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companion; and this was done because the double standard was necessary in certain states that were used to it, or where silver was the exclusive standard.

This valuable unanimity on a question so important, tending to perfect the monetary system of the convention of 1865, will certainly influence public opinion, and certain men in the interior of states who may have retained any doubt on the question.

In thus adopting gold as a basis for the desired union, it was only in a common denominator above the frane that it was possible to realize the useful equations and frequent coincidences in the systems to be brought together; for, in gold coins, the very minute differences could not be distinguished with precision by the process of coinage, and already the mere distance of five francs may be sometimes difficult to express sufficiently in the external form of the monetary disks.

The weight of five francs in gold of nine-tenths fineness, the standard which was unanimously approved, and also one of the conditions of the convention of 1865, then appeared to be the proper denominator for the basis of the desired assimilation between the monetary systems of the twenty states represented.

You are aware that the coins of the union of 1865 are already grouped around this denominator.

For example, it was shown how near the type of twenty-five franes came to the pound sterling, the half-eagle of five dollars, and a piece adopted by the Vienna conference to represent the value of ten florins. This type of twenty-five francs, especially recommended in the conference by the representatives of Austria and of the United States, has been unanimously accepted by the states that voted in the discussion of question nine, but on optional conditions.

Your opinions were more divided, in fact equally, in regard to the utility of recommending at present a gold piece of fifteen francs, the approximate equation of seven florins of the Netherlands and South Germany, and of four thalers of North Germany. But, without recommending this type, as you did that of twenty-five francs, you nevertheless agreed that, if circumstances rendered it proper, it would be open to no serious objection in itself, unless it might be in the delicacy of the process for coining it distinctly.

The eventual extension of the types of gold coins would necessitate, a fortiori, for the states that desired it, correlative latitude in the forms of their silver coins, the internationality of which is of less importance.

Such, gentlemen, are the simple but instructive and plain bases that you have thought proper to accept as a sort of siege to the citadel of monetary diversity, the fall of which you would like to behold, or, at least, to gradually destroy its walls, for the benefit of the daily increasing commerce and exchanges of every description among the different members of the human family.

The desire of not detaining you longer, gentlemen, after a session of three weeks, is my apology for the imperfection of this hastily written digest, which is made in the hope that some decision may be reached by the middle of February, 1968, or at least some instructive steps taken by the governments that have sent you to this conference. If the germs of our collective, enlightened, and benevolent aspirations, freed from the unpleasant compensations that sometimes attend the most seductive reforms, in which we are all animated by the true spirit of civilization and modern progress, shall come to fructify around you, I hope, gentlemen, you will pleasurably recall the honorable memories of the part you have taken in these delicate scientific discussions, with the satisfaction of their joint pursuit, under a presidency so memorable, and with a facility and harmony as perfect as that of delegates from a single nation in its ordinary deliberations.

E. DE PARIEC, Vice-President of the International Monetary Conference. After the interchange of a few observations, the terms of M. Parieu's report were unanimously approved by the conference.

III.

Memorandum of the populations of the four groups of countries referred to in this paper.

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Berlin, July 2, 1870. (Received July 21, 1870.) SIR: Your No. 199, on the reform of the coinage of the world, was received on the 28th of June, and was immediately communicated to the governments of Prussia and of North Germany. I have received in reply the communication which I inclose. The Diet of North Germany, at its last session, directed inquiries to be made to establish a uniformity of coinage and currency for North Germany. The customs parliament went further and requested that the inquiry might extend to all the States included in the customs union. Good results may be hoped for from these inquiries, because the policy of North Germany requires uniformity in the coinage for all the States; and if the States of South Germany join in the inquiry, it must lead either to no action or to a most thorough reform. The tendency here is strong toward the adoption of the five and twenty-franc gold piece, with decimal divisions; but nothing is decided.

Your dispatches to No. 202 have been received.

GEO. BANCROFT.

The efforts to reform the coinage in Germany are designed: 1. To introduce a uniform national system of coinage with decimal divisions. 2. To introduce circulable gold coins, and that either (a) by the adoption of a simple gold coinage, in such a manner that silver money shall be coined above its value; or (b) by the introduction of a socalled double coinage, with an unchanging ratio of value between gold and silver, such as exists in France; or (c) by adopting the double coinage only as a transition to a pure gold coinage, with a ratio of value either of 154 to 1, or of 15.55 to 1, or of 154 to 1, between gold and silver. 3. To bring the coinage unit of Germany into a simple ratio or relation to the coinage unit of other countries, and that either (a) by a simple adoption of the French franc system; or (b) by the introduction of a gold coin of the

value of 25 francs as a basis, with decimal divisions, so that a unit of reckoning may be reached, viz., (a,) the gold thaler, at 5 franes; or (3) the gold florin, at two-thirds of a thaler; or (y) the mark, at one-third of a thaler; (c,) by the introduction of the gold crown, as being a coin which is akin to the metrical system of weights, and therefore suited to be the basis of an international system; also, by a decimal division of the same, so that the gold thaler one-tenth of a crown = about 28 silver-groschen, may form the unit of reckoning, and one one-hundreth of a gold thaler may form, as a kreutzer, the smallest unit belonging to the decimal system.

The following questions now arise:

I. In arranging the system of coinage, shall the silver coinage alone be retained? An affirmative answer to this question would greatly facilitate the establishment of a uniform coinage in Germany, but would necessitate à renunciation (1) of the introduction of a legal gold currency; (2,) of the establishment of a simple relation between the German system of coinage and that of those nations which have a gold coinage or the so-called double coinage.

It must, therefore, be determined (1) whether the retention of the simple silver coinage would be attended with such great advantages that the introduction of a legal gold currency would be advisable; (2,) whether the establishment of a simple relation of the German standard to that of the countries having a gold or double coinage would be attended with such advantages that, in the arrangement of the system of coinage, the establishment of such a relation would be indispensable.

But these advantages and disadvantages must be considered from the standpoint of internal and international trade.

II. Should a simple gold coinage be at once introduced?

In relation to this question two things must be considered: 1. The advantages of a gold coinage over a simple silver coinage, (already considered under I,) and over the so-called double coinage. 2. The difficulties and expense of the change.

With regard to 1, the following questions arise: (a.) Which offers greater guarantees, a gold coinage or a double coinage, that the price of the circulating media will not be liable to sudden and great fluctuations? (b.) Which will give rise to greater confusion, a simple gold currency or the double currency, when the relation of the respective market values of the two precious metals becomes changed? (c.) Which offers greater convenience, a simple gold coinage or a double coinage, for internal and international payments?

With regard to 2, the following questions arise: (a.) What would probably be the price of gold if the gold necessary for this change had to be purchased? (b.) At what price would the silver money now in circulation have to be purchased, payment being made in the new gold currency, in order to avoid the disastrous consequences of a sudden diminution in the value of the circulating medium? (c.) What relation of value between gold and silver would it be proper to place as the basis for a change of existing obligations payable in silver to obligations payable in gold? Or (d) would it be better to make no such legal change, and to leave the conversion simply to private agreement? (e.) What precautions ought the state to take, in the event of a legal conversion of existing obligations, in order to obviate the danger of a general repudiation of existing obligations? (f.) To what extent could the exchanged silver currency be used in making new silver coins, and how high a coinage tax might be laid thereupon? (Here it should be considered for how high amounts payment in gold should be made obligatory.) (g.) At what price would the silver that could not be used probably have to be sold? (h.) How great would the expense of the change be to the state?

III. Is a change to a double coinage advisable?

With regard to this question, there is no need to consider whether a double coinage is to be regarded as the ultimate object of a reform in the coinage, since, even if it should now be regarded as the ultimate object, a change to a simple gold coinage would still remain feasible.

As reasons for a double coinage, the following are adduced: 1. The possibility of going on gradually with the preparation of the necessary gold coins, and of thereby diminishing the expense of the reform. 2. The possibility of using the silver coins hitherto in use in the new system. 3. The possibility of an accurate conversion of existing obligations into obligations according to the new system, since such conversion would not be so far removed from the silver values, in which the obligations are payable. 4. The possibility of such an assimilation to the Frenceh system that, by a retention of the two systems of double coinage contemporaneously, a revolution in the market price of the precious metals would be avoided.

With regard to these points, it has been proposed to adopt the unchanging ratio now existing in France between gold and silver, taking the florin as a standard. According to this, 1 florin of the thalers hitherto in use 24 francs, the unit of reckoning. One 25-frane piece : 10 florins 6 of the thalers now in use, the chief gold coin. The florin being divided into 100 kreutzers, the -thaler piece=25 kreutzers,

the thaler piece=124 kreutzers, the 3-thaler piece=5 kreutzers. The 25-franc piece would have to contain 7.25 grammes of fine gold.

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According to the French relation of value of 1: 154, 10 florins, which 6 thalers, would have to contain 154×7.25 grammes=112.375 grammes of fine silver. But 6 thalers contain only 111.111 grammes of fine silver, and therefore 1.264 grammes less. If, therefore, in the conversion of obligations, 1 thaler of the present coinage shall be converted into 14 florin of the new, the debtors would become indebted 14 per cent. more in silver, while the creditors would gain 14 per cent. in silver. It must therefore be asked: Is it allowable to ignore this difference, and that (a) in all claims for debt, (including state taxes, salaries, &c.,) or (b) in claims for debt to a certain amount, and to what amount ?

If this question is answered in the negative, it is to be asked: Is a system to be recommended whose unit of reckoning in the conversion of existing obligations stands to the analogous unit of the present system (1 Austrian florin) as 101 to 100?

Precisely the same questions would arise if, instead of the florin, we should undertake to make the frane, or a multiple thereof, (5 franes,) the unit of reckoning. With regard to these propositions, the advantages of the franc or florin system would have to be considered (a) with respect to the value of the Rechnungsmünze or money of account, [i. e, imaginary coin, such as the pound sterling of England;] (b) with respect to the advantages or disadvantages of conformity of the small gold, silver, and copper coins, as well as of the various denominations of banknotes and paper money with those of the nations using the frane system.

A second system has for its basis the gold crown, which would be divisible into 100 thalers, at 100 kreutzers each.

tain

500

30

According to the relation of gold to silver=15.5: 1, this new thaler would con10 x 15.5 15.5 grammes of silver, and therefore, since the thaler now in use contains 15.5

10

=16.666 grammes of fine silver, it (i.e., the new thaler) would be equal to 16.666=0.93 thaler 27.9 silver-groschen.

As this ratio is an inconvenient one, it is proposed to let the ratio between gold and silver be as 15.55 is to 1, according to which the new thaler would equal 0.933 of the thaler now in use, or 28 silver-groschen ; the kreutzer would=3.36 pence=16 South German kreutzers.

It is a question whether, in making a change, the ratio of 14 to 15 is a favorable one, and whether this system is calculated, through the coöperation of other nations, to become an international one, and whether, through this establishment of the reciprocal value of the precious metals, sufficient remittances of gold would be made to our market, or whether it would be more advisable to let the ratio between the two be as 15.75 is to 1.

Finally, it is proposed to take but one step, viz., to give the gold crown a fixed value of 9 thalers 10 silver-groschen, and to leave further developments to the future.

It may be questioned whether a satisfactory gold coinage may be thus reached, and a sufficient gold currency created, and whether, for the sake of this convenience, it would be well to renounce the other advantages to be obtained by a reform in the coinage.

III.-CORRESPONDENCE IN RELATION TO THE CONDITION OF
THE COMMERCIAL RELATIONS BETWEEN THE UNITED
STATES AND THE SPANISH AMERICAN STATES
AND BRAZIL.

CIRCULAR-DEPARTMENT OF STATE TO MINISTERS AND CONSULS IN SPANISH-AMERICAN STATES AND BRAZIL.

DEPARTMENT OF STATE,

Washington, August 19, 1870.

SIR: Copies of a report of this Department to the President, of the 14th, ultimo in answer to a resolution of the Senate, touching the commercial relations between the United States and Spanish-American countries, are herewith transmitted. With a view to enable the Presi dent more fully to comply with the request for information upon that subject; and to make recommendations with a view to the improvement of those relations, you will, without unnecessary delay, communicate to this Department any facts, and will make any suggestions which you may deem useful.

I am, sir, your obedient servant,

HAMILTON FISH.

Report from the Department of State in relation to the condition of the commercial relations between the United States and the Spanish-American states; transmitted to the Senate in obedience to a resolution.

DEPARTMENT OF STATE,

Washington, July 14, 1870.

The Secretary of State, to whom was referred the resolution of the Senate requesting the President "to institute an inquiry, by such means as in his judgment shall be deemed proper, into the present condition of the commercial relations between the United States and the Spanish-American states on this continent, and between those countries and other nations, and to communicate to the Senate full and complete statements regarding the same, together with such recommendations as he may think necessary to promote the development and increase of our commerce with those regions, and to secure to the United States that proportionate share of the trade of this continent to which their close relations of geographical contiguity and political friendship with all the states of America justly entitle them," has the honor to report:

The resolution justly regards the commercial and the political relations of the United States with the American states of Spanish origin as necessarily dependent upon each other. If the commerce of those countries has been diverted from its natural connection with the United States, the fact may probably be partly traced to political causes, which have been swept away by the great civil convulsion in this country.

For the just comprehension of the position of this Government in the American political system, and for the causes which have failed to give it hitherto the influence to which it is properly entitled, by reason of its democratic system, and of the moderation and sense of justice which have distinguished its foreign policy through successive administrations from the birth of the nation until now, it is necessary to make a brief notice of such measures as affect our present relations to the other parts of this conti

nent.

The United States were the first of the European colonies in America to arrive at maturity as a people, and assume the position of an independent republic. Since then important changes have taken place in various nations and in every part of the world. Our own growth in power has been not the least remarkable of all the great events of modern history.

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