REPORT

from the

SECRETARY OF THE TREASURY

(In compliance with a resolution of the Senate, of the 29th December, 1828,)

Respecting the relative value of Gold and Silver, &c.

May 4, 1830.

Read, and ordered to be printed, and that 1000 additional copies be sent to the Senate.

Treasury Department, May 4, 1830.

In obedience to a resolution of the Senate, of the 29th of December, 1828, “requiring the Secretary of the Treasury to ascertain, with as much accuracy as possible, the proportional values of gold and silver, in relation to each other; and to state such alterations in the gold coins of the United States as may be necessary to conform those coins to the silver coins, in their true relative value, and to report at their next session;” the Secretary of the Treasury has the honor to submit the following report:

Whatever causes affect the relative values of gold and silver, must have first affected the absolute or intrinsic value of one or both of them; and hence every inquiry as to the former necessarily involves the latter: the quantity of labor applied, under all the variety of circumstances of soil, climate, &c. which enter into the production of any given article, constitutes one principal measure of its value. But labor alone cannot determine the value of a product: that which is not suited either to the real or imaginary wants of man, can have no value in his estimation, whatever may have been the amount of labor required for its production. Hence another measure of value is to be sought, in the adaptation of the product to these wants. The aggregate of causes which control the value of these measures, respectively, is comprehended in the terms supply and demand, which alone regulate and establish the intrinsic as well as relative values of all exchangeable articles. Those of gold and silver are governed by the same general laws which determine the values of other products: but public necessity having required the establishment of some standard measure, in which contracts may be made, and exchanges regulated, between communities, the precious metals have, by general consent, been adopted as the most fit material for this purpose. This application of these metals, where two or more are used as standard measures of property, gives them a quality which does not necessarily belong to articles of commerce. It subjects their value to the influence of political regulations, whereby the demand may be increased or diminished for the one or the other, and their relative values changed, according to the interests or caprices of governments. But this effect is also controlled by the same general considerations which determine the value of all other articles entering into the purposes of human economy; viz: supply and demand, and the values thus ascertained are the result of the public judgment, made up by the combined intelligence of all those who best understand the real state of the market.

There are probably few measures which have engaged the attention of governments, from their origin, wherein those charged with the administration of public affairs have indicated more distrust of their judgment, or in which so many mistakes have been committed, as in that of adjusting and regulating the metallic standards of value, and their relation to each other. The Secretary of the Treasury therefore indulges no hope of being able to remove those difficulties, which inherently belong to the subject of the present inquiry.

The original adaptation of metals to measures of property was founded on weight and fineness alone. The use of coins computed by tale was of later invention; and the terms which express moneys of account were generally all derived from units of weights, and were originally synonimous with them. The Egyptian talent was a measure of weight, and also a money of account: the Roman pound, supposed to be derived from the Egyptian minæ, had the same properties; and so of many others. But the great convenience of computing measures of property by tale, together with a knowledge of the fact disclosed by experience, that coins could easily be kept in circulation by tale, although below the standard weight, have induced governments to rely upon this mode of computation, and frequently to debase their coins, as a means of raising money from the people without their knowledge. A few examples will sulfice to show the progress of governments in this respect. Twenty shillings, weighing 3 oz. 12 dwt. 16grs. will now pay an annuity in England, (allowing for a small difference between the Saxon and Troy pounds) contracted to be paid in the reign of William the Conqueror, in the equivalent of a pound weight of silver; being twenty shillings of the coinage of that day. In other countries, the debasement of coins is even more remarkable.

The German florin was originally a gold coin, worth about $2 28; it is now a silver coin, worth about 39½ cents. The French livre originally contained a pound of^ silver, equal to 7,555 Troy grains; worth, according to the United States’ standard, $18 16: it is now worth 18‍478⁄1000 cents. The Spanish maravedi, in the year 1220, weighed eighty-four grains of gold, which, supposing it to be of the British or United States’ standard, was worth $3 19; and the maravedi of the present day is about one-quarter of a cent.

The reigns of Henry the VIII. and Edward the VI. are the most distinguished in English history for reckless abuses in the debasement of the measures of property. Prior to the thirty-fourth year of the former reign, gold was estimated, at the mint, in comparison with silver, at 11‍151⁄955 to 1. The subsequent abuses may be seen by referring to the different ratios established during this period.

By successive changes, the relative value of gold was reduced; and in the

These debasements were effected chiefly by increasing the proportion of alloy in the silver coins, while their legal value at the Mint, and in payment of debts, was unchanged. They procured for the Crown the means of extensive plunder; but it is probable that no small portion went into the pockets of the numerous sharpers which such a policy must have produced.

These examples are not less discreditable to the morality of governments than to the intelligence of their people; for it cannot be supposed that so great frauds would have been attempted if their real character had been generally understood. The United States are, as yet, exempt from all such imputations in the regulation of their coins, as will be seen by referring to the acts of this Government in relation to its coinage; which may not be unprofitable in the present investigation.

On the 6th July, 1785, it was unanimously resolved by Congress, that the money unit of the United States should be one dollar;

That the smallest coin be of copper, of which 200 pass for one dollar; and

That the several pieces shall increase in a decimal ratio.

Neither the fineness nor weight of the unit was fixed, but no doubt the Spanish dollar was intended for the standard.

On the 8th of August, 1786, it was Resolved, That the standard of the United States of America for gold and silver shall be eleven parts fine and one part alloy.

That the money unit of the United States (viz: the dollar) shall contain of fine silver 375.64 grains. [This proposition originated with Mr. Jefferson in 1782 — see his memoirs, 1st volume, page 43.]

That the money of account, to correspond with the division of coins, proceed in a decimal ratio as follows, viz:

That betwixt the dollar and the lowest copper coin, as fixed by the resolution of Congress of the 6th July, 1785, there shall be three silver coins and one copper coin.

That the silver coins shall be as follows.

One coin, containing 187.82 grains of fine silver, to be called half a dollar.

One coin, containing 75.125 grains of fine silver, to be called a double disme.

One coin, containing 37.564 grains of fine silver, to be called a disme.

That the two copper coins shall be as follows:

One, equal to the 1⁄100 part of the Federal dollar, to be called a cent; and

One, equal to the 1⁄200 part of the Federal dollar, to be called a half cent.

That two pounds and a quarter avoirdupois weight of copper shall constitute one hundred cents.

That there shall be two gold coins: one, containing two hundred and forty-six grains and two hundred and sixty-eight thousandth parts of a grain of fine gold, equal to ten dollars, to be stamped with the American eagle, and to be called an eagle.

One, containing 123.134 grains of fine gold, equal to five dollars, to be stamped in like manner, to be called a half eagle.

That the mint price of a pound, troy weight, of uncoined silver, 11⁄12 fine, shall be *nine dollars nine dimes and two cents.

[* This is an error which does not appear to have been noticed in any edition of the laws. The value of a pound weight of silver 11-12 fine, without allowance for coinage, at the rate of 375.64 grains of pure silver to the dollar is $14.056, but no coins were made under this regulation.]

That the mint price of a pound, troy weight, of uncoined gold, 11⁄12 fine, shall be 209.77 dollars.

On the 16th October, 1786, Congress adopted an ordinance for the establishment of the mint of the United States of America, and for regulating the value and alloy of coin.

By this ordinance it was made the duty of the assay-master to receive gold and silver bullion and foreign coin, to assay the same, and give his certificates for the value at the following rates:

For every pound, troy weight, of uncoined gold or foreign gold coin, 11⁄12 fine, $209.77, money of the United States, as established by the resolution of 8th August, 1786.

For every pound, troy weight, of uncoined silver or foreign silver coin, 11⁄12 fine, $13‍777⁄1000 money of the United States, as aforesaid.

It was also made the duty of the Treasurer to receive and duly enter the certificates for uncoined gold and silver issued by the assay-master, and to pay ninety-five hundredths of the amount thereof in gold and silver, and five-hundredths in the copper coin of the United States.

From these proceedings it will be perceived that there was retained at the mint, on the coinage of gold, about 97⁄100, and on that of silver about 98⁄100, of one per cent.

The act of Congress of 2d April, 1792, establishing the mint and regulating the coins of the United States, fixes the weight of the eagle at 247½ grains of pure gold, or 270 grains of standard gold, equal to 11⁄12th parts fine; and the weight of the dollar at 371¼ grains of pure, and 416 grains of standard, silver, equal to 1485⁄1664 parts fine. It may be remarked, that, when the United States’ dollar was established at 375‍64⁄100 grains pure silver, and the eagle at 246‍268⁄1000 grains of pure gold, the proportional value of gold to silver was 1 to 15.253. At that time the ounce of standard silver in England 37⁄40 or 444 grains pure, was valued at the mint at 5s. 2d., and the ounce of standard gold, 11⁄12 fine, at 3l. 17s. 10½d.; hence the relative value of gold to silver was 1 to 15.209; nearly the same with that proposed by the resolution of 1786. But the weight of the United States’ dollar was supposed to be greater than that of the latter coinage of Spanish dollars; and hence the reduction of it, by the act of 1792, to 371¼ grains; which, it appears from the report of the Secretary of the Treasury, was intended to be an average of the weight of the Spanish dollars then most current. The relative value of gold to silver, as fixed by the same act, was also founded on a supposed average of the relative values of those metals, as established amongst the principal commercial nations. But it does not appear for what reason the fineness of the silver was varied in that act from 11⁄12 to 1485⁄1664.

It is, however, not improbable that, in fixing the ratio of gold to silver as 1 to 15, the mint regulations of other countries were referred to, rather than the market prices; and, as silver has not been made a general tender, nor is it extensively coined, in England, the mint regulations of that country bear but a remote relation to the actual market value of silver, and were not to be relied upon as any guide in ascertaining the new ratio. Since the establishment of the ratio between gold and silver in the United States, various causes have contributed to lessen the comparative demand for silver. That which has the most direct influence upon it is the revolution in the India trade: some of the chief manufactures of that country are no longer consumed in the United States, and England pays for her whole consumption of India fabrics in fabrics of her own manufacture.

It was stated by Mr. Huskisson, in 1829, that, in the commerce with India, the difficulty was not as formerly, to find precious metals to remit in payment of the balance, but to find returns from India to Europe.

The change adopted in the monetary system of England in 1816, by which payments in silver were limited to forty shillings, has also diminished the comparative demand. These facts indicate causes for fluctuation in relative values, which, depending on the will of every independent government, as well as the operations of commercial enterprise, are beyond the reach of the political power of other governments to obviate or control.

It may be, therefore, safely asserted that there are no data to be found, even in the known causes which affect the value of gold and silver, from which a calculation of their values can be made with any claim to certainty. These can alone be discovered in the results which are produced by ihe operation of supply and demand. But these results are various at different periods in the same place, and in different places at the same period.

It may be proper here to observe, that the time employed in this inquiry has not been sufficient to collect the facts necessary to a full development of these results. A circular, sent to Europe, has obtained but little information. Nor is it, perhaps, to be expected that much could be procured on a subject so complex in its nature, and so little understood, except by a direct correspondence with those who had made it a peculiar study, and whose leisure and public spirit would authorize so heavy a demand on their attention. The requisite facts, so far as they are developed by the monetary transactions of the United States and those of France and England, are believed to be accurately ascertained. Several gentlemen, distinguished for intelligence and research, have, at considerable labor, rendered valuable information to the Department. Papers, communicated by Mr. Gallatin, Mr. John White, of Baltimore, Dr Samuel Moore, director of the mint, and also a number of tabular statements in relation to exchanges, prices current of gold and silver, and calculations reducing the coins and moneys of account of other countries into the money of the United States, are appended.

England and France, by reason of their wealth and extensive commercial connexions, furnish the best data for ascertaining the ratio of gold to silver in Europe, if not throughout the world; and it is from these countries that the information most relied upon has been derived. But, to avoid confounding the different ratios of these metals, their distinctive character should be noticed.

1st. The ratio fixed by regulation, or the value of gold coins compared with silver coins.

2d. The legal value of one metal compared with the market price of the other, or gold coins compared with silver bullion, or silver coin with gold bullion.

*3d. Gold bullion compared with silver bullion at the mint, when a charge for coinage is made.

[* Whenever this designation is referred to in this report, it is termed mint price, in distinction from the value of the coins, which is termed mint value.]

4th. Gold bullion with silver bullion, in the market.

In England, an ounce of pure gold is coined into £4 4s. 11‍5⁄11d.; and, as there is no charge for coinage, the legal mint price is the same with the value of the metal when coined. An ounce of pure silver is coined into 5s. 11.35135d.; and as 5s. 11.35135d. : £4 4s. 11‍5⁄11d. :: ∥ 1 : 14.2878, the ratio of pure gold to pure silver in English coin. But the price given for pure silver at the mint is 67‍1⁄37 pence per ounce; and as 67‍1⁄37d. : £4 4s. 11‍5⁄11d. :: 1 : 15.209, the ratio of gold to silver at the mint before coinage, or of silver bullion to gold coins. As the mint price of gold is the same with that of the gold coins, this difference arises from the charge for coining silver, the ounce of standard silver being received at the mint at 62s. and coined into 66s. But the market price of silver, owing to the limited demand for coinage, is considerably below that of the mint; it may be averaged, for the last five years, at 64‍43⁄100 per oz. (pure;) and as 64.43d. : £4 4s. 11‍5⁄11d. :: 1 : 15.81, the ratio of gold coins to silver bullion in the market. The total expense of exporting gold and silver to Europe, according to various accounts of sales, may be estimated, at the maximum, at 2 per cent.* If to these charges be added the premium given in the United States for gold, we have the total amount of the expense of a payment made in England or France in specie. But in order to compare this payment with that of a bill of exchange on England, it must he observed that bills are computed at $4 44&frac49; for the pound sterling, while, in fact, the pound sterling or sovereign, containing 113.0016 grains of pure gold, is equal to $4 56.57, (as 247½ grains of pure gold in an eagle : 113.0016 :: $10 : $4 56.57;) hence, 2.73 per cent. is to be added to the nominal par of the bill to make the real par. But it will be seen by table B, that the average ratio of gold to silver bullion in England, for the last 10 years, is 1 to 15.8, which makes the pound sterling worth $4 80. 92, or 5⅓ per cent. more than its par value.

[* (See table L.)]

The comparison between a payment by bill of exchange, and by shipment of specie, may be made by ascertaining the difference between the value of the pound sterling at nominal par, (444.44) and its real value, according to the ratio of gold to silver in the market, ($4 80.92) and adding the cost of shipment. The several items which make up this difference may be exhibited as follows:

Making the payment in specie equivalent to the purchase of a bill at sight at 10.37 per cent. advance, or 9.37 for bills at 60 days.

Upon the supposition that the expense of shipping gold and silver is the same, the premium that may be afforded for gold, when exchange is 9.37 for bills at 60 days’ sight, will be 5⅓ per cent. which is the difference between the United States’ ratio of 1 : 15, and the real ratio of 1 : 15.8.

There are remarkable discrepancies in the tables of the rates of exchange and prices current of bullion, which cannot be reconciled, at least with any information now in possession. Table K states the exchange with England for 1821 at 8⅓, and the premium for gold at the same period 1.94 per cent; the same table gives for 1825 exchange at 8‍3⁄10, and premium for gold 3‍3⁄10. These discrepancies show that the tables of prices current, are either not accurately made up, or that there is not sufficient uniformity in the prices to form a guide.

The United States’ dollar contains 416 grains of standard, or 371¼ grains of pure silver. The eagle contains 270 grains, standard 11⁄12 fine, or 247½ grains of pure gold, making the ratio 1 to 15. Gold, within the last 8 years, has commanded a premium from 1 to 6¾ per cent.; this fluctuation is partly owing to the rate of exchange. But a comparison of silver bullion with that of gold, in England, can alone show what is the highest premium which can be afforded for gold in the United States, before silver can be shipped with equal advantage. United States’ dollars command in England 57½ pence sterling per ounce, equal to 64.43 per ounce for pure silver. Hence, each dollar is worth 4s. 1⅘d. in England. One dollar, in gold 24¾ grains pure, or 27 grains standard (11⁄12) is worth (at £3 17s. 9d. per ounce) 4s. 4.48⅛, and the difference between the gold and silver dollar will be 4s. 4.48⅛ − 4s. 1⅘d = 2.68d. or 5.37 per cent. which is the premium that can be afforded for gold in the United States, when the metals bear these prices, upon the supposition that silver can be shipped at the same expense as gold. The last quotations of bullion make gold £3 17s. 9d. and dollars 4s. 9d. the ounce; making the difference 6¼ per cent; while the quotations for 1827, ’8, make dollars 4s. 9‍5⁄8d., and gold £3 17s. 6d. or 4⅔ per cent.

It should be observed that this fluctuation in the premium for gold in the United States is not attributable to the exchange with England, but exclusively to the fluctuations in the respective values of gold and silver in that country. But, whenever the difference of exchange, above the real par, is less than the difference between the mint and market relative values of gold and silver, the premium given for the preferred metal will he determined by the rate of exchange, rather than by the relative values of the metals. In proof of this remark, the tables of prices current show, that, when exchange is at or near par, no premium is given for gold; and that, when exchange rose to 12 per cent. gold commanded a premium of about 6 per cent. The maximum influence of exchange on the price of gold in the United States can therefore only be ascertained, when the premium for bills is so high as to exceed any possible difference between the mint and market relative values of gold and silver, and to make it certain that the premium for gold has risen to the point at which silver can be exported, to pay balances with the same advantage as gold. If the exchange, or its influence on the price of gold or silver, were a true test of their relative values, it would prove a fluctuation more than sufficient to deter any government from attempting to fix them by regulation.

It is because exchange has rarely been so unfavorable to the United States as to raise the price of gold to its maximum, that it has been sometimes confounded with the question of relative values. This consideration suggests, that no reliance is to be placed on an average premium for gold in the United States for a series of years, as a criterion for the ratio of gold to silver; and that the only inference of this nature is to be drawn from the highest rate of premium given for gold, which is to be corrected by the market prices of the two metals in those countries to which they are exported. The highest premium for gold quoted in the prices current is 6¾ per cent. which makes the ratio 1 to 16.01¼. The lowest price of gold in England, during the same period, will be found £3 17s. 6d. an ounce, and the highest price of silver corresponding as to time, is 5s. 2d. per ounce standard; making the ratio of the pure metal 1 to 15.28. The mean ratio between these extremes, is 1 to 15.64; but the average, deduced from the market prices of the metals respectively in England, as before stated, for the last 10 years, is 1 to 15.8, which shows that a mean ratio between the highest and lowest prices is not to be depended on. Other correctives must, therefore, be found, for which the monetary system of France affords the best lights. In that country, the currency is essentially gold and silver; and in a nation of so much wealth and internal commerce, the quantity of currency being in proportion to its business, the demand for coinage is very great; and the mint being well supplied, especially with silver, is kept in full operation, and gives great activity to the bullion market, which consequently produces an extensive influence upon those of other countries.

By the mint regulations of France, gold and silver are fixed at 9⁄10 fine, 1⁄10 alloy. The kilogramme of gold (equal to 15434 grains troy, or 13890.6 pure) is coined into 3100 francs; hence one gold franc contains 4.48084 grains pure gold, which is equal to 9.5167 sterling, or 18‍104⁄1000 cents in U. S. gold. The kilogramme of silver, 9-10 fine, is coined into 200 francs; hence one silver franc contains 69.453 troy grains of pure silver; and as 371.25 : 69.453 :: 1 to 18‍703⁄1000 cents, the value of the franc in U. S. silver — difference 3⅓ per cent; and as 69.453 : 371.25 :: $1 : 5 francs 34.534 centimes, the value of the U.S. dollar in francs and centimes; and as 4.48084 : 69.453 :: 1 : 15.5, the ratio of gold coin to silver coin in France. The charge for coinage at the French mint is 3 francs per kilogramme of gold, or 3.10 per cent. nearly, and 9 francs per kilogramme of silver, or 1½ per cent. The mint price of the kilogramme of gold is therefore 3091, and that of silver 197 francs; and 3091⁄197 gives 15.69 to 1, as the ratio of silver bullion to gold bullion. Now if all the gold and silver offered in the market can be used at the mint, the market price will never be less than the mint price: but the market price may exceed the mint price; and since the Bank of England resumed specie payments, or for the last 13 years, as stated by Mr. Gallatin, gold has commanded a small premium of from ⅕ to ⅘ per cent. averaging about ½ per cent. If this premium be added to the legal relative value of the gold, the ratio will be as 1 to 15.58. The average value of the U.S. dollar in France is computed at 5 frs. 26.065 centimes, and the true value, as above stated, is 5 frs. 34.534, making a loss of 1.609 per cent. upon the exportation of silver dollars compared with the par of exchange. But it has been shown that gold is worth one half per cent. more than silver, according to the mint ratio; hence the advantage of shipping gold to France is (½ + 1.609=) 2.109 per cent. provided 10 silver dollars will purchase 1 gold eagle in the United States; this added to the difference between the U. S. mint ratio and that of France, (3⅓) gives 5.409 per cent. for the premium, which may be be afforded for gold before silver can be exported, making the ratio l : 15.82.

In the statement presented by Mr. Gallatin, the ratio in France is supposed to fluctuate between 1 : 15.69 and 1 : 15.58, but it should be observed that the first is deduced from the mint prices of gold and silver, and the last from a comparison of the value of the coins, allowing for an half per cent. premium on those of gold.

The market prices of silver, however, show the average to be below the mint price; and it is only from the market price of both metals, without regard to the mint price, that the true relative value is to be found. From these it will be seen that the average ratio in England, for the last 10 years, is 1 : 15.8; for the last 5 years, l : 15.81; and in France, for the last 13 years, 1 : 15.82. The near conformity of these rates almost amounts to demonstration of the true relative value of gold and silver. It should be observed that, among the various causes which disturb the values of gold and silver, the restrictions against their exportation have perhaps the most decisive effect, and are the most difficult to estimate. The bullion committee of the House of Commons ascertained that the prohibition of the exportation of gold reduced the price of that which was prohibited 5 per cent. below that which could be lawfully exported. The restrictions imposed by the Governments of the Spanish American continent, although ineffectual as to their object, could not fail to influence very sensibly the values of both metals, and more especially that of silver, which, by reason of its greater bulk in proportion to its value, is the more difficult to conceal. However uniform prohibitory laws may be, the irregularity of their execution by different officers, under various temptations, must necessarily derange the ordinary operations of supply and demand. But as these restrictions give way to a more rational policy, it may be expected that the price of silver, which has been most affected by them, will be reduced in other countries; and this is probably one cause for the reduction in it which has taken place since the great political changes in Spanish America and Brazil. A view of these considerations has directed the present inquiry mainly to the condition of the bullion market in those countries where there are no restrictions, as furnishing the only data to be relied upon for ascertaining the results sought. The market in France essentially regulates that of the principal countries on the continent of Europe; and the British market, by reason of its extensive connexions, may be considered as controlling that of every other commercial nation in the world; or rather the result of the various influences which affect the values of gold and silver in any part of the world, may be most accurately ascertained where these metals are most extensively used and freely bought and sold, which is in France and England. In pursuing this inquiry into another branch of the subject, it seems to be necessary to refer to the well known fact, that, wherever an erroneous mint regulation exists, the metal rated highest is always used as the standard measure of property; and whether the fluctuation to be corrected has arisen from a superabundant supply of one, or a deficient supply of the other, the only correction that can be safely made, is to increase the mint value of the coins of that metal which has been estimated too low. It would not be proper to change the mint value of that which had been rated too high, because of its immediate and obvious effect on contracts. For instance, all contracts in the United States are now made with reference to the mint value of silver coins: gold being rated too low at the mint for its market value, no payments will be made in it, because silver being made by the mint regulations a tender at a higher rate than its market value, and the payer having his option, will always pay in the coin that pays the most debt in proportion to what it costs him. The most easy change may therefore be made in the value of the gold coin; but, in determining what ought to be the ratio of coins to coins, it is important to keep in view the constant liability of the metals to fluctuation, and so to adjust the ratio, if possible, that, while both metals may be kept in circulation, that which is most desirable for currency may not be at any time estimated lower in the coin than in the market. It is this consideration which constitutes the essential difficulty in the establishment of mint regulations. The fluctuations in the value of gold and silver cannot be controlled; and even the attempt to conform the mint to the market values must produce a change in the latter. But if, after adjusting the ratio at the mint by raising the value of the gold coins, it should happen that silver should rise in the market above the mint value, the silver coins, exchange with foreign countries being unfavorable, would be withdrawn from circulation; and the only remedy within the power of the Government would be to reuuce their weight, as is now proposed in respect to the gold coins. Successive changes of this nature must in time subject the policy of this Government to the reproach which has been so justly cast upon those of the old world, for the unwarrantable debasement of their coins. The contemplated change, therefore, requires to be undertaken with guarded care. Even if it should succeed in bringing gold into general circulation in the United States, the new demand for it thus created must sensibly affect its value, and create a new ratio in other countries; and the Governments which have more than one metal as a standard of property would be obliged to change their mint ratio, or suffer the inconvenience of an exportation of their goid, which might leave our currency in but little better condition than at present. A conventional agreement among the principal commercial nations of the world which desire to use both gold and silver as standards of value, fixing the same relative values, might avert such consequences. But the regulation of the coins of a country is regarded as a high attribute of sovereignty; and, until higher objects of ambition shall overcome the folly of maintaining mere dignity at the expense of public good, it is not to be hoped that such a measure would be favorably considered.

Each nation has, however, a relief within its own power from all the evils incident to the regulation of the relative value of the metals used for current coins, which is to have one standard measure of property. Great Britain has, after a series of experiments for some centuries in vainly endeavoring to adjust the relative values of gold and silver, come to this conclusion, in theory at least, and adopted gold as the proper standard. France maintains both goid and silver in circulation with tolerable success; but her currency is not merely founded on a specie basis; it is essentially a specie currency, having virtually no bank paper to interfere with it. Necessity for both metals in due proportion, keeps up a regular demand for them, which is so extensive as in a great measure to control their relative values.

The policy of the United States in changing the ratio of gold to silver in the coins, may be governed by the probability of effecting such an adjustment as will permanently maintain both metals in general circulation; or, if this be doubtful, by the preference to be given for the one or the other, as a principal medium for currency.

The history of coinage proves that little reliance can be placed on artificial regulations of relative values of the standard measure of property, as a means of maintaining a regular currency of uniform value. Some remarkable instances, as noticed by Lord Liverpool, occurred in England in the reign of James I, and subsequently. Gold being estimated too low at the mint, compared with silver, was freely exported, which caused incessant complaints. To remedy this evil, King James raised the value of gold in his coins, by successive proclamations; but he at last raised it too high; and during the remainder of his reign, and that of Charles I, the silver coins were exported until the complaints were as great for want of silver as they had been before for want of gold. About the middle of the 17th century, during a short period, according to the same author, the relative values at which the precious metals were estimated in the coins appear to have been in equilibrium with the market prices. But it should be observed that no change seems to have taken place at the mint from 1626 until 1663. As gold had been previously estimated at the mint too high, the market price of it must have raised, to produce the equilibrium above noticed. It appears, however, that, in 1663, the relative value of gold was further raised at the mint in the proportion of 13.346 to 14.4S5. This must have been done in consequence of a further rise of the price of gold in the market; and yet the new mint value was still too low; for “all the gold coins then made,” says the same writer, “would have been immediately exported, if the Government had obliged the people to receive [pay] them as a legal tender at the nominal value given to them in the mint regulation:” “they passed in payment at a higher value than the mint estimate, by general consent of the people.”

After noticing these and other facts of the same kind, Lord Liverpool observes, “that, from the beginning of the reign of James 1, to that of William III, gold and silver coins were alternately exported, to the great detriment of the public, as often as individuals could profit thereby. In 1717, a report of Sir Isaac Newton, then master of the mint, to the Lords Commissioners of the Treasury, states, the mint regulations of relative values to be 1 pound standard gold in 44½ guineas, at 21s. 6d., and one pound standard silver into 62s. or 1 to 15.57, and the relative values in the market at 1 to 14⅘ or 15; by which it appears that gold was then estimated at the mint too high: silver was consequently again exported; and as a remedy, it was proposed to take off 10 or 12d. from the value of the guinea; or, as a safer experiment, Sir Isaac suggests the diminution, at the present, of 6d. in the value of the guinea, “which, by its effects, might show hereafter better than can appear at present, what further reduction would be most convenient for the public.” He no doubt foresaw that it was impossible to ascertain, by calculation founded on all the facts that could be collected, what would be the precise effect of a change in the weight of the gold coins; and, hence, with a distrustful caution, proposed an experiment by reducing the weight of the guinea only one half of the ascertained excess in its weight, according to the existing market value of gold and silver.

It seems very clear from these facts, to which many others of later date might be added, that, however exactly the proper equilibrium of values of gold and silver may be adjusted at the mint, the balance is liable to be disturbed by causes which can neither be anticipated nor controlled by political power. If the regulation be founded on the most exact calculation of relative values for the time being, the vibrations of the values of gold and silver must alternately cause the expulsion of each: and where one metal is more essential to public convenience than the other, the adjustment which exposes that under any circumstances to general exportation or melting, may become a greater evil than a regulation which constantly excludes from circulation the less desirable coin. These difficulties had long been a matter of great concern in England, although it was not well settled in public opinion which metal was the best suited for the currency of that country.

“The coins,” says Lord Liverpool, “were in a great state of confusion;” and neither Sir Francis Bacon nor Sir Edward Coke, though especially consulted, appear to have been able to propose a remedy. Sir William Petty first, and subsequently Mr. Locke, “asserted and maintained the opinion that coins which were to be the principal measure of property could be made of one metal only;” and Mr. Locke insisted that “silver was the most fit metal for a standard measure of property.”

In 1774, a partial experiment was tried. Silver was made a tender for payments not exceeding £25; and, subsequently, in pursuance of the report of Lord Liverpool, viz: in 1816, a further experiment was made by reducing the payments in silver to 40s. It may be observed, that, although public opinion in England is favorable to gold as a standard measure of property, yet, under the last arrangement, it was thought expedient to protect the silver coins by a charge for seignorage of 4s. for the pound weight. This proves that silver currency was deemed indispensable. It is not known that any inconvenience has been experienced in England from the exportation of the coins since that time. Indeed this could scarcely have occurred, because, gold being substantially the measure of property, nothing but unfavorable exchanges could, under ordinary circumstances, affect the gold currency; and silver being estimated, not only in the coins, (66s. to the pound,) but at the mint, (62s. to the pound,) above the highest market price, the silver coin could not be withdrawn from circulation. This leads to a consideration of the effect which may be produced on the currency by a charge for coinage at the mint. This charge is termed seignorage and brassage, or by the French retenue. It is virtually a charge for the manufacture, and may either be made simply to meet expenses, or for profit and revenue to the Governments. It is paid in the first instance by the holder of the bullion, who receives a remuneration, not in the same weight of coined metal, but in the increased legal value of a less quantity, which is made by law a tender for as much as it was valued at when delivered at the mint. The coinage, therefore, costs the holder nothing, except what he pays as a member of the community, whose property is affected by the depreciation of the standard measure.

Standard silver bullion had, for a long time, been received at the English mint at 62s. for the pound weight, and paid out at the same rate; but when the silver coins became so light that 66s. scarcely weighed a pound, they were bought in at 62s. and re-coined and re-issued at 66s. If the loss of weight by wear had been equal to 4s. in the pound, there would have been no gain to the Government by the operation, nor loss to the community; the number of pounds of silver, and that of shillings too, being the same as before the new coinage took place, no seignorage was paid in the process. But the determination subsequently to receive silver bullion at 62s. for a pound weight, and issue coins at 66s. constitutes a charge of 4s. on each pound of silver coined, in the nature of a tax. It has been plausibly urged that a charge for coinage is of great importance in preserving a wholesome uniformity in the currency, and protecting the coins from exportation; and some nations have evidently established mint regulations ostensibly founded on this theory. It is certain, that, where two metals are used as standard measures of property, the coins made of one of them may be protected by a seigniorage as long as those of the other, not having this protection, will supply the demand for exportation. But, if the relative value of the coins is properly adjusted, an equal seignorage on the coins of both metals can afford no permanent protection to either. The effect will be to raise the nominal rate of exchange to as much as the difference between bullion and coin, when the exportation will be made as freely as though no seignorage was charged.

A further effect of a charge for coinage is to fix one price for bullion at the mint, and another for the same quantity of metal in the coins. There may be, therefore, three distinct prices for the metal, at the same time, each influencing in some degree both the others. While the market and mint price of bullion correspond, or while the former shall not exceed the value of the coins, these will not be exported; but, if the market price of bullion exceeds the mint price, none will be sent to the mint, if a seignorage is to be paid; and the coinage ceases.

It seems to have been supposed that the difference between the mint price of bullion and the mint value of coins afforded room for a fluctuation in the price of bullion to a certain extent, without affecting the coinage. But this is not essentially the fact. The price of bullion is estimated in the current coin and standard measure of property; and wherever a demand for any other purpose than coinage exists, although the price may not be so high as to cause the existing coins to be melted, yet it will withdraw the supply of bullion from the mint, and thus indirectly affect the currency in the same manner as if a portion equal to the usual coinage for the same time was exported or melted. And whenever the bullion in the market is inadequate to the demand, the quantity of pure metal in the coin being the only measure of their value for any other purpose, the transition from the market price of bullion to the mint value of coins will be more rapid than if the prices were governed by the unrestrained laws of supply and demand. Hence, in practice, it will be found that the currency is probably not more stable under the supposed protection of a seignorage, than where none is charged, or when a sufficiency only is retained to defray expenses.

There are some objections to the charge for coinage, well worthy of consideration. It necessarily causes a greater number of pieces of the same value to be coined from the same quantity of metal, and affects the value of contracts, which may be paid in a less weight of metal after such a regulation than before. The difference operates as a premium for counterfeiting even in the standard metal; to which being added a small deficit in weight and fineness, that operation may be carried on with increased success. If a high seignorage be charged on one metal, the coins thus retained in circulation by long and frequent use must become sensibly depreciated; and the lighter they are, the more reluctant every individual into whose hands they fall will be to send them to the mint or melting pot: they are therefore kept in circulation as long as possible, until public institutions and money dealers refuse to receive them by tale, when a shock is produced, and the whole loss, as well on the counterfeits as the real coins, will fall suddenly upon those who are least able to bear it. Instances of this kind have occurred in Europe, and sometimes threatened serious convulsions, which have either ended in the imposition of a tax on the people, to supply the loss to the holder of the light coins, or in a new coinage, debased to correspond with the depreciation; and the evil has probably more than counterbalanced all the benefits derived from seignorage or other measures to prevent melting or exportation of coins. This subject may be more practically considered by referring to the actual fluctuations in the price of gold in the United States during the last ten years, varying in relative value from 1:15 to 1:16, under which it would have required a seignorage of 6⅔ per cent. to protect the gold coins.

The holder of gold bullion could afford to send it to the mint when it was at or below the mint price; but the coinage must cease whenever the price of gold rose above 15 to 1: and, on the other hand, the exportation of gold coin could not be made until the price of bullion exceeded 16 to 1 of silver. Coinage must therefore be made when pure gold bullion could be bought for $19 39⅓; and the channels of currency could not be drained until it rose to $20 68 the ounce. As long as the prices ranged between these points, silver would be exported in preference to gold, and the gold coins would be wasting by use: none could be taken from the currency, nor any added to it. To avoid this consequence, the mint prices of bullion should approach nearer that of the coins; or, in other words, the seignorage be reduced. But there is no certain rule to determine what ought to be its amount to avert the effects of the fluctuations in the price of bullion, and at the same time to promote an adequate supply of new coins to maintain a wholesome currency. It would seem to be most safe not to attempt much by way of remedy for one evil, which must inevitably create another.

The public mind is not a little prone to delusion on the subject of precious metals and money, which has no doubt caused much injudicious legislation on these subjects. Money being merely the representative and measure of property, its value consists in its adaptation to the payment of debts. Every successful effort, therefore, to confine it within given limits, must embarrass its application to the only purpose for which it is wanted; and, unless it can be shown that a tax upon the payment of debts will promote national wealth, a seignorage, or any other measure of that nature, must appear to be injurious. The efforts to secure the currency by restricting the exportation of the precious metals, have always proved unavailing, by reason of the impossibility of executing them, except so far as the penalties of the law cost the exporters a small premium by way of insurance against detection. When laws prohibiting the exportation of British gold were executed with the utmost rigor in England, the difference of price between the gold that could not and that which could be lawfully exported, as before observed, was about 5 per cent. As long as commercial intercourse is continued among nations, debts between them must be liquidated, and the precious metals are, by universal consent, regarded the safest standard in which to estimate not only the prices of merchandise, but to test the value of all paper currency.

The transactions between the people of different nations are similar to those between a number of merchants: the balance due from one to another is paid by the transfer of a debt, due from a third, if the third nation happens to be a creditor of the second to the same amount of the debt due from the first, and no more. The operation is performed on paper, and exchange is at par between all of them; but if, when this amount is adjusted, a balance remains due to one, which can be paid in nothing else more advantageously, it must be paid in the standard agreed upon among them, viz: the precious metals; and when these are to be procured for that purpose, the current coins are liable to be withdrawn from circulation. But if the operations of the mint of the debtor nation fix a value on either of them, above their market value for exportation, this artificial advance is virtually a tax upon the payment of the debt: the creditor estimates the payment by its weight in pure gold or silver; and the debtor merchants must therefore pay the tax, or pay interest upon the debt, until some other means of payment are devised.

It may be said that it is better to pay interest than to drain the channels of currency. This might be the case if there were no other relief or safe remedy for overtrading. But it should be observed that a demand for the precious metals to pay debts stimulates increased exertions to procure them wherever they are to be found. Hence a supply, except in extraordinary cases, will be generally furnished. But when the disposition to overtrade continues, and the specie is withdrawn from the banks to pay debts abroad, the banks, if well conducted, will abstain from discounting new paper, or extending the means of contracting further debts; thus curing the diseased appetite by low diet. And the more readily specie can be applied to these payments abroad, the more vigilant the banks are obliged to be in interposing this check. Hence there is less danger of their making excessive issues of paper beyond their specie means, which are a sure test for the real wants of the country, wherever wants are regulated by the ability to pay.

The easy adaptation, therefore, of coins for the payment of debts, promotes prompt payments, restrains speculations, and lessens all the other evils incident to the licentious issues of bank paper. A seignorage on either metal, of sufficient amount to affect the currency, is of the same character with the prohibitions of the exportation of specie, and is liable to most of the objections to that measure. The difference is chiefly in degree. It could not, therefore, be beneficially adopted to such an extent; but a charge of small amount on both metals, equivalent to the expense of coinage, would not be liable to the same objection, and would remunerate the mint for the expense to which it is now subject, that of coining, merely for the purpose of putting the metal into a form better suited for exportation.

It remains to be considered whether gold or silver is the most convenient currency for the United States. It has already been observed, that, prior to the year 1821, gold and silver generally bore the same relation in the market of the United States, which they did in the mint regulation. Silver sometimes commanded a premium for the India trade. But, at no time since the general introduction of bank paper, has gold been found in general circulation. It may not be necessary here to inquire minutely into the causes which prevented the ratio of gold and silver in Europe from affecting the price of gold in the United States prior to 1820. The fact that gold did not circulate in the United States at a time when it commanded no premium, is sufficient to prove that other causes than an erroneous mint regulation have excluded, and may still continue to exclude it from circulation. These are to be found partly in the operations of our banks. Bank paper supersedes the use of gold for large payments; and whether preferred or not by the people, the banking system, if it may be called system, will most probably exclude the circulation of both gold and silver, to the whole extent that bank paper can be made a substitute for them. As to gold, the substitution is complete, while there is a paper medium in tolerable credit that will circulate throughout the United States. But this is not the case as to silver. Notes of very small denomination are soon defaced and worn out by frequent, use, and counterfeits are less easily distinguished than those which are not so much used: hence some of the States have prohibited their emission and circulation, and the convenience arising from it may induce others to follow the example.

Silver, being substantially the only standard measure of property, is the basis on which the credit of bank paper is founded; and when any portion of the small notes is withdrawn or expelled, silver, being best adapted for small coins, takes their place. Gold cannot be so well employed for this purpose; pieces 1⁄15 of the size of the small silver coins are unfit for circulation. So precious a metal is only suited for coins of the larger denominations. There are probably other causes; but, whatever these may be, experience alone has proved the fact that gold could not be made to circulate freely with bank paper and silver; even although the paper was based on specie, and there was no visible error in the mint ratio.

Mr. Lowndes, in a report made to Congress in 1819, states “that gold can scarcely be considered as having formed a material part of our money circulation for the last 26 years;” and although he attributes this fact to the erroneous ratio in the mint regulation, yet it does not appear from the market price in the United States, during the whole of that time, that gold was more valuable for exportation than silver. On the contrary, it will be observed, by reference to table B, that in England, prior to 1810, the ratio of gold to silver had, for fifty years, averaged at less than 1 to 14.75, and at no period of 10 years as high as 1 to 15. These facts explain the reason why gold did not, at that period, command a regular premium; and when connected with the fact that it did not then circulate, they demonstrate that some other causes than erroneous mint regulations have excluded it. Whether these have been correctly explained or not, it is very clear that an exact adjustment of relative values cannot be expected to bring gold into general circulation. Silver is, therefore, the preferred metal for our currency.

It may be further remarked, that we have had long experience of a currency without gold, and but very little of a currency without silver. The inconvenience of the former is scarcely felt, but that of the latter was insupportable. We have, however, had no experience of a gold currency without silver. But it would not be difficult to foresee, that, if any event should drain off the silver, its place will be supplied, not by gold, but by small bank notes and paper tokens, which are the most obnoxious of all the various materials for currency.

Much has been written in England to prove that gold is the most fit metal for a standard measure of property. The principal argument relied upon to prove this is, that, being more precious, it is less liable to fluctuate. An inspection of table EE will show that it has no advantages over silver in this particular. And it may be remarked, that, notwithstanding the preference given to gold, by law, in England, in making it the principal standard, the silver coins are deemed so essential to a wholesome currency, that they arc protected by a seignorage of 6.48 per cent. If it be true that gold is less essential, as a current medium for the United States, than silver, and that a drain of the silver coins would be attended with serious inconvenience, it is very desirable that the mint value of gold should be so low as to prevent the possibility of silver being preferred to gold for exportation. For whatever inconvenience may be felt in the currency from unfavorable exchange, its force will, in that case, be broken by the exportation of the gold, before it reaches the silver; giving the banks time to prepare for protecting the latter.

Should a change be made in the relative value of gold and silver in the United States coins, there is some reason for conforming the regulation to that of France, founded in the consideration before adverted to; that of establishing a common regulation among the principal commercial nations of the world, which use both metals as standard measures of property. Another reason for adopting this ratio, is that there would be little danger of its causing the exportation of silver in preference to gold. But it ought not to be expected that it would bring gold into general circulation with silver in the United States.

Nor does the subject admit of such regulation as to enable the government to accomplish with certainty that result. The values of gold and silver, compared with each other, as already shown, are liable to fluctuations, resulting from the operations of human enterprise, the political convulsions of nations, and from the laws of nature, which can neither be anticipated, controlled, nor averted. And even if all other causes which affect the supply and demand of the precious metals were uniform, every new mint regulation, changing the legal relative values with a view to conform them more nearly to the true values, must produce a change in the true value of the metals, by creating an increased demand for that which is raised, the extent or effect of which cannot be calculated; and hence a new fluctuation is caused by the measure designed to correct an existing error.

It must be evident that a mint regulation in the United States, which would bring gold into general circulation, must withdraw a portion from some other channel, and enhance the price, which, if found inconvenient, might induce a new regulation by other governments, to draw it back. The subject is in its nature one of great difficulty; and the most judicious measure which can be suggested deserves only to be considered as an approximation to any given result. There is no doubt but gold could be made the basis of our bank currency, and of course would become the principal material for bank deposits. But a bank paper, convertible into gold, would not circulate less freely than a paper convertible into silver; and unless the paper currency of the United States shall be generally abolished, by confining the issues to very large notes, there can be no well grounded hope that any regulation will bring gold and silver into joint and general circulation. All that can be expected is that bank paper may be made equally convertible into both metals; and if this desideratum were obtained, it is very certain that whenever any charge should occur in the market, to drain off the silver coins, instead of gold coins supplying their place, it would be immediately occupied by the worst species of paper currency, small bank notes and tokens.

Amidst all the embarrassments which have surrounded this subject since the adoption of metallic standards of property, it is remarkable that Governments have so tenaciously persevered in the effort to maintain standards of different materials, whose relation it is so difficult to ascertain at any one time, and is so constantly changing; and more especially when a simple and certain remedy is within the reach of all. This remedy is to be found in the establishment of one standard measure of property only. The evil of having two or more standards arises, as already observed, from the impossibility of so fixing their relative values by law that one or the other may not, at times, become of more value in the market than estimated by regulation; and, when this happens, it will be bought and sold according to its market value, regardless of the law.

The proposition that there can be but one standard in fact is self evident. The option of Governments charged with this duty is therefore between having property measured sometimes by gold and sometimes by silver, and selecting that metal which is best adapted to the purpose for the only standard. Why the latter course has not been universally adopted, it is not easy to explain, unless it may be attributed to that prevalent delusion which seeks to secure the possession of gold and silver by restraining their exportation, and avoiding the payment of debts rather than improving the public economy by giving every facility to it. It would seem strange, however, that, while every individual who had a deposite of money in bank, or in his chest, (unless he is sufficiently deranged to think of hoarding it,) would be wholly indifferent whether it were gold or silver. Governments should persevere in maintaining a different theory. But such has been the fact. The history of coinage abounds with mint regulations to keep gold and silver together, and statutes prohibiting, under severe penalties, the exportation of either; all of which have disappointed every expectation of their projectors. The adoption of one metal as a standard measure of property is recommended by its simplicity. No change in the mint regulations can ever be required, and it removes every pretext for dishonest or unwise Governments to debase their coins. All other metals may be imported as freely as before, and, like other articles of merchandise, applied to the payment of debts. The standard coins could not be withdrawn from circulation except by an unfavorable exchange, which is to be corrected by selling more or buying less, not by refusing to pay. That there must be some fanciful delusion, originating in the love of money, that induces such pertinacious adherence to the maintenance of two standard measures of property, can scarcely be doubted. All agree that measures of weight and capacity should be based on a unit, determinable by some fixed law of nature; and none will pretend that this measure could be perfected by referring to two or more variable laws, having no connexion or equalizing principle to correct their aberrations: yet such is the theory of two standard measures of property.

It may, indeed, be alleged that the supply and demand, or value of either gold or silver, is not governed by an invariable law; but this will not prove that the value of both is less variable than that of either, and still less that the variations of the one will counteract those of the other. Much might be said to prove that the standard measure of property should be made of a metal sufficiently abundant to enter into general circulation, determining values in small as well as large transactions. The whole productive wealth of a nation is but the aggregate of accumulations from small transactions; and the character of the English monetary system, which has one standard measure for small payments, and another for large ones, may be practically understood when it is observed that a tenant, who receives in payment for his products silver tokens at 66 shillings for the pound, equal to 71s. 4½d. the pound for fine silver, may be obliged to pay his rent and taxes in a medium wherein this pound of fine silver will only pay 64‍43⁄100 shillings; making a loss to him of about 9.7 per cent. on all that part of his income which may be demanded of him in sums over 40 shillings. Such would inevitably be the consequence of a redundant coinage of silver. How far the evil may be practically averted by restricting the coinage and keeping the supply of shillings short of the demand, whereby their price may be kept above their intrinsic value, can only be known by practical observation. But it can scarcely be possible, under any state of things, to convert a sum of money in silver coins into gold without paying at least the difference between the mint price of silver and the nominal value of the silver coins, (viz: 66 − 62) near 6½ per cent.

The only defence of such a system is, that people, knowing the value of the tender, may make their contract with reference to it. But those who are most liable to suffer by the system cannot be expected to calculate the difference between the mint and market values of gold and silver from day to day: all they can do is to make some approximation to it; and even that will probably be neglected in most of the small transactions.

Such is the monetary system in England, as commenced in 1774, and established in 1816. Its error seems to have arisen from a deceptive prejudice in favor of gold as a standard measure of property, while experience had shown that silver could not be dispensed with in the currency; wherefore an attempt was made to reconcile necessity to prejudice by establishing gold as the general standard, and protecting a debased silver coinage for small payments by a seignorage and an excessive valuation at the mint.

The same effect, in a degree, will be produced by any measure that shall introduce into the currency, for small payments, any medium which is not itself a standard measure of property. It is unfortunate, perhaps, that the people are so little disposed to resist impositions of this nature: they often consent to accept depreciated tokens, and pay the discount for converting them into the standard money, rather than contend for what seems to be a small matter; hence such a currency is readily forced into general circulation, as soon as the standard medium can be expelled.

If these views be correct, silver ought to be the standard measure of property in the United States, and maintained by mint regulations, as the chief material for metallic currency. But if there were no paper medium like that of the Bank of the United States, circulating freely in all parts of the Union, and every where convertible into the standard, at a very moderate discount, gold coins would be almost indispensable. Without them, every traveller, even from State to State, and often from one county to another, must either encumber himself with silver, or be exposed to vexatious embarrassments and impositions.

In conclusion, should it be determined to maintain both gold and silver as standard measures of property, without changing the ratio, it will be advisable to discontinue the gold coinage whenever the premium for gold shall exceed 2 per cent. The mint may be employed in coining silver; and an assay of gold bullion will, at a small expense, answer every purpose now derived from coining it. But if it be deemed expedient to change the ratio, the extent of the alteration is a matter of considerable importance.

To adopt the ratio of France, might tend to a general conformity of mint regulations among different nations, and, in time, remove that cause for fluctuation which proceeds from the successive changes of their respective mints. It may be objected to this measure, that gold is evidently estimated too low at the French mint; and although the premium for it in the United States market would be reduced 3‍1⁄10 per cent. it would still be high enough to withdraw the gold coin from the banks and entirely prevent its circulation.

It has been already shown that the relative value is about 1:15.8. If it be intended to render gold and silver equally attainable in the United States, proper allowance being made for the influence which an increased demand must have on the price, a ratio of 1 to 16 would, in all probability, be necessary. The objection to this measure is, as already observed, that, when the ratio is so adjusted as to maintain both metals, for the time being, in equilibrium, subsequent fluctuations may expel that which is most necessary to the currency. But if it be deemed advisable to maintain the silver currency as the general standard of property, and, at the same time, preserve a sufficient quantity of gold for the occasional uses in which it may be preferred to silver or bank paper, which, under all circumstances, promises the most favorable result, gold should be estimated in the coin, somewhat, but not much, below the market value of bullion.

If the ratio of gold to silver in the market be not more than about one per cent. higher than it is estimated at in the coins, there will be little danger of its being wholly withdrawn from circulation. Silver, being a standard measure of property, and legal tender to any amount, may be obtained from banks without the expense of brokerage. But not so as to gold; the broker’s charge for purchasing will not be less than ¼ per cent.; and the uncertainty of realizing the remaining difference in the foreign market, will leave it in the power of the shipper to offer but an inconsiderable inducement to the holders of gold coins to sell them: and, although gold would still be preferred for exportation, a sufficient quantity might generally be retained to supply all the material purposes for which it will be wanted, or can be used, under the present state of the paper currency.

It is of considerable importance, in fixing the ratio between gold and silver, to select one which can be expressed in definite numbers, and more especially admit of an expression of the weight of the coins, in both pure and standard metal, without an indefinite fraction. Such numbers facilitate the calculation of exchange, and the detection of light or spurious coins. When this object can be attained, without deviating too sensibly from the ratio proper to be established, it is worthy of attention.

The ratio suggested by Mr. Gallatin, 1:15.609, is liable to objection on this account — not only the ratio, but the weight, of the coins in pure metal, is incapable of a definite expression. It is also believed that it estimates gold rather too low to accomplish, with reasonable certainty, the object desired. The ratio of 1:15.625* is free from the first, and less liable to the sesond objection. It leaves the value of gold bullion in the market at 1‍12⁄100 per cent. above that in the coin; and although may be doubtful whether it does not estimate gold still too low, yet the error, if it prove to be one, is on the safe side. This ratio will render the weight of the eagle, in pure gold, 237.6 grains, and in standard, (11⁄12 fine) 259.2 grains; making the eagle, as now coined, of 247½ grains pure, worth $10 41⅔, and the corresponding value of the pound sterling will be within 4⁄1000 parts of a cent of $4 75.6. These results seem to recommend the ratio 1:15.625 as decidedly preferable to any other, there being no other numbers near the desired point that will bear such a relation to those with which it must be connected, as to admit of a common multlple, which object is happily attained in the proposed ratio.

[* For the weight of the eagle, according to various ratios, from 1:15 to 1:16, see Table G.]

In concluding this report, the Secretary of the Treasury has to remark, that it has assumed a more discursive form than may seem to have been called for by the letter of the resolution of the Senate: but, in looking to the object of the Senate, as inferred from the inquiry directed, it has seemed proper to present such views and facts as appeared calculated to facilitate their further investigation of the subject. It was, moreover, not easy to separate, distinctly, the inquiry as to the true relative value of gold and silver in the market, from that which might be deemed a proper ratio in the coins, or from the various considerations which might determine the expediency of a greater, or less, or any change, in the existing mint regulations.

Several interesting communications in relation to the general subject, contributed by correspondents, together with various tables and calculations, deemed worthy of preservation, are appended.

All which is respectfully submitted.

S. D. INGHAM,
Secretary of the Treasury.

Treasury Department, May 4th, 1830.

A.

Comparative values of English, French, Spanish, and United States’ Coins.

The fineness of English and United States’ gold being 22 carats, or 11⁄12, an ounce of it must contain 440 grains pure, and 40 grains alloy; and it is minted into £3 17s. 10½d., or 934½ pence. Therefore, as 934.5d. : 240d :: 440 : 113.0016 grains, the weight of pure gold in one pound sterling or gold sovereign.

The United States’ gold eagle contains 247½ grains pure, and 22½ grains alloy: therefore, as 113.0016 : 2475 :: 240d. : 525.657d., the sterling value in British gold of one eagle: hence, that of the dollar is 52.5657d., or 4s. 4.5657d.

Again: the standard fineness of British silver is 37⁄40; therefore, 1oz. of it must contain 444 grains pure, and 36 grains alloy, and is minted into 5s. 6d., or 66 pence.

The United States’ and Spanish dollar contain 371¼ grains pure, and 44¾ grains alloy; the fineness in each being 1485⁄1664. Therefore, as 444 : 66, or 74 : 11 :: 371.25 : 55.1858 = 4s. 7.1858d., the value of the dollar in sterling silver. Hence, as 52.5657 : 55.1858 :: 100 : 104.985, or five per centum nearly, the difference of its value in sterling gold and silver.

Again: as 11 : 74 :: 240d. : 1614.5454 grains of pure silver in one pound sterling or British sovereign.

Again: since 4s. 6d. is 9⁄40 of a pound sterling, it will be as 9⁄40 : 1 :: 1 : 4.44‍4⁄9; differing from the estimated par of one pound, $4 44, by 4⁄9 per centum: and as 66d. : 54d. :: 444 : 363‍3⁄11 grains pure silver in 4s. 6d., which is 7‍43⁄44, almost 8 grains less than 371¼ grains, the quantity in one dollar.

As 113.0016 : 1614.5454 :: 1 : 14.288, the ratio of the value of silver to gold in the British monetary system; and as 24.75 : 371.25 :: 1 : 15, the ratio of the same in the coins of the United States. Therefore, it will be as 14.288 : 15 :: 100 : 105‍1⁄24, or more than five per cent. difference in the comparative values of silver.

Again: as 416 : 480 :: $1 : $1.1538, the value of 1 ounce United States’ standard silver; and as 371.25 : 416 :: $1.1538 : $1.2929, the value of 1 ounce of pure silver. Hence, 1 grain of these is value for .002404, and .0026936, of a dollar, respectively. Also, as 247.5 : 440 :: $10 : $17‍7⁄9, the value of 1 ounce United States’ gold; and as 11 : 12 :: 17‍7⁄9 : $19‍13⁄33 the value of 1 ounce do. pure. Hence 1 grain is worth .040404.

Again: as 113.0016 : 440 ;: £1 : £3 17s. 10½d., the value of one ounce sterling gold; and as 11 : 12 :: £3 17s. 10½d. : £4 4s. 11.45d., the sterling value of 1 ounce pure gold. Likewise, as 37 : 40 :: 66d. : 71¼d., = 5s. 11¼d., the value of one ounce pure silver in sterling money.

The kilogramme is equivalent to 15434 grains Troy; and a kilogramme of French standard gold, 9⁄10 fine, is minted into 77½ forty franc pieces of gold. Hence, one gold franc must contain 4.48084 grains of pure gold. Therefore, as 113.0016 : 4.48084 :: 240d. : 9.5167d. sterling, the British value of the gold franc in British gold. Again: the kilogramme of French standard silver, 9⁄10 fine, is minted into 200 francs: hence, the pure silver in one franc is 69.453 grains: therefore, as 74 : 11 :: 69.453 : 10.324d., the value of the silver franc in British silver.

Lastly: as 247.5 : 4.48084 :: $10 : 18‍14⁄100 cents, the value of the gold franc in United States’ gold; and as 371.25 : 69.453 :: $1 : 18‍708⁄1000 cents, the value of the silver franc in United States’ silver: and as 4.48084 : 69.453 :: 1 : 15.5, the ratio of the value of silver to gold in the monetary system of France.

The British copper penny is the twenty-fourth part of one pound avoirdupois, or of 7000 grains Troy: hence, one penny must weigh 291¼ grains, and it is estimated 54⁄100 of our dollar. Therefore, as 1d. : 54 :: 291¼grs. : 157‍11⁄40 grains, the proportional weight of one cent. But the United States’ cent weighs 208 grains, being nearly 50¾ grains more than its equivalent in British copper coin; that is, about 32¼ per centum. And as 208 : 7000 :: 1 : 33‍17⁄26 cents per pound avoirdupois, the value of the copper. Consequently, when the market price of copper exceeds 34 cents per pound, cents will disappear, as eagles and dollars do when their market price exceeds their mint value.

Note from the online editor: The above figures, highlighted in pink, are suspect.
• With 7000 grains in the avoirdupois pound used to produce 24 British copper pennies, 7000 divided by 24 gives 291⅔ grains per coin, not the above 291¼ grains.
• Do not know the source for stating that one British penny “is estimated at 54⁄100 of our dollar” (which is another way of saying 54 cents) which is very much wrong, when a value of just under 2 cents is expected (something close to 100⁄54 of our cent, for example). One plausible derivation, of the valuation of one British penny as 1⁄54 of our dollar, is as follows: it is between the above derived values of: 52.5657 pence sterling as the value of one dollar (as one-tenth of a $10 gold eagle), and 55.1858 pence sterling as the value of one dollar (as a full silver dollar) — the average of these two values is 53.8767 pence — close to, but not exactly, 54.
• The above relationship, that produced the value of 157‍11⁄40 grains for the weight of one of our cents, would yield that result if, instead of the value of 54, the value of 54⁄100 were used (the value of our cent, expressed in British pennies).

B.

The ratios of gold to silver, from 1760 to 1829, with the averages for each ten years, and the total mean average for 70 years.

Department of State,
Patent Office, March 31, 1830.

Sir: In compliance with your request “to calculate in United States’ currency the value of the different current coins and moneys of account rated in Kelly’s Cambist, the weight and fineness of which have been ascertained at the British mint; and, also, to give any information I may possess respecting the wear of gold and silver coins,” I have the honor to transmit the accompanying papers on these subjects;

And remain, with sentiments of esteem,
Respectfully, yours,

JOHN D. CRAIG.

Hon. Samuel D. Ingham, Secretary of the Treasury.

The following table (C) exhibits the value of various current coins in United States’ currency, estimated by the weight of pure silver contained in each, at the rate of 371¼ grains for 100 cents.

Table D exhibits the like value of various moneys of account, estimated in the silver currency of the respective countries in which they are used.

These tables are a guide for ascertaining the true par of exchange with all places where silver is a standard measure of property, and is valued in the coins as high, or higher, in proportion to gold, than it is in the market, which is believed to be the fact, generally, throughout Europe, Asia, and America: England, and some of the West India islands, are, perhaps, the only exceptions. But when gold is the only general measure of property, as in England, or when gold coins are estimated by law above the market value of bullion, as in Cuba, &c. the value of coins and moneys of account should be estimated in gold, in order to ascertain the true par exchange, and to determine the basis for calculating ad valorem duties at the custom house.

C.

A TABLE of Silver Coins, with the weight of pure silver in each , as determined by assays at the London and Paris mints, and their corresponding values in cents; 371¼ grains being worth one dollar.

The numbers in the first column of the above table are taken from the table on coins, in Kelly’s Cambist, vol. II. page 162; those in the second are formed by multiplying the respective numbers in the first by .26936, the value of one grain of pure silver, according to the standard value of the United States’ silver coin.

D.

A TABLE containing the values of moneys of account, of different nations, expressed in hundredths of the United States’ silver dollar; with their equivalent weight of pure silver, as valued in the United States’ standard coin.

N. B. The numbers in the first column of the foregoing table are deduced from the sterling values of moneys of account, as given by Kelly, vol. II. page 149; and are found by multiplying said values, in pence, by 7.1613, the grains of pure silver worth one penny sterling. The numbers in the second column are found by multiplying those in the first by .26936, as in Table C.

The British Government, in 1798, appointed a committee to take into consideration the state of its coin: for, among other circumstances, it was discovered that the gold coin had, within certain periods, sustained considerable loss in weight. It therefore became an interesting inquiry whether this loss was occasioned by any defect in the composition or quality of the standard gold, or in the figure or impression of the coins.

Two principal questions were to be decided:—

First. Whether very soft or ductile gold, or gold made as hard as is compatible with the process of coining, suffer most by wear, under the various circumstances of friction to which coin in circulation is subjected.

Second. Whether coins with a flat, smooth, and broad surface, wear less than those that have certain protuberant parts raised above the general level of the piece.

After a laborious, expensive, and widely diversified course of experiments, in which gold was combined with different quantities of the same, and of different metals as alloy, and the compound subjected to proper trials, the following, among others, were found to be the results:

First. That fine gold, when exposed to friction against gold of equal quality, under the pressure of a considerable weight, suffers a very notable loss; and that, under all circumstances, it is more subject to have any embossment on its surface obliterated, than any variety of alloyed gold; not so much by abrasion, as by the compression of the raised parts, in consequence of its extreme softness and ductility.

Second. That fine gold, when rubbed against the various kinds of that which is alloyed, almost in every case suffers the greatest loss.

Third. That gold reduced to standard, or 22 carats fine, by silver, silver and copper, or copper alone, suffers by friction, under general circumstances, a smaller diminution than fine gold; and with or without abrasion, the protuberant parts on the surface of these pieces, remain more permanent, under all circumstances, than those of the fine gold. The difference of wear between the three kinds of standard gold above mentioned, does not appear considerable; but, upon the whole, the preference is due to gold alloyed with a mixture of silver and copper, or copper alone.

Fourth. That gold made standard partly by iron or tin, sustains a greater loss by friction, than either of the above mentioned standard compounds.

Fifth. That the wear of standard silver, is nearly equal to that of fine gold, but more than that made standard by silver or copper, but less than that which is debased below 18 carats fine, even by copper.

Sixth. That, as gold not inferior to standard, wears, in general, less than silver, so does this last suffer much less than copper.

Seventh. That the metals most subject to wear, are those that produce the greatest diminution in others when rubbed against them.

Eighth. That pieces with embossed surfaces, suffer a greater loss, under all circumstances, than those which are smooth and flat.

The course of experiments we have mentioned, exhibited one very remarkable and important result, viz: that gold alloyed with a ¼ of a grain of antimony to the ounce, or 1⁄1920 part of the mass, had its ductility so far destroyed, as to be rendered unfit for coinage. And it is well that the copper of commerce frequently contains a much greater proportion of that metal, and consequently is unfit to be used as alloy for gold.

The result stated, though highly important with respect to the fabrication of coins, afford no data to ascertain the absolute loss, in weight, which a given coin suffers from wear, during a given period of its circulation. For this purpose, we must have recourse to actual weighing of coins of the same date, at protracted intervals of time. Now, admitting as correct the estimates deduced from experiments said to have been made at the U. States’ mint, wherein the loss, in fifty years, of the eagle, half eagle, and quarter, is designated by the numbers 1, 2, and 3; and that of the dollar, half dollar, quarter, disme, and half disme, by the numbers 1, 2, 3½, 6, and 10, it follows that the loss of weight in the gold eagle is to that of its value in silver dollars, as 1 to 10; in half dollars, as 1 to 20; in quarters, as 1 to 35; in dismes, as 1 to 60; in half dismes, as 1 to 100. Again, the wear of the half eagle will be to that of its value in dollars, as 1 to 5; in half dollars, as 1 to 10; in quarters, as 2 to 17; in dismes and half dismes, as 1 to 30 and 60, respectively. Lastly, the wear of the quarter eagle, will be to that of its value in the dollar, in subdivisions, as 1½ to 2½; 5, 8¾, 15, and 25; or, as 4 to 10, 20, 35, 60, and 100, respectively.

These results are worthy of attention, and consistent with what ought to be expected, from the nature and circumstances of the case; for the smaller coins are always more frequently handled, and, of course, subjected to more attrition; they have also a greater surface, in proportion to their solid content or weight, and, consequently, on both these accounts, will be exposed to a proportionably greater diminution of weight.

On the comparative wear of Gold and Silver Coins.

The density of standard gold, is to that of silver as 18880 to 10534; hence, the surfaces of similar solids and equal weight composed of these metals, will be as 10534^⅔ to 18880^⅔, or 2 to 3 very nearly. If, now, the loss of weight by attrition in gold, be to that in silver, under like circumstances, as m to n, and equal weights of them, as 15 to 1 in value; it will follow that the loss, in value, of similar pieces of equal weights, will be in the compound ratio of 2 × 15 × m to 1 × 3 × n; or, 10 m to n, that is, the loss in value by wear, under like circumstances, in similar pieces of equal weight of standard gold and silver, would be as 10 to 1. But, to have an equal amount of these metals in circulation, there must be 15 pieces of silver for one of gold; therefore, the loss on equal amounts of gold and silver coins of equal weight, would be as 10 m to 15 n, or 2 m to 3 n; that is, as twice the facility of gold to wear, to three times that of silver; and, if the quantities m and n were found by actual experiment, it would be easy to extend these results to all the subdivisions of both gold and silver coins; but, it is not probable that the coins of both metals will ever be exposed to equal wear in the United States.

Washington, December 31, 1829.

Sir: The information which it is in my power to give you respecting the relative value of gold and silver, applies principally to France. It, however, happens, that it is that which affords the best and most easy means to ascertain the fact, as it is by far the most wealthy country in which both gold and silver coins circulate simultaneously. There has been no scientific comparison of the new French and British weights. The most correct is that made in the year 1824 by Dr. Kelly, the result of which is 15,434.1 grains, troy weight, for the kilogramme; but, as it cannot be relied on within 3 or 4 grains, I have assumed 15,435 grains, which makes the par of exchange between the United States and France 5 francs 34½ centimes for our dollar. The standard of both the gold and silver coins is nine-tenths fine and one-tenth alloy, and the legal relative value of the two species of coins is, since about the year 1790, 15.5 to 1, the kilogramme of standard gold being coined into gold coins of the nominal value of 3,100 francs, and the kilogramme of standard silver into silver coins of the nominal value of 200 francs. It is believed that, notwithstanding the great attention which was at that time paid to the subject, gold was even then rated too low in proportion to silver: it is certain that the fact is so now. During the thirteen last years, there has never been a premium on silver coins, and there has almost always been one on gold coins. This has never, during that period, reached one per cent. which may be considered as the greatest fluctuation in the relative value of gold and silver coins in France. But it is very rarely, and only for very short periods, that this premium on gold coins has ever fallen below one-fifth, or exceeded four-fifths per cent.; and the average is about one-half, rather below than above it. If, therefore, the legal relative value was enhanced one-half per cent. or be about 1 : 15.58, instead of 1 : 15.5, the ordinary fluctuations would not exceed three-tenths per cent. above or below that legal value.

The relative value of gold and silver bullion differs from that of gold and silver coins, and is liable to greater fluctuations. Independent of these, there are two reasons which make gold bullion more valuable, in relation to silver bullion, than gold, in relation to silver coins. It is more expensive to coin ten silver dollars than one gold eagle, which, if the charge for coining is the same for both, makes, in proportion, the silver coin more valuable; and the unavoidable difference between the legal and the actual standard of the most faithful coins, as well as the similar original difference of weight, and the diminution arising from wear, are more sensible and greater in value in gold than in silver coins; so that the loss in melting the current gold coins of any country may be fairly estimated at one-half per cent. Of this the French Government was aware; and accordingly the mint, which coins all the bullion and foreign coins that are brought to it, paying for it as it is brought, deducts a much greater seigneurage on silver than on gold; that is to say, 3 francs (or 1½ per cent.) on each kilogramme of standard silver, and 9 francs (or less than three-tenths per cent.) on each kilogramme of standard gold; in other words, the mint price of standard gold and silver per kilogramme, in France, is 3,091 francs for the first, and 197 francs for the last. The relative value of gold to silver bullion is therefore fixed at the rate of 3,091 : 197, nearly equal to 15.69 : 1. Each metal is brought to the mint in greater or less quantities, respectively, according to the fluctuations in their relative market value. But what proves that this ratio does not essentially differ from the true average market relative value is, that the mint has been abundantly supplied with both for the last 25 years, the coinage of France being far greater than that of any other country. I hardly need observe that this is due to the almost total expulsion of paper as currency. The Bank of France alone issues paper, and none of a denomination less than 500 francs; so that it is used almost exclusively for commercial remittances and transactions, and makes no part of the currency, properly so called, of the country. Paper, as all know, necessarily drives away the precious metals, which will naturally flow to the places where paper is not used. They are a dearer, but the only safe circulating medium; and no country that will resort to other means can expect to have a sound and uniform currency. There is indeed no permanent standard of value in nature; but, as applied to periods of 20 or 30 years, within which time all ordinary contracts are executed, gold and silver are, for that purpose, far preferable to any other commodity; and paper, having no intrinsic value, must, however used as currency, be always estimated in reference to those precious metals.

Although it cannot be expected that an alteration in the erroneous relative legal value of the gold and silver coins of the United States will, whilst paper chiefly of a local circulation continues to be their general currency, be productive of any great advantage, still the change will do some good, and can be attended with no injury. The present rate was the result of information, clearly incorrect, respecting the then relative value of gold and silver in Europe, which was represented as being at the rate of less than 15 to 1, when it was in fact from 15.5 to 15.6 : 1. It would be better, at all events, to discontinue altogether the coining of gold than to continue the present system.

Although the ratio of about 1 : 15.58, as from coin to coin, which is deduced from the average premium on gold coins in France, is most to be relied upon, yet there may be an advantage, and no danger, in fixing the value of gold at a somewhat higher rate: for it appears certain that the average ratio is higher, both in England and in the United States.

I have not sufficient data to estimate that ratio in the first country, but I am inclined to the opinion that, for the last two years, the price of American (United States) silver has not exceeded there the average of 57½ pence sterling per ounce, which gives the ratio of 15.82 : 1. But it must be observed that this is not merely the ratio of bullion to bullion, (which, in France, is 15.69 : 1) but of silver bullion to gold coin. This ratio is, in France, according to the mint price and current value of gold coins; that is to say, with 1½ per cent. premium, at 3,115.5 : 197, or about 15.81 : 1.

With respect to the United States, the average premium on the American gold coins, for the last four and a half years, has been about 5‍1⁄6 on the nominal value. This being according to our ratio of 15 : 1, gives, for the average market price, the apparent ratio of 15.775 : 1 for that of gold bullion to silver coin, since, being so underrated, the American gold coins can be considered only as bullion. But, as they are probably one-half per cent. defective in weight and standard together, the true ratio may rather be estimated at 15.82 : 1, or about the same as that deduced from the price in England of 57½ pence per ounce of dollars for the ratio of silver bullion to gold coin. But less reliance can be placed on the ratio deduced from the price of American gold in the United States than from either of the other two modes. A single glance at the tables of prices current will show that that price is entirely regulated by that of the exchange with London. It will be found, accordingly, that, in the Summer of 1825, when the nominal exchange on London was 5 per cent. premium, or, in reality, near 2 per cent. below par, the nominal price of American gold was 2½ per cent. premium, or, in reality 1½ per cent. below its average market value in Europe or in the United States. This anomaly was clearly due to the legal value being underrated. Generally speaking, the difference between the true rate of exchange on London and the true market price of American gold in the United States, is about 1½ per cent. (as will be seen by the table F, where the true premium on both is calculated according to the ratio of 15.6069 to 1.) This general result, deduced from the New York prices current for the last four and a half years, agrees with the general result of actual sales of our gold in London. The freight, insurance, and all charges, are near 1½ per cent. and the average loss in weight and standard about one half per cent. But, from this loss of 2 per cent. must be deducted, when compared with exchange at 60 days, near ¾ per cent. gained in interest, the sales of gold being realized within fifteen days after arrival. It follows that, if gold coins are raised by law to their true vaiue, they will not be exported so long as the exchange on London is not above 1½ per cent. above the true par, or about 8½ per cent. nominal, as now calculated. Whenever the exchange is above that rate there is no means to prevent the exportation; and as the general tendency of our exchanges with Europe is against us, this affords a reason why, in fixing the relative value of the two metals, gold may be a little overrated beyond the ratio deduced from the average premium on French gold coins in France. But this should be done cautiously, as there is always danger in going beyond what the well ascertained facts will warrant.

No notice has been taken, in what precedes, of the market price of Spanish dollars and doubloons. The first vary in standard; and it is much more simple to draw conclusions from the price of our silver coin abroad, than from the fluctuations in the price of Spanish dollars in the United States. The marc of Castile, of standard Spanish silver, should, according to law, be coined into 8½ dollars, making the legal weight of the dollar 416½ to 417 grains troy weight. The legal standard, at least since the year 1772, is 65⁄72 pure and 7⁄72 alloy, and the Spanish dollar, faithfully coined, should, therefore, contain about 376 grains pure silver. The calculation is founded on what has been stated, as an accurate comparison of the Spanish with the modern French weights; by which it appears that the marc of Castile is equal to 229.8 grammes. In fact, the Mexican dollars, which (with the Bolivar) are the best, contain but about 374½ grains, and are worth from ¾ to 1 per cent. above ours. The Spanish proper vary, and the most modern are sometimes worth ½ per cent. less than our dollar. The price of the Mexican is in London 3⁄8 of a penny sterling more per ounce than ours, and in France 6 centimes per dollar.

It may be proper, as connected with the exportation of our silver coin, to state that the price of American dollars in France, deduced from twenty different shipments, is fcs. 5.26065 per dollar. Deducting ½ per cent. according to the mint price, from the par value of the dollar, or 5.345, would give fcs. 5.26482. The small difference arises partly from that in weight, principally from a small charge at the mint for refining bullion below the French standard. The freight, insurance, commissions, &c. amount, as on gold, to about ½ per cent. and the total loss to 3.28 per cent. If from this ¾ per cent. is deducted for the gain in interest, the difference is 2½ per cent. Whenever, therefore, the premium on exchange exceeds 2½ per cent. true premium, (equal to 9½ nominal on London) the American silver coins will be exported.

Means have been found very lately, in France, to extract with profit the very small quantity of gold which is always found in silver. The effect has been, within a few months, to raise common silver bullion 1-5 per cent. above the mint price. Dollars and other bullion are purchased at that rate by the melters, who, after having extracted the gold, sell the bullion to the mint at its ordinary price. This circumstance will not ultimately affect the relative value of gold and silver coins, as the process will be gradually applied to all the silver bullion before it is coined; but it is, in the mean while, a reasoh against overrating gold.

The doubloon ought to be of the same weight and standard as the dollar. But it has been more adulterated, and, taking the ratio of 15.6 : 1, is not believed to be, on an average, intrinsically worth more than dollars, 15.16. The premium, calculated on that basis, varies in the United States from 2½ to 8, and averages 4½ per cent. This affords no criterion whatever of the relative value of the two metals, as it is exclusively due to the varying demand for the Havana and South America market; where, by internal regulations, the doubloon is rated never less than 16 and generally at 17 dollars. This arbitrary order drives, of course, silver from the market, and without raising, actually, gold to that rate, has, nevertheless, a considerable effect on the price of that particular coin. The average premium on Patriot doubloons, which are as good, is but about 2 per cent.

Reverting to the valuations founded on correct data, it has been shown that,

1st. The relative value of gold to silver coins, deduced from the average premium of ½ per cent. on gold coins in France, is below 15.6 : 1.

2d. The relative value of gold to silver bullion, deduced from the mint price in France, is below 15.7 : 1.

3d. The relative value of gold coins to silver bullion, deduced from the mint price in France, combined with the average premium of ½ per cent. on gold coins, and, also, from the presumed average of 57½ pence per ounce of American dollars in England, is above 15.8 : 1.

4th. The premium in the United States on American gold, though much less to be relied on, since it is regulated by the exchange, corroborates the last mentioned ratio.

It is clear that it is the relative value of coins to coins which is the proper foundation. That of bullion to bullion, and that of gold coins to silver bullion are, in fact, the same, allowing for the superior value of coins over bullion; and although, for the object in view, less correct than that of coin to coin, shows, nearly, how far the gold coins may be rated, without danger, above the last mentioned ratio. The conclusion is, that the ratio should not be below 15.58, and not above 15.69 : 1; and that we will be safe between those limits.

The ratio is only a basis on which to proceed, and it is quite immaterial whether it gives an apparently inconvenient fraction, since, once adopted, it is never recurred to, either at the mint, or for any calculation of exchange, rate of duties, &c. In selecting, therefore, a ratio between the limits aforesaid, the first object is to take one which will correspond with a convenient number of grains, standard and pure, contained in the ten dollars gold piece. The next, if practicable, is, that this should also give a convenient number for the reduction of pounds sterling into dollars and cents, which must be perpetually recurred to in the calculations of duties and exchange.

The most convenient ratio, in both respects, is that of 2700 : 173, equal to about 15.6069 : 1; and answers nearly to a premium of ⅔ per cent. on French gold coins; which is above the average. This ratio will give 259½ grains for the weight of the ten dollars gold piece, 237‍7⁄8 grains pure gold in it, drs. 4.7505 for the value of the pound sterling, and make the present eagle worth $10.40½. The table G shows the results of several other ratios. I think that that which gives 258 grains for the weight of the ten dollars gold coin rates gold too high. The calculations in relation to the pound sterling are, of course, all founded on the fact, that the 20s. sterling gold piece contains 113‍1⁄623 grains of pure gold, and the American dollar 371¼ grains of pure silver.

As there is not in nature any permanent standard of value, it has been objected to the simultaneous circulation of the two metals, as a legal tender, that, in addition to the fluctuations in the price of either gold or silver, if only one of the two was made the sole circulating medium, the fluctuations in their relative value increase the uncertainty of the standard.

Great Britain has, since the year 1819, acted on the plan of adopting gold as the sole legal tender for all payments above 40s. sterling. But in order to have money for small payments, she resorts to an adulterated silver currency, which is by law rated at about 9 per cent. above its intrinsic value. The object appears to be to prevent the exportation of that silver currency, which is, in fact, assimilated to the copper coinage. It has been a part of the same system to prohibit the issuing of bank notes of £2, and under, the place of which is to be supplied by the overrated silver new currency.

Great Britain, till the year 1797, when the suspension of cash payments took place, and all other nations, to this day, have used the two metals simultaneously, without any practical injury, and to the great advantage of the community; though, in many instances, sufficient care had not been taken to assimilate the legal to the average market value of the two metals. A fact so notorious, so universal, and so constant, is sufficient to prove that the objection, though the abstract reasoning on which it is founded is correct, can have no weight in practice. It might not, therefore, be necessary to discover in what respect the principle is misapplied; but the reasons appear sufficiently obvious.

The whole amount of the inconvenience arising from the simultaneous use of the two metals, consists in this: Their relative value being fixed by law, if this changes at market, the debtor will pay with the cheapest of the two metals; and, therefore, at a rate less than the standard agreed on at the time of making the contract, if the change in the market price is due to a fall in that of the metal with which he pays his debt. And it is obvious, in the first place, that, if the change is due to the rise in value of one of the two metals, and that had been the only legal tender, the choice given to the debtor to pay with either, enables him to do it according to the standard first agreed on.

But the true answer is, that the fluctuations in the relative value of the gold and silver coins, arising from the demand exceeding or falling short of the supply of either, are less in amount than the fluctuations, either in the value of the precious metals, as compared with that of all other commodities, or in the relative value of bullion to coin, and even than the differences between coins, particularly gold coins issued from the same mint; and, therefore, that those fluctuations in the relative value of the two species of coin, are a quantity which may be neglected; and is, in fact, never taken into consideration at the time of making the contract.

It has been shown that the fluctuations in that relative value may, by affixing a correct legal value to each metal, be reduced to 3⁄10 or at most ½ per cent. The relative value of gold bullion to gold coin has, within the last five years, varied 1‍2⁄5 per cent. in England; the price of standard bullion having been, in 1824, as low as 76s. 9d. and the average value of the bullion was for four years (1822-1825) 77s. 7⅓d. or ⅓ per cent. less than that of the coin. It has already been stated that the remedy and wear together make a difference of ½ per cent. between old and fresh American gold coins; but the differences are sometimes much greater, since even the guinea, of the legal weight of 129‍4⁄9 grains, could pass, when weighing only 128 grains, or 1‍1⁄10 per cent. less than the legal weight. And the simultaneous rise and fall of the two metals, in relation to all other commodities, though not susceptible of being precisely valued, does often take place to a greater amount than any of the other fluctuations. It is evident, that, whenever such rise takes place, whether generally or only on the spot, it is an advantage to be able to resort to both instead of one of the metals; and that, if the rise is only on one of the metals, for which there happens to be a greater demand, and that should be the sole legal tender, it will be exported, and diminish in a most inconvenient way the whole amount of specie — a diminution which, in that case, cannot be remedied by resorting to the other metal, which is not a legal tender. That inconvenience is still greater when gold is the metal selected for currency to the exclusion of silver, the annual supply of this last metal being much larger in value than that of gold. That annual supply was estimated with considerable correctness by Humboldt, at thirty-six millions of dollars in silver, and twelve millions in gold, prior to the year 1809. Since that time, on account of the revolutions and internal disturbances in what was formerly Spanish America, the annual supply may be estimated at eighteen millions in silver and nine millions in gold. As order is restored, the usual supplies will again take place. In the mean while, the annual exportation of silver to India and China, from Europe and America, has been lessened from twelve to about six millions of dollars, and this has prevented any sensible alteration in the relative value of the two metals. What proves the great amount of both previously existing is, that the diminution in the general supply has not even affected sensibly the value of the precious metals in relation to other commodities.

But not only has England, by that experiment, in the face of the universal experience of mankind, gratuitouly subjected herself to actual inconvenience, for the sake of adhering to an abstract principle; but, in so doing, she has departed much more widely from her own principles, and from those which regulate a sound metallic currency. Whilst pretending to exclude silver, she admits it, and makes it a legal tender for all that multitude of daily purchases and contracts under 40 shillings, at an overrated value. This is, in fact, an issue of adulterated money; which does not regulate itself; which, on account of the profit in the coinage, there is a strong temptation to issue beyond what is actually wanted for the object intended; which, being irredeemable, is therefore liable to fluctuation between its nominal and intrinsic value; and which, by its connexion with the 20s. and 40s. gold coins, deranges, or may derange, the whole system of British currency.

Even if the precedent were good, it could not be conveniently adopted in the United States. If silver were adopted instead of gold, as the legal tender, which is, in fact, our present system, gold will be excluded altogether, and the partial advantage gained by the English issue of silver must be given up. To the excluson of silver there are, on the other hand, great objections. The American dollar, or 371¼ grains of pure silver, is the unit of money and standard of value on which all public and private contracts are founded: the supplies of silver are greater, and it requires a greater premium on the exchanges before it can be exported: payments in silver, suppressing small notes, are, as yet, the only practical remedy against over issues of the worst species of paper currency.

I have the honor to be,
Respectfully, Sir,
Your obedient servant,

ALBERT GALLATIN.

To the Hon. S. D. Ingham,
Secretary of the Treasury.

E.

AVERAGE MONTHLY nominal rate of Exchange and price of Specie at New York, for the year 1825 to June, 1829.

F.

A TABLE showing the actual premium or discount on Exchange and Specie at New York, from the 1st of January, 1825, to 30th June, 1829, calculated on the supposition that the relative value of Gold and silver coins is at 15.6069 to 1, which makes the pound sterling =475, and the weight of ten dollars Gold coins 259½, grains, being an increase on the present legal value (U. S.) of Gold of about 4.05 per cent.

G.

A TABLE showing the number of Grains in Standard and Pure Gold in a Ten Dollars coin , and the par value of the Pound Sterling in money of the United States, according to the relative value of Gold and Silver coins , which may be adopted..

CIRCULAR.

Treasury Department,
21st July, 1829.

Sir: Being charged by a resolution of the Senate with an inquiry as to the true relative value of gold and silver, I request the favor of you to communicate to this Department, so far as it may be conveniently within your power, answers to the following queries, viz:

1st. What is the standard weight (Troy) and fineness of the current gold and silver coins of the principal commercial nations of Europe?

2nd. What is the market value of the above mentioned coins, of standard weight and fineness, in the principal commercial cities of the United States, expressed in the established unit, viz: the dollar and its parts, estimated in the coin of the United States; and what has been the market value, as above, of these coins, at their current weight?

3d. What is the average differerce between the standard and current weight of the respective foreign gold coins, usually found in the money market of the United States; also, what is the difference, if any, between their actual and standard fineness?

4th. What have been the rates of exchange between the United States and the principal commercial nations of Europe, the value of bills in the United States being estimated in the money of the United States, as above?

5th. What has been the difference, if any, between the market value of the legal coins of those nations and their “current medium,” in which mercantile and exchange accounts were reported?

6th. What is the entire expense of transporting gold and silver coins from the United States to the principal commercial nations of Europe respectively; also, that of gold and silver bullion?

7th. What premium has been given for the United States’ gold coin, and for silver coins, at the same point of time, estimated in the same bank paper, during the suspension of specie payments by the banks in the United States?

8th. What premiums, if any, have been given, before or since the specie suspension, for either gold or silver coins of the United States?

9th. Are the gold coins of the United States regularly or casually bought for exportation; if so, in what country are they chiefly melted or recoined?

10th. The same as to silver coin?

11th. What premium was given in England for standard gold or silver, in bank paper, during the suspension of specie payments or since?

12th. Are there any known causes, founded in the supply or demand for gold or silver, calculated to change their relative value; if so, do these causes operate progressively, or do they fluctuate?

It is desirable that the answers to the foregoing queries should comprehend as great an extent of time, and embrace as many points of time, as your information and convenience will admit; that the corresponding time of each fact should be distinctly noticed; and when the information is derived from authority, that it be referred to. An answer to either of these Questions will be thankfully received.

I am, very respectfully, Your obedient servant,

S. D. INGHAM.
Secretary of the Treasury.

Mint of the United States,
Philadelphia, Sept. 30, 1829.

Sir: I have now the satisfaction of replying to the several inquiries embraced in your letters of the 2d and 6th instant, and your circular of the 21st of July.

For the determination of the weight and fineness of the gold coins of Great Britain, and the gold and silver coins of France, requested in your letter of the 2d, I was only fortunate enough to obtain, after much inquiry, a few sovereigns and 5 franc pieces of this year, and one specimen of the 40 franc gold pieces of 1828, all apparently perfect however, exhibiting, even under a strong magnifier, no mark of attrition. They were all weighed and assayed with the utmost attention to accuracy. The sovereigns were found to weigh precisely 5 dwts. 3 grains, and, on being assayed, proved to be of the standard fineness of 22 carats. The value of each sovereign of standard fineness, and weighing as above, will be 455 5. The full weight of the sovereign, by mint regulations, is 5 dwts. 3‍27⁄100 grains; and its intrinsic value estimated in our coins at $4 56.6. The 40 franc piece of France weighed 8 dwts. 7 grains, and was found to be of the fineness of 21½ carats, equal, in the French expression, to 896⁄1000. The value of the 40 franc piece deduced from this specimen, would be $7 20.5. By mint regulations, it should contain 8 dwts. 7‍15⁄100 of the fineness of 900⁄1000, the value corresponding to which is $ 7 24.2. A 40 franc Napoleon of 1810, unaltered by use, was weighed and assayed with the same result in every respect.

The 5 franc pieces of 1829, though differing in weight to the extent of 4 grains, weighed, on an average, 16 dwts. 1 grain, and, on assaying, proved to be of the fineness of 10 oz. 16 dwts. 7 grains fine in the pound, equivalent to the French expression 900⁄1000. This gives for the value of each piece 93‍4⁄10 cents. The 5 franc piece, by mint regulations, should weigh 16 dwts. 1‍85⁄100 grains, which, at the standard fineness of 900⁄1000 gives for the value of the 5 franc piece 93‍54⁄100 cents.

For the purpose of accomplishing the objects specified in your letter of the 6th, and some of the inquiries in your circular, the accompanying table has been formed of the rates of exchange of Philadelphia, on London, Paris, and Amsterdam, through a series of years, commencing in 1788, before the effects of those events were developed, which, in a few years after that period, disturbed the ordinary arrangements of commercial intercourse. In commencing the search for data to complete this series, I entertained the hope of being much more successful than I have been; but I fear to render what has been done useless for your purpose, by longer delay, in attempting to perfect it. Incomplete as it is, it presents, during some parts of the period it embraces, a train of facts not uninteresting. In no instance has a conjectural quotation of exchange been inserted, however probable it might be that the rate continued the same. When the sign of repetition appears in the column, it represents an actual quotation in the price current or record made use of.

In giving the exchanges, I have, for more ready comparison, reduced those on Paris and Amsterdam to their rate above or below par, as those on London are now given.

In reducing the quotations on Amsterdam, the guilder has been estimated at 40 cents, the usual estimate, which is very nearly true; strictly, the guilder is worth, comparing silver with silver, 39‍97⁄100. This coin is of the same value now as at the commencement of the series.

The par on Paris has been assumed at 5 francs 26 centimes per dollar, and the quotation reduced accordingly This par is, however, staled by some very respectable authorities at 5 francs 25 centimes per dollar, founded on the erroneous, as I contend, report of the French assays, by which our silver coins are rated at about the fourth of one per cent. below their standard. Previously to the present French system, the quotations were founded on the livre, the relation of which to the franc is well known, and has been regarded in the reductions of that date.

The earlier exchanges on London are reduced according to the old proportion of 166⅔, Pennsylvania currency, for £1 sterling. In later years, the quotations are given in our prices current at so much above or below par, having in view the par of $4 44 assumed in our revenue laws, which, when thus assumed, was, no doubt, considered equivalent to the proportion above mentioned.

The near equality of the rates of exchange on London, Paris, and Amsterdam, in 1788, 1789, indicates that the old estimate of the par on London, which was very nearly true during the currency of the pillar dollar, had not, at those periods, been discovered to be erroneous, though this was the fact after the Spanish dollar of 1772 and onwards had become general in circulation, and considered still to represent 4s. 6d. sterling. The remarkable want of accordance exhibited in recent yfars, between our exchanges on London and those on Paris and Amsterdam, strongly intimates that the nominal par on which the former is quoted is now far from being conformable to the existing monetary systems of the United States and England.

The exchanges on London, Paris, and Amsterdam, given for the years 1826, ’27, ’28, ’29, are worthy of special notice; they are actual transactions of the same institution, the United Slates’ Bank.

I find no trace of a premium on gold, in this city, before 1821, for the purpose of export and remittance, in preference to bills of exchange. A small premium of perhaps ½ per cent. was, in previous years, occasionally given for gold, to be used in the arts, or as a medium of easier transportation than silver. The state of exchange in May of that year would now bring gold into demand at a premium of 4 per cent.; but it is probable that, for a few months after the first experiments of remitting gold, it might have been obtained without a premium. In the year 1820, more than $1,300,000, in gold, were coined at the mint, and it would not bear a premium that would attract notice, until it had become scarce.*

[* The effect of the suspension of specie payments by the Bank of England on the paper currency, is given at so much per cent. below the par of £3 17s. 10½d. per ounce, for gold, calculated from the quotations of the price of gold, given in Marchett’s tables, from 1815 to 1825, inclusive, from which, also, are chiefly taken the quotations of the price of silver per ounce. It would seem from these, that, until 1800, the paper currency of England had been sustained by public feeling, though specie payments were suspended in 1797.]

I have carefully taken the average of the rates on London and Paris, together with the price of silver in London, and premium on gold here, for the years 1823, ’24, ’25, in order to place them in opposition with the exchange between London and Paris, given for those years by Mr Tooke, in his “Considerations on the Currency.” These comparisons will, it is presumed, bear on the general subject of your investigations. This writer states the par between London and Paris at 25 francs 15 centimes for the pound sterling, This is deduced, I presume, from a comparison of the market price of silver in the two countries. The price of standard silver in London, for those years, averaged almost precisely 5 shillings per ounce, equal to 5s. 4¾d. for fine silver, which, compared with the price of fine silver in Paris, by mint regulations, gives for the par, during those three years, 25 francs 23 centimes, differing only the third of one per cent. from the ratio assumed by him as the ordinary par.

It is worthy of notice, that the par between London and Paris, deduced from the par of 5 26½ between the United States and Paris, compared with the actual par in silver between the United States and London, results in the above ratio of 25 francs 23 centimes for £1 sterling.

Another series of rates of exchange is subjoined, embracing, for the years 1827 and ’28, the exchange of Philadelphia on London, Amsterdam, and Paris, from actual sales by the United States’ Bank.

Specie payments were suspended in Philadelphia the 30th August, 1814, but, from the silence of the prices current, it is to be inferred that a general good feeling prevented the effects of this measure from becoming sensible, in the form of a premium on specie, until the Spring of 1815. The first notice of a premium that I have discovered, is in May, 1815.

Specie payments were resumed by the Philadelphia banks February 20, 1817. During all the period of suspension, gold and silver appear to have been equally appreciated.

The inquiries contained in your circular will now be reviewed in their order.

Question 1. The standard weight and fineness of the gold and silver coins of Great Britain, France, Holland, Spain, and Portugal, will embrace, it is presumed, all that it will be important to notice.

Great Britain.

The sovereign, or pound sterling, in gold, is of the standard weight of 5 dwts. 3‍27⁄100 grains, and of the fineness of 22 carats. The silver coins of Great Britain are of the standard fineness of 11 oz. 2 dwts. fine in 12 ounces, and of the standard weight of 3 dwts. 15‍3⁄11 grains for the shilling piece. The market value of the sovereign of full weight, when exchange on London is 9½ to 10, is 475 to 480 by tale. The sovereign is considered to be of full weight when it weighs 5 dwts. 2¾ grains; when below this, it is called light, and is sold by weight at the same premium as our gold coins. But few of them are light.

The silver coins of Great Britain are rarely seen in the Atlantic cities of the United Slates. The value of the shilling piece, when of standard weight and fineness, is 21‍74⁄100 cents, the multiples in proportion.

France.

The standard fineness of the gold coins of France is 9 parts fine and 1 part alloy. The standard weight of the 40 franc piece is 8 dwts. 7‍15⁄100 grains; the value, when of full weight and fineness, has been before stated. These coins, whether of full or of light weight, are not sold by tale, but at a premium by weight, variable with the demand for gold, and nearly the same as that on our gold coins; the latter are, however, preferred, as being of a familiar standard. The fineness, weight, and value of the 5 franc pieces, have been before stated.

Holland.

The ten guilder piece of the improved coinage of 1816 must be of the standard fineness of 900⁄1000 and weigh 103‍85⁄100 grains Troy; its value, when of full weight and fineness, is 3‍77⁄100, on which value it bears a premium in the market with other gold coins; it is not sold by tale, and is not frequently found in the United States.

The silver guilder must be of the fineness of 893⁄1000, and be of the weight of 166‍17⁄100 Troy grains; its value is 39‍97⁄100; it is rarely seen in the United States.

Spain.

The standard fineness of the gold coins of Spain is 21 carats; their actual fineness is a little variable, but, on an average, about 20 carats 3‍7⁄16 grains. The doubloon is the most important of these coins; by mint regulations, it should weigh 17 dwts. 10 grains; their value, if of the weight and fineness above stated, would be $14 68; they rarely, however, exceed the weight of 17 dwts. 9 grains, and, on an average, may be stated at 17 dwts. 8 grains; they are sold only by tale, being in constant demand for export to the West Indies, especially to Cuba, and varying in price from 15 to 16 dollars; their ordinary real value, estimated in our gold coins, is $14 62.

The standard fineness of the silver coins of Spain is generally stated at 10 oz. 15 dwts. fine in 12 ounces; they incline to exceed, rather than fall below this. By mint regulations, 8½ dollars are to be coined from a marc of silver; assuming for the marc the weight of 3553 grains, which is exceedingly near the truth, the standard weight of the Spanish dollar will be 17 dwts. 10 grains. These coins are not, however, made of this weight. When new, they weigh, on an average, 17 dwts. 8+ grains; taken promiscuously, as found in circulation at this time, they will average 17 dwts. 7 grains, the value corresponding to which is 100 cents 3 mills.

Portugal.

The standard fineness of the gold coins of Portugal is 22 carats; they do not, however, as repeated assays prove, adhere strictly to that standard; the deviation from it is from a quarter to half a carat grain. The standard weight of these coins is 9 dwts. 5⅓ grains for the half Johannes, the value of which, of standard fineness, would be $8 18¾. The average value of a considerable number, which were the subject of examination in 1826, was found to be $8 18: they are sold only by weight, and bear a premium on their intrinsic value nearly equal to that on the gold coins of the United States.

Of the silver coins of Portugal, none are found in our currency.

The above remarks embrace what I have to offer on the 1st, 2d, and 3d queries. The scope of the 4th has been embraced in the quotations of exchange exhibited in the table. The 5th will, no doubt, be replied to from some source possessing means of information not within my reach. The table, however, will satisfy this inquiry in relation to Great Britain.

6th. The entire expense of transporting gold and silver coins to London or Paris may be stated at 2½ to 3 per cent. That on gold may be slightly less than that on silver, insomuch as the forwarding from Havre or Liverpool would be somewhat more expensive in the case of silver. This statement is founded on actual operations of the United States’ Bank. Among the items of charge, I observe, is one of one per cent. commission, which probably many shippers, by the aid of partners abroad, or some accommodating arrangement of mutual favors, find means to avoid, and thus reduce the charge to about 2 per cent.

7 & 8. These are embraced in the tabular details.

9 & 10. The gold par with London is $4 56.6 for the pound sterling, which is 2¾ per cent. above the par of $4 44, on which exchanges on Europe are now computed. Until exchange advances nominally to 2¾ premium, it is actually below the par of gold, which would, in that case, rather incline to come into the country than to go out. When exchange is nominally at 2¾ premium, if gold could be transported without expense, a remittance in our gold coins, or by a bill, would be equal; but the exchange must advance so much more as to cover the entire expense of transportation, before gold will be shipped in preference to bills, even if it could be obtained without a premium. When the exchange advances to 6 per cent. gold will be shipped regularly, and will begin to bear a premium, as there will at all times be some shippers who possess facilities for its transportation, which reduce the charges on the operation. With exchange at 7 advance, as usually computed, gold would be worth a premium of 1 per cent. to shippers, if ordinary facilities and the premium will advance thereafter with the advance of exchange.

It is known that our gold coins occasionally are taken directly from the Mint to the Liverpool packets. On examining, however, the exports of gold and silver for 1828, as stated in the annual report on the commerce of the United States, I was surprised to find only 12,000 dollars in gold exported to England. The export to the British American colonics of about 51,000 dollars, consisted, probably, of our coins; the large shipments to Cuba were principally, I presume, of doubloons. I am unable, however, to add any thing useful to the information contained in those statements of the distribution of specie and bullion exported.

11. This has been embraced in the table.

12. Before the discovery of America, the proportional value of gold and silver was as 10 to 1, and the amount in weight of gold produced in Europe was to that of silver about as 1 to 40. I follow, on this subject, the statements of Humboldt, in his work on New Spain, who appears to have investigated the subject with much care. The production of gold from America, up to the year 1525, was much above the proportion first stated. From this period to the discovery of the gold mines of Brazil, near the end of the 17th century, the quantity of silver exceeded in weight that of gold, in the proportion of 60 or 65 to 1. In the first part of the 18th century, a remarkable change occurred. The silver produce had but little increased, but that of gold was so much extended by the productiveness of the Brazil mines, that the proportion of silver to gold, received annually from America, was reduced in weight to 30 for 1; but in the last part of this century, the mines of Mexico produced, annually, fourfold the quantity derived from them at its commencement; so that from 1750 to 1800, the quantity of silver imported from America into Europe has been to that of gold as 40 to 1, the increase of silver from Mexico having more than counterbalanced that of gold from Brazil.

It is to be remarked, that, in order to sustain the production of gold in the above ratio to that of silver, it has been found necessary, progressively, to strengthen the inducement for its production by increasing its value relatively to silver, so that it has advanced, since the discovery of America, from 10 for 1, to 15, and even 16 for 1.

New mines of gold or silver, it is conceivable, may again, as heretofore, be developed, of such productiveness as suddenly to derange the existing proportions; and, in this view of the subject, the proportional value of these metals is liable to great fluctuation. But such contingencies apart, it results from past experience, and is conformable to analogy, that the proportional value of gold to silver must still be progressively increased, from time to time, in order to elicit from the mines the relative proportional production in weight of gold to silver, or countervail the diminution of it.*

[* What the requisite proportion of weight may be to sustain a given proportion in value of gold to silver, is a difficult problem. The proportion of nations that shall decide on making gold an essential element in their currency, must very much control it. The great disproportion in the quantity of gold and silver existing in nature, is strongly indicated by the fact, that a price per pound fifteen times as high, and operating for such a series of years as must have tested its effect, has not commanded an average annual supply «f gold, in proportion to silver, higher than 1 to 40 or 50.

In a well written article in the Encyclopedia Britannica, under the head of ores, the annual production in weight of gold and silver, derived from the mines of Europe and America, from 1790 to 1802, is stated to be, gold 17,800 kilogrammes, (say 48,000 lbs. Troy) and of silver, 947,500 kilogrammes, (say 2,550,000 lbs.) making the proportion about 1 to 53; the amount of the gold, estimated at our standard, which will be near the truth, would be, in round numbers, $10,000,000; and that of the silver, estimated in like manner, which is probably too low, would be, in round numbers, $35,500,000. During a great part of the interval, from that to the present time, the annual production has been much diminished, but the proportions, perhaps, have little varied.]

It may be added, that, if any highly commercial nation, not now employing gold in preference to silver for the purposes of currency, should decide on giving to it this preference, the effect of a new demand operating on a supply not now well sustained, must sensibly increase this tendency to an advance in the proportional value of gold. The measure of this effect would depend on the quantity of gold required for the circulation of such nation, and the relation of gold to silver, adopted in order to secure the object in view.

In compliance with the request subjoined to your circular, respecting the fineness and weight of the Mexican dollars, I have to observe, that the Mexican, Central American, and Peruvian dollars, weigh 17 dwts. 8 grs. The Mexican has often been found to exceed this weight, by half a grain on an average of large deposites, and the Central American has generally exceeded it by a quarter of a grain. Our latest trials, however, indicate a disposition to issue these coins at a fraction less weight; but the deviation is not clearly ascertained, if indeed it be more than casual. All these coins, as well as the Chilian dollar, are of the Spanish standard. The Chilian has, however, been generally found deficient in weight, the average not exceeding 17dwts. 7 grs. The Columbian dollar is an anomaly: its fineness is only 9 fine in 12, and its weight 15 dwts. to 15 dwts. 11 grs., and its average value 70 to 75 cents.

The Mexican dollar has, from its fuller weight, been more in demand than other varieties of the Spanish dollar for shipment, as a remittance, when exchange is high, its average value, when of recent emission, being about the half of one per cent. above that of our dollar. When exchange on London is at 8 per cent. advance, as usually computed, that being very nearly the par with London, comparing actual value of silver with silver under the present English system, our silver coins would be exported if the operation involved no expense; they will not in fact, however, be exported until exchange has advanced about 3 per cent. higher; and, even in that case, Mexican and Spanish dollars will be preferred, if obtainable without a premium, being a little superior in value to our coins. When exchange is at 11½ to 12, and Mexican and Spanish dollars at a premium, our silver coins are exported with some advantage, in preference to bills at that rate.

Of the value of different coins in Cuba, or South America, &c. I have been unable to acquire any information to be relied on, except as to the doubloons, which has already been noticed.

Very respectfully, Sir, Your obedient servant,

SAM’L MOORE

Honorable Samuel D. Ingham,
Secretary of the Treasury.

TABLE H.

RATES of EXCHANGE at Philadelphia, on London, Paris, and Amsterdam, with the paper medium of England valued in gold, the London prices of gold and silver, and the Philadelphia premium on gold valued in silver..

TABLE I.

A STATEMENT of the current rate of 60 days Bills of Exchange on London, in the Boston market, from the year 1795 to 1827, inclusive, excepting the year 1823.

In the years 1823 and 1828, sixty days bills averaged about nine per cent. advance. The price for the present year (1829) is about 8½ per cent. advance.