistent enough with barbarous nations, where the ruling power practises unmitigated despotism at all times, and, between two courses, prefers that which is the most convenient for its idleness and ignorance; but it is not becoming to those civilised States where the government professes to respect their citizens in their persons and property. With civilised nations, the penal code should reserve its severities for acts which the conscience condemns; but it must not be allowed to strike with the sole object of sparing the government the vigilance and care which are among the number of its imperative duties.
The case thus stated, where is the difficulty which we shall now encounter, and whence does it arise? With time, an inequality may and must inevitably manifest itself between pieces of money of the same denomination. Some, which are old and worn with long circulation, will weigh less than the others which are new, and it is feared that if, in these circumstances, the practice of “selecting” he permitted, private individuals will make a profit out of the withdrawal of the latter, so that the former only will remain in circulation. Very well. It is well to foresee the fact, for history attests that it has frequently, if not always, occurred. But it is also proper to ask if the motive for which private individuals put aside coins of full weight, is not precisely the existence in juxtaposition of the pieces of light weight which the vicious or incomplete wording of the law, or its unwarrantahle interpretation, would assimilate to coins of full value. The cause of the evil is this favour which, in contempt of principle, it is attempted to accord to coins of light weight. Let the government and the legislator, acting up to their mission, banish from the circulation these defective coins, or authorise them to pass in payments for only what they are worth, and from that moment no one will have any further interest in separating the pieces of full weight. In a word, the true solution, that which does violence to no one, that which troubles no citizen in his industry and liberty, is either to withdraw the light coins, or to declare by law that they shall only be taken in payments according to their weight.
It may not be useless here to remark, that in conformity with what has been done in other countries, where the law has declared that light coins should only be taken for their weight, it would be well, in case such a measure should be adopted in France, to admit that, in small payments up to a certain sum, the pieces should pass for their full nominal value. The English law of 1774 upon the silver currency fixed this limit at £25 sterling (about 630 francs). We might, by analogy in France, fix the limit at 500 to 600 francs. It seems, however, that it would be better to name a still lower sum, 100 francs, for example.
As a general proposition, the withdrawal of the light coins would be easy. We know that in the United Kingdom, the Bank of England takes charge gratuitously of this service, and supports the expense. She weighs all the money which the movement of trade brings to her counter. For this purpose she has a machine which effects the object very skilfully. Similar machines might be used in France, at the bank as well as in its branches, and in the offices of the principal Receivers General,. They would thus intercept every piece which should be below the standard weight. If a machine of this kind were kept at every mint, for the verification of the coins which issue from the balance, the necessity for the establishments which we have just enumerated would be notably simplified. The expedient which consists in deciding legislatively that coins should only be received by weight in payments beyond a certain sum is quite practical, and has for authority many precedents. This would, perhaps, be in itself sufficient. However, for permanent exactness in the monetary system, which is important in the rapidity of transactions, it would be well to combine this act with the withdrawal of the light coins, by establishing weighing machines in the public establishments through which the money flows.
Experience, in all nations, has shown the impossibility of maintaining in parallel circulation, under the same denomination, coins of full weight and fineness, and pieces of inferior value, because it is contrary to the very nature of things to which we must all conform ourselves. The light pieces have always and everywhere expelled those of full weight and fineness, and to keep the latter in circulation it has been always necessary to throw the others into the crucible of the Mint, or to give them a circulation according to their value. On this point, the annals of England may be consulted with peculiar interest.
In France, at the present time, the withdrawal of the light coins, which have accumulated since the year 11, would only be a serious operation as regards the 5 franc pieces, and we may form an approximate estimate of what it would cost so far as they are concerned. The wear has not yet had time to be very considerable; the French and foreign refiners have withdrawn from the circulation, from the motives already explained, the chief part of the coins anterior to 1825, and even to 1830. The oldest pieces have, therefore, been hardly a quarter of a century in circulation; the corresponding loss would not be more than eight centimes per piece. Upon the sum of a milliard (£40,000,000), which would have the average circulation of about fifteen years, the loss would be 48,000 kilogrammes or 9,600,000 francs (£384,000). There would also be the expense of melting and recoining, which, according to the tariff of the Mint, would, supposing it to be general, amount to 7,500,000 francs (£300,000). We thus reach a total expense of 17,100,000 francs (£684,000). If the mass of 5 franc pieces remaining in France at this time, amount, as some persons suppose, to 1,500,000,000 francs (£60,000,000), the expense would amount to 25,650,000 francs (£1,026,000), always with the supposition, evidently forced, that the recoinage would be general. The sum is large assuredly, but the advantage of having thenceforth a sound currency is well worth it. These charges would be spread over two operations, or three at the utmost, because in cases of this kind success depends on rapidity of movement. It must be added that the sum of 25,650,000 francs is the maximum, which for several reasons would never be reached. It is likely that for an undertaking so vast, the State would come to an agreement with the directors of the Mint for a reduction of the tariff. In the next place, the coins of a date anterior to 1825 and 1830, which are still in circulation, would yield a profit rather than a loss. And, besides, some of the pieces would be found above the legal weight and fineness, and consequently would not require to be returned to the crucible.
Under William III., a century and a half since, parliament voted eagerly £1,200,000 sterling to re-establish on a sound basis, that is in conformity with its type, the silver money which had been worn by circulation or excessively “sweated,” Weight for weight, £1,200,000 would make 30,000,000 francs of our money; but taking into account the greater value of silver at that time, it would be equal to 70 or 75 millions of francs of our day.
A word or two upon the purchase and sale of coins at a premium. Latterly, some persons have made violent efforts to incriminate those who are engaged in these operations. The vehemence with which they are attacked is hardly explicable, inasmuch as they follow a commercial pursuit, that of the money-changer, perfectly understood, and duly licensed. In every age and in all countries this commerce has existed, because it is useful and necessary, and because it is not condemned by any of the principles on which society is founded. Ignorant governments have often tried to subject it to unjust restrictions, opposed to the public interest, but they have always failed in their efforts. In France, previous to 1850, every one who went on a journey bought gold at the changers at a premium of about 10 or 20 centimes per piece of 20 francs; neither justice nor the government frowned on these operations; everybody admitted that they were quite practical and legitimate, both on the part of the changer who sold, and the traveller who bought. At present, the premium has passed from the gold to the silver; by what sorcery is it that what was formerly innocent should now become criminal?
A fact, however, has occurred, the announcement of which has cooled the ardour with which certain persons have set about demanding the application of the edicts of the ancient regime agrinst the purchase and sale of coins at a premium, and also against the trade in ingots, as often as they were at a premium in relation to the tariff of the Mint. It has been observed that the Bank of Trance, which is treated with merited consideration by the State, gave itself up to this commerce on a grand scale at the very moment when it was denounced with so much hubbub, as a crime against the rights of the State. The monthly returns in the Moniteur, upon the subject of the Bank of France, contained a prominent announcement during the latter part of 1855, and the whole of the years 1856 and 1857, in the following words: Premiums paid for the purchase of gold and silver bullion. These transactions were mostly in ingots, but they also included coined specie, which even for the Bank were preferable, inasmuch as the Bank purchased ingots only to send them to the Mint. Besides, there is no way of distinguishing them: the trade in ingots and that in coins are inseparably connected; they are so practically, as well as in the ideas of those retrograde writers who have astonished the public with their passionate appeals for the intervention of the government. The old edicts were equally merciless towards the one and the other of these operations. The edict of the 24th October, 1711, the application of which has been demanded recently in France, contains, in the very article which prohibits the melting of money by private individuals, an interdict against the purchase of gold or silver bullion at a higher rate than the tariff of the mints, and the penalty consisted of confiscation, with the addition of “an arbitrary fine “ (I quote the words of the text) "ivliich shall not be less than the value of the specie confiscated,” At this rate, the Bank ought to be condemned to pay, for confiscation and fine, a fabulous sum, something like 2 milliards (£80,000,000), if not more: for it probably purchased more than a milliard in the course of the three years 1855, 1856, and 1857. In virtue of the salutary principle of equality before the law, it would have been impossible to have summoned before a magistrate the money-changers, without placing beside them at the bar, the governor and directors of our great financial institution.
On the subject of the exportation of specie, of the penalties with which it was formerly visited, and of the idea which has been recently put forth, of either reviving them in full vigour, or with some mitigation, or of substituting for them a custom-house duty, I will add nothing to that which has already been said previously (Section V., Chap. V.), and again, more specially, in the preceding chapter.
[*]In one of the works which were published by the members of the Academy of Moral and Political Sciences, in 1848, during the commotion caused by the Revolution of the 24th February, M. Troplong brought out conspicuously the communistic character of the opinions of Louis XTV. on property, and the contrast which they present to the ideas which formed the basis of the Code Napoleon. On this subject the writings themselves of Louis XIV. may be consulted. Some very significant extracts will be found in M. Henry Martin's History of France, VoL XIII., p. 259, edition of 1858.
[*]The administration, however, refused to embark in the undertaking, when advantageous proposals were addressed to it, for taking the place of the private refiners, and refining the 5 franc pieces paid in for taxes. These proposals were made several years previously.