at Liverpool, on the manner in which points of importance were thus
swamped, will not readily be forgotten by those who heard them. Among
other subjects, the Professor instanced that of an international
coinage, which, after having received considerable and careful
attention, had receded for a time from that prominence which it
deserved.
In this country, the question has been considered from two points of
view--the one taken by those who are desirous to adopt a universal
system of coinage, as well as a universal system of weights and
measures; the other, by those who are aware of the present and
increasing deterioration of the gold coinage of the country, arising
from the number of coins deficient in full weight which are now in
circulation.
Neither of these points have escaped the notice of the active mind of
the present Chancellor of the Exchequer (Right Hon. R. Lowe). He has
become aware that many of the gold coins now in circulation are below
the legal tender weight; that the opportunity of a considerable
re-coinage might be made use of to assimilate the weight of gold in the
sovereign to that contained in twenty-five francs, and that in doing
this the expense incurred in the coinage of gold might, by means of a
seigniorage, be spared to the country.
To explain these points, it will be well, in the first place, to refer
to a report of the then Master of the Mint, and Colonel Smith, late
Master of the Calcutta Mint, in reply to the question put by the
Chancellor of the Exchequer--
'What would it cost, first to manufacture a sovereign, and
afterwards to keep it in good condition for all time? The
coin is always losing weight by wear, while it passes from
hand to hand, and ends by becoming light (after
three-quarters of a grain of gold have been lost), and is
no longer current. The individual piece has thus a limited
existence, and must be withdrawn and replaced by a new
sovereign of full weight; that, again, by another in due
time; and so on. Now, for what present payment could this
succession be maintained? What is the contract price to
cover the first construction, and all future
restoration?'[3]
To put it in another shape. The person who thinks it worth his while to
convert his gold bullion into coin, according to this plan, is to pay
for the expense of manufacture, and is also called upon to contribute to
a reserve fund, by means of which the natural deterioration of the coin
he has caused to be put into circulation is to be provided for.
The coinage of gold in this country is--and it is well to explain this
point at the outset--entirely gratuitous as far as the Government is
concerned. That is to say, any person possessing gold bullion of the
required purity of standard, may, if he chooses, take that bullion to
the Mint. And, in due time, the officers of the Mint will return
him--weight for weight--an equal quantity of gold coin. _In due time_,
however, means in practice, a considerable delay; and delay in money
matters means loss of interest. Hence, it arises, that in the natural
course of events, no private person takes gold bullion to be coined,
himself. But he carries it to the Bank of England. Now, that great
corporation, among other duties to the State, has this particular
charge. It is bound to buy all gold bullion of standard fineness offered
to it, at the rate of £3 17s. 9d. per oz. These payments are made in
bank notes; and as bank notes are immediately exchangeable for
sovereigns, the result is, that any one possessing gold bullion of the
Mint standard, can at once and immediately turn that bullion into gold
coins for the slight cost of 1½d. per oz., or something less than ½d.
for every sovereign. This is really buying a sovereign at cost price,
for the mere manufacture of a sovereign costs fully a ½d., as will be
mentioned further on. What is more, the payment, small as it is, does
not accrue to the Government, but is retained by the Bank of England,
and is considered as being only sufficient to compensate that
institution for the trouble and expense of the operation, including the
loss of time, and consequent loss of interest incurred. No provision is
made to include the loss by wear, which, though imperceptible at the
moment, accumulates in process of time to a large amount. Investigation
shows that 100 sovereigns lose 8d. a year by fair usage. If the amount
of British gold coin in circulation amounts, as it is supposed to do, to
eighty millions, sixty-eight being whole sovereigns, and twelve millions
in halves, the annual loss would amount to £35,000 from deterioration
due to wear alone. The charge for manufacturing sovereigns is not high
when all that has to be done is taken into consideration. Great
precautions have to be taken in the process to secure the needful
quality. Each bar has to be brought to the required standard. Careful
assays are made, and great exactness in the weight of each coin is, of
course, essential. All these points cannot be attended to without
considerable expense. Again, the great amount of valuable property in
the shape of coin and bullion necessitates vigilant watching. The total
charge is estimated at ½d. each sovereign. Half sovereigns are, in
proportion to value, more expensive to strike than sovereigns. They also
wear more rapidly. This arises from greater rapidity of circulation, and
also from the fact that, weight for weight, each half sovereign presents
a greater surface for abrasion than a sovereign. After making careful
calculations, the Master of the Mint and Colonel Smith arrived at the
conclusion that a charge of £1 13s. 6d. for every £100 coined would be
sufficient to cover all expenses. That is to say, that if an arrangement
were made with a contractor to undertake to manage the Mint, and to keep
the gold coinage in good repair, he would require, to hold him harmless
from loss, to be paid about £1 13s. 6d. for every £100 in the average
proportion of sovereigns and half sovereigns put into circulation. And
this sum is at the present time lost to the community.
It is characteristic of the manner in which public questions are handled
in this country, that throughout the report, to which is attached the
name of an official in such high place as that of the late Master of the
Mint, continual reference is made to the investigations, not of a public
officer, but of Mr. Jevons, Professor of Political Economy in Owen's
College, Manchester. Mr. Jevons, being desirous of ascertaining the
condition of the gold currency, made inquiries of bankers and other
suitable persons in all parts of the United Kingdom, requesting them
'to take one or two hundred pounds in sovereigns, and half
the amount in half-sovereigns, from gold received in the
ordinary course of business, and to cause the number of
coins of each date to be counted and stated. The aid thus
requested was furnished with a readiness which I had no
right to expect, and which I cannot sufficiently
acknowledge. Not a few gentlemen, on becoming acquainted
with my purpose, procured very extensive returns, and the
final result was, that this kind of census of the gold
coinage was extended over one-sixth of a million of coins,
thus composed:
Number of sovereigns enumerated 90,474
Number of half-sovereigns enumerated 75,036
------
Total number 165,510
'At least one gold coin in every hundred now existing in
this country was, on the average, enumerated; and, as there
were 321 separate returns received from 213 distinct towns
or localities, including almost every place of commercial
importance, it may be allowed, I think, that sufficient
data were acquired for determining the average character of
the circulation.'--_Journal of the Statistical Society_,
vol. xxxi., p. 439.
Mr. Jevons' inquiry was, as he describes it, made in a private manner,
but it was, beyond question, conducted most efficiently and thoroughly.
And there is no reason to doubt that he has rather under-estimated than
over-estimated the case when he states, that about 45 per cent. of the
sovereigns and 62 per cent. of the half-sovereigns now in circulation in
the country are lighter than the legal standard. If this statement
appears excessive to any one, he can easily verify it for himself. He
has only to go to his banker, in whatever part of the United Kingdom he
may reside, and ask him to provide out of the gold in his till--out of
the ordinary circulation of the locality--100 sovereigns of _full_
weight. Then, if he inquires how many sovereigns have been picked over
to obtain this number, he will--within those reasonable limits of
variation which every similar calculation is liable to--find that Mr.
Jevons' statement gives a correct idea of the ordinary circulation.
But Mr. Lowe, as will have been observed, did not confine himself to the
actual deterioration of the existing British gold circulation. His
thoughts took a wider range--'a coin which would have the advantage of
an international circulation' occurred to him as a possible thing--and,
further, that the British sovereign, reduced to an exact equation with
twenty-five francs of gold coin of France, Italy, Belgium, Switzerland,
&c., might be such a coin. The question of the desirability of an
international coinage has frequently been discussed. From some of the
remarks which have been made on Mr. Lowe's speech, it might have been
imagined to be only a recent idea. But this is far from being the case.
Much attention was drawn to the point in 1851. The difficulty then
experienced in comparing the value of the articles produced in different
countries and shown at the Great Exhibition, naturally suggested the
idea of a coinage common to all nations. The International Statistical
Congress then took the matter up at their meetings at Brussels, in 1853,
and at Paris, in 1855, and at London, in 1860. This last-named meeting
was held under the presidency of the late Prince Consort, and his
address on its opening was the last public speech delivered by him. In
it are to be found these words, which show that the importance of the
question of international coinage had not escaped the notice of the
Prince:--'The different weights, measures, and currencies, in which
different statistics are expressed, cause further difficulties and
impediments. Suggestions with regard to the removal of these have been
made at former meetings, and will, no doubt, be renewed.' Before this
meeting separated, an international commission was formed to report on
the question. Further consideration was given to it at Berlin, in 1863.
In December, 1865, the idea was put into practice. A formal convention
was entered into by France, Belgium, Italy, and Switzerland; and those
four countries established an international currency among themselves.
The French Government followed up the subject by giving official notice
of this convention, inviting this country, with many others, to send
commissioners to attend a conference 'for the purpose of deliberating
upon the best means of securing a common basis for the adoption of a
general international coinage.'
'The Conference was attended by thirty-three delegates,
representing twenty different countries, viz.:--Austria,
Baden, Bavaria, Belgium, Denmark, France, Great Britain,
Greece, Italy, Netherlands, Portugal, Prussia, Russia,
Spain, Sweden and Norway, Switzerland, Turkey, United
States, Wurtemburg.'
'The delegates were not authorized in any way to bind their
respective countries, but they voted according to their own
opinions.'
* * * * *
'Great value seems to be attached to the cooperation of
England in any measure of this description. England has
been forward in urging the policy of free trade upon
Continental nations; and while her joining in any movement
originated abroad for promoting and facilitating commercial
intercourse would be most favourably received, and would
increase her influence among them, her declining altogether
to enter upon it might appear to be inconsistent with her
general conduct upon such questions.'
'The recommendations of the Conference may be shortly
stated to be:
'I. The adoption of a single gold standard.
'II. The adoption of 9/10 as the proportion of fine gold in
the coins.
'III. That all gold coins hereafter struck in any of the
countries which are parties to the Convention, should be
either of the value of five francs or multiples of that
sum.
'IV. That a gold coin of the value of twenty-five francs
should be struck by such countries as prefer it, and be
admitted as an international coin.
'In other countries steps have been taken with a view to
promote a general international coinage.
* * * * *
'A Bill has been introduced into the Congress of the United
States for altering the value of the American coinage, so
as to assimilate it to that of the Convention of 1865; and
we have received the report of the Finance Committee of the
Senate of the United States, recommending the adoption of
the measure, with certain amendments; together with a
report also presented to the Senate, adverse to the passing
of the Bill.
'A Bill has been introduced into the Canadian Parliament
for the regulation of the currency of that country, in
which provision is made for the adoption by Canada of the
system of the Convention, in the event of the measure above
referred to becoming law in the United States.
'Another Bill has been introduced into the Congress of the
United States, in order to assimilate the coinage to that
of this country, making the half eagle equal to our
sovereign.
'The Federal Parliament of the North German Confederation
has passed a resolution declaring necessary the adoption of
a decimal monetary system.
'Finally, we have received a communication from the Foreign
Office, by which it appears that the Government of Sweden
have proposed to strike a gold coin equivalent to ten
francs, and further to coin pieces of twenty-five francs as
soon as such a coin shall be struck in France.'--_Report
from the Royal Commission on International Coinage_, 1868.
The Spanish Government has recently given notice of being willing to
join the Convention (Nov., 1869), and the pattern pieces of the
twenty-five franc coin have already been struck at the Paris mint.
This brief _résumé_ of what has actually been done by several other
nations, suffices of itself to show that the question deserves, as Mr.
Lowe has stated in Parliament, very careful consideration.
Four nations, with more than sixty-six millions of inhabitants, already
possess an international coinage. That is to say, any merchant in the
furthest point to which the Convention extends knows at once, if he
takes up a paper with the prices current at Paris, Marseilles, Bordeaux,
or any of the great centres of commerce, what those prices mean, and how
nearly they correspond with his own. Other nations besides France,
Belgium, Switzerland, Italy, are prepared to join in this uniform
coinage. It is not unlikely that the sixty-six millions may be more than
doubled shortly. Will it not be a great disadvantage to the thirty or
thirty-two millions inhabiting these islands to be outside this great
confederation?
The values of the gold in the pound sterling and in twenty-five francs
approximate very closely. To enable this country to join the
confederation, it would be needful for the values to be equalized. This
must be done in one of two ways.
Either the amount of gold contained in the proposed coin of twenty-five
francs must be increased by twenty centimes to make it the equivalent of
the English full-weight sovereign. Or, the weight of gold in the English
sovereign must be diminished to make it equal to that contained in the
25-franc piece. The Royal Commissioners on International Coinage appear
to have entertained an aspiration--it can hardly be termed a hope--that
the former plan would be adopted; but it can scarcely be looked for. The
inconvenience to the nations who have already joined the Convention
would be so great as to preclude the idea. The other alternative alone
practically has to be considered. It amounts to this: that 2d. in value
should be taken out of every sovereign. But to do this without due
compensation would be to alter every existing contract. A seigniorage to
be charged on all bullion taken to the mint to be coined, is proposed as
a method of bridging over this difficulty. To effect this such a charge
or seigniorage would have to be proportionate to the amount of bullion
subtracted from each sovereign.
It is desirable to trace out what effect such a charge would have. It
would be--
'tantamount to an enhancement of the purchasing value of
the coinage in the country of its currency. It immediately
augments the value of the coinage as expressed in its
exchange value for bullion, unless the weight of pure metal
in the coinage be simultaneously reduced to the same extent
as the amount of the seigniorage. The following may serve
as a test example, and avoid the necessity for the use of
fractions:--"What would be the effect of a seigniorage of 1
per cent, in a country where it is imposed for the first
time?" It would be this: that whilst the pieces of current
coin before the imposition of the seigniorage were exactly
worth their weight in uncoined bullion of the same
intrinsic fineness, they would, after its imposition, be
worth 1 per cent, more than their weight in bullion of the
like standard.'--_Mr. Hendriks' Evidence, Royal Commission
on International Coinage_, p. 142.
The sovereign, thus diminished in weight, would still possess exactly
the same purchasing power--within the limits of the country--as it
previously had. Beyond those limits, as shown by the practice of the
French mint authorities, it would still retain its value. It would not
be, as the present sovereign now is, undervalued in consequence of the
mint charges of other nations.
An objection may be, and has already been, made to the alteration--that
such a change would be unfair to all those creditors who had made
contracts in the old coin, and would be repaid in the new. This
objection is sufficiently disposed of by the fact that, as mentioned
before, the purchasing power of the new coin will be equal to that of
the old.
If any doubt existed, a further security might be given under all
circumstances, by adopting the plan recommended by Colonel Smith, the
late Master of the Calcutta Mint. His proposal is, 'that the new
sovereign shall be changeable for gold bullion at the present price.'
This would cause the value of the new coin to remain equal with that of
the present coin, exactly as the value of the existing silver coinage is
maintained. The present shilling, even when of full weight, is by no
means worth its weight in the metal of which it is made. The pound troy
of standard silver is, and has been in England, since 1817, coined into
sixty-six shillings. The value of the shilling, thus debased, is
maintained at the proper level by the coin being limited, as a legal
tender, to 42s. by tale. The result is obvious. Silver of the value of
something like 18s. does service for 20s. What is more, this has been
the case for years, and no one has ever been injured by it. And the same
effect would surely follow if Colonel Smith's plan were carried out. If
the holder of 100 sovereigns were to desire to convert them into gold,
he would take them to the Bank of England, who would give, as now, a
certain quantity of bar gold of standard fineness, at £3 17s. 10½d. per
oz. The sovereign would, to a certain extent, become a 'token' coin;
that is to say, each sovereign would, as the shilling is now, be worth
something less than the stamped value. But it would, within the limits
of the convention, that is, within the limits of the civilized world, be
current exactly to the extent of its nominal value; and any one desiring
to employ it beyond the limits of the Convention would be placed in
exactly the position in which he is now, by simply taking his gold coins
to the Bank of England and exchanging them for bar gold. A further
advantage would arise from this diminution in weight of the sovereign.
As the sovereign is worth a fraction over ten rupees in India, it
follows that the internationalization of the English sovereign, and the
reducing it by about twopence, to make it equal with twenty-five francs
or five dollars, would immediately rectify the present difference
between the British sovereign and the 10-rupee piece; and the rupee, the
British florin, and the Australian florin would, in the international
scheme of coinage, ultimately become absolutely identical, so far at
least as gold coinage is concerned.[4]
Any alteration of coin in so backward a country as India would have to
be introduced with great caution; but the advantage of assimilating the
currency to that of this country cannot be doubted. There are great
disadvantages in allowing coins, nearly identical in value, to circulate
together; and if the 'sovereign' remains at the present value, what Mr.
Jevons anticipates may not be unlikely to happen.
'It is only necessary for the Continental nations and the
United States to issue, as is already proposed, a piece of
twenty-five francs in order to supplant the sovereign; for,
as the new coin would have the value of a well-worn
sovereign, it would soon be accepted equally with the
sovereign in all foreign countries and our colonies, if not
at home. At the same time, the difference of value being
about 2d. in the pound, would ensure the melting of all new
sovereigns in preference. Thus, however many sovereigns are
coined, we should never succeed in dislodging the 25-franc
piece from circulation. More even than at present our
British Mints would perform the labours of the Danaïdes,
ever pouring forth new and beautiful coin, at once to
disappear into the bullion dealer's crucible. The sovereign
would be an evanescent coin, constantly liable to be
recoined with the permanent impress of a foreign mint.
Common sense, as well as invariable experience, tells us
that we must be worsted in this contest of the heavier and
the lighter coin.'--_Professor Jevons' Paper in the Journal
of the Statistical Society_, vol. xxxi., p. 429.
The extent of the populations employing the 20-franc piece as their
principal gold coin, has already been mentioned. Some persons may say,
'It is true these nations more than double in number the persons whose
basis of accounts is the pound sterling; but still there may be more
"sovereigns" in existence than 20-franc pieces.' Now, it is by no means
as easy to enumerate the coins in a country as to make a census of the
inhabitants. You may count the dwellers in the poorest hovel. But you
cannot count the coins hidden under the hearth, or in the end of the
stocking. It is, however, by no means clear that the amount of British
gold coin in existence is as much as that circulated by several other
nations. Sovereigns, so far from preponderating, appear to be in an
absolute minority. At the Paris Conference of 1867, the amounts of the
gold coinage of Great Britain, France, and the United States were stated
as follows:--
France, from 1793 to 1866, of the value of £262,444,160
Great Britain, 1816 to 1866 187,068,290
United States, 1792 to 1866 169,107,318[5]
It is, of course, impossible to state with certainty what proportion of
coins struck at any mint at any time remain in existence afterwards.
Some coins are called in, some are lost, others find their way to the
melting-pot: it is impossible to say how many continue to circulate. One
thing, however, is certain, that whatever casualties of this nature any
coins are exposed to, British coins feel to the fullest extent. The
rapidity of circulation in Great Britain tends to great deterioration
from wear and tear. The absence of seigniorage causes our coinage to be
relatively undervalued in proportion to other gold coins.[6] Even
supposing British coins to remain current as long as those of other
nations, they are certainly less numerous. They are probably far less
frequently hoarded. The coinage returns from 1851 to 1866 inclusive show
the relative proportions even more clearly than the earlier statements.
Our Mint was less fertile during that time, than either the Mints of
France or the United States.
YEARS 1851 TO 1866.
Great Britain struck in gold coins £91,000,000
The United States 131,600,000
France 197,400,000
-----------
420,000,000
The amount of gold coin in a country is very far from being an
indication, either of its wealth or of its business transactions; but
these figures suffice to show that the sovereign does not hold the
pre-eminence frequently ascribed to it. Even if the proceeds of the
Sydney Mint are added in, the sovereign will still be found in the
minority. The Sydney Mint was established in 1855. The coinage has been
as follows:--
Average
Years. Coinage. per annum.
7 years 1855 to 1861 £ 8,438,162 £1,205,451
5 " 1862 to 1866 11,889,838 2,377,967
-----------
£20,328,000
And it must not be assumed that all these Australian sovereigns are in
circulation now. An imperfection in the process of refining incident on
carrying on that operation in a new country, left a certain portion of
silver at all events in the earlier mintages, and this circumstance is
believed to have made these coins favourites with the 'melters.' Sir A.
Donaldson, formerly Colonial Secretary, and Colonial Treasurer to the
Government of New South Wales, gave evidence before the Select Committee
of the House of Commons on the Sydney Branch Mint, appointed in 1862;
and, after stating that he believed that a considerable number of the
Australian sovereigns have reached England, added, 'as a matter of fact,
I think they all find their way to the refiner.' Mr. W. Miller, of the
Bank of England, when examined before the same Committee, 'understood
that upwards of 2,000,000 were sent to this country some time ago, and
that they have been melted.' This was before the proclamation making
these coins legal tender in this country. They have probably been less
frequently melted since that proclamation. But it cannot be assumed that
the whole twenty millions are still in circulation. Even including all
of them, the sovereign would not be the preponderating coin as far as
number is concerned.
Mr. Hendriks, a very eminent statistician, who has paid much attention
to questions connected with the coinage (_vide Journal of the Society of
Arts_, February 14, 1868), has given to the public the grounds upon
which he bases his opinion that, although the sovereign and the dollar
may be more widely diffused than the Napoleon, there are now current in
the world twice as many Napoleons as sovereigns, four times as many as
half-eagle or five-dollar pieces, and about one-third more than
sovereigns and half-eagle pieces together. This writer has also made the
following calculations, showing the relative importance of the United
States, England, and France, as the chief manufacturing countries of
coinage since 1792. The object of the division of the results into
separate periods is to show the altered condition since the gold
discoveries in California and Australia.
PERCENTAGE OF THE COINAGE OF THE THREE
NATIONS TO THEIR TOTAL COINAGE.
Years Years Years
1792 to 1851. 1861 to 1866. 1792 to 1866
United States 18-1/3 31-1/2 27-1/3
England 43-2/3 21-1/2 30-1/3
France 33 47 42-1/3
------ ------ ------
100 100 100
In further commenting, in the pages of the _Economist_, on these
statistics, Mr. Hendriks observes:--
'It thus appears that whilst England coined 48-2/3 per
cent., or nearly one-half, of the grand total from 1792 to
1851, her proportion has fallen from the first place to the
last, in the subsequent period 1851 to 1866, her fresh
coinage having therein sunk to 21-1/2 per cent., or a
little more than one-fifth of the total. The proportion for
France was 33 per cent. in the first period, and 47 per
cent. in the second. From the second place she thus moved
to the first. But the advance of the United States was
equally marked, and from the smallest proportion, 18-1/3
per cent, in the period 1792 to 1851, there was an increase
to 31-1/2 per cent., or to the second place, in the period
1851 to 1866.
'The report from the Secretary of the American Treasury for
1868 gives more recent statistics, namely, for the years
ended 30th June, 1867 and 1868. These show a gold coinage
of about forty million dollars in 1867, and of about
twenty-four million dollars in 1868. But in England, in
1867, the gold coined was actually less than half a million
sterling, or under two and a half million dollars' worth in
American coin. And in 1868 the English Mint turned out only
£1,653,384 sterling, or about eight million dollars' worth
in American coin. The gold coinage of France has also
declined below the rate of fresh production in America.
Thus America is rapidly attaining the first place as a gold
coining country. And it will be a question for future time
to solve, whether the English and Australian Mints, in
their united working, will exceed the manufacture by the
United States' Mints at Philadelphia, San Francisco, and
Denver.'
As some persons may say, 'Other nations need a larger gold coinage than
we do, because their paper money and banking systems are not like ours;
but their coinage is no proof of the extent of their business
transactions,' it is best to mention that the united export and import
trade of the European countries alone, who have already joined the
Monetary Convention, or have signed preliminary treaties of adherence
thereto, amounts to no less than five hundred million pounds sterling
per annum at the present time, or to nearly one-fourth more than the
aggregate exports and imports of the United Kingdom. It will now be
desirable to mention the charges made for coining, or seigniorage, at
the principal mints. In England no charge is made; but the 1½d paid
to the Bank on each ounce of standard gold bullion, amounts to about
0·1605 (say 3s. 2½d.) per cent. In France it is different. When gold
is carried to the mint there, coin is returned for it, with a certain
deduction. This deduction is about ¼ per cent. Beyond this there is
some delay, practically, before the coin is returned. On an average the
loss of interest on the money, caused by this delay, amounts to about
¾ per cent. Altogether, the charge is about 1 per cent., or more than
six times the charge now made in England. In Prussia the charge is ½
per cent., and the delay is about the same as in Paris. In America and
India it is about the same.[7]
It appears from these statements that there is nearly a universal
consensus of practice in charging a seigniorage. There is also a nearly
universal consensus of opinion on the part of the leading authorities in
political economy (such as Adam Smith and J. S. Mill) that such a
seigniorage, when moderate, really enhances the value of the coin to the
extent of the charge. If, therefore, this opinion is correct, it follows
that the gold coinage of England, where no charge is made, will be
depreciated--that is, will not obtain its real value in those countries
where a charge is made. It is not difficult to show that this is the
case in France; and if in one country where a seigniorage is charged, it
follows, of course, in all of them.
A British sovereign of full weight contains about equal intrinsic
quantities of pure gold with twenty-five francs twenty centimes.
'But it does not follow that even a full-weight sovereign
is more valuable, either in a mathematical or in a
commercial sense, than twenty-five francs of gold coin,
when it is conveyed to a country within the operation of
the Monetary Convention of December, 1865. There the
sovereign ceases to be coin, and is nothing more than
bullion; and, as bullion, is subject to a seigniorage or
mint-charge, when converted into coin. And as, in the
countries in question, twenty-five francs twenty centimes
of bullion are, on the average, equal to only twenty-five
francs of coin, the sovereign is practically "valuable"
only as twenty-five francs.'--_Royal Commission on
International Coinage. Evidence of Mr. Hendriks_, p. 145.
The reason for this must be that the British coinage is gratuitous. A
sovereign may be regarded from two points of view--as a certain weight
of gold of a known fineness, manufactured into a uniform shape by the
officials of the mint, and as the current coin of the realm. At present
no charge is made for the process of manufacture. The question to be
decided is this, Is the coin, _plus_ the process of manufacture, worth
more than the same weight of gold before that process is performed? It
appears that it is even worth less in France.
'The French Mint publishes a tariff giving a schedule of
the coinage of each country, the legal weight and fineness
in the country of its mintage, and a comparative estimate
of fineness, according to the French Mint tariff of
purchase, stating the value of each coin per kilogramme and
per single piece.'
If the intrinsic value of the pure gold contained in the sovereign is
considered, it is equal to 25·2079 at par; but the Mint tariff giving
the price of purchase makes it only 25·12 at par, a deduction of about
nine centimes on each sovereign. In estimating it thus,
'The French Mint Commission and M. Durand, its
Commissioner-General, practically admit that current gold
coin in France is equal in exchange to its full legal
weight of bullion, _plus_ seigniorage. In order to test
this with mathematical exactness, we must observe that a
kilogramme, _i.e._, 1,000 grammes of absolutely pure gold
without deduction for seigniorage or mint charges, is worth
3444·4444 francs; or, _with_ deduction at the rate of 6
francs 70 centimes, on 3,100 francs, 9/10 fine, the 1,000
grammes of absolutely pure gold, 10/10 fine, are worth
3,437 francs. Then, at ·916 fine, _i.e._, at the French
Mint tariff of English gold coin treated as bullion, the
proportionate value of the kilogramme of sovereigns,
allowing for seigniorage or mint charge, comes out as given
in the tariff, 3148·29 francs. And thus, doubtless, the
French Mint arrives at its present equation of 25·12 francs
= 1 sovereign. For the proportion is, 1,000 _grammes_ :
3148·29 francs :: 7·98085 grammes : x = 25·12602
francs.'--_Royal Commission on International Coinage. Mr.
Hendriks' Evidence_, p. 146.
It appears by this that the pound sterling is practically undervalued
2d. in France; one penny about in the intrinsic worth of the gold; and
another, the cost of coining the metal, including the loss for delay in
so doing.
Any alteration in the standard of the coinage is, beyond doubt, a
measure which should not be carelessly undertaken. Those opposed to such
a measure have stated that the standard had remained unchanged in this
country for more than a century and a half. Great weight has also been
attributed by some persons to the resolution of the House of Commons of
20th October, 1696, and passed again in the same words on the 12th June,
1822, 'That this House will not alter the standard of the gold and
silver coins of this kingdom, in fineness, weight, or denomination.' A
solemn declaration beyond doubt; but notwithstanding this, several
changes have at various times been made in the currency of the realm.
In 1696, the year of the 'Resolution' silver was the sole legal tender.
In 1717, silver ceased to be the sole standard, and the double, or
alternative standard of gold or silver, was adopted. This change was
made under the advice of Sir Isaac Newton.
In 1774, silver was restricted, as a legal tender, to sums under £25 by
tale, and above £25 by weight, but gold remained a legal tender without
restriction.
In 1783, both gold and silver, without any restriction, became legal
tender.
In 1797, bank notes were made legal tender. The effect of this change is
well known.
In 1798, silver was made legal tender as in 1774.
In 1817, gold alone was made legal tender, silver being debased and
restricted as mentioned before.
In the face of these alterations it is impossible to appeal to history
for a proof that it is not lawful to make any desirable change.
But some objectors say, If the British Mint no longer coins gratis, gold
bullion will no longer make its way to this country as freely as it now
does. At the present time England is the great bullion exchange of the
world, because it is the country where the mint charges are lowest.
Deprive this country of this advantage, and the stream of bullion will
be directed elsewhere. If this argument is of any validity, of course
all, or at least the greater part, of the bullion which has already
reached this country, must have found its way to the Mint. But what is
the real fact? That not so much as the ninth part of the gold bullion
imported into this country within the last four years, has been coined
into British money.
The following figures are taken from the Statistical Abstract for
1869:--
COMPUTED REAL VALUE OF THE REGISTERED IMPORTS
OF GOLD AND SILVER BULLION, AND SPECIE, INTO
THE UNITED KINGDOM.
Gold. Silver. Total.
1865 £14,485,570 £6,976,641 £21,462,211
1866 23,509,641 10,777,498 34,287,139
1867 15,800,159 8,020,888 23,821,047
1868 17,136,177 7,716,418 24,852,595
_____________
£104,422,992
AMOUNT OF GOLD AND SILVER MONEYS COINED AT THE
ROYAL MINT.
Gold. Silver. Total.
1865 £2,367,614 £501,732 £2,869,346
1866 5,076,676 493,416 5,570,092
1867 496,397 193,842 690,239
1868 1,653,384 301,356 1,954,740
___________
£11,084,417
Looking at these figures, it will scarcely be argued that the fact of
gratuitous coinage at the Royal Mint is of any power in attracting gold
bullion to this country.
The charges made on coining in other countries amount to large sums in
the aggregate. It is desirable to show what these sums are.
It has been calculated that, upon each million pounds sterling worth of
gold coin delivered, the charge (including adjustment for loss of
interest in the fixed delays for delivery) amounts in all
England to £ 1,605
France 10,490
United States 15,000
Australia 13,330
India 13,330[8]
It is of itself a sufficient answer to those who think that the
imposition of a seigniorage might prevent bullion from being brought to
this country for coinage, to note what has taken place where such a
charge is made. Both France and the United States have coined
considerably more gold during the sixteen years mentioned above than
this country. Yet the charge in the United States is nearly ten times
that in Great Britain. The coinage at the Mint of Sydney has nearly
doubled, yet the charge in Sydney is nearly as high as in the United
States. The returns for the years 1867-1868 have not, as far as we are
aware, yet reached this country. But considering the great and
progressive increase in the Sydney coinages, it is highly probable that
the coins struck in Australia during those years have greatly exceeded
those minted in London.
To sum up:
It is at present open to this country to join the International Monetary
Convention already in force between several of the principal European
States.
It is probable that this Convention will shortly include the most
important powers of the civilized world.
The population of the countries which have already given in their
adherence to this Convention, greatly exceed in number the inhabitants
of the British Islands. Their trade is more important in value than our
own.
The disadvantages of being outside such a Convention are very great.
In joining it, a seigniorage would have to be charged on all British
gold coinages.
A similar seigniorage is always charged on the coinages at the Sydney
Mint; and the coinage at the Sydney Mint is now large and increasing--in
the last two years probably more than that of the English Mint.
This seigniorage is no disadvantage to anyone. On the contrary, it
possesses several advantages. At present, the last holder of a light
sovereign is exposed to loss. This is unfair, as probably the last
holder has done nothing to cause the coin to be light.
Were a seigniorage imposed, the first holder, the man who thinks he can
gain something by causing the coin to be minted, would have--as is
fair--to provide against the depreciation. Further, the first holder
would have to pay for the work he has done; _i.e._, the manufacture of
the coin--a charge now defrayed by the country.
It is clear that the absence of a seigniorage is not the cause which
attracts gold to England, as barely the ninth part of the bullion
imported finds its way to the Mint.
It is also clear that alterations, one at least of far more importance
than the imposition of a seigniorage, have at former times been made in
the status of the currency of the country.
To conclude, in the words of an early pioneer of British commerce, 'The
exchanges practised in England, and principally in London, are confined
within a narrow scantling, being but as a rivolet issuing out of the
great streame of those exchanges that are used beyond the seas.'
Thus wrote 'that eminently deserving author,' Mr. Lewes Roberts, the
'delineator' of the Merchant's Mappe of Commerce in 1638. The 'true
dimensions of our English traffique' even then excited his limited
admiration and wonder. He could only imagine either that this commerce
was 'at its full perfection, or that it aymes higher than can hitherto,
by my weake sight, be either seen or discerned.' To us, 'the full
streame' of that trade seems but 'a petty rivolet,' and we only wonder
how, with the complicated and varying systems of money then in practice,
with measures of length and quantity differing in almost every place of
importance in Europe, any commerce could be kept up between differing
nations. It is no longer needful to note now, as it was then, that
different weights and measures were to be found in the principal cities
even of the same country. It is no longer needful to bear in mind, as it
was then, that there was a difference of exchange between places close
to each other, and within the same territories. Commerce now would not
bear such fetters. The vigour of the early days of trade surmounted
those obstacles as the rush of a mountain stream drives it unhindered
over rocks that vainly bar its course. In these times affairs approach
what has been termed the stationary state. As the stream expands, the
current becomes more gentle. As facilities for trade become greater, a
smaller obstacle suffices to turn that trade from its course. It is now
far more easy to give a vessel the option of discharging her cargo in
one port or another, in one country or another, than it was then.
Increased opportunities of intercourse render any change of the line of
traffic far less difficult now than at any previous time. A smaller
difference in profit renders such alterations of destination more
desirable and more necessary. The course of commerce has just been
compared to that of a stream--as dashing rapidly down the mountain glen,
or slowly moving through the rich and level plain. Is it permissible to
carry on the simile still further?--to watch how, as in Holland, a
trifling artificially-produced change of level is sufficient to divert
the scarcely perceptible flow of the almost stagnant flood--to add the
waters of the Rhine to the Yssel, or of the Waal to the Lech? So as a
general extension of wealth brings all countries more closely to one
uniform condition, is it not needful to remove those obstacles which may
cause similar diversions of our trade? Is it not needful to take a step
onward, and to supply our own people with those advantages which are now
possessed by many--will soon be possessed by almost all civilized
nations? Among such advantages, to provide a coinage which, while
entailing no expense on the country, either at its creation or for its
maintenance, may be truly international in character, and aid the
streams of our commerce to maintain their course around the globe.
ART. III.--(1.) _Diaries and Correspondence of James Harris, first Earl
of Malmesbury._ Edited by his Grandson, the Third Earl. 4 vols. Second
edition. London: 1845.
(2.) _Letters of the first Earl of Malmesbury, his Family, and Friends,
from 1745 to 1820_. Edited, with Notes, &c., by his Grandson, the Right
Hon. the EARL OF MALMESBURY, G.C.B. 2 vols. London: 1870.
From 1745 to 1820--this was the lifetime of James Harris, afterwards first
Earl of Malmesbury; and such is the period over which the subject-matter
of these two works extends. A more memorable period is not to be found
in the annals of this country, or even in the long and more momentous
history of Europe. It bridges the chasm which separates the old world of
Europe from the new. It shows us that elder world in its last stage; it
also shows us the beginning of that new and better order of things
amongst which we now live. In the earlier period of those seventy-five
years, we see the thrones of Louis the Fifteenth, of Frederick the
Great, and Catherine of Russia, standing high above the heads of a
crushed and miserable people, who counted for nothing either in their
policy or in their pleasures. The simple facts of that old _régime_ of
royal absolutism now read like a monstrous dream. Vice and despotism in
the palace, license and intrigue at the Court, penury in the cottage,
and degradation everywhere, such is hardly an exaggeration of the
general condition of the Continent at that time, and simple truth as
regards France, who then, as since, boasted her leadership of
civilization. As is always the case in analogous periods, the people
themselves had sunk into a moral torpor. There were no national
movements or aspirations. Religion, freedom, and the thirst for military
conquest, are the three great motive powers of humanity. But all of
these were then dead or in abeyance. Humanity had settled on its lees.
Even mental philosophy, which so often flourishes in such dead times of
a nation's history, threw its teachings into the scale in favour of an
ignoble life; and while a pitiless Scepticism robbed men of heaven and
all their religious beliefs, Materialism bade them "eat, drink, and be
merry, for to-morrow ye die" _for ever_, like the trees of the wood and
the beasts of the fields. While Philosophy robbed man of his moral
freedom and a future life, Royalty denied him his personal and political
liberty and plundered his pockets. In truth, the whole upper crust of
society had become heartless, debased, and corrupt, while beneath was a
seething mass of suffering, ignorance, and savagery. And so the upper
crust, with king, priests, and nobles--crowns, croziers, and
coronets--gave way and fell into an abyss of devouring fire, like that
which burst up of yore beneath Sodom and Gomorrah, devastating the
corrupt Cities of the Plain. The old world of Europe was cast into the
furnace, and all things became new--Providence overruling the wrath of
man to its own wise and merciful ends.
All history is an ennobling study, alike in its events and its examples;
but life is short, and it is the French Revolution that commences the
period of history of deepest importance to the present age. Beyond that
chasm, so rudely severing the old world of Europe from the new, lies the
realm of the historian; on this side begins a drama of opinions and
events constituting by far the most useful field of study in secular and
political knowledge. Changed since then, and still changing, as are the
territorial arrangements of Europe, the conquests of Napoleon
contributed greatly to the rise of the principle of Nationality which is
now the great power at work in the alteration of boundaries and the
shaping of kingdoms. It is true, Napoleon meant to conquer only for
himself and for France. He sought to found a vast empire, with vassal
kingdoms under the rule of his brothers and relatives. But in
establishing this empire, he swept away a great deal of the obstructive
rubbish of the former time. By expelling the Germans from Italy, and
also by creating a titular King of Rome, he paved the way for the
subsequent aspirations and movement of the Italians in favour of
nationality and independence, which have at length borne their full
fruits in the establishment of a free and united Italy. In like manner,
by sweeping away a whole host of petty princedoms in Germany, he
simplified the subsequent course of events towards a unification of
Germany; while the iron despotism which he exercised in that country
first compelled all Germans to feel the tie of brotherhood, in the
glorious uprising of the Fatherland in 1813 against the foreign foe.
Poland, too, during the ascendancy of Napoleon, temporarily (but only
for the great conqueror's own purposes) regained in part its old
existence, thereby keeping alive the hope for renewed independence; a
hope which, improbable as our expectations may seem, we think will yet
be realized amid the great trouble, and changes impending over the
Continent. But still more memorable, and worthy of thoughtful study, are
the times of the French Revolution, from the influence which they have
produced upon the current of political, social, and religious thought,
in subsequent times. A whole flood of new ideas, principles, and
opinions was then poured upon the world. Some of these were wise and
good, others were detestable, but nearly all of them were given to the
world in so crude a form and in so savage or ruthless a spirit, as to
make them as a whole so repulsive that even yet some of their
excellencies are but little known or acknowledged. Every one recognises,
however, the vast influence which that grand and terrible Revolution has
exercised upon the whole current of subsequent thought; and if Europe
has yet to undergo one more great upheaving of democratic revolution (as
we believe it has), we may rely upon it that some of the more extreme
and, at present, all but forgotten dogmas of the first revolution will
again appear on the scene; including, we regret to say, that terrible
development of infidelity and materialism, against which even
Robespierre himself, with his firm belief in the Supreme Being and a
future life, was unable successfully to contend. That storm of blasphemy
and utter scepticism, in its worst features at least, soon blew
over--and let us trust that such will be the case again; but any one
who has watched the turn of thought on the Continent, and in Germany
even more than in France, must expect any new outburst of democratic
revolution to be accompanied by a manifesto of infidelity and an attempt
to banish religion from the fabric and principles of society, in a
manner only too similar to that which formed the worst feature of the
first French Revolution.
The first Earl of Malmesbury was in public life, for the greater part of
the time holding the highest diplomatic appointments abroad, during the
whole course of these momentous events. From a vantage-ground enjoyed by
few men either of this or any other country, he beheld the Courts and
peoples of Europe both before the deluge and after it; and although he
withdrew from public office before the termination of the great war with
France, he continued to the end to be confidentially consulted by the
Ministers of the time. The first of the two works whose titles are
prefixed is by far the most valuable and important. All the leading men
of the day--monarchs, statesmen, and generals--figure constantly in the
diaries and correspondence. The work has been quoted with advantage to
history by some of our ablest writers, and not least so by Lord
Stanhope, in his 'Life of Pitt.' It constitutes a mine of historical and
political facts; and though published too late to be made use of by our
chief historians of the French war and of the immediately preceding
times of the Empress Catherine and Frederick the Great, its value is
fully recognised by the writers of the personal and political memoirs
which have recently issued from the press. The second of the works on
our list is of a lighter character, in which the incidents of
fashionable life mingle largely with matters of State and Parliamentary
politics. The one work shows us the grand movements of the time, the
other gives us the bye-play. The latter, to which we chiefly confine our
remarks, is a selection from private letters received by three
generations of the Harris family. They are confidential exchanges of
intelligence and ideas, in which the hopes and fears, the expectations,
disappointments, and impressions of our ancestors are given in the very
words in which they were described. The noble editor of these letters
calls them 'waifs of the past,' but they possess a twofold interest,
firstly, as illustrating the opinions and social habits of that past
time; and secondly, they are reliable indications of what public feeling
was at their date with regard to politics, society, and the general
condition of our own and foreign countries:--
'And how eventful those years were,' says the editor:
'They saw the Highland rebellion; the American war; the
despotic Courts of the Bourbons, of Catherine, and of
Frederick; the great French revolution, and its subsequent
phases of a bloody republic, an aggressive empire, an
ephemeral restoration, and again of a short empire and a
second restoration. They witnessed the struggles of our
English people for greater freedom, even from the
privileges claimed by their own House of Commons; and
lastly, a far fiercer contest to save their own country
from the subjugation under which for a time Napoleon held
every nation in Europe except theirs.'
The chief recipient of the earlier letters in this collection was Mr.
James Harris, the father of the first Earl of Malmesbury. The Harris
family had lived quietly on an estate in Wiltshire from the middle of
the 16th century; and Mr. James Harris first broke through the
hereditary sameness of existence by becoming one of the most
distinguished scholars of his day. Besides 'Philosophical Treatises,' he
published a work on grammar, called 'Hermes,' which the accomplished
Bishop Lowth styled 'the most beautiful example of analysis produced
since the days of Aristotle,' and which obtained so high a reputation
that it was afterwards translated and published by command of the French
Directory in 1796. He was member of Parliament for Christchurch, which
seat he held till his death, in 1780; was made a Lord of the Treasury in
1763, and in 1744 he became Secretary and Comptroller of the Queen's
Household. When he first took his seat in the House of Commons, John
Townshend asked who he was, and on being told that he had written on
grammar and harmony, replied 'Why does he come here, where he will hear
neither?' His literary talent and high personal character procured for
Mr. Harris a wide circle of friends and acquaintances among the leading
men of the times; and owing to the influence he thus acquired he was
enabled to launch his son, afterwards the first Lord, early into public
life. The present Earl (who edits these letters), speaking of the
'_fêtes_ and social intercourse in the venerable city of Sarum,' where
his great-grandfather resided, observes regretfully 'how much less of
cliques and class categories then existed among the nobility and their
neighbours than in the present day.'
Mr. Harris was passionately fond of music and art, and wrote treatises
upon them, which indicate a more lively and sympathetic nature than
would he inferred from the dry philosophy of his other works. His wife
moved much in society, and appears to have possessed a similar taste for
the fine arts. The best artists of the day were visitors at their house
in Salisbury. The family went frequently to the theatre, and in the
letters we find critical observations on most of the new dramas of the
time. There are two letters from David Garrick, asking permission to
bring out at Drury Lane a musical pastoral, called 'Damo and Amyrillis,'
which, the editor says, 'was in Mr. Harris's hands,' but which, there
seems to us reason to believe, was actually composed by him. As might be
expected of a musical family, they attended the concerts and the opera,
and by-and-by we read of 'the great house in the Haymarket,' and Italian
singers come to the front. Then, as now, the Opera was a perilous
venture, and both the managers and singers occasionally came to grief.
Of one of the favourite singers of the day we read as follows:--
'All Manzolini's clothes and finery are seized, and carried
to the Custom House, so he has sent a petition to the Lords
of the Treasury to have them redeemed. This event diverts
Lord North, as he says not one of the Treasury know a note
of music, nor care one farthing what becomes of Manzolini,
_except Mr. Harris_. He says your father has told so moving
a story to Mr. Grenville about it, that he thinks it may
affect him.'
A close friendship existed between Mr. Harris and Handel, who left him,
by will, his portrait, and all his operas in manuscript. The very first
letter in this collection has a touching allusion to the great musician,
whose intellect had been affected by his labours, and who had become
very eccentric. The Countess of Salisbury, a relative of Mr. Harris,
writes to him thus (in 1745):--
'My constancy to poor Handel got the better of my indolence
and my propensity to stay at home, and I went last Friday
to see the 'Alexander's Feast;' but it was such a
melancholy pleasure as drew tears of sorrow, great though
unhappy Handel, dejected, wan, and dark, sitting by, not
playing on the harpsichord, and to think how his light has
been spent by being _overplied in music's cause_. I was
sorry, too, to find the audience so insipid and tasteless
(I may add unkind) as not to give the poor man the comfort
of applause; but affectation and conceit cannot discern or
attend to merit.'