alter the present standard of value, and confine myself simply to the question of the facility and advantage which would result from having a standard of two metals, as we had before 1778, and as every other country of the world besides ourselves now have.

At present, speaking of a state of peace and quiet, I do not see that there is much fault to find with our present circulation; but the value of a medium of circulation, in a country where it is necessarily combined with much paper, and especially where the paper forms the larger portion, depends on its flexibility, on its power of contraction and expansion to meet the varying circumstances of the times, the desideratum in this country, where neither justice nor policy permit increasing the value of money, is to keep out as much paper as can be safely kept out. A sudden change from peace to war, a bad harvest, or a panic year arising from over-trading and other causes, immediately impose upon the Bank of England, which is the heart of all our circulation, for the purpose of protecting itself, to stop the egress of specie, sometimes even to bring in large quantities into the country. These indispensable remedies are always applied with more or less restriction of the circulation, and consequent distress to those who have been for some time trading under expectations of the ordinary facilities of circulation and banking. No care or prudence can enable the great Bank, on which all smaller ones rest in the day of trial, to avoid occasional resort to those measures of self-defence: and that system of currency is the best, which admits of their being made the least frequently, and with the least possible effort and derangement. Now it is evident that the Bank, wishing to reinforce its supply of specie, can do so with infinitely increased facility, with the power of either drawing in gold or silver, than if it were confined to only one of the metals. The choice is already much, but the circumstance that silver is the practical standard of Europe, more than doubles the certainty and facility of procuring a supply. Bills on Paris, Amsterdam, Hamburgh, &c. once taken, secure silver, in which they must be paid; but if gold alone will answer the purpose of the Bank, gold is a merchandise which you must go into the market and buy. It may be forestalled by others speculating upon the Bank's known necessities, it will always be enhanced in price by them, and the real increased difficulty acting in an increased ratio upon the apprehensions of a body of directors, whose characters are at stake, will lead to extravagant precautions, the tendency of which will always necessarily be to cramp and reduce the circulation, and to increase the existing distress. That medium of legal tender is best which affords the best security against these forced operations. The greater the facility of the Bank to right itself in these constantly recurring ebbs and floods in its specie, the greater will be the facilities given to those who depend upon it, and the less frequent will be those sudden jerks and changes so fatal to credit and to commerce. As I have already said, in quiet, orderly times, our present system works well enough, but these sudden storms arise in

time of peace, as well as of war. The only one which we have seen, since the adoption of our present moneyed system, was in 1825, and, I believe, an investigation into what then took place, will strongly confirm my observations. That the efforts of the Bank for self preservation made great havoc among its dependents through the country is well known; and I believe it is equally so, that, while it was rummaging every corner for gold, which could alone answer its purpose, it was sending large sums of silver from its coffers, which were perfectly useless. The wants of the Bank, when they occur, interest speculators and jobbers of every description, and, independently of operations to derive a profit from the price of the gold wanted, there will be persons interested in thwarting the Bank, and preventing its supply.

Q. Do you conceive it possible that any degree of skill or ingenuity in adjusting the proportions of gold and silver, can be such as to prevent the one or the other from having a preference, and becoming, practically, in the course of a short period of years, the currency of the country, almost to the exclusion of the other, except for purposes of convenience?

A. I think it is not possible. The practical currency may change from one metal to the other in a short space of time. The fact of gold hav ing been the practical tender in this country under the former system, and that silver would now be so if that system continued, is a practical proof of it. It will vary with the variations in the relative value of the metals, however wisely you may adjust the difference; and there is no doubt that the whole inconvenience and difficulty of the case arises from this circumstance. The objections to the two metals is, that they are constantly varying; and it may be doubtful whether the fact of that tendency to vary does not make it more desirable, in the case of a double standard, to take something in the way of seignorage or brassage; in other words, something for the price of manufacture, than you otherwise would, so as to counteract a little the tendency to melt the one or the other down. This allowance would tend, in some degree, to meet an increased expenditure at the Mint: for the consequence of varying proportions between the two metals might increase the charges at the Mint, by the occasional melting of the rejected metal. On the contrary, if you put something of the value of manufacture into the coin, then, even supposing your coin goes abroad by any altered proportion, or any state of exchange, it is an inducement to the persons abroad to keep it in the shape of coin.

Q. Supposing we were to adopt precisely the proportions of the French Mint, would not the result probably be the same as in France, namely, that silver would become the bulk of our metallic currency, and that gold would be in use only for those purposes for which it was more convenient; and that, in consequence, the diffusion of gold, which is now concentrated in this country, would be more equable over the civilized countries of the world?

A. Undoubtedly, if you were to take the same proportions. I do not

see any reason why exactly the same result should not take place, with this single difference, the extent of which I am not able to calculate; that this country partially rejecting gold as its tender, the effect would be to reduce to some extent the value of gold over the rest of the world. There is no doubt that, when this country returned to payments in specie, supposing we wanted from £15,000,000 to £20,000,000 of gold for instance, and that, to that extent there was a demand on the rest of the world for gold, gold got an increased value from that circumstance. If you make silver a large proportion of your currency, and still more if you were to make it the bulk or the whole of your currency, silver would gain something in value over gold. A free concurrent circulation of the two metals in all countries would certainly keep the proportions of each to the other most equable, and have little other ground for fluctuations than such as may arise from the charges of producing them. At present these fluctuations are more affected by changes in the wants of the gold or silver circulating countries than by any other cause.

Q. The result would be that silver would rise in value over the continent, as we claimed a larger proportion?

A. Yes.

Q. Does not the preference given to gold in the French currency arise from silver being over-valued?

A. Undoubtedly.

Q. Supposing both gold and silver coin made legal tenders in this country, and that the proportions rather favored gold as a legal tender, would not the advantage of a double standard, such as it exists in France, be obtained, without our disturbing the existing mode of our currency; that is, with the advantage of retaining gold as the bulk of it, and silver as an aid to it; just as in France, silver is the currency and gold the aid?

A. This might certainly be easily done; by a very slight difference we could make gold the ordinary and habitual currency, and silver the auxiliary, which would come in aid on an emergency; the variation in France is seldom above a tenth per cent.; it sometimes runs up to a quarter per cent. It has been, I am told, something higher on particular occasions; when the Bank of England was running all over the continent for gold, this was the case; I believe, also, at another time for the service of the peninsula; now and then, from casual circumstances, one metal gets preferred. If Russia goes to war in a distant part, she does it always with gold. At the present time, gold has been bought up to a large extent for this purpose, but unless any disturbing causes of this description arise, a very slight difference of one tenth or one fourth per cent. would determine the use of one metal or another.

Q. As they are liable to vary in their relative proportions, would it not be a difficulty attending such a system, that we should have frequently to re-adjust the proportions?

A. In using the two metals, one of two courses must be taken-either

to leave them to chance, and to give to the debtor the advantage of the option, as was the case under the old system, or to fix at once which is to be your standard, and to adjust at given periods your other metal to it. If you want the advantages of the fixity of standard of one metal with the facilities and conveniences of two, you must take this latter course. I gave this opinion when the questions of currency were last before Parliament, and I see no objection to it now. This system of occasional adjustment has been practised in France, and in these matters practical experience is worth all the theories of mere speculation. It is quite clear that, without this occasional adjustment, you may lose the benefit of the double standard, which is only to be preserved by keeping the value of gold and silver coins within a fraction of each other. Nobody can say how their value may vary according to the varying cost of their production, and as it is the duty of the State to see justice done between all debtors and creditors through the kingdom, I should prefer the principle of adjustment to leaving the result of their contracts or engagements to greater hazard.

EXTRACTS FROM THE REPORTS OF MR. C. P. WHITE, FROM THE SELECT COMMITTEES OF THE HOUSE ON COINS, ETC.

[Mr. White was (February 22, 1831) the reporter of a committee to which was referred a resolution of the House of December 23, 1830, to inquire into the expediency of giving the Legal-Tender quality to foreign Coins. (See page 751.)

On March 17, 1832, he made a report for the committee on the state of the Coins, the relative value of Gold and Silver, etc., in which, in addition to other documents, the report of date December 15, 1830, made by Mr. Sanford, of New York, from the Senate Committee on Coins, etc., was carefully digested.

On June 30, 1832, appeared a report from the Select Committee on Coins, whose commission embraced the widest range of questions. In view of the actual novelty of these forgotten facts I transcribe their mandate, which was as follows:

They were

Instructed to inquire into the expediency of authorizing prompt payment in coin for bullion delivered at the Mint requiring a seigniorage not exceeding the expense of coining, making gold a tender in large and silver a legal tender in small payments, or the reverse; and to report whether any and what evils or inconveniences result from the currency of bank notes of small denominations and what are the appropriate remedies: whether it is practicable and expedient to restrain this circulation by providing that bills of such banks as issue them shall not be received in payments to or deposits on account of the United States, or by any other and what means within the legitimate powers of Congress; and what further measures are requisite for the purpose of preserving an adequate supply of gold and silver coins in use, and increasing the specie circulation of the country; and also, to inquire into the expediency of making silver the only legal tender, and of coining and issuing gold coins of a fixed weight and fineness, which shall be received in payment of all debts to the United States at such ratio as may be fixed from time to time, but shall not otherwise be a legal tender; and also to present their views with respect to small coins.

S. Ex. 58- -43

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