Government, would form a check on any superfluity of coinage beyond the wants of commerce.

It is unfortunate that the prominent promoters of bimetallism in England began their recently organised agitation under the influence of two theoretical mistakes, namely, the idea that international legislation is requisite for the establishment of an international standard of value; and that free, in the sense of gratuitous, coinage of silver is requisite for the maintenance of the double standard. It is also, I think, unfortunate that they oppose independent action on the part of England, under the idea that the restoration of the double standard by the British Parliament at the recent ratio of 15 to I would result in the exclusion of gold coin from England. The effect of such a measure is a purely practical question, to be judged by the condition of the currencies and the interests of other nations; and I have always contended that, if England moves in the matter before the French mint undertakes to issue gold and silver at a new ratio, we may, without any international treaty on the subject, make silver crowns as well as gold sovereigns unlimited legal tender, in full assurance of the action of such a measure being supported by the French and American mints for their own convenience. It is not likely that those mints would stand idle to allow our mint to realise a profit of 20,000,000/. or that they would force silver on the market so as to make that profit 50,000,000l.

But, whatever may be our opinion on this point, I beg to impress on you the fact that the existence of our National Debt makes the coining of silver a question of right and justice, against which the question as to the

H

comparative convenience of a gold or a silver currency ought not for one moment to be weighed in the balance. And, in conclusion, I express the opinion, which is shared in by all who advocate bimetallism, to the effect that our wealth and prosperity are not in any manner due, as many suppose, to the establishment of our gold standard of value, but have rather been achieved in spite of the establishment of that standard. We are, indeed, convinced that that wealth and prosperity would be greater than it now is if the ancient standard of the realm' had not been tampered with in the manner advocated by Lord Liverpool.'

Whilst this (the third) Edition has been in the hands of the printers, Mr. Crump has published a letter, in the Economist, May 19, 1883, attacking the views expressed by Mr. Goschen in his recent Address to the Bankers' Institute, 'n the Probable Results of an Increase in the Purchasing Power of Gold,' and Mr. Crump concludes his letter as follows:

'It would appear, then, from the evidence here adduced, that Mr. Goschen has been too hasty in attributing the fall in prices during the last ten years to an appreciation in the value of gold; that the fall is not to any material extent attributable to such appreciation, but that it has been the result of other causes to which I have referred.'

The extract which I have given, at the end of Chapter III., from Mr. Crump's previous work, admits a sufficient appreciation of the value of gold for the purpose of my argument on that point. And besides this, Mr. Crump's writings do not touch the main points of my argument.-Note to the Third Edition, May 26, 1883.

If, for the sake of argument, we suppose Mr. Crump to be right in attributing the fall in prices, not to an appreciation of gold but to a depreciation of commodities in general, resulting from other causes, we should then be driven to the conclusion that the extra demand for gold, caused by the closing of the mints against silver, has merely prevented gold from depreciating more or less together with the average of all other commodities; and, even by that argument, the fall in gold prices would be due to the closing of the mints against silver. We have, however, now clearly before us the fact that since 1873 gold has risen 40 per cent. in relation to silver, and at least 40 per cent. in relation to the average of all other commodities, and that relative rise is, for all practical purposes, an

absolute rise, seeing that gold actually commands so much more of other commodities than it did before. A fall in the gold price of wheat may result from either a fall in the value of wheat, or a rise in the value of gold. But a fall in the value of wheat cannot be measured otherwise than by a fall in the ratio which the price bears to the average of prices, including the price of wheat itself; or, in other words, its fall in relation to the average price of all commodities. I see no escape from that argument or the converse, making a fall in the average of prices the only possible measure of a rise in the value of gold; and if so, then to say that the average of prices has fallen, or to say that the value of gold has risen, are merely two different ways of stating the occurrence of the same phenomenon.-Note to the Fifth Edition, 1888.

CHAPTER II.

THE POUND STERLING: ITS HISTORY AND

CHARACTER.1

Quis talia fando temperet?

THE Nineteenth Century Review for June, after propounding the question What is a Pound?' seems inclined to answer, as I did before the Literary Society last year, to the effect that it is either 1,718 grains of silver or 113 grains of gold, at the option of the debtor; and, though I am at present exiled from England by the

This history was published in Buenos Ayres in 1881 in support of the argument given in Chapter VI.

The following extract from a leading journal, and more especially the part I have italicised, is worthy of careful consideration in connection with the history of the pound sterling :

:

Any one who has studied the administration of England during the great French war, and the period which was its sequel, will pause before 'condemning the influence of Cobbett, if not the man himself, too uncompromisingly. It was a period of pretences, and subterfuges, and hypocrisies. The rulers ruling under one title exercised powers that title was never meant to cover. The "Political Register" had its birth in a period when they who were supposed to represent the British people represented either Downing Street, or a score of borough-mongering peers, or a heavy balance at their bank. Wages were a species of poor rate, and the poor rate a form of wages. The criminal law was a lottery, in which the least guilty might draw the penalty of the most atrocious outrage. Finance was reduced to mere jugglery! and, lastly, Lord Castlereagh was transplanting the principles of foreign despotism into English soil.'-Edinburgh Review, April 1879, pp. 497-8.-Note to the Third Edition, 1883.

hostility of the professional philosophers, who cannot forgive a merchant's clerk for having become the discoverer of the action of astral gravitation, and for having, by means of that discovery, corrected the fundamental error which pervades what they have for two centuries been teaching as the 'Laws of Motion,' I will not on that account refrain from continuing to take part in the discussion of this, the most important question which thoughtful men are now endeavouring to make politicians understand.'

I approach the subject in a tone of moderation,' not because I think that those who clearly understand its importance ought at this time to be moderate in the expression of their opinion, but because I cannot readily command, for the discussion of what are now to me stale truisms, the 'zeal and enthusiasm' with which nearly a quarter of a century ago I denounced theinjustice of the standard of value which was established in 1816, and denied the right of Parliament, under then existing circumstances, to alter the ancient standard of the realm.'

The sovereign, which is at present the only legal

1 At the Bimetallist Meeting held at the Mansion House this year (1882) the Lord Mayor on opening the proceedings expressed an opinion similar to that I have expressed above; declaring this to be the most important question of the age. On the other hand, the Times, in a leading article. on Nov. 16, 1881, soon after reviewing the above, in the First Edition, declared, not that the Currency Question but the Land Question is 'the most important subject which can now engage the attention of the men of politics or the men of science'; and ignored the possibility of the difficulties between landlord and tenant being in any manner connected with the Currency Question. The writer of that article perhaps does not know that any change of the standard of value occurred in 1873.-Note to the Second Edition, 1882.