THE MOTIVES FOR THE ADOPTION OF THE RATIO OF 16 IN PREFERENCE TO THE RATIO 15.62 IN 1834-'7.

The extracts reprinted in the following pages from the utterances of Mr. Thomas H. Benton, who held the leadership in Congress in the discussion of monetary questions at this period, and a table showing the production of the Gold fields of the Southern slopes of the Alleghanies in the years preceding 1834, taken together, will serve to suggest the controlling motives that presided at the rejection of the ratio of 15.62. The latter ratio was, as Mr. Benton himself admits, the "ratio of nearly all who were best calculated, from their pursuits, to understand the subject."

The style of forensic argument by which the reasoning of those who were "best calculated to understand the subject" was overruled, and the temper in which the question was met by those who commanded the majority, make themselves known in the extracts themselves. It may, however, be noted here that the extremely high ratio maintained in the Spanish and Portuguese countries (concerning which see pages 461 and 484), served the American advocates of the ratio of 16, in 1834, as an argument of the same purport as that which enabled the minister of Louis XVI in France to justify, in his own view, the adoption of the ratio of 15 in 1785 (see page 257), while they ignored such views as those of Sir Isaac Newton in 1717, who, adverting to the existence at that date of the ratio of 16 in Spain and Portugal (see page 319), did not hold himself bound to pay homage to the policy of coining Gold Tokens which was pursued in the mine-owning States, but directed his view to the general ratio of equivalence established between the metals by the greater forces of the world's demand.

As for the table showing the yield of the Southern Gold fields (re

printed in 1877 from the National Calendar of 1836), it suggests a motive, which, although not entirely available in public argument, may well have enlisted efficient support, for the highest practicable rating of Gold as compared with Silver. It would naturally be understood by all concerned that the elevation of the ratio must serve to enhance the profit, and hence, to further the development, of Gold-mining in the South.

Looking back upon the matter from the vantage-ground of to-day, it is not difficult to recognize that the object, if attainable in full measure, was well worthy of a national subsidy.

The introduction into the South of the varied industries, the movement and friction which successful mining might have brought in its train, were an object eminently to be desired in the interest, not merely of the South, but of the whole country. A great mining and manufacturing population in the Southern Alleghanies might have been a solvent of the "Southern question."

But, unfortunately, the sacrifice demanded was entirely disproportioned to the benefit that could arise from it. The difference between 16 and 15.62 is but 23 per cent., and this was not a difference in the purchasing power of Gold-which alone can determine whether the search for it is profitable-but simply in its rating as compared with Silver.

The measure of the difference between the two ratios as they affected the profitableness of the Southern Gold mines must, therefore, be less than 2 per cent. If a California had existed in the South, could it have been stifled by so small a difference. The event has proved that such an Eldorado did not exist, and, to continue the comparison, one may assert with confidence that the ratio of 15.62, had it been adopted, would not have suppressed the California of the Pacific Coast.

It is, indeed, too obvious to need extended discussion, that this premium, implied in the ratio of 16 as compared with the ratio of 15.62, neither brought, nor in the nature of things could have brought, any advantage approaching in importance those which were attainable through the ratio of 15.62.

The ratio of 15.62 meant substantial unity with France. Although in France the ratio of the coins was 15.50, the ratio of the coinage* between 1803 and 1835 was 15.69 while in 1835 the latter ratio gave place to 15.62.

*MINT PRICE AND MINT RATIO IN FRANCE.

It is almost incredible to what an extent this important distinction has been neglected.

Distinguished authority could be cited for the use of an argument in favor of the opinion that "it is impossible to establish a fixed ratio between the metals" (see page 751), based upon the fact that "no sooner had the ratio of 15 been established by the law of 1803 than the market rate in Paris went up above 15.50." But in fact it was eminently natural that it should do so, seeing that the moment a movement of the metals under pressure of foreign demand began to bring one or the other to the mint the comparison must arise between the cost of coining the one as compared with the

It is hardly necessary to advance arguments to show the importance of such substantial unity of our monetary laws with those which regulated the most important national epoch in Europe.

Passing by, therefore, the paramount question of the stability of exchanges, it is perhaps worth noting that had we maintained the same ratio as France, the drain of Silver after the Gold Discoveries might have come upon both countries at the same time, and the recoinage of Silver change, ordained in 1853, might not have been needed. Our old Silver change might have remained in use till the exigencies of war replaced it with paper.

But it is more recently that the nemesis of the error of 1834 reappears in full force. In the emergencies caused by the Demonetization of Silver, it would have strengthened the friends of the use of the two metals had the American ratio, which, after being neutralized and abandoned was again readopted for a limited coinage of Token Dollars, been identical with that of France. That the monetary armaments of the two countries, which by their history are committed to Bimetallic Money were not of the same caliber, was an element of confusion and of weakness when it became essential that their armies should be fused into one. Having in 1834-'47 established a Gold unit that was too light, we see ourselves forced, if union with Europe at the rate of 15 is ever to be attained, to reach it either by adding a percentage to the Gold Dollar, or by lightening the Silver monetary unit of Hamilton's day. But the policy of the adoption of 16 cannot be rightly judged unless we take an even wider view, and consider what would have been the result had Congress listened, not to the partisans of the anti-bank movement, nor to those who sought to mould to local ends, measures that in their character were inevitably international as well as national, but to "those who understood the subject."

The question naturally arises whether the substantial unity with France consequent upon the adoption of 15.62, might not in the course cost of coining the.other, and the equilibrium would tend to establish itself about the ratio given by cost of coinage.

In view of the misapprehension prevailing on this point, it may be well to call attention to the facts. The ratio of 15 to 1 is a ratio between the Coins. The Silver in the Silver 5-franc piece weighs 15 times as much as the Gold in the Gold 5-franc piece. This ratio has been maintained without alteration since 1803. The mint price, however, has undergone various changes. It was fixed in the law of 1803 at 9 francs per kilogram of standard Gold, 3 francs per kilogram of standard Silver.

The kilogram of standard Silver containing 200 francs, and that of Gold 15 times as much, or 3,109 francs, the mint ratio stood as 3091:197, or 15.69+ : 1.

In 1835 the mint charge on Silver was reduced to 2 francs to the kilogram, that on Gold to 6 francs. The mint ratio became, therefore, 3094: 198, or 15.626:1, and so remained till 1850.

In 1850 the mint charge on Silver was reduced to 1 franc 50 centimes the kilogram. The mint ratio became, therefore, 3094: 198.50, or 15.586: 1, and so remained until 1854. In 1854 the mint charge on Gold was raised to 6 francs 70 centimes the kilogram. The mint ratio became, therefore, 3093.30: 19850, or 15.583: 1, at which rate it now stands.

of events have led to a closer assimilation; perhaps an identity of ratios of metals in the coin, and of charge for coinage, if not in the actual weight of the coins. Had such an International Bimetallic Union been in existence, Anglo-Saxon-American, as well as Latin, might not the Monetary Tournament of the Nations, that Field of the Cloth of Gold of 1867, have witnessed the victories of Bi-metallic rather than those of Mono-metallic Union?

The course of nations has its turning points, and they often consist of circumstances apparently trivial. 21 is a more convenient number in calculation than 201, and therefore the guinea is rated at 21 shillings, and England abandons the Silver Standard of Elizabeth and cleaves to Gold. De Calonne, in 1785, and Gaudin, in 1803, omit to do what other statesmen under the circumstances would have done. They refuse to take 15; and the one establishes, the other ratifies, the ratio of 151, and 15 becomes the "normal" ratio of the nineteenth century.

Do not these examples warrant the inference that the early establishment of substantial unity of metal between the United States and France, might have changed the current of later monetary history?