HISTORICAL MATERIAL

FOR AND

CONTRIBUTIONS

TO THE

STUDY OF MONETARY POLICY,

SELECTED AND PRESENTED BY

MR. HORTON.

Hon. Wм. M. EVARTS,

Secretary of State, Washington:

DEAR SIR: On completing, in December last, my official duties in connection with the late Monetary Conference at Paris, by putting in your hands the corrected French and English Records of its Proceedings, I had the honor to say that if it were intended, in pursuance of an idea which I recalled your having mentioned in June last, to supplement the record as printed with matter of Appendix, documents, etc., germane to its subject, I should gladly present what contribution to this end my brief leisure from private affairs would permit me to put in order.

In pursuance of the request then expressed by you, I herewith offer a considerable body of selected documents (including some translations), the appearance, or reappearance, of which in print, seems opportune, in bringing within reach of an enlarged range of readers matter embodying some points in the history and doctrinal basis of the monetary policy of the more powerful States; and with these I send some papers designed to serve as preface and explanation.

Trusting that what I have been able to do, may contribute to that reexamination of the grounds of monetary policy which the time demands, I am, dear sir, with respect, very sincerely yours, S. D. HORTON,

POMEROY, OHIO, 1879.

Late Delegate, etc.

INTRODUCTORY.

To those at all familiar with monetary history it is well known that the adoption, or alteration, of a ratio for coinage and Legal Tender, between Silver and Gold, has been one of the chief problems of Monetary policy.

Nature having provided for man,two metals, indestructible, structureless, ductile, and rare, and hence uniquely fitted to serve as Money, their inevitable use in one and the same function has inevitably compelled the recognition, at some point in the scale of their relative weight, of an equivalence of value; and Money being a political institution, it fell to the State to fix upon this ratio of equivalence.

Aristotle enumerates among the prominent subjects in the "Economy of a Ruler" that he know when to raise or lower the value of Money; and that provision of the Constitution of the United States which reserves to the Federal Government the right not merely to "coin Money," but to "regulate the value thereof," is an evidence that this function of rulers has not lost importance in the course of centuries; while, in our day, the chain of testimony to this truth is supported by the earnest discussion which preceded the adoption, and by the adoption itself, in the new German Empire, of the ratio of 15 between the existing Silver and the new Gold Coin, for that period of transition from one to the other, which, after the lapse of years, seems still remote from completion.

In late centuries, it is safe to say, that the object of such regulation of the relative value of the Precious Metals, when coined, has generally been, not merely to eliminate doubt in the respective nations, concerning the relative rates of currency of coin already in actual use, but with a view to motives of general policy; to guard against exportation to foreign countries of one or the other metal, or to obtain a concurrent circulation of Silver Coin and of Gold Coin at the legal par. In spite, however, of this purpose, a tendency has been at work to widen the