Page images
PDF
EPUB

States, increasing our moral and political power and rendering us yet more secure against the intrigues, jealousies, and hostility of those governments which desire our downfall and the dissolution of the American Union. Although we cannot promote the creation of such political combinations, we can have no reason to regret the rise of governmental forms which will deliver Europe from the scourge of constantly renewing wars, and which will put an end to the abuses and evils against which outraged humanity has for centuries protested in vain. Past experience will teach the necessity of establishing future European republics on a firm basis that will guarantee their induring existence, and we shall not again see the short-lived and disastrous experiments at republican government which we have hitherto witnessed in Europe,

Although we cannot safely predict the political future of Europe for any long period ahead from the standpoint of view occupy here, I am however persuaded that we are on the eve of great changes, and tending in the drift above suggested, and having an inevitable tendency to vastly increase the authority of the United States over governments of a kindred form, and with like political sympathies.

E. JOY MORRIS.

II-CORRESPONDENCE RELATING TO THE PROPOSED INTERNATIONAL GOLD COINAGE.

No. 195.

Circular instructions sent to the legations of the United States at London, Paris, Berlin, Vienna, Madrid, Brussels, Copenhagen, Florence, The Hague, Lisbon, Stockholm, and Berne.

DEPARTMENT OF STATE,

Washington, June 11, 1870.

SIR: The Senate has requested the President "to invite a correspondence with Great Britain and other foreign powers, with a view to promote the adoption, by the legislatures of the several powers, of a common unit and standard of an international gold coinage."

I presume that it will not be necessary to present to the enlightened governments with which this correspondence is invited any considerations in favor of the adoption of such a common unit and standard. That it will simplify the daily business transactions of the world, and that it will bring into closer communion the nations that adopt it, is manifest. The Government of the United States, therefore, in opening this correspondence, at the request of the Senate, limits itself to the presentation of the objections that have been hitherto raised against such unification, in the hope that some plan may be devised which will obviate them. In doing this we must necessarily regard the subject, primarily, as it effects our own commerce and trade.

The principal part of the trade and commerce of the United States is carried on with four groups of countries:

First. Those in which the accounts are rendered and settled in sterling currency.

Second. Those in which they are rendered and settled in francs. Third. Those in which they are rendered and settled in the North German unit of account.

Fourth. Those in which they are rendered and settled in dollars.

In commenting upon the commerce with these several countries, I shall adopt for convenience the returns for the year 1867, and I shall make the statements in round numbers.

The first of these groups comprises the United Kingdom of Great Britain and Ireland, the various British colonies and dependencies, India, China, and Japan. I add the last two countries to the list, because I understand that most of the settlements are made in sterling bills, although the accounts are kept in Chinese taels or Mexican dol lars. Our aggregate annual domestic exports to these countries are about $275,000,000, and our aggregate annual imports from the same countries are about $220,000,000.

With the countries in which the franc is the unit of account, viz., France, Italy, Switerland, and Belgium, the dealings of the United States are less extensive. The domestic exports to these countries are about $57,000,000, and the imports from them are less than $50,000,000.

It is to be remembered, however, in this connection, that Austria, Greece, and Sweden have adopted, or propose to adopt, a unit of gold coinage which can be expressed in a given number of francs. I do not understand, however, that they propose to adopt the French system of money.

The exports to the third group of countries amount to $27,000,000, and the imports from them to $26,500,000.

When it is remembered that the entire imports of the United States are about $418,000,000, and the entire exports are about $440,000,000, it will be seen that the commerce with the countries comprised in these three groups amounts to more than three-fourths of the whole foreign trade of the country, and that the commerce with the first group only is more than one-half the aggregate foreign commerce of the United States.

The fourth group includes the United States and their Territories, with all their domestic commerce, and also such neighboring domainions of other powers as have practically adopted the dollar standard. In magnitude this trade far surpasses all the others combined. Its results are expressed in the permanent capital of the country. A change in the value of the unit of account affects not only all this commerce, but also all the contracts for the payment of money in the United States, including the national debt, and the value of all the permanent capital of the country. Any material change in the unit would render necessary a series of computations, which would occasion an amount of inconvenience to the population of the United States for which the benefits they would receive from the change would scarcely compensate.

The same may be said of the effect of a material change in the value of its unit of account upon the domestic trade and property of each of the other groups of countries.

If, therefore, the idea of "a common unit and standard of an international coinage" is to be carried to the extent of an absolute identity in the coins, it will be necessary to seek for a basis of unification which complies with the following requisites, so far as it may affect the coinage of the United States, and, probably, the same may be said, mutatis mutandis, as to Great Britain and France:

First. It must be one that does not materially vary from the existing coinage.

Second. It must be one that will be acquiesced in by the government of the United Kingdom, and by the countries which express their values in francs.

It would also be extremely desirable, though not absolutely essential, so far as the interests of the United States are concerned, (whose commerce is mainly with the powers whose values are expressed in sterling or francs,) that it should be acceptable to the other leading powers.

It is also indispensable that gold should be made the sole standard. France still adheres to the double standard; but, in the opinion of the Government of the United States, it will not be practicable to unify the coinage of the world on the basis of a double standard. The resolution of the Senate aims at a correspondence for the unification of gold coinage only.

Several attempts have been already made to secure the desired uniformity.

The coinage of Belgium, Switzerland, and Italy was assimilated by convention in 1865 to that of France, and the issues of each country regulated thereby; and it has been assumed that the uniformity, so easily secured in these territories, may be extended with equal ease. But it

is to be observed that the formation of the kingdom of Italy out of a number of independent sovereignties, with a heterogeneous medley of coinages, afforded an occasion and an opportunity for remodeling the coinage of that country which does not exist with the United States or with the United Kingdom. No reasoning, therefore, can be drawn from the example of Italy.

In the International Monetary Conference held at Paris in 1867, on the invitation of the French government, this subject was elaborately considered. The government of Great Britain was represented by Mr. Graham, the director of the royal mint, and by Mr. Rivers Wilson, attached to the treasury. The Government of the United States was represented by Mr. Samuel B. Ruggles, one of its most eminent statisticians.

That conference determined unanimously (voting by states) "against the creation of an entirely new system, independent of existing systems," and in favor of the mutual coordination of existing systems, taking into account the scientific advantages of certain types, and the numbers of the population that have already adopted them."

It was also determined, with like unanimity, that the monetary system established by the convention of 1865 should be the one to be principally considered by the conference.

It was decided to recommend gold for the standard, with silver as a transitory companion, and to adopt as the common denominator, for the basis of the desired assimilation, the weight of five francs in gold of nine-tenths fineness. On the last question the vote of England was recorded in the negative, and the vote of the United States in the affirmative.

It was unanimously determined to adopt the twenty-five-franc piece, with which it was supposed that the American half-eagle and the British sovereign could be made identical in form, size, weight, and fineness, so that, in the language of Mr. Ruggles, they "would readily circulate side by side with the French twenty-five-franc piece on conditions of perfect equality." The values of the dollar and the cent, of the shilling and the penny, were, under this scheme, to be all changed and made to conform to the new measures.

I inclose a copy of the report of the proceedings of the conference, prepared by a French delegate, M. de Paricu, vice-president of the council of state, member of the institute, and vice-president of the conference.

It is understood in Washington that the British government has not yet shown a willingness to give its adhesion to the plan proposed by the conference, notwithstanding the favor with which it was received by the delegates of Great Britain in Paris. We are informed that that government is not disposed to adopt the proposition while a double standard is maintained in France. Nor has the Congress of the United States shown a disposition to authorize the Executive Department of this Government to reduce the values of the coins of the United States to the proposed measures.

The plan of the conference would, if adopted, make a greater change necessary in the coinage of the United States than in the coinage of the United Kingdom. The reduction in the value of the gold dollar would be about 3 per cent., which would put the people of this country to great inconvenience in their business.

The Senate, having before it a bill aiming at the adoption of the recommendations of the monetary conference of Paris in the coinage of this country, after full consideration, disposed of the subject by refer

ring it to this Department in the manner I have already indicated. This was done on the motion of the distinguished chairman of the Committee on Finance, whose letter to Mr. Ruggles in Paris had more, perhaps, than any other cause, given vitality to the scheme proposed by the conference.

The House of Representatives has before it two bills. One of these, introduced and advocated by Mr. Kelley, of the Committee on Coinage, Weights, and Measures, proposes to substitute for the present system of coinage what is known here as the dollar system, to which I shall soon allude. The other, introduced by Mr. Hooper, of Massachusetts, aims to carry into effect the recommendations of the Paris conference. But, in a speech in the House after the introduction of this bill, Mr. Hooper said, "Any change of coinage, so great as to be accounted for, involves an inconvenience in the payment of prior contracts, and particularly in the payment of the interest and principal of public and corporate debts, which inconvenience is thought by some to be very much greater than the international convenience arising from conformity of coinage. The whole question appears to demand that an attempt should be made to arrive at some agreement with Great Britain for an international coinage, in which the nations of continental Europe could be reasonably expected to join at no distant period."

Both bills were referred by the House to the committee; and it would appear reasonable to conclude that the House, as well as the Senate, is not disposed to adopt the suggestions of the Paris conference without further communication with the British government.

Without expressing on behalf of the Executive Department of this Government a decided opinion upon the merits of the franc system, I may say that, if there is to be unification, the Government of the United States would prefer a scale assimilating nearer to its present system. In any event, the extent of the dealings between this country and Great Britain makes it proper that, before the President can consent to recommend Congress to subject the citizens of the United States to the annoyance, inconvenience, and loss which may be caused by a large depreciation in the national measure of values, he shall have assurance that the assent of her Majesty's government can be relied upon.

Another scheme for unification which has been presented to the consideration of this Government has been already referred to as the dollar scheme. This scheme proposes a reduction in the value of the dollar of three-tenths of 1 per cent., in order to make the coin of metrical weight, so that three dollars coined of nine-tenths fineness shall weigh five grams, while two dollars shall contain three grams of fine gold. It also contemplates that the British penny shall be equivalent to two metric cents, and that the sovereign and a new French coin of twenty-five francs shall each be brought to the weight, fineness, size, and value of the half-eagle as reduced.

This plan is one very favorable to the United States. The change is within the mint tolerance, and need not be accounted for. It would also adapt itself without change to the new German system of coinage, two eagles being equal to three vereinskrone.

Should the governments of Great Britain and France be disposed to join the Government of the United States in recommending the adop tion of this system, the President is prepared to advise Congress to adapt the coinage of the United States to it.

But we cannot shut our eyes to the fact that it may not meet with favor in Great Britain, when it calls for an increase in the value of the

« PreviousContinue »