It may be assumed that a people as enterprising and progressive as that of the United States, holding a leading position among nations, will not consent to the total abandonment of the use of gold as one of the metals to be employed as money, and we cannot consent to be placed in the very awkward position of paying for all that we buy abroad upon a gold standard, and selling all that we have to sell on a silver standard.

It is therefore recommended that the provision for the coinage of a fixed amount each month be repealed, and the secretary be authorized to coin only so much as will be necessary to supply the demand.

The effect of storing large amounts of silver coin in the Treasury vaults, with the present law requiring the issue of silver certificates, is to furnish a paper currency not payable in gold or its equivalent. This policy is open to most of the objections that can be urged against the increase of United States notes or of gold certificates, and to the additional objection that it furnishes a currency depreciated, from the very nature of the basis on which it rests-that is, silver coin of a debased value as compared with gold coin.

There is no objection to supplying fully a demand for silver dollars for actual use at home and in some few foreign markets; but so long as generally, in the markets of the world, they are of less value than the gold dollar, which is our legal standard of value, they must be regarded as subsidiary coin. It is believed that the amount in circulation will be steadily increased, but not so fast as to require, for some months, or perhaps years, any addition to the amount already coined.

SILVER CERTIFICATES.

The Department has issued silver certificates at the several sub-treasury offices, upon a deposit of gold coin in like amount with the Assistant Treasurer at New York, and through this means certificates have been issued for nearly all the silver held by the Treasury. These certificates amount to about $66,000,000, and are now outstanding. About $34,000,000 of silver dollars arə now in circulation. The total result of this silver coinage is to increase the currency of the country to the extent of about $100,000,000, and to require the Treasurer of the United States to hold the silver coin in which the certificates are payable. On November 1, 1881, the Department held in its cash about $7,000,000 of the certificates and about $250,000 of the coin for which certificates had not been issued.

The act of February 28, 1878, requiring the issue of silver certificates upon the deposit of standard silver dollars was a part of the policy of the Government to maintain the standard of the silver dollar at or near the value of the standard gold dollar. The same act provided that such certificates should be receivable "for customs, taxes and all public dues."

The liberal purchase of bullion and coinage of silver dollars by this Government, and the reciept of them by it for public dues, has failed to raise the price of silver bullion to any great extent in the markets of the world.

As is said elsewhere herein, the circulation of some sixty-six millions of silver certificates seems an inexpedient addition to the paper currency. They are made a legal tender for the purposes named, yet have for their basis about eighty-eight per cent. only of their nominal value. There is no promise from the Government to make good the difference between their actual and nominal value.

The

There need be no apprehension of a too limited paper circulation. national banks are ready to issue their notes in such quantity as the laws of trade demand, and as security therefor the Government will hold an equivalent in its own bonds.

The embarrassments which are certain to follow from the endeavour to maintain several standards of value, in the form of paper currency, are too obvious to need discussion.

It is recommended, therefore, that measures be taken for a repeal of the act requiring the issue of such certificates, and the early retirement of them from circulation.

As a supplement to the foregoing, which shows with clearness the official view of the position into which the United States appears to be drifting, and the course which it is thought desirable to adopt, the following extracts are reprinted from the Commercial and Financial Chronicle, a financial journal of standing in New York. They may be regarded as representing the views of a large and important section of the unofficial and mercantile class

What is the feature in our fiscal arrangements which is now causing chief anxiety? A few facts in the Treasurer's report, just issued, develop it pretty clearly. According to that report, the coinage of standard silver dollars to the 30th of September had reached $98,322,705. The average monthly coinage during the last year has, it appears, been about $2,400,000, and consequently on the first of November the total coined had reached the large aggregate of nearly 100 millions; of which there were in circulation about 33 millions, leaving on hand 664 millions, with an issue of silver certificates in just about the latter

amount.

But there are other facts which should appear by the side of the foregoing. During the time silver coinage has been in progress, we have imported about 200 millions of gold, besides retaining our own production. It is not quite accurate to say that the import was because of our produce shipments; those shipments furnished the opportunity, but the gold came because we wanted the gold more than anything else the world had to send. Had we been on the old greenback basis, or on a silver basis, the gold would not have come-in the former case, merchandise at the ruling high values, and in the latter case silver, would have been sent in payment for our produce.

We were then, however, establishing a gold currency, and we needed gold for that purpose, so it flowed in rapidly as soon as the opportunity offered. Yet even with this large addition, we still have an aggregate, including the invisible stock, very much less than either France or England, and with a country so large and a population so scattered, we require more, and can and will secure more, unless we continue to repel it. Our silver coinage law is a cunning device, possessing just that repelling force, though of course not so intended. It is an instrument for furnishing a cheap substitute, and thus in part satisfying without supplying the need for gold; and the facts as to silver coinage and certificates stated above, measure the effort of this unnatural law of Congress during the last three years to keep gold out of the country and to force silver and its representatives into its place.

Consider how much safer the monetary situation would be with gold coin diffused generally among the people. Now our stock is in very great part visible, and in case of an adverse trade balance it is in position to respond quickly to a foreign demand. Throughout the entire country, the people themselves hold only about two hundred and twenty-five millions and perhaps less. We are accustomed to look at our large visible supply and express satisfaction because it compares so favorably with the holdings of the Banks of England and France. But those countries have, besides, very large invisible reserves. England is supposed to possess in this way about 600 millions in active circulation, and France about 900 millions. Observe how the Bank of France is now drawing gold from this source, through the receivers of taxes and thus replenishing its diminished holdings; it took this same course a year ago and the consciousness that the country possessed such abundant supplies has prevented loss of confidence, while the visible supply was so rapidly decreasing.

In a similar position our monetary affairs would be seriously disturbed, if not thrown into confusion. Our whole currency fabric is built upon our visible supply of gold, being almost wholly paper with that exception. If only a portion of this base or support was withdrawn, it would make the whole fabric totter. This is the explanation for the great sensitiveness our markets have several times shown under the fear of such a possibility-notably in the winter and spring of 1879-80. What the country needs, if its currency is to be put into a thoroughly conservative position, is at least two or three hundred millions more of gold to be drawn from the old accumulations of Europe; that, with our production constantly retained, would give us a consciousness of strength, in place of the sensitiveness which is now felt at every upward turn of the foreign exchanges.

But it may be said that we cannot secure this additional supply-Europe has not got it to spare. We think differently. At least we need it, and it becomes us therefore not to repel it, but to do our best to secure it. We do repel it, when we attempt to supply the people's demand for currency with a cheaper substitute.

We admit that this struggle for gold is to be a severe one. But Europe has said that gold alone shall be the basis of international commerce, and would it not be prudent to accept the gage of battle thus thrown down and act as it it were to be so; for if it is, we need more gold and must have it. Every silver dollar we coin, and, worse still, every silver certificate we issue, weakens our position The certificate is the more objectionable because (1) it prevents or checks the outflow of dollars already coined which might in the absence of the certificates find a lodgment in the remote agricultural districts and there remain; and (2) because the certificates in a time of general confidence move so readily and perform so nearly all the domestic purposes of currency, and yet do not fulfil any of the requirements of our foreign commerce. That is to say, the certificates give us a substitute for the real, and keep out the real, although in time of general distrust they would be of limited service and might prove a source of great annoyance and danger.

But we need not prolong this discussion. It is already, we think, apparent to every reader that we need further large supplies of gold to give stability to our financial system; that our coinage of silver and the issue of certificates are weakening our power to secure those supplies, while not really adding a dollar to actual currency, for we could obtain gold instead if we only stopped the coinage and allowed the laws of trade to assert their natural influence. We have made no reference here to the facts so often presented in these columns, showing and proving that the course suggested would in the end also secure the re-establishment in Europe of silver as currency on a par with gold. That conclusion is so obvious, following so evidently from what we have said, that it is unnecessary to dwell upon it. Nor will we stop to point out the actual danger threatening the permanency of our gold standard if we persist in this silver coinage. These dollars have now reached over 100 millions, and with the help of silver certificates all of them are in circulation, although worth 12 per cent. less than our gold currency. It cannot require the eye of a prophet to see that these two currencies will not stand side by side if the cheaper one is allowed to increase indefinitely. There is a limit, and how soon it will be reached no man can tell. But when it comes it will come suddenly and unexpectedly, and through some revulsion which will disturb confidence and make the truth appear.

In the light of the foregoing, is it not evident that policy, principle, the safety of our currency-all, call for a pronounced course of action on the part of the Administration on the question of silver coinage?

With the exception that these later extracts contain a more boldly enunciated hope that European nations may be forced to accept bi

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metallism, the official and the unofficial views here expressed are in harmony, and show that the best minds in the country are keenly alive to the extraordinary position which the Silver Bill has brought about, and the still greater evils which must result from its continuance. Yet it appears very doubtful, from late advices, whether the obvious expedient of stopping the coinage of silver dollars is likely to be carried out. The party in favour of inflation of the currency by any and every means is a strong one, and it is only too probable that the present system will be allowed to continue.

The position in the United States appears to be this. A legal currency exists there, with certain variations in regard to the extent to which the paper money is a legal tender, consisting of notes, based some upon credit, some upon security; gold dollars; silver dollars, and certificates based only upon silver dollars. Of these the silver dollars are the only part of the currency which the people will not use; but, with an extraordinary want of perception on the part of the Legislature of the requirements of the country, it is the only part which the law determines shall be surely but slowly augmented. The certificates based upon these coins and redeemable in them, are for the present readily accepted along with all the other acceptable forms of the currency, and it would seem that their use blinds the community to the insidious accumulation of the depreciated silver coin, and leads them to defer the evil day when the whole question must be faced. Each new silver coin struck takes the place of so much gold, and by the operation of the present law, which insists upon a certain fixed addition to the silver coinage every month, a period must arrive when it will be found that a large proportion of the currency of the country is resting upon a silver basis.

But this is a view of the question as it affects the American people. They have by legislation deliberately created the position, and they are free either to continue it or to set it aside. The question has, however, a grave interest for Europe. The day must surely come when the United States will seek effectually to rid themselves of such an incongruous condition of things. Assuming that this will be effected by a demonetization of silver, or at least, by a cessation of its coinage, with the inevitable consequence that that metal must be depreciated, and the metal that is to supplant it be appreciated, this means for gold-using Europe that there is hanging over it another era of disturbance and depreciation of prices, with the certainty that the longer the storm is delayed, the more severe will be the consequences when it actually breaks.

NOTES ON SOME RECENT PAPERS AND PAMPHLETS.

Proceedings of the Convention of the AMERICAN BANKERS' ASSOCIATION, held at Niagara Falls, August, 1881.*

rest.

At this "Convention," as our American friends style it, which consists, apparently, of delegates from such banks or kindred associations as are members of the society, a great number of papers connected with American banking questions were read. As there does not appear to have been any discussion, at least none is reported, there is no means of knowing how far the several contributors carried the convention with them. The papers, however, though varying greatly in point of style and power, are all of inteSome are confined to questions which would naturally call for more attention in the States than elsewhere, notably those referring to the evidently sore subject of taxation, and others, of which there are several which raise the question as to what security shall become the basis of the national bank notes of the future, when the national debt shall have been greatly reduced, or as to what form these notes will assume, will be dealt with more fully when the question of American banking is considered, as will probably be the case shortly. One address, however, by Mr. F. Marion Crawford, of New York, on "Our Silver," stands somewhat alone, and merits attention.

Mr. Crawford states that the chief point of difference between the United States and other countries, in regard to the question of currency, lies in the fact that whilst they, generally speaking, have to import their currency in the first instance, she produces not only enough for herself, but a large amount for others also. After doing this, however, so great is the production, that it has been found hitherto impracticable "to force the circulation up to the figure which represents the home coinage; or, in other words, to keep the demand for coined dollars in any sort of equilibrium with the supply." In short, there were then about $77,000,000 lying in the treasury vaults, not only without any expectation that they would come into circulation, but rather that the accumulation would increase. The question which Mr. Crawford then proposes

* New York: Published by the Bankers' Publishing Association, 247, Broadway.