exportation, on November 5th of the same year all the gold coins were tariffed at a still higher rate, and in 1527 a new coinage was ordered, in which the weight of the silver coins was again changed. That the difficulty still remained is evident from a state paper of 1529, which describes a dispute between English, Italian, Flemish, and Spanish merchants over the effect of the last edict about gold on the exchanges, and in which the writer recommends an increase in the care exercised at the ports to prevent the exportation of gold. About 1539 the ratio between gold and silver had changed on the Continent to such an extent that silver began to leave England instead of gold, and in order to prevent this there was a general retariffing of coins in 1542 and 1544. During the next fifteen years the currency of England was brought into the greatest confusion by the debasements of Henry VIII and Edward VI but, after the recoinage ordered by Elizabeth in 1559, honest efforts were again made to maintain an adequate currency of gold and silver, but with the same results as before. Elizabeth issued proclamation after proclamation for this purpose, and in 1601 changed the ratio between gold and silver in the coinage, but unfortunately in the wrong direction. The monetary history of England during the seventeenth and eighteenth centuries is simply a dreary recurrence of complaints against the exportation of coins and of royal proclamations and recoinages for the purpose of preventing it or of turning the tide in the other direction.

In France, Germany and the Netherlands the course of events was in all essentials the same as that in England. Constant changes in the ratio between gold and silver and in the rates at which coins were to be accepted was the rule in all these countries down to the nineteenth century. It is not, of course, possible to hold bimetallism responsible for all of this confusion. During the greater part of the period

the coins of one nation were legal tender in the others at rates fixed by royal proclamation, and, since these rates were far from uniform, it was usually possible to make a profit by shipping coins from the nation in which the valuation was low to that in which it was higher. But bimetallism increased these opportunities enormously and imposed upon the statesmen of the period an impossible task. A remedy for the under- or over-tariffing of foreign coins might have been found, but the task of keeping pace with the fluctuations in the market value of gold and silver by changes in the legal ratio through proclamation or recoinage was hopeless from the beginning.

2. Currency reform in England and the act of 1816.-The first change in England's method of dealing with her currency difficulties came in 1774. At that time she was suffering from the double evil of a currency deficient in quantity and in the weight of the individual pieces. Owing to the rates at which foreign coins were tariffed, all the full-weight gold and silver coins were speedily exported or melted down, and light-weight money of both domestic and foreign manufacture was alone in current use. On the advice of Lord Liverpool a remedy was adopted which differed in principle from that which had been employed over and over again in the past. A recoinage of gold was ordered, and it was decreed that the new coins should not be legal tender if they were underweight; and that henceforth worn and clipped coins should be accepted at their bullion value only. Regarding silver the terms of the act are still more significant. They are as follows: "And be it further enacted . . . that no tender in the payment of money made in the silver coin of the realm, of any sum exceeding the sum of £25 at any one time, shall be reputed in law or allowed to be legal tender within Great Britain or Ireland for more than according to its value by weight, after the rate 5s. 2d.

per oz. of silver, and no person to whom such tender shall be made shall be in any way bound thereby or obliged to receive the same in payment in any manner than as aforesaid; any law, statute, or usage to the contrary notwithstanding." In this legislation the modern method of maintaining the concurrent circulation of gold and silver coins was clearly foreshadowed and the first step taken toward the introduction of gold monometallism. It was only necessary to still further limit the legal-tender quality of silver coins, and to introduce a considerable margin between their tale and their intrinsic value, as measured in gold, to make them subsidiary in the modern sense of the term, and thus to take away their capacity to drive gold out of circulation and to render their exportation unprofitable.

Nearly half a century passed before these last steps were taken, and in the meantime the country experienced the effects of the suspension of specie payments by the Bank of England. This happened in 1797, and the depreciation of the bank-notes which followed drove both silver and gold out of the country in large quantities, and rendered retail and small transactions of all kinds difficult on account of the scarcity of small change. Tradesmen were forced to issue private tokens and various other forms of unauthorized currency in order to relieve the needs of the situation. It was as a remedy to this state of affairs that the act of 1816 was passed, the preamble of which reads as follows: "Whereas the silver coins of the realm have, by long use and other circumstances, become greatly diminished in number and deteriorated in value, so as not to be sufficient for the payments required in dealings under the value of the current gold coins, by reason whereof a great quantity of light and counterfeit silver coin and foreign coin has been introduced into circulation within this realm, and the evils resulting therefrom can only be remedied by a new coinage

of silver money," therefore be it enacted, etc. The substance of the enactment was that a Troy pound of silver, eleven ounces two pennyweights fine, should be coined into sixty-six shillings, but issued to the importer or to the public at the rate of sixty-two shillings per Troy pound, and that all silver coins should henceforth be legal tender only to the amount of forty shillings or less. A portion of the section relating to this last point is worth quoting on account of the clearness with which it sets forth the intention of Parliament to establish the gold standard. These are the words: "And whereas at various times heretofore the coins of this realm of gold and silver have been usually a legal tender for payments to any amount, and great inconvenience has arisen from both these precious metals being concurrently the standard measure of value and equivalent of property, it is expedient that the gold coin made according to the indentures of the mint should henceforth be the sole standard measure of value and legal tender for payment without any limitation of amount, and that the silver coin should be a legal tender to a limited amount only."

The principles established by the act of 1816 have not been violated in spite of the numerous efforts of other nations and of many English citizens to induce the Government to re-introduce the double standard. Throughout all the controversies of recent times English statesmen have championed the cause of gold monometallism and have been able to point out very substantial advantages enjoyed by reason of adherence to this system. Since 1816 there has never been any doubt regarding the value of a sound bill of exchange on England or regarding the exact meaning of any other contract calling for the payment of pounds, shillings, and pence. As we have had occasion to point out in the preceding pages of this book, this fact has been one of the chief causes of England's long-continued dominance

in the field of international finance, and it is highly probable that she owes much of her industrial and commercial progress to the same cause. Whoever may be disposed to doubt this, however, cannot question the fact that this act put an end to the difficulties which had harassed English statesmen for centuries and had been a constant drag upon industry and commerce. After 1816 the currency problems of England concerned her credit and banking systems rather than her coins.

3. Bimetallism in France to 1865.-The experience of France with bimetallism between the years 1803 and 1865 is most instructive because the obstacles which tended to obscure its action in the Middle Ages had by that time been swept away. Though the modern practice of making silver coins subsidiary was foreshadowed as early as 1577, it was not introduced until late in the nineteenth century, and the numerous proclamations and recoinages of the seventeenth and eighteenth centuries exhibit the application of no principle except that involved in the attempt to adjust the legal to the market ratio of the two metals. In 1785 the ratio was finally fixed at 151⁄2 to I, where it has remained until the present day, and in 1803 the present unit of value, the franc, and the decimal system of reckoning were introduced. Thus in France, since 1803 at least and until the discontinuance of the free coinage of silver in 1874, the bimetallic system had every opportunity to exhibit the normal effects of its action. The ratio remained unchanged during the entire period, the mints were opened freely to the coinage of both metals, and both were legal tender in unlimited amounts.

Since it is the belief of the bimetallists that the compensatory action of the double standard will prevent any marked divergence between the legal and the market ratios of the two metals, we are chiefly interested in noting what