"Standard" to the metal that stood steady. And yet the Bullion Report does not mention it.

But, although not formally repealed, this law of Free and Gratuitous Coinage of Silver was in fact abrogated by the law of 1798-'99, which forbade in perpetuity the coinage of Silver in England. And yet the Bullion Report shows no knowledge of this fact. We hear much of the mint price of Standard Silver, as we do of the mint price of Standard Gold, and Mr. Horner, in one of his questions, says: "You know that at the time we are coining Gold at £3 17s. 101d. per ounce we are coining Silver at 5s. 6d. per ounce!" (Compare section III, page 368.)

How to account for this triple lapse of knowledge?

Is it merely one of those anomalies which, at least in other departments of thought, English thinkers, manly in their self-examination, are not unwont to discover in the theories and practice of their countrymen?-H.

REPORT FROM THE SELECT COMMITTEE ON THE HIGH PRICE OF GOLD BULLION.

[Extracts.]

Ordered, by the House of Commons, to be printed, 8 June, 1810.

THE SELECT COMMITTEE appointed to enquire into the cause of the High Price of Gold Bullion, and to take into consideration the state of the Circulating Medium, and of the Exchanges between Great Britain and Foreign Parts;-and to report the same, with their Observations thereupon, from time to time, to the House;-Have, pursuant to the Orders of the House, examined the matters to them referred; and have agreed to the following REPORT:

Your Committee proceeded, in the first instance, to ascertain what the price of gold bullion had been, as well as the rates of the foreign exchanges, for some time past; particularly during the last year.

Your Committee have found that the price of gold bullion, which, by the regulations of His Majesty's Mint, is 31. 178. 103d. per ounce of standard fineness, was, during the years 1806, 1807, and 1808, as high as 47. in the market. Towards the end of 1808 it began to advance very rapidly, and continued very high during the whole year 1809; the market price of standard gold in bars fluctuating from 47. 98. to 4l. 128. per oz. The market price at 4l. 10s. is about 15 per cent. above the Mint price.

Your Committee have found, that during the three first months of the present year, the price of standard gold in bars remained nearly at the same price as during last year; viz., from 41. 10s. to 41. 128. per oz. In the course of the months of March and April, the price of standard gold is quoted but once in Wettenhall's tables; viz., on the 6th of April last, at 41. 6s. which is rather more than 10 per cent. above the Mint price. The last quotations of the price of gold, which have been given

in those tables, are upon the 18th and 22d of May, when Portugal gold in coin is quoted at 4l. 118. per oz.: Portugal gold coin is about the same fineness as our standard. It is stated in the same tables that in the month of March last the price of new doubloons rose from 41. 78. to 41. 98. per oz. Spanish gold is from 4 to 4 grains better than standard, making about 48. per oz. difference in value.

It appears by the evidence, that the price of foreign gold coin is generally higher than that of bar gold, on account of the former finding a more ready vent in foreign markets. The difference between Spanish and Portugal gold in coin and gold in bars, has of late been about 28. per ounce. Your Committee have also to state, that there is said to be at present a difference of between 38. and 4s. per ounce between the price of bar gold which may be sworn off for exportation as being for eign gold, and the price of such bar gold as the dealer will not venture to swear off: while the former was about 4l. 10s. in the market, the latter is said to have been about 41. 68. On account of these extrinsic differences, occasioned either by the expense of coinage, or by the obstructions of law, the price of standard gold in bars, such as may be exported, is that which it is most material to keep generally in view through the present inquiry.

It appeared to your Committee, that it might be of use, in judging of the cause of this high price of gold bullion, to be informed also of the prices of silver during the same period. The price of standard silver in his Majesty's Mint is 58. 2d. per ounce; at this standard price, the value of a Spanish dollar is 4s. 4d. or, which comes to the same thing, Spanish dollars are, at that standard price, worth 48. 111d. per ounce. It is stated in Wettenhall's tables that throughout the year 1809, the price of new dollars fluctuated from 5s. 5d. to 5s. 7d. per ounce, or from 10 to 13 per cent. above the Mint price of standard silver. In the course of the last month, new dollars have been quoted as high as 5s. Sd. per ounce, or more than 15 per cent. above the Mint price.

[Page 4.]

It will be found by the evidence, that the high price of gold is ascribed, by most of the witnesses, entirely to an alleged scarcity of that article, arising out of an unusual demand for it upon the continent of Europe. This unusual demand for gold upon the continent is described by some of them as being chiefly for the use of the French armies, though increased also by that state of alarm, and failure of confidence, which leads to the practice of hoarding.

Your Committee are of opinion, that, in the sound and natural state of the British currency, the foundation of which is gold, no increased demand for gold from other parts of the world, however great, or from whatever causes arising, can have the effect of producing here, for a considerable period of time, a material rise in the market price of gold. But before they proceed to explain the grounds of that general opinion,

they wish to state some other reasons which alone would have led them to doubt whether in point of fact, such a demand for gold, as is alleged, has operated in the manner supposed.

[Page 6.]

Here your Committee must observe, that both at Hamburgh and Amsterdam, where the measure of value is not gold as in this country, but silver, an unusual demand for gold would affect its money price, that is, its price in silver; and that as it does not appear that there has been any considerable rise in the price of gold, as valued in silver, at those places in the last year, the inference is, that there was not any considerable increase in the demand for gold. That permanent rise in the market price of gold above its Mint price, which appears by Mr. Greffulhe's paper to have taken place for several years both at Hamburgh and Amsterdam, may in some degree be ascribed, as your Committee conceive, to an alteration which has taken place in the relative value of the two precious metals all over the world; concerning which, much curious and satisfactory evidence will be found in the Appendix, particularly in the documents laid before your Committee by Mr. Allen. From the same cause, a fall in the relative price of silver appears to have taken place in this country for some time before the increase of our paper currency began to operate. Silver having fallen in relative value to gold throughout the world, gold has appeared to rise in price in those markets where silver is the fixed measure, and silver has appeared to fall in those where gold is the fixed measure.

*

[Page 10.]

In this country, gold is itself the measure of all exchangeable value, the scale to which all money prices are referred. It is so, not only by the usage and commercial habits of the country,* but likewise by operation of law, ever since the act of the 14th of his present Majesty [finally rendered perpetual by an act of the 39th year of the reign] disallowed a legal tender in silver coin beyond the sum of 25l.

[Page 11.]

Your Committee think it proper to state still more specifically, what appear to them to be the principles which govern the relative prices of gold in bullion and gold in coin, as well as of paper circulating in its place and exchangeable for it. They cannot introduce this subject more properly, than by adverting, to those simple principles and regulations, on which a coinage issuing from the King's mint is founded.

The object is, to secure to the people a standard of a determinate value, by affixing a stamp, under the royal authority, to pieces of gold, which are thus certified to be of a given weight and fineness. Gold in bullion is the standard to which the legislature has intended that the

*See page 323.

coin should be conformed, and with which it should be identified as much as possible. And if that intention of the legislature were completely fulfilled, the coined gold would bear precisely the same price in exchange for all other commodities, as it would have borne had it continued in the shape of bullion; but it is subject to some small fluctuations.

[Page 15.]

In this manner at Hamburgh, silver is not only the measure of all exchangeable value, but it is rendered an invariable measure, except in so far as the relative value of silver itself varies with the varying supply of that precious metal from the mines. In the same manner the usage, and at last the law, which made gold coin the usual and at last the only legal tender in large payments here, rendered that metal our measure of value: and from the period of the reformation of the gold coin down to the suspension of the Bank payments in specie in 1797, gold coin was not a very variable measure of value; being subject only to that variation in the relative value of gold bullion which depends upon its supply from the mines, together with that limited variation, which, as above described, might take place between the market and the Mint price of gold coin.

The highest amount of the depression of the coin which can take place when the Bank pays in gold, has just been stated to be about 5 per cent., and accordingly it will be found, that in all the periods preceding 1797, the difference between what is called the Mint price and market price of gold never exceeded that limit.

Since the suspension of cash payments in 1797, however, it is certain, that, even if gold is still our measure of value and standard of prices, it has been exposed to a new cause of variation, from the possible excess of that paper which is not convertible into gold at will; and the limit of this new variation is as indefinite as the excess to which that paper may be issued. It may indeed be doubted, whether since the new system of Bank of England payments has been fully established, gold has in truth continued to be our measure of value: and whether we have any other standard prices than that circulating medium issued primarily by the Bank of England and in a secondary manner by the country banks, the variations of which in relative value may be as indefinite as the possible excess of that circulating medium. But whether our present measure of value, and standard of prices, be this paper currency thus variable in its relative value, or continues still to be gold, but gold rendered more variable than it was before in consequence of being interchangeable for a paper currency, which is not at will convertible into gold, it is, in either case, most desirable for the public that our circulating medium should again be conformed, as speedily as circumstances will permit, to its real and legal standard, gold bullion.

[From page 60.]

Average amount of Bank of England Notes in circulation, in each of

[For the first five months of 1810, Appendices XXXIX and XL give an average of about 15,000,000 of the first denomination above mentioned and about £5,800,000 of notes under £5.]

EXTRACT FROM THE MINUTES OF EVIDENCE.

Sabbati, 24° die Februarii, 1810.

FRANCIS HORNER, Esq., in the chair.

W. MERLE, called:

[Page 40.]

Q. What is the cause of the present price of Silver bullion being higher than the coinage price?-A. The demand.

Q. You know that at the time we are coining Gold at £3 178. 101d. per ounce, we are coining Silver at 5s. 2d. per ounce, that the proportions between Gold and Silver are such that the Silver will always buy more than the Gold?-A. Yes; certainly it will.

Q. Therefore, it is not possible that much Silver should remain as the Coin of the country?-A. No; certainly not.

Q. Are not the bankers in the habit of giving a premium for Silver A. We used to do it till we got the stamped dollars.