Final Selection of the Unit of International Money. I will conclude this chapter by some remarks on the reasons which should guide us in selecting the monetary unit to be finally established as the basis of a future universal money. I attribute very little weight to arguments concerning the absolute amount of the rival units. It is said that as the wealth of nations increases, and the value of gold at the same time sinks, we need a larger unit. The pound is recommended on this ground as clearly superior to the franc. If we count in francs our figures will be twenty-five times as large as in pounds sterling. It seems to be forgotten that the same unit can never suit the extremely different sums which we have to express, so that we must use multiples or submultiples of the actual unit. Just as we use inches, feet, yards, furlongs, miles, or diameters of the earth's orbit, according to the magnitudes to be measured, so we vary the unit with money. If we are discussing a workman's weekly wages, we count in shillings; if we speak of a clerk's yearly salary, we speak of pounds; if the fortune of a merchant or banker is in question, we take notice. only of thousands of pounds; in matters relating to the revenue of the kingdom or the national debt, we give our exclusive attention to millions of pounds. The Portuguese unit of account, called the rei, is worth only about the nineteenth part of an English penny, and is probably the smallest unit in the world. Practically, however, the milreis, or thousand reis, worth 531d., becomes the unit. In the same way Indian merchants speak of lacs and crores of rupees. The French estimate their national debt in milliards of francs. No doubt it is puzzling to Englishmen to interpret exactly the meaning of a milliard of francs, but, to those accustomed to count in francs it is no more difficult than a million of pounds. Exactly the same considerations apply to units of weight; thus, though the French use so small an ultimate unit as one gram, or 15:43 grains, yet according to the magnitudes of the objects to be weighed, they use smaller or larger units, centigrams or milligrams on the one side, or decagrams and kilograms on the other. The absolute amount then of the ultimate unit seems to me to be entirely a matter of indifference in this point of view. Now the franc is divided centime has a value of less Though bronze pieces of coined to the amount of As regards the subdivision of the unit there are considerations of more importance. The subdivision ought of course to be decimal, and it ought to be so contrived that the lowest submultiple shall correspond to the smallest sum which is thought worthy of being recorded in mercantile transactions. into 100 centimes, so that the than the tenth of a penny. one and two centimes were about 5 per cent. of the whole bronze currency, it is found that they hardly circulate. Even if they were used in the smallest retail transactions at baker's shops, they would not be entered in account books. Thus the lowest entry which a French accountant makes is five centimes, and the next lowest ten centimes, corresponding to our penny. A needless complexity is thus introduced into small accounts. It is indeed so inconvenient to have to call the smallest coin in general use cinq centimes that it is still common to speak of it as a sou, in spite of the ninety years during which the decimal system has existed in France. The Portuguese rei is so small a unit that it is not represented by any coin at all. It nevertheless has a place in Portuguese mercantile accounts, and thus needlessly adds a figure to all pecuniary statements. In England the smallest coin in actual use is the farthing, but in accounts little notice is taken of farthings or halfpennies, so that the penny is the lowest money of account. The post-office, in the regulations of the savings bank business, refuses to recognize any coin less than the penny. But the penny is inconveniently related to the pound, the hundredth part of which is 2.4d., and the thousandth part about a farthing. Thus the decimal system applied to our pound would oblige us to record as the lowest money of account an inconveniently small coin, namely, the mil. In this respect, indeed, the pound and mil franc and centime system. pressed as 625 mils; but in five francs to the pound) it would become 15.625. Taking the ten-franc piece as the principal unit, it would become 1.56 units, or 156 metrical pennies. In many cases it would require less figures to express a sum in pennies than in mils or centimes. scheme is superior to the Thus 12s. 6d. may be exFrench money (at twenty The American system is unexceptionable in this respect. The dollar is divided into one hundred cents, each of which has the value of about one halfpenny. Although half-cents have been coined, and may be used in some trifling purchases, they need never be entered. in ordinary accounts. The cent thus seems to me to correspond to the smallest sum which need be treated in accounts, so that money statements are reduced to the greatest possible simplicity. The question may well be asked whether the lowest coin actually recorded is not truly the unit, of which all other coins are multiples. Perhaps the best answer would be to say that the unit is indifferently the cent, or the dollar, or the eagle. In English money it matters not whether we regard the pound, or its twentieth part, or its two hundred and fortieth part, as the unit. The absolute amount of the unit, I repeat, is totally a matter of indifference, and the only point we have to consider is whether it, or any decimal part of it, corresponds to the smallest sum of which we need take account. In this respect the dollar is the best existing unit; but it might admit of discussion whether the double dollar, or ten-franc piece of gold, equal to eight shillings, or one hundred pence, would not be better. If the wealth of nations continues to grow, and the value of gold to fall, even the cent will be too small a coin to appear conveniently in accounts, and the penny will be a better lowest unit. In this case the hundred pennies, or the ten-franc piece, would become the best unit. The choice thus seems to me to lie between the five-franc and the ten-franc piece in gold as the ultimate unit of interna |