TRANSLATOR'S PREFACE.

The address here translated gives a brief summary of the conclusions of a recognized authority on monetary questions on the larger and more general aspects of the silver situation.

In the original, the chapters are not numerically designated, but appear under the following heads:

Der gegenwärtige Stand der Währungsfrage. Vortrag gehalten in der Gehe-Stiftung zu Dresden am 16. Februar 1895.

Anhang.

Nachwort.

A simple numerical designation of those different parts is used in the translation, with sub-titles indicating the topics taken up.

The address which forms the first and main part of the publication was delivered at Dresden in February, 1895, and refers to the situation as it then stood. The changes since that date have been slight, and in no way affect the substance of the arguments. In a few places brief notes have been added, explaining the text, or bringing figures more nearly to date.

While some of the matter in the later parts is of a controversial nature, and refers more especially to the

mode in which Professor Lexis gradually reached his present views, the whole is believed to be of interest to American readers, and is accordingly reproduced without abridgement.

JOHN CUMMINGS.

THE PRESENT MONETARY SITUATION.

I.

THE PRESENT MONETARY SITUATION.

In 1871 Germany took the first step toward the reform of her currency system-a reform at that time so necessary as to be unavoidable-and with the law of July 9, 1873, she brought the great work through to a provisional conclusion.

Who could think, however, in that period of hope and public felicitation over the creation of the German Empire that the work of reform would rest under this law, and that it would remain after the lapse of more than two decades as incomplete to-day as the law left it then? that the anticipated change to a gold standard, pure and simple, would not yet be altogether accomplished, nor silver thrust wholly out of circulation?

In other words, who could think that Germany would still find unsolved to-day the problem of determining her monetary standard? Not that everyone took so optimistic a view of the matter at that time as did a certain minister of the Prussian government who believed the reform might be left to take its own course. Many expressed their fear lest the adoption of the gold standard by Germany should lead to an appreciation of gold, and some few-Ludwig Bamberger, for example,

a leader in the party which favored gold for a standard -saw clearly that the real difficulty lay in the query, "Whither with the silver?" The real difficulty lay here, because the demonetization of silver by Germany alone and the introduction of her stock of that metal into the world market for sale, might very conceivably cause silver to fall. No one held it within the range of possibility, however, that silver should depreciate to anything like the extent it has actually done since that time-not alone, surely, nor even chiefly, in consequence of German monetary legislation.

The extraordinary fall of silver, so generally unlooked for by the friends of currency reform, was the check which brought the work to a stand before the fulfillment of the original plan. As early as 1879, when silver had lost one-sixth its value-and that, too, although it had formerly been subject to but slight fluctuations-the imperial government thought it wise to suspend the sale of thalers, since on sales at the rates current the loss seemed too great. Besides the government hoped a stronger and steadier market, wherein later sales of silver might be made to better advantage, would follow these first bids. This hope, like that which led the United States in 1878 to undertake the coinage of silver under the socalled Bland act, remained unfulfilled; and that is how the German currency system to-day happens to be loaded down with a balance of some 400,000,000 marks ($100,000,000) in thalers, intrinsically worth at present barely half what they were worth in 1879.

Here, then, we come upon one of the evil conditions