variations of supply and demand over a larger area, instead of leaving each metal to be affected merely by its own accidents.

Imagine two reservoirs of water, each subject to independent variations of supply and demand. In the absence of any connecting pipe the level of the water in each reservoir will be subject to its own fluctuations only. But if we open a connection, the water in both will assume a certain mean level, and the effects of any excessive supply or demand will be distributed over the whole area of both reservoirs. The mass of the metals, gold and silver, circulating in Western Europe in late years, is exactly represented by the water in these reservoirs, and the connecting pipe is the law of the 7th Germinal, an XI, which enables one metal to take the place of the other as an unlimited legal tender.

The Demonetization of Silver.

M. Wolowski has earnestly warned Europe against the danger of abrogating the law of the double standard, and demonetizing silver. Germany, in adopting a gold standard, is causing a considerable demand for gold, and at the same time throwing many millions of silver coins upon the market. Austria, Denmark, Sweden, and Norway are likely to follow her example. If other countries were to insist upon suddenly having a gold money, it is evident that gold would tend to rise in value compared with silver, which might be largely depreciated. If France, Italy, Belgium, and other countries now

possessing theoretically the double standard, were to allow the free action of their monetary laws, the depreciated silver would flow in and replace the appreciated gold, so that the change of values would be moderated. M. Wolowski asserts that if this compensatory action be suspended, and the demonetization of silver be extended, there must ensue a disastrous rise in the value of gold, thus rendered the sole standard of value. All debts private and public will be legally due in this metal, and all burdens will be greatly increased.

Within the last year or two the predictions of M. Wolowski may seem to have been verified in some degree. The price of standard silver, which was at one time 623d. per ounce, has already fallen as low as 574d. while the demonetization of silver in Germany is only partially accomplished. The whole effect of the great discoveries of gold was only to raise the price from about 593d. to a maximum of 621d., while the double standard system freely worked; but since its action has been, as we shall see, suspended, the minting operations of a single government can affect the price in a greater degree.

Agreeing that M. Wolowski is entirely correct in an abstract point of view, and is justified to some extent by the course of events, I must adhere to the opinion which I expressed at his request in 1868, and which was partially published in his volume, "L'Or et l'Argent" (p. 62).

The question seems to be entirely one of degree, and in the absence of precise information is quite indeterminate. If all the nations of the globe were suddenly

In the New World, Peru, Ecuador, and New Grenada, profess to have the same system.

A few years ago a very considerable part of Europe might have been classed as retaining the ancient system of a single silver standard, with gold coins circulating, if at all, at varying rates, as commercial money. The whole of Germany, north and south, together with Austria, the Scandinavian kingdoms, and Russia, belonged to this group. Owing to the changes already mentioned, only Austria and Russia now clearly represent the silver standard in Europe, and even Austria has begun, since 1870, to coin gold pieces of eight and four florins, the same in weight and fineness as the French gold twenty- and ten-franc pieces. By an imperial decree, dated Vienna, 12th July, 1873, it is ordered that the French, Belgian, Italian, and Swiss gold pieces of twenty, ten, and five francs shall be internationally accepted in the Austro-Hungarian empire in the ratio of eight gold florins to twenty francs of gold coin of the other nations. Nevertheless the silver standard practically prevails over a large part of the world. The vast populations of India and China, Cochin China, the East Indian Islands, portions of Africa and the West Indies, Central America and Mexico, have a currency mainly consisting of silver coins, either rupees as in India, sycee bars as in China, or silver dollars as in many other places.

The gold standard has thus made great progress, and it will probably continue to progress. When the United States return to specie payments, they will certainly adopt gold, and Canada, whose currency can hardly be

classed at all at present, must do the same. The Latin nations, having once abandoned the double standard in practice, are not likely to return to it, and Austria must follow. An extensive monetary change is hardly to be expected in Russia, although it is very remarkable that in the province of Finland, a part of the empire highly distinguished for intelligence and good education, Russia has positively admitted the franc system and its decimal subdivisions, the Finnish marc or quarter-rouble having the precise silver weight and value of the franc, lira, and peseta. A great step towards a future international coinage is thus effected. Like changes are impossible among the poor, ignorant, conservative nations of India, China, and the tropics generally. Hence we arrive, as it seems to me, at a broad, deep distinction. The highly civilized and advancing nations of Western Europe and North America, including also the rising states of Australasia, and some of the better second-rate states, such as Egypt, Brazil, and Japan, will all have the gold standard. The silver standard, on the other hand, will probably long be maintained throughout the Russian empire, and most parts of the vast continent of Asia; also in some parts of Africa, and possibly in Mexico. Excluding, however, these minor and doubtful cases, Asia and Russia seem likely to uphold silver against the rest of the world adopting gold. In such a result there seems to be nothing to regret.

CHAPTER XIII.

TECHNICAL MATTERS RELATING TO COINAGE.

In this chapter I propose to consider several minor points relating to the construction and regulation of metallic currency. Although the first principles of money are simple, it is surprising how many little details have to be considered before we can attain the maximum of convenience. We have already discussed the selection of metals to be employed, the modes in which they may be combined into a system, the regulations as to issue, etc. In this and the following chapters we still have to consider the character of the alloy which is best adapted for coining; the most convenient sizes for coins; the method of counting large numbers of coins; the cost at which the currency is maintained; the advantages and disadvantages of international currency of money; the difficulty of selecting a single standard unit; the best series of multiples and submultiples of the unit. At the most I cannot in this work attempt to give more than a slight sketch of the complicated questions of detail which have to be considered before making any change in the currency.