No secret was made of this fact, for Congressman C. S. Dunham, of Indiana, who secured the passage of the bill in the House, relied mostly on this feature for success. In speaking against an objectionable feature of the Hunter Senate bill and in reference to the silver coins he said: "This, however, would make them a standard in all small transactions; we would thereby still continue the double standard of gold and silver, a thing which the committee desire to obviate. They desire to have the standard currency of gold only, and that these silver coins shall be entirely subservient to it and that they shall be used rather as tokens than as standard currency. We intend to do what the best writers on political economy have approved; what experience has demonstrated to be best, and what the committee believe to be necessary and proper to make but one standard and to make all others subservient to it. We mean to make gold the standard coin, and to make these silver coins applicable and convenient, not for large payments, but for small transactions." There are other statements of a similar import. This bill with slight alterations passed ten days later, and the nation for the first time now possessed what Hamilton so earnestly strove to secure for it, and what every Secretary of the Treasury and every Congress had likewise striven for, viz., the concurrent use of both gold and silver as money by the American people. The results of that act were hailed with satisfaction and delight by Congress and the country.

It was here that the battle of the standards in America was fought and decided. The law of 1853 took away the free and unlimited coining privilege of all silver that was expected to serve as money, and to all intent and effect established gold as the only full money of the Nation. It is true that the provisions for the continued coinage of the old silver dollar were not repealed, nor was its actual coinage stopped, or intended to be stopped. When coined, however, it was never from 1853 to 1873 worth less than $1.03 and sometimes as much as $1.07, and, such being the case, there was no danger of its threatening the gold standard by a displacement of the gold currency. It was evident, however, that should silver cheapen in value so that the silver in the silver dollar should be worth less than the gold in the gold dollar (which was not considered impossible, though improbable) the gold standard would be overthrown. Why, then, it will be asked, if it was so clearly the intent to establish the gold standard in 1853, was not this menace of a possible return to silver removed by abolishing the provisions for the apparently useless silver dollar?

Though this may appear perplexing to many at the present time, the reason was very well understood in 1853. Though silver dollars ceased to circulate as early as 1849, they did not cease to be coined. In fact, nearly 6,000,000 of them were coined between 1853 and 1873. But they were not intended to be used as money by those who brought the bullion to the mint to have it stamped into dollars. They were used exclusively for commerce with China, Japan, and India, where it was more advantageous to use silver than gold in the purchase of commodities for importation into the United States, because of the relatively high valuation of silver in those countries. The nations of the East, recognizing the stamp of the United States as a guarantee of the weight and fineness of the silver in the dollar, accepted such silver more readily than they would in the form of uncoined bullion. To substantiate this assertion that this anomaly of retaining provisions for the free and unlimited coinage of the silver dollar, while virtually establishing the gold standard, was only to foster and protect American commercial interests in the East, I will quote some of the opinions and recommendations of directors of the Mint and secretaries of the Treasury made previous to 1873, at which time the privilege of unlimited coinage of silver dollars was stopped.

The first quotation I give is from the report of Mint Director Pollock, made in 1861. At this time the excuse for the continued coinage of the silver dollar for commercial purposes was beginning to lose force. Director Pollock said in this report: "The silver dollar was supposed to be needed for our China and East India trade, but our consular advices are to the effect that our silver dollars are taken very reluctantly at the ports, and not at all in the interior, of China. The reasons for its retention having ceased, we should cease to coin the silver dollar or it should be made to conform in weight and value to our lesser silver coins."

From the Report of the Finances for 1864, page 215: "Permit me again to refer to the anomalous character of the silver dollar of the United States and to the observations on this subject in former reports. The whole dollar should be made in weight and fineness the exact multiple of our fractional currency and the gold dollar should be declared the unit of value of our money."

From the Report of the Finances for 1868, page 432: "Our silver dollar is not received by the Chinese except at a discount. This is owing to the fact that while of equal fineness with the Spanish or Mexican dollar it is about 1 per cent less in weight. This

rejection seems to take away the past plea for continuing to coin that piece."

Could better evidence be brought to show that at this time gold was acknowledged as the intended and existing standard, and that our currency was in a highly satisfactory condition? The continued coinage of the silver dollar, though no more to any purpose, was as yet no menace to the existing national currency and of little expense to the Government; so Congress from its usual conservatism or lack of interest in the matter had taken no notice of the repeated recommendations for its abolition.

D. International Bimetallism

81. THE THEORY OF INTERNATIONAL BIMETALLISM During the latter part of the nineteenth century discussion of the double standard centered largely around the question of international as distinguished from national bimetallism. There were many writers, and these the more careful students of the theory of bimetallism, who believed that bimetallism when adopted by a single nation would always break down sooner or later, but that it would prove successful if established uniformly by the leading nations of the world.

The argument was that as long as there are different coinage ratios in different countries, or so long as some important nations have bimetallism and some monometallism, the maintenance of national bimetallism is rendered impossible on account of the flow of specie from one country to another. For instance, if gold were undervalued at the United States mint relatively to silver, it would be shipped abroad to a country where such undervaluation was less, or nonexistent. Such movement abroad would take place whenever even slight variations occurred in the ratios of different countries. But if there were an international agreement there would be no gain in sending the undervalued metal to a foreign country for the reason that its relative valuation would be the same in all markets. Under international bimetallism, therefore, the compensatory action of a double standard would be unimpeded.

82. THE LATIN MONETARY UNION

The nearest approach to a trial of international bimetallism is found in the Latin Monetary Union. The Latin Union resulted from the fall in the value of gold following the discoveries of gold in

California and Australia. Under the operation of Gresham's law even subsidiary silver was expelled from circulation so that there was a great dearth of small change. Switzerland, like the United States, resorted to the use of token coins. But as the unit of value was the one-franc piece (about 19 cents), Switzerland first raised the unit to five francs, and then lowered the value of the two-franc, one-franc, and fifty-centime pieces, by making them only .800 fine.

This step at once caused trouble in Italy and in France, where the franc system was also in use. The coins of these nations circulated in common in the various countries, and now, owing to Gresham's law, the cheaper Swiss coins began to drive out the dearer French and Italian coins. Accordingly, in April, 1864, France by a decree prohibited the receipt of Swiss coins for public dues of all kinds, and they therefore became uncurrent.

Belgium, also using the franc system, about this time made overtures to France looking to a concerted action by the four countries to remedy the existing evils. A conference of delegates representing Belgium, Switzerland, France, and Italy accordingly met in Paris on November 20, 1865. Discussion of the state of subsidiary coins led promptly to the larger question of the whole metallic currency system. Belgium, Switzerland, and Italy were strongly in favor of the adoption of a single gold standard, retaining silver for minor coins only; but the French delegates opposed this, it is said, because of the influence of the Bank of France and the Rothschilds. They nevertheless came to an agreement and established a uniform currency for the four countries, on the general principles of token money as adopted by the United States in 1853.

They reduced the silver pieces of two francs, one franc, fifty centimes, and twenty centimes from .900 to .835 fine. They retained bimetallism, however, coining gold pieces of one hundred, fifty, twenty, ten, and five francs, and a five-franc silver piece. These coins were all .900 fine and were coined at the ratio of 15 to 1. Although each country used its own inscriptions in stamping its coins, all coins of the Union were of uniform weight, fineness, diameter, and tolerance. The subsidiary silver coins were legal tender to the amount of fifty francs between citizens in each state, and for public dues to any amount. The total quantity of coin outstanding was limited, being six francs per capita.

The treaty went into effect on August 1, 1866, to continue until January 1, 1880, and at the expiration of this time to be automatically

renewed for another like period, and so on, unless dissolved a year before the expiration of the term. In 1866 Greece, Roumania, and the States of the Church entered the Union.

Within a few years, however, changed conditions of production of the precious metals caused the value of silver to fall relatively to gold. In 1872 the ratio reached 15.5 to 1 (coinciding here with the mint ratio). When the ratio fell below this the situation became quite the opposite of what it had been in 1865. The problem now was how to prevent silver from flooding the currency, rather than how to retain it in circulation. In 1871-72 there had been presented at the French mint for coinage into five-franc pieces only 5,000,000 francs of silver bullion. But in the single year 1873, when silver became the cheaper metal, 154,000,000 francs were presented. On December 16, 1873, Belgium passed an act authorizing the government to discontinue the coinage of silver five-franc pieces.

On January 30, 1874, a meeting of delegates from the various countries of the Union was called at Paris to discuss the new problem of the silver coinage. A new treaty was agreed upon which provided that during the year 1874 the power of coinage of the silver five-franc piece should be restricted, each state being limited to a moderate amount. This provision was adopted for only one year, since it was believed that the fall in the value of silver would be but temporary, having been caused by the demonetization of silver by Germany in 1873.

But the value of silver continued to fall, and the Latin Monetary Union therefore made its policy of restricting the coinage of silver continuous. In 1876 the total amount allowed to be coined for the whole Union was fixed at 120,000,000 francs. Meanwhile the various states did not coin their full quotas, Switzerland coining none in either 1875 or 1876.

Each state under the terms of the agreement reserved the power to suspend the coinage entirely, the convention fixing only the maximum that might be coined. As has been seen, Belgium exercised her right to suspend the coinage of silver in 1873. France followed suit on August 5, 1876. In 1877, the Union itself entirely suspended the coinage of the five-franc silver piece for that year (except 10,000,000 francs for Italy).

Decisive final action was taken in the treaty of November 5, 1878, which provided that the "coinage of silver five-franc pieces is provisionally suspended. It may be resumed when a unanimous