wmm . -ies, "4 ^^^^1^^':^:-^ ^'^ ^^^^^: MSDWBSMmmmm te -i!. ,\ ■vu 3' Cornell University Library HG307.G7 A3 1876 + + Report 3 1924 030 186 773 olin Overs DATE DUE fi£!t ^^ggm^ m^mr ■"11 HL'"^- '*-^>. GAVLORO PniNTEOIN U.S.A. R E P B FROM THE SELECT COMMITTEE ON DEPRECIATION OF SILVER: TOQETHEK WITH THE PROCEEDINGS OF THE COMMITTEE, MINUTES OF EVID EN C E, AND APPENDIX. [Communicated from the Commons to the Lords.] isro. (178.) The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924030186773 REPORT PEOM THE SELECT COMMITTEE ON DEPRECIATION OF SILVER; TOGETHER WITH THE PROCEEDINGS OF THE COMMITTEE, MINUTES OF EVIDENCE, AND APPENDIX. [Communicated from the Commons to the Lords.] Ordered to be printed 17th July 1876. (a; (178.) /ax.s J-,\ •■•■riY' '^:^ l.a&^-i."' .R^/ , r REPORT p. iii PROCEEDINGS OF THE COMMITTEE p. Iii MINUTES OF EVIDENCE ----..-. p. i LIST OF APPENDIX ---.-.- - p. 71 APPENDIX- - p. 1 PRELIMINARY INDEX - - - p. 195 Jl \ \ L i J TABLE OF CONTENTS. Appointment of the Select Committee - Report of the Select Committee ... Object in view - - - - - Statistics obtained from Foreign Countries Fall in Price of Silver ... Rate of Exchange for Bills on Indian Governments - - - . . — ' Causes of Fall in Price of Silver - Production of Silver : aggregate - „ „ in United States - Exports of Silver from United States to United Kingdom Coinage Operations of United States Germany: Surplus Supplies of Silver thrown on Market „ Legislative Measures „ Action under Coinage Laws „ Demonetisation of various Coinages - - - - „ Withdrawal of Coins f, Amount in circulation in 1871 „ Amount required for sub- sidiary Curi-ency „ Payment of French Indem- nity - - . - „ Total Amount of Sales of Silver „ Thaler Currency Scandinavian Kingdoms India: Decline in demand for Remittances for purposes of Trade „ Exports and Imports „ Amount of Remittances „ Change in mode of Remittance : Substitution ofGovernmentBills for Bullion „ Increase of Government Bills for Home Requirements „ Increased Remittances by private Persons .... „ Increased Remittances of Rupee Paper, &c. . . . PAGE. ii iii iii iii iv iv iv V vii XV xvi xviii xviii XX xxi xxi xxii xxvii xxix xxix xxix XXX xxxi xxxii xxxm xxxiv XXXV XXXV Report of Select Committee — continued. India : Effect of fall of Silver on Ex. changes, and of Exchanges on Price of Silver „ Capacify for absorbing Silver, in Coinage - - - „ Gapaeity for aitBOiUiaig Silver, in Manufactures .... „ Effect of Depreciation of Silver in stimulating Exports of Mer- chandise irom India Latin Monetary Union Movements of Silver : n General Austria Italy - France Russia Spain United Kingdom Rest of Europe - East (exclusive of India) United States SwnMmary -1 Use of Silver for Manufacture ■'i Final Summary - Proceedings of the Committee Evidence of Witnesses :— Mr. H. Waterfield Sir H. Hay Mr. S. Pixley Mr. R. Giffen - ' . Mr. F. G. Wilkins Mr. P. Campbell Mr. R. W. Crawford - Mr. G. Pietseh Mr. S. Seldon Mr. W. Robinson - Colonel H. Hyde - Mr. J. T. Mackenzie - Mr. E. Seyd Mr. W. Bagehot - XXXV xxxvi xxxvii xxxviii xxxviii xl xli xli xlii xlv xlv xlv xlvi xlvii xlvii xlvii xlviii xlix 1. 33. «)i 2 7 )2. 17 15 22 26 34. 68 40 4? 43 49 55 63. 6b» 338. a2 L ii ] Friday, 3rd March 1876. Ordered, That a Select Committee be appointed to consider and report upon the causes of the Depreciation of the Price of Silver, and the effects of such Depreciation upon the Exchange between India and England. Thursday, 9th March 1876. Select Committee nominated of — Mr. Baxter. Mr. Christopher Beckett Denison. Mr. Goschen. Mr. Kirkman Hodgson. Mr. Hubbard. Lord George Hamilton. Mr. Massey. Mr. MulhoUand. Mr. Fawcett. Mr. Cave. Mr. Shaw. Mr. Hermon. Sir Charles Mills. Ordered, That the Committee have power to send for Persons, Papers, and Records. Ordered, That Three be the quorum of the Committee. r iii 1 R £ P O R I THE SELECT COMMITTEE appointed to " consider and Report upon the Causes of the Depreciation of the Price of Silver, and the Effects of such Depreciation upon the Exchange between India and England " ; Have considered the matters to them referred, and have agreed to the following REPORT :— Your Committee have, throughout their proceedings, steadily kept in view that they were simply charged with an inquiry into the causes of the fall in the value of Silver and its effect on the Indian Exchange, and that the ques- tions referred to them did not include an investigation as to what measures, if any, legislative or administrative, might be contemplated as expedient or neces- sary under the circumstances. The condition of the Silver market has given rise to many speculations on the possibility or necessity of action being taken by various countries with respect to their currency, ^but your Committee, being of opinion that their func- tions did not extend to the consideration of such suggestions, refrained from examining witnesses on this branch of the subject. In their inquiry into the matters actually referred to them, they have also, as far as possible, avoided the examination of merely speculative views ; but in many cases, in the absence of authoritative statistics, they have been compelled to take estimates into their consideration which were more or less matters of opinion. Your Committee appUed to the Foreign Office to procure for them official Appendix 20. statistics from various foreign countries on the movements of the precious metals, and on the stocks of Silver coined and in circulation. Their labours have been greatly assisted by the very important information thus obtained. The despatches from Her Majesty's representatives at Paris, Berlin, Washington, and Brussels have been especially valuable. The most important Papers supplied have been printed with the Evidence, but in many cases they were too voluminous for this to be done. The Imperial German Government courteously sent a complete set of all official printed documents bearing on the recent changes in the laws on currency and on banking, including the steno- graphic Reports of the Parliamentary Debates thereon. The French Govern- ment, besides the statistics printed in the Appendix to this Report, furnished the " Minutes of Proceedings " {proch verbaux) of the recent Conferences of the members of the " Latin Monetary Union," and have facilitated the inquiry of your Committee in every way. From Belgium your Committee received a set of elaborate and highly valuable documents, entitled " Documents Mone- taires," collected and published by M. Malou, Minister of Finance, and now Premier in that country, and presented by him to the Belgian Parliament. They have special reference to the Silver question. Your Committee recommend that all these volumes and papers, though not included in the printed evidence, should be kept in the Library of the House of Commons. The statistics contained in these foreign documents are naturally given in the currencies of the respective countries to which they relate. Your Com- mittee have found it necessary for purposes of convenience to convert all amounts into sterling money ; and, to avoid misapprehension, it should at once be stated that the calculations have been based on the value of foreign coins before the fall in the price of Silver took place. 338. a 3 The Appendix 21. IV REPORT FROM THE SELECT COMMITTEE Appendix 5 b. Appendix 26, Table 1. The fall in the price of Silver, which forms the subject-matter of this inquiry, has been as follows : Between 1862 and 1866 the yearly average of the price of bar Silver per ounce standard ranged between 1867 „ 1872 ■ ditto . . . - In 1873 the yearly average was - - - - 1874 ditto - - - - - ," 1875 - ditto _ - - - - - '- 1876 the fluctuations in January were between „ February „ - - „ March „ _ _ - April „ - - May June „ - - - 62«?. andeirf. 61 d. „ 60 d. 59k d. 58-i\d. dSid. 56^ d. and 54g d. 54irf. „ 53 d. 5Ud. 54 d. 54 d. 52 d. 52 i d. 5Sid. 52 d. 50 d. fall from 60^ c^. the average between 1867 and 1872, to 53 ,000,000 marks had been coined ; there remained to be coined 270,000,000 marks (13,500,000 /.). Deducting these 2/0,000,000 marks from the total stock of 700,000,000, the result would be a surplus of 450,000,000 marks (22,500,000 /.), which would have by degrees to be sold. This calculation of Deputy Sonneman accordingly lies about half-way be- tween the two estimates previously given. Dr. Soetbeer expresses his regret that he himself is obliged to consider this estimate as " corresponding to the reality," and as rather too low than too high ; but he states the important fact, that " the representatives of the Government thought that they were bound to '•' assume a considerably lower estimate of the stock of thalers which they would " have to clear off (beseitigen) ." He proceeds to quote from speeches of the Ministers on the subject, and it is important to observe, that in these speeches the calculations are made from a totally different point of view. The Ministers looked to the evidence furnished by such returns as were at their disposal, as to the whereabouts of the Silver Coins still in circulation, and argued from these data that the amount remaining to be dealt with was very moderate. Staats Minister Delbruck stated, that stock had been taken of the one and two thaler pieces on hand on the 30th September 1875 in the public treasuries, the Bank tills, and so forth. The result was a total stock of about 34,270,000 thalers (5,140,000/.). Of this amount about 20,000,000 thalers were in the Banks, about 1 1,000,000 in the other treasuries. The Minister then proceeds to infer that the 20,000,000 thaler pieces in the Banks " scarcely belong to the traffic (verkehr) of the public properly so-called, but must rather be considered as assets in the hands of the Banks, for the purpose of covering their issues of notes, and that accordingly the amount of thalers to be considered as forming part of the circulation in the hands of the public was reduced to the small amount of 11,000,000 thalers (33,000,000 marks, i.e., 1,650,000/.), which was on hand in the State, Communal, and other public chests." Staats Minister Camphausen (the Prussian Minister of Finance) spoke, says Dr. Soetbeer, " in the same sense," but he carried the analysis of the stock of Thalers which was traceable, still further. Taking the 20,000,000 Thalers in the banks, he distinguishes between 14,000,000, which were in the Prussian Bank and its branches, and the remaining 6,000,000 which were in non-Prussian Banks; of the latter amount he says,that itwas moneyin the hands of Banks which, owing to the withdraival of small bank-notes were still in the position of having to meet the wishes of the pubhc for Silver money as far as possible, and as the demonetisation of the South German florin had just been decreed, and an amount estimated as equal to about 12,000,000 thalers had still to be withdrawn, it was to be expected that the whole stock of thalers in the non- Prussian Banks would not half suffice to meet this gap. The importance which Herr Camphausen attributed to this evidence may be gathered from the last sentence quoted by Dr. Soetbeer : "We are therefore able to look forward to the whole process of this transition with the greatest tranquillity, and we may say to ourselves that this transition will be completed in a fashion which is mere child's play." (In einer wahrhaft spielenden Weise.) Dr. Soetbeer observes on these declarations of the Ministers, that "while it is true that no positive estimate is expressed of the total amount of thaler coins stiU on hand, which in future will become superfluous, it is certainly undoubted that their view does not even remotely approach the estimate given by Deputy Sonneman," which, it vill be remembered, gave a result of 22,500,000 /. as ultimately available for sale. Dr. Soetbeer, as has been stated, inclined to the view that the latter estimate was rather too low than too high, and he endeavours to meet the arguments of the Ministers. He denies that the comparatively small stock of Silver thalers in the hands of the Banks permits a conclusion as to the total of this coin circulating in the ordinary daily transactions of the public, as the banks collected Gold coins by preference in their cash assets, whereas the public in Northern and Central Germany from old custom hked to use thaler coins as 338. e means XXVI REPORT KROM THE SELECT COMMITTEE means of payment in the ordinary expenses of daily life, so long as they were still to be had in abundance. Dr. Soetbeer adduces a further argument to shew that if so few thalers were still in circulation, an incredible amount of thalers must have disappeared but this is probably a conclusion which the advocates of the lower estimate would be prepared to accept. Your Committee, while they admit the force of the view that the stock of Silver coin in the banks cannot justify any distinct conclusion as to the amount of Silver that is actually in the hands of t le pubUc, circulating from, day to day, are nevertheless of the opinion that it is certainly a valuable element of calculation, which ought not to be omitted. The fact that elsewhere than in the pockets of the people, or in hoarded stores, comparatively small amounts could be shewn to exist, justified the Mini'^ters to a certain extent in drawing tranijuillising inferences. The two prominent facts to which allusion has already been made, the withdrawal of upwards of 20,000,000 /. sterling of small bank notes, and the issue of 70,000,000 I. of new Gold coin, must be taken into account. It would appear that, making every allowance for considerable amounts having already been ex- ported, and for the fact that the War Treasure formerly held in Silver is now held in Gold, a large amount of Gold must have passed into the hands of the public. Means have thus been furnished for the larger payments, and Silver, previously employed for that purpose, must thus, j^ro tanto, have already been driven out of the field. Consequently the Silver coin still circulating must be held to circulate for the smaller payments for which neither Gold nor bank-notes of larger denominations are equally convenient. The stock of Gold coin must be abundant. Therefore Silver cannot be simply used for lack of other means ol' payment. It must be used for those purposes for which it is most convenient, namely, the ordinary payments of daily life ; and it is precisely in these that the withdrawal of the small notes has opened up a new channel for the employment of Silver for subsidiary purposes. It appears, tlierefore, that, if the amount of Silver in circulation is still large, it is large because the ordinary system of everyday payments creates the necessity for its being large. Any excess must become apparent in the tills of the banks. The amount in the tills of the banks, it will be remembered, stated by Herr Delbruck, did not excted 3,300,000/. on the 30th September 1875. Your Committee have inquired what the stock of Silver in the same banks amounted to at a later date. • They have found on inquirv that the stock ascertainable by the German Government as held on the 31st March 1876, in tlie Imperial Bank and the 32 private Banks of Germany, was rather over 8,000,000 I., but your Committee have no information as to wiiether the stock in the hands of the Imperial Bank contained any largs number of coins belonging to series in course of withdrawal, and which are awaiting disposal, nor whether the new coins issued ent-r to any extent into the stock in the hands of the banks. They do not know whether the returns have been made up on the same principle on the 30th September and on the 31st of March. The difference, however, between the 3,300,000 1, held on the 30th Sep- tember 1875 and the 8,000,000/. held on the 31st March 1876, shews that the arguments as to the Silver being kept in circulation cannot be pushed too far. The increase between the two dates is large, and running thus counter to the inferences drawn by the Ministers, must suggest caution as to the estimates of the surplus still to be disposed of, which were based upon these arguments. It may be fairly admitted that, looking to the circumstance that Kot more than 8,000,000/. was in the tills of the l)anks on the 3lst March notwithstanding the coining of 1 l,00(T,000/- of new Silver coins, and the fact thai the circulation still includes a balance of ) 0,-500,000 /., which has still to be recoined, it is unlikely that so large an amount as 30,000,000/. of Silver the amount in round numbers of the maximum estimates, will still have to be brought to market. On the other hand, the sum of 8,000,000 /., held by the Bank on the 31st March, shews that this amount at least might, and probably will, be at once offered for sale. Nor does the statement of this minimum amount in the hands of the banks appear to exclude the possibility of some further stock of Silver buUion being in the hands of Government, and also dis- posable for immediate sale, as the result of the melting down of coins which might ON DEPiiEClATJON OF SILVER. XXVll might already have been withdrawn from the Imperial Bank, and have been handed over to the manufacturing establishments for conversion into bar Silver. To recapitulate the remaining estimates, they are as follows : — That of Deputy Sonneman, 22,500,000/., endorsed by Dr. Soetbeer with the remark that it was rather too low than too high. Thnt contained in the memorandum forwarded by Lord Odo Russell, which concludes that a short time back the amount might be calculated at 20,000,000 /. That of Mr. Pietsch, which, based on views which he declares were shared in official quarters, brought out an amount of about 1 3,000,000 /. Your Committee do not think that they are in a position themselves to adopt any one of the above estimates, ranging as they do between 8,000,000 I. and 30,000,000 /., especially as the uncertainty is admitted on all sides to be so great ; but they cannot deny that the evidence as to the absence of any indica- tion of a large surplus stock has made a considerable impression upon them. It is clear from much that has already been stated that the amount of Silver which should be assumed to have disappeared is not the only element of uncertainty. It is also uncertain how much will be required for subsidiary currency. The sum of 21,500,000/. or 10 marks per head of the population was only provisionally fixed, and doubts are already entertained, especially looking to the withdrawal of the smaller bank notes, which alone appear to have amounted to more than 20,000,000 /., whether the sum named will be found sufficient. In the official " Motives " submitted to the German Parliament as a basis for the clause in the Bill fixing the provisional maxinmm of 10 marks per head, it i- stated why the limit is put higher than the maximum limit (Maximal Grenze) fixed in the Convention of the Latin Union of the 23 December 1865, which was six francs per head of the population. This limit referred only to the subsidiar}^ coinage of the Union, which consisted ot i, 4, 1, and 2 francs, whereas no huiit was fixed to the coining of five-franc pieces (which were practi- cally the monetary unit), the lowest full-weighted coins. In the German Coinage Law the maximum limit of 10 marks per head was to be applicable to 'all Silver coins, including the five-mark pieces. The amount to which the limit was raised iU Germany left room, for about one five-mark piece per head of the population. The passage concludes : " it is open to question whether the limit is not a rather too narrow one. However, it will only then be time for coming to closer quarters with this question when the withdrawal of the Silver coin of the separate States is approaching its conclusion." It should, however, be borne in mind that when these " Motives " were presented, the Government did not contemj^late the coining of Gold 5-mark pieces, which, so far as they are likely to pass into use, would diminish the amount of Silver subsidiary coinage. The Government were opposed to the coining of a five-mark Gold piece at all, alleging as an objection that, besides its costliness, they did not beheve '• that it was suited to fulfil the purposes for which a coin of the value of five mark has to serve ;" but in deference to the feeling expressed by the majority in the "Reichstag," they gave way, and promised to give fair play to the coin. Dr. Soetbeer, in his volume on the Coinage Laws, observes (p. 70, "that the expe- riences alleged to have been made in the United States with the Gold one-dollar piece, and in France with the Gold five-franc piece, do not speak much in favour of a Gold five-mark piece." It may be added, iu corroboration of this remark, that the proportion of the small Gold coins shewn to be paid in in the ordinary course of business to the Bank of France, appears to indicate that not only the small Gold five-franc piece, but even the 10-franc piece, or half Napo- leon, is not a very popular coin. A return furnished to your Committee by the Bank of France shews Appendix ti i the foilowmg amounts as in stock on a given day — In 20-franc pieces (Gold) - - - 475,700,000 francs. In 10 „ „ „ - - - - 31,170,000 „ In 5 „ „ „ - - - - 21,395,000 „ 338. e 2 While XXVIU REPORT FROM THE SELECT COJIJIITTEE While the amount in Gold five-franc pieces thus amounted to only 21,395,000 francs,, the amount in Silver five-franc pieces was 379,185,000 francs. In fact, the part played by the Gold five-franc piece in Francs is infinitesimal. It seems accordingly to be very doubtful vfhether the introduction of the Gold five-mark piece into Germany, where the people have been even more in the habit of using Silver money than in France, will much diminish the demand for Silver subsidiary coinage. The case of England has also been pointed to in arguments as to the necessary amount of Silver coinage for Germany. Dr. Soetbeer quotes the estimate of Mr. Jevons that in the year 1869 the circulation of Silver coin in the United Kingdom was 14,000,000 /., or about 9i marks per head of the population, that is to say, almost the same amount as that fixed by the German Government. The amount of subsidiary Silver coinage necessary for various countries appeared so important to your Committee as bearing on the future demand for Silver in countries where demonetisation takes place, that they wished for infor- mation as to the view held by the authorities of the Bank of England on the subject of the amount of Silver coin actually in circulation. Appendix 1. Mr. Kirkman Hodgson, a Member of your Committee, put in a paper prepared at the Bank of England, shevdng the present estimated amount to be 19,536,000/.: £. 14,799,000 Mr. Miller, late cashier of the Bank, estimated the amount in 1860 at - Since then there have been issued - - - - - £. 6,437,000 And worn coin withdrawn .-.-.- 1,700,000 £. 4,737,000 19,536,000 These figures shew a considerably larger amount per head of the population than that allowed for Germany. To this it must be added that it seems certain that more subsidiary coinage will be used in Germany than in England, owing to the smaller use of cheques and to the habit of daily payment for all family expenses in the place of the English system of weekly or monthly bills. Appendix 21 Lord Odo Russell observes, in his despatch of the 6th of May, " The maxi- (No. 16). « mum issue of the new Silver currency is fixed by i^rticle 4 of Coinage Law "at 10 marks a head on the whole population, but in course of time the amount " required will in reality be considerably larger, larger even than in England, " because the habits of Germany in regard to housekeeping and business trans- " actions necessitate a far larger amount of Silver currency for payments which " cannot be made in Gold." From what has been stated, it clearly appears that possibly the excess supply, supposed in most of the estimates quoted to be ultimately likely to come to market, may be diminished by further amounts required beyond the present limit of 21,500,000 /. for subsidiary coinage. (In the estimates of the Ministers which were based, as has been shewn, on the appearance of the Silver circula- tion at the present moment, this element of the calculation appears to have been already taken into account.) On the other hand, two circumstances have still to be mentioned havino- an opposite tendency. Firstly, in allowing 1 marks per head of the population the nominal value of the coins is taken, but as the Silver coins contain less Silver- by 11 per cent, than that nominal value, little more than 19,000,000 I. of fine Silver would be required for manufacturing the 425,000,000 marks, thus settino- an additional 2,000,000 /. of Silver free ; and secondly, there is an amount of Austrian thaler'=! outstanding, which have been incorporated to such an extent with the German coinage, that it is believed they will also be redeemed by the German Government. A special Act was passed with reference to these coins ON DEPriECIATION OF SILVER. XXIX coins in the Session of 1874. It has been estimated by Dr. Soetbeer that 3,000,000 I. may be derived from this source. If the ultimate requirements for subsidiary coinage should at all approach 15 marks per head instead of 10, an additional amount would be required, which would far more than absorb these two last items of increase, which amount together to 5,000,000 I Your Committee have purposely reserved these modifying circumstances for separate mention, and refrained from introducing them with the various estimates they have quoted, as it seemed better to give the estimates precisely as they were framed and stated. In the foregoing calculations and observations no account has been taken of the amount of Silver introduced into Germany by the payment of the French indemnity. Statistics on this point are given in M. Leon Say's official Report " on the payment of the War Indemnity," made in the name of the Budget " Commission of 1875." Out of the total sum of 200,000,000 I. paid by France to Germany, a little less than 10,000,000?. (240,000,000 fr.) was paid in Silver five-franc pieces; and it is an interesting and remarkable circumstance, that out of these 10,000,000/. nearly 4,000,000/. were coined out of Silver bought in Germany, and imported into France for the purpose. The Report in question describes how 92,000,000 francs' worth of Silver were procured at the Bank of Hamburg, the price of Silver having fallen in Germany, and coined into five-franc pieces, which, under the Treaty arrangements, were taken by Germany at jjar. Thus only a balance of 6,000,000 /. passed to Germany from France. It is believed the whole amount passed back again either into France or Belgium. The receipts of Silver by the Bank of France corroborate this belief. Your Committee, in concluding this portion of their observations, consider it expedient once more to caU special attention to the fact that — 1st. The sum which is stated officially to have been sold up to the 26th April last does not exceed 6,000,000 /. ; 2ndly. That the Thaler currency has not yet been demonetised, though considerable sums have been withdrawn. It wiU be remembered that the Thaler currency amounted to 74,200,000 /., while the "Gulden" currency amounted only to 10,200,000/. These pro- portions shew how much more important the demonetisation of the Thaler must be, compared with that of the Gulden. Your Committee do not know what the intention of the Imperial Govern- ment may be as to the period when the final step with regard to the thalers may be taken, nor do they know at what period the new Silver subsidiary Silver coinage will be completed, but it seems to be evident that the earlier or later issuing of the decree of demonetisation might exercise a vital influence on the course of the Silver market, and even on the amount of Silver which may be ultimately required in Germany. Assuming, as the facts seem to warrant, that the thalers are at present in the most active stage of circulation, namely, settling the ordinary payments of daily life, if time is allowed, they would probably ultimately be presented for exchange against the new subsidiary Silver coinage, which would then perform the same functions ; but if the decree is issued before a sufficient stock of new Silver coin is prepared, the use of Gold coin may, to a certain extent, be forced on the public, who otherwise would prefer the Silver coin. The result might be, that Gold might then per- manently take the place of Silver to a greater extent than would otherwise be the case, and that more Silver would be thrown upon the market. The Scandinavian Kingdoms. The course of Germany in substituting a Gold currency for. Silver has been followed by the Scandinavian kingdoms, but the scale of their currency has 338. e 3 been XXX KEPORT FROM THE SELECT COMMITTEE been too small for the change to have exercised any considerable effect on the Silver market. At the same time, the fact of countries which were buyers having changed into sellers, is not without its importance. The circumstances of Denmark are as follows: During the period 1871 Appendix 21 —1875, the import of Gold exceeded the export of that metal by nearly (No. i9j. 2,500,000 /., whilst during the same period the export of Silver exceeded the import by nearly 600,000 /. Since 1872, no Silver seems to have been imported. The Government was a large seller of Silver during the period 1^73— 1 876, subsequent to the adoption of the new monetary system, the sum sold being about 850,000 I. The stock of Silver held by the Danish National Bank on the 31st March 1876, was only 430,000 /. in Silver against 1,465,000 /. m Gold. Appendix 21 In Sweden the change from Silver to Gold was commenced in 1873. (No. 20). In Sweden, it appears from the statistics furnished to your Committee, that the import of Silver exceeded the exports in every year from 1866 to 1873 inclusive. The aggregate imports during that time were 970,000 1., the exports 516,000 /. But in 1874 and 1875, after the change of the currency, the export of Silver exceeded the import by 237,000/. In 1873, the stock of Silver held by the Bank of .Sweden was 736,000 I. On the 31st March 1876, it was 465,000 /. Appendix 21 In Norway, where the Gold standard was introduced on the 4th June 1873, (No. 21). the figures of the exports and imports of the precious metals unfortunately do not distinguish between Silver and Gold, but the Minister of Foreign Affairs informed Mr. Erskine, that for the years 1866-1871, the movements were mainly in Silver; that in the year 1872 there was a certain importation of Gold, and that after the change in the currency enacted in June 1873, the im- portations were mainly of Gold, and the exportations of Silver. The total imports of Bullion for the years 1873-1875 were above 1,050,000 I., the exports 1,000,000 /. The former was accordingly, probably. Gold, the latter Silver. This probabihty is entirely confirmed by the statistics of the Bank of Norway. Their stock of Silver in 1872 was 1,042,000 I.; in 1875, only 13,500/. Their stock • of Gold in 1872 was 1 17,000 I. ; in 1874, it was 1,094,000 I. ; in 1875, 817,000 I. It is clear, therefore, that the Bank had substituted Gold for Silver to the amount of about 1,000,000 /. Taking Denmark, Sweden, and Norway together, the excess thrown on the market through the monetary changes, may, according to the foregoing figures, be estimated as follows : In Denmark the excess of Silver exported was about n Sweden - .. _ _ . . In Norway _ - .. . . . The Total Amount would be £. 600,000 200,000 1,000,000 1,800,000 thrown on the market by the process of demonetisation in the Scandinavian Kingdoms. India. Your Committee now proceed to report on the facts which have been brought to their notice in respect of India. The falling off in the demand of Silver, for India has been adduced as a very serious element in the decline of prices in that metal. Such a decline might be due to either or both of the following causes: (1.) A diminished demand for remittances, owing to the circumstance of the balance to be remitted to India being actually less ; (2.) An increase in the supply of a different form of remittance, such as Government Bills, which merchants could remit in lieu of Silver. The evidence afforded to your Committee as to the decline in the demand for remittances to India in the ordinary course of trade has not been conclusive. It ON DEPRECIATION OF SILVER. XXXI It has been stated that the depression in the Indian trade caused a smaller demand for Silver. On the other hand, it has been stated that, as the depres- sion of trade has extended as much to the import trade to India, as to the export trade from India, the balance of transactions which alone has to be settled by remittances of Bills or Silver, has been comparatively unaffected by the dulness and unsatisfactory condition of trade, which has undoubtedly pre- vailed for some years past. Taking the transactions in merchandise alone, India has been in the position of having to claim a considerable balance from other countries for a long series of years. « The statistics of trade between India and this country are very complicated, as in many departments " shipments to the East " do not clearly define how much is destined for India and how much for other eastern countries. Again, as appears in the evidence of Mr. Crawford, balances arising from the Q* 60S. trade between India and America, or between India and China, have to be settled by transactions between India and England- It is, therefore, lo the aggregate imports and exports of India that regard must be had rather than to the transactions between India and England or Europe. Your Committee accordingly call special attention to the papers put in by Appendix 26. Mr. Waterfield, of the India Office, as to Indian trade, which gives totals of exports and imports relating to India, compiled from Indian sources. The following figures shew, in round numbers, the excess of exports from India over the imports, for a series of years : — Official Years. Exports (exclusive of Treasure). Imports (exclusive of Treasure). Excess of Exports. £. f. £ 1855-56 ... - 23,040,000 13,945,000 9,095,000 1856-57 - - - - 25,340,000 14,195,000 11,145,000 1857-58 - - . - 27,460,000 15,275,000 12,185j000 1858-59 - - - - 29,800,000 21,730,000 8,130,000 1859-60 27,960,000 24,265,000 3,695,000 1860-61 . - . - 32,970,000 23,495,000 9,475,000 1861-62 36,320,000 22,320,000 14,000,000 1862-63 - 47,860,000 22,630,000 2.5,230,000 1863-64 - 65,625,000 27,145,000 38,480,000 1864-65 . - - - 68,025,000 28,150,000 39,875,000 1865-66 - - - - 65,490,000 29,600,000 35,890,000 1866-67 (11 months) 41,860,000 29,040,000 12,820,000 1867-68 - - - - 50,875,000 35,705,000 16,170,000 1868-69 - - - - 53,060,000 36,900,000 17,070,000 1869-70 52,470,000 32,925,000 19,545,000 1870-71 - 55,335,000 34,470,000 20,865,000 1871-72 - - - - 63,190,000 32,090,000 31,100,000 1872-7.3 - - - - 66,230,000 31,876,000 23,365,000 1873-74 - 54,980,000 33,835,000 21,145,000 1874-75 - - - - 56,360,000 36,220,000 20,140,000 1875-76 - ^^0,000 38,515,000 IftSSS.OOO These figures are given, in accordance with the usual practice of the Indian Government, at the exchange of two shiUings to the rupee, instead of at the varying rates of the several years. As the conclusions to be drawn from the statement would not be altered by taking the current rate of the individual year, your Committee have throughout adopted the figures of the export and import trade of India as officially given. Custom House Statistics, as to the value of exports and imports, are stated never to be entirely rehable ; but even if they do not afford accurate 0^8. e 4 information xxxu REPORT FROM THE SELECT COMMITTEE information as to any particular year, a general view of the relative transactions over a series of years may be legitimately based upon them. It aj^pears, then, that in the last fom- years, during which the fall in Silver has occurred, the excess of exports of merchandise over imports ranged between 17;^5,000 I. and 23,355,000 I. In 18/1-/2 it was very much larger, reaching'^he sum of 31,100,000/. Compared with that year, there has accordingly been a much smaller balance to settle by remittances since ; but that year was exceptional. In the four previous years, the annual balance to be remitted ranged between 15,170,000/. and 20,865,000 /., the extreme limits and the totals being both lower than in the years 18^2-73 to 1875-76. The years of the cotton famine ought clearly to be eliminated in any general review. They led to an extraordinary increase in the excess of the exports over the imports, and in the amount of buUion remitted to pay for that balance. In 1861-62 the exports from India were In 1862-63 they rose to - - - In 1863- 64 they were . - - In 1864-65 „ - - - - In 1865-66 „ - - - - Then they fell, in 1866-67 (11 months), to 36,320,000 47,860,000 65,625,000 68,025,000 65,490,000 41,860,000 It will be seen that through a change in the arrangement of the financial year, the year 1866-67 contained only II months, but in 1867-68 the amount was not more than 50,875,000 /. The exceptional effect of the cotton famine is quite apparent in these figures. And the same result is seen in the total bullion imports. £. 14,950,000 20,510,000 22,960,000 21,365,000 26,555,000 13,235,000 11,775,000 In 1861-62 they were In 1862-63 they rose to - In 1863-64 they were In 1864-65 „ - - - In 1865-66 „ - - - In 1866-67 (11 months) they fell to In 1867-68 they again fell to - To form an opinion, therefore, of the normal trade of India, the years from 1862-63 to 1865-66 should be omitted. Making this omission accord- ingly, it is not apparent that there is any such reduction in the surplus of exports over imports, representing the amount to be settled in favour of India, as would count for much in the fall in price of Silver, and the exports during the last four years have been almost exactly equal to those of the previous four years, even including the exceptional year 1871-72. From 1872-73 to 1875-76 the exports were, in round numbers, 2^,0000,00 1. ; from 1868-6P to 1871-72, they were 224,000,000/. In the last four years the imports were 140,500,000 /. In the four previous years they were ] 35,500,000 /. To a small extent it is true, therefore, that, looking over the range of these eight years, the amount to be claimed by India as the balance between her exports and her imports has been reduced, and it is to be remarked that, on the basis of these statistics, it is especially true of the last year of the series, not so much owing to a diminution of exports, as to an increase in the imports. But the test should also be applied of the actual amount remitted. If it is true that there was a less amount due, and to be remitted, is it also true that less remittances were made ? The folio wing are the facts : — There were remitted between 1868-69 and 1871-72 :- In Treasure In Government Bills ■ Total - - £. £. 40,000,000 29,500,000 69,500,000 ON DEPRECIATION OF SILVER. XXXUl There were remitted between 1872-73 and 1875-76 In Treasure ------ In Government Bills - - - - £. £. 16.500,000 50,500,000 67,000,000 - for 1875-76 - for 1874-75 - for 1873-74 - for 1872-73 There has accordingly been a slight diminution . in the total to be remitted, and again it appears that this diminution is mainly to be found in the last year, the figures being for Treasure and Bills together — £. 15,500,000 - - - - compared with 17,400,000 - - - - 17,200,000 - . - - 17,200,000 - - - - The average of the four previous years was 17,400,000 /. These statements certainly show a decline in the demand for remittances, but not on a scale sufficient to account for any great fall in Silver. Looking further back, it win be seen that — £. In the year - 1866-67 the amount remitted was ~ - 16,400,000 1867-68 „ „ - - 14,350,000 And in the year 1867-68 the price of Silver was about 60hd. per oz. standard. The great change has not been in the aggregate amounts remitted, but, as the foregoing Tables have shewn, in tlie mode of remittance. It will be observed that Government Bills have in the foregoing calculations been added to the Treasure remitted. To the merchant and banker, remit- tances in these Government Bills are equally, if not more, convenient than a remittance of Silver. It is simply a question of price between the two. The Government Bills on the Indian Presidencies, which are offered for sale, are payable in rupees, thus entithng the purchaser to an amount of Silver in India. The balance of ordinary trade is settled by one form of remittance as well as by the other ; and it will be seen that, though the total amount of Treasure and Bills together remitted to India during the last four years has but shghtly decUned, the proportion between the two has been entirely reversed, as the following figiu-es shew : — Treasure. Gf »vernment Bills. Period between 1868-69 and 1871-72 - £. 40,000,000 £. 29,500,000 „ 1872-73 and 1875-76 - 16,500,000 50,500,000 Annual Average, 1st period - 10,000,000 7,400,000 „ „ 2nd „ 4,100,000 12,600,000 Andjin 1875-76, the proportions were 3,100,000 12,400,000 It will be seen, therefore, to what a great extent the purchase of Go- vernment Bills has displaced the transmission of Bullion. The difference would be stiU greater but for the year 1870-71, which is included in the first period, but which appears to have been an exceptional year, by the following figures : £. In 1869-70, Bullion was sent to the amount of - - - 13,955,000 In 1870-71 „ „ „ - - . 5,445,000 In 1871-72 „ „ „ - - - 11,575,000 notwithstanding that more Government Bills were sold in 1871-72. In the figures given hitherto Gold and Silver have been taken together, 338. f and Appendix, 27. Appendix, 26 b. Q. 611— 627. XXXiv REPORT FROM THE SELECT COMMITTEE and the whole of the diminished value of the Bullion exports must not be calculated as relating to Silver. From 1868-69 to 1871-72 the surplus of Gold imports into India was - ^J'JJJ^'JJJ^ From 1872-73 to 1875-76 „ „ >> ,. " " o^'^no 000 From 1868-69 to 1871-72 the surplus of Silver imports into India was - ^^'^^^'" ;" From 1872-73 to 1875-76 „ „ » " ^,^^^'^^^ The diminution, therefore, as far as these two periods are concerned, is divided between the two metals. The following are the figures for Silver alone ; and they shew at a glance the exact proportions of the diminished demand for Silver : — Net Imports (after deducting Exports). IT In 1866-67 - - - ... - 6,960,000 „ 1867-68 - 5,590,000 „ 1868-69 - 8,600,000 „ 1869-70 - - 7,320,000 „ 1870-71 940,000 „ 1871-72 ... - - - 6,515,000 „ 1872-73 705,000 „ 1873-74 - - 2,450,000 „ 1874-75 - -- _ 4,640,000 And, in the year just concluded, i.e., 1875-76 - - - - 1,555,000 In the years of the cotton famine the amounts were very much larger, viz.': — £. In 1862-63 --------- 12,550,000 „ 1863-64 - 12,795,000 „ 1864-65 10,080,000 „ 1865-66 18,670,000 These years were, as have been stated, quite abnormal, and have, there^ fore, been excluded in the foregoing calculations ; their effect may, never- theless, have extended over the next four years. Europe was swept for Silver remittances to India during the American war. At its conclusion it would be natural that some Silver would flow to the countries which had furnished Silver supplies in addition to the new Silver produced from the Mines. It might, therefore, fairly be argued that, though the abnormal years in question may be omitted, some consideration ought to be given to the fact that they tended to keep up the price of Silver even subsequently to the extraordinary supplies furnished to India at that time ; and that, in addition to the smaller amounts actually sent to India of late, the cessation of the effects of the Silver importation of the period of the cotton famine ought to be taken into account, and that, accordingly, the fall from the 28,000,000 l. of Silver sent during the period from 1867-68 to 1870-71, to the 20,000,000^. sent between 1871-72 and 1874-75, or even the fall from the larger figures of the earlier years to the amount of 1,555,000 I., the net imports for 1875-76, does not give a full measure of the actual effects. Whatever these effects may be, they are simply to be accounted for by the large amount of bills on India, which the Indian Government have now annually to sell. It may be said that their requirements are, in round numbers about 1,250,000/. a month, or 15,000,000/. per annum. This is the sum which has to be paid annually by India to England, and this sum, pro tanto, displaces the despatch of bullion. It appears that, previous to 1862-63, the bills drawn in England never reached the sum of 4,000,000 /. The excess of the present requirements is therefore 1 1,000,000 /. The full effect of these requirements has only recently been felt. So lona; as Railways were in course of construction in India on an extended scale and money was being raised in this country for their construction, funds which were to be spent in India on wages or other expenses came into the hands of the Government here, and were paid out by the Government in India. The exact method of proceeding vnll be found in Mr. Crawford's evidence. The ON DEPKECIATION OF SILVER. XXXV ^ The Government were thus furnished with funds to that extent without the necessity of selUng bills, or, to put the matter in a different form, so much more money had to be remitted to India in one form or another. The proceeds of the railway loans (so far as they were not spent on materials purchased ni England) passed over to India. The Government did not themselves remit Silver, having Silver at their disposal in India, but they had so much less Silver to pass over to merchants in India, and accordingly the merchants had to buy and remit so much more Silver themselves. A paper put in by the Under Secretary of State for India, shewing the mode Appendix, 27. in which the disbursements of the Home Treasury of the Indian Government have been provided for over a series of years, brings out the effect of the railway loans into clear reUef, as also the gi-owth of the total " home requirements." Before the Indian Mutiny the total disbursements at home ranged, very roughly speaking, between 4,000,000 I. and 5,000,000 l. sterling. From 1860-61 to 1866-67 they ranged between 9,000,000^. and 11,000,000/.* Now they stand at about 15,000,000 L, and to the precise extent to which India must thus remit funds to the Home Government, she has so much less to receive in merchandise or Silver. Her powers of importation are reduced to that extent. Other columns in the same statement show the various modes in which the money was provided. Attention need only be drawn to three columns, the funds paid in by the railways, the Government loans raised, and the drafts on India. Taking the receipts from the railwaj/s, it appears that during the 10 years 1860-61 to 1869-70 the Indian Government received, as a balance to be paid out in India, 35,000,000 I. from the Guaranteed Railway Companies, or, on an average, 3,500,000 I. a year. In the year 1870-71 the amount received was 2,250,000 /., and in 1871-72, 1,200,000 / Since then the receipts from this source have been practically closed ; nay, more than this. In 1872-73 the railways received from the Govern- ment in London 530,000 I., and in 1874-75 nearly 800,000 I., in place of paying an annual average of 3,500,000 I. in the previous 'period. In round numbers, therefore, the Government had to provide 4,000,000 I. a year more than in the previous period, by other means. These other means were either drafts on India, or loans raised on its own account at home. In 1874-75 about 5,000,000/. was raised by loans, and in that year only 10,840,000/. was dravra, but in the two previous years the drafts amounted, as has been shewn, to between 13,000,000 I. and 14,000,000 /., and in the first 10 mouths of the year 1875-76 to 12,360,000 /. It appears that they would have nearly reached 15,000,000 /., but for the difficulties experienced in selling bills in February and March. The Committee have no official evidence before them as to hoV the balance was raised, but vdtnesses stated that the difficulty was being met by loans. The account of the diminished amount which India had to claim in return for her exports, would not be complete without a reference to the fact, brought to the notice of your Committee, that less of the money received by Europeans in India appears to be retained in that country than was formerly the Q. 652. case. It has been stated that, owing to various circumstances, more funds are remitted to England not only after fortunes have been made, but during the sojourn of the various officials or European residents in the country. A re- mittance from India to England is equivalent to a draft from England on India. It diminishes the aggregate balance which India has to claim when transactions are squared. And in proportion as this practice increases, so is the demand for Silver diminished. The transfer of any India Stock held in India to European holders, would, of course, have a similar effect. If, for example, rupee paper is held in India, the interest on such paper remains in India. If, on the other hand, even the rupee paper finds its way to this country, the interest is paid to the Enghsh holder in a draft on India, and, therefore, so much less Silver has to be sent out. To * In 1863-64 the total given is 16,800,000/.; but this amount includes an item for the repay- ment of debt of nearly 8,000,000 Z. 338- f2 XXXVi REPORT FROM THE SELECT COMMITTEE To recapitulate the bearing of Indian trade and Indian finance on the fall of Silver, it may be stated : 1st. That the total remittances actually made to India in Government Bills and Treasure together, in the ordinary course of business, have declined, but only on a slight scale. 2nd. That except for other causes, and excluding the extraordinary years of the cotton famine, there is no evidence to shew that the demand for Silver would have materially fallen off ; 3rd. But that the supply of a different form of remittance, namely. Government Bills, has superseded to a great extent the necessity of remitting Bullion. 4th. That the effect of this substitution has to be measured in very large figures, as the yearly amount payable by India for the disbursements of the Home Government has risen since the Indian Mutiny from 5,000,000 I. to 15,000,000/., a difference of which the magnitude will be appreciated Iwhen it is remembered that it is considerably more than half of the total ji amount of Silver annually produced. 5th. That the full effect of this substitution has only been recently felt, as ; that effect was retarded by the construction of the Indian railways, which ; involved an, expenditure in India of money raised in England, counter- i balancing therefore an equal amount of expenditure in England of money ' raised in India. 6th. That the amount of the disbursements which has just been stated appears to represent the present normal expenditure of the Home Govern- ment, and that, therefore, unless by some marked change of policy, no diminution of that amount can be looked for. It is apparent from the foregoing observations, that, while undoubtedly the faU in the Silver market affected the Indian exchanges, causing all bills payable in rupees to experience a corresponding fall in value, it is also true that the situation of the Indian exchanges, involving, as it has done, a pro- portionately decreasing demand for the means of payment in India, owing to the increasing amounts which India had to pay in England, has itself acted upon the Silver market, and would have tended under any circumstances, pro tanto, to lower the exchange value of the rupee. It remains to be considered what is the capacity of India for purchasing or absorbing Silver, notwithstanding the circumstances indicated. Appendix, 26 c. I The amount of Silver which India has absorbed during the last 40 years, smay be stated in round numbers at 200,000,000 I. The surplus of imports over iexpQrts of Silver is given in the official tables as 198,464,000 I. for the 40 years Appendix, 28. jbetween 1835-36 and 1874-75. Colonel Hyde, for 14 years the Director of the Mint in Calcutta, furnished your Committee with statistics respecting the Indian coinage up to the year 1866-67- The total amount of Silver coinage between 1835-36 and 1868-69 amounted to 188,531,000/., including the re-coinage of old coin to the amount of about 2 1 ,000,000 /. India accordingly was furnished with 167,000,000/. in additional Silver coin between these dates, lit should be added that the total export of Silver from India is so small that f}no appreciable quantity of the Silver coined can have left the country. Colonel Hyde was examined with reference to the redundancy or insufficiency of the coinage thus supplied. He was asked whether he believed that India Q. 912 et seq. has already been supplied with adequate Silver currency. He stated in reply his belief that the capacity of India for absorbing Silver currency remained great. He gave as the grounds of his belief that in many parts of India, espe- cially in the distant and more isolated parts, transactions were not carried on by currency but by barter. He explained that " wherever large public works " have been in progress, such as railways, roads, and irrigation schemes Silver ' " had been generally distributed in such districts," and that where this had taken place, the use of Silver currency had superseded barter arrangements to a gi-eat extent. Where the natives have once been taught the convenience of Q. 1065 et seq. Silver currency, there the currency remains. Another witness, Mr. Mackenzie also spoke strongly on the absorption of Silver by India. He said : " It appears " from historical periods she has always gone on absorbing Silver, and there seems " at present no cessation to this absorption." He also spoke of the circulation in many ON DEPRECIATION OP SILVER. XXXVU many districts being "totally inadequate," " a large amount appears either to " be hoarded or converted into ornaments, and remains in the district." A practical distinction should, in the opinion of your Committee, be drawn between the addition made to a currency in countries where all trans- actions have been previously carried on the same form of currency, and where accordingly an increased supply would simply have for its effect a rise in prices, and, on the other hand, an addition made to the currency by the extension of that currency, over fields where transactions were previously carried on in a totally different form. If, at a former period, only a portion of India used Silver to any extent in the ordinary transactions of life, and if now the extent of territory using it has been doubled, it is clear that India requires more Silver than formerly ; and the facts of the case seem to warrant the conclusion that the use of Silver coin has greatly extended in India, and will continue to extend, not so much by the use of more Silver in the terrritories already occupied by the existing currency, as by the gradual increase of its use in the remoter parts of India. The question of the expectation which may be formed as to India con- tinuing to absorb Silver, is, how-ever, not confined to the consideration of the currency. The practice of the natives to accumulate Silver ornaments must also be taken into account. Mr. .^Jackenzie said that an immense amount of the Silver is converted into ornaments, and absorbed. Asked whether he could Q- 1046. speak from positive knowledge, he replied : " From having seen it done. In " every large village there is a silversmith^ or some one who \\ orks in Silver, " and as soon as a man gets a few rupees he employs the silversmith to come "to his house and make the ornaments there." The same witness said: " Although the peasantry in India have poor houses, yet the amovint of orna- Q. 1052. " ments they have would exceed in value the furniture and utensils of the same " class of peasantry at home." It appears to your Committee that, independently of the question of the , employment of Silver as a circulating medium in India, it is clear that there is I a constant demand for it, in a proportion quite unknown in European countries, 1 for manufacturing purposes amongst the population of India. Its use for such ^purposes in Europe appears, as will be shewn in this Report, to be compara- tively small ; but in India, first passing through the stage of coinage, vast amounts may be thus absorbed. The tendency to this practice appears to be manifest even by the statistics of Gold in India. Gold enters only to a slight extent into the monetary transactions of India ; yet the surplus of the im- ports into the country in the course of forty years has been no less than 100,000,000 I. Colonel Hyde, in reply to a question as to what had become of the large Q. 938, amount of Gold sent to India, said : " I think it is turned into ornaments, " used in manufacture, or hoarded." With a population thus accustomed to use the precious metals in large quan- tities for purposes different from that of circulation, the calculations which would be applicable in the case of European countries, as to the amount of Gold and Silver which they can use without causing a rise in prices of aU goods, will hold good in a far less degree. Your Committee believe that as India has been a great consumer of Silver in the past, so it will continue to be in the future, the question at issue being rather, how, looking to the amount it has to pay to this country for Government purposes, it wiU be able to pay for that Silver, than whether a desire to obtain and use Silver will exist. At this ]joint the passion for accumulating ornaments I seems to be of much importance. (^Bullion is the final method by which, in 'most countries, the balance of trade is settled, it is sent, so to speak, when the demand for other commodities fi-om other countries is exhausted. But in a country where Gold or ISilver is largely used for manufacturing purposes it does not absolutely follow that it would only be imported when required to adjust a balance. If the exports from India were to fall to a point at which 338. ^ 3 they XXXVlll REPORT FUOM THE SELECT COMMITTEE they only equalled the present value of the imports plus the amounts due to the" Government at home, it does not follow that the import of Silver into India would absolutely cease. It is open to question, whether, in such circum- stances, the demand for Silver would not be such as to displace some of the other articles imported. Your Committee confine themselves to the simple indication of this possibility, which is, however, rendered more probable by the great fall in the price of Silver. Silver is thus acquired more easily, while the export of other goods to India is discouraged for a time at least by the great fall in the exchanges. On this head, Mr. Bagehot, the editor of the " Economist," gave very interesting evidence. He stated the conclusion at which he had arrived, that " the first immediate effect of the depreciation of Silver would be to cause an Q. 1363 et seq. " unfavourable balance of trade with the East, and in consequence a great export " of Silver to the East." He pointed out the mode in which the fall in the price of Silver would for a time encourage exports /rom India, and discourage imports into India. By such a process, a larger balance due by other countries to India would be created, and Silver would be taken to cover the difference. Mr. Bagehot also pointed to the length of time, and vast amount of Silver currency which it would take to depreciate Silver to the extent of 2 per cent, all over the East. While admitting the speculative character which must necessarily attach to opinions as to the amount of Silver which India is hkely to absorb, your Committee have thought it right, looking to the fact that the subject of the Indian Exchanges had been specially referred to them, to call attention to the foregoing considerations side by side with their remarks on the great diminu- tion in the Silver remitted to India during the last few years. Your Committee have now described the main causes which have been simultaneously in operation producing the Depreciation of Silver. They have given such an account as they were able of the increased production in the United States and the surplus supphes from Germany and the Scandinavian Kingdoms on the one hand, and of the decreased demand for India on the other ; but further hght may be thrown on the subject by the enumeration of the legislative steps which have elsewhere than in Germany and Scandinavia affected the demand, and by the examination of the ebb and flow in the move- ments of Silver in other countries. The Latin Monetary Union. Appendix, No. 21 Reference has already been made in this Report to the Latin Monetary (No. 7). Union. The despatch of Mr. Lumley, Her Majesty's Minister at Brussels, gives a full and interesting account of its original formation in 1865, to which your Committee beg to refer. Mr. Bagehot also described the circumstances of this Monetary Union in his evidence, and numerous official document from France, Italy, Switzerland, and Belgium, contain information as to the motives with which it was constituted, and the situation in which the members of the Union now find themselves. It should be observed that the Union was formed more than 10 years ago, and that though the measures which it has recently taken with regard to the coinage of Silver have given special importance to its attitude on this question, the present situation was in no way contemplated when it was formed. The following description of the Convention by which the Union was con- stituted is given by Mr. Lumley, Her Majesty's Minister at Brussels : — " This " Convention determines, among other points, the conditions of the emission of " divisional coins which are struck at a rate inferior to that of the monetary " standard, giving rise to several important conditions established by the Con- •' vention, the emission of the same being Hmited, and its acceptance not being " obligatory beyond a certain fixed sum ; the loss from wear being borne by the " Government by whom it is emitted. It assures the legal circulation of the " money of the one State in all the States of the Union ; this being only imposed, " however, on private individuals with regard to the national coinage, though "it is admitted for the coins of all the States belonging to the Union. The " amount ON DEPHECIATION OF SILVER. XXXIX *' amount to be emitted by each country is calculated at six francs per head of " the population according to its presumed increase up to 1879, and is fixed ".for— Belgium France Italy - Switzerland Francs'. 32,000,0001 239,000,000 141,000,000 17,000,000 J Divisional Coin. " As has been already stated, in consequence of the fall in the value of Silver, " a law was passed in 1873 enabling the Belgian Government to suspend or limit " the coinage of 5-franc pieces. This principle was subsequently adopted by " the States of the Latin Union ; and at the meetings of their respective dele- '' gates, which have taken place annually at Paris since 1874, the limitation of " the Silver coinage was fixed as follows : Countries. For Belgium For France - For Italy For Switzerland - 1874. Francs. 12,000,000 60,000,000 40,000,000 (Ordinary). 20,000,000 (Extraordinary). 8,000,000 1875. Francs. 15,000,000 75,060,000 50,000,000 10,000,000 1876. Total. Francs. 1 Francs. 10,800,000 I 37,800,000 54,000,000 36,000,000 7,200,000 189,000,000 146,000,000 25,000,000 " With one exception, each State has either coined, or caused to be " coined, the contingent awarded to it ; that exception is Switzerland, where a " tendency exists for adopting a single Gold standard. In 1874 Switzerland " caused 7,000,000 of francs, forming the complement of its contingent for that " year, to be coined at Brussels, but it did not make use of its right to coin " its contingent in 1875, nor does it appear to have the intention of exercising " it this year." As appears from the foregoing description, Belgium led the way amongst the members of the Union in limiting the coinage of 5-franc pieces in view of the position of Silver. The action taken by aU the members of the Union in sus- pending the free coinage of Silver has naturally exercised a very important in- fluence on the market. It is not only the actual limitation of the amount which has to be taken into consideration. So long as the holder, or importer, of bullion knows that he can present his bullion at the Government Mint to be changed into coin, his bullion has a definite value for him, and is practically equivalent to legal tender. To suspend or abolish the privilege of presenting the metal at the Mint to be turned into coin, is, so to say, to demonetise the metal, though the coins already struck, i.e., the existing circulation, may not be demonetised. The suspension of the privilege of unlimited coinage has been decreed among all the members of the Latin Union. They are under covenant to each other not to coin beyond the amount allotted to them annually, but it would appear that they may follow their own discretion in either reserving the limited issue permitted for the State, or distributing it amongst individuals under such restrictions as they may see fit to adopt. The advantage of coining Silver coins to pass as legal tender for their full nominal value, while the value of the metal itself is depreciated 10 to 15 per cent., is so great that the restrictions mutually imposed on each other by the members of the Monetary Union, and on importers or holders of Silver by the respective Governments, were unavoidable. The various members of the Union have still the right, as has been shewn, to coin a certain amount, but whether they will or will not make use of that right rests with themselves. The latest law presented on the subject is the Bill lately introduced by the French Minister of Finance in the following terms : — "Art. 1. The manufacture of Silver five-franc pieces can be limited, or sus- " pended by the Government. 338. f 4 " Art. 2. The xl REPORT FROM THE SELECT COMMITTEE Appendix, 2. Appendix, 21 (No. 18). " Art. 2. The present law will only remain in force up to the 31st January " 1878." Your Committee, as already stated, have not thought it within their functiohs to inquire what steps are likely to be taken by the members of the Latin L) nion in future, nor have they taken evidence upon the point. Mr. Seyd, in a Paper which he put in, states his opinions with regard to the course which will have to be taken both by these States and by others, but it must be under- stood that the Committee are in no way responsible for these views, nor have they cross-examined Mr. Seyd or any other witnesses upon the subject. The case of Holland differs in so far from that of the members of the Latin Monetary Union, inasmuch as the latter had the double standard, whereas Holland had the Silver standard. Indeed, Holland made the change from a Gold to a Silver standard in the year 1847. It was not sufficient, therefore, for Holland to suspend the coinage of Silver. The coinage of Gold was authorised at the same time ; and, at present, under a temporary Act which will shortly expire, the privilege of coining a limited amount of Silver is reserved for the Government, while the public have been granted the privilege of having Gold bullion turned into coin. The legislative act of Holland, Hke that of the Latin Monetary Union, is calculated to lower the value of Silver, both by the withdrawal of the valuable privilege which formerly attached to the metal, and has now been transferred to Gold, and by the actual limitation of the sums which are coined. Appendix, 6. General Movements of Silver. Your Committee, having now described both the supplies which have been thrown on the market by the process of demonetisation in several countries, and the legislative action taken by other countries in view of the situation pro- duced, now address themselves to the question as to what has become of the Silver which has been imported while the changes referred to have been in progress. The answer to this question must have an important bearing on the degree to which the causes which have been in operation to depress the Silver market have been counterbalanced by circumstances creating a demand. The aggregate production of Silver during the last four years (1872-75) £. may be estimated at--- _._-_ 54,700,000* The aggregate production of Silver for the four previous years (1868-71) has been estimated at - _-.___ 41,500,000 During the last four years India took and retained _ _ _ 9,100,000 During the four previous years India took and retained . _ _ 23,400,000 In the previous four years accordingly, the balance to be disposed of, after , India was supplied, was 18, 100,000 1. In the lastfouryears it hasbeen45,600,000Z., certainly an extraordinary difference. To this amount of 45,600,000 I. must be added the 6,000,000^. which has been sold by Germany, and about 2,000,000^. set free by the action of the Scandinavian kingdoms. It appears therefore, that a sum of nearly 54,000,000 /. has had to be sold after the requirements of India ' had been satisfied, and after Germany had become a seller instead of a buyer, as compared with a sum of about 1 8,000,000 /. which had to be similarly disposed of in the four previous years. The mere statement of these figures appeal's suffi- cient to account for the serious fall in price which has occurred. Your Committee have endeavoured to trace what has become of the total Silver produced. Knowledge as to the quarters in which it has been absorbed appears of considerable importance, not only in showing how a greater fall even than that which has taken place has been averted, but also as shewing to some extent whether particular countries in the future are more likely to buy or to sell. Unfortunately the statistics of the imports and the exports have not been furnished for all countries, and in several, where they have been furnished, they are incomplete. A general idea may, however, be gained by a careful study of the figures supplied. * In this estimate, the production in the United States in 1874 is taken at 6,400,000 I. and that ii 1875 at 7,000,000 /., in the place of the figures given by Sir H. Hay (vide p. xiv). ' ON DEPRECIATION OF SILVER. xli Austria. Austria appears to have taken none of the disposable Silver. On the contrary, as stated in a memorandum forwarded by Lord Odo RusseU, the Imperial Appendix 21 Bank appears to be endeavouring to accumulate Gold in its cellars, and to reject (^O' 15-) Silver. This bank possessed — Yf.ars. Gold. Silver. Guldens. Guldens. In 1865 1,507,000 a^rainst . - 120,014,000 (about 12,000,000 Z.) „ 1871 - - - - 44,403,000 . 99,093,000 (about J 0,000,000 Z.) „ 1875 ... - 67,854,000 against - - 66,562,000 (about 6,600,000 Z.) The decrease since 1871, therefore, amounts to nearly 3,500,000 I. During the four years from 1868 to 1871, the imports and exports of Silver were as follows : During the years 1872 to 1875 they were as follows 1868. 1869. 1870. 1871. 1868 to 1871. Imports ... Exports £. 1,560,079 1,026,801 £. 1,236,375 504,844 £. 838,455 1,126,819 £. 766,532 2,064,391 £. 4,401,441 4,719,855 DiiFerence he-"| tvveen Imports . £. and Export* .J + 533,278 + 731,531 — 288,864 — 1,294,859 — 318,414 1872. 1873. 1874. 1875. 1872 to 1875. Imports Exports £. 571,106 3,733,657 £. 1,462,835 1,818,478 £. 930,708 1,338,897 £. 896,785 1,021,304 £. 3,861,434 7,912,336 Surplus of\ „ ExportsJ ■ '3,162,551 355,643 408,189 124,519 4,050,902 It will be seen that Silver began to be exported on a considerable scale in the year 1870, that in 1872 the excess of exports over imports assumed very large proportions, and that this excess continued during the years 1873-4-5. The total excess for the four years is upwards of 4,000,000 I. The coinage of Silver coins has been almost stopped in Austria. In 1869, 13,000,000 guldens were coined. In 1870, 14,000,000 were coined. During the whole of the next five years little more than 2,000,000 have been coined. Thus, far from relieving the Silver market, Austria has also contributed by her opera- tions, so far as can be ascertained, to depress the price. Italy. No trustworthy statistics have been presented to your Committee with regard to Italy for any year after 1 873, and those supplied with regard to earlier 338. g years Xlii REPORT FROM THE SELECT COMMITTEE years are not very consistent. From the information obtained, it seems clear that Italy has been a constant exporter of Silver since April 1 866, when a forced paper currency was introduced. It will be seen from the Heport of Appendix 21 Mr. A. Macbean, forwarded by Sir A. Paget, that from the years 1860 to 1865 in- (No. 10.) elusive, France exported to Italy 1 0,000,000 /. more than she received from Italy, whereas from the year 1866 to 18/2, Italy exported to France 27,000,000 1, more than she received from France. A French commercial Return, quoted in this Report, shews that immediately after the introduction of the forced currency, i.e., in the year.s of 1866 and 1867, the sums sent to France exceeded those re- ceived by 12,000,000?. In the following year the imports and exports were fairly balanced, but the exportation began again in 1869, and from then to 187^ the surplus of exports averaged 4,000,000/. a year. Whether the stock of Silver in Italy would have permitted a continued export on this scale during the years 1874 and 187.5 is not apparent. It is stated that on the 30th April 1866, the day on which sj)ecie payments were suspended, the value of Silver currency known to exist throughout the then Kingdom of Italy was estimated at about 17,000,000 /. It is difficult to see how, if this be correct, the French com- mercial Returns can be correct, which give an excess of 27,000,000 L, as sur- rendered by Italy to France since 1866, unless, indeed, the sum of 17,000,000/. included only Italian coins, and was exclusive of the large sums of French coin previously imported. At all events, it appears that Italy can have no Silver left to spare. Indeed, the Report of Sir A. Paget states that the Monetary Convention concluded at the end of 1865, when the Latin Union was formed, encourage d the export and employment of part of the coin thrown out of circu- lation in Italy by the forced paper currency. It is stated that the inducements to export the Italian specie were very great, and it is added, " even the divi- sional Silver coin, possessing intrinsically 9 per cent, less than its nominal value, irresistibly found its way out of the country, the agio between silver and paper exceeding that rate. The Italian coinage was of the same M'idth, purity, and diameter as that of France, Germany, and Switzerland. It was received from each of the State Treasuries of these countries, and the researches of a Committee of Inquiry, which met in 1868, revealed the existence in the coffers of the Bank of France and of the National Bank of Belgium of a great abundance of Italian divisional Silver coin." Further on, referring to the year 1 873, it is stated that '• Gold and Silver had long ago disappeared from the circulation of Italy." Appendix 22 b. ^^^ ^ memorandum received from a high French authority, printed in the Appendix, similar statements are made with regard to the flow of Italian coins into the coffers of the Bank of France. In the Monetary Conferences which have taken place between the members of the Latin Union in the years 1874 and 1875, Italy bargained for a larger share in the distribution of the amount to be coined by each member of the Union, and an additional amount of 800,000 /. was allotted to her, in the first instance on the condition that it should be kept as a reserve by the National Bank, but ultimately without this limitation. Generally speaking, the evidence seems to shew, that for a considerable period, large supphes from Italy came into France ; but that Italy at this moment can have little, if any, specie beyond what she herself requires. During the years 1872 and 1873, she appears still to have exported on a considerable scale, but no e\-idence is forthcoming with regard to the years 1874 and 1875. So far, therefore, as Austria and Italy are concerned, no portion of the 55,000,000 /. of Silver, which remained to be sold during the last four years appears to have been taken by these countries. On the contrary, they have added to the amount. Your Committee now turn to France. France. The examination of the French Tables of exports and imports shew verv interesting results, both with regard to the actual amount of Silver taken, and ' the ON', DEPRECIATION OF SILVER; xliii the relative amount as compared with former years. The following figures are extracted from the official returns : Total imports of Silver into France, 1868-71 „ _ » . . „ 1872-75 - Surplus of imports of Silver iuto France over exports, 1868-71 - - - . - Surplus of imports of Silver into France over exports, 1871-75 - - - - - Francs. 697,000,000 1,343,000,000 271,000,000 837,000,000 £. 27,900,000 Appendix 21 53,700,000 (No. 0.) 10,400,000 33,500,000 It appears, therefore, that France imported nearly 26,000,000 1, more in the last four years than in the previous four years ; that the surplus of imports over exports was about 23,000,000 /. more than in the previous years, and that the actual balance which France may be said to have taken off the market in the last four years is no less a sum than 33,500,000 I. Of the amounts thus taken by France, a large portion has found its way into the Bank of France, which has increased its stock of Silver from 80,000,000 Appendix 22 c. of francs in 18/1, to 640,000,000 of francs in April of the current year. It has thus absorbed no less a sum than 460,000,00Q of francs, or about 18,400,000 /. France, which was comparatively drained of Silver, has thus replenished Iser stocks to a very great extent ; and indeed, looking at the Table furnished Appendix 21 officially to Lord Lyons for the use of your Committee, of the stock of the (^o. 3.) precious metals held by the Bank of France during a period of 25 years, it will be seen thai more Sdver is held now by the Bank of France than in any previous year, except 1869. The ebb and flow of Silver into and out of France has so great an influenn" on the market, and is so closely connected with the subject-matter of this in- quiry, that your Committee subjoin the substance of a very important statement relating to the movements of Silver in France, derived from a high authority. "In 1868, after a long period, during which the excess of exports of Silver in France Appendix 22b. " had reached the considerable figure of 1,400,000,000 francs (56,000,000 Z.), the imports " began to exceed the exports, and the price of Silver returning to par, permitted the " fabi'ication of 5-franc pieces to be again taken up. '' At this moment there was a general agreement in valuing the stock of the 5-franc " pieces at 1,500,000,000 francs (60,000,000 I.) "In the following year, 1869, the stock of Silver at the Bank had considerably " augmented, both in consequence of the resumption of the fabrication of 5-franc pieces " (none of which had been coined during the years 1856 to 1867), as also in consequence " of the almost exclusive use of Gold which had been thrown in great abundance into " circulation. " This stock had gradually risen from 474,000,000 francs to 687,000,000 francs. " In 1870 the Bank furnished the population in a few months with 600,000,000 francs " in Silver (24,000,000 /.) " In 1871 the payment of the war indemnity commenced. The stock in the bank of " 5-franc pieces no longer exceeded 70,000,000 francs. " The metallic circulation had also become impoverished ia enormous proportions, and " it had been necessary to replace coin by paper. " In 1872 a great portion of the payment of the war indemnity to Germany was " effected. Nevertheless, the Silver which had left, returned promptly to France, and " the stock at the Bank rose from 70,000,000 francs to 110,000,000 francs, and the circu- " lation was enriched every day by the return of the 5-franc pieces. " From 1873 forward the re-importation into France of the Silver money given to " Germany, the reappearance of Gold, and the impulse given to the coining of Silver by " the fall in the price of this metal, produced the effect of increasing simultaneously both " the circulation of Silver and the stock of the Bank." A table is then given shewing the stock of Silver in the Bank, and the amount of Silver 5-franc pieces coined between 1868 and 1875. The amount coined' in France in 1873 was about 6,000,000 Z., and an equal amount (in the aggregate) was coined, in that year by the other members of the Latin Monetary Uoiioii., The total coined by all these countries, including France, for the eight yesffs was 46,000,000 /. 338. g 2 The Xliv REPORT FROM THK SELECT COMMITTEE The statement proceeds ; "It is notorious that the grounds for coining so large an amount during the last three " years, viz., about 600,000,000 francs (24,000,000 Z.),"are not to be sought even in Italy, " where the forced circulation is still carried on, in the necessity of providing for the " exigencies of an impoverished circulation of hard money. The coining of the 5-iranc " pieces has occurred in consequence of the low price of Silver, which assured specu- " lators considerable profits. " In this situation, coined money, according to the laws of exchange, was certain to " accumulate in that State out of the five of which the others might be debtors. France, " which has always been favoured by the balance of trade, was accordingly called upon to •' encash a large portion of the 5-franc pieces which had recently been coined, and m '• fact the branches of the Bank which were nearest to Belgium and Italy, have received, " and are slill receiving important remittances of Silver from these two coiintries. ^ " What proportions have these remittances reached, and by what sum has our circula " tion been thereby increased ? That is a difficult estimate, which can only be made " approximately. " As has been already seen, it was admitted that the circulation in France of Silver " 5-franc pieces was — " In 1868 " Since that period, the figures have been increased : — (1.) By the coinage in France between 1868 and 1875, in round ibers (2.) By the amount of the imports of foreign coins to the value of -------___ Which brings the actual figure of thel p Silver circulation to - - -J " " " Ji vanes Francs. 1,500,000,000 500,000,000 200,000,000 2,200,000,000" (£. 88,000,000.) Pointing to the circumstance that the stock of 5-franc pieces in the Bank of France is now not much larger than it was in 1 868, and not so large as it was in 1 869, the writer draws the inference that " it is accordingly the " circulation which must have absorbed the increase of 700,000,000 francs (or " 28,000,000 /.), by which the stock of Silver has been augmented." The question is then suggested whether the result has been "a state of '• plethora." " Does the circulation, surcharged with 5-franc pieces, cast up an " excess under which it feels discomfort {qui lagene) ?" The answer given is " No, not up to the present time ; except the railway companies and some " industrial estabhshments or institutions of credit which pay their cash " balances beyond their wants into the bank, trade in general and individuals " do not fippear to be inconvenienced by the employment of the Silver 5-franc " piece, which still plays a part that has not lost any of its usefulness. " The cash receipts in Paris of the bank, which may justly be considered as " a thermometer indicating exactly the situation of the monetary circulation •' justifies this opinion by the proportion in which the amounts encashed during " the last three years have been respectively composed of Gold and Silver " In 1874 the receipts included Silver to the amount of 85 per cent • in 1875 " to the amount of 45 per cent. ; and. during the first six months of 1866 to " 35 per cent." ' The result of the foregoing statement, so far as the present inquiry is concerned, appears to be, that France has increased her stock of Silver bv 28,000,000/. since 1868, having raised that stock from 60,000 000 Z to 88,000,000 /., and that, as far as can be judged by the evidence adduced there is no " state of plethora." It will be remembered, too, that of this total nnt more than 22,000,000 I. were in the Bank of France. The figures here given of the increase between 1868 and 1875 are not mconsistent with the fact of the increase being still larger durin"- the 1^ four years, viz., 33,500,000 /., as in the years 1870 and 1871 a portioS of Si W left the country in consequence of the war. ^nver Your Committee point to the circumstance that France has thus in tb. plemshmg her stocks, swept off an amount equal to considerably more than b«lf of the total Silver produced during the last four years, a most importaS S in relation to the future of the Silver market. Neither 'previous eTriencenoJ the present policy of trance, m imposing hmitations to the Silver coinage justify the behef that such a process can be indefinitely prolonged. ' ON DEPRECIATION OF SILVER. xlv Russia. As regards Russia, the bullion brokers who gave evidence before your Committee were unable to state what amounts had been exported to that country, though they stated that they were aware of Silver remittances having been made. It appears certain from the official documents received from St. Appendix 21 Petersburgh that Russia has been a buyer of Silver during the last four years. (No- is.) This is proved to be the case, both by the increase in the stock held by the Imperial Bank of Russia, and by the tables which have been furnished of the imports and exports. For the year 1875 no statistics are given as to imports and exports, but during the years 18/2, 1873, and 1874, the exports were only 160,000 L, against imports to the amount of 4,100,000 I. The returns of the Imperial Bank shew that in the year 1871 the stock of Silver amounted to 8,250,000 roubles, whereas in 1876 it stands at 29,350,000 roubles. The increase is, therefore, 21,000,000 roubles, or rather more than 3,000,000 /. This circumstance strongly corroborates the statement of the surplus imports. Spain. No official returns have been furnished with regard to Spain, but the bullion brokers state that they are aware that that country has been a buyer of Silver. The Board of Trade Returns of the United Kingdom shew the following Appendix 35.* exports from the United Kingdom to Spain during the last eight years : First period of Four years, 1868 to 1871 1868 - - . . 1869 1870 - - _ 1871 £. 1,000 Nil. 3,036,000 1,054,000 Second period of Four years, 1872 to 1875 1872 1873 1874 1875 _----. £. 4,001,000 731,000 377,000 1,882,000 1,680,000 4,670,000 £. 8,761,000 It wUl be seen, therefore, that since 1871 Spain has been steadily importing from this country, and that a portion of the surplus stocks of Silver produced has found its way to that country. The United Kingdom. England has retained, and always retains, a small portion of the total SUver she imports, but that portion is but a small part of the transactions in Appendix 25.* that metal which pass through EngUsh hands. Taking the same periods as have been taken in the case of other countries : — The total imports of the four years, 1868 to 1871, were The total during 1872 to 1875 The total exports for 1868 to 1871 - - . 1872 to 1875 £. 41,600,000 46,550,000 37,400,000 41,600,000 The excess in the first period was, therefore, 4,200,000 I. ; the excess in 338. . g'd the Xlvi REPORT FROM THE SELECT COMMrTTEE tlie second period, about 4,950,000 I. It is interesting to observe how little fluctuation there is in this country, where Silver coins are simply tokens, as compared with the fluctuations in the other large countries of Europe. The figures quoted seem to shew that a little over 1,000,000 /. per annum is retained in England for replacing the coinage and for purposes of manufacture. These figures tally on the whole with those supplied from the Bank of England as to the amount of new coins issued, and with the estimate formed of the amount, of Silve. used for manufacturing purposes in the United Kingdom. The con-- sumption of Silver in manufactures in the United Kingdom may be estimated at about 600,000 I. , as will be shown in a subsequent paragraph. Rest of Europe. With regard to the movements of Silver in the remaining countries of Europe, it is impossible to ascertain any particulars. Neither from Holland nor from Belgium have statistics on this head been svipplied. As to Holland, your Committee have to regret that they are almost without any information, no answers to the questions with regard to imports or exports, or stocks held by the banks, having been made in reply to the questions put by the Foreign Office. The cessation of the coinage of Silver for account of individuals, which has been described, must certainly have tended to reduce the amount of importations, and to induce Holland to buy less than she previously has done. The absence of inforination from Holland is the more to be regretted, as her trade with her Eastern possessions, where there is an exclusive Silver currency, renders her position peculiarly interesting, as being in many respects analogous to that of the United Kingdom. Appendix 21 As to Belgium, Mr. Lumley writes : — " No reliable information can be (^o- ''•) " obtained with reference to the amount of the precious metals exported from or '' imported into Belgium." Indeed, " the returns of the trade in precious metals " have been omitted for some time past from the account of the general movement " of Belgian commerce, as the declarations made at the Custom House were " evidently incorrect and incomplete." But Mr- Lumley makes some important remarks on the view taken as to the state of the Silver circulation in Belgium at this moment. He writes : " It is a curious fact that since the relative " depreciation of the value of Silver, far from there being any complaint of a " plethora of that metal in Belgium, there has been more than once reason to " fear that the amount in the country was not sufficient for the demands of the " circulation. The amount of Silver coined by Belgium amounts to about half " a milliard of francs (20,000,000 l) ; but in the month of March last, the stock " of Silver in the National Bank was only 30,415,000 francs (1,200,000/.), in " 5-franc pieces, on a total cash balance of more than 130,000,000 francs," He further quotes Monsieur Malou, the Belgian Premier and Minister of Finance, as having stated in an official document that " notwithstanding the " enormous amount of Silver money produced before the adoption of the limita- " tion of the coinage of Silver by the Latin Monetary Union, it is not superabun- " dant. and that it is neither demonetised, nor suspected, in the general opinion, " notwithstanding the relative depreciation of the metal constituting it ; whereas' " if there were any excess beyond the wants of the circulation, or any doubt or " moral discredit existed with regard to it, either of those causes would suffice " to cause the Silver coinage to flow into the coffers of the banks." M. Malou thus uses a similar argument to that used by M. Camphausen in Germany, in pointing to the rate at which the precious metals flow into the' coffers of the banks as an index of the stock of those metals in the hands of the pubHc. It is a fair inference from; this argument that no surplus supplies are likely to come upon the market from Belgium. Appendix 21 From Switzerland no information as to the imports of Silver could be (No. 8.) obtained, but the bulk of the operations in Silver in Switzerland, as in the remaining countries of Europe which have not been enumerated, is not sufficient to have any important bearing on the general question. ON DEPRECIATION OF SILVER. xlvii The East (exclusive of India). Turning from Europe to the East fex elusive of India), it is, of course, im- possible to obtain any complete information. With regard to China and Japan, a memorandum was furnished by Appendix 24 e. Messrs. IVIatheson & Co., giving the estimates of the amount of Silver shipped to China and Japan. These estimates apply not to British trade exclusively, but to receipts from all quarters It appears that the amovmt of Silver imported into China and Japan in the four years 1872 to 1875, was about 7,400,000 /. in the four previous years the amount was 5,000,000 I. This increased import of Silver into China and Japan does not seem to have been caused by any diminution in the imports of manufactured goods, as during the last lour years the exports from the United Kingdom to China were larger than they had been in the previous four years. It is probable that this increased import of Sib er to the East has been due to the amounts supplied from the Western Territories of the United States, which exceeded a million sterling in each of the three years 1873 — ^1875. China and Japan must accordingly be placed on the list of countries who have absorbed Silver during the last four years, for an amount of about 7,500,000 /. With regard to some other countries in the East, some information is Appendix 26 e. suppHed by the statistics of the Indian Government. The exports of Silver from India have been deducted in the calculations made as to the amount absorbed by India itself; they amounted for the four years between 1872 and 1875, to about 6,000,000 /. So much of this amount as was sent back to Em'ope, or was sent to China, has been already accounted for, being included in the imports of those countries. A further amount represents simply a movement of bulhon between India and some neighbouring regions, such as the Persian Gulf. But a considerable balance was actually distributed elsewhere? Ceylon and Mauritius especially having received large sums. It would appear that about half of the total has been absorbed in these two countries, and an amount of at least 3,000,000 /. must be added in respect of Eastern countries other than India, China, and Japan, to the aggregate amount taken off the Silver market during the last four years. United States. It remains to ascertain the amount retained by the United States during the same period. On the one hand, it is necessary to recall the amount pro- duced, and on the other, the amount exported, or rather the excess of exports over imports. The difference represents the amount retained for use in the United States. The approximate figures appear to be as follows : Produce of the United States, between 1872 — 1875 Excess of exports over imports during the same period Balance of production retained ----£. £. 26,300,000 18,700,000 7,600,000 General Summary of the Movements of Silver. Your Committee have now passed under review the movements of Silver in all countries where information was available, with the object of showing which countries have absorbed the large supphes which have been produced during the last four years, or added to the amount produced by the disposal of surplus stocks. If the statements made with regard to the separate countries be put together, the general account will be as follows, the figures being mainly 338, g 4 derived xlviii REPORT FROM THE SELECT COMMITTEE derived from official documents, but nevertheless, doubtless, open to much criticism : — Total production, 1872—1875 - ' " ." Sold by Germany and Scandinavian Kingdoms in consequence of changes in the Currency, about - - - - - Surplus of Exports over Imports in Italy during 1872 and 1873 Ditto - - ditto - Austria 1872 1872—1875. quence of md 1873 - -1875 - £. 54,700,000 8,000.000 8,000,000 4,000,000 £. 74,700,000 1872—1875 |- Taken by India . . _ _ _ France ------ Russia . _ _ . Spain and Portugal . - _ England _ _ - > United States - _ - - Japan and the East The East (other than India, China and Japan) Your Committee only submit this statement as a general sketch. The investigation is so complicated, and surrounded with so many difficulties, and the statistics so incomplete in many instances, that it is very remarlvable that the figures so nearly balance, but they are rather valuable as shev^ing the general tendencies of the market, and the ebb and flow in the movement of Silver, than as actual historical data. £. - 9,100,000 - 33,500,000 - 4,000,000 _ 4,000,000 5,000,000 . 7,600,000 - 7,500,000 ^apan) 3,000,000 £. 73,700,000 Appendix 39. Appendix 30. Appendix 34, and 36. Appendix 32. Appendix 36. 35, Use of Silver for Purposes of Manufacture. Your Committee, in the course of their inquiry, have had to consider to vfhat extent, if any, the disuse of Silver for articles of plate, and the weR- known substitution of electro-plated manufactures in their place, might have contributed to the fall in the price of silver. They did not pursue this subject into any detail, as it appeared that the total quantities in question used in Europe were comparatively too small to exercise much influence on the market in comparison with the immense operations connected with the use of Silver as a circulating medium. Evidence obtained from the Inland Revenue Office shewed the amount of manufactured Silver on which duty has been charged over a series of years. Certain articles are excepted, but the details as to the amount of duty levied are a complete indication of the quantity used for plate. An extract from the 13th Report of the Commissioners of Inland Revenue shews on what articles the duty is charged, what are exempted articles, how the duty is raised, and what is the mode of its collection. It will be seen that it is collected at the Assay Offices, which are in the following cities and towns : London, Birmingham, Sheffield, Exeter, Newcastle, Chester, and York ; Edinburgh and Glasgow, and Dublin. In London the work is done by the Goldsmiths' Company. Returns have been received from all the Assay Offices, and also statements from the Inland Revenue, and from the Statistical Department of the Custom House. Mr. Seyd also put in a paper based on official information. The amount of foreign plate imported is so small as scarcely to merit mention. How far the duty of Is. 6d. per oz. on Silver plate, whether manufactured abroad or at home, interferes with the manufacture is an open question, which your Committee did not pursue. The annual quantity of foreign Silver plate imported ranged between 50,000 and 90,000 oz., except in the year ON DEPRECIATION OF SILVER. xlix j^ear 1871, when, in consequence of the war in France, the amount was some- what increased, and reached 103,000 oz. The quantity of Silver plate manufactured at home and exported is also very small. The amount on which drawback was allowed in the year 1852 was about 150,000 oz. ; in the year 1875 it was 120,000 oz. The value of Appendix 32. the Silver used, taken at 60 d., would only be 30,000 /., allowing for the fact that the duty is only paid on 5-6ths of the weight. The amount retained for home use was, in 1862, 725,000 oz. ; in 1874, 730,000 oz. ; in 1875, 766,000. No change of any moment is apparent in these Appendix 32. figures. The use of electro-plate appears to have had but the slightest effect on the total quantities of Silver plate manufactured, as far as these statistics shew. And with regard to the total, it will be seen that, taking the gross weight of Silver marked at Goldsmiths' Hall and the other assay offices, it does Appendix 34 & 35 not exceed about 1,300,000 ounces, or at 60 d., 325,000 I. Taking into account the amount imported, the total does not reach 350,000 I. actually retained for use in England. To this, however, it is necessary to add what is used for electro-plating and other manufacture. Mr. Seyd estimates this quantity as Q- 1258. under 1 ,000,000 oz. This amount, calculating on the old value of the metal, viz., 60 d. per ounce, on which all the estimates of production and supply have been framed, is 250,000 I. The result would accordingly be a total of 600,000 /. The consumption in France is probably rather larger, as more " solid articles" Q- 1268 et seq. are used. The great consumption of Silver plate in the United Kingdom is among the higher classes ; but in France, as well as in Germany, it is among the lower classes. The German peasantry, for instance, are in the habit of collecting a certain amount of Silver spoons, which they treat as dowries for their daughters. It is unfortunately impossible to obtain any trustworthy information on this subject. Mr. Seyd spoke of very exaggerated statements, which had been q_ ^o^q. made elsewhere, with regard to an enormous consumption of Silver for manu- facturing purposes. Your Committee were inclined to think that he, on the other hand, somewhat under-estimated the amount. If an amount of about 600,000 /. be the correct amount for England, the sum of 2,000,000 1, per annum for the whole of Europe would appear rather small, in any case there is no appearance of such fluctuations in the quantity as would count for much in the movements of the European markets. Final Summarv. To sum up the more striking facts which have been brought before your Committee, the situation at the present moment appears to be this : 1. The total annual production of Silver has risen to upwards of 14,000,000/., from an average of about 8,000,000 ?. to 9,000,000 /. in I860. 2. Of this amount of 14,000,000/., the Mines of the United States are estimated to have produced about 7,000,000 L, with the prospect of an increase for some years to come. On the other hand, if the price of Silver should remain as low as at present, there may be some diminution in the production elsewhere. 3. Germany has still to dispose of an amount which is certainly not less than 8,000,000/., with the possibility that it may exceed 20,000,000/.; but with the possibility, on the other hand, that a considerably larger sum than the estimated amount may be ultimately required for subsidiary coinage. 4. The Scandinavian kingdoms have discontinued the use of Silver ; but the amounts of demonetised Silver coin which they have thrown, or can throw, on the market are not important. 338. h 5. Austria 1 REPORT FROM THE SELECT COMMITTEE 5. Austria has apparently been exchanging Silver for Gold_, the amount of Silver held in the Imperial Bank having diminished from 10,000,000 I. to 6,600,000?. since 1871. 6. Italy has been gradually denuded of her Silver currency. Since ] 865 large amounts have been exported ; her forced paper currency has apparently expeUed the whole of the metallic currency, of which the Silver coins amounted, at the beginning of 1866, to about 17,000,000 /. 7. France, on the other hand, has for some years past been replenishing her stock of Silver, of which during the last four years her imports have exceeded her exports by 33,500,000 /. 8. England, Russia, and Spain have each been buyers to the extent of some millions. 9. Japan and China, and other countries in the East, have absorbed a certain amount. • — 10. India still takes Silver, but in greatly decreased amounts. 11. The Home Government has BiUs to sell to the extent of 15,000,000 I. per annum, which debtors to India can buy in the place of remitting bullion. This total has been gradually reached, and represents an excess of more than 10,000,000 L, compared with 20 years' ago. 12. The gross remittances of Silver to India during the last four years have been 1 5,600,000 /., compared with 28,900,000 /. in the four previous years. Legislatively, the position is as foUows : — Germany is gradually demonetising Silver, and looks forward to its use only for subsidiary coinage. The United States is carrjdng out a poUcy of introducing Silver subsidiary coinage in the place of all fractional paper currency now afloat, and of coining full-weighted Silver coins, but only on a contracted scale, and only available for legal tender for a limited amount. The members of the Latin Union and Holland have adopted an expectant attitude ; but, meanwhile limit, as far as possible, the coinage of Silver. No indications are given of any intention on the part of Russia and Austria to pass any laws with regard to their currency. The actual facts which have been enumerated speak for themselves ; and it will be seen at once which of them are in favour of a rise in the price of Silver, and which of them tend in a contrary direction. It is important, too, that the temporary character of some of these facts, and the normal character of others, should be fully taken into account. The surplus stock of Germany will in all probability weigh heavily on the market for some time to come, still it is a temporary circumstance. On the other hand, the United States wiU afford temporary relief to the market by retaining, for her own coinage, considerable amounts of the Silver there produced. It is indeed possible, according to the e-vddence adduced, that the United States will retain as much Silver for her new coinage operations as Germany may have to sell as the result of hers. The case of France deserves especial attention. The replenishment of her stock of Silver can scarcely be regarded as other than a temporary circum- stance. During the last four years, out of a total of 76,000,000 /. of disposable Silver, France absorbed 33,500,000 I. The relief thereby given to the market must have been immense. It is impossible to assume that it can be continued on the same scale. The natural inference to be drawn would be in the opposite direction. With regard to India and the East, hitherto the largest consumers of Silver, so much must depend upon the prosperity of the populations, on the abundance of the crops, in fact, on their powers of production, that it is im- possible to make any forecast ; and as regards actual facts, no more can be stated than that, on the one hand, they have always possessed a very large / power of absorbing bullion, while on the other, that power has been diminished / by the growth of the sums annually payable by India to the Home Government. The ON DEPRECIATION OF SILVER, U The only facts in any calculation as to the future which are certain, and appear to be permanent, are the increased total production of Silver, and the effect caused by the necessity of the Indian Government to draw annually for a heavy amount. Both are adverse to the future value of Silver, as far as they go ; but they may be partially counterbalanced by changes in the trade with the East. As regards Europe, much must depend upon the action taken by the Governments of the various countries where the question of the currency to be adopted is stiU unsettled. Your Committee have not considered it to be within the scope of the questions referred to them to make inquiry as to the intentions of these Governments, though many references to their views will be found in the various official documents procured for the Committee by the Foreign Office. Your Committee on this point would simply remark, that it is obvious that, if effect should be given to the poUcy of substituting Gold for Silver, wherever it is feasible, and giving Gold, for the sake of its advantages in inter- national commerce, the preference even among populations whose habits and customs are in favour of Silver, and thus displacing Silver from the position (which it has always occupied) of doing the work of the currency over at least as large an area as Gold, no possible hmits could be assigned to the further fall in its value, which woidd inevitably take place ; but your Committee are bound to refrain from giving any opinion on the expediency of such a policy, or the necessity for its adoption. In conclusion, jour Committee have to observe, that while they have endeavoured to be as precise as possible in their statement of the facts which have been brought to their notice, and to give an explicit answer to the questions referred to them, as to the causes of the present Depreciation of Silver, they consider that, in view of the many uncertain elements to which they have pointed, and which necessarily enter into every calculation as to the future, they are not authorised to offer any further opinion as to the probable course of the SUver Market, beyond indicating, as they have endeavoured to do, the various circumstances which have to be taken into account. 5 July 1876. 338. ^ ^ lii PROCEEDINGS OF THE SELECT COMMITTEE PROCEEDINGS OF THE COMMITTEE. Tuesday, I4th March 1876. MEMBERS PRESENT Mr. Hermon. Mr. Christopher Beckett Denison. Mr. Goschen. Mr. MulhoUand. Mr. Massey. Lord George Hamilton. Mr. Baxter. Mr, Fawcett. Mr. Kirkman Hodgson. Mr. Goschen was called to the Chair. Adjourned till Monday next, at One o'clock. Monday f 20th March 1876. MEMBERS PRESENT : Mr. Goschen in the Chair. Mr. Hermon. Mr. Hubbard. Sir Charles Mills. Mr. Baxter. Mr. Massey. Lord George Hamilton. Mr. Kirkman Hodgson. Mr. Fawcett. Mr. Christopher Beckett Denison. Mr. Henry Wnterfield was examined. [Adjourned till Thursday next, at One o'clock. Thursdai/, 23rd March 1876. MEMBERS PRESENT : Mr. Goschen in the Chair. Mr. Kirkman Hodgson. Lord George Hamilton. Mr. Hubbard. Mr. Cave. Mr. Fawcett. Mr. Christopher Beckett Denison, mined ^'''"'^ ^"^' ^''' "^^'""""^ ^'''^'^' ^"""^ ^^' ^"^^''^ ^'^^"' ^^^^ severally exa- [Adjoumed till One o'clock on Thursday next. Mr. Baxter, Mr. Hermon. Mr. Shaw. Sir Charles Mills. Mr. MulhoUand. Mr. Massey. ON DEPRECIATION OF SILVER. liii Thursday, 30th March 1876. MEMBERS PRESENT : Mr. GOSCHEN in the Chair. Lord George Hamilton. ] Mr. Christopher Beckett Denison. Mr. Baxter. i Mr. Fawcett. Mr. Shaw. | Mr. Mulholknd. Sir Charles Mills. Mr. Cave. Mr. Hubbard. i Mr. Wilkins was examined. Mr. Robert G Iff en was further examined. Mr. Patrick Campbell and Mr. Robert Wigram Crawford were severally examined. [Adjourned till Thursday next, at One o'clock. Thursday, 6th April 1876. MEMBERS PRESENT: Mr. GosCHEN in the Chair. Sir Charles Mills. Lord George Hamilton. Mr. Hermon. Mr. Cave. Mr. Shaw. Mr. Massey. Mr. Fawcett. Mr. Christopher Beckett Denison. Mr. Earkman Hodgson. Mr. Mulholland. Mr. Henry Waterfield was further examined. Tiuel Seldon, Mr [Adjourned till Monday, 1st May, at Twelve o'clock. Mr. Gustavus Pietsch, Mr. Samuel Seldon, Mr. William Robinson, and Colonel H. Hyde, were severally examined. Monday, 1st May 1876. MEMBERS PRESENT Mr. GosCHEN in the Chair. Lord George Hamilton. Mr. Hermon. Mr. Baxter. Mr. Fawcett. Mr. Hubbard. Mr. Massey. Mr. Mulholland. Mr. Cave. Sir Charles Mills. Mr. Kirkman Hodgson. Mr. J. T. Mackenzie was examined. Mr, Henry Waterjield was further examined. Mr. Ernest Seyd was examined, [Adjourned till Monday next, at One o'clock. 338. h 3 Ut PKOCEBDINaS: — DEPRECIATION OF SILVER. Monday, 8th May 1876. MEMBEES PRESENT: Mr, GoscHEN in the Chair. Mr. Fawcett. Sir Charles Mills. Mr. Massey. Lord George Hamilton. Mr. Baxter. Mr. Hubbard. Mr. Cave. Mr. Shaw. Mr. Hermon. Mr. Kirkman Hodgson. Mr. Christopher Beckett Denison. Mr. Bagehot was examined. Mr. Pietsch and Mr. E. Seyd were further examined. Adjourned till Wednesday, 14th June, at Twelve o'clock, to consider Report. The adjournment was further postponed to Thursday, 29th June, at half-past Twelve o'clock. Thursday, 29th June 1876. MEMBERS PRESENT : Mr. GoscHEN in the Chair. Mr. Massey. Mr. Baxter. Mr. Fawcett. Lord George Hamilton. Sir Charles Mills. Mr. Shaw. Mr. Cave. Mr. Hermon. Mr. Christopher Beckett Denison. Mr. Kirkman Hodgson. DRAFT REPORT, proposed by the Chairman, brought up, and read the first time. Draft Report read a second time, paragraph by paragraph," and amended. [Adjourned till Wednesday next, at One o'clock. Wednesday, 5th July 1876. members present ; Mr. GoscHEN in the Chair. Mr. Christopher Beckett Denison. Mr. Massey. Sir Charles Mills. Mr. Bxater. Mr. Kirkman Hodgson. Mr. Hubbard. Mr. Cave. Mr. Fawcett. Mr. Hermon. Lord George Hamilton. Mr. MulhoUand. Draft Report further considered, commencing at paragraph 165, amended, and agreed to. Question, That this Draft Report, as amended, be the Report of the Committee to the House,— put, and agreed to. Ordered, To Report, togedier with the Minutes of Evidence, and an Appendix. [ Iv ] MINUTES OF EYIDENCE. 338. h4 L ivi ] LIST OF WITNESSES. Monday, Wlh March 1876. PAGE Mr. Henry Waterfield - 1 Thursday, 23rd March 1876. Sir Hector Hay --__ _.___. 2 Mr. Stewart Pixley ---_____ .7 Mr. Eobert Giffen 12 Thursday, 30lh March 1876 Mr. Frederick G. Wilkins - - - .... 15 Mr. Eobert Giffen - . I7 Mr. Patrick Campbell --- ------- 22 Mr. Robert Wigram Crawford ----__. -26 Thursday, 6th April 1876. Mr. Henrjr Waterfield -----_-_._. 03 Mr. Gustavus Pietsch -----_.____ 04 Mr. Samuel Seldon - ---__. .n. Mr. William Robinson ---42 Colonel Henry Hyde ------___ ~ a% Monday, 1st May 1876. Mr. J. T. Mackenzie - - . _ - Mr. Henry Waterfield ' ~ " ' ka Mr. Ernest Seyd '-'.'. \ ~ y". Monday, 8th May 1876. Mr. Walter Bagehot - - . . Mr. G. Pietsch - - - - . 53 Mr. Ernest Seyd ^^ •^ - - - - - - 69 [ 1 j MINUTES OF EYIDEI^CE. Monday, 20t/i March 1876. MEMBEES PRESENT : Mr. Baxter. Mr. Christopher Beckett Denison. Mr. Fawcett. Mr. Goschen. Lord George Hamilton. Mr. Hermon. Mr. Kirkman Hodgson. Mr. Hubbard. Mr. Massey. Sir Charles Mills. The Eight Honourable GEORGE JOACHIM GOSCHEN, in the Chair. Mr. Henry Watereield, called in ; and Examined. Chairman. 1. Yoxj have prepared some statements in the India Office, I believe ? — Some statements have been compiled in the India Office (not all by my- self), which I am prepared to put in. 2. Will you read the headings of the state- ments ? — -The first statement ia one showing the " Total value of merchandise and treasure re- spectively imported into, and exported from, British India, by sea, from and to foreign coun- tries, and of the sums obtained for bills drawn by the Court of Directors or Secretary of State on the several Governments in India," in each of the last 20 years. The second shows the value of gold and silver respectively imported into, and exported from, British India for the same period. The ^hird statement contains much the same in- formation respecting the imports and exports of gold and silver, but it has been continued back so as to include the last 40 years ; and also it includes the particulars for each month Chairman — continued. of the current year up to January, the informa- tion for which last mouth we have received by telegram this morning, and which is added in writing. The fourth shows the value of gold and silver coinage in the mints of Calcutta, Madras, and Bombay, for 20 years. The fifth shows the amount of silver received into the mints in India from Government Treasuries and Depart- ments for the last 20 years. The sixth shows the amount of Government currency notes in cir- culation, the amount of coin and bullion reserve and Government securities heldon the 1st January in each year by the Department of Issue of Paper Currency, since the formation of the department in 1862 ; and the seventh shows the average rate of exchange obtained for bills drawn by the Court of l5irecl,ors or Secretary of State on the several Governments in India for the last 40 years. ( The Statements laere handed in, vide Appendix.) Mr.H. Waterfield.. 20 March 1876. 0.77. A^ MINUTES OF EVIDENCE TAKEN BEFORE THE Thursday/, 23rd March 1876. MEMBERS PRESENT; IMr.Baxter. Mr. Cave. Mr. Christopher Beckett Denison. Mr. Fawcett. Mr. Goschen. Lord George Hamilton. Mr. Hermon. Mr. Kirknian Hodgson. Mr. Hubbard. Mr. Massey. Sir Charles Mills. Mr. Mulholland. Mr. Shaw. The Right Honourable GEORGE JOACHIM GOSCHEN, in the Chair. Sir Hector Hay, called in ; and Examined. Sir H. Hay. 23 March 1876. Chairman. 3. You are a partner in a firm of bullion brokers ? — Yes ; Mocatta & Goldsmid. 4. You have devoted considerable attention, I think, to the question of the statistics connected with the production of silver? — I have, 5. Your inquiries have ranged ove? a certain number years. of years? — Yes, over a great many 6. Can you state, generally, to the Committee, statistics with regard to the production of silver in various silver-producing countries? — I can. As well as I have been able to collect, I do not pretend to say that these are figures that are nearly exact ; but they are the best that can be obtained from the authorities extant, as far as I know. 7. In the first instance, can you state any figures with regard to the aggregate production of silver ? — Do you mean annually ? 8. The annual production of silver ? — I have here an estimate of the annual production of silver since the year 1852, ranging from about 8,000,000 Z. in 1852 to 16,000,000 /. in 1875, by a gradual increase. 9. The production of silver for the year 1875, I understand you to estimate at 16,000,000/. ? — £. 16,000,000. sterling. 10. Being double the amount produced in 1 852 ?— Exactly. 1 1. Can you read to the Committee your figures from the year 1868 ? — In 1868 , I reckon it as 10,045,000 Z. ; 1869, 9,500,000 Z.; 1870, 10,315,000/. ; 1871, 11,510,000/. ; 1872, 13,050,000/.; 1873, 14,050,000/.; 1874, 14,300,000/.; 1875, 16,100,000/. 12. The Committee is to understand that these are not the imports of silver, but that they are your estimate of the production, computed from such statistics as have been at your service? — Yes ; I can tell you the chief authorities. There were the Reports of the Director of the United States Mint for 1874-75, as regards the produc- tion in America ; and also of a considerable part of Europe and South America, because in the year 1874, in his Report, he gives the result of Chairman — continued. inquiries made by his department as to the pro- duction in various countries, and that has helped me in making an estimate for many of the coun- tries besides the United States. With regard to gold you do not ask any questions, and therefore I need not say anything. 13. Does the production of this amount of silver which you state include the proportion of gold which is found, together with the silver, in many of the mines ? — The amount of silver I gave excludes the gold. I have put the produc- tion of gold in silver with the gold production. 14. You have made an estimate of your own, as far as you could tell, on that point ? — Yes. 15. Would you object to state the estimat showing the gradual increase of it as we come near to 1846. {The same vjas handed ew, vide Appendix.) 385. Will you give us the amount in the year 1846 ?— The amount in the year 1846 was 1,7^2 poods. 386. The value in sterling is what? — £. 3,527,000. 387. M. Chevalier gives an estimate of the Archipelago of Asia, and other sources ? — That is one of the items of his estimate. 388. What amount does he give? — Three mil- lions sterling. 389. This is in excess of any previous estimate, and is not confirmed by what is known now ? — So far as I can judge now, it is not confirmed, at least as regards any gold coming into the general markets of the world ; the estimates are much, lower now. 390. Will you pass to the next period, from 1852 to the present time. Do you substantially agree with Sir Hector Hay's figures giving the amounts of the proportions of an average of five years ? — As regards the gold I should be inclined; to do so generally, but I am not prepared to give an opinion as to silver for a series of years. 391. Will you state the amount of the propor- tions of gold for an average of five years ?— In 1852-56 the amount is given 29,900,000/., and of silver 8,100,000 /., showing the proportion of silver to gold to be -27 to 1. In 1857-61 the annual production of gold is put at 24,600,000/;, and SELECT comjuttee on depreciation of silver. 19 Chairman — continued, and of silver 8,200,000/., and the proportion of silver to gold is -33 to 1. In 1862-66 the annual production of gold is 22,700,000 1. ; of silver, 9,900,000 l. ; and the proportion of silver to gold is -44 to I. In 1867-71 the annual production of gold is 23,600,000 1. ; of silver, 10,600,000 /. ; and the proportion of silver to gold is -41 to 1. In 1871-75 the annual production of gold is 20,400,000 l. ; of silver, 13,900,000 1. ; and the proportion of silver to gold -68 to 1. 392. Then summing it up very broadly, at the beginning of the century silver was priiduced in value three times as much as gold ; towards the middle of the century the proportions had been so reversed that gold was produced in value three times as much as silver ? — That is a fair descrip- tion of the change ; it was rather just after the middle of the century that the increase of gold was so great. 393. But latterly, again, the production of silver has increased in proportion to gold till we finally close over an average of three years in the rela- tion of "68 of silver to 1 of gold? — Yes, that is so ; which is nearly the proportion just before the Californian and Australian gold discoveries. 394. Therefore, we are at present, through the increased production of silver and the cessation of the increase in gold, arriving at the same point where we were in the relation of the two metals before the Californian discoveries? — Yes, that is so. 395. Of course the situation is entirely differ- ent, owing to the difference created in the stocks of silver and gold? — The stocks of gold and silver now are very much greater than they were in the early part of the century ; gold especially has increased very much. 396. Arranging the figures somewhat dif- ferently, the production of gold has ranged, has it not, between 30 millions and 20 h millions in round numbers ? — That is since 1852. 397. Silver has ranged between 8,000,000 /. and 14,000,000 /. according to your figures ? — Accord- ing to Sir Hector Hay's figures. 398. Or 16,000,000 I. according to other esti- mates that have been put before us ? — I believe there are estimates higher than Sir Hector Hay's by one or two millions. 399. And the proportion of silver to gold has gradually risen from '27 to 1 to "68 to 1 ? — Yes, that is the nature of the change since 1852. 400. The differences in the amounts of gold now as compared with the early part of the cen- tury, show a very different aspect, do they not, as regards the increase, to what is the case with silver ? — Yes, the increase of gold is much greater ; the gold is put between two and three millions in the early part of the century and down to the middle of the century, but since then it has gone up to between twenty and thirty millions, which is nearly ten times more than it used to be in that period. 401. Have you had any means of checking Sir Hector Hay's figures as regards gold? — Some time ago I prepared a Statement. 402. Which was published in the " Economist" of 3rd August 1872 ? — Yes, which gives an esti- mate of the gold production from tlie different countries. It does not profess to be a complete estimate. I took for the earlier part of the period what Messrs. Tooke & JN^ewmarch give in Vol. 6, down to 1856, which was based very much upon figures that had appeared previously in the " Economist" of 24th January 1857. They give - 0.77. Chairman — continued . the productionof California, of New South ^Wales and Victoria, and of Russia; after that period, I made up a Statement from the Board of Trade Returns and other official documents which I have, showing the amount of the exports of gold from all the ports of Australia ; the coinage at the Sydney Mint ; the deposits of gold at the United States Mints, and the production in Russia, which latter I obtained from private sources ; and those make up totals which do not correspond exactly from year to year with Sir Hector Hay's, but, taking an average, and making allowances for the different scope of the tables, they seem to correspond pretty fairly with his figures. 403. Do you put in the Statement? — I do. ( T/ie same was put in, vide Appendix.) 404. In your Statement none of the figures are estimates, except for the last year ? — Except for the last year or two. 405. But all are records from which more or less correct inferences may be drawn ? — Yes. 406. And which are true as far as they go ? — Yes, my object was to give what the official state- ments were on certain points. The only excep- tion is the statement as to the Russian produc- tion, which is an estimate of production merely. 407. Having stated to the Committee your views as to the estimates of production, can you give us any figures with regard to the amounts of gold and silver which have come into what may be called the general commerce of the world ? — Yes, I thought it might be as well, as the esti- mates always raise some doubtful points, if we could have any evidence as to what came into the general business of the world from time to time ; that might show also the proportion of silver to gold. 408. To recall the general course of your argu- ment, you have considered the question of the production of silver ; you have shown that the production of silver has greatly increased, and you would now show whether the demand for silver and gold relatively have also increased or decreased according to the use to which they have been put? — Yes, as far as the evidence of our own trade is concerned. 409. Because, otherwise, the large increase in the production of gold would have led you to be- lieve that there would have been a rise in the price of silver ? — I should have expected a rise in the price of silver apart from other circumstances, whereas there is a fall. 410. Is it your view that the fall has arisen through the use of gold being increased for pur- poses where silver formerly was used ? — That is my opinion. 411. Will you proceed to the figures which you are prepared to put to the Committee. To what do the particulars you are going to give us relate ? — First of all, to the exports of gold and silver between 1801 and 1810, as given in the Appendix to the Bullion Committee's Report of 1810. 412. That is exports from this country ? — That is exports from this country ; next, to similar exports in 1830-1853, as given at page 709 of Tooke's " History of Prices," Volume 6 ; and, third, to both imports and exports since 1858, since which time the imports and exports have been given by the Board of Trade, and these figures I have taken from summaries prepared by myself. 2-^ 413. Will Mr. R. Oiffm. 30 March 1876. 20 MINUTES OF EVIDENCE TAKEN BEFORE THE Mr. Chairman — continued. R.Qiffen 4j3_ ^jij y^y py^ in Tables upon that ?— I will o M h P^* ^^ Tables showing the imports and exports iRi-g^'^ since 1858. {The same were put in, y'lAQ Ap- ' ' pendixJ) 414. A member of the Committee calls atten- tion to this answer of Sir Hector Hay ; he says : " In the imports and exports of silver the same amount Derhaps figures three or four limes in the Returns ; it is imported here ; it is sold and goes to France ; it is exported ; by-and-by a turn of the exchange comes ; it comes back here, and then goes to India; so that the Customs Returns show little or nothing as to the quantity of silver and gold that is being used"? — I hardly think that would affect my point, because we are taking the general movements in trade of the two articles, and according as the one is more used than the other, we should judge of the quantities actually in existence. 415. So that, although the figures may not be absolutely correct, the proportions of the general movement of trade you consider may be fairly seen from these results ? — It would probably cor- respond, in some degree, to the production of the two metals. 416. What were the exports of silver in the ten years from 1801 to 1810?— £. 9,323,488, and of gold 1,072,665 /., or in the proportion of about 8-7 to 1. 417. 1830 to 1833 ?— I can state the proportions for periods of five years. In 1830 to 1834 the amount of gold exported is 6,220,000 /., of silver 19,560,000/., and the proportion of silver to gold is 3-1 to 1. In 1835 to 1839, gold 7,450,000 Z., silver 14,410,000/., and the proportion of silver to gold as 1-9 to 1. In 1840 to 1844, gold 4,720,000/., silver 17,840,000/., and the propor- tion of silver to gold 3-8 to 1. In 1845 to 1849, gold 8,615,000/., silver 24,820,000/., and the proportion of silver to gold 2-9 to 1. In 1850 to 1853, gold 24,350,000 /., silver 21,570,000 /., and the proportion of silver to gold '9 to 1. 418. Down to 1848 the proportions were about 3 to 1 ?— Yes. 419. Then it suddenly fell -9 to 1 ?— Yes. 420. Since 1858 what have the proportions been ? — I give both the imports and exports since 1858: this shows that in 1858 to 1861 the imports and exports of gold together were 127,300,000/., and of silver the imports and exports together were 72,500,000/., shoiving a proportion of silver to gold of '57 to 1. In 1862 to 1866 the imports and exports of gold were together 159,700,000 /., of silver 101,100,000 /., and the proportion of silver to gold is "63 to 1. In 1867 to 1871 the imports and exports of gold were 146,900,000/., of silver 93,400,000 /., 'and the proportion of silver to gold "63 to 1. In 1872 to 1875 the amounts of the imports and exports of gold together were 148,600,000 L, and the im- ports and exports of silver together 88,000,000 /., the proportions being -59 of silver to 1 of gold. 421. One point of interest, I think, in the Tables you have read is the magnitude of the amounts in the later period as compared with the earlier period? — Yes, I think that will be ob- served from the figures I have read. 422. The Bullion Committee give the amount of the import of the precious metals in four years from 1810? — Yes, and these amounts are very small indeed; I do not know that it is worth while to read them. Chairman — continued. 423. The Committee speak of them, however, as large ? — Yes ; that was what drew my atten- tion to them. 424. Have you any other remark to make upon the subject? — The Bullion Committee give the purchases by the Paymaster Greneral for ex- port of specie for war purposes, from May 1805 to the 1st February 1810, and these show that while the total purchases were 5,826,000 /., the purchases of gold out of that amount were only 507,000 /. 425. What presumption have these general facts raised in your mind ? — That the fall in silver is not due to any excessive production as com- pared with gold, looking to the relations of the metals in past times, especially during the earlier part of the century, but rather that the change of the metals has been such as more probably to cause a fall in gold or a rise in silver ; and that was what was anticipated, I believe, by writers at thab time. 426. What do you suggest, therefore?— I sug- gest that there has partly been some change in the uses of silver and gold ; that gold has come more generally into use than it was before. 427. Can you explain that? — I think one of the principal uses of gold since then has been that France took a very large quantity of the new gold. I have not the exact figures here, but I believe that is a matter of common knowledge, and probably you may have evidence on that point. This gold which went to France partly took the place of silver which was sent from France to the East; a part of the silver which went to the East was taken out of the previous stock of France. 428. Can you give any figures to the Com- mittee on that point ? — I have not any figures I can give. 429. With regard to the outlet for silver; sil- ver having been exported from France to the East; have some of the outlets for silver been closed since 1870? — Yes; I think that is very important. Silver cannot have gone to Germany ; that is one change ; and then in the last year or two the Latin Convention has imposed a hmit on the amounts of silver which they permitted to be coined. 430. The Latin Convention is a Convention between France, Belgium, Switzerland, and Italy, with regard to the coinage of silver?— Yes, and I believe it now includes Greece, Greece having been taken into the Convention. The Conven- tion regulates the coinage of both silver and gold. 431. The Convention have come to various agreements at various times since 1867, and they have limited the coinage of silver ?— They have limited the coinage of silver, and the amounts fixed have been very small. 432. They are observing at present an expect- ant attitude ?— That seems to be so. The Con- vention expires in 1880, and they seem to be doubtful what to do. 433. Holland has not bought much silver, I presume ?— Holland would buy silver up to last year, I believe; but it has been preparing to change its standard since then. 434. Germany, of course, not only has not been a buyer, but has been a seller of silver ?— Yes. , 435. But for the agreement of the Convention, do you believe that silver would have gone back to France? — I believe that silver would have gone back to France ; and that a fall in silver such SELECT COMMITTEE ON DEPRECIATION OF SILVEK. 21 Chairman — continued, such as we have now, if the Convention had been taking the same course as it is now doing, might have taken place in 1867. 436. Turning to G ermany, I wish to ask a very few questions on that point at the present stage. There has been little re-coinage so far under the new law ? — I believe there has been very little re-coinage of gold in Germany under the new law. The estimated quantity of gold was about twenty-six millions sterling of the old gold coin- age ; and from statements which I have seen referred to, I believe the amount which has been received is only about five millions sterling in gold ; that is the amount of the old coinage pre- sented for withdrawal. 437. So that all the gold ooin has been either bought, or received from France in the Indem- nity? — It must either have been bought in the London market or received from other sources. I believe Germany may have received a good deal from Russia and from other sources. 438. Do you know how much gold has been coined; is it sixty millions? — It is -over sixty millions ; I believe about sixty-eight millions, by a very recent statement. 439. Of that about five millions is re-coinage, and the remainder, or nearly sixty millions, has been actually, over a certain number of years, bought or received by Germany from other sources ? — Yes, as far as I can make out. 440. You heard the evidence given bv Mr. Wilkins ( Question 325), that he knows of twenty- four millions purchased by the German Govern- ment ? — Yes. 441. And a large amount was received under the French Indemnity ? — I think about ten mil- lions was received directly from France under the Indemnity ; then large amounts would go from France and Belgium besides, as weU as from this country, and from Russia. 442. It has been put before the Committee that the amount of silver coined in Germany up to the year 1871 was ninety millions sterling? — That was the official estimate, I believe. 443. Do you gather from the inquiries you have made, that ninety millions sterling in silver were actually in circulation at that date ? — The matter has been very much discussed in Germany, and the discussion seems to point to the fact that very much less than ninety millions sterling was in circulation. There is a good deal of debate about it, but the best authorities seem to me to lean to an amount between fifty and sixty mil- lions sterling (I should say the nearest figure is fifty-seven millions) as the circulation of silver alone out of the ninety millions. That is so far confirmed by the experience which the German Government has had in withdrawing the florins of South German currency. They find that a much less quantity of them must have been in circulation than what the Mint returns gave of the coinage ; but as one-thaler and two-thakr pieces have not yet been withdrawn, they cannot speak about them, and those were the principal silver coinage, 444. A certain amount would naturally have been melted down and exported when the price of silver was high ? — Yes ; the question is what is the amount ; but the authorities lean to about thirty per cent. 445. Therefore the total amount of silver, according to these estimates, which the German Government had got to deal with, was between 0.77. Chairm an — continued . fifty and sixty millions at the date when they first began their coinage operations ? — Yes, per- haps a little more or less ; of course we cannot tell until the operation is completed. 446. Are you prepared to state in round num- bers the result of your inquiries as to how that sixty millions would be disposed of? — The sixty millions of gold ? 447. No, the sixty millions of silver in circu- lation? — Twenty millions of it, or perhaps rather more, is required under that provision of the German coinage law to which I made reference before, that the silver coinage is to be about ten marks per head, which would give about twenty millions sterling. That would leave about thirty to forty millions sterling of silver which they would have to sell from first to last, but a great deal of course has yet to be withdrawn. The coinage of new gold exceeds this estimate of silver to be displaced, but the presumption is, that the Ger- mans have required gold for the increase of the population since 1871, and they have also required an additional amount in order to with- draw notes under 5 1, which have been withdrawn under the new Bank Law of Germany, and that has required a certain amount of gold to take its place. 448. An increased amount of currency would be required by the increase of population ? — By the increase of population, and a certain amount is required to take the place of these small notes which have been withdrawn. Mr. Christopher Beckett De/dson. 449. In your answer to Question 269 on the last occasion on which you were before the Com- mittee, you stated with regard to the United States : " The coinage has, I believe, absorbed a " part, because in January last year an Act was " approved by the President of the United States " for the resumption of specie payments, to take " place on the 1st January 1879. One part of " that Act provided for the issue of silver in place " of what is called the fractional currency in the " United States. This is the clause : ' That the " ' Secretary of the Treasury is hereby authorised " ' and required, as rapidly as practicable, to cause '•' ' to be coined at the Mints of the United States " ' silver coins of the denominations of 10, 25, and '•■ ' 50 cents of standard value, and to issue them in " 'redemption of an equal number and amount of " ' fractional currency of similar denominations ;' " and further on you give the estimate about 44 millions of dollars. Then with reference to the question which has been put from the Chaiv this morning, regarding the telegram which has come, that Congress had refused a proposal to buy a million dollars monthly for this very purpose, what is your reading of that? — I am not pre- pared to say anything about it, because I should prefer to see the full information about it when we get it about ten days hence. I do not like to speak about a telegram in a matter of that kind, and I am not aware that the Act which I quoted has been repealed. I mentioned last time, " unless there was some change made by legisla- tion." I put in that proviso, that the Act of last year would go on. Mr. Baxter. 450. And it is going on now ?-— It is going on now, I believe. c 3 1- 451. Have Mr. M. Giffen. 30 March 1876. 22 MINUTES OF EVIDENCE TAKEN BEFORE THE Mr. R. Gifen. 30 March 1876, Mr. Shaw. 451. Have you formed any estimate of the proportion of silver used for manufacturing purposes ? — No, I find that is too difficult to go into ; the bullion brokers are the proper people to give evidence on that point. 452. A great deal of it goes into use of course? — I could not say how much, but as far as I have observed the former estimates on the subject, about .30 or 40 years ago, appear to have been rather exaggerated. Mr. Jacob and other people give very large sums indeed, but that is not the opinion which I find in the trade now. 453. There is a very large waste, of course, in silver coinage, much more even in proportion than gold ? — Yes, I think so. 454. In circulating among the poorer classes, greater waste and wear and tear ? — Yes ; but I can give no special information on that point. Chairman. 455. With regard to India, large amounts of gold have gone there, have they not ? — When I made up the figures of gold to which I referred, I ascertained that perhaps nearly ninety millions of gold had gone to India between 1848 and 1871, Chairman — continued. and that was a very much increased use of gold compared to what it had been previously. 456. If we examine the exports to India we shall find that the exports of gold to India have increased vastly since the discoveries in Australia? — I am speaking now of figures published by the India Office, Indian figures, showing the importfl from all countries into India, and I believe you will get them from the office much better than I can give them. Mr. Fawcett. 457. Is it not supposed that a considerable pro- portion of that gold went on to China afterwards ; is not that mentioned in Tooke's " History of Prices" ? — I rather find that gold on balance.goes from China to India. 458. That was not the case for some time?— At the period of which I speak, from 184-8 to 1871, it seems to have been the case. 459. So that that would rather increase the quantity of gold which had been absorbed by India ? — Yes, it comes to about 90 millions altosether. Mr. Patrick Campbell, called in; and Examined. Mr. P. Campbell. Chairman. 460. You are the chief manager of the Oriental Bank Corporation ? — Yes. 461. Besides your Indian business you are, I believe, agents for banks in California ? — We are. 462. And for banks in Chili ?— Yes. 463. You have, therefore, had experience bolh of importations of silver in your connexion with San Francisco and Chili ; and, I presume, with the exportation of silver through your dealings with the East? — Very largely. 464. Have you looked into the statistics of Messrs. Mocatta & Goldsmid, given to us through Sir Hector Hay ? — Yes ; I have discussed them with him. 465. Do you generally corroborate his figures ? —I do. 466. You have observed that while the produc- tion of silver in 1868 were 10 millions, they have risen to from 14 to 16 millions in 1875 ? — Yes. 467. Have you through your agents in San Francisco details which you can give us as to the exports of silver from that place? — It is all included as treasure. I have here very carefully compiled reports, which I believe are authentic, from the Custom House returns for 1873, 1874, and 1875, detailing the different points to which the shipments have been made, and the descrip- tion of the treasure. 468. Have you before you the exports in dollars from San Francisco to China and Japan during three years ? — I have. 469. Will you state that ?— The great bulk is in silver, eitlier bar silver, trade dollars, or Mexican dollars. 470. Will you read the figures?— The figures are, in 1873, 8,540,000 dollars ; in 1874, 8,365,000 dollars, and, in 1875, 7,170,000 dollars. 471. Do you think that the Chinese labourers take away much silver in their pockets ? — No ; they take it in gold, as being more portable. Chairman — continued. 472. How do they take away their fortunes, mainly ? — They take it in drafts from the bank of California on our branches in China. 473. You have branches in China ? — Yes. 474. And the banks in California give even the labourers drafts on your banks for suoh earnings as they have made ? — I do not think the labourers take them ; but there are certain native Chinese firms who employ that labour, and they buy from the Bank of California a large draft upon us and subdivide it, giving small drafts. 475. You are quite satisfied, are you, that the amounts of silver taken away in their pockets from San Francisco to China by the labourers are not such as need enter much into our cal- culation ? — Decidedly. Gold they may take , but they have got too much accustomed to western ways when they go back to cumber themselves with a large amount of dollars. Trade dollars would be most inconvenient. A man cannot go a voyage of 30 days with a bundle of dollars slung about him ; he either takes gold or a draft ; I believe drafts generally. 476. Have you received any information from your agents or correspondents in San Francisco, with regard to the Comstock lode? — Yes; the latest information we liave about the production of these very large mines is dated the Hth February last, and says, " The out-put of silver from the mines continue most abundant; Con- solidated Virginia yielded over two millions of dollars in January ; and it is expected that when California begins to yield, about May, the combined production will be over four millions of dollars per month." Mr. Fawcett. 477. That is 10 millions sterling a year? — No. Scarcely so much as that, because a dollar must be taken at 4 s. 478. Are SELECT COMMITTEE ON DEPEECIATIOK OF SILVEE. 23 Chairman. 478. Are these statements modified at all by the proportion of gold which is found with the silver, and which is calculated in the out-put ? — Very much. 479. Can you give us any particulars with regard to that point ? — We have had the silver sent to us for sale in London ; therefore I speak from knowing exactly. I have carefully taken out of our books several large invoices of this dore silver, as it is called ; and I find that the Consolidated Virginia, on the average, yielded 40 per cent, of gold and 60 per cent, of silver. 480. That is not your estimate, but it is the result of actual sales ? — Yes, the result of actual sales from these large mines, not generally of the whole Californian export of dore silver. 481. But in these large mines where the great increase takes place ? — Yes. 482. Therefore we may say that of the four millions of dollars a month which these mines are expected to put out, 40 per cent, may be deducted as gold? — Yes. 483. And that we shall have to deal only with the balance in silver ? — Yes ; on that point there is one very strange fact. They are going deeper, and I have heard from very good authority indeed that the deeper they get with these mines the richer the gold is ; that is to say, the further down they go they find that the gold increases and the silver decreases. 484. You do not anticipate that the proportion of silver will increase, but rather the reverse ? — The reverse from all that I can hear ; the deeper they go the more gold they find. 485. You are also, I understand, receiving silver from the South American mines ? — We are. 486. Can you give us any information with regard to the Caracoles mine ? — It is very difS- cult to separate the production of the Caracoles mines from the others, because it is shipped from various ports ; it comes down sometimes in coast- ing steamers, and it is very difficult to discover which is Caracoles and which is the other. 487. Where is the Caracoles mine? — At the most northern point of Chili, bordering on a part of Bolivia that goes down to the coast. 488. How does that silver reach you? — It reaches us chiefly by the Pacific mail steamers coming through the Straits of Magellan. The silver containing gold comes to us through New York, by railway from San Francisco to New York, and from New York by the Cunard and other lines. I have brought with me a bill of lading to show you that certain trade statistics might be very much out. This is a bill of lading for 38 bars, said to be silver, valued at 78,586 dollars. In trade statistics I have no doubt that it is put down as silver, because the bill of lading says it is silver. This is a very rich description of silver, and when it was sold in the London market, in turning the 78,586 dollars into pounds sterling, it came to about 15,000/., but of this shipment, when it was realised in London, 8,800/. was paid for silver, and 6,200/. for fine gold. This is from the Comstock lode. 489. With reference to the evidence you have given as to the yield of the California and Con- solidated Virginia mines, are you aware of the evidence upon which your agents form their opinion ? — No, but we have never been disap - pointed yet on any information they gave us as regards these matters. I believe it is confirmed 0i77. Chairman — continuerL by the report of the director of the mint in California. 490. Are your agents interested in the mines ? — I think not. 491. Your information comes not from the owners of the mine ?■ — Oh, no. 492. Nor from any persons that you know ostensibly to be interested ; it is information sent to you, with a view of guiding you as regards the price of silver, if at all ? — Yes. Mr. Fawcett. 493. Do you know whether your agents sent you this information from rumours possibly coming from people interested in forcing up these mines, in which there have been, as I understand, enor- mous speculations, or they have themselves sent independent persons who are' not pecuniarily interested in the mine, to inspect the lodes and the mines as they are ordinarily inspected? — They sent me the balance sheet of one of these mines, the Consolidated Virginia, which gave the out-put as they call it in California for the last year, ending December 1875. I believe one of the members of the Committee has the report : at least I sent it to Mr. Hodgson. It distinctly stated that 17 millions of dollars within a small fraction were raised, and 12 millions of dollars were distributed to their shareholders as dividends during the year 1875. That makes me think that the statement which we have just received, and which is confirmed by an English house in San Francisco, must be tolerably correct. 494. Your evidence seems to me to raise a very important point ; you have given an estimate with regard to the future ; you say you have reason to believe that in May the yield of this mine will be much greater than it has been ? — Yes. 495. With regard to the yield up to the present time, that might be ascertained from precise and well-known facts ; but with regard to the future, everything is uncertain in mining, and what I want to know is, is your opinion with regard to the future based upon rumour, which rumour may possibly come from people pecu- niarily interested in the mines, or is it based on a careful and independent inspection of the mines? —I believe it is based on a careful and indepen- dent inspection. 496. By a competent mining engineer? — Yes, I believe so. 497. Employed by whom, by your agent ? — No, certainly not ; most probably by the owners of the mine. 498. You say it comes as the opinion of some one employed by the owners who, of course, are pecuniarily interested in making the mine ap- pear as prosperous as possible ? — No doubt ; but the one mine is alongside the other, the Cali- fornia mine is exactly parallel with the other ; the one bounds the other. 499. That does not at all touch my point, be- cause it has happened, for instance, in Cornwall, I know, of my own knowledge, that you may have one mine, an enormously rich mine, and that there is not another mine in the neighbourhood which has paid its working expenses. Does this information come from an engineer or a mine in- spector who has been employed by a perfectly independent person who has been anxious to get information independently of any pecuniary pro- fit, or do I understand you it is an opinion based upon the report of some one employed by the c 4 •*- owners Mr. />. Campbell. 30 March 1876. • 24 MIKUTE3 OF EVICENCE TAKEN BEFORE THE Mr. P. Camphell. 30 March 1876. Mr. Fawcett — continued, owners of the mine, who are pecuniarily in- terested in representing it as prosperous ?— It is impossible for me to say. It comes from our cor- respondent, and he is corroborated by the first English house there. 500. You do not know the basis of that in- formation ? — No. Mr. Mulholland. 501. You find it necessary for the successful conduct of your own business to acquire informa- tion of this kind from correspondents upon whom you can generally rely?— I believe so. 502. And you have reason to rely upon the information of this correspondent ? — Yes. 503. It has come to you in your usual course of business ? — Yes. Chairman. 504. It is sent to you not for publication, but to guide you in your operations ? — Yes. 505. We were on the subject of the Caracoles mine : can you give us statistics with regard to the export of silver from Chili ?— Yes, these are statistics made out by the Government of Chili, and sent to us by the National Bank of Chili. I find the following among mining and the general exports of its produce : bar silver and silver ores, as nearly as possible, three millions of dollars for 1873, and about the same amount for 1874. The amount for 1875 is not given. 506. Thatwould be about 600,000/.— £.700,000. 507. Does that include the Caracoles mine? — I fancy it must ; I am not able to say. 508. The Caracoles mines are in Chili ?— It is a matter of dispute between Chili and Bolivia. It is the very north point between Chili and Bolivia. Mr. Baxter. 509. You said the produce was shipped from various ports? — Yes. ■ Chairman. 510. Will you state, that which I presume you can speak to with absolute certainty, what _ you have received from your correspondents in silver for the last few years ?— I have mads out that during 1875 we have received about 600,000/. sterling in bar silver from the different Chilian ports. Mr. Baxter. 511. Chili alone, not including any part of Peru ?— All Chili. Chairman. 512. In previous years? — Not so much. I have not got it. 513. Have you received larger amounts during the years 1874 and 1875, than previously V — Certainly ; it is gradually increasing. 514. You see, in the amounts sent to you an increase in the silver production of Chili?— I do. 515. Can you tell us when the Caracoles mines began to be productive ? — They have been known for a long time. I believe some years ago they produced much more. They have now come upon richer ore. They ceased working almost entirely for some years, and now they have increased again. 516. Have you had any information as to the expense at which they are now worked, whether they can produce silver at a profit even at present prices ? — No. CAfliVman— continued. 517. Is there anything you can add to your evidence with regard to the receipt of silver from Chili or South America ?— No ; I may say it coQtains no appreciable gold. _ _ 518. Have you got any statistics as to Mexico? ]s^o ; I am not able to say much about Mexico. 519. Have you considered the causes or the fall in the price of silver ?— Yes. „ ,, , ^ 520. To what do you attribute that tall ?— It began by the alarm created by the demonetisation of silver in Germany ; then the increasing amount of council bills sold in London on India ; and also, I think, that which has been going on for many years now, the wants in England of the largely increased English army in_ India, and the large increase in the Civil Service. 521. You mean that the English officers, whether civil or military, and English soldiers in India, remit a portion of their pay which they receive in India to this country ? — No doubt of it. 522. Do you believe that to be an increasing sum ? — Yes. 523. Those remittances would affect the ex- changes, would they not ? — I think so ; in fact, we have large amounts coming home, what are called family remittances. Lord George Hamilton. 524. Which are not remitted through the India Office?— Yes. Chairman. 525. These remittances would have the effect of lessening the amount which had to be sent back to India as returns for their exports?— They act the same as council bills, exactly. 526. The total amount of bills to be drawn on India, and which can therefore be sent as re- mittances, has increased, and the amount of silver therefore, which is required for settling the trade arrangements between India and this country, is thereby diminished ?^ — -Yes. 527. That accounts, in your judgment, to a certain extent, for the small demand for silver for the East ?— Yes. 528. Do you look upon that as a permanent cause so far as it goes ? — Unless the Indian Go- vernment are able to reduce their expenditure in England, it must be so. 529. Apart from the Government increase, is it permanent in your judgment as regards the indivi,duals remitting from India to this country ? — So long as the large Indian army is there, and so long as the large English civil service is there, their wives and families and friends and relations all in England derive some benefit from them generally. 530. Have you seen an increasing amount? — It has been a steady increase as the English army has increased, and as the English officials have increased. 531. But it. has been increased by the sub- stitution of the English army, and the increase of ■ the English army as compared with the native army ? — I think so ; more money is spent in England, and less in India, than when the Indian army was there. 532. Can you tell us anything with regard to the fall in silver being caused by any depression in trade ? — I think so ; that is another cause which I think has had a great deal to do with it. 533. You attribute importance to that cause? —I think SELECT COMMITTEE ON DEPKECIATION OP SILVER. 25 Chairman — continued. —I think the stagnation in trade hasreduced the circulation ; in fact, there is less inducement for the English merchant to buy produce in India ; there has been a loss on almost every import. 534. To what extent do you attribute import- ance to that cause?— Well, it is impossible for me to say ; there are four causes united which have caused it. 535. Will you state those four causes again ? — It began by the demonetisation of silver in Grermany ; it was reported that they would be obliged to sell from 50,000,000 Z. to 60,000,000 /. of silver; that frightened everybody in India. Then the stagnation of trade with India ; the increasing amount of council bills th'it were sold in Loiidon, and the wants in England of the largely increased English Army and Civil Ser- vice in India ; and then on the top of all came this increased yield from the Californian mines. '536. You attribute the depreciation in silver to those four causes, without being able to assign any particular effect to any one of them ? — Yes ; they all, gradually following each other, have caused it, and liave caused a great deal of panic. 537. Can you give us any information with regard to the depression of trade, and falling off in exports ? — No, I have not prepared myself to do that. 538. There has been, has there not, a general loss on Indian exports, at least upon some arti- cles ? — I believe so. 539. Are there any other observations which you can offer the Committee on that part of the subject ? — Yes ; I took it carefully from our returns, which will explain, perhaps, more than anything else the value of a sovereign in India ; although there is not so much gold, still there is a market constantly for English and Australian sovereigns ; during the year ] 874 if any officer or civil servant were coming: home he could get a supply of sovereigns to bring with him; say 100 I. ; he would get them at from Rs. 10. 10. to Rs. 10. 12. each. By our last quotation they would cost him Rs. 11. 8. or Rs. 11. 10. That shows the difference that has taken place since 1874 in the value of the rupee as compared with sovereigns. 540. Have you seen anything of the export of gold to India? — No, not of late years. 541. When the large amounts of gold went to India, did they return or have they been absorbed in the country ; can you give us any informa- tion upon that, or would you prefer not to answer upon that point? — I do not remember during the last ten years any gold coming from India to England. 542. Are there any other points which you wish to put before the Committee ? — No, I think not. Mr. Baxter. 543. Have you any information with regard to a contract said to have been entered into by the United States Government with the mine- owners of Nevada ? — Nothing, except that within the last day or two we have received advice from our friends in California that the stagnation in the silver market caused by the fall in the value of silver in London has been checked con- siderably by purchases by the United States Government. 544. Do those advices refer to purchases made by the United States Government at the time, 0,77. 1876. Mr, Baxter — continued, Mr. P. and not to any contract for a period of years 5* — Campbell. No, but they are buying now in California, ■"" 545. Can you give us any information with 3° Ma,rch regard to silver said to be stacked up in American mines at present?— No. 546. A very considerable sum would be re- quired in order to alter the American currency (what is called the fractional currency), to sub- stitute silver for the notes at present in circula- tion? — A very large amount. 547. Would that be required in the next two or three years ? — It depends entirely on the acts of the United States Government. They are evidently paving the way for it. Mr. Faiocett. 548. In addition to the four causes which you mentioned as accounting for the present depreci- ation of silver, are there not one or two others you would add ; should not you add the great absorption of gold by France, and the export of silver from France, which shows that France who once absorbed silver to a great extent now does not absorb it at all, but exports more than she takes in. That cuts off another source of absorption, does not it ? — Yes, and there are Holland and Germany, which formerly took large quantities of silver, and they now do not take any. Instead of being buyers they are being sellers of silver. 549. With regard to India, one of the reasons to which you attribute the depreciation of silver is that Englishmen show a greater tendency to remit home than they used to, and that, with the improved means of communication, is increasing, is it not ? — Perhaps I should not say they show an increased tendency, but they have increased very largely in number. The Army is very largely increased and the Civil Service is very largely increased. 550. What I mean is this : that formerly, when it took a long time to get home, it was a very frequent thing for persons to spend nearly the whole of their lives in India, and not to come back to England once in seven or eight years ; now a great number of people come horne from India even for two months' holiday ? — Yes. 551. Of course with improved means of com- munication that is likely to increase ? — No doubt of it. 552. Then there is also a larger portion of the revenues of India now spent in England; for in- stance, leaving out of the question the Army and Civil Service, and that amount of stores which is required for public works that the Government are carrying out ? — That has increased the neces- sity of the Indian Council drawing so much more largely than they used. 553. That is another cause of the deprecia- tion ? — That takes the place of silver. 554. Therefore it cuts off another source of absorption ? — It does. 555. Therefore your genera] evidence is this; that with the largely increased production of silver you have several important sources of ab- sorption for that silver either altogether closed or greatly diminished ? — Yes. 556. That is your point, is not it ? — Yes. Mr. Cave. 557. Are there not large quantities of sove- reigns which go to Brazil and China from this country ? — I do not know as regards Brazil, but certainly not to China. D -f- 758. Is 26 MINUTES OF EVIDENCE TAKEN BEFORE THE Mr. P. Campbell. 150 March 1876. Mr. Cave —continued. 558. Is not the sovereign one of the means of circulation in China as well as in Brazil ? — No ; sovereigns are an article of merchandise in China, as in India. 559. How are they used in China ? — Not as a circulating medium at all. 560. For what are they used ? — There are very few there. 561. They have not displaced in any way the ordinary circulation of the country? — Oh, no. 562. Have they done so in Brazil ? — I am not aware of it. I do not know Brazil sufficiently. 563. Does all the silver from Bolivia go by the Pacific ? — Now I think it does. 564. There are no other mines on the other side of the Andes, the produce of which comes down by the Rio Madalena and the Amazon ? — I am not aware of it ; all we get comes by the Pacific. 565. From what port ? — Different ports ; three or four ports on the coast. Mr. Mulholland. 566. You alluded to one new mine which will produce largely this year, two millions of dollars a month, in the Comstock lode. Are there many other new mines to be opened, do you know ? — None that I have heard of so rich as that. There may be some. 567. That includes the probable increase for this year ? — As far as we are advised. 568. Do you know anything of the amount of silver in circulation in India ; I do not mean the total amount, but its adequacy for the wants of the people ? — It is impossible to say that. 569. Do you know anything of the demand for silver in China at present ? — It is impossible to say. 570. As far as your bank is concerned ? — I was a long time in China ; I have sixteen years' experience, and I know it is impossible to say. 571. What is the present state of the current of silver towards China? — At Canton and the southern ports, Amoy and Foochow, dollars pass current. In the north, Shanghai and Yan-tzi, Syce silver. 572. Is that the extent of it at present? — It is utterly impossible to say. 573. I mean whether the course of exchange at present is such as would require the usual current of silver into China? — No ; the low rate of exchange has checked the export of silver into China very much. Mr. Mulholland — continued. 574. The cause of the dulness of trade has probably affected China as it has India?— I think it has. Lord George Hamilton. 575. You spoke of the increased amount of remittances ; are those remittances chiefly made by persons in the employ of the Indian Govern- ment, or are they by private individuals ?— By both. 576. The tendency the last few years has been, I think, to increase the number of Europeans or British subjects who settle in India? — Yes. 577. Of course the more capital they invest in developing Indian products, the larger would be the amount of remittances they would make home? — Yes, of course. English people, soldiers, civilians, or merchants, or people who settle there and cultivate estates, most of them have their families in England. You are aware that families must be sent home from India at certain seasons, and they all remit a certain portion of their income to this country ; and that, in the aggregate, is very large. It acts exactly as the Council Bills in India ; it prevents a certain amount of silver being required for India. 578. Therefore the amount of remittances from India is likely rather to increase than decrease, in consequence of the greater numter of persons who go out to India, Dot only in Government employ, but for private purposes ?— Yes, I think so. Mr. Christopher Beckett Denison. 579. Have you any knowledge of the form m which the eight millions gross, which the Government of India receive for opium each year is paid to them ? — During all my experience there was a steady drain of either gold or silver from China to India. I never remember the reverse current taking place. I never remember silver or gold going from India to China. There was always a steady drain as there has been from England, for many years into India, of gold and silver from China. I am not prepared with any statistics. I have brought ratber a careful Eeport of the Imperial Mint of Japan, where they tried a gold currency, or a mixed currency, and I will put it in, if you like. They coined there during three years fifty millions of gold dollars, and only thirteen millions of silver, and nearly the whole of that gold has been sent away. — {The same was put in, see Appendix.) Mr. BOBERT WiGRAM Crawfoed, Called in ; and Examined. Mr. R. W. Crawford. Chairman. 580. I NEED not ask you whether you have been engaged for many years in business? — I have been for forty-two years responsibly engaged in business. 581. A large portion of your business has been with the East Indies, I believe ? — I was resident in Bombay from 1833 to 1847, and since that time I have been engaged in business in London. 582. In the East India trade ?— In the East India trade, 583. From the position which you held for some time as Governor of the Bank of England, you have also watched financial affairs ? — Yes. Chairman — continued. 584. You are Chairman of the East Indian Eallway Company ? — I am. I have been chair- man for about 22 years of that company. 585. Your connexion with that company will no doubt enable you to give the Committee some information with regard to the effect which the remittances for those railways have had on the exchanges ? — Possibly it may. 586. Will you, in the first instance, state to the Committee whether you have considered this question of the depreciation in the price of silver, and have considered what causes have led to it? — I have considered it, naturally, as a question very much affecting my own interests and the interests ,; SELECT COMMITTEE ON DEPEECIATION OP SILVER. 21 Chairman — continued, interests of the particular trade in which I am engaged, but I do not profess to have examined it from an economical point of view or philo- sophically. 587. Practically, what causes have, in your opinion, led to the depreciation in the price of silver ? — In the first place, I should say it is due to the great increase that has taken place in the production of silver concurrently with the demonetising of silver in Germany, and in the second place to the prodigious increase in the amount which the Indian Government in this country draws upon India, which is also added to by a large amount of bills of the same character, that is bills representing the interest upon that part of the Government debt which is enfaced for payment in this country, that interest amounting to about three-quarters of a million in the year, and all that concurrently with a great stagnation of trade and a fall in the value of the commodities raised in India and sold in Europe. '588. Can you give any opinion to the Com- mittee with regard to the stagnation of trade ? — As a rule, there is not an article grown in India (there may be one or two exceptions) which can be sold to a profit in this country, and there is hardly a thing that is exported from this country to India that is realised without loss. That may be taken as the condition of the Indian trade for the last three or four years. 589. The effect of that has been, I presume, to a certain extent, that the exports from India have been less in value than at previous times ? — Perhaps I may illustrate that by referring to the value of cotton. I made a memorandum before I left the city, of the price of cotton, taking one standard quality, and I find that whereas that standard quality (I am speaking of Indian cotton only) is worth now about 4| d., last year it was worth 5J d. ; the year before that 5^ d., and three years ago it was worth rather more than Q\ d. If you take the last three years' fall to represent 2d. per pound, that will amount to about 60 s. per bale upon the average of the cotton ex- ported from India to Europe, and as that quantity is certainly not less than one million and a half bales in the year, there is at once, in that single commodity, a depreciation of about four and a half millions in value, which value, if the price had been maintained, would have to have found its way back to India. 590. The proceeds would have had to find their way back to India? — Generally speaking, they would, in the settlement of the balance of trade. 591. Are there any other articles in a similar position ? — I have not taken out the figures of any other article, but I may say that the export of sugar from India to this country has almost entirely ceased, partly owing to the operation of the sugar laws of this country, and also to the fact that the people in India are able to con- sume a much larger quantity of it themselves. Take the case of saltpetre, which not long ago was worth 30 s. a hundredweight ; you can with diflSculty get 17 s. or 18 s. for the same thing now. On the other hand, there has been a cop- siderable increase in the quantity of some goods, such as oilseeds, though a diminution in the value. That is due partly to the increased facilities in bringing those goods to the chief port in India. 592. "Cotton ? — Cotton has been, perhaps, almost a principal commodity which has not returned money for money. 0.77. Chairman — continued. 593. Tea? — Tea has increased very much in- deed in the amount exported from Calcutta; that is to say, increased in quantity, from a very small quantity becoming a large quantity, and that has been fairly profitable, but I should say more profitable to the grower than the exporter. 594. You state generally, that the exports from India have neither been profitable nor have they been equal in bulk to what they were in previous years ? — I should say they have not been profit- able, as a rule ; whether they are equal in bulk it is difficult to say, without going into a minute investigation, but certainly, in the quantity of cotton, they have not been. 595. Cotton being one of the principal articles? — Perhaps the principal article. Mr. Fawcett. 596. Do you mean equal in bulk or equal in value ; your statistics showed a great falling-off" in quantity, but not in quality, did they not ? — I said I found it difficult to give an answer to that question. Chairman. 597. As regards cotton, has there been a falling- off^ in the export of cotton ? — There is a falling-off" now going on, but there has not been a very great falling-off' in the quantity compared witu three years ago, in what you term bulk. 598. In regard to the export of Manchester and other goods to India, has there been a cor- responding falling-off"? — No, for this reason, that India is the quarter of the world to which manu- facturers mostly export goods that they cannot sell here ; or rather, I should say, the excess of their own production, from the extreme facility in obtaining advances of money upon it. 599. May I gather that this is your notion of the situation, that the exports from India have, at all events, fallen off^ in value, that the exports to India have remained stationary, and that there- fore there is a smaller balance to be remitted from this country to India as the result? — I do not know that the exports to India have diminished in value as far as England is concerned, but cer- tainly they have diminished very much in value so far as India is concerned ; prices have fallen very much there. Mr. Baxter. 600. The export trade of this country, as well as the import trade, has been a losing trade ? — Unquestionably. Chairman. 601. If there had been a corresponding falling- off" in the exports to India, to that which we have seen in the value of the exports from India, it would not have any eff'ect upon the balance of trade, would it ; there would not have been that operation on the exchange which would otherwise occur ? — Certainly not. 602. So far as the falling-off in the exports may have been modified by the falling-off in the imports to India, the exchange would remain at the same point ? — It would naturally remain at the same point, if there be no other countervailing considerations. 603. Do you believe that there has been a greater falling-off in the value of the exports from India than in the value of the imports into India in the gross ? — I said that the gross value of the goods imported from India into Europe has D 2 -!- fallen Mr. R. W. Crawford. 30 March 1876, 28 MINUTES OF EVIDENCE TAKEN BEFORE THE 30 March 1^76. Mr. jR. W. Chairman — continued. tr auifor d. f^iig^ Jq ^ much greater proportion than the value of the goods which have been sent out. 604. That diffei-ence, besides other causes, would operate upon the silver markets ; the ba- lance between England and India, so far as it is not affected by the foreign trade in other coun- tries, being sel tied in silver ? — Yes ; it is rather difficult to talk of the balance of trade between India and this country. It is the balance of trade and finance ; the two together. The old term "balance of trade" is becoming very nearly an extinct term. Financing takes the place of trade now in the commerce between a great many countries and England. 605. Can you state to the Committee the way in which, as regards merchandise, the operations between India and Europe are modified by the operations between India and China, for in- stance ? — It has always been a very diflflcult thing to arrive at anything like a result in a calculation of the balance of trade between Eng- land and India ; because there is such a large trade carried on between India and other coun- tries into which money belonging to people en- gaged in trade in this countiy enters more or less. For instance, everybody knows there is a very large trade between India and China. The value of the opium imported from India to China may be taken roughly at 9 to 10 millions a year. There is &■ certain amount of cotton also exported.. Well, China does not send that value back direct to India in goods or silver ; it used to send it back partially in silver, but a very large proportion of it went to supply the funds with which the tea purchases were made for the supply of the New York, Boston, and generally the American markets ; so that it would be im- possible to take into account everything bearing upon the balance of trade between this country and India, unless you also take into account the trade between India and China, and knew accurately to what extent the returns were made direct from China to India in silver, or in the form of goods. Then, again, there is a very large trade between Calcutta and New York, at present, amounting, I should think, to not very far short of two millions in the year. The Americans take a large quantity of oil-seeds from Calcutta, and also indigo and hides; the three together making up, I think, last year, not less than 1,800,000 I. America sends Calcutta nothing at all ; so that all that has to be adjusted through the trade of this country. 606. The Committee would, therefore, be mis- led if it were to be guided in its view as to the exchanges of India simply by the exports and imports between India and Europe alone ? — They would not know all the facts necessary to enable them to come to a proper conclusion. 607. Other facts would be necessary? — Other facts extraneous to the actual trade between the two countries. 608. With regard to your answer tliat finance enters so largely into that which was formerly called the balance of the trade, the loan opera- tions of the Government of India, I presume, have had a very considerable effect upon the exchange between Europe and India ? — The loan operations have a certain effect, because the public securities issued by the Government of India, which are always in the form of promissory notes, form a very handy mode of remittance between the two countries, according to the view that the Chairman — continued. . persons sending them may have of their probable value at the time of their receipt in the country to which they are sent. Then, again, as I said before, about 15^ millions of the Rupee debt of India had been as it is termed enfaced for pay- ment of the interest in this country. The interest, when so paid, is not paid in the form of money here, but in the form of a bill for (lie rupees which would have been due in India upon the note if it remained there. The interest upon 15| millions at from four to five per cent, it will be seen, will amount at once to a sum of probably from six to seven hundred thousand pounds. That is to be added to bills of the same character which the Government themselves sell. 609. These remittances in the enfaced paper to India must not be included in the Governme^it drafts ?— No. 610. They act as much in reference to exchange and import into India as if you had sent Man- chester goods? — Just as much. 611. With regard to the Indian railways you ' are able, as chairman of one of them, I have no doubt, to state the way in which finance arrange- ments between the railways and the Government of India were settled ? — Yes. Those arrange- ments have had a very important bearing upon the question of the exchange between this country and India. Under the contracts, which are con- tracts in sterling, made in this country between an English company and the Government of India in this country, the capital is paid, when raised, into the hands of the Secretary of State ; a very small portion of it, not 1 per cent., has been raised in India. Upon the money so paid into their hands the Government pay interest at the , rate they may have guaranteed, which may be taken almost invariably as 5 per cent. Now the amount of interest which they at present have to pay annually to the railway companies here is 5 per cent, upon about 95,000,000 Z. sterling. That money is earned to a very great extent by the railway companies in India in rupees, but the Government are bound by their contract to pay the money here in sterling. 612. At a fixed rate of exchange ? — At a fixed rate of Is. 10 d. a rupee. That rate was settled by Mr, James Wilson when he was Secretary to the Board of Control, in the year 1849, in the case of the railway with which I am connected, and that principle having been established has been maintained ■ throughout, excepting in the case of the Oude and Eohilkund Railway and the South Indian, the last Companies with which contracts have been entered into, and there the terms are different ; but what they are I do not recollect. 613. The Committee may understand that the operation of bringing home the money is this : the fares and receipts of the railway company, I presume, are paid into the company on the other side in rupees ? — Yes. 614. Those rupees are paid in to the Govern- ment in India ? — They are. 615. The Government in India have got to turn them into gold at some stage in order to pay the interest which is practically guaranteed in' gold in this country ? — They have to convert into some form of sterling money here, the difference between the gross receipts and the charges. 616. The difference between the gross receipts and the charges has got to be paid in this country? — Yes. 617. And SELECT COMMITTEE ON DEPRECIATION OF SILVER. 29 Chairman — continued. 617. And that is paid at the fixed exchange of 1 s. 10 d., however much silver may have fallen ia price ? — Yes. 618. Have the exchanges been affected in any- way by the payments made in this country to the Government during the construction of the rail- ways? — About 40 per cent, of the whole sums paid in are disbursed in this country for the pur- chase of rails, permanent way, locomotives, and plant of various kinds. The remaining 60 per cent, has to be paid by the Government to the companies in India, and to the extent of 60 per cent, the moneys paid by the railway companies have come in relief of the sum which the Govern- ment would otherwise have had to draw upon India, and I think it will be found that one of the causes of the increase of the Government bills upon India has been, that as the construction of those railways has been concluded in India, they have no longer had the moneys paid to them for capital to meet the charge which came upon them for interest. 619. In other words, is this the position : that the difference between the amount paid in by the railways to the Government and the amount spent by the Government in this country for purchases connected with the railways was paid out in India by the Indian Government ? — Yes, the figures being 60 per cent, and 40 per cent, out of every 100 Z. paid in here by the railway com- pany to the Government, 40 1, was expended in the purchase of things required for the railway ; the other 60 I. remained in the hands of the Government to be accounted for in India. 620. Therefore this expenditure came in dimi- nution of the remittances which otherwise India would have had to make to this country ? — That is one way of stating it. 621. It came in diminution of the amount which the Indian Government on this side would have had to draw on the Indian Government in India ? — That is the way in which I should have put it. 622. The construction of railways under this system has practically terminated, has it not ? — Practically it has. 623. The construction of the railways having been completed, there is no longer that relief to the Indian Government of receiving from the railways a large amount in this country, which relieves it from the necessity of drawing upon India? — Precisely so; the construction having finished they have no longer that rate in aid from the railway companies. 624. On the other hand, the lines now having been made, the operation is rather in the reverse direction. The Government is under an obli- gation to pay the interest in this country on the loans which have been raised, and is therefore the payer instead of being the receiver ? — Ex- actly so; the obligation remains on the Govern- ment to pay interest on the capital that has been so raised. At the time when the exchange was fixed at 1 s. 10 d. it was considered that it was a great advantage to the railway companies to get a rupee in India for every 1 s. 10 d. in the hands of the Government here, and the Government were taken to task for having fixed such an ex- change. The answer was, "By and by, when we come to pay in this country the interest, we shall get the pull of the railways ;" but, unfortu- nately for them, this question of the demone- tisation of silver in Germany, and the great 0.77. Chairman — continued. Mr. R. W. production of silver elsewhere has arisen, and the Crawford. railways have got the turn the other side. ~~m~ h 625. The railways first benefited by the rate ^ ^ a J of exchange when they had to place their money in India? — Yes. 626. And now they are saved from a loss which they would have incurred when they have to get their money home? — Just so. I should like to mention one point, and that is that this question of the depreciation in the value of silver affects the railway companies only in one par- ticular. When they make a profit, that is, when their receipts in India are in excess of their charges to an amount larger than the interest, which the Government have to pay here to the companies, there remains a profit. In the case of the railway company over which I am pre- sidino-, we have been fortunate enough for some time past to make something every half-year in excess of the guaranteed interest. The Govern- ment pay us every half-year 2^ per cent, on the capital, but there still remains a certain number of rupees in India over and above that. For that we have to draw upon India ; at all events we have to get these rupees home which we distribute to our shareholders in the form of a dividend in excess of the guaranteed interest, and to that extent we shall have, I have no doubt, to sustain a loss until a better time arises. 627. Can you put before the Committee any statement of the amount of money which has been paid by the railways to the Government during the course of their construction? — Yes ; in Mr. Juland Dan vers' annual report of last year, the total amount raised by the railway companies up to 31st March, was 95,119,119 Z. That has been practically all raised in this country, and paid into the hands of the Secretkry of State during the period to which the figures refer ; that is, from the year 1849-50. The sum paid out of that has been 93,400,000 /., the difference probably re- maining in the hands of the Government. Out of that sum, in round numbers, 40,000,000 1, has been expended in this country, and 54,000,000/. in India. 628. Have you before you the last year's re- turn ? — Yes ; the amount paid here by the Indian Government to the railway companies has been decreasing as construction has been coming to an end ; I mean the amount of the capital returned for expenditure. In the year 1867-8 the amounts paid in this country were very nearly 4,000,000 /. 629. The exchange has been affected by the fact that now the Government has to draw its full amount instead of being relieved of a part ? — I look upon it that it is one of the chief causes which have brought about the present very low exchange. I think probably that it will be traceable when the figures are examined, that the increase of the amount of the drawings upon India has followed the cessation of the supply from the railway com- panies. 630. The question will naturally arise how far that is permanent? — I suppose it must, as a matter of course. 631. Unless the Indian Government tempo- rarily were to borrow in this country? — It is impossible to speak with any confidence on the subject of exchanges in connexion with the pro- ceedings of the Governments, for they are sur- rounded in this country with profound mystery. None of us in the City know how we are to be » 3 -f- guided 30 MINUTES OF EVIDENCE TAKEN BEFORE THE Mr. R. W. Crawford. 30 March 187C. Chairman — continued. guided in anything we do in relation to the ex- changes with India, as far as the transactions of the Government here are concerned. There is a popular impression at the present day that since they have failed to receive money by the selling of bills in India, they are living upon unex- hausted credits which they have received from Parliament. Now, it is known perfectly well that you may go to any broker in the City and he will buy you one or two hundred thousand pounds of Indian Government bonds, but the public do not know what amount is offering in the market. They do not know under what authority the bonds are issued ; they only know that in a matter so very much affecting the exchanges between the two countries, those exchanges are liable to be inter- fered with by some unknown operations of the Indian Government. 632. How does it affect the exchanoes ?— Because if the Government do not obtain money in that way they must sell their bills. 633. Can they sell their bills?— They can sell their bills at a price. Lord George HamUton. 634. If they must sell them, they would have to sell them lower ? — Precisely ; as I said, at a price. Chairman. 635. In that way, you think, at present the exchanges are influenced to a certain extent ? — The exchanges are influenced to a certain extent. If I might supplement my last answer, I would say that when the Government was transferred from the East India Company to Her Majesty's Government in this country, one of the first things that was objected to was the system of open loans in India. In India there was always a loan open at a rate of interest, to which any person might subscribe money and receive for it a promissory note. It seems to me the Govern- ment are pursuing precisely the same course here now. They have an open loan, because anybody can obtain through a broker any securities which the Government are selling. 636. Are you speaking from information ? — Partially. 637. It has a bearing on the exchanges, no doubt? — It has a bearing on the question of the exchange, because as the Government have for a number of years derived their means by the sale of bills in India, if their means are derived from any other source the question of the exchano-e is a good deal affected by it. Lord George Hamilton. 638. I suppose you are alluding to the fact that the Secretary of State for India, the other day, placed a certain number of debentures privately, through a broker ? — I should not have said the other day; I have always understood that that is almost a constant practice. 639. You know that since the Secretary of State ceased to obtain bills at the rate fixed, a certain number of debentures have been issued "> —Yes. 640. It was not merely to that fact you re- ferred, but to what you believe to be the prac- tice ? — I believe it to be the practice of which what your Lordship now refers to is an instance. Chairman. 641. One sometimes reads about the par ot exchange of India ; what would you call the par of the exchange, or should you say there is no par of the exchange ?— I would submit there can be no par of exchange between any two countries whose standard of value and legal tender are dis- similar. There cannot be a par of exchange between this country, where the standard of value and legal tender is in gold, and India, where it is in silver. I was looking at the exact value of the rupee to-day, to see what was the precise intrinsic value of it; but to get at the value of the rupee, you have to take the value of the silver contained in the rupee. The Indian Government had a large quantity of silver sent home, about six years ago, at the time I was governor of the Bank, andwe had the sellingof that silver for them. I have referred to the accounts and I find that silver was sold at something better than 60 d. per ounce. Now, the value is no more than y3 d. ; there is a difference of 11 per cent. Therefore it is impossible to establish a par value between the two countries when, in the course of six years, so enormous a difference as that in the value of one of the precious metals, as it is termed, has arisen. 642. To go back for a moment to your former evidence, apart from the question of demonetisa- tion in Germany, of the increased production of the Californian mines, I understand you to attri- bute a certain importance, amongst the causes for the fall of silver, to the depressed state of Indian trade, and to the increased amount of Govern- ment bills to be drawn on India ? — Yes ; on the one side I consider that there is an enormously increased supply, and on the other side there is a very largely diminished demand for silver ; that diminished demand arising not so much from the excessive increase in the production, as from separate causes altogether. Mr. Christopher Beckett Denison. 643. An enlarged supply all the world over, or an enlarged supply here ?— An enlarged supply in the world. Chairman. 644. So far as the fall may be due to the de- pressed state of trade, I presume you would con- sider that a temporary cause; so far as the increased drawings of the Government in India through the accumulated debt of India, would you believe it to be a permanent cause?— I cannot see any grounds upon which we can look for any early change. I suppose the supply will continue to be excessive. I suppose the- Germans will go on with their course of demonetisation ; and I _ suppose the Government in this country will still have to draw very largely indeed upon India. 645. I did not allude to the permanent or tem- porary character of the supplies, or to the opera- tions m Germany, but I meant with regard to the other two factors in the sum, namely, the de- pression m trade, and the increased drawings of the Government on India. "With regard to those two causes the depressed state of trade might be considered, I presume, a temporary cause?— I hope so, I am sure. 646. But the amount to be drawn by the In- dian Government may be looked upon, I pre- sume, as permanent, unless it is modified by loaa arrangements, taking the tribute to be paid by Jii(Ka SELECT COMMITTEE ON DEPEECIATION OF SILVER. 31 Chairman — continued. India to this country in the shape of interest payable upon her debt, the paymentfor troops, and various items, which comprise the 15,000,000 1. ■which the Government have to draw ; you are not aware that there is anything to diminish that sum? — I am not aware of any circumstances likely to lead to a diminution of that sum. Al- ready it forms about one-third of the whole revenue of India. Mr. Christopher Beckett De.nison. 647. "Would not the introduction of a double currency into India alter the calculation?— I think a double currency is a financial heresy, which can receive no support. Mr. Fawcett. 648. With regard to what you said just now about the Secretary of State for India having an open loan here like the East India Company used to have in India, if he raised money on deben- tures he does not avoid the difficulty which India will have to bear with reference to the deprecia- tion of silver ; it only postpones it, because the interest will have to be paid ; if it is an interest of 4 /. on 100 L, it requires so many more rupees, if silver is depreciated, to be sent over to pay the interest on each 1/. ? — It will not avoid the diffi- culty, it merely postpones it. It may be stated in this way : I apprehend the Government of India have now not raised any money for the last three months by the sale of their bills in India ; that would, I think, amount to 4,000,000/. of money. If the Government of India, not having to pay these rupees in India, were with those rupees to pay off the rupee debt in India, they would then transfer their debt from a rupee debt in India to a sterling debt in this country. The relief they would get would be only temporary, because they would have in time to come to send the money home to pay the interest. 649. The difficulty would not be avoided by raising what is called a sterling loan in this country, because the interest on that would be paid in the same way ? — Yes ; the money must come from India to pay it. 650. That does not avoid the difficulty, it only postpones it ? — That is all. 651. Have you any idea as to the amount that has been raised by these debentures ? — I should think a motion in Parliament would probably produce the figures. There used to be, I remem- ber, when I was in the House, an account laid before Parliament every year, a series of accounts, showing the amount which the Secretary of State was authorised to raise under existing powers. For instance, I believe when the Government was transferred there was a sort of general credit given to borrow money, to the extent of 2,000,000 L, in the event of the Government at any time being in difficulty. There was autho- rity given, not more than four or five years ago, to borrow money generally, for 8,000,000 /., of which one-half was ear-marked for the state rail- ways; and I think authority was also given to the Indian Government to raise money for the relief of the famine. There is a popular impres- sion that the Government here is, in point of fact, living upon those unexhausted credits at the present time. Lord George Hamilton, 652. In your answers to Mr. Fawcett, .i gards the debentures, of course you assum Lord George Hamilton — continued. rale of exchange would remain the same? — I assume that there would be a very adverse ex- change, as at present. 653. I m.ean as regards the debentures; of course, raising the debentures is simply a tem- porary relief? — That depends upon the length of time the debenture has to run. 654. It might so happen, if the rate of exchauwe rose afterwards, that it might be a saving? — It might ; on the other hand it might not; it might become worse. Mr. Fawcett. 655. If silver became more depreciated it would increase the difficulty ? — Yes. Mr. Christopher Beckett Denison. ,, 656. To go to another point, do you know in what form the eight or nine millions of money received by the Indian Government for their opium is received? — The Indian Government derive their opium revenue in two different ways. In Bengal, the produce of Patna and Behar is sold at public auction, and the money is paid for it in rupees. The produce of Malwa, which is a foreign state, is only allowed to come through the Bombay Presidency for export upon payment of a pass duty, that pass duty being about the equivalent of the profit that the Government realises in the case of the Bengal. 657. The last witness says that for a long series of years there had always been large remittances of the precious metals from China to In;3ia, but he had never known an instance of its being the other way ; of the exportation of the precious metals from India to China ; would that be your experience ?-^Quite so. I should say a great deal of the proceeds of the opium which is sent from India to China, belonging to private merchants, comes back in the form of silver, at least it used in my time ; the remainder went to provide the funds with which the American trade with China was carried on to a great extent. Mr. 3Julholland. 658. When you allude to the diminished amount of imports and exports in the Indian trade, do you mean since March last year? — No, I am speaking of it generally. I am speaking rather of the diminished values received here for the same quantities of goods. 659. According to the returns, the trade up to the 31st of March last year showed no diminution whatever, but rather an increase? — Do you mean the export of goods from this country ? 660. No, the imports into India? — That is the same thing. 661. They were larger than they had ever been before for ten years with the exception of one year? — They are going on very largely now, taking the export of Manchester manufactured goods. 662. The exports to India were larger than they had been for ten years except in one year? — They may have been larger, and they may not have produced an equivalent amount in India. 663. The diminution was in the value, not in the volume ? — I should say so. 664. With respect to the effect on the price of silver, I believe that the imports of silver into India during the year ended March last were rather larger than usual ; they were larger than they had been ? — You mean into India generally, and from aU quarters ? D 4 1- 665. Yes ?— Mr. R. W. Crawford. 30 March 1876. 32 MINUTES OF EVIDENCE TAKEN BEFORE THE Mr. K. W. Crawford. 30 March 1876, Mr. Mulholland — continued. 665. Yes ? — There may have been a very large quantity from China in return for opium. 666. I thought you spoke of the whole trade of India ; I am not exactly aware of what ques- tion you may be referring to, but I probably had in my mind the trade between this country and India alone. 667. The imports of the precious metals into India in the year ending the 31st of March last, were 8,140,000 Z. against 5,790,000/. the previous year, and 4,550,000 Z. the year before that, so that no eifect on the silver market could have been produced by the dulness of the Indian trade ? — The exchange did not fall materially at all before March last year ; it began to fall about that time. 668. The increase in the Treasury bills seems to be the effect of the change in the current of the railways; the four millions a year that used to go from this country to India has now been replaced by five millions a year going back for interest, so that that makes a difference of nine millions a year ? — The one paid the other. Lord George Hamilton. 669. The company of which you are chairman is, I believe, a very prosperous one, and has for the past few years paid surplus profits? — Yes. 670. The more Indian railways pay the greater will be the amount that will have to be remitted here ? — Exactly so, in the shape of surplus profits. 671. Therefore, although the Treasury in India will pay less on account of guaranteed interest, yet the actual amount of remittances in one shape or another made from India here will be greater? — Provided the companies progress in prosperity. Chairman. 672. In fact an immense progress in the receipts of the railways would have the eflfect of complicat- inc the situation as regards remittances? — The effect of greater prosperity in the railways would be that more money would have to be drawn to this country, the shareholders being all here. Mr. Cave. 673. You said that the laws in this country affect the import of sugar from India here ; what do you mean by that ? — The honourable Member and myself were members of a Committee of this House some few years ago ; I forget the year; it is most distinctly in my recollection that in consequence of the legislation which ensued after that Committee sat, the export trade of India in sUgar was very seriously affected. 674. Then you do not mean late legislation, because now,, of course, there is no duty on sugar from any part, or do you refer to the French drawbacks? — That is a very large question, and if we were to go into the whole French question, it might last till the Day of Judgment, Mr. Mulholland. 675. Do you think the cessation of Govern- ment expenditure on railways has much to do with the present balance of trade in India? — I am not aware that the Government expenditure has ceased to any very great extent. Put it the other way, the construction of railways has been of enormous value to the country. 676. The withdrawal of the stimulus has some- thing to do with the present state of things ?— To a certain extent. The money went principally in wages to persons who consumed very little beyond their food, and who were used to but a scanty amount of clothing. SELECT COMMITTEE ON DEPRECIATION OP SILVER. 33 Thursday, 6th April 1876. MEMBERS PRESENT Mr. Baxter. Mr. Cave. Mr. Christopher Beckett Denison. Mr. Fawcett. Mr. Goschen. Lord George Hamilton. Mr. Harmon. Mr. Kirkman Hodgson. Mr. Massey. Sir Charles Mills. Mr. Mulholland. Mr. Shaw. The Eight Honourable GEORGE JOACHIM GOSCHEN, in the Chair. Mr. Henrt Waterfield, re-called ; and further Examined. Chairman. 677. I believe yon are at the head of the Statistics and Commerce Department of the India Office ? — Yes. 678. Yon have had papers examined in the office, which have been presented to Parliament, relating to the production and amount of gold and silver ? — I have. 679. You have drawn out from them, the re- ports from Consul Booker of the trade of Cali- fornia in the year 1871? — Yes; and for 1872 and 1873 ; Mr, Pakenham, on the commerce of the United States, in 1873 ; Consul General Archibald, on the trade of New York in 1873; and Mr. Watson's Keport on the finances of the United States for 1874 ; I have also taken from the Board of Trade statements the registered imports of silver coin and bullion from the United States into the United Kingdom. 680. Will you put those Papers in ? — Yes (vide Appendix). 681. You have also extracts from the general [Report of Mr. Bunch on the United States of Columbia in 1873 and 1874?— I have. 682. You have also extracts from a Report by Mr. Plunk ett on the Mines of Japan, presented to Parliament ? — I have (vide Appendix). 683. You have also extracts from statistics concerning the Territory of Utah, for 1872-73, by Mr. Bentham Fabian ? — I have. 684. You have also prepared an extract from the "San Francisco Journal of Commerce and Price Current " of the 12th of January 1876, which gives a report and annual statement of the precious metals by the superintendent of the Express Company ? — Wells, Fargo & Co. are the Express Company, and the Report of their superintendent, Mr. John J. Valentine, is quoted ; but the whole newspaper seems to contain more than that; it is a compilation made by the editors of the paper of all the par- ticulars which they could obtain on the subject of the movement of metals in San Francisco in the last year. Chairman — continued. 685. It is an elaborate Table, apparently care- fully prepared? — It is carefully prejoared. There were evidently some misprints of figures, which I have corrected as far as I was able ; but iu some cases I have been obliged to put notes, to show that the totals are incorrect. 686. You have looked at the totals and ex- amined them, as far as you have been able? — Yes. 687. I think you have also, at my request, compared the various statistics which have been put in with regard to the exports of gold and silver to the East? — ^I have, as shown in the three circulars which you placed at my disposal; Mr. De Quetteville's Indian Circular,;Messrs. Pixley and Abell's Table of the Fluctuation in the Price of Silver, and Messrs. Page and Gwyther's Com- parative Statement of the 10 Years' Exj)ort of Bullion and Sovereigns to the East ; and I have added to that a comparison with the statistical abstracts for the United Kingdom presented to Parliament (vide Appendix). 688. You have brought together in this Table, for the convenience of the Committee, all the statistics that have been placed before us from various sources, in order to see how far they tally, or how the differences can be explained ? — So far as they relate to the exports to the East. There are two other papers which I have extracted ; one is from the Report of Dr. Linderman, the Director of the Mint of the United States ; the other is from the Biennial Report of Mr. Whitehill, the State Mineralogist of the State of Nevada, for the years 1873 and 1874. 689. Those Reports give details, do they not, with regard to the coinage in the United States, and with regard to the movement of the precious metals ? — Mr. Whitehill's Report gives details with regard to the production of silver rather than the coinage ; the Report of the Director of the Mint goes into coinage statistics. Mr. ir. Waterfield. 6 April 1876. 0.77. E 34 MINUTES OF EVIDENCE TAKEN BEFORE THE Mr. GusTAVUS Pietsch, called in ; and Examined. Mr. G. Pietsch. 690. Chairman. You are the Manager of the London GApril 1876 t)ranch of the Deutche Bank ? — Yes. 691. Will you state the nature of the establish- ment in Berlin 'f — We are a German Joint Stock Bank ; the head office is in Berlin, with various branches in Hamburg, Bremen, London, and for- merly in the East, but the eastern branches we have given up. The nature of the business is common banking, exchange business, discount, loans, bullion, and so forth. 692. The branch in England, which is under your management, has conducted, has it not, the sale of a portion of the silver which has been sold by the German Government ? — Yes ; we have sold it. 693. The sale was placed in ihe hands of the Bank at Berlin, and you acted for them in Lon- don ? — Yes. 694. As far as you know, has a large portion of the silver passed through your hands ? — Yes ; the amount which has passed through my own hands is very neai'ly 3,000,000 1. in two years. 695. Have you given your attention to the subject of the depreciation in the price of silver? — Yes, I have. 696. Have you studied it, even before you had the sale of silver? — Yes. I may mention hero, that in former years I was office manager of E-othschild's in Paris, and subsequently the chief agent of the Comptoir d'Escompte ; and I have spent many years in India, France, and England, and 1 am intimately acquainted with bullion operations, exchange, and everything relating to it. 697. You studied them both in England, France, Germany, and India?. — I left Germany very early ; chiefly in England, France, and India and China. 698. Have you examined the official statistics presented by the German Government with re- gard to the calling in of silver? — I have. 699. Can you state to the Committee the original amount coined ? — Y es, I can. I will state the amounts in sterling in round numbers ; everything under 500,000/. I will omit, and over 500,000 Z. I count for 1,000,000?. The total amount of coin, that is to say, old coins which had been coined by the separate States up to the end of 1873, amounts to 90,000,000/. sterling. 700. The coinage of the thalers included in that statement began in the year 1750, did it not ? — Yes ; of course everyone knows the con- fusion of coin in Germany was great; but, in order to simplify the matter, I am simply speak- ing of the leading coins, the thaler and florins. The thaler formed by far the greatest quantity. The quantity of thalers coined up to the end of 1873, that is to say, the quantity coined of all those coins which were in circulation at the end of 1873, amounted to 74,000,000/. sterling. Next come the florins ; that is the South Ger- man currency. They amounted to 10,000,000/. sterling ; that is the bulk. 701. The coinage of florins did not commence as early as the coinage of thalers ? — No, it ex- tended over about 40 years; 1837 to 1873. The next is in Hamburg and Lubeck. We had a silver currency known under the name of marks Chairman — continued. current ; that was very little ; that was 1,000,000/., or a trifle more. Besides the thalers and florins and the marks current, we have the fractional currency of Germany, the groschen and the kreutzer, representing 4,000,000/. sterling ; consequently, if you add together 74,000,000 /. of thalers, and 10,000,000 /. of florins, 1,000,000/. of marks current, and 4,000,000/. of fractional currency, you will find it amounts to within a fraction of 90,000,000/. sterling. 702. That is the figure which has been coined in Germany, and which would be in circulation, less the amounts which may have been melted down, or lost, during the period from 1750 to the year 1873 ? — Yes ; it does not represent the total quantity of German coins coined, but it represents the quantity coined of those coins of which any was left in circulation at the end of 1873. 703. Have you studied the question as to how much of the original amount may have dis- appeared in the course of time, and how much may actually remain in circulation ? — Yes, I have. I may mention here, that about two or three years ago, when the subject was first spoken about,' there was a very exaggerated idea of the amount which would ultimately remain for sale, and that has given rise subsequently to a great depression of the silver market; itwais stated that out of 90,000,000 /. coined, about one- third had been lost, and 60,000,000/. remained in circulation, out of which 20,000,000/. would be required for the new coins ; and it was sup- posed that 40,000,000/. would remain for sale; some people spoke of 50,000,000 /. 704. How have you tested those figures? — Since then the withdrawal of the old coins has made progress, and I have examined the official returns which have been submitted to the Ger- man Reichstag. We know already, to some extent, how much has disappeared. 705. They have commenced, have they not, calling in the florins ? — They commenced with calling in the florins, and, as far as the official accounts go, we know already that one-third has disappeared from circulation by having been melted down, exported, and so forth. I thought you would ask me the question, and I have brought the official papers which have been sub- mitted to the German Parliament, but they are in German. If anyone will compare them, they will find that my figures are the official figures submitted to the German Parliament. 706. Is the operation, so far as the florins are concerned, fairly complete ? — Yes, almost en- tirely complete. 707. The German Parliament has been able by that to ascertain how much has disappeared of the total coinage of florins ? — Yes ; that is to say, in the last Keturn submitted to the Parlia- ment they speak of a certain series of florins. The florins have been almost entirely withdrawn. The accounts are not yet quite complete, but as far as they go, the one-third has disappeared; 32 per cent, is the exact amount. 708. Will you recall to the Committee the date at which the florins commenced to be coined? — I have also the official Returns with me which I can SELECT COMMITTEE ON DEPRECIATION OF SILVER. 35 Chairman — continued. I can submit to you, from which it appears that they were coined from 1837 to 1873; everything comes to the end of 1873 ; that is the time when the old system came to an end. 70&. So far as florins are concerned, the esti- mate of which you speak, that one-third has dis- appeared, would be correct ? — Yes. 710. Will you state your views as regards the thalers ; has the retirement of the thalers pro- ceeded as far ? — No; the thalers have only been partially retired ; and in order to render myself an account of the probable result I have looked into the figures, or into the particulars given, of the coinage of the thalers ; and I find that the coinage began in 1750 up to the end of 1873 ; and consequently it extends over a period of 123 years. 711. While the florins only extended over a period of 40 years ? — Yes, and consequently, rea- soning by analogy, I believe that if in 40 years the one-third part has disappeared, at the end of a century the whole quantity ought to have dis- appeared. But we can admit that some remain, because the whole quantity had not been coined 100 years ago ; that is just a difficult question to decide^ and no one cau tell how many thalers really remain in circulation before the operation is terminated. 712. Before you proceed to give us your rea- sons as to the disappearance, will you state what has hitherto been done in the retirement of the thalers ; it has consisted hitherto mainly of two- thaler pieces, has it not? — Yes; the quantity of thalers retired, so far represents in English money, about 7,500,000/. ; and all that I take from the official Returns. 713. What causes would you state as having afiected the disappearance of a certain number of the thalers between 1750 and 1873 ? — Here I may state that at first, when I heard that the quantity remaining in circulation was much less than it was at first anticipated, I was very much surprised ; and I could not render myself an account ; but, however, in thinking the matter over I believe the reasons why such a great quantity has disappeared are the following: in the first instance during the last century a great many wars have taken place in Germany. 714. During the latter part of the last half century ? — 1750 was the time of the Seven Years' War, and subsequently we have had the French wars, the invasions of Napoleon, and it is a well-known fact that during the invasions of the French very large amounts were abstracted by contributions, by pillage and by indemnities, because the Frenck always followed the system of letting the vanquished countries pay for the expense of maintaining the armies, and I have often heard, for instance, when Berlin was occu- pied by Napoleon in 1806, that very heavy war contributions were levied ; I am not in a position to say exactly bow much that may amount to, but there is not the least doubt that the amounts were very considerable ; it is an historical fact. 715. You think a certain amount of that was caprried away out of Germany ? — I think so cer- tainly ; that is one reason ; then the next reason is. that it is also a well-known fact that a very large quantity was melted down and exported as a bullion and exchange operation. 716. At one particular time> do, you mean? — No,, at various periods. It is a. well-known fact 0,77. Chairman — continued. that whenever here in London an Indian demand created an inquiry for silver, the stock of bar silver in the Bank of Hamburg diminished, and any bullion seller can tell you that ; that at various times silver arrived in London from Germany ; in point of fact it is the same in every country, in France, England, and Germany, when- ever there is a small profit, coin is exported. 7 1 7. Do you mean that besides bar silver coming from Hamburg, coin has come from Ham- burg? — I think so, because when you look through the import lists in London you find that in a cer- tain number of years a large quantity has arrived, and it is a matter of course that part must have consisted of coin melted down, because the stock of silver bars in Germany could not liave supplied the total quantity. 718. Can you put in a Statement of silver im- ported into London from Germany, and exported from London into Germany during a certain period ? — Yes ; I have been looking through the lists, and I find the Custom House returns are not very reliable. I have reason to think that gold sometimes mav be declared for silver, the freight being paid on the value; but I have been looking through many of them, and I find the Tables pre- pared by Messrs. Pixley & Abell, the well-known bullion brokers, are the most reliable; at any rate, they particularise the silver arriving from the Hanse Towns in a certain given period, but they do not go back beyond 1861. I find that, according to their Tables, from 1861 to 1875 about 10 mil- lions arrived from Germany; part of this 10 millions must have consisted of bars, being the proceeds of coin melted down, because the stock ■of bars was not large enough to supply the quan- tity. 719. How much has gone from London to the Hanse Towns in the same period ? — In the same time a larger quantity has gone, and that would apparently prove that during that time the quan- tity of silver in Germany has increased ; that during the same time 12 millions went from here to Germany; part of these 12 millions were, no doubt, converted into coin in Germany. In cal- culating the total amount of coin in existence in Germany, we must not add these 12 millions. Whatever was coined of this 12 millions there is no evidence to show, but, whatever it is, it must not be added to the total quantity of coins coined, because that is included in the 90 millions of which I have spoken before. 720. But a portion of the silver which came back from the Hanse Towns, you consider would be the result of coin which has been melted down ? — Yes, I have not the least doubt about it, because I have been engaged in operations of that kind myself. 721. Was not one of the public reasons assigned by the German Government for the steps they have taken in demonetising silver, that their coinage suflPered when there was a demand for silver from India ? — That I really cannot say. 722. When the prices for silver were higher elsewhere than in Germany the German coin would be melted down and exported in bar silver ? — Naturally. 723. And so far as that operation has been carried on since the Germans have begun to coin, so far deductions must be made from that stock of dollars which might be assumed to be in existence if no such operations had taken place ? — Quite so. E 2 H- 724. Are G. Mr, Pietsch; 6 April 1876. 36 MINUTES OF EVIDENCE TAKEN BEFORE THE Mr. Pietsch. 6 April 187^. Chairman — continued. 724. Are you able to put in detailed lists of exchange variations which would show that such operations could be performed with profit? — Yes ; I thought you would ask me the question, but the time was a little too short to prepare a list ; I shall be most happy to supply it. I will prepare a list showing the value of sterling ex- change in Germany as compared with the silver price in London, and there you will see that practically there was a profit on the operation of melting down the German coin and importing it to London. 725. Can you state any other cause for di- minishing the total amount of silver in circula- tion ? — Yes ; it is also well known that a great quantity was melted down for private purposes ; being converted into plate, spoons, and forks. la South Germany, where they are Catholics, a great many church ornaments were made. 726. Can you say positively that such opera- tions have taken place ? — Yes, I know that from ■ my own experience. 727. That ornaments would not only be manu- factured from bar silver exported, but occa- sionally they would melt down coin?— Yes, I know it as a fact. 728. Is that recently, or do you know it as an historical fact ? — I believe it has been going on ; I am not in a position to say at what particular time it may have occurred, but it has always been going on. 729. Are there any other causes for the dimi- nution of the circulation ? — Yes. We now come to the balance of trade in Germany, and it is also well known that the balance of trade was against Germany during many years. The balance of trade itself does not decide the ques- tion. We must take the balance of international indebtedness. Even if we take into account that Germany has to receive every year the very large amounts for interest on foreign stocks which she holds, such as American stocks, it does not change the general balance of indebted- ness in Germany's favour. We always find in looking through international accounts that according to all probability Germany must have paid certain amounts of importance for the pui'- pose of settling her international indebtedness. How much that may be it is very difficult to say, because the German statistics as to export and import are very imperfect; but it is a well-known fact that the balance is against Germany, and how could she settle her indebtedness without losing part of her metallic currency ? I believe that is a reason which may be given ; I have not heard it mentioned before. 730. This cause would surely be practically the same as that which you have mentioned in another form, the export of bullion operations ? — Yes, it is the same thing. It is an operation which may have been carried on by bankers and bullion dealers for the purpose of realising a profit, and the coin may have been exported by people owing money to foreign parts and having no other means of remittance. 731. It would never be profitable to undertake exchange operations except at that time the ex- change were unfavourable in consequence of there being payments to make ?-. — Quite so. 732. Is there any other cause ''. — Not that I can think of just now. Chairman — continued. 733. There is the subject of emigration ? — Yes; it is a well-known fact that emigration has been going on from Germany to America for many years, and the number of people who have emigrated is very great, consisting chiefly of agricultural labourers and peasants. I believe, from what I have seen myself when I was in New York, seeing the Germans arrive, that they all have a little money in their pocket. Comraoa people have no idea of transmitting money by letters of credit or bills of exchange ; each of them carries away a few dollars or florins in his pocket, and consequently we may presume that many millions have disappeared in that way, though I have no statistics of emigration just now at my disposal to show how much that maybe. 734. This emigration has been going on for many years? — Yes. I recollect when I was a young man they were emigrating in great numbers. 735. When in New York you positively knew that a certain amount of silver coin was brought with them by the emigrants ? — Yes. 736. How do you sum up your estimate? What result do you consider these causes may have had in diminishing the amount of silver in circulation in Germany ? — As regards the florins I have already said that one-third has disappeared. From all these various causes, I have arrived at the conclusion that more than half of the thalers must have disappeared. I am confirmed In my opinion by the fact that in official quarters In Berlin they always say it is much more tlian one- half has disappeared. They estimate at from three-fifths to two-thirds. We must take into account that they have much more detailed ac- counts than I possess. They know how much has been coined of each series In each year, and they can make comparisons between the quantities originally coined of certain years and the thalers retired. 737. Are they withdrawing them by series ? — Yes. They begin with the oldest first. They began with the very old thalers, and with the fractional currency. The thalers which remain in circulation are thaler pieces which pass for three marks ; consequently those thalers as long as they circulate represent three marks or three shillings, and one-third of those thalers represent 1 s. one mark. So they have done away with all the old coin and fractional currency, and they have kept the thaler pieces and fractional thaler pieces. Knowing hov.'- much has been coined of tliose coins they can make comparisons, and though they do not give any particulars they always say that the amount disappeared is as I have stated. Con- sequently I believe we are justified in supposing that out of the total quantity coined three-fifths have disappeared ; but that is a thing which is quite an approximation— it may be more or less ; in official quarters they pretend it is more. 738. The broad result of your argument is that the thalers having been coined very much longer than the florins, and the florins showing by the actual result that one-third has disappeared, you may assume that considerably more has disap- peared of the thalers ?— Yes. Besides that there are the Hanse Towns ; it is Immaterial how we estimate it. The total quantity of marks current was merely a million and a fraction. Out of that, supposing that one-third has disappeared, same as the florins, two-thirds would remain. Then as SELECT COMMITTEE ON DEPRECIATION OP SILVEE. 37 Chairman — continued. as to the small coin, it is quite evident that a very large quantity has disappeared. Some of them were so old that travellers in Germany may have noticed it. They are so defaced that you cannot distinguish by whom they were issued. Out of 4,000,000 one-half must have disappeared. 739. Calculating on the foregoing basis, taking the original amount of the old German silver currency as you have stated it, its diminution, and the balance remaining in circulation towards the end of 187 3, what then is the broad result ? — I find that out of an original amount of 90,000,000/. 51,000,000 Z. have disappeared, and consequently 3 9,000,000 Z. is the probable amount actually re- maining in circulation at the end of 1873, when the monetary reform began. 740. What is the quantity of fine silver con- tained in this sum of 39,000,000 /. ? — Of course, in order to know how much silver there will be available for sale, we must bear in mind that the surplus of 39,000,000/. is a nominal value, and that the German silver coins consist mostly of silver 900/1000 fine — or nine-tenths. The thalers consist partly of old thalers and of new thalers, and the old thalers contain 750/1000 parts of fine silver, and the new thalers contain 900/1000 parts. Then the florins contain also 900/1000 parts fine and the marks current are 900/1000 parts fine. 741. I see by a Paper you have given to me that you estimate the 39,000,000 I. to be thus com- posed : Thalers,29,700,000Z.; florins, 6,800,000/., Hanse Towns currency, 800,000 /., and small coin, 2,000,000 /. What sum would the 29,700,000 /. worth of thalers yield on your estimate ? — They would yield 26,000,000 /., as far as can be calculated. 742. And the 6,800,000/. worth of florins?— They are 900/1000 parts fine, and they would yield 6,100,000/. 743. And the 800,000/. worth of Hanse Towns currency ?— They are 900/1000 fine, and that would represent in round numbers 700,000/. 744. And the 2,000,000 /. worth of small coin ? — They are quite of low metallic value; they contain on an average not more than one-third of pure silver; that would make consequently about 700,000/. 745. How much would your 39,000,000/. yield in actual pure silver ? — £. 33,500,000. 746. Your view is that the amount actually to be dealt with in Germany was 33,500,000/. of pure silver? — Yes. 747. How much of that will be absorbed by the new Imperial silver coin ? — So far it has been de- cided that the new Imperial silver coins are to be coins at the rate of 10*. a head for a population of 42,000,000 ; that would consequently be 21,000,000/. The new coins are also 900/1000 parts fine, and consequently these 21,000,000/. would represent 18,900,000 /. of pure silver. I may mention here that it strikes me that is some- what low, and that ultimately they may find the necessity to coin more ; consequently the amount may be more than I have stated, but, for the present, it is the intention to coin at the rate of 10*. a head. 748. Your figures give the surplus of pure silver, how much?— £.14,600,000. 749. That is equal to English standard fine- ness? — The English standard fineness of silver is 37/40; that makes the English standard silver 15,800,000 /. 0.77. Chairman — continued. Mr. 750. How many sales have been effected up to G. Pietsch. the present time? — ^ According to the Parlia- r~„ mentary Eeturns I have got they have sold to the ° "^P"' '''^o. end of September an amount which is equal to 5,000,000 /., and since then there are no official returns ; but reasoning from what has occurred before, we may say that no more than perhaps one to two millions have since been sold; the total sales up to dates may be estimated at from six to seven millions ; that is a guess ; it is an amount which I cannot say exactly ; I only know that up to the end of September five millions were sold, but it is almost certain no very large quantity has been sold since ; it cannot be more than two millions. 751. According to your calculation there would remain to be sold about nine or ten millions sterling ?— Nine millions ; I rather think It is somewhat less, because I have not taken into account the loss of weight which would arise from wear and tear, and from my experience I find that silver coins in 25 years diminish at least by one-half per cent., especially the small coins, which diminish quicker than the large ones, because tlie whole surface is touched with the finger. 752. In what coins would what remains over mainly consist? — They consist of thalers and fractional thalers ; all the rest has dis- appeared. ■ 753. What Is the actual stock on hand avail- able for sale at present ? — That has only lately been obtained ; I always urged upon tlie German Government the advlsableness of seeing how much there was ; I think It would have been much better for the silver market ; however, we never knew anything ; so far the German papers con- tain every week the amount of old coin with- drawn, the amount of new coin coined, and now for the first time they have given us the stock which is available for sale ; of course there is a certain stock which is intended for coining pur- poses, and then there is a stock available for sale; according to the latest letters which I have received it is 850,000 /., so that that is very little. 754. I presume that an addition Is made to that almost every day or every week ? — Yes. 755. Through the thalers that are presented? — Yes ; the withdrawals are going on rapidly, and there is a great desire to bring tlie whole operation to a rapid close, but it cannot be very much accelerated, because they cannot withdraw the old coins before they have coined a sufficient quantity of new coins to replace them, and that is a gigantic thing. They have coined almost a sufficient quantity of gold ; but as regards the coining of silver and copper coins it is something enormous, and it may extend over some years, on account of the limited minting capacity of the German mints; and consequently the with- drawal of the old coins can only be effected slowly. 756. Can you put in a statement of the old German silver coin retired from circulation up to the end of February 1876, as appears In the official statement published in the German news- papers ? — Yes ; the total amount up to the end of February, that is the last Return, was 1 9,800,000 /. 757. And of new German silver coins that have been made up to the 18th of March 1876 ? —£. 9,800,000. E 3 -^ 758. Tho 38 MINUTER OF EVIDENCE TAKEN BEFORE THE Mr. G. Pietsch. Chairman— contirmed. 768. The total amount of new German silver coin to be coined you have stated at 21,000,000 1. ? 6Aprili876. _Ygg 759. £. 9,800,000 has been coined ? — Yes. 760. How much does there remain to be coined ?— £. 1 1,200,000 ; so that the operation of coining the new silver coin is about half com- pleted. 761. How long have they been coining that 10,000,000/., in round numbers, which has been coined already? — I think they began a little more than two years ago. 762. Have they been able the process latterly ? — Yes ; new mint in Hamburgh now to accelerate there is one I think there are m all six or seven. The operation _ is a little impeded by the necessity of melting down the old thalers; their melting capacity also is limited. I may mention that the thalers intended for sale must be melted down and refined to be fit for the Indian market; their meltino- and refining capacity is hmited. Those are reasons why the operation goes on so slowly. 763. Can you give the Committee any mfor- mation as to the Austrian thalers ? — Yes. 764. The Austrian thalers have not been in- cluded in the 90,000,000 1. of which you spoke ? — No ; the 90,000,000 I. are German coins, pro- perly speaking. 765. A portion of those Austrian thalers cir- culate in Germany as a legal lender?— So they do ; that is in consequence of the monetary con- vention which was passed between the German States and Austria in 1857. The object of the monetary convention was to assimilate as much as possible the silver currencies of the two countries, and Austrian florins were then ad- mitted as a legal tender in Germany. 766. I presume, as they have a large paper currency in Austria, a large quantity of those Austrian thalers found their way from Austria into Germany ? — Quite so ; they are circulating very freely. 767. What is the amount coined up to 1867 ? — Four and a half millions sterling. 768. It is possible, is it not, that the German Government may ultimately have to deal with them to a certain extent ? — Yes, it is very probable. 769. In that case you would have to add some millions to the amount of silver which would be set free by the coinage operations of the German Government ? — Yes. Mr. Fawcett. 770. You have referred to several causes which account for the diminution of the German silver coinage, sucli, for instance, as the balance of trade, or, as you describe it, the balance of inter- national indebtedness, and also emigrants taking away silver ; when gold is substituted for silver, those amounts which used to be paid in silver would of course have to be paid in gold ? — Yes, I daresay. 771. Have you made any estimate of the amount of silver which has been exported from Germany, and of the amount that has been taken by emigrants? — No, I have not had an opportunity. 772. Whatever the amount was, supposing. Mr. Fawcett — continued, we will say, it was 2,000,000 Z. sterling a year, for the sake of example, if gold takes the place of that, that would represent so much less demand for silver ? — Yes. 773. Have you calculated how much silver would maintain the German coinage, and supply the other wants of Germany for silver; how much she annually required before the demone- tisation scheme commenced; how much she requires for various purposes to keep up her coinage, and in the aggregate ; _ you said you could not give me the particular items, but can you tell me how much silver Germany actually required to keep up her coinage before the demonetisation scheme commenced, and to adjust the balance of trade?— No, I could not tell you that. 774. It is evident, looking at the effect of this demonetisation scheme on the future price or value of silver, that we have not only to consider the amount of silver which would be actually brought into the market, which j'ou have been selling, but also this very important fact, that in future the demands of Germany for silver, or her want of silver, will be very much less than it was before ? — Yes, certainly ; but how much those requirements will be in the future, I am not prepared to say just now. Of course a limited quantity will be required. 775. Therefore, as far as Germany's change of policy affects the future value of silver, you may say two causes are in operation, one of them a temporary one, namely, that she is throwing a, certain amount of surplus silver into the market; another cause will be permanent and lasting in its operation, namely, that she would require less silver than she required before? — Yes. 776. I understand you, that the depreciation in the value of silver had been partly due to an exaggerated estimate of the amount of silver which Germany had thrown into the market? — To a certain extent; but as regards the de- preciation of silver there are three causes, in my opinion. 777. Will you state them ? — The first is, that the Continental markets are now to a great ex-: tent practically closed against silver ; the second is the increase in the production in America ; and the third is the diminished requirements for India. Let us examine that in detail. First, why are the Continental markets closed ? Because Germany has demonetised silver, and Holland and the Scan- dinavian kingdoms have done the same. The Latin States, France, Belgium, and so on, have been compelled to limit first, and then to cease coining silver altogether. Secondly, there are almost no European countries where you can get rid of any silver. Very little is required in England, perhaps a million a year, two millions for Spain, a million for Austria, and, perhaps, a little for Russia; I cannot _say. That is the state of Europe. Now we come to America. I daresay the Committee have all the information about America, otherwise I could give you the American statistics. The collection of statistics I have made quite agrees with the figures pub- lished in the papers which you have received. With regard to the third cause, that is the diminished inquiry for India, that is caused by the increase of Council drafts, and the diminu- tion in the value of produce. People have re- mittances SELECT COMMITTEE ON DEPKECIATION OF SILVER. 39 Mr. Fawcett — continued. mittances to make to India, and if they can get Council drafts, they will not buy silver. 778. Therefore, I understand your opinion to be this: that although the exaggerated estimate of the amount of silver to be thrown into the market may have somewhat added to the depre- ciation of silver, yet yoa think two very power- ful series of causes have been in operation to depreciate silver, namely, that there has been a great falling-ofif in the Eastern demand for silver, and that has been accompanied by an increase in the supply? — Quite so. 779. With regard to the increase of supply, of course that depends upon uncertain circum- stances as to the yield of mines, of which it is impossible to make a contradiction ? — Yes. 780. But with regard to the demand, do you, or do you not, think that many of those causes which you have enumerated as diminishing the demand for silver in Europe, and in India, are permanent in their operation ? — One is perma- nent, and one is not. The permanent cause is the administrative requirements of the India Office. They now draw 16,000,000/. instead of 10,000,000/. That is a matter I cannot speak about. I suppose it is a matter of necessity, and I suppose that that will be permanent, but as regards the diminisheel inquiry resulting from a fall in the value of produce, that is not a perma- nent cause. We have had bad years, and we shall have good years. With increasing ship- m.ents, or rather with a rise in the value of pro- duce, there will be a greater inquiry. 781. With regard to Europe, the fact that so many European countries are using less silver in their coinage, and, therefore, require , less silver for the various purposes discharged by money, is a permanent cause ? — It mav be, and it may not be. It is not altogether permanent. If the German silver could be disposed of, I be- lieve, for instance, that France would maintain the double standard and employ a certain quan- tity of silver. Of course, if France and the Latin States adopt a pure gold standard, then the depreciation of silver, as far as that goes, would be permanent. That is a thing which we do not know. So far the French are evidently waiting. They are not yet prepared for the pure gold standard. They have merely ceased the coining of silver, but if they find that the supply does not increase, they may probably keep the double standard. Chairman. 782. That is a sjjeculative opinion of your own? — That is a speculative opinion of my own, but I am quite convinced that they cannot adopt the pure gold standard, because they cannot get rid of their silver. There is no buyer for it. Mr. Christopher Beckett Denison. 783, You seem to think that there is some- thing artificial and unnatural in the state of matters between India and this country ; will you explain a little what you have in your mind there ? — I did not mean to say that there was something artificial. 784. You said, tliat so long as the Council of India sold drafts at a very cheap rate, there would be no temptation to remove silver ? — The depreciation of the sterling exchange in India and the depreciation of .silver are the same 0.77. Mr. C. B. Denison — continued. ^J' tiling. These are two different methods of ex- ' . ^ pressing the value of silver. The sterling 6 April 1876. exchange expresses the value of the rupee, that is, of a given quantity of silver, whilst the quota- tion in London expresses the value of silver per ounce. The two things are the same. Conse- quently, the value of the exchange, or of silver, is affected by the quantity of drafts put on the market by the India Office here. 785. Supposing that the rate of exchange was such as to make it more advantageous to the Council of India to import silver into this country, that would not remedy matters at all, would it ? — No ; of course if they did not draw, and had to receive money from India t!iey would have to import and sell the silver, but in point of fact there is no import of silver ; they sell the bills to people who remit them again to India, and consequently it is no export of silver ; it is merely a change of hands ; the Government pay it in India to the holders of the bills, and the returns are made in produce. Chairman. 786. But the result is that silver has not to be sent which otherwise would have to be sent ? — Yes. Mr. Kirkman Hodgson. 1^1. Have you any idea of the quantity of silver which has been sent to Russia ? — No, I have not; I have written about it, but have not received a reply ; I do not think it can be much. 788. Does not that seem to be one of the countries in which something might be done ? — Evidently Russia and Austria have turned their attention to gold, and it is very questionable whether they will take silver. 789. You do not look for much relief from that quarter ? — I am sure I cannot say ; they are not in a position to resume specie payment for a long time to come, I believe. Lord George Hamilton^ 790. As far as I can gather from your evi- dence, you have come to these conclusions ; that at present the German Government i'.ave about 850,000 I. worth of silver for sale ? — I'es. 791. That they will ultimately have about nine millions ? — Yes. 792. But that they will not have that sum until they have completed their coinage opera- tions? — Yes. 793. And that half the process of coining is completed ? — Yes. will be -I can- not tell you, because that depends on the minting capacity of the German mints, and what they have to do now is much more difficult ; they had chiefly to coin gold in the first two years, and of course the coining of gold goes on much quicker than the coinage of silver or copper ; there is an immense quantity of small coin to be coined, and I cannot tell you how many years that will take. 795. You could not give even an estimate? — Not to-day ; I can get you the information, if you wish it ; I can inquire and get it, no doubt, but I do not know now. E 4 -.- 796. Your 794. How long do you estimate it before the whole process is completed ? 40 MINUTES OF EVIDENCE TAKEN BEFORE THE G. Mr. Pietsch. 6 April! 876. Sir Charles Mills. 796. Your bank has sold three millions in the course of two years ? — I believe they have sold more, but I do not know exactly what they have done in Berlin ; the amount which has gone through my hands is three millions ; I could tell you how much in London and how much in India, if you like. 797. Has it principally gone to India ? — The sales which we have effected in London are about one million in round numbers, and about two millions in the East. 798. Have you any idea where the other four millions which has been sold has gone ? — I do not know, but as a matter of necessity it must have been sold on the Continent; 1 suppose France took it, and that a little went to Austria and a little to Kussia ; some of the silver we sold here found its way to India ; one lot went to Belgium and one lot to Spain. 799. You gave us one of your reasons in esti- mating the decrease in the amount of silver, that a considerable amount had disappeared by re- moval to France during the wars ? — Yes. 800. "Would not a considerable amount be returned in the way of indemnity if it were paid by France to Germany ? — Certainly ; that leads us to the affair of the five milliards ; I am scarcely in a position to say how that will be ; it is a question I am not prepared just now to answer. 801. Are you aware whether any portion of that indemnity was paid in silver coin ? — You mean the late indemnity? 802. Yes? — Yes: a great quantity was paid by bills on Hamburg ; that is silver, and a great quantity was paid in five-franc pieces. Chairman, 803. Was any portion of it paid in German coin, in actual silver German dollars? — No; I suppose not ; I sujDpose as far as the payments were made in coin it was in French coin ; I should imagine that the coin which left Germany during the first wars was not preserved in the shape of dollars; it must have been converted into French coin or melted ; but as to that I cannot say. It is not likely that it should have returned in the same form. Sir Charles Mills. 804. You estimate that a certain amount of coin had been melted down to make articles of luxury ? — Yes, that I know from experience. 805. Would it not be cheaper to make them from the bar silver?^-! really cannot say how that may be. I only know it is a fact, especially in South Germany, from friends who have told me that they have done it themselves. Mr. Hermon. 806. You say that a good deal of the coin of Mr. Hermon — continued. Germany has been melted down for articles of luxury. Is there any seigniorage or cost at the mint for the coinage of silver? — I do not know. 807. In England it is nearly 6 per cent., is it not ? — Yes, or more. 808. If there is a charge of seigniorage for coining, that would seem to be an obstacle in the way of melting down coins, would it not, as com- pared with the bar silver? — Yes, of~ieet»se. A» regards the details of private operations, I am not in possession of any particulars. I merely state it as a well-known fact that it has taken place. Mr. Mulholland. 809. A large portion of the smaller coins that were called in in Germany were melted down into bar silver, and sold in that shape, were they not ? — Yes, producing very little silver. 810. I suppose that the sale of silver will go on gradually during the time required for the completion of the coinage ? — Yes, the depreciar tion of silver has not been caused by the sales, because the sales are so far very small, compara- tively speaking. In two or three years they have only sold 6,000,000 I. or 7,000,000 /. The sales were never pressed : on the contrary, we lost many an opportunity to sell by holding out for prices which were above the market: and I believe I may say that sales will go on in the same way, that is to say, with great moderation; it is by no means probable that at any given moment a large quantity of silver M'ill be put in the market. It will be an operation which will be going on gradually for a certain number of years until the whole operation is completed. 811. With reference to the large import of silver into Germany previously to the demone- tisation of silver, it was retained in Germany, there was no export and import of silver ?— Yes, there was import and export continually, the same as between London and Paris. There is con- tinually gold and silver coming and going accord- ing to the prices of the day, as they may be ; the same as between here and America. 812. Have you any estimate of the annual amount required in Germany for purposes of ornament or luxury ? — No, I have not. Ckairmaji. 813. If yon have any bias either way, you look at the question rather as a seller than as a buyer, I presume ?— Yes, of course. 814. Through your connexion with the Ger- man Government?— Yes; what I have stated here has not been dictated by a desire to main- tain the price, by stating the quantity to be sold at less than it really will be; it is my conscien- tious conviction that it is as I have stated it. Mr. Samuel Seldon, called in ; and Examined. Mr. Chairman. S. Seldon. 815. I BELIEVE you are at the head of the "~— Statistical Office in the Custom House ? Yes. 816. Will you state to the Committee what the amount of duty is on the import of foreign manufactured silver plate?— One shillino- and sixpence an ounce. " 817. Will you put in a statement of the num- Chairman — continued, ber of ounces of foreign manufactured silver plate imported into the United Kingdom, during the last ten years, also of the quantities on which duty was paid, and the amount of duty received, together with the rate of duty leviable to counter- vail the stamp duty on British plate ?— Yes. ( The same was put m, vide Appendix.) I may mention, SELECT COMMITTEE ON DEPRECIATION OF SILVER. 41 Chairman — continued, mention, I have just had time to procure these figures without preparing myself for any addi- tional facts the Committee might wish to know ; but if time were given me I could do so. You will observe that the imports are not identical with the quantities entered for home use. That would arise from various causes ; for instance, you will see that in 1870-71 a large quantity of plate was imported on which no duty was paid. The French sent a quantity of silver plate here for safe custody. 818. A drawback is allowed on the re-export? — A drawback is allowed on the export of new British silver plate. 819. The highest amount in your table, I see, is 103,000 ounces in a year, that is the import ? — Yes, that will be in the year 1871. 820. That would include a certain amount of plate imported for safe custody ? — Simply ware- housed, and afterwards re-exported from this country. 821. I see the largest amount of plate im- ported from abroad which has paid duty has been 76,000 ounces, paying a duty of 5,700 I. ? — Yes. Perhaps it would be worth my mentioning that we cannot ascertain positively whether all that is foreign silver plate ; it is just possible that some of it may be British silver plate which, when it was exported from this country, had not the benefit of the drawback, and therefore, when it was re- imported, would be regarded as foreign silver plate, and charged accordingly. 822. On the whole, the importation of foreign silver plate is exceedingly small? — Compara- tively small. 823. You have also prepared an account of the quantities and declared value of British and foreign silver plate exported from the United Kingdom in each of the 10 years from 1866 to 1875 ? — Yes ; I was not required to prepare it, but I thought it would be desirable information for the Committee. ( The same was put in, vide Appendix-^ Sir Charles Mills. 824. That export of silver plate is of new plate ? — Not necessarily. That on which drawback is received must be new British silver plate ; but as a matter of fact, a large quantity of foreign silver plate is exported again from this country ; therefore we should have two headings, one for the export of British silver plate, and the other for foreign silver plate previously imported into this country. 825. There is no drawback, except upon new silver plate ? — Quite so. Lord George Hamilton. 826. Is the excise duty on the British manu- factured plate the same as the import duty on foreign manufactured plate ? — Exactly ; the one is framed with a view of countervailing the other. The stamp duty is 1 «. 6 d. an ounce, and in order that the British producer may not be at a disadvantage, as compared with the foreigner, we charge him \s. 6d. an ounce for all he pro- duces and sends here. Mr. Kirkman Hodgson. 827. Do you recollect how long it is that the rule that foreign plate was to be broken has ceased ? — It is so now ; a merchant imports a quantity of foreign silver plate, or British silver 0.77. Mr. Kirkman Ifodf^son— continued. ^r.S.Seldou, plate, on which he has not previously received 6 April 1876. the drawback, and which, therefore, would be chargeable with an import duty. He says, " It is not worth my while to pay the duty, and, therefore, I elect to have it battered and entered as bullion, free of duty." 828. He can bring it in if he chooses to pay the duty?— Yes. .829. On articles of curiosity, he would bring it in? — Yes. Yery frequently British silver plate is sent abroad without the drawback being claimed; that is rather due probably to haste than to actual neglect, but sometimes we have plate sent abroad for approval. The exporters do not keep it long enough at the Custom House to have it examined ; it is perhaps not approved, and is sent back again, but because they have not observed the due formalities of exportation it is charged on re-entry into the country. Sir Charles Mills. 830. There is a duty on re-importation of British silver? — Yes, we regard it as an impor- tation pure and simple without going into the question of whether it has been exported first. Unless the exporters take the trouble to clear the plate outwards so that it may be identified on its coming back again, we do not regard it in any other light than that of a fresh importation of plate. 831. I take it that all plate has to pay import duty ? — It has. The Board, however, exercise a discretion, and on receipt of trustworthy evi- dence of exportation will sometimes waive the duty ; but still that is the rule. Mr. Mulholland, 832. Does electro-plate pay duty? — It does not ; it is included under " manufactured goods." Chairman. 833o Do you believe that this duty is check- ing the import of foreign plate ? — That is plate of foreign manufacture ? 834. Yes 1 — I should say not. I say so, be- cause I argue from other countervailing duties, which do not act as a restriction upon the impor- tation of goods liable to a similar rate of duty at home. Take the familiar instances of spirits and playing cards, which are pertinent to the case, I think. 835. Both the Customs duty and the Excise duty of Is. &d. an ounce, are very heavy on the value of silver ? — I should not have thought it a very heavy duty on the value of the silver. Perhaps on such articles as silver spoons it may press heavily. Mr. Fawcett. 836. I suppose taking the average of manufac- tured silver generally, it would sell for three times as much as the value of the silver, would it not ? — I should say more than that. 837. So that, practically, what you have to consider, is not the duty of Is. 6d. an ounc9 upon whatever silver may be worth, but four or five times that amount ? — Precisely ; the per» centage of duty to the value of the article looked upon, for instance, as a work of art, would he very small indeed. 838. Looking at the value of the silver, it is F -H not 42 MINUTES OF EVIDENCE TAKEN BEFORE THE Mr. Fawcett — continued. 'HLx.S.Seldon- - ~~r, r „ not more than a duty of 4c^d. an ounce, sup- ^ 7 ■ posing its value were four times the amount of the silver ? — Probably not. 839. That is, if you say tlie manufactured article is on an average worth four times as much ? — I would not limit myself to that pro- portion of the value to the duty, because J should consider that works of art may be worth very much more. 840. I mean putting it as a minimum, it very much diminishes it ? — Yes. Mr. Herman. 841. In answer to the Chairman, you said you Mr. Hermon — continued. did not think the Is. &d. duty checked the im- portation of foreign silver plate ; do you mean spoons ? — Yes ; I mean all articles of manufac- ture. 842. It does not check it, considering that we have a 1 5. 6 rf. Excise duty ? — Yes ; I mean in that sense. 843. You do not mean to say that supposing others" come in free while we had a 1*. 6«?. Ex- cise duty, there would not be a greater consump- tion of foreign silver in England ? — I think there would be, but I should think that would be a great injustice to the English producer. Mr. William Robinson, called in ; and Examined. Jifr. j^. Chairman. Bohinson. 344. You are one of the officers of the Gold- smiths' Company? — Yes. 845. Will you state what course you pursue in connexion with the Inland Revenue Office with regard to the marking of silver ? — The duty is collected by the Goldsmiths' Company upon the weight of the silver, as it is delivered at the Goldsmiths' Hall. There is an allowance of one- sixth weight for work sent in an unfinished state, and the returns give the total weight of the silver received and marked. 846. Would the silver which passes through your hands affisrd some indication of the silver used for manufactures in the United Kingdom ? — Yes. 847. You do not mark all the silver which is manufactured ? — No. There are other assay offices in England. 848. But with reference to the silver which is manufactured at Birmingham and, I think, some other towns ? — That is sent to the local halls. 849. What other local halls are there besides your own? — Those at Birmingham, Sheffield, Exeter, Newcastle, Chester, Edinburgh, Glasgow and Dublin. 850. Do they collect the duty for the Inland Revenue Office ? — They do ; in precisely the same manner that we do, and make their returns. 851. Could you state the amounts, the total weight of silver marked at your hall during the years 1873, 1874, and 1875?— In 1873, 1,006,973 ounces; in 1874, 1,006,163 ounces; in 1875, 1,046,921 ounces. 852. What kind of proportion do you believe, does the amount which you mark bear to the whole. Should you be able to state at all what Birmingham and the other towns mark as compared with your own ; is it a large propor- tion ? — No, the London hall is the largest, con- siderably ; I do not think they mark much plate at Birmingham ; at Sheffield (.they do mark some, but nothing equal to the London hall. 853. Do all the other halls together mark as much as you do ?— Perhaps one-lhird. 854. But you are not able to give any positive statement to the Committee on that point ?— No. 855. All the silver which is used for electro- plate and other purposes would not pass through your hands at all? — No, only manufactured plate passes through our hands. 856. The largest amount which has ever passed through your hands I see has been in the year 1875? — Yes; during the last 15 years. Chairman — continued. 857. And that amounts in round numbers to 1,050,000 ounces?— Yes. 858. You have collected the duty for the Inland Revenue? — Yes, it is collected in the Assay Office. 859. You collect it, and pay it over ? — It ie paid to the Inland Revenue every quarter. 860. Silver watch cases are exempt from the duty ? — Yes. Mr. Hermon. 861. You say that you hand over to the Inland Revenue this Is. Qd. per ounce ? — Yes. 862. Do you charge anything for assay and stamping ? — A small charge is made independently of that for assaying and marking. 863. Do you know what charge per cent, it is to the manufacturer; the manufacturer of the silver article pays you Is. Qd. an ounce ? — Yes, and a small charge is made for the cost of assaying and marking. 864. That would be very trifling? — It is so trifling that it is not, in some instances, above ^ rf. or 1 d., orl^d. an ounce. 865. I suppose you mark every independent piece of silver in a large ornament ?— Yes ; all , separate pieces would bear a mark to indicate that it has been duly assayed. Sir Charles Mills. 866. 1 suppose the total amount stamped at the other places can be ascertained from the total amount paid to the Excise? — They can furnish the same returns as we can. Mr. Fawcett. 867. Of course only a portion of this silver which is brought to you as manufactured silver to be stamped represents new silver which has been obtained from new sources of supply; a certain portion of it, of course, is old silver melted down, which already existed; simply ' turning it from one form into smother ?— Pro- bably so. I think it is chiefly new. I should think the manufacturer scarcely Hkes to trust to melting down old plate, in consequence of the doubt as to whether it is the correct standard, for the solder would be melted with the silver. I think they more often purchase the new silver for the purpose of manufacture, 868. Still old plate, which bears your mark, would have just as good security for genuineness as new silver ? — Yes. 869. Therefore SELECT COMMITTEE ON DEPRECIATION OP SILVER. 43 Mr. iJawceM— continued. Mr. Fawcett — continued. Mr. W: 869. Therefore the manufacturer could not manufacturing spoons, but in other plate there ^"^^''jg^g have any doubt if he bought old spooas and " is a portion of solder, which is of course under the " ^P" 7 things bearing your mark ? — No. Spoons would standard. But they cliiefly use new silver for be an exception, because there is no solder in manufacturing purposes. Colonel Henky Hyde, called in ; and Examined. Chairman. 870. You have been Director of the Mint in Calcutta? — Yes, for 14 years. 871. And you are able to give the Committee some information with regard to the coinage of silver in India ? — Yes. 872. Have you given your attention generally to the question of the silver currency in India ? ■ — I have inquired into the question at various times, and I have collected information with a view to writing something on the subject, be- cause, I believe, very little is generally known albout the history of the currency in India. 873. Can you put in a Paper for the use of the Committee, showing the amount of silver coined over a long series of years in India ? — ■ Yes (the same was put in vide Appendix). It is a statement of bullion imports, coinage, and coin in circulation from the year 1835 to 1869. The statement was drawn up in the year 1871. 874. You are able to state the total amount of new silver coinage coined in India since 1835, are you not ? — Yes. 875. Will you state the total ?— £. 188,531,256 sterling. 876. Will you state the amount coined, year by year, from 1861 downwards ?— In 1860-61, 5,192,328 I. ; in 1861-62, 7,070,000/. ; in 1862-63, 9,251,000 1. ; in 1863-64, 11,477,000 1. ; in 1864-65, 10,358,000 1. ; in 1865-66, 14,507,000 I. ; in 1866- 67, 6,1 1 8,000 1. This is the coinage of 1 1 months only, for from 1867 the financial year was made to terminate on the last day of iV] arch ; in 1867-68, 4,313,000 I. ; in 1868-69,4,207,000 I. 877. When did you leave the Calcutta Mint ? — In February last. 878. Would you be able to procure for us the same details for the four years since 1869 ? — Yes; I will write out and get the statement continued in- this form. 879. The new silver coinage includes the old silver coinage, which has been re-coined, does riot it? — Yes. 880. What was the amount of old coinage outstanding in 1835 and 1836 ? — The amount that I have given here is a calculated amount made out from the coin that has been called in and yearly coined in the Inilian Mints. 881. What sum do you believe there was out- standing in 1835 and 1836 ?— £.21,241,000. 882. The total amount coined from 1835 to 1869 was 188 J millions, was it not ? — Yes. 883. Have you formed any estimate of the loss or destruction of the new coinage ? — I think it almost impossible to form an estimate ; but I have taken a supposition of one per cent, per annum in this table. 884. Would you include in that the melting down ? — I suppose that to include every loss. 885. If you take in that loss, what would be the amount of coinage left in circulation in 1868- 1869 ?— £. 166,315,000. 886. You would be unable, I presume, to put before the Committee any substantial proof of 0.77. Chairman — continued. the amount of destruction of the coinage ? — Quite unable ; I only take one per cent, as a unit; it is entirely an imaginary quantity. 887. There is some destruction, and you cal- culate it at one per cent. ?— Yes. 888. If there has been any large melting down, by the native population, of the rupees, the pro- bability is that it would be larger than one per cent. ? — I am quite unable to estimate it. 889. The coinage figures are certain ; you have issued 188 1 millions ? — One hundred and eighty- eight millions and a half have been coined in three Mints. 890. You cannot state to the Committee what may have become of the coins, but you have coined them, and as far as you know they have passed into use in India?— Yes, 188^ millions have been issued from the three Mints. 891. In that figure you have taken the rupee at what ?— At 2 s. 892. Can you give the Committee any informa- tion as to the power of India to absorb silver circulation? At what period did the increase begin to take place in the issue at Calcutta and other towns? — -After the Mutiny after 1856- 1857. 893. Am I right in assuming that until the year 1852-1853, the amount coined yearly in new silver never exceeded 5^ millions ? — It never exceeded five millions. 894. The first year when five millions was ex- ceeded was, in fact, the year 1852-1853 ? — Yes. 895. Will you read the next figures to the Committee. In 1853-1854 you coined what? — £. 5,253,000. 896. In 1854-55?— £. 1,365,000. ' 897. In 1855-56 ?— £, 6,973,000. 898. In 1856-57 ?— £. 10,779,000. 899. In 1857-58 ?— £. 12,551,000. 900. In 1858-59?— £.6,542,000. 901. In 1859-60?— £. 10,677,000. 902. The largest year, I think, was the year 1865-1866 ?— Yes. 903. What was the amount coined in that year?— £. 14,507,000. 904. The process, then, of coining silver for India has, since the year 1856-57, assumed very large dimensions ? — Yes. 905. Can you state to the Committee the pro- cess by which that silver coin finds its way into the country ; the silver bars arrive in India and are consigned to merchants or bankers, I presume? — They are consigned to merchants, who bring them to the Mint, and in return for which they receive orders on the Treasury for the Mint out- turn. 906., How does the coin pass into circulation ? — The merchants draw the coin from the Treasury, and generally it goes up country to pay for pro- duce. 907. It presumably goes to the indigo, cotton, and other produce districts, and is there paid over for labour and other purposes ? — Yes. F 2 f- 908. Have: Ck>lonel H. H^de. 44 MINUTES OF EVIDENCJE TAKEN BEFORE THE Colonel H. Hyde. Chairman — continued. 908. Have you found that much of the silver 6 April 1876, finds its way down again to Calcutta from the produce districts, or does it appear to be absorbed bv the country itself? — At certain times of the year it finds its way down. 909. And in large quantities ? — Yes, in con- siderable quantities. 910. At what periods? — It finds its way up country at the time when produce comes down to Calcutta, and it returns to Calcutta after the revenues are paid into the Government. 911. The rents are generally paid in silver, are they not ? — They are. 912. Do you believe that India has already been supplied with adequate silver currency, or that its capacity for absorbing silver currency remains great? — 1 believe the capacity remains great. 913. Will you state your grounds? — My grounds are, that I believe that in many parts of India transactions by means of currency are not carried out at all. Many transactions are carried out by barter in the more distant and isolated parts. 914. What have been some of the main chan- nels by which the silver coin has been introduced into whole districts in India ? — Wherever large public works have been in progress, such as railways, roads, and irrigation schemes, in these districts silver has been distributed largely. 915. So far as your experience goes, have you found that where that has taken place, the use of silver currency has superseded barter arrange- ments to a great extent ? — Yes. 916. Do you mean that where the natives have been taught the convenience of the use of silver currency, through Europeans having spent money there, there the currency remains ? — It is exactly so. It is only in the extreme outlying wild dis- tricts that barter is carried on ; in all the more civilised districts currency is used. 917. Is there much hoarding of silver among the natives of India? — There are a great many opinions on that subject. My own opinion (and it is only an opinion) is, that to a certain extent hoarding is practised among certain classes, but I do not believe it is practised to the extent that is generally supposed. 918. It is generally believed that there is a considerable amount of hoarding ? — It is. 919. Among individuals or by the princes? — By both. 920. Is there much melting down into orna- ments ? — There is a good deal of melting down into ornaments. 921. Can you state to the Committee when in the native villages silver is used, in what class of transactions do they use it ; in daily retail trans- actions, or not? — 1 have no actual knowledge of that ; it is a very long time since I was in the district, where alone the information could be obtained. 922. Have you on one occasion directed officers in various departments to report to you upon the extent to which copper and small silver currency was used ?— Some years ago I thought it desirable to obtain information on the subject, and I sent a circular letter of questions (with the sanction of Government) to every executive engineer in India, thinking that the engineers who largely employed labour, and who spent money among the poorest classes, would be best able to give information on the subject, and I obtained and tabulated all the replies. Chairman — continued. 923. Have you got any general remark to make upon the subject of these replies ; did they show that there was a suflScient small currency generally ? — I think there was a great deficiency of small currency. 924. In what year did you make that inquiry ? — In 1870. 925. Has that Keport been placed before the public in any shape ? — No, I asked the Govern- ment not to publish it, because I intended to en- large upon it, but I have not been able to do so, 926. You would have no objection to its being put in ? — None whatever. 927. Is the result to show that there is a capacity for absorbing more currency, and a need for more currency in India generally ? — The re- sult of that is to show that a smaller division of currency was required, but the essential part I wish to point out is with reference to the extent to which barter exists, which would tend to show that there is a capacity for absorbing more cur- rency. 928. Are the copper coins referred to in this Paper of very small denominations ? — The lowest coin is one pie. 929. Are there many small silver coins in cir- culation ? — A comparatively small amount. 930. What is the smallest silver coin that has been in use in India ? — One-eighth of a rupee. 931. What is the fineness of the present coins? — Eleven-twelfths of pure metal and one-twelfth alloy. 932. What was the fineness of the old sicca rupee? — The sicca rupee of Regulation XXV., 1793, weighed 179f grains, and contained 97'9I7 parts of pure silver in 100 ; this was current to 1818. The sicca of Eegulation XIV., 1818, weighed 191,916 grains, and contained 175"923 parts of pure silver in 100; this was current till 1833. The sicca of Eegulation VII., 1833, weighed 192 grains, and contained 176 grains of pure silver, and was current till 1835, and its value in the Government rupee is |f, or 106"66 per 100. 933. Can you give the Committee any infor- mation as to any difficulties that arose when the present standard of fineness was adopted ? — The rupees of the three different Presidencies all dif- fered in fineness and were of different weights ; the question was carefully considered, and the present rupee was determined upon after the question was fully gone into. 934. In what rupees do the zemindars pay the land tax ? — The Government rupee is the only rupee current. 935. Do they not pay a small addition or per- centage in order to put them upon the same level as the sicca rupee ? — I do not personally know that ; 1 have no knowledge on the subject. 936. You cannot speak upon that point?— I have no knowledge on the subjeci. 937. Can you tell us anything with regard to the use of gold in India ? — It is simply bullion. 938. Can you tell us what has become of the large amount of gold that has been exported to India ? — I think it is turned into ornaments, used in manufactures, and is hoarded. 939. Is it used at all for the purposes of cur- rency ? — I do not think it is used anywhere for the purposes of currency ? — Jeypore is reputed to be the largest coiner of gold, and the mohur of Jeypore is held in the highest esteem; I inquired in Jeypore regarding it, and I found there SELECT COMMITTEE ON DEPRECIATION OF SILVEE. 45 Chairman — continued, -there was no gold whatever in circulation in the State; as fast as it was coined so it was ex- ported. 940. Where to?— Different parts of the country ; simply on account of the purity of the coinage. 941. Do you think that much of the silver that is passed into India goes into Central Asia ? — Not much. 942. It is too bulky to be carried for mercan- tile purposes, I presume? — Yes; I do not think much goes, 943. Would gold be used rather than silver by such native traders as may trade between the northern frontiers and Central Asia ? — I have no knowledge on that subject The only matter "that has come before me is that when the envoy of Yarkund came down he brought gold with him. In India gold has always been used for re- mittances, as being easier to carry ; the finer the gold the more it is esteemed for that purpose. Formerly fine gold coins used for this purpose were especially named. 944. What gold? — Gold from Yarkund, bar gold ; I wish to adii something in regard to what I said about the gold mohur ; I believe that the mohur is simply an assay stamp, and that the reason for the coinage of gold is that it is more safe and convenient for the poorer people of India to buy gold coins than gold from the bar, simply because they then know what they are pur- -cbasing. The impression on the coin is simply an assay stamp as to the quality of the gold. Purchasers have some security in buying gold mohurs which they have not, if they buy a bit of gold off the bar. 945. So that is assay gold rather than a coin ? — It is certified gold. 946. Can you state anything further to the Committee with regard to the probable increase or decrease in the use of silver in India ; have you anything to add to the evidence you have given on that point ? — No; I do not think I have anything to add. Mr. M asset/. 947. Is it a fact that there is a large absorption of silver coins by the native population for the purpose of conversion into ornaments ? — The natives never invest their money in the way in which civilised nations look upon an investment. A native when he realises a little money puts it into the form of ornaments on the females of his family, and in times of scarcity those ornaments are taken to the bankers and sold. 948. Have you any means of estimating the -consumption year by year of silver coins for that purpose ? — None whatever. 949. You have stated that in 1865-66 the coinage rose to the sum of 14,000,000/. ? — Yes. 950. That was the year when there was a de- mand for Indian cotton in consequence of the American war ? — Yes. 951. Did a large proportion of that coinage go up country ? — The greater part of that was sent to Bombay, of which I have very little knowledge. Mr. Christopher Beckett Denison. 952. When you say sent to Bombay, was Bombay not coining itself ? — Yes, it was sent from Europe to Bombay, not brought to the Calcutta Mint. 0.77, Mr. Massey. 953. Within the last 15 years there has been Colonel H. Hyde. a paper currency established in India? — Yes, it 6 April 1876. began operations on the 1st March 1862. 954. Have the currency notes produced any sensible impression upon the silver coinage in the way of diminishing the demand for it ? — No, I could not say that ; I do not know. 955. I think you brought your returns of the coinage up to 1868 ?— Yes, to 1868-69. 956. Will you give us the figure for 1868-69 ? — £. 4,207,000. 957. Can you follow on to the next year, 1869-70?— I have nothing further. Chairman. 958. Has the coinage been going on in the same proportions, or has it decreased, as far as your memory goes ? — Very little silver has come to Calcutta since that date. Mr. Massey. 959. In fact the coinage of 1865-66 was quite exceptional in consequence of the exceptional state of the demand for produce ? — Yes ; more silver has been imported into Bombay, but very little into Calcutta. Mr. Fawcett. 960. When you say that 1 per cent, represents the amount that is required to make good the annual waste, as far as I understand, that is mere surmise ? — I would not say that 1 per cent, represented it ; this was a statement that I drew out some years ago, and I merely adopted 1 per cent, as a unit, simply to give some idea of what waste would be, and that could easily be mul- tiplied. 961. As far as I can understand, there is no . reason why you should not put in as a unit 2, 3, 4, or 5 per cent. ? — Certainly. 962. Whether you adopt one of those figures or not would make a great difference to your esti- mate as to the aggregate amount of coins in cir- • culation ? — Yes, but I myself see no way to adopt any amount. 963. Unless you can form some estimate of the amount that is required to repair waste, whether 1, 2, or 3 per cent., the aggregate amount you have coined at the Mint really gives you no indi- cations at all of the amount of coin that is in cir- culation ? — J\o, of course not. 964. For instance, take the coinage, the last you have given us, of four millions, if you sup- pose that the aggregate coinage in India is 180 millions, and if you take the annual amount re- quired to repair waste to be 3 per cent., the amount that is coined is not sufficient to keep up the coinage? — No ; up to 1869 I made out that the amount of rupees issued per head of popula- tion was 11'36 in 35 years. From my own obser- vation I estimated that each head expended a certain sum in ornaments per year, but after I had calculated what the total expenditure would amount to, I found that in 35 years it amounted to such a very large sum that my first estimate was perfectly impossible, and I was brought up at the outset and utterly unable to form any opinion. Mr. Christopher Beckett Denison. 965. You took the- population of the final year? — Yes; that is, 11*36 rupees per head has been issued during 35 years. F 3 +- 966. Practically, 46 MINUTES OF EVIDENCE TAKEN BEFORE THB Colonel H. JSyde. 6 April 1876, Mr. Fawcett. 966. Practically, you rather agree in the opinion that the mere amount that is coined in a country like India gives scarcely any indication of the amount in circulation ? — No actual indica- tion, I should say. 967. You spoke once or twice, in your evidence, of the capacity of a country like India to absorb silver coinage ; when you used the expression " capacity of a country to absorb," what did you mean by it ? — That India has not at present got a currency throughout the country. 968. There are two ways of absorbing; of course any country could absorb far more coinage than it has, but the question is whether that absorption can take place without depre- ciating its value ? — Of course it will first depre- ciate its value ; but I look upon it that any country where barter is carried on to a conside- rable extent requires a currency, and will have it in time. 969. Was it not shown by actual facts, in those years which have been referred to, and in which th<;re was an exceptionally large coinage, owing to the great quantity of cotton purchased, that a great part of that additional coinage was coined in Bombay, and a considerable portion of it stopped there ; of course it was absorbed in one sense, but in another sense it was not absorbed, because that addition to the coinage produced a marked rise of prices in Calcutta, andif there is a rise in prices, there is, pro tanto, a depreciation in the value of silver, silver being the currency? — Yes, there will be for a time, but I look upon it that the currency will per- meate the whole of the outlying districts in time. 970. Still am I not correct in saying that that additional coinage did for a time, if not per- manently, produce a very marked rise in the prices, and, consequently, an equally marked depreciation in the value of silver ?— Certainly. 971. Has the present depreciation of silver been shown by a change in the value of the mohur ; do you have to give more rupees now ? — Yes. 972. So that that, to a certain extent, would be a test of the depreciation of silver estimated in gold ? — Yes, certainly it is. Mr. Christopher Beckett Denison. 973. You are speaking of the foreign mohur ? —Of the mohur generally ; it varies as gold bul- lion. Mr. Fawcett. 974. It varies with silver ? — Yes. 975. So that now you would have to give a greater number of rupees for a mohur than be- fore ? — Yes. Mr. Christopher Beckett Denison. 976. Do you mean you would have to give more than 16 rupees for the Government gold mohur ?— Yes; in India all gold is bullion. Mr. Fawcett. 977. You have not got a double currency in India ?— No. 978. Silver is the currency ; gold rises in price m exact proportion to silver diminishing in value ? — Yes. 979. You say the coinage during the last few years in India has been very small? — Yes, Mr. Fawcett — continued. 980. So that that is another indication that contemporaneously with the increased supply of silver we have a decreased employment of it in the way of new coinage in India ? — Yes. Mr. Christopher Beckett Denison. 981. In a statement that we have here, show- ing the amount of silver received into the Mint in India from the Government Treasury De- partment from 1857-58 to 1861-62, there is a considerable amount of silver shipped to India by the Home Government in those years. Do you know whether that is in English or Indian silver ? — I do not know. I had prepared a states ment before I left India of all the kinds of silver that had been received since 1835, but I find I have not brought it with me. 982. Whatever it was that was sent to this country, it would have to be re-coined, I sup- pose ? — Yes. 983. What practically determined the amount of silver you coined each year in the Mint ? — The amount that was tendered at the Mint. 984. No estimate ?— No. Chairman. 985. You coined, not so much for the purpose of supplying the circulation, as for the merchants who imported bar silver, and in that way wished to utilise the silver which they imported ? — Exactly. 986. Did you ever hear any complaints that there was not sufficient silver in circulation in the country ? — No. Mr. Christopher Beckett Denison. 987. I observe, from this statement of the new silver coinage which you have put in, that the great increase of the coinage began in the year 1856-1857 ; that was the year of the Persian War, was it not ?— Yes ; and 1857 was the year of the Mutiny. 988. The Mutiny had nothing to do with 1856 ? — The Mutiny was in 1857-1858. 989. You could not give any particular reason why, in any special year, it was so very much more than in others ? — No. 990. Have you put in any paper showing the amount of gold that is coined contemporane- ously ?— No, I have not. Chairman. 991. Could you supply us with that state- ment? — I have got none. The information is given in a statement already handed in by Mr. Waterfield. Mr. Christopher Beckett Denison. 992. There are no particular times of the year at which silver flowed from one part of the world rather than another ; in which, for instance, silver came in abundance from China? — Yes, it came from China at certain seasons, and it came from Europe at certain seasons ; it was very regular in the influx. Of late years there has been very little sent from China. Mr. Cave. 993. Is very much silver brought in by the emigrants from the Mauritius and the West Indies returning to India?— I have no knowledge of it; they have a considerable rupee circulation in the Mauritius. 994. You do not know whether there is much brought in in the way of ornament ? — I do not. 995. Because SELECT COMMITTEE ON DEPEECIATION OF SILVER. 47 Mr. Cave — continued. 995. Because we know that in the West Indies the greater part of their eanliugs is turned into ornaments, whixih are carried back in the shape of silver ? — I have no knowledge of it. 996. They are paid any arrears by drafts on the Treasury of Calcutta / — I have no knowledge whatever of it. Mr. Mulholland. 997. From what you said, I presume we may assume that almost all the bar silver imported into India is coined ? —Not all. 998. By far the greater part? — By far the greater part. 999. Is it used in any way as bar silver, or is it used for ornaments? — The finer descriptions of bar silver are taken up into the country and used in the arts, and also sold to native States. For- merly, I believe, bar silver was not so used be- cause it was difficult of carriage ; but since rail- ways have been opened and carriage is easy and safer^ the bar silver, which stands the purchaser at 2|- per cent, less than coin, and does not re- •quire refinage, is taken up country. 1000. How does the silver come from China ? — It comes in sycee and in doUars. 1001. Are they melted down ?— All melted down. 1002. And coined ? — And coined. 1003. I think you said that the coinage lately had been on a small scale? — In Calcutta; in Bombay it has been larger. 1004. The total imports of silver into India in the year ending the Ist of April 1875, were very large ? — It mostly went to Bombay. 1005. I speak of India as a whole ? — Yes. 1006. There were 7,500,000Z. ?— I do not know what amount was imported into Bombay. 1007. We may assume the greater part of it was coined ? — Yes. 1008. That would be a full coinage year? — Yes. 1009. When you spoke of the quantity of silver that was melted down for ornaments you alluded, I think you said, to coins ? — Formerly ornaments were almost entirely made of the coined silver. 1010. If 1 per cent, would include not only the waste and wear and tear of the currency, but the amount melted down, it would not be a very large total ? — The wear and tear of the currency is not known, as the older, and consequently lighter, rupees are in the distant districts and remain there ; of the worth, also, nothing can be known. Of the amount melted down it is very difficult to form an estimate. All that can be said is that zemindars and others invest their savings in ornaments, and in times of pressure these are taken to bankers, and are either mort- gaged or sold. Some of the records of the old Benares Mint show, that in times of scarcity, the greater part of the silver brought to that Mint to be coined was in the shape of ornaments. Now that there are not any country Mints, all such silver must remain in the shape of ornaments. Lord George Hamilton. 1011. In the tables which you have put in, in the last column you give the per-centage of revenue of silver coin in circulation ? — Yes. 1012. If you look at the first year you will find that the revenue was then 85 per cent, of the amount of silver in circulation ? — Yes. 0.77. Lord George Hamilton — continued. 1013. Whereas, in the last year, 1868-69, it is only 29 per cent. ? — Yes. 1014. Have you ever heard that the revenue in consequence has been more easily collected ? — No, I have no knowledge at all of that. 1015. I think you said that the gold mohurs which were coined in Jeypore and elsewhere were valued by the natives as an indication of the quality of the metal ? — The coin stamp is, as it were, an assay certificate ; it certifies to the purity of the gold. Mr. Fawcett. 1016. Like the Goldsmiths' stamp ? — Like the Goldsmiths' stamp. Lord George Hamilton. 1017. Would not that apply to the coined rupee ? — Yes ; but the coined rupee has one- twelfth of alloy. 1018. Do the natives, knowing this, buy rupees at all for the purpose of making silver ornaments in preference to bar silver? — They prefer the pure metal for ornaments. 1019. Therefore you do not think that a very large amount of rupees would be converted into ornaments ? — I think the alloy protects the coin- age very much ; if the coinage were finer it would be more melted down. Jewellers now take the finer coinages of native States if they require silver to work up into ornaments, because it is expensive to take the alloy out of the rupee. 1020. Looking at column 8 of the last page of your tables, in the year 1856-57, the total old and new silver coinage issued was estimated to be 88,400,000 I. ?— Yes. 1021. Whereas, in 1868-9 itwas 188,500,000/.? —Yes. 1022. Therefore, there had been an increase during thirteen years of upwards of 100,000,000 1. ? —Yes. 1023. Mr. Fawcett asked you one or two questions as to the increase of prices. Do you atrribute the increase of prices to the deprecia- tion of silver consequent upon over circulation, or do you attribute it more to the increased wealth of the country, and consequently the greater demand for different commodities ? — The India of 1835 was a very small portion of the India of 1869. The territory has increased ; Oude, the Punjaub, and Sinde have been an- nexed. They have all required a currency. Chairman. 1024. They had no currency previously? — No. That is, the currency of native states was very insufficient, as revenue was largely collected, and payments made, and transactions carried on in kind. English currency had to be introduced. Twenty-five years ago I was up at Loodiana in the Cis Sutlej States, on the borders of the Punjaub; we had just taken the Punjaub; and were changing from the old Sikh system, which collected the revenue largely in kind, to the col- lection of revenue in money. Then we got 150 lbs. of gram, which was the staple grain there, per rupee, and now you do not get 30. Part of this rise in price is due to the opening of the railway, but the greater part to the large amount of silver coin sent into the Punjaub. Lord George Hamilton. 1025. Then the estimated increase of silver F 4 t— issued Colonel H, Hyde. 6 April 1876, 48 MINUTES OF EVIDENCE TAKEN BEFORE THE Colonel H. Hyde. 6 April 1876' Lord George Hamilton — continued. Issued might be partly accounted for by the in- creased territory in which it was circulated ? — Yes. 1026. And that, of course, would be the case, especially since the Mutiny, or rather during Lord Dalhousie's viceroyship ? — The addition of territory has been large ; Sinde, the Punjaub, Nagpore, and Oude, as well as Burmah, have been added to the British possessions. In the case of the Punjaub, I know that money was remitted to Lahore in very large quantities until there was suflBcient currency in that newly-acquired terri- tory for its use. 1027. You still think, that notwithstanding the great increase in the issue of silver, India has considerable power of absorbing more silver ? — I think it is so, because I do not think it has got a sufficient currency. I think that the progress of the currency in India will be very slow indeed, but I think it will be sure. Chairman. 1028. New ground will be covered with coin- age? — Yes, new ground will be covered with coinage. Lord George Hamilton. 1029. When any merchants brought bar silver to be coined, did you coin it as they wished it, or did you coin it in a certain proportion, say sb much in rupees ? — It was invariably in rupees. Mr. Cai^e. 1030. Has there been any quantity of foreign silver coin brought into the Mint of Calcutta to be recoined ? — Since I have been there a very larwe quantity of American dollars, and the dollars of South America, and a very large quantity of 5-franc pieces, of Austrian coinage, of guilders • in fact new guilders that had never been in cir- culation there were received from Java. 1031. For what reason are they sent to Cal- cutta ; merely to be sold as bullion ? — In the course of trade as bullion. 1032. I asked you just now about the emi- grants from the West Indies ; you do not know whether they bring any quantity of the South American dollars ? — I do not know. Chairman. 1033. Is the fractional currency of the same fineness ? —It is of the same fineness. 1034. It is not a token currency ? — No. SELECT COMMITTEE ON DEPRECIATION OF SILVER. 49 Monday, \st May 1876. MEMBERS PRESENT ; Mr. Baxter. Mr. Cave. Mr. Fawcett. Mr. Goschen. Lord George Hamilton. Mr. Plermon. Mr. Kirkman Hodgson. Mr. Hubbard. Mr. Massey. Sir Charles Mills. Mr. Mulholland. The Eight Honourable GEORGE JOACHIM GOSCHEN, in the Chair. Mr. J. T. Mackenzie, called in ,• and Examined. Chairman. 1035. Will you kindly state your connexion ■with India ? — When in India, as a large zemindar, I had indigo factories ; and when I came home I was a merchant, and before giving up business, deputy chairman of one of the Indian railways, and I have always taken a considerable interest in the subject, and written some pamphlets and letters in the papers on the question. 1036. You have had considerable experience in India when you were engdged in business as a landowner, or as a zemindar ?• — Yes. 1037. You have been able to watch the methods in which business is conducted in India by the zemindars ? — Yes, most minutely. 1038. In what part of India? — In Bengal. 1039. Will you state, in the first instance, how the business in B.engal connected with land is conducted, so far as regards actual payments in specie are concerned ? — As a rule, the smaller farmers are in debt, and in every village there are several mahajans, who practically act as bankers for the farmers ; they also make advances to them in money and food during the season, and when the crops are cut they are repaid. As a rule, they generally pay the money required for the zemindar's rent ; the land proprietor's rent in Bengal is generally paid in nine different in- stalments in the year. 1040. Did much actual silver pass in the transactions? — With the exception of the silver passing to pay the rents to the zemindar, there was a very small amount of silver passing in the transaction. 1041. Are the weekly purchases for consump- tion and the retail trade managed by transfer, or is it managed by coin? — The family transac- tions in the interior are so small that they are done with copper coin and cowries (shells) about 200 of which go to a pice. 1042. What were the dates when you were in Bengal ? — I was there from 1844 to 1851. 1043. At that lime was there a scarcity of silver circulation, so far as you could see ? — Very great. 1044. In what respect did that scarcity of silver make itself felt? — The tendency in Bengal is, when silver gets into a district a large amount appears either to be hoarded or converted into ornaments, and remains in the district. 0.77. Chairman — continued. 1045. Are you -of opinion that any large amount of the silver which has been coined in India, has been used for purposes of ornament? — A very large amount. 1046. Can you speak from positive knowledge on the subject? — From having seen it done. In every large village there is a silversmith, or some one who works in silver, and as soon as a man gets a few rupees he employs a silversmith to come to his house and make the ornaments tiiere, who brings his little implements required for manufacturing it, and there the rupees are made into ornaments. 1047. Have you seen comparatively large amounts of silver ornaments in the houses of the very poor ? — Of course you are never in the houses of the peasants yourself, but you know ■ for a practical fact that they have a very large amount. When their children come out to any great festival they take an immense pride and ambition which children shall have the greatest amount of ornaments ; those that cannot afford gold or silver get brass, and if they cannot afford brass they will have clay. 1048. They take the actual coins and melt them up into ornaments ? — A considerable amount. 1049. Is gold hoarded in the same way? — There is a very small amount of gold in circula- tion among the peasantry, because their transac- tions are comparatively so small that gold does not enter into the currency. 1050. Not having entered into the currency, am I to understand that they have not had the means of converting it into ornaments? — Exactly; if they had, and could afford it, as soon as they could get gold they would. When a man gets a considerable amount of silver ornaments he will sell these for the purpose of converting into one gold ornament, because it adds to his prestige in the village if one individual of his family has a large gold armlet, or other ornament. 1051. It is not a preference for the silver as compared with the gold, but it is the opportuni- ties afforded by the silver circulation wliich have- caused the hoarding of silver in preference to gold ? — Entirely. 1052. The two reasons why the silver is hoarded in preference to gold, I may understand G ■<- to Mr. J. T. Mackenzie. I May 1876. 50 MINUTES OF EVIDENCE TAKEN BEFORE THE Mr. J. T. Mackenzie. 1 May 1876. not the means of accumula- rold ; and the other, silver is in and gold is comparatively little in Chairman — continued, to be these ; one, the poverty of the^peasants,^so that they have ting so much circulation, ^ ^ , . ,■ t n circulation V—Decidedly ; but I think 1 wouid qualify the poverty of the peasants with this remark, that although the peasantry in India have poor houses, yet the amount of ornanaents they have would exceed in value the furniture and utensils of the same class of peasantry at home. 1053. You believe that tlie actual amount of capital would be really laige in silver ?— I believe so. 1054. Will you state to the Committee how do they possess themselves of this silver, if as I understand you, the silver circulation is used so little ? — The way in which silver is introduced into the districts of Bengal is by trade. Silver is introduced very largely for the purchasing of different articles of commerce, and when the peasant or mechanic saves by any means a few rupees they are hoarded, converted into orna- ments, or ornaments bought. 1055. You have seen the absorption ef large amounts of silver ?— Very large amounts. 1056. Could you state to the Committee the process in which silver reaches these districts in the first instance;' the silver arrives, I presume, in bars at Bombay ? — The silver arrives at Cal- cutta and Bombay in bars ; a merchant sends the silver to the Mint. The Government make a charge of 2 per cent, for coinage, with a small charge of about a quarter per cent, on fractional coins. Apparently, by the public returns, the Government make 3 per cent, upon their coinage. How this additional 1 per cent, is made, I can- not make out. 1057. The merchant then receives the silver back in coins ? — Less expense of Government _ for coinage. 1058. Then what becomes of the silver ? — That required for the interior is sent there ; as a rule, the English planters and native merchants make advances to the growers for the different crops India produces. 1059. Does the silver go straight into the dis- tricts, or does it circulate first in Calcutta? — That for the districts, the merchants at the seaports send direct from the Treasury or the banks. 1060. Did you receive, as zemindar, the silver direct from Calcutta ? — No ; as a zemindar, I had to receive rents in the interior. As a planter or a merchant, I should have had to receive in the interior silver from Calcutta. 1061. As a planter you received silver direct from Calcutta ? — Yes. 1062. A portion of that would be paid out in wages ? — A large portion of that was paid out in wages. 1063. At that time could you state, as a matter of fact, did you receive remittances of silver every year? — Every month generally. 1064. The silver which came to you through rents, or which came to you, or which was cir- culating in the district, would that have been insufficient for the purposes of trade unless there had been a continual addition made to that stock by being sent up from Calcutta? — I think it would have greatly depreciated the prices of all commodities in the interior if there had not been a constant influx of silver into the provinces, on account of the absorption. Chairman — continued. 1065. Is it your opinion that India can con- tinue to absorb large amounts of silver as regards its circulation ? — It appears from _ historical periods she has always gone on absorbing silver,, and there seems at present no cessation, to this absorption. 1066. I do not wish to put this as a leading question, but simply to elicit your opinion ; does India require silver for two purposes still, namely, the one to increase the circulation, and the other for the purpose of satisfying that demand for ornaments which you have de- scribed ? — lu my opinion decidedly for both pur- poses. 1067. Have you found that where the silver coins had once begun to penetrate, the natives have become accustomed to their use, and that the circulation has increased in those districts, while in other districts there is scarcely any circulation at all of silver ?— The tendency with every native when he gets silver which he does not require for use is to hoard it, or to convert it into ornaments, and there are districts where there is a great deficiency of silver circulation. 1068. The point to which I wanted to call your attention is, are there districts of India where there is a greater demand for silver where the circulation is still very inadequate to meet the wants? — In many of the districts totaUy inadequate. For instance, there are some distrietg where the population averages 600 to the square mile, and some where it is not 50. The poorer and the more dispersed the population, the less coinage is there in circulation, and in many districts I believe it to be inadequate. 1069. I have heard it described that where there have been public works for railways, w where other expenditure has been going on, silver has been introduced into certain districts by Europeans, that afterwards the business in these localities continued ±0 be conducted with a much larger amount of silver circulation than ifl other districts where there has been no such expenditure, and where the habit had not grown up; can you at all speak to that point? — The whole amount introduced by the Public Works is small in comparison with that introduced by commerce ; what you have heard may be true to a small extent, but I should doubt it as a general rule. The only large amounts that have beea introduced for public works are upon the railways, and of that only about 40 per cent, is expended in India, and 60 per cent, in this country. 1070. Does the railway not penetrate into certain districts where commerce has scarcely yet penetrated ? — No. 1071. Are there not railways over tracts of country where as yet there are few European planters ? — There are many districts of India where there are no Europeans, and in others very few; in many parts of Bengal the English planters have decreased a half within the last 25 years, and generally in Bengal the tendency is to de- crease, except in those districts where tea is now being very successfully cultivated. 1072. To turn to a different point ; are there any particular coins which the natives prefer melting for ornament as compared with others?; — Yes ; there were the old sicca rupees which were coined prior to 1808, being of purer silver; they were in great demand for making ornaments, as they could be manufactured better than the new rupee, which contains one-twelfth of alloy.' 1073. They SELECT COMMITTEE jON DEPEECIATION OF SILVER. 51 Chairman — continued . 1073. They prefer the sicca rupees? — Yes. 1071. Were the sicca rupees at a premium afterwards?— There are two descriptions of sicca rupees. The sicca rupee coined in 1818 and 1821, had very nearly the same proportion of alloy as ours ; but the old sicca rupees were almost pure silver, with about 2 per cent, of alloy ; but as all the sicca rupees contain a larger amount of pure silver than the at present current rupee, all sicca rupees sell at a premium. 1075. Did the change at all affect the demand for silver by the natives in the way of inspiring them with any distrust or doubt about the rupee? — You mean the existing coinage ? 1076. Yes. — The existing coinage of 1835 caused an immense distrust throughout Bengal. 1077. Why ? — Government by it introduced a uniform coinage throughout British India. Pre- viously there were several silver rupee coins of different values in purity in circulation. In Bengal there were sicca and sunnut rupees ; the Coinage Act declared the equivalent for 100 sicca rupees to be 106| of the new rupee, and 104| of the sunnut rupees, their exact relative value in pure silver ; the agreements of the Government were to pay the native employes in sunnut rupees, but as the sunnut rupee prac- tically ceased to circulate long before 1835, Go- vernment paid their servants in sicca rupees, without making any deduction, though they were ^ per cent, intrinsically of higher value than the sunnut rupee ; but after 1835, in terms of the Coinage Act, they paid their salaries at the equivalent of 104-1 new rupees for every 100 sunnut. Government continued to pay all exist- ing employes, if their agreements were in sicca rupees, at 106| in new rupees, and in sunnut rupees at 104| ; but, I believe, as a rule, their successors' salaries were paid in the new rupees without the allowance for the depreciation of silver in the new coin ; Government continued to take their payments for land revenue, &c. at the rate of 106f new rupees for every 100 sicca rupees. In consequence the natives believed the Government had taxed the coinage 6| per cent, for the purpose of effecting the saving on the salaries ; this was the confirmed belief when I was in India among the natives ; it led tQ endless disputes and discontent in Bengal. Em- ployers paid their servants in the new depreciated rupee without the allowance, and zemindars exacted their rents in the new rupee at the rate of 106|. The Coinage Act, so far as Bengal was concerned, was rather hastily and injudiciously done, and led the natives to mistrust the Go- vernment. 1078. I ask the question mainly with regard to the effect of changes such as that upon the circulation of silver ; do I understand that the natives are exceedingly cautious with regard to any changes in coinage, and that changes in coinage are likely to affect the circulation ? — Particularly after the coinage of 1835. I am alludino- to Bengal, as in the Madras and Bombay Presidencies the new assimilated in value more nearly to the coins current in these districts, and it had not the same effect. 1079. Do you believe that silver leaves India for the interior of Asia to any extent ? I do not speak with regard to the exports, because that can be ascertained by the Board of Trade Re- turns. — I think to a smaller extent than is gene- rally supposed ; the only mode it can be trans- 0.77. Chairman-coutmneA. Mackenzie. mitted into such provinces is by excess of pur- chases over sales, or by employes in our districts ^ ^^7 ^ ^7"" remitting part of their 'pay. It has been esti- mated as follows : The population of the feuda- t0]-y States is about one-sixth that of the British territory, and it is assumed they take about one- fourth as much silver per head of the population as those in our districts ; this would give about 4 per cent, of the imports, to which is to be added a further allowance of 2 per cent, for all the other provinces of Asia (excluding China and Japan) supplied from British India. This would give an annual absorption of 6 per cent. ' to these non-British territories of Asia. I give these merely as estimates with no means of veri- fication. 1080. Has much of the gold which has been coined in India been melted down? — I should think a very considerable amount, but the gold coinage has been veiy small, 1081. The gold coinage is what? — Gold mohurs, equal nominally to 15 rupees, double gold mohurs, and 10 rupee pieces, and 5 rupee pieces. 1082. Do you think that a portion of what has been coined has been melted down ? — A con- siderable portion. 1083. Have the natives used them to any extent ? — To a very small extent. 1084. Has much gold been hoarded by the native princes ? — I should think it has been used in ornaments, and hoarded. The native princes, and those who can afford it, have a great passion for gold ornaments, and it is their custom to use gold mohurs as necklaces, as gentlemen here wear watch chains. 1085. Of the whole of the gold which during the last 40 or 50 years has gone to India, you consider that a very small portion only has been used for coinage purposes ? — Very small. 1086. Has the remainder been used in any way for trade purposes, or mainly for the pur- poses of ornament ? — I should think chiefly for the purposes of ornament, as the circulation of the gold coin is much restricted : 1st, it is not a legal tender ; and 2nd, payments to actual pro- ducers in India are so small that gold does not enter into the transactions. 1087. Is it exported ?^ — To a very small amount. 1088. Is it exported into the interior of Asia? — On the assumption that the territories of Asia supplied through British India take 6 per cent, of the bullion imports, and on account of its easier transport, a larger portion might be in gold than in silver ; but I cannot state so from my own knowledge. 1089. Have you at all studied the question of the balance of trade between India and Europe ? —Yes. 1090. The balance of trade in the ordinary sense of the word has been nearly always in favour of India, has it not? — Always. 1091. When I say " in the ordinary sense of the word," you have looked at the matter from the point of view of the difference between ex- ports and imports, I presume .' — Yes. 1092. Can you state any statistics over certain periods ? — I think the following will make it clear to the Committee: From 1833-34 to 1837-38, in five years, that is when the exclusive trade of the East India Company was thrown open, the average export trade from India was 10 mil- G 2 +- lions 52 MINUTES OF EVIDENCE TAKEJT BEFORE THE Mr. J, T. Chairman — continued. Mackenzie, ^j^^^ ^ ^^^^ . ^^^^ 1853-54 to 1857-58 it was 1 May 1876. 22 millions. Mr. Pawceit 1093. Does that include the whole export trade of India ? — The whole export trade of India by sea. 1094. Including opium to China? — Every- thing. But in the 10 years which probably the Committee will think most important, from 1864- 65 to 1873-74, the export trade had increased to 56 millions, or a rise of about five and a half times the preceding amount. • Chairman. 1095. Fifty-six millions per annum? — Yes; the import trade in the same figures from 1833- 34 to 1833-38 was 4J millions ; "from 1853-54 to 1857-58, 13 millions; from 1864-65 to 1873- 74 the import trade into India had increased to 32 millions per annum. That is to say, it had increased about seven times the amount in 35 years. 1096. This is the average per annum, not the totals ? — Yes, the annual average. The import of bullion for those seasons shows that in the first five years the average import of bullion into India was IJ millions; from 1854-55 to 1857-58, the average import of bullion was eight millions ; in the 10 years, from 1864-65 to 1873-74, the average import of bullion was 1 1 millions sterling. These figures are exclusive of the export of bullion. 1097. Can you divide the last 10 years into five years and five years ?— The exports from 1864-65 to 1868-69 were 279 miUions; from 1869-70 to 1873-74 they were 281 millions, or only an increase in the last five years of three millions sterling. The imports in the same case for the five years, from 1864-65 to 1868-69, were 158 millions, and from 1869-70 to 1873-74, 161 millions, or an increase of three millions net ; so that for the last five years our trade had com- paratively remained stationary, all other years, from 1834-35, having been nearly doubling every five years. Now, in the first five years, from 1864-65 to 1868-69, the bullion imports into India were 79 millions, and for the last five years of the period the bullion iuiports were 33 millions. The great decrease of the bullion im- ports, the trade remaining stationary, naturally arises from the immense increase in the home requirements of the Government. 1098. Will you state the averages for those two last periods of five years ? — From the first five years, from 1864-65 to 1868-69, the average was 16 millions sterling of bullion; and for the last five years, from 1869-70 to 1873-74, it was 6^ millions, or an annual decrease of the import of bullion of 9J millions into India. 1099. When you say the year 1873-74, what year do you mean? — The official yeai'. 1100. When you say the year 1873-74, from what date does that year begin, and when does it end ? — The official year begins on the 1st April and ends on the 31st March. 1101. You mean, therefore, the year 1873 to 1874, ending on the 31st March 1874 ?— Yes. 1102. All your figures, we are to take it, mean the year ending on the 31st March in each year? — Yes; formerly, I may mention up to 1867, the official year ended on the 30th April ; up to that date the figures are for the official year ending on the 30th April, but subsequent to that Icr the year ending on the 31st March. Chairman — continued. 1103. From 1864-65 to 1873-74, in those lO years what was the excess of the exports over the imports? — The excess of the exports over the; imports was 240 millions sterling. 1104. And the treasure remitted during the same time? — 112 millions. 1105. To pay for a portion of that excess, I presume ? — It paid for a portion of that excess. 1106. Have you added the drafts of the Go- vernment during those 10 years? — The home re- quirements of the Government were 89,000,000/. for that period. 1107. Where do you take that figure from?— From the returns to Parliament. 1108. Is that the requirements, or the actual drafts? — This is the actual requirements as par- ticularised in the accounts that the Government require at home. The actual drafts would be a great deal more, because this does nrft include the payment on the railway dividends. 1109. The treasure remitted, and the home requirements together, make an amount of 201 millions ? — Yes. 1110. Supplying, as far as it goes, the excess , of exports over imports of 240 millions ? — Yes. ' 1111. Leaving a difference of 40 millions ster- ling ? — Yes. 11 12. Which is still the excess of exports over imports ; how do you account for that ? — In the first place, the inaccuracies of the Government returns from India are great. I do not mean the India Office returns, as they are most correct To give you an instance : since the appointment of this Committee, I believe the Government of India have telegraphed home to correct the re- turns for four years to the extent of about li millions each year in the exports. Then there are private remittances, which would account for a considerable amount ; and the Custom House returns give nominal values at which the pro- duce is imported, and there would be a great diff'erence between that and what the produce might sell for. 1113. Supposing that there had been a loss, or if not a loss, short proceeds as compared with the estimate of the exports, that might account over such a large period as 10 years for a con- siderable amount ? — Yes. 1 1 14. If there had been actual loss, that would go in diminution of that excess of exports over imports ? — Yes. 1115. In the same way, if there was a loss on the imports, that would diminish that item ?— Yes. 1116. You have not taken into consideration, in those calculations, the rupee paper which may pass to and fro ? — JSTo, it is left out because you cannot tell the amount. It is used as a medium of exchange. The amount could be ascertained at the Bank of England. 1117. On the whole, do you believe that the Indian securities have been exported in larger quantities from England to India, or from India to England ?— From India to England. 1118. Do you believe that the amount of stocks held iu India is increasing or decreasing in amount ? — Decreasing. 1119. Do you speak with any amount of know- ledge?— Yes; Government since 1859 allowed loans issued in India to be transferred to this country. The dividends on these loans are still payable in rupees by drafts from home on the Indian treasuries ; I forget the amount that has beett SELECT COMMITTEE ON DEPEECIATION OP SILVER. 53 Chairman — ccTntinued. been transferred ; the Committee could procure it from the Bank of England : I believe it will exceed 14,000,000 /. in value since 1859. 1120. Is your knowledge of the Indian trade such that you can speak as to the causes which have led to this cessation of the increase in the amounts of exports and imports during the last three or four years ? — There has been no de- crease ; the increase has not continued to pro- ceed. 1121. My words were the cessation of the increase ? — There is a great decrease in the value of cotton exported in the last five years, as con- trasted with the preceding five, of an annual average of eight and a half millions sterling, which the increase ia other commodities has just made up for, and I think the cessation of the increasing ratio of the exports is to be attributed in a great measure to the efiect of the introduction of rail- ways and steam, which has materially increased the price of labour and enhanced cost of pro- duction. 1 122. As far as you look at the question, from a purely Indian point of view, would there have been a fall in the Indian exchanges due to these circumstances you have described, totally irre- spective of the operation of increased production in America or demonetisation in Germany ? — I think the cause is the great increase of the home requirements of the Government, and that these must have caused a fall in the price of silver and lowered exchanges, irrespective of the other cir- cumstances. 1123. The Government have supplied debtors to India with so large an amount, that they had less silver to remit? — Yes; the efiect is their in- debtedness is substituted in place of silver, and requires that amount of bullion less to be re- mitted to India. 1124. Do you attribute no portion of the fall to this circumstance of diminished trade gene- rally ? — The balance of trade remaining in India in the same proportion it would not matter; of course in the last 10 years India, but for its home requirements, would have taken 10 milllous more silver, the trade remaining as it is. 1125. But if the exports had sold at a higher price, and had not left so much loss as they are represented to have left during the last three or four years, the value of the exports would have been higher? — No doubt they would have realised higher prices. 1126. And if the value of those exports had been higher, there would have been more to pay by this country to India ? — Yes. ' 1 127. Therefore, may it not be said that the depression of trade and the loss on the exports, and the falling value of the exports have, to a cer- tain extent, also had an influence on the ex- change ? — I think you will find that the fall of prices on the imports into India will quite balance the fall of the exports into this country. 1128. You have looked into that point? — I have looked into it, as far as I can, minutely ; if you take the returns, and that is all you can go by, they seem to be very even; there are tl\e returns for the last 10 years to the United King- dom ; they have averaged about 30 millions. Mr. Massey. 1129. I think I understood you to say that the habits and customs of the people of India caused a regular demand for bullion, quite irrespective of 0.77. Mr. Massey — contlDued. what was required for the purposes of coinage ? Mr. J. T. Mackemie. It is, is it not, the fact that the natives ' ^^^ ' ^7''- —Yes. 1130, of the East, from the highest to the lowest, adorn their persons with bullion ornaments when they have the means of doing so ? — Everyone who can aflTord it. Mr. Fawcett. , 1131. I understand that among the various causes that contributed to this depreciation of silver, you attribute by far the greatest import- ance to the increase in the home requirements of the Indian Government ? — Unquestionably, be- cause when the Crown, in 1858, took over the direct government of India the home require- ments then were 4^ millions; now, including the railway dividends, they are 15 millions. 1 132. Therefore, arguing upon that basis, the home requirements have increased by 9^ millions a year, or putting it differently the demand of India for silver has diminished by that amount ? — -Exactly. 1133. And, therefore. If the home require- ments go on increasing, the demand of India for silver will, pro tanto, go on diminishing? — Cer- tainly. 1134. And if that is accomplished with greatly increased production of silver In the United States and a diminished demand for silver from various European countries, the depreciation may become very much greater than it Is now ; is ' that your opinion ?— Decidedly, because India 20 years ago used to take more than the assumed average production of the world when India Vv'as taking 20 millions. Now if you reduce the demand for India to five or six millions with an increased production from America and a de- creased use on the Continent, it is almost Im- possible to say what the price may not fall to. 1135. You have devoted very considerable attention to Indian finances and the financial arrangements at the India Office ; will you tell the Committee whether in your opinion you think the requirements of the home India Office are likely to Increase or diminish. Has any event happened lately which will throw light on that ? — If I might make the remark, I think It is most injudicious of the Government to raise loans for India In England. Chairman. 1136. The question was whether the home requirement, by which I presume Mr. Fawcett means the increased expenditure, is likely to Increase ? — We can only judge by the last 10 years. If it goes on in the same scale it will Increase about three millions every year. That is their Increase over the last five years. You have anincreaseof 14 millions from 1869- 70 to 1873-74 more than what there were from 1864-65 to 1868-69. That is exclusive of the dividends upon tlie railways; if you Include those they would amount to about 10 millions more, or 25 millions In all, for which you have the official returns. For the last five years the home require- ments have been about 25 millions more than bo :ne what they were in tne preceding five. Mr. Fawcett. 1137. I will confine my question as far as possible to facts. To obtain some idea what the increased requirement would be in the future for G 3 ^ India 54 MINUTES OF EVIDENCE TAKEN BEFORE THE Mr. /. T. Mackenzie. 1 May 187(1. Mr. Fawcett — continued. India we may fairly assume this, may we not, that on every loan that is raised in England for India, the interest of that loan payable in Eng- land will represent an increase in the home re- quirements ? — Certainly. 1138. And that the capital, if it is ever to be repaid, will also, if silver depreciates, require so much more gold of course to pay it off? — Cer- tainly. 1139. Whilst this Committee has been sitting, there has beer, a loan raised for India in England of 4,000,000 /., which represents another increase, does not it, of the home requirements ? — Another increase of 160,000 I. a year for the interest on the loan. 1140. Therefore, so far as that cause takes place, there will be an influence at work repre- sented by the amount of interest which will have to be paid affecting the depreciation of silver this year, which was not in operation last year ? — For three months it will enable the Government not to draw on India. In three months they generally expend about four millions ; a four- million loan will meet the home requirements for three months ; for three months it will have the effect of possibly preventing the exchange from going down. At the expiration of those three months, it will decidedly have the addi- tional effect of lowering the exchanges. 1141. Therefore, if it has any effect at all, it is simply a temporary expedient ? — To make things pleasant for three months. 1142. Do you wish to give any evidence about the increased production of silver ; have you looked into the matter at all ? — I simply know from what the American reports say. Mr. Hermort. 1143. "When you spoke of the alteration of the rupee in the year 1835, you spoke of the Govern- ment ; I suppose you alluded to the operations of the old East India Company ? — Yes, as at that time they were the Government of India. Mr. Mulholland. 1144. The t'.xports to India are shipped on account of English merchants chiefly, are they uot ? — No ; I should suppose, of the whole trade of India, about 70 per cent, of it is now conducted by natives of India, Greeks and Germans, and only about 30 per cent, by English merchants. 1145. They get the proceeds for which the goods sell in this country ; they are not bought out in India by the shippers ? — Whoever ships the produce gets the proceeds. 1146. So that it really does affect the ultimate exchanges, the price at which the goods are realised ? — Yes, a low exchange is in favour of an exporter from India. If, for instance, with an exchange at' 2 s., a shipper consigns 1,000 Mr. MuUhoUand — continued. rupees in value, it has to realise at home 100/. for a remittance to cover the shipment; with an exchange at 1 *. 9 d. its realising 88 l covers it. A low'' exchange is in favour of the exporters from India, and against exporters from this country to India. 1 147. I think you alluded to the formation of railways as having a tendency to check exports by raising the price of wages; ought_ not the money expended on railways to have increased the productive powers of the country ?— I think you must take into account that you are dealing with a population of 240 millions ; and, with the exception of some peculiar articles, the amount that they export is comparatively small in com- parison with the local consumption. The local consumption in India is very great, and the ex- ports of many articles are small in comparison with the local consumption. 1148. You do not think the railways have increased the production more than it has in- creased the local consumption ? — No, not the power to continue increasing exports at the con- sequent enhanced prices in production of many articles. Mr. Hubbard. 1149. You spoke of the export trade of India being conducted by Greeks and Germans, where- are those Greeks and Germans domiciled? — Principally in London. 1150. It is not a trade between India, Greece, ' and Germany, but between India and London only, conducted by the houses having Greek and German principals ? — Yes, principally Greeks. 1151. It must be looked upon, after all, as a British trade ? — Entirely. They are really most of them British subjects. 1 152. Do you imagine that those houses have their houses of agency in India, or are they in communication and correspondence with Indian houses having an independent position? — Most of the Greek firms have firms of their own in India, as a rule. 1153. In fact, it is a double trade ; ic is a pro- cess of export, and of the import of the proceeds, but conducted for the sake of one establishment located in London? — Yes, and they having all affiliated establishments in India. In fact, they are doing, and are the real merchants who do, the export and import trade between this country and India. 1154. So that the trade between India and England must not be looked upon as the inde- pendent operations of two distinct countries, each of them exporting to the other ; but it must be looked upon as the operations of English capital sending its exports to India and bringing back the proceeds in Indian produce ? — Yes, so far as con- cerns the trade of the United Kingdom. Mr. Henry Waterfield, re-called; and further Examined. Mr. H. Waterfield. Chairman. 1155. You have preparecL some more state- ments for the use of the Committee ? — I have. 1156. Will you state what they are ?— The report of Consul Booker on the trade of California for the yearsl874andl875,in continuation of the Papers which I put in on the last occasion; an ex- tract from a report on statistics of mines and mining Chairman— continued. in the States and territories west of the Kocky Mountains for the year 1874 by Mr. Raymond, the United States Commissioner of Mining Statistics. I have also the figures of the imports and exports from India, of gold and silver for the months of Februaiy and March, which, with the permission of the Committee, I will add to the figures that I have SELECT COMMITTEE ON DEPRECIATION OF SILVER. 55 Chairman — continued. have already put in. {The same were 'put in, yi^e Appendix.^ I have also prepared a state- ment comparing the figures that have been laid before the Committee in various reports on the subject of the production of gold and silver in the United States (vide Appendix.) I have also a paper comparing the figures on the production of Chairman — continued. Mr. S. gold and silver during this century, which I have 'y aterfi eld. thrown similarly into a comparative form for the , jyj^ jg_g use of the Committee (vide Appendix). And I have a statement exhibiting the production of the mines in the Comstock Lode, Storey County, Nevada (vide Appendix). Mr. Ernest Setd, called in : and Examined. Chairman. 1157. I think you have given your attention to this question of silver for some time past ? — 'Yes. 1158. Among other points you have con- sidered the amount of silver and gold in circula- tion in different countries, and at various times ? — I have. 1159. I think you have stated in one of the papers which I have read, the amount of gold and silver which you consider to be in existence in England ? — I have. 1160. Will you give us those figures ? — I have two statements here, one giving the general result, and one analysing it. 1161. Will you give me the general result in the first place ? — The general result would be that, before 1870, there was 700 millions sterling in gold money in existence, and 650 millions in silver. 1 1 62. Do you include India in that? — I include India ; all gold and silver, which would be either in the shape of money, or in bars held for monetary purposes, exclusive of silver or gold held by way of ornament. 1163. What authority can you give for those figures ? — There are a number of authorities which I have consulted ; one of the principal ones are researches made by the Belgian Govern- ment. 1164. M. Malou?— M. Malou. Besides that, I have made my ovm researches as to the coinages made from time to time in the various countries, which are here at the disposal of the Committee. 1165. Have you been able to ascertain those figures in such manner that great confidence can be placed in those aggregate amounts of gold and silver ? — I think so. I have obtained most of these returns from the Mints themselves. I have the returns of the British Mint, the French Mint, the German Mint, and so forth. 1166. With regard to the total amount of gold, .you have stated that before 1848 the amount of gold current in the world was 400 millions ? — Yes. 1167. On what does an estimate of that kind rest ? — You vdll find works by Humboldt, Jacob, and other authorities, which would very nearly show you that some such amount as 400 millions would be a fair estimate. 1168. Since then 350,000,000 Z. has been added?— Up to 1875. 1169. Though the total production has been 500,000,000 I. ?— Yes. 1170. What has become of the difference ? — That has gone by 'way of ornaments, jewelry, and otherwise. 1171. Out of 500 millions, 150 millions has gone for that purpose P^-Yes. 1172. How can you discover how much has gone for that purpose ? — That is a mere matter of inference. We know pretty well what has 0.77. G Chairman — continued. been coined since 1848. In fact, the evidence as to coinage is almost absolute. 1173. Therefore, you have deducted the abso- lute amount for the coinage, and assumed that the remainder had been used for other purposes than coinage ? —Yes. 1174. You have arrived at the Idea that the present stock of gold coin and bar gold is 750,000,000 /. sterling ?— Yes. 1175. You add the 350,000,000 Z. to the 400,000,000 1, which existed before 1848 ?~ Yes. ] 176. Then you assume that since 1848, the amount of gold has almost doubled? — Very nearly doubled. 1177. What was your amount of stock of coin as regards silver?— £. 650,000,000. 1178. Can you analyse that In the same way as regards any particular dates? — Very nearly so. The coinage of silver of 15 out of the 36 States amounts to 740,000,000/. No definite information can be obtained In reference to the others. The 740,000,000/. has been coined during this century alone. 1179. What remaining stock of coin do you assume ? — £.650,000,000 I assume as remaining. 1180. What amount would you assume as re- gards silver, In the same way as you take away l.^OjOOOjOOO I. from the gold stock for purposes of ornament ? — That I cannot just now state ; but the production of silver from the year 1801, at the minimum estimate, has been more than 900,000,000 /. ; and the balance, I infer, has gone into other uses. 1181. £.900,000,000, you assume, to be the total production, and of that 650,000,000 I. has gone into the coinage ? — Yes. That is to say : 650,000,000 I. remains at the present time, not out of the production during this century alone, but out of the total stock existing before 1800, and the production since. The stock at the end of the last century is estiniated at 800 millions by way of minimum. 1182. Then, as regards the currency In Eng- land ? — The currency in England, including the stock of gold In the Bank of England, which I look upon as virtually In circulation, amounts to 130,000,000 I. of gold, and 15,000,000 /. of subsi- diary silver coin. 1183. What Is your authority for that amount of 15,000,000 I. ?— I take that from the amount of coin which Is manufactured, which amounts to 24,600,000 I. from 1816 to 1875 inclusive ; and I deduct from that such quantities of silver as have from time to time been withdrawn. It is just possible that this estimate of 15,000,000 /. Is not strictly accurate. 1184. Do you believe it to be a minimum or a maximum ? — I believe it to be rather a maxi- mum. 1185. On the whole, you would think there was less In circulation '/ — There may be less than 4 -f- . 15,000,000/. Mt. E.Seyd. 56 MINUTES OF EVIDENCE TAKEN BEFOBE THE Mr.E.Seyd. 1 May 1876. Chairman — continued. 15,000,000 Z. According to ray researches, there must be more than 14 millions. 1186. Will you now go to France ? — In France I estimate the quantity of gold monev present before 1871,at260,000,000Z. sterling, 70,000,000 Z. of silver money of full legal tender value, and about 14,000,000 Z. of subsidiary change. 1187. How have you arrived at the figures of 260,000,000 Z. for the gold ?— I again take the total coinage of France, which amounts, from 1795 to 1872,. to 309,000,000 Z. sterling. I must mention that this 260,000,000 Z. of money is my estimate before 1871, before France made the payment to Germany. 1188. You have taken the whole of the gold that has been coined ? — Not the whole of the gold. I deduct something like 40,000,000 Z., and .«dd the stock of gold at the Bank of France. 1189. How are we to infer that a larger amount of that gold has not left France ? — It has since left France, I admit ; this estimate is, as I state, before 1871. 1190. Even before 1871, how do you arrive at the amounts which you deduct from the total amount coined ? — The bulk of the coinage of 300,000,000 Z. has been made in France in the last 26 years. 1191. What is the figure of what is coined? — £, 309,000,000 has been coined altogether during the centur}-. 1192. From that you deduct only49,000,000Z.? — That is all. ] 193. Have you compared that with the ex- ports of gold from France ? — I have. 1 1 94. You have not been able to ascertain any amounts that have gone from France to Ger- many previously to 1871? — I have not. The Custom-house statistics fail to account for sums carried by passengers. 1195. bo you "believe that 260,000,000 Z. cir- culated in France ? — Yes, and I think that state- ment is borne out by the Finance Minister himself, M. Magne; he stated the same. My statement in- cludes the stock of bullion held by the Bank of France, which amounted to 55,000,000 Z. 1196. Then you assume that in France, not- withstanding the silver currency, they have got twice the amount of gold in circulation to what they have in England ? — Yes. 1197. And that if you add your estimate for the silver circulation and the gold circulation to- gether, there was, previously to 1871, a m.etallic circulation of 300,000,000 Z. ?— Yes, of between seven and eight milliards of francs, say from 250 to 320 millions sterling. 1198. I understand you to say that your views are borne out by the French authorities ? — They are. 1199. Have they been disputed by others ? — They have been disputed as far as the quantity of silver at present in France is concerned. It has been stated that there is much less silver than what I assume. 1200. Have j'ou corrected your figures up to the present date? — Not up to the present date. My statements are based upon the staUis quo of 1871.. 1201. With regard to Germany, what estimate do you form of the amount of silver and gold in circulation there ? — The amount of gold in circulation in Germany before 1871, I esti- mate at 30,000,000 Z., that of full-value silver at 60,000,000 Z., and of subsidiarv silver coinage at Chairman — continued. 16,000,000 Z. Since then considerable changes have taken place by the coinage of gold in Germany, and the sale of certain quantities of silver. _ > 1202. Have you made any calculation as to the amount of 'silver Avhich you believe to be still in circulation ; the amount that the Germans still have to sell ? — Yes, that would amount to about 30,000,000 Z. sterling. 1203. Can you state very roughly how you arrive at that figure? — I must mention that I have arrived at that figure by a comparison with the statements made semi-officially, which I think are rather understated. To a certain extent this rests on inference. The allegation that Germany, after parting with only 6,000,000 Z. of its silver coinage, should have left only an amount suf- ficient for the limited token coinage, is contrary to the fact that full-valued silver coin has hitherto been the staple of the German valuation, as sovereigns are the staple here ; and even the bank note issues did not exceed 30,000,000 Z. Notwith- standing the authoritative .statement put forth, I am of the opinion that the estimates made for the disappearance of silver in Germany by melting and abrasion are most extravagant. In certain districts of Germany gold has scarcely appeared, and the quantity of silver thalers in circulation appears as large as before. A justifi» cation of my view as to the quantities of silver in circulation in Germany before 1872 lies in the fact that, according to the statement put forth, a sum of no less than 31, 000,000 Z. of French, German, and Dutch silver coins have been sent across the frontiers; and if, before 1872, the home- coined thalers formed the greater part of the silver circulation, as it is well known they did, the sum left must be far in excess of what has been assumed. My opinion is that it is fully 30,000,000 Z. ; the estimate of Dr. Soetberr is that nearly 22,000,000 Z. sterling of silver is yet in circulation in Germany. 1204. He is a statistician of eminence ? — Yes, although he approves of the steps taken in Ger- many, he himself criticises the statement made by the Government. 1205. His view is that there are how many millions?— £.22,000,000 of thalers yet in circu- lation — full value silver money. 1206. Would a portion have to be deducted for the new coinage, or is that after making allowance for the new coinage ? — A portion of that will have to go into the new coinage, but not much. 1207. You are aware of the amount fixed for the new coinage?— Ten marks per head of popu- lation. 1208. That is altogether 21 millions ?— Yes. 1209. Are you aware how much has already' been coined ?^ — I am not aware how much has been coined up to the present day ; I believe the amount is nearly 10 millions ; the coinage is con- tinually proceeding. 1210. That would leave 10 millions more to be coined? — As the outside limit 10 millions will not be coined, in all probability. 1211. Why do you assume that it vrill not be coined in all probability ? — We go pretty nearly by the experience in France. In France eight francs were assumed as the outside limit, but it has not been fully carried. 1212. You mean all subsidiary coinage below five francs ? — Yes. 1213. But SELECT COMMITTEE ON DEPRECIATION OF SILVER. 57 Chairman — continued. 1213. But as you have a five-franc piece to do a certain amount of work in France, and as you have got no gold piece under the 10 marks, would not they require more in Germany ? — Ten marks is also accordingly more than eight francs ; is a higher amount, it is nearly 50 per cent. more. 1214. "Would not you require more subsidiary currency in a country where the unit is 10 marks than in a country where the first coin which is full weighted is five francs? — You mean from the use of the five-franc piece the average of the subsidiary coinage in France would be less than in Germany ? 1215. Certainly ; would it not be so ? — That would be so ; T admit that. 1216.- In a country with the first amount of five francs of full weighted coin you do not re- quire so much subsidiary currency as in a country where the first full weighted coin is 10 marks ? — Where the gold valuation prevails. 1217. In fact every sum between five francs and 10 marks would have to be made up, as it were, by additional subsidiary coinage ? — Quite so. 1218. If anyone in France had to pay eight francs he could pay five francs in a full weighted coin and three francs with subsidiary coinage ? — Just so. 1219. But if in Germany under the new system he had got to pay the same amount, eight francs, he would have to pay the whole of it in subsidiary coinage ? — Yes. 1220. There being no amount under the full weight coin of 10 marks ? — Quite so, on the same system as exists in England. 1221. The consequence would, therefore, be that circumstances would require that the estimate of eight francs which was taken for France would not hold good in Germany, the conditions would be different? — That is a matter of experience. Here in England, with our some- what higher standard of prices, the circulation of subsidiary silver does not reach 10 s. a head. 1222. Theoretically if you argued from one to the other that argument would break down, would it not, because the circumstances would be different, but experience might influence the matter differently? — Quite so, upon the mere argument of the case it would seem that Germany would require more subsidiary coinage than France. 1223. So far as the argument is derived from the single point of "the eight francs having been fixed for France when a five-franc piece was a full weighted coin? — Yes. 1224. Assuming that they coin the 10 millions which they have estimated they would have to coin, would that have to be deducted in your calcula- tion from the 30 millions or not ? — That would have to be deducted from the 30 millions. 1225. Do Dr. Soetberr's calculations correspond to about the date when you would estimate that the 10 millions had already been coined ? — They do ; they stand upon the same basis. My assump- tion merely is, and I say it is an assumption, that the amount is larger than that taken by the Oovernment or by Dr. Soetberr. 1226. You would calculate that there might be more even than the 30 millions of which you have spoken ? — Quite so ; I think the calcula- tions made by the German Government as to the quantity of coin actually consumed are far too high ; there is probably not one-fifth of the amount which they have taken, 0.77, Chairman- —continued. Mr, E. Seyd. 1227. Will you state your grounds for that? — — —The grounds are very simple, the assumption i May 1876. IS that the abrasion of coin, as a rule, has been between half and one per cent, per annum, whereas in reality it is scarcely one-twentieth per cent. 1228. Have you gone pretty fully into the question of the amount of German coin still re- maining in circulation ? — I have gone into it as fully as my data would permit. 1229. Are you aware why the German Go- vernment have arrived at the opinion that so much silver has already left the circulation ? You spoke of abrasion ; would not that be a single and very small cause ? — A very small cause in- deed ; it would not consume a million sterling of the entire amount during the century. 1230. Then there would be the melting down of the silver ? — The melting down for purposes of plate, even taking it at the very highest average, would not amount to 10,000,000 /. ster- ling from beginning to end. 1231. Then there is the melting down for pur- poses of export ? — The only exportation that has practically taken place has gone through Ham- burg, and that amount is also a good deal less than the statements made according to my expe- rience. 1232. Are you not aware that there has been a melting down in South Germany, too, of silver, which has been exported, via Egypt, for instance ? — I am not aware of any large quantity having been melted down, but a portion has no doubt been so absorbed. 1233. Have you gone into the question as to the amount of silver in the coins at various times in Germany, to show that at some periods it would have paid to melt down the silver in order to get the gold out of it ? — That has been the case ; some of the old thalers contained gold, and so did some of the old guilders. 1234. Have you made an allowance for that in your calculation ? — I have; all that business was conducted at Hamburg principally, and some at Frankfort. 1235. Have you made an allowance for the melting down of the florins ? — I have; taking the entire coinage of Germany at 98,000,000 /. ster- ling, I have added to that that which forms a most important element in considering the ques- tion of the quantity of silver in Germany, the coins of foreign countries which were in use in Germany, and I have mentioned that after 1871 the German Government exported no less than 30 millions sterling of those coins. There were nearly 20,000,000 I. sterling of five-franc pieces, 10,000,000 I. of Dutch guilders, and also a large quantity of Austrian pieces. My estimate is that of this total of coin there remained in 1871, 60,000,000/. sterling in Germany ; that would in itself be an allowance of 68,000,000 Z. having dis- appeared. Besides this, there was a considerable stock of bar silver in the banks. 1236. We have had evidence in detail before us, showing that the coinage of Germany was 89 millions ; how do you arrive at 98 millions ? — I think you will find that the total statistics give 98 millions. 1237. The official statistics give 89 millions? — Up to the latest date ? 1238. Yes, up to the commencement of the mone- tary changes in Germany ? — I think you will find in M. Malou's statement that it was 98 millions, H-^ up 58 MINUTES OF EVIPENCK TAKEN BEFOEE THE Mr.E.Setfd. 1 May 1876, Chairman — continued, up to ] 873, but this already includes a portion of the new subsidiary coinage. 1239. Can you speak from your own know- ledge of the examination of German official documents?— Partly by the examination of of- ficial documents and partly by other statements. 1240. Can you tell us anything with regard to silver in Russia? — There are no statistics pub- lished by Eussia as to the quantity of coin ; Dr. Linderman alludes to a report which the Russian Government makes. The great bulk of the Russian silver has all disappeared ; it has all been exported. 1241. Can you state what you believe to be in Austria at the present moment ? — That I am not prepared to say ; the quantity was very small, but I hear that a number of florins have been re- imported. 1242. Can you tell us the amount of silver in stock in the United States? — The subsidiary coinage of the United States has almost entirely disappeared: they are now endeavouring to re- establish one; practically the old silver dollars have long been exported. 1243. Do you lay it down that practically there is no silver in the United States at all at present ? —Except the stock which may be held pro- visionally as it comes from the mines, there is no silver in circulation, or a very small quantity only. 1244. No silver worth taking into account ?— No silver worth taking into account. 1245. How much gold do you estimate there to be in the United States ? — With the exception of the Western States and California there is practically no gold current in the United States. The Treasury, as well as the New York banks, hold a certain stated quantity. 1246. Will you state that quantity? — Thirty millions sterling I take to be the quantity of gold at present in the United States. 1247. Divided between the banks and the Treasury ? — Yes, and in circulation in California. 1248. Can you separate the three items? — I have not the data here, they are in the American official documents ; they vary of course ; now and then the Treasury hold more, and the banks hold variable amounts, as the exchange varies. 1249. Previously to 1848, what metallic cur- rency did the United States have ? — I have not been able to get any definite statistics as to the quantity ; it is more a matter of inference. The American coinage has always been liable to ex- port; from the very beginning their coin has always come to Europe, so that it would be ex- ceedingly difficult to fix upon any quantity at any definite period. 1250. I think you have stated at one time some views with, regard to the amount of metallic cur- rency ; for instance, that the metallic currency was far lar2;er before 1848 than the 20 millions of gold now held by the banks and the Treasury ? — That would be indicated by the rate of ex- change which then existed in the United States. By way of inference there must have been a larger quantity of coin at that time before 1848, comparatively, than since, because there was no premium on gold. 1251. What was the total amount of gold pro- duced in America between 1848 and 1875 ? — I do not have the precise statement at hand here, but Dr. Linderman gives the quantity. I must mention that the publication of mine, to which Chairman — continued. you refer, is merely a condensed account of what I ventured to submit at the Society of Arts. 1252. I think you have studied the questionas regards the use of silver apart from its use as coin ? — I have. 1253. Can you give the Committee some sta- tistics upon that point? — In M'CuUoch's Die- tionary there appears, quoted from Porter's work the quantity of gold and silver consumed in this country from 1801 to 1850. I have since through the courtesy of Sir Wm. Stephenson the Chairman of the Board of Inland Revenue obtained similar returns, from 1852 to 1875, of the amount of duty paid respectively for gold and silver and the drawback, and at the calculation of the duty on plate of 18*. for gold and Is.Qd. per ounce for silver, I have been able to make up the account. It appears according to that, that the consumption of silver in this country has fallen off In 1810, for instance, we consumed 1,171,000 ounces, whilst in 1871 we consumed only 598,000 ounces of silver. The Table containing these statistics will be found in the journal which I will put in. (7'Ae same was put in, vide Appendix). Mr. Fawcett. 1254. That gives no estimate whatever of the amount of silver that is used. That is only the amount used for silver plate ? — Yes, and it in- cludes the re-melting of old plate. 1255. The great quantity of silver is used for other purposes, is it not ? — The entire quantity used for electro-plating amounts to under one million ounces per annum. 1256. You may draw much too wide an infer- ence from these figures. These figures do not by any means conclusively prove that the use of silver has fallen ofi\ They simply show that the use of silver has fallen off for one purpose? — For the specific pm-pose of plate. Chairman. 1257. A million ounces is used for purposes of plate ?— Yes. 1258. You estimate that another million of ounces is used for electro-plating ? — Yes, and all my authorities agree that this is the maximum for England. 1259. Have you formed any estimate as to the total use of silver for manufacturing purposes in England ? — Such an estimate can only be formed, with anything like accuracy, in this country. Expressing an opinion on the point, I should say that the absolute loss of silver in the total ster- ling silver and electroplate manufacture in this country amounts to about one million and a half ounces per annum. 1260. Silver is used for photographic purposes? ' — Yes, that quantity is small ; it is under 30,000 ounces per annum. 1261. Having given your attention to this, and endeavoured to collect together all the purposes for which silver is absorbed, can you state to the Committee any others besides those which have been mentioned? — Silver is used for medical purposes, nitrate of silver, and for hair-dye ; but that is probably a very small amount. 1262. Your belief is, that the total amount of silver used for manufacturing purposes in this country is comparatively an unimportant element in the calculation ? — Unimportant, comparatively, in the question of supply and demand. 1263. How many million ounces does it amount SELECT COMMITTEE ON DEPRECIATION OF SILVER. 59 Ydu would take a larger amount for Chairman — continued. amount to, according to your views, as a maximum statement ? — In England alone ? 1264. Yes? — Two million ounces might be the maximum at times. 1265. That would be the value of how much? — £. 300,000 or 400,000" Z. 1266. Have you made similar inquiries in other countries ? — I have, as regards France. 1267. Can you give us any details ? — No official details, because there is nothing officially published in France. It would be only a matter of inference by way of inquiry into the various trades. 1268. What estimate have you arrived at? — In this country we use more electro-plate than in France, but in France the consumption of solid articles is rather larger than here. 1269 France ? — Yes 1270. Would you take 1,000,000/. sterling per annum? — Hardly as much as that. I should say that the consumption in France is between 400,000 I. and 500,000 I. 1271. In Germany?— In Germany it would be a great deal less than in England. 1272. Why? — There is not so much silver plate used, and what is used is very thin. 1273. Do not the German peasantry, much more than the English of the same class, collect a certain amount of silver spoons, with which they make presents to their daughters when they marry? — Quite so; the same as in France. The great consumption of silver plate in this country is among the higher classes, but in France, as well as in Germany, it is among the lower classes. 1274. Would not that be a reason why there should be more used in Germany than in Eng- land ? — I hardly think more would be used in Germany than in England, but that again, to a great extent, is a matter of opinion. There are no statistics, and nothing at all available. A kind of judgment might be formed by the quantity of silver refining that goes on in the country, and that is a great deal less in Germany than here or In France. 1275. Adding up the amount used for electro- plating, photography, and all other purposes in Europe, would not it come to a considerable amount ? — It would amount to between one and a half to two and a half millions sterling. 1276. For all countries together ? — For all Europe together. 1277. But you have already allowed one and a half million for England only ? — I meant one and a half million ounces, not sterling. It is possible that in one year there might be a rise in the consumption of silver to a million ounces, and that more might be used for plate. These are contingencies of trade. 1278. Will you state, in your own way, the amount of ounces which you consider would be likely to be used in England, France, and Ger- many respectively ? — Between five and six million ounces. 1279. Do you make any allowance for the rest of Europe ? — I have not gone very closely into all the rest of Europe. Even for Europe it is a matter of inference. The chief consumption takes place in the three States named. 1280. I think generally, in your published writings on the subject, you have almost elimi- nated the idea of the consumption of silver for manufacturiiig purposes; you have treated Q.77. Chairman — continued, as a trifle neai'ly everywhere ? It trifle, but I were made sumption Not as a have treated the statements which in reference to the enormous con- as being exaggerated. My object Mr. E. Seyd. 1 May 1876. principally was that of showing the exaggera- tion. 1281. In fact, you were answering other esti- mates that had been made ? — Quite so ; that was my object chiefly. 1282. Which dwelt on the loss by abrasion and other things, and expressed views which you do not share on the subject? — My statements had been challenged, and I endeavoured to sup- port them by more exact evidence. 1283. Have you gone into the question of the consumption of silver for purposes of ornament in India ?— 1 have not ; not anything like original research ; I have taken statements made by others as the foundation. Mr. Baxter. 1284. I want to clear up one point with regard to the United States ; you said there was no subsidiary coinage in the United States at pre- sent, and they were endeavouring to establish one. It is a fact, is it not, that they are coining now with a view of replacing the fractional currency ? — They are projiosing to do so. 1285. At this moment are they not coining a very large sum indeed, and going on rapidly ? — They are beginning to do so now. 1286. With a view of replacing the whole of what is called the fractional currency ? — Yes. 1287. Have you formed any estimate of the amount of silver that would be required to replace that currency ? — The estimate will be in accord generally with what would be used here. The United States having adopted the gold valuation, about the same proportion of silver currency can circulate in the United States as is circulating here. 1288. The same proportion to the population ? — Yes ; as a simple test you may take it, as a rule, that it would amount to two dollars or two and a half dollars, supposing the system became complete. 1289. That would be 15 or 16 millions sterling? —Yes. 1290. A large portion of the produce of the American mines, I suppose, is now beirg absorbed for that purpose ?— Yes ; I maintain, however, that in the United States they will nat be able to keep the silver currency in circulation so long as their premium on gold exists. It is a matter of contention now whether the silver coinage can be maintained. The moment the price of silver • in this country rises to 55 pence it would be ex- ported. 1291. The new coinage of the American Go- vernment would be exported to this country ? — Yes, to this country. 1292. Would not it be replaced by fresh coinage ? — That would also be exported again. The premium on gold in the United States being 13 per cent., and the difference between the subsidiary coinage and the full value coinage only 9 per cent, there would be a margin of 4 per cent, towards the export of the subsidiary silver itself. Chairman. 1293. The subsidiary coinage being coined with a margin of 9 per cent, at present ? — At present. H 2 ■•- 1294. You 60 MINUTES OF EVIDENCE TAKEN BEFOKE THE Mr. E. Seyd. 1 May 1676. Sir Charles Mills. 1294. You have got an impression, I believe, that the depreciation of silver has not been caused to any extent by the low prices of Indian produce ? — No, I do not think it has been caused by that. 1295. Is not less silver required for the pur- pose of paying for Indian produce ? — That would be the case in the event of the Indian trade having fallen off, but the Indian trade has not fallen off. The sending of silver to India is entirely dependent on the balance of trade. 1296. It has fallen off in value? — Scarcely, according to the statistics. The only thing that appears to have checked the import of silver into India from here, are the Council drafts, which are now larger than they were formerly. Chairman. 1297. There is one question with regard to the American coinage ; I think at one time the Americans coined in the proportion of 16 of silver to 1 of gold, did they not ? — Nearly 16. Their old dollar weighed 412^ grains. 1298. Can you explain that to the Committee? — Under the old Coinage LaAv of the United States, which maintained both gold and silver as the standard, the proportion of silver to gold was taken as 16 to 1, whilst the proportion elsewhere was 15^ to 1 ; and one of the consequences of this arrangement was the immediate export of the American dollar. 1299. Will you explain to the Committee how that occurred, and the operation that would be performed ? — The American silver dollar was accordingly cheaper by about 3 per cent, than the five-franc piece. 1300. It contained so much less silver? — It contained three per cent. more. 1301. If it contained more, how was it cheaper than the five-franc piece ? — The American dollar contained 3 per cent, more silver than the pro- portion which was universally accepted, assuming that proportion to be 1 to 15|. The American old dollar ought to have weighed 400 grains, instead of 412^ grains. 1302. Was the operation this, that that coin would be brought over, we will say to France, then it would be melted down and coined into a five-franc piece, and there would be so much over which could be sent back again to America as profit? — Quite so; profit was made on the melting down of the American dollars. 1303. The five-franc piece could then be changed into gold again ; that gold could be taken over to America and the operation re- peated .' — Just so. 1304. But the point was that the silver coin weighed so much more than the five-franc piece, it contained so much more silver ? — It contained 3 per cent, more silver than the usual average of legal tender silver coins. Mr. Baxter. 1305. Is the new coin to contain that additional quantity of silver ?— Their neM- trade dollar is still heavier, it contains 420 grains ; it is conse- quently worth about 5 per cent, more than the five-franc piece, in the relative proportion. 1306. The old dollar was worth 3 per cent, more than the usual average ? — Yes. Chairman. 1307. To make it clear with the same amount of Chairman — continued, gold they could, through the system of the double standard, be able to get a certain amount of silver in America and a certain amount of silver in France ?— Yes. That is to say, they would buy more silver in America for the same amount of gold, because America adopted a proportion between gold and silver different from that of the other States of the joint valuation. 1308. And the amount that they got for the same quantity of gold in America was 3 per ceni larger than they would, have got for the same amount of silver in France ?— 'I'hat is the correct way of stating the case. It is independent of the question of what is called the double standard. Mr. Baxter. 1309. Three per cent, formerly, but the new coins I understand to be of eight grains more value? — America has abolished the old dollar and now coins a trade dollar which is still heavier, and contains 420 grains, and of course gives more silver still than formerly. 1310. What is the per-centage of difference between the coin that the Americans are now coining, the new coin, and the value of. silver coinage in Europe ? — At the rate of 1 to 15^, the value of the silver coinage in Europe, the American dollar ought to have weighed 400 grains, but was coined at 412J grains; the new dollar at 420 grains gives an additional 2 per cent. 1311. Is that 6 per cent, in all? — The exact difference is 5 per cent. Chairman. 1312. As I understand, the American Govern- ment is now performing two monetary operations? — Quite so. 1313. The one is replacing the fractional currency which has been in bank notes by silver token coins ? — Yes, by subsidiary silver coin, 1314. And the difference is in one respect like our shilling, that they are coined avowedly under the value ? — Precisely the same system as customary under all the systems of the gold valuation. 1315. On the other hand, they have been coining trade dollars, have they not, for export to China and Japan ? — Yes. 1316. But that has been under a totally dif- ferent operation ? — That is an entirely separate system, so to speak, although the trade dollars were legal tender. 1317. Those trade dollars were legal tender, and were coined with reference to gold rather on the system of the double standard than as subsidiary coinage ? — On a compromise, so to speak, between what you call the double standard and the gold valuation. 1318. And they were coined, not in the pro- portion of 15|, which is the ordinary proportion in those countries that have got the double stand- ard, but they have been coined in the proportion of 1 to nearly 17 ? — The proportion would be 1 to 16J. 1319. The Committee, I think, may under- stand, may they not, that the trade dollar is made cheaper, so to speak, not by mere alloy being put in, but by more silver being put in ? — By smaller division ; the ounce of silver is divided into less pieces, if I may so express it. 1320. No; you have explained to us tha;t when the Uniteil States before coined silver dollars which were exported when the proportion was SELECT COMMITTEli ON DEPRECIAIION OF SILVER. 61 Chairman — continued, was 1 to 15^, the nominal silver piece weighed more than the piece corresponding to it in Europe, and that, therefore, it was exported in order that there might be the profit of the extra weight ? — Just so. 1321. Is the same the case as regards these trade dollars ? — That is not the case at present, because, although the new dollar is still heavier, the price of silver has fallen in Europe. States like Germany and France do no longer purchase silver, therefore the trade dollar does not come to Europe to be exchanged for gold, and con- verted into other silver pieces of legal tender, but is exported to China only. 1322. Have the United States followed an nnalogous course in coining these trade dollars, that they have debased the silver by putting more silver into the coin while only allowing it to cir- culate for the same amount? — Just so. 1323. They have not done this : they have not made a debased coin by saying that this dollar shall contain so much less silver and so much more alloy ? — They have performed the contrary operation, so to speak. 1324. The silver coin is really worth more, and not less ? — It is worth more. 1325. You have used the term " to debase the currency ;" it is not that they have debased the currency, but they have made the currency even more valuable ; they have debased the silver by assuming that it stood in the relation of 1 to I65 to gold instead of 1 to 15J ? — They have debased their Mint price for silver, if we may assume that the division made at the Mint determines the Mint price. 1326. But the coin itself contains more silver, and is, so to speak, the better coin, and therefore is exported ? — Yes. Mr. Cave. 1327. What is the object which the United States have in incurring this loss to the country ? — The actual object is a matter of controversy. We should look upon this step as a deliberate step towards debasing silver ; as one injurious to the silver interests of the United States. They might have said : " We will put 450 grains of silver into this dollar " with just as much or as little reason as they have determined upon 420 grains. Mr. Favjcett. 1328. They were recognising the certainty of silver to depreciate? — They have, so to speak, forestalled it. They were the first of the nations •who deliberately debased silver 5 per cent, by virtue of the law. 1329. You are not aware that the object stated has been, that they wanted to drive out, and to have better dollars than the Mexican dollars which used to circulate ? — No doubt that is part of their object, to find a market for their silver in the East by offering to the Eastern people a better dollar. 1330. I have seen it stated, that formerly the Mexican dollars were excessively valued in China, and that the Americans thought that they would have a silver coin which should compete with those favourite dollars? — Just so; the Chinese people would soon find out that there was more silver in the new American dollar, and accord- ingly favour it. 0.77. Mr. Cave. greater 1331. Is not that the case to a still extent in the old Colonato dollar ? — To a certain extent. 1332. That was still more favoured than the Mexican dollar, was not it? — Yes. Altogether the dollars have been a matter of fashion, so to speak, in China. Then the Mexican dollar went to a very high premium. The Hong Kong dollar was never accepted by the Chinese, and now they are likely to accept the American trade dollar. Chairman. 1333. Did the American Government not coin these dollars in this proportion of 1 to 16| before the great fall in the price of silver? — Yes, quite so. The law was passed before the price of silver fell as it has done. 1334. And it was passed rather with a view to the commercial relations between America and Japan, than looking to the financial position of gold and silver relatively to each other? — It was a transaction entirely independent of the ijontro- versy. Mr. Hubbard. 1335. You have your book there ; please open at page 96 ? — I give the details of the matter. 1336. You state there that "the United States have within the last three years coined a new silver dollar, not for legal circulation, but for export to China and India ; have they made that dollar 378 grains fine ?" Can you tell the Committee what were the contents in fine grains of the old dollar, that being the new one ? — In this very paper there is the statement. The (• Id dollar weighed 412^ grains ; 900 fine. 1337. If you can give me the fine grains of the other, we shall be able to make the com- parison? — That would be about 371 grains fine. 1338. If the other were 371, and this were 378, this was better than the old one, and not worse ? — -The coin is larger by seven grains of fine silver. Chairman. 1339. The silver has been debased by making a better coin to do the same work ? — I draw a distinction between the debasem.ent of the coin and the debasement of the material. I will furnish you with the exact detail of these matters in a Supplementary Report (see Appendix). Mr. Hubbard. 1340. The depreciation in the price of silver was an event which was acknowledged through- out the world, and not peculiar to the United States ? — Yes, it is an international matter ; it is a question of international value. 1341. Has not silver fallen all over the world ? — All over the world it has. 1342. Therefore it had fallen in the United States as well as in Germany, and France, and England?— Quite so. 1343. Why, therefore, do you reproach the United States with wantonly debasing silver ; silver had fallen because it was more abun- dantly produced, and the demand for it was not equal to the improved supply ? — That would raise the entire theory of the case which you are anxious to avoid, what caused, or who started the debasement of silver ? The United States have contributed towards the fall in the price of silver ; they were the first, at all events, H 3 -I- who Mr. E. Seyd. 1 May 1876- 62 MINUTES OF EVIDENCE TAKEN BEFORE THE Mr^E. Seyd. 1 May 1876. Mr. Hubbard — continued. who contributed officially to the fall in the price of silver. 'J'he Germans merely demonetised it, but the Americans deliberately adopted a lower price by their Mint law. It is for that reason I think I am justified in saying they practi- cally were the first to debase its value. Mr. Fawcett. 1344. Using the word debased as applying to the conduct of the United States, although that word usually implies censure, when you say the Government has debased the coinage, you do not mean in this case in the slightest degree to cen- sure the United States, do you ? — I do mean to censure them. 13*5. Why? — Of course this is a matter of controversy. The question asked is, what was the object of the United States in making this change ? There is a legitimate object, and there is an object which is not a legitimate one, but that is a matter of opinion. I consider that the United States did wrong in first lowering the price of silver by their Mint law. Chairman. 1346. You say in your published lecture they did it for the purpose of driving out and taking the place of the Spanish and Mexican dollars there current? — Yes ; thati? the avowed object. 1347. Do you believe, as far as you have been able to ascertain, that that was the real object? — The real object. 1348. And it was incidentally that they fore- stalled the fall of silver ; do you think that when they took this step, they had it in their minds " Silver \i going to fall, and therefore we had better establish a new relation "? — I think that was incidental, not founded on anything like scientific research; for instance, if the United States had lowered their coin from 412 grains to 415 grains, the effect would have been just the same, only the lowering of the price would have been less than what it is now ; but they adopted 420 grains, because it seemed to be a round sum. That this proceeding did not involve any design founded on, or elucidated by calculation as to the coming depreciation of silver, the event proves. The difference adopted is 20 grains or 5 per cent, from the normal price, but in 1876 silver itself had fallen 12 per cent, below that. I may mention at the time I had conversation with people from the United States about this very matter, and predicted some suchi result. 1349. They raised the dollar to 420 grains ? — Yes. 1350. What was the old dollar? — Four hundred and twelve and a half grains. 1351. How do you get at the 8 per cent, dif- ference ? — It is not 8 per cent., but 8 grains upon the old dollar, or 20 grains upon the as- sumed proportion of 15^. The 5 per cent, dif- ference between the 1 to 15J is what I wish to point out. Mr. Fawcett. 1352. Why do you think that, if silver is going to be depreciated, independent of the action of a Government, simply from the supply increasing, and the demand falling off, a Government can be said to act wrong, because, using your own words Mr. Fawcett — continued, they forestalled that event, and recognised it as a possibility ? — Again, I may say, that raises the entire question ; you allege that the fall in the price of silver is due to the natural cause of supply, I say that it is due simply to the legis' lative Acts which limit the use of silver. The question is what is the truth in that respect, whether there is any actual overwhelmingly greater supply, or, if there is, whether it would not be readily absorbed if the laws permitted it, without lowering the price, as they have hitherto done. 1 353. I will not go into that question of theory, but your contention is that the depreciation of silver has not been due to an alteration in the supply of silver, and demand for silver, but simply to passing a certain law quite inde- pendently of the change ? — To the killing of the demand by law ; I use that word ; the question of demand is as important in this case as the question of supply. 1354. If you recognise the killing of the de- mand as one of those things, you must recognise supply, because suppose you destroy one-fourth of the demand, the supply remaining the same must affect the price ?— Yes. 1355. Therefore after all it comes to demand and supply, whatever causes you say the demand has been afi'ected by ? — I hardly understand this form of the question. 1356. I will not enter into the theory; I understood you to say that you do consider the depreciation of silver as being due to the demand and supply, and then afterwards I understood you to say that you thought the depreciation was due to Governments artificially affecting the de- mand ; therefore you do think it does affect the demand and supply ? — If I expressed myself in that way, I did not mean to ascribe the deprecia- . tion to the just action of supply and demand, for the depreciation is only due to the action of the laws against the demand, its annihilation by law. Mr. Cave. 1357. I understood you to say that you ob- jected to the United States tampering with their standard as the means of creating an additional demand for a particular coin in China and India? — I object to it on this ground, that it is only another contribution towards the depreciation of silver; that all States must follow the same policy. 1358. Tampering with the standard for the purposes of trade is something different, is it not ? — Yes ; but that is the avowed object men- tioned in Congress, on account of which this law has been passed. Permit me to mention that the object for which I had prepared myself was that of showing to the Committee the actual state of the valuations, as far as they fall under popula- tion, and if the Committee would permit me to show that evidence, it is a short matter ; it might perhaps be considered of some value. Chairman. 1359. That is in your Paper, is it not ?— It is contained in my Paper. 1360. Will you put that Paper in, separating it from matters of opinion? — I will do so. (^The same was put in, see Appendisp). SELECT COMMITTEE ON DEPRECIATION OF SILVER. 63 Monday, 8th May 1876. MEMBERS PRESENT: Mr. Baxter. Mr. Cave. Mr. Christopher Beckett Denison. Mr. Fawcett. Mr. Goschen. Lord George Hamilton. Mr. Hermon. Mr. Kirkman Hodgson. Mr. Hubbard. Mr. Massey. Sir Charles Mills. Mr. Shaw. The Eight Honourable GEORGE JOACHIM GOSCHEN, in the Chair. Mr. Walter Bagehot, called in; and Examined. Chairman. 1361. You have been for many years, I believe, the editor of the " Economist " ? — Yes. 1362. I think you have given particular atten- tion to this silver question ? — Yes. 1363. Have you considered the relation between the depreciation of silver and the Indian exchanges ? — I have devoted a certain amount of attention to it, and it appears to me to be almost certain that the first immediate eifect of the depre- ciation of silver will be to cause an unfavourable balance of trade with the East ; and, in conse- quence, a great export of silver to the East. 1364. It has been alleged that the depression of the Indian trade has in part contributed already to the depreciation of silver ? — I should hardly like to give an opinion on such a point ■without reading the evidence which has been given before this Committee, which I understand has on this head been contradictory ; it appears to me that, to a great extent, the depres- sion in the trade has been common both to ex- ports and imports; and, therefore, would not affect the balance of trade, or, in consequence, the exportation of silver to the East. 1365. If the fall in the value of the crops ex- ported from India to England had been compen- sated by a corresponding diminution in the exports from England to India, trade might be depressed, but the price of silver would remain unaffected? — Quite unaffected as far as that goes. 1366. Do you share in the view that has been expressed that the drafts of the Council of India have contributed considerably to the depreciation of silver ? — I should rather put it in this way, that the drafts in India represent an increase in the tribute, a beneficial tribute no doubt, which India pays to this country, and, of course, that being a payment which she has to make, alters the exchange, tends to make it unnecessary to remit silver from this country, and therefore diminishes the demand for silver. 1367. Do you believe that the fall in the price of silver has operated unfavourably, or is calcu- lated to operate unfavourably, in Indian trade, either temporarily or permanently ? — I should say that the effect of the depreciation of silver wa,s to cause an i^n creased export of goods from 0.77. Chairman — continued. India to this country, a diminished export from this country to India, and, in that manner, to cause an unfavourable balance of trade. 1368. Could you explain that a little more fully to the Committee ? — I think the increase of the export of goods from India to this country will arise in this way : a merchant in London, who is thinking of importing goods from the East, looks at the price current in Calcutta, and he sees the price quoted in rupees. The mer- chant in London is in possession of sovereigns in London, therefore he has two operations; first, he has to buy his rupees in India ; next, with those rupees he has to buy the article which he saw in the price current. The question of profit and loss to him is compounded of the result of those two operations ; if, therefore, he can buy his rupees in Calcutta on more favourable terms, he will find it to his interest to go into a specu- lation which would not otherwise be profitable. If he can get rupees at Is. 8 d. instead of 2 s., and he can buy his goods in Calcutta with the same number of rupees, that is so much extra gain to him. Conversely, the English exporter of goods to the East will receive payment in rupees, and he will have to sell those rupees ; and if he sells them for a less amount of sove- reigns, he will suffer a loss, and that is a dis- couragement to exporting from this country to India. The result of these two operations, of the encouragements of exports from India to this country, and the discouragement of exports from hence to India, necessarily is an increase of the balance which this country has to pay to India, and consequently a flow of silver to the East. 1369. And is, so far, a counterbalancing ele- ment tending to raise the price of silver as com- pared with the other causes which have been mentioned, which might depress the price of silver ? — Quite so ; and I should say a cause of even greater magnitude than any which tend to depress it. 1370. It is a rectifying cause? — A rectifying cause, and a rectifying cause of the first magni- tude, because what I have said extends not only to India, but to all countries which have a silver currency. Those countries are the great majority of the world ; the circulation of silver in those h 4 ■<— countries Mr. W. Bagehot. 8 May 1876. 64 MINUTES OF EVIDENCE TAKEN BEFORE THE Mr. 1^. Bagehot. S May 1876. Chairman — continued. countries is something enormous, and to all those countries you will have to send a certain amount if the depreciation of silver continues. The quota- tions of prices in all those countries are made in silver. Traders with those countries have to go through the operation both ways as to exports and imports, which I have described, in silver. As to all those countries, there will be a bounty on importing into them, and a discouragement in exporting from them, and in consequence to every one of those there will be a flow of silver. 1371. In order that the Committee may thoroughly possess themselves of those particular points, do I understand you correctly that the operation is as follows : a depreciation of silver in India, and the depreciation of the Indian ex- change have the following effect, that a London merchant desiring to speculate in Indian produce, will be able with his gold to buy a larger number of rupees, and that if the prices remain stationary in India, he will, having a larger number of rupees, be able to buy the exports of India at a cheaper rate himself, and therefore make a larger profit ? — Yes, that is one side of the opera- tion. 1372. And, on the other side, that the ex- porter of goods from this country to India will realise, if the prices have not risen (which is the same supposition), the same number of rupees in India, but in turning them into gold, he will find that the identical number of rupees will furnish him with a smaller amount of gold in return here for his outlay, and that therefore he will make a less profit ? — Yes, that is exactly my meaning. Mr. Fawcett. 1373. That opinion, though, is based on the supposition, that as the depreciation of silver continues the prices remain stationary, is it not? but very soon after the depreciation commences in this country, where silver is a standard of currency, the rise in prices will be exactly pro- portioned to the depreciation of silver? — When it is, of course the encouragement is withdrawn. 1374. After all, the depreciation of a metal which is chosen for the standard of currency is measured, and is marked by the rise in prices, that is what depreciation of money means ; if you say that money is depreciated 10 per cent., you mean that prices have risen 10 per cent. ? — I do not quite understand the question you ask. 1375. If gold were depreciated in this country 10 per cent., it means that gold possesses 10 per cent, less purchasing value ? — Yes. 1376. Or, in other words, prices had risen to that extent ? — Yes. 1377. The same way in India, where silver, not gold, is the currency, if silver is depreciated to a certain extent, prices must rise to the same extent, therefore, your reasoning is based on an hypothesis which cannot take place in actual life ? — No ; I consider that it is based on the present facts. The purchasing power of gold or silver by the English merchants is at this moment in- creased ; gold will buy a great deal more silver than it used to do ; but the silver prices of articles in Calcutta have not been affected. Silver is not, as yet, depreciated in the East. It is only during the process of depreciation that my argument holds. Chairman. 1378. When I asked you your opinion, I drew Chairman — continued. a distinction betwen a temporary effect and a permanent effect ; the opinion you have stated, I understand you to mean is, the temporary and first effect ? — Yes ; as soon as the the deprecia- tion of silver, as repects the Indian commodities, is equal to its depreciation as respects the gold of the English merchant, then the process which 1 have described is at an end. Mr. Fawcett. 1379. What I understand is this, that for a time, it may be shorter or longer, during which the depre- ciation of silver may take place without affecting general prices, you have indicated the prices which will exercise an influence to restore the value of silver to its former level of value ? — The point I wish to make before the Committee is this, that all over the East the process I have described will go on, and that to depreciate silver 2 per dent, all over the East will require a vast amount of silver currency, because the region is so large. No doubt it will stop when the depreciation of 2 per cent., or whatever it may be, has been effected, but that will take a long time. Chairman. 1380. The first operation is such as you have described; the next operation would probably he, would it not, that the prices of commodities in India would rise ? — Yes. 1381. While silver had been depreciated?— Yes. 1382. Then in proportion as the price of silver rose you would require a larger amount of silver to do the work than had been used before?— Yes. 1383. That increasing need for silver to pay for the aggregate increase due to the rise in prices would be spread over a vast surface, in your opinion ? — Yes, that is my meaning. 1384. Namely, over the countries with the silver valuation in the East generally ? — Yes. 1385. The greater demand for silver during this process would tend to arrest the fall of silver, pro tanto, in your opinion ? — That would be a main cause, supposing other causes which tend to depreciate silver to have the effect which is sup- posed. 1386. In the first instance prices might remain stationary for a short time ; then the flow of silver would take place to the country owing to the encouragement to export and the discourage- ment of import ?— Yes. 1387. And when that was past, and prices rise to their level, so that there was neither that en- couragement nor discouragement, the aggregate amount of silver needed for the commerce of those countries would have been increased?— Yes. 1388. After a rise of pride all over the East, due to the depreciation of silver, more silver would be required for carrying on the general trade of those countries than before ? — Yes ; to a very great extent. ; 1389. Have you at all calctilated the surface covered by what is called the silver valuation as compared with that which is covered by the gold valuation ? — It used to be said until a few years ago, that England and Portugal were the only ccountries where gold was the standard of value ; and there were certain countries which had a double standard, but those were not very many ; and SELECT COMMITTEE ON DEPRECIATION 01' SILVEK. Chairman — continued. Chairman — continued. Mr. W. Ba^ehoL and all the rest were silver. Silver is the normal currency of the world, and from a natural cause, because silver is a much cheaper metal, and is suited to those small transactions which con- stitute the bulk of the dealings of mankind. 1390. Have you examined the statistics which Me available to the Dublic with regard to the aggregate amount of silver and gold in various countries ? — 1 have examined them, but I regret to say that I do not think they are of such value as to be made the basis of sound reasoning in such investigations as this. It appears to me that you neither know with certainty the present stock of silver in the world„nor are you able to estimate the probable augmentation of it ; nor do you know the effect which any given per-centage, say 10 per cent, on the stock, would have upon its value. The last part is a matter which has not even been discussed, I think. 1391. You would question, after all the study you have given to the subject, both the accuracy and the real substantial value of figures that go into the aggregate amount of silver and gold in the world, and the proportions of the metals to each other? — I do not believe they are worth the paper on which they are written. I do not consider that anyone knows anything about them, or has the means of knowing. 1392. To resume the point of the effect of the depreciation of silver on the Indian exchanges, which is one point referred to this Committee, can you treat that question as one of exports and imports between India and this country alone; I have heard a remark with regard to the effect upon other countries ? — Of course it will be evident that if this country has to export silver to the East, it must buy that silver somewhere. That silver it wiU have to buy in America, and therefore a consequence of the new state of things will be that the English exporters of goods to some parts of the world will be benefited. I do not say the English exporters of goods to America, for probably we shall not pay America directly. The nature of the trade between America and this country is, that America sends us directly a great deal more than we send her, and America buys, in various parts of the world, coffee, and rice, and tea, and a variety of articles, and that the sellers of those articles draw upon England, and so the balance is struck ; we shall have to pay America in some way for the silver, and we shall pay her by exporting to the countries from whom she buys some of those articles, and therefore, though it is perfectly true to say that the effect of the depreciation of silver may be unfavourable to the English exporter of goods to the East, yet it will be favourable to another class of English exporters, that is to say, those who pay America. 1393. You mean this, that as the silver is to be produced^ and comes to Europe, or when it comes to Europe, it must be paid for by some means ? — It comes here, and we must pay for it. We shall pay for it, not to America directly, in all pro- bability, but by exporting goods to various parts of the world where America buys. She buys in Brazil, in Cuba, and in the East, and in France, and all those countries draw drafts upon England, and ultimately the account is settled in com- modities. 1394. If America draws more eastern produce in consequence ot producing more silver, and therefore having something to sell which it can 0.77. turn into commodities abroad, then a certain SMaj^iSyS. amount of new purchasing power is given to those countries from which it draws its exports ? — Yes. 1395. And that purchasing power they may again avail themselves of in purchasing from this country ? — Yes ; such are the dimensions of our trade, that ultimately they come to buy of us. We are the great settling house of the world. 1396. Have you examined the effect of the depreciation of silver upon our trade up to this date ? — I cannot say that I have made such an examination of it as I should like to lay before the Committee, especially as I understand that contradictory opinions have been expressed upon it, and I should rather rely on the general principle I have stated, because the facts of a particular year are far more difficult to discover than the general tendencies which operate over a long period of time. 1397. There are so many disturbing causes in any jjarticular year ? — Yes ; and it is so diflScult to get at the precise facts of any particular year. Statements may be made as to depression of par- ticular trades. Well, what does depression mean ? The traders will not come and show you their books ; you ought to have a comparative statement of their profits in the period at which the depression is said to commence, and at the period of which you are talking. Now no such account is ever given in, and therefore you are dealing with a statement which you have n» means of measuring or testing. 1398. Do I understand you rather to question the prolonged depression in the Indian trade ? — I do not doubt that there is a great depression in the export trade from this country, and that that arises verj' largely from the causes of which I have been speaking. The depreciation of silver has necessarily caused discouragement to export to the East ; the people who most call themselves the Eastern trade are the exporters to the East. 1399. Unless the manufacturers and producers in our manufacturing districts have got stocks of arti- cles already manufactured for India which they are bound to sell ? — No doubt they will have to sell them practically at reduced prices, because they will sell them in rupees, and when they bring these rupees home they will yield less in sterling^ money. 1400. Still if they are manufactured they would be likely to be exported ? — Yes, and per- haps for other reasons. Some part of the export trade, I would not at all say it is true of the Eastern trade, but some amount of trade is car- ried on by drawing on consignees for the creation of bills, which bills are discounted in this coun- try, and that trade, which is not of a very healthy- description, will always go on whatever the prices may be. 1401. Do I understand you to mean in very- general terms that it is difficult to arrest any particular branch of manufacture and export the moment it becomes unprofitable ? — Very difficult indeed. In the first place an amount of fixed capital is sunk in it which has to be moved, and people have formed habits and connexions ; and such a general cause as I have been speaking of will not operate perhaps for a considerable period of time. 1402. The export trade from this country to another great consuming country might be pro- , longed sometimes without its being exactly ' I evidence - MINUTES OF EVIDENCE TAKEN BEFORE THE Mr. Chairman — continued. • "^' ' "'' • evidence tliat that export was the result of sound B Miiv 187C. trade and permanent causes? — Quite so, without its being at all a conclusive indication that it was such a trade as ought to be carried on, or such a trade as anybod)- would begin. 1403. Would the depreciation of silver have this effect, that it would prevent the extension of business or the initiation of new business while alarm was felt as to the uncertainly of returns through the fluctuations in silver, but it would not cause an immediate cessation and diminution of the trade ? — Yes, it would have that effect, it would have a gradual tendency in that direction, a tendency to make the export trade cease, and to make the import trade into the country from India begin ; both are gradual. 1404. Turning to another subject, the evidence before the Committee, I think, has been generally to the effect that the depreciation of silver has been caused by the increased production, or the impression produced by the increased production in America, by the demonetisation in Germany, and by the increase of the drafts of the Indian Council ; do you agree in the existence of these causes ? — I think that those causes are real, but I think a fourth ought to be added to them. 1405. What is that fourth cause ? — A great number of States which are grouped together in what is called the Latin Union have ceased to coin silver ever since the year 1874 in the same manner which they did before ; as the Committee are aware, the Latin Union is a name for five States, France, Belgium, Italy, Switzerland, and Greece, which up to the year 1874 had what they called a double standard, that is to say, silver and gold were tenders for any amount for debts, and the coinage was framed on the rela- tion of 15^ to 1. Up to that time it was open to anybody to go to the French, or any other mints, with silver or gold, as the case might be, and get it coined ; the consequence of course was, that the moment metal became depreciated, the holders took it to those mints and had it coined; but in the year 1874 that process was arrestfd, because Xhni>Q. Governments limited the amount of silver whiih. they would coin, and if it had not been for that change of policy, all the silver which is now flooding the London market, and lowering the price, would have been long since in the mints of those countries ; it would have released gold from them, and the combined effect of the two operations would have been, that the comparative value of gold and silver would have been very Ifttle altered, probably not at all. 1406. Without giving an opinion as to whether they did right or wrong in the steps they have taken, do I understand you to mean that their abstention from purchasing, whereas formerly they were buyers, must be added to the effect of the demonetisation in Germany ? — The operation of the double standard cause, a supply on speculation ; the moment any one of the two metals becomes depreciated, there is a motive to any balllon dealer to take the depreciated metal to the mint, leave it there, have it coined, and with that he can buy the appreciated metal and have a profit ; in that way, in former times, the old silver currency of France was entirely taken away, and gold substituted for it, merely because gold was cheaper; in the same wny now, if the Latin Union continued to coin aa before, gold would have been taken away and silver •^kcn back. Chairman — continued. 1407. Are you aware that the stock of silver in the Bank of France has increased of late years?— Yes, I am aware that it is now 20 millions or more. 1408. You contend that but for their cessation of coinage a larger figure than that would have accumulated ?— Yes, and gold would have been taken away from them. 1409. To the same amount ? — To an equivar lent amount, not only of France, but the Latin Union generally. 1410. There has been once or twice before, hag there not, in France, a change from silver to goW and from gold to silver?— Yes, we were enabled to pay India in silver for the cotton we wanted during the famine, by getting it from the French currency in this way. 1411. Was France at that time drained of a large portion of its silver currency ? — A very large portion. It was the saying in France at that time, " The English have taken away the silver," meaning that we had sent it to India, It was quite true that it was bought up with, gold. 1412. Did we pay a premium on silver at tEi timb ? — Gold 'was much depreciated as against the legal equation, just as silver is now against the legal equation, and therefore it was profitable to send gold to the mint. 1413. Had the Governments in the Latilfr Union not curtailed their coinage even before the year 1874? — 1874 is the first year in whiek they made a treaty on this subject, I think. 1414. Can you state to the Committee sbiJ facts with regard to the legislation as to HoUafti? — It appears to me that the difficulty of Holland' in this question is far greater than that of any country, because they have, as England has, sd Indian Empire, and they have the same currency in the Indian Empire that they have at home. They are much in the same position that we should be in if we had a rupee currency here^ and we thought of demonetising rupees. It hafli been proposed to demonetise the Dutch dollar^ which is the coinage both of Holland and of Java, and of other Dutch possessions, which cir- culates in the East to an enormous extent. 1416. The Dutch dollar has not yet beea demonetised ? — It has not, but proposal's are con- stantly being made, and an experimental' stigp was made last year towards its demonetisationi 1416. Was a Bill passed with regard to it?— Yes ; but like many experimental measures, it was very complex ; I should not like to explain its exact effect ; I have had it explained to me in various ways ; it was a small Act in itself, and' only of importance as an indication of a policy which was to follow. 1417. Was it a temporary Act or a perma- ment Act ? — Temporary. 1418. To cease when ? — To cease very soon, I think, but I am not perfectly certain. 1419. As a matter of fact, when that Act ceases, will the Government of Holland have to make up its mind one way or the other again, and to take some measures ? — Either to make a change or leave things as they are ; Holland demonetised gold years ago, and has only a silver currency. 1420. As a matter of fact, without expressing, any speculative opinion, they have not yet esta- blished a gold valuation P—Nff, they liave greater difficulties SELECT COMMITTEE ON DEPR KCIATfON OF SILVER. Chairman — continued. diiBculties in going in that direction than any other country. 1421. I have seen it stated in some publica- tions that Holland was one of those countries that adopted the gold valuation ? — That is a com- plete error ; many circumstances much impede them in so doing. 1422. Have they been buying silver or gold latterly to your knowledge ? — I could not lay the details before the Committee. Mr. Fawcett. 1423. The Latin Union, or the Latin Conven- tion, continues in operation till 1880, does it not? — Till some date of that kind. 1424. Therefore its policy, which you think has been influential in assisting the depreciation of silver, will, continue till the time when it ceases, when the confederation breaks up ? — Not necessarily ; it has an annual meeting, by which it determines the amount of silver which it will coin ; I should say that in 1874 they had made a cardinal alteration in their policy ; the theory of the double standard is that anyone should be able to bring their money to the mint and get it coined in any amount, but that was altered. Chairman. 1425. What was the original policy of the Latin Union ? — It was the policy of the double standard, as it is called, in which both gold and silver circulate, and are legal tenders for any amount, and in which the relation between them was that of 15^ to 1. 1426. What was the object of their combining? — It was, I suppose, partly a political movement on the part of the French Empire to gain an in- fluence in those countries, and partly the natural wish of countries so intimately connected to have the same coinage, and they adopted the French coinage of that time as being the predominant power. 1427. The Latin Union was not formed with reference at all to the question as between silver and gold? — They simply adopted the French currency of that time. 1428. The policy to suspend the coinage is the common policy that has been adopted by them in the course of their union, but is not one of the principles of their union ? — It is contrary to the fundamental principles of their union. They gave up the double standard the moment they allowed their metal to be limited. The cardinal principle was abandoned. Mr. Fawcett. 1429. Did not they come to some agreement with reference to the coinage of silver, vthicli agreement was to continue in operation till 1880 ; I think we have had evidence to that effect ?— They met annually, and determined the amount of silver which they should coin. 1430. I think Mr. Giifen gave the evidence, but I fancy we have had evidence to this effect, that when they met in 1874, one of their agree- ments was that they should continue a certain policy with regard to the coinage until 1880, and that thev should be bound by that agreement until that year ? — They re-vote annually what the amount shall be, and it is open now to the annual meeting to change, and to go back to the double standard pure and simple. In 1874, the amount which they agreed to coin was 4,800,000 1. In 1875, it was raised to 6,000,000 /., and now it U.77. Il is Mr. Fawcett — continued, has gone back to 4,800,000/. in 1876 divided between the countries. 1431. You say they cardinal!}' changed their policy in 1874 with regard to the coinage of silver, and their policy with regard to the futme of course is uncertain ? — Very uncertain, i t la a possibility, I do not say it is a probability, that they might begin to coin silver in unlimited amounts, and that would take the silver off the market. 1432. On the other hand it is possible that they may continue this policy which you think has been influential in assisting the deprecintion ? — Yes ; or they may go further and demonetise the silver in France. That has been proposed, and that would throw an additional amount of silver on the market. 1433. Their policy, one way or the other will have a considerable effect either in promoting the depreciation of silver, or in retarding its depre- ciation, and tliat polic)^ with regard to the future is, in your opinion, obscure and uncertain ? — Yes ; it will be a force of the first magnitude. 1434. You would not like, at any rate, posi- tively to predict in what direction that force, which you have described as one of the first mag- nitude, will operate ? — I think there are very great difficulties in the way of demonetisinp- silver in France, and it is certain, I believe, that the present rulers of France wish to preserve what tbey call an expectant attitude, and to con- tinue the present state of things, only coinin"- limited amounts, but whether they will be able so to continue I do not know. 1435. Do you think that one element in con- sidering what the value of silver is, is this : that the value of the precious metal after all is deter- mined by the same considerations as the value of any other mineral, or any other commodity, and that consequently the cost of producing those metals, or the cost of raising them, must have an important bearing on their future value ? — Un- doubtedly. 1436. Therefore, if the cost of producing silver should greatly diminish, that must sooner or later, just in the same way as if the cost of producing any other article greatly diminished, have its effect upon its value? — That will ot course have an effect upon the value, but it will be limited by several considerations ; one is, that it is the cost of production under the most difficult circumstances which reguhites the price, not the cost of production in those mines of splendid fer- tility which we hear of, but the cost of produc- tion in the least of the old mines which keeps itself at work. 1437. To draw an analogv, if you suddenly discovered in a country a great tract of fertile land, the immediate effect of that land being dis- covered, which would enable agiicultural produce to be produced cheaper, would not necessarily be to lower the value of agricultural produce if the demand for it keep on increa>ing so that it was necessary to keep the comparatively speaking unfertile land in cultivation, which before had been cultivated ? — Quite so. 1438. But if, on the other hand, this fertile land should so add to agricultural produce that the more unproductive sources of supply which had been before worked should be given up, then the cost of producing that produce would di- minish ? — Yes. 1439. You think that would Mr. W. Bagekot. S Muy 1876, 12 apply as an analogy 68 MIXUTES OF EVIDENCE TAKEN BEFORE THE Mr. Mr. Fawcett — continued. -W. Bagehot. ^^^logy to the value of the precious metals ? — & Mav 1876 ^^®' ^ think it would be the mine of the least fertility that should keep itself at work that would regulate tlie price. 1440. You have described to us very clearly what you think will be the effect on the trade of India, if the depreciation of silver continues, but have you considered whht its effect on the revenue of India is? — I suppose that it will be unfavourable' to the revenue of India, because the Indian Government are so unfortunate as not to be able to increase their taxation. 1441. And the peculiarly unfavourable effect it will produce is this, that one considerable por- tion of the land revenue of India is either per- manently or for a considerable j^eriod fixed in pecuniary amount, which amount is estimated in silver ? — Yes. 1442. Therefore, although from that circum- stance inferences may come into operation to correct any bad eflect which it may have on the trade of India, the loss which would arise to the revenue of India from that circumstance cannot be got over by any of the circumstances to which you have referred ? — I do not think there is any connexion between the trade of India and the revenue of India for this purpose in the peculiar circumstances of the Indian Government, be- cause they do not seem to be able to apply ad- ditional taxation. 1443. But as to the loss on the revenue, even if they could apply additional taxation, which is afixed pecuniary amount, either fixed permanently or for a considerable number of years, there is no way of meeting that ? — No, that is a matter of agreement which cannot be altered. Sir Chailes Mills. 1444. You mentioned the demonetisation of silver by Germany as being one of the causes. I suppose you will supplement that by the cessation of the demand for fresh coinage ? — Quite so. 1445. It Includes not only the selling of the silver, but also the cessation of the demand for fresh silver ? — Yes. 1446. You stated that you thought it was very difficult to form any opinion as to the amount of silver and gold there was in circulatiou in the world. I think you go further, do you not, and say it is very difficult to form even an opinion as to the amount of gold in circulation in England ? Sir Charles Mills — continued. — There are very various estimates by very com- petent persons. Of course, it is much more possible to get near that than the circulation of the world ; iDut such estimates are more matters of scientific cimjecture than anything else. 1447. We had some figures given us as to the amount of thalers iu Germany ; do you think that those are also very doubtfur? — Very dubious, indeed. I have a strong belief that the Govern- ment do not themselves know ; their whole policy is perplexed by uncertainty as to that, as far as an external observer can judge. Chairman. 1448. When you speak of the drafts of the Government of India, you consider that those drafts, I presume, are determined by the amount that they require ; It is not an open question how much money they can raise, or how much they need not raise? — I suppose that the drafts are regulated by the necessities of the Indian Govern- ment at home. They have a certain interest to pay, certain salaries to discharge, and certain things to buy, which are absolute necessities, I suppose. 1449. You do not wish to convey the ideay when you stated, as other witnesses have stated, that the increase in the drafts of the Indian Council are one of the causes which have led to the depreciation of silver, that it was at all a cause which the Indian Government could have avoided ? — I apprehend it Is not optional at all. Mr. Fawcett. 1450. The great part of the expenditure of India is quite within the control of the Home Government here. I will give one illustration ; for instance, so much had to be remitted from India to England for the payment for the build- ings at the India Office. It was perfectly optional with the Govei'ument here whether they erected buildings. I do not mean to say whether they were wise in erecting the buildings they have ; but it was optional for them to spend more or less, or the exact amount which they did spend on those buildings. Therefore the expenditure is within their control; but having sanctioned a certain expenditure, of course the amount they have to withdraw is not within their control? — Yes ; It is only In that sense optional. Having determined their expenditure by political ccn- siderations, the money must come. Mr. G. PiETSCH, re-called ; and further Examined. G. Mr. Pi^ttch. Chairman. 1451. I THINK you are anxious to correct one or two points in your evidence ? — Yes. 1452. When you placed before the Committee your analysis of the amount of silver which was likely to be thrown by the German Government on the market, you made a deduction, I think, from the total silver to be sold in respect of the circumstance that the silver coins coined were 900; 1000 fine? — Yes; I may mention in the first instance that for sim]jliclty's sake I gave my figures In sterling, whilst the official German statements are in thalers ; consequently, to arrive at the sterling amount, I calculated at a certain rate of exchange, and I subsec] ucntly made a reduction for the difference of fineness. The Chairman — continued. most correct way to calculate would be to cal- culate by weight, that is to say, it would be best to take the total amount of thalers and cal- culate the amount of silver represented by those thalers. If there had been only one standard in Germany, that is to say, if all the German coins had been coined at the rate of 30 thalers out of 1 lb. of fine silver, it would have been very simple, but unfortunately, in Germany, there were a very great number of different standards, and even up to the end of 1873 there were six or seven remaining. In order to make that calcu- lation bv weight I ought to have known what quantity of each description of coin existed, and to what standard they had been coined. 1 did not SELECT COMMITTEE OM DEPRECIATION OF SILVER. 69 Chairman — continued. not know that, consequently ,1 was not able to make that calculation ; I calculated at a certain rate of exchange, and made the deduction you allude to. 1453. Your deduction amounted to something like three millions? — Yes; that has been objected to, and without making the exact calculation by weight, I am really not able to say whether the objection is well founded or not, but I will admit, for argument's sake, the deduction ought not to have been made ; according to a calculation I have made, that would make a difference of about four millions sterling, that is to say, the amount remaining for sale instead of being nine millions would be 13 millions ; I may mention that since I had the honour of appearing before you, I have submitted my figures to the people in Berlin, and the semi-official reply which I have received is that all the estimates given so far are too high ; I may also mention that I have been making attempts for the last two or three years to re- move the German silver from the market by a loan, but in all these negotiations the German Government have persistently refused to under- take the delivery of more than 7 J millions for fear of over-selling themselves, and that shows best what they think of the ultimate surplus. 1454. You raise your amount from the nine millions which you have submitted to the Committee to 13 millions sterling ? — Yes ; but in point of fact, from all I can learn, so much silver does not exist, though in theory we may arrive at 13 millions. 1455. Have you any later information as to sales made by yourself or others with regard to the German silver? — No, I can only say that no important sales have been effected since I ap- peared last before you. 1456. Do you think the sales of German silver have reached the total amount of nine millions, so far ? — No, I think not ; as far as I know, and as far as I can appreciate, the sales amount to fiix or seven millions ; seven millions, perhaps. 1457. Is there any other point in your evidence which you wish to correct? — Yes, there are a few points. 1458. Any points of importance? — On the last occasion I was asked by one of the Members of the Committee whether I did not think that part of the German silver coin which had been paid away to France by war contributions and money indemnities had returned to Germany. I have been making inquiries since, and I find that the last war indemnity paid by France to Ger- Ckairmmi — continued. Mr. many consisted entirely of gold, bills of exchange, *^' P^ck. and silver five-franc pieces, with the exception of g j^ 1876. an amount of 750,000 /. German coin. 1459. That was the amount returned? — Yes. 750,000 /. must have been German coin which came into the possession of the French during the last war, because before the war there was no German coin in France. Then, as regai-ds the indemnity ]iaid by France to Germany in 1815 I have no data; I do not know whether any German coin returned from France to Ger- many at that time, but still there is a very strong presumption that on balance the Germans must have lost coin by their war indemnities, con- sidering that the period during which the thalers were coined extends over 120 years, and that during that time the seven years' war took place, and all the wars of the French Republic and the Empire, during which time Germany was frequently invaded. 1460. Is there any other matter of fact which you would wish to state to the Committee ; the Committee do not wish to open up new ground ? — No, I cannot say there are any new facts ; I should like to supplement some of my answers given to former questions. I vvas asked, in speak- ing of the loss of coin caused by melting down, why I supposed that coin had been melted down instead of bars. I find that besides the stock of bars in the Bank of Hamburgh there never was any very large stock of bars in Germany, except the floating stock, and that, consequently, coin was resorted to. That was done the more as many of the coins contained gold. Then I was asked as to the amount of German coin taken away by emigrants. As to that I do not know; I have not been able to ascertain the extent of German emigration. I only know that the number of Germans who emigrate is very con- siderable ; in New York alone there are 300,000: and when I was In America I was told that at certain times a good deal of German coin circu- lated in Ohio and Missouri and other States occu- pied by Germans. I was asked another ques- tion as to the effect on the price of silver caused by the great quantity of council drafts. My attention was called to the fact that if no council drafts were drawn the Government would have to remit silver from India to England, and whether that would not have an effect still more injurious on the market price. I do not think it would, because if that were the case the people who buy council drafts would buy the silver so remitted and send it back to India, and the course of exchange would remain the same. Mr. Ernest Seyd, recalled ; further Examined. Chairman. 1461. On the last occasion you gave the Committee some evidence upon the value of American dollars; I understand, in lookmg through your evidence, you found that there were one or two inaccuracies ? — Scarcely inaccuracies, but I had not the precise figures with me which referred to the case. I have a supplemental statement here. 1462. The old American dollar was 412 grains, was it not? — 412 J grains. I endeavoured to explain that if that old dollar had been in accord with the French system of the proportion of 1 to 15|, it ought to have weighed 400 grains, the 0.77. Chairman — continued. Mr. E. Seyd. fact of its weighing 12i grains more than the assumed normal proportion was the cause of this undue export. 146.3. I think you used the phrase that there was a difterence of 8 per cent ? — That was a little confusion in reference to grains and per- centages. There was a difference of eight grains between the old dollar and the new trade dollar, the difference actually is 3 per cent, between the old dollar and the supposed normal dollar which ought to have been coined in the pro- portion of 1 to 15i. 1464. Will you state to the Committee the I 3 three 70 MINUTES OF EVIDENCE: — SELECT COMMITTEE ON DEPRECIATION OF SILVER. lh:E.Seyd. 8 May 1876. hundred issued by Chairman — continued. tlii'cc values of the dollar. According to the 15i standard it ought to have been what? — Four grains ; according to the proportion their Mint law of 1834, the dollar was made 412^ grains, consequently it contained 3 per cent, more silver than the proportion of 1 to 15^. Their new trade dollar is made of 420 grains, and contains 5 per cent, more silver than the normal proportion customary in France, and other systems of the gold and silver valua- tion. 1465. You put in this sujiplementary state- ment respecting the coinage of the United States of one dollar silver pieces ? — I do, and that will explain the matter. ( The same was put in, vide Appendix.) 1466. I beheve you wish to put in a statement Bhowing the countries where the gold valuation is in force, where the silver and gold standard exist together, and where the silver standard exists ? — I do. ( The same was put in, vide Ap- pendix.) Those are Tables which bear on the proportions involved. 1467. You have arranged your statement so as mainly to confine yourself to the facts of the case ? — Yes, and I have condensed the conclu- sions into tables, which are submitted in addi- tion thereto. They show the nations and num- bers of population under each of the three groups in 1871, and the changes actually made since and entered upon. These tables also con- tain the respective quantities of coin and bullion present in each system. 1468. Have you assumed, in these tables, the present status quo ? — The previous status quo before 1871, or rather in 1871, and the status quo since the changes which have been introduced, and I have ventured to make some remarks showing the bearing of those changes on the question of facts. 1469. Was there any point in your evidence besides that with regard to the Amei-ican dollars which you desired to correct ? — There is nothing that I would desire to correct in my previous evidence. 1470. There was a question asked with regard to the decline in the value of silver being caused either by the laws of supply and demand alone or by actual legislation ? — Perhaps I may be allowed to give the answer in this form ; the Chairman — continued, ordinary natural laws of supply and demand scarcely apply in this case, as they are supposed to bring about a natural settlement. The point which ought to be considered here is that the legislative law, if I may be allowed to use that term, has actually destroyed the demand. 1471. In Germany, for instance? — In Ger- many, and in consequence thereof, everywhere else. 1472. Therefore you mean that it would be untrue to say that the laws of supply and demand alone affected the silver market, considering that whether there is a demand or not in Germany the German Government had checked the de- mand by a legislative Act ? — Yes, and all other States are bound, according to my opinion, to follow the same course. I have ventured, in the statement I have submitted to you, to make a remark with reference to that point, and to show that, so far, Germany alone has succeeded in making any change at all ; all the other states, so to speak, hold the matter in abeyance. Mr. Baxter. 1473. What do you mean by saying that all the other states are bound to follow ? — That is, of course, a matter which does not rest on any fact which has already happened, but is a subject for inquiry ; France, for instance, as a matter of self-protection, is obliged to give up silver as a valuator, and all other states would be bound to follow the same course. That which has already taken place in Holland and elsewhere is proof lof this necessity. 1474. In your opinion, they must all of neces- sity follow the example of Germany? — Yes; if I may so express the matter: England was the first countiy to demonetise silver in 1816, but between the three groups which were formed thereon, that is to say, the English group, as the gold valuing one ; the French group, as that of the gold and silver ; and the German, as re- presenting the silver valuation, an equilibrium was formed which upheld, not only the price, but also the use of gold and silver. Since then Ger- many has joined the gold valuing group, con- sequently the old foundation for maintaining the value of both metals on an equal basis has been lost, and now the other states, it seems to me, are forced to follow the same course. ( 71 ) LIST OF APPENDICES. Put in by Mr. R. B. Hodgson Mr. E. Seyd Mk H, Waterfisld Mr. R. Gifien^ Mr. S. Pixley Sir H. Bay - Mr. G. Pietsch Mr. H. Waterfield - Subject. 0.77. Estimate of Gold Coin in Circulation in United Kingdom - - - r Silver „ „ „ Statementas'to Dates of Laws determining Valuations of various Nations previously to 1871, Changes introduced and in abeyance, Actual Condition of Metallic Efficiency of each System, and Coinages made. Gold Valuing States -..-. .... Gold and Silver Valuing States - - Silver Valuing States ----- .-.. Nations and Populations under Three Systems in 1871 - - - - Changes in Three Systems decided by Law, and in abeyance since 1876 - GoBipaiFison of various Statements of Production of Gold and Silver throughout the World, 1800 to 1875. Annual' Production of Gold and Silver at beginning of 19th Century^ HumBolkit) „ „ „ „ 1809' to 1829 (Jacob) - - - - „ „ „ „ prior to 1848 (Chevalier) . - . „ „ „ „ 1852-75 (Sir H. Hay) - - - - Efxport's of Gold and Silver from United Kingdom, 1800-1810 - - - . „ „ M „" 1830-53 - - - - Imports and Exports of Gold and Silver into and from United Kingdom,, 1868-74 ,, ,, Gold into and fi-om United Kingdom, 1858-75 ,1 _ >> silver ,, ,, ,, ,, - - Supplies of Gold from California, Australia, and Ru'^sia, 1849-56 . . - Production of Gold, 1857-75 - . - - - - . . „ ,, in Russia, 1819-46 - - - Produce of Gold and Silver Mines of Mexico, Chili, and Peru, 1790-l«ji9 Imports of Silver into United Kingdom from America, 1852-75- - - - Exports of Silver from Southampton to India, China, and the Straits, 1865-76 - Monthly Fluctuations in London in Price of Bar Silver, Coinage of Silver in England, Bills drawn on Indian Governments. Exports of Silver to the East, Imports of Silver, and Average Bank Rate of Discount, 1833-76. Imports and Exports of Bullion into and from London, 1874-75 . - . Estimated Production of Gold and Silver, Shipments of Silver to India and China from England and the Mediterranean, and Average Price of Silver, 1862-76. Estimated Production of Gold and Silver in various Countries, 1862-75 Coinage of Old German Silver Coins, by separate States of Germany, to end of 1873. less Withdrawals (Statements presented to the Reichstag). Amount of Old German Silver Coins retired from Circulation, to end of 1876 (Official Statements). „ New „ „ coined, to 18 March 1876 (OfEcial State- ments). „ remaining to be coined - . - - - - „ of Old German Silver Coins converted into Bars and sold, to end of March 1876. Movement of Silver between London and Hanse Towns, 1861-75 - - - Memorandum on Alloy in Old German Coins - . - . - - Report of United States Commissioner of Mining Statistics (Mr. Raymond), 1874:— History of relative Values of Gold and Silver - - - Estimate of Production of Precious Metuls in Slates Wtst of Rocky Mountain^, 1869-74. I 4 Page. 2' 3 5 7 8 10 12 12 13 13 13 14 14 14 15 15 16 IC 17 18 19 20 24 25 2(5 26 2(i 26 27 27 28 S4 ( 72 ) No. Put in by i) Mr. H. Waterfield 10 U 12 13 13* 14 » }> w » » 5) Lord George Hamilton 15 ■ The Chairman 16 17 18 Mr. H. Waterfield - Mr. E. Seyd - Mr. R. Giffen 19 Mr. H. Waterfield 20 21 The Chairman Subject. Report of Director of United States Mint (Dr. Linderman), 1874-75 - - . Report of Professor Rogers on Consolidated Virginia and California Mines Gross Yield of Mines of State of Nevada, 1874-75 Report of Secretary of United States Treasury on State of Finances for 1875 Biennial Report of State Mineralogist for Nevada (Mr. Whitehill), for 1873 and 1874. Extract from San Franciso Journal of Commerce and Price Current of 12th of January 1876. Reports by Consul Booker on Trade of California, 1871-75 .... Production of Mines in the Comstock Lode - - . - . , Letter from M. Gansl to Messrs. Rothschild on Production in United States, 1876. Letter from M. Berton to the Director of the Mint at Paris on Production in United States, 1876. Comparison of Statements of Production of Gold and Silver in United States, 1848-76. Memorandum on the Coinage of One Dollar Silver Pieces in United States Imports and Exports of Gold and Silver in United States, 1864-75 - Imports of Silver into United Kingdom from United States, 1865-74 - Letter from the Chairman of the Committee to the Secretary of State for Foreign Affairs, asking for Information from various Foreign States. Information from France .... ---.. Movement of Precious Metals, 1815-75 -----.. Coinage of Gold, 1S03-75 „ ,, Silver, 1795- — 1875 ... - . . . „ „ Gold and Silver, 1795-1875 - - - . . „ „ Bronze, 1852-75 -----.. Projet de Loi to limit and suspend the Coinage of Silver 5-franc Pieces (M. Leon Say). Projet de Loi to put an end to the Coining of Silver of Standard Fineness (M. de Parieu). Letter from Mr. F. O. Adams, respectirigM. Berton - - . . „ M. Leon Say, forwarding Proces Verbaux of Monetary Con- ferences, 1874-76. Stock in Bank of France, 1850-75 - ----... Letter from Lord Lyons respecting the Bills of M. Say and M. de Parieu - Information from Belgium ; Letter from Mr. J. Savile Lumley Expose des Motifs of a Bill for proroguing the Law of 1873 (M. Malou) - Information from Switzerland -------... Letter from the President of the Confederation respecting Coinage &c. „ „ Mr. Corbett, respecting the position of Switzerland with regard to the Latin Union. Information from Italy - ------. Memorandum by Mr. Macbean ----.. Information from Greece; Letters from Mr. Stuart - - . . Memorandum by Mr. Merlin on the Currency of Greece - Royal Decreee on Silver Currency ---... Infortnation from Russia ------... Exports and Imports of Silver, 1865-74 - - . . Coinage of Gold and Silver at St. Petersburgh Mint, 1866-75 Stock of Gold and Silver in Imperial Bank, 1865-76 37 43 45 46 it 57 63 72 74 76' 81 82 82 84 90 90 92 98 99 108 112 112 113 113 iia, 118 119 119 120 120 121 121 ( 73 ) No. Put in by 22 A. 22 b. 22 c. 23 24 A. 24 B. 24 c. 0.77. Mr. R. Giffen The Chairman Mr. H. Waterfield - Mr. P. Campbell - Mr. J. G. Hubbard, m.p. Subject. Information from Austria-Hungary . . - - Letter from the Minister of Finance - . . - Import and Export of Silver, 1867-75 Coinage of Silver, 1867-75 Letter from Sir A. Buchanan, on the Silver Currency Information from Germany - Memorandum on the Depreciation of Silver ... Letter from Lord Odo Russell, forwarding Official Documents Sales of Silver on account of the State, 1873-76 Information from Holland: Letter from Sir Ed. Harris - Information from Denmark --..... Letter from Mr. Gosling, on Coinage Operations Bullion Transactions of Danish National Bank, 1871-75 - Amount of Silver sold by „ „ 1873-76 - Coinage Operations, 1873-76 ------ Stock of Gold and Silver in Danish National Bank, 1876 - Information from Sweden ---.--,. Letter fi-om General Bjornstjerna Imports and Exports of Silver, Coinage, and Stock in Bank Information from Norway ------_.-. Letter from General Bjornstjerna ------.. Imports and Exports of Gold and Silver, Production of Silver from the Kongsberg Mines, Coinage at Kongsberg Mint, and Stock in Bank. Information from United States Letter from Sir Ed. Thornton -- Memorandum on Production, Export, Coinage, Circulation, and Stock of Silver (Dr. Linderman). Exports of Silver from San Francisco Mint Draft Act of Congress for Issue of Silver Coin in place of Fractional Currency. Letter from Secretary of Treasury, transmitting Report of Director of Mint. Report from Dr. Linderman, Director of the Mint - - - . . Estimated Production of Gold and Silver in United States, 1845-75 - Memorandum on the World's Product of Silver (Mr. Raymond) The World's Production of Gold and Silver, 1852-75 (Journal des Economistes.) Estimated Production of Gold and Silver out of the United States, 1846-75 (Mr. Raymond.) Report on Production of Gold and Silver in United States (Mr. Young) Production of Gold and Silver in United States, 1849-75 - - ? . Imports of Gold and Siver into United States, 1820-75 ... Foreign Exports „ from „ , 1820-75 - - . . Domestic Exports „ „ „ 1820-75 - - - . The World's Production of Gold and Silver, 1849-76 - - . . » » „ by. Epochs, 1849-75 Aggregate Production of Precious Metals, distinguishing United States from other Countries, 1849-75. Average Production of Precious Metals, distinguishing United States from other Countries, 1849-75. Imports and Exports of Gold and Silver into and from France, 1848-74 Memorandum on French Circulation and Coinaare ---... Stock in Bank of France, 25th April 1876 Memorandum on Monetary Question in Holland ---... Report on Mines of Japan, by Mr. Plunkett ----... Report of Director of Japanese Mint, 1873-74 - --.... Memorandum on China Trade, by Messrs. Matheson & Co. - . . . Imports from China into United Kingdom, and Exports to China from United Kingdom, 1855-74. Exportsof Silver to China and Japan, 1860-75 - - . - . K ( 74 ) No. Put in by Mr. H. Waterfield » " Lord George Hamilton Colonel H. Hyde Mr, H. Waterfield The Chairman Mr. E. Seyd - The Chairman Mr. W. Robinson The Chairman Mr. S. Seldon bUBJECT. Imports of Gold and Silver into United Kingdom from various Countries, 1860-75. Exports of Gold and Silver from United Kingdom to varions Countries, 1860-75 Movement of Silver in United Kingdom, 1868-75 Page, 162 16S 168 Imports and Exports of Merchandise and Treasure into and from India, and Bills 170 drawn on Governments in India, 1855-6 to 1874-6. „ „ Gold and Silver into and from India, 1855-6 to 1874-5 - „ „ . „ „ „ „ with surplus of Im- ports, 1835-6 to 1875-6. Imports of Gold and Silver into India from various Countries, 1869-76 Exports „ „ from „ to „ ,, ,, - - Coinage of Gold and Silver in Indian Mints, 1855-6 to 1874-5 - - - . Receipts of Silver into Indian Mints from Government, 1855-6 to 1874-5 Currency Notes in Circulation, and nature of Reserve, 1863-76 - - - - Average Rate of Exchange of Bills drawn on Governments in India, 1835-6 to 1875-6. Disbursements of Home Treasury, and mode of providing for them, 1833-4 to 18ft 1875-6. 171 172 174 176 178 178 179 179 Re-coinage of old Rupees, and Coinage of new Rupees and small Silver Coin, 1835-6 to 1874-5. Imports of Silver Bullion, Coinage, and Re- coinage, and Revenue of India, 1835-6 to 1874-5. Comparison of Statements of Exports of Gold and Silver to the East, 1851-75 IVote on Gold and Silver Plate Duties in United Kingdom (from 13th Report of Commissioners of Inland Revenue). Gold and Silver Plate Duty charged, and Drawback allowed in United King- dom, 1852-75. Weight of Gold and Silver Plate on which Duty was paid. Drawback allowed, and Net Amount retained for Home use, in United Kingdom, 1852-75. YieM of Gold and Silver Plate Duty in United Kingdom, 1866-75 - Weight of Silver marked at Goldsmiths' Hall, and Amount of Silver Plate Duty . received, 1861-75. Returns of Silver Plate assayed at various Assay Offices in United Kingdom, 1851-75. Imports of Foreign Silver Plate, and Duty paid on Import into United Kingdom, 1866-75. Exports of British and Foreign Silver Plate from United Kingdom, 1866-75 182 183 181 187 188 169 190 191 192 104 Wi L 1 ] APPENDIX. Appendix, No. 1. PAPEK. put in by Mr. Kirkman Hodgion, a Member of the Committee. Appendix, No, l. Estimate of Gold Coin in Circulation in tlie United Kingdom. 1858 - Mr. Miller's Estimate ... - Ditto - (continued by Mr. May) - Coined £. Imported --.... 20,350,000 17,669,000 £. 90,000,000 1872 - 1872—1875 107,637,000 » " " Light Coin withdrawn - £. 3,763,000 Exported - - - 23,781,000 38,019,000 27,544,000 • Added to circulation of United Kingdom (Held by Bank 6,568,000 I) Coined .--.-- j Imported ------ Light Coin withdrawn - - £.541,591 Exported - - - - 500,000 10,475,000 E. 3,645,200 1,652,000 10,475,000 1876 to date 118,112,000 5,297,200 1,041,591 Added to circulation of United Kingdom - 4,255,609 4,256,000 (Held by Bank 12,122,000 /.) - , - - £. 122,368,000 6 May 1876. S. O. Gray. Estimate of Silver Coin in Circulation in the United Kingdom. 1860 - 1861—1875 Mr. Miller's Estimate Coined Worn Coin withdrawn - _ - Estimated Circulation, 31 December 1875 6 May 1876 £. 14,799,000 6,437,000 21,236,000 1,700,000 19,536,000 S. 0. Gray. 0.77. APPENDIX TO EEPOKT FROM THE Appendix, No. 2. Appendix, No. 2. PAPERS |)Ut in by Mr. Ernest Seyd. STATEMENT as to the Dates of Laws determiniDg the Valuations of the various Nations previously to 1871 ; the Changes introduced and in abeyance; the actual Condition of Metallic Efficiency of each System, and Coinages made, where ascertain- able in £. sterling value. A. Geoup of Gold valuing States before 1871, without Changes up to 1876. States. England. — The law of the Gold valuation dates from the 2-2nd June 1816. On the 20th August 1819, the Bank of Enoland resumed specie payments. England (with her A ustralian colonies) is the only country where the Gold valuation is complete and fully effective through the law of legal tender and an actual home coinage. Total coinage from 1816 to 1875 inclusive Coinages. Gold. 234,139,886 Silver. 24,663,309 Australian Colonies.— Total coinage from 1855 to 1875 - ... 35857000 Cape Colonies and Canada — Both dependent on England, the £. sterling being legal tender for 4 dollars 80 cents in Canada. Portugal. — Silver valuation to 1854. Law of Gold valuation dates from 29th July 1854. The Gold coroas coined since have been withdrawn, and English sovereigns, 5 franc and other Silver pieces, are the circulating coins. The Silver token coins, from the J milrei downwards, are the home coinage. The system is therefore incomplete and dependent on England. Total coinage (not published). Turkey. — Silver valuation nominal to 1844. The Gold medjidies coined since have disappeared. The Silver piastre and foreign coins circulate above their tariff value without reference to a law of legal tender. The Gold valuation is nominal and non- existent. Total coinage (not published). Persia. — The Gold toman has always been the principal coin, but its coinage and value are arbitrary. Foreign (principally Rus- sian) Gold and Silver coins circulate without reference lo a law of legal tender. The Silver token coinage of 1857 has not been successful. In reality, the Gold valuation is non-existent. Total coinage (not published). Brazils.- Silver valuation to 1849. Scarcely any new Gold coins and but a limited quantity of the new token Silver, have Deen coined. The English sovereign and other coins circulate at a high premium. The valuation is one of paper money, ibat of Gold non-effective. Total coinage (not published). Argentine Republic. — Silver valuation to 1857. The law of the 21st July of that year fixes a tariff value for various foreign gold coins, and that of the Gold onza at 17 pesos; but these, and, other full-valued Silver coins, circulate at.a high premium on the paper valuation, the Gold valuation being non-effective. Total coinage (not published). These States are those which ly latv were under the Gold valuation up to 1871 In reality England only (with Australian Colonies) has the full svstem ''m^alllc'syS?'''"''"'"'^'^"'^'''"'''^"' '''' ""'^^"^"^ States have no definite SELECT COMMITTEE ON DEPRECIATION' OF SILVEE. B. Group of the States of the Gold and Silver Valuation, intact to 1871, and liable to changes now (1876). Appendix, No. 2. State. France. — The law of 2Sth of March 18U3, adopted the Gold valua- tion together with the Silver valuation— or the bi metalhc system — in definite proportions of 1 of Gold to loj of Silver, and no change was made until, under the Convention concluded with Belgium, Switzerland, and Italy of the 23rd December 1865 — which came into force on the 1st August 1866, the hitherto full- valued Silver coinasfe from two francs downwards was clianged into token, the five-franc silver piece remaining as full legal tender. Since 1874, however, the Latin Monetaiy Union has limited the coinage of five-franc pieces for each of the years 1875 and 1876 to £4,800,000, and so placed the present valuation in abeyance. Total coinage from 1795 to 1872 - - - - Ditto from 1872 to 1875 - - - - Belgium — Total coinage from 1832 to 1873 - Switzerland. — Coins no Gold, and uses that of France, &,c. Total coinage (Silver only) to 1868 Italy. — Has a paper valuation at present. Total coinage from 1862 to 1869 - - - - - Spain. — Adopted the Gold and Silver valuation under the Mint law of 19th October 1868, which came into force on the 1st Janu- ary 1871. Spain has not actually joined the Latin Union, but the system is identical with France. Total coinage (not published). Greece. — Under the Mintlaw of the 10th April 1867, the French isystem was adopted, and Greece joined the Latin Union on the 4th December 1 86h, the new system to come into force on the 1st January 1871. Nothing effective has been done as regards the new coinage. All sorts of coins (chiefly Spanish and other dollars) circulate without law of tender. Total coinage (not published). RouMANiA.-^The new law of 14th April 1867 (although the Silver lion or franc is the leading coin) is otherwise identical with the coinages of the Latin Union, but no five-franc Silver pieces are made. French and Russian coins circulate at a premium, the home coinage having been insignificant. Total coinage (not published). These are the seven European States under the Gold and Silver valuation, which, as regards France, Belgium, Switzerland, and Spain, -was fully effective up to 1871 ; partially effective as regards Italy, and non-effective as regards Roumania and Greece. United States. — The Gold and Silver valuation dates from 1792; but as the coinage of Gold and Silver shewed a proportion of one of gold to nearly 16 parts of silver (whereas the French proportion was 1 of Gold to 15J of Silver), the Silver dollars could not be maintained, and were unduly exported ; more notably so between 1848 and 1851. The Mint law of 21st February 186.3, converted the Silver coinage from the half dollar downwards into token money ; and although, practically, this was tantamount to the Gold valuation, the old dollar and the Gold and Silver valuation were not legally abolished. Since then, by the law of the 12th Fe- bruary 1873 (in force from 1st April 1874), a new Silver dollar of Still heavier weight, or " trade" dollar, has been coined. The American valuation is one of paper. The premium on Gold is still 13 per cent. (April 1876), so that, as calculation shews, the subsidiary Silver coinage now in contemplation will be exported as soon as Silver in Europe rises again to 56 pence per ounce. At this time the question of the Gold and Silver valuation is again being discussed in America, and proposals to reintroduce a new silver dollar are being made. So far the ten- dency is in favour of the Gold valuation ; but in either case, as lono' as the premium on Gold remains, the metallic valuation is non-effective, the coinage made having Keen exported. Total coinage from 1703 to 1868 Ditto since. Coinages. Gold, £. 309,783,000 10,369,000 8,772,000 8,160,000 192,800,000 Silver. £. 197,520,000 12,749,000 18,068,000 812,000 6,740,000 13,340,000 0.77. L 2 APPENDIX TO EEPOET FEOM THE Appeaaix, No. 2. ^ Group of the States of the Gold aud Silver Valuation intact to 1871, kc— continued. State. Columbia. — According to the Mint laws of the 30th May 1853, and the 14th May 1872, the piastre hB.s been made equal to the Gold and Silver five-franc pieces, and the subsidiary coinage equal to that of the Latin Union. Total coinage (not published). Venezuela. — Since 1872, has adopted a system similar to that of the last-mentioned State, modelled upon the Latin Union. Coinages. Total coinage (not published). Chili. — According to the Mint law of the 9th January 1851, this State coins Gold and Silver in proportions of 1 to 16|, the Silver peso being equal to the silver 5-francs. Hence the latter pieces have been exported, and the Gold valuation has prevailed practi- cally ; but the present low price of Silver has restored the balance. Total coinage (not published). Uruguay.— Under the Mint law of 1862, coins a Silver peso in proportions of 16 of Silver to 1 of Gold, and the latter has been exported. This is tantamount practically to the Silver valuation, and as the paper valuation has been abolished, the metallic basis is non-effective. Total coinage (not published). Silver. SELECT COMMITTEE ON DEPHECIATIOlSr OE SILVER. C. Geoup of the States of the Silver Valuation intact to 1871, with the Changes made and those in prospect now (1876). Appendix, No. 2. State. Coinage. Gold. Silver. Germany, — The Silver valuations of Germany were last consolidated and affirmed by the Mint Convention between Germany and Austria of the 24th January 1857, when Gold coins (crowns) were made "trade" money. The Imperial law of 4th December 1871, pre- pared for the Gold valuation, and that of the 9th July 1873 — limiting the coinnge and tender of Silver — established it. The new system was to be in full operation on the 1st January 1876. The payment by France of 200,000,000 1, war indemnity enabled the Government to acquire Gold, and to prepare for its coinage and issue. Of the full-valued Silver thaler there are yet many in circulation, and the law of legal tender is not definite enough (being a'^ain under consideration at this moment). The Gold valuation is vearhj effective, but not yet complete, as in England. Coinages (from 1768 to 1873) - . . . . „ from 1873, about ------ Holland.-— Holland had a Silver valuation, but also coined Gold pieces. In April 1875, it decided temporarily to suspend the coinage of Silver, since when about 4,000,000/. of Gold have been coined. But almost the whole stock of Silver remains, and awaits disposal. The valuation is in abeyance. Coinage from 1840 to 1872 Ditto since 1872, about --...- Denmahk. — Entered into a Convention for the adoption of the Gold valuation with Sweden on the 27th March 1873 (the so-called Scandinavian Union), to which Norway gave its adhesion on the 4th June 1873, the new system to come into force on the 1st January 187.^7. Total coinage from 1864 to 1872 Ditto since ? Sweden agreed to the above Convention with Denmark for the adop- tion of the Gold valuation on the 10th April 1873. Total coinage from 1868 to 1872 Ditto since ? NoHWAT joined on the 4th June 1873. The old and also foreign Gold and Silver coins are still in circulation, and the Gold valuation is not yet effective in the three countries. Total coinage from 1868 to 1372 Ditto smce , Austria. — Under the Convention of 24th January 1857, with Ger- many, Austria aflfirmed the Silver valuation. Upon dissolution of this Convention, in 1866, Austria has coined Gold pieces of the value of 20 francs, with the view of introducing the French sys- tem ; but as the country is under a paper valuation, very little metal has been retained, and scarcely any has been coined in recent years. The National Bank of Austria, however, holds a fair stock of Gold, having sold some of its Silver in good time; but the metallic system is for the present non-effective. Total coinages from 1857 to 1S67 - - - - - Ditto smce 0.77. L 3 26,560,000 65,000,000 4,000,000 98,280,000 26,360,000 111,200 7,680,000 502,000 144,000 23,400,000 APPENDIX TO REPORT FROM THE Appendix, No. a. C. Group of the States of the Silver Valuation intact to 1871, kc.^ continued. Russia, — The law of 1810 established the full-valued silver rouble ; that of 1817 the Gold half-imperial. In 1867 the small Silver change was debased in fineness. Both gold and silver full-valued coins have disappeared through the paper valuation ; but the Imperial Bank is said to hold 30,000,000 Z. of Gold. For the present, the metallic valuation is non-effective. Total coinage (not published). Egypt has a Silver valuation, but European Gold pieces are also used, without reference to a law of legal tender, and at a high premium over tariff rates. The metallic system is non-effective. Total coinage (cot published). Mexico.— The gold doubloons are nearly all exported, and few are coined. The Silver dollar is the staple and the chief export pro- duce of Mexico. So far the Silver valuation remains effective. Total coinage (from 1800 'to 1867) - Ditto since West Indies. — Silver dollars are current chiefly, and the British sovereign, at its legal tender rate of 4 dollars 80 cents, is under- valued. Central America. — The Republics of Central America coin Gold and Silver pieces in accord with the French system; since 1870 the Silver peso, or five-franc piece, being the leading coin. Total coinage (not published). Bolivia — According to Mint law of 29th June 1863. Total coinage (not published). Ecuador. — According to Mint law, which was to come into force on the 18th October 1866, and Total coinage (not published). Peru. — According to Mint law of 31st January 1863, have also adopted a Silver coin of the precise value of the Silver five-franc piece. Total coinage (not published). Japak.— Before 1871 Japan adopted a system of Gold and Silver valuation ; but in 1872 it ceased the coinage of Silver, so as to bring about a Gold valuation. Since then the silver dollar has again been coined, and made full legal tender. The Gold coin has been largely exported, and the Gold and Silver valuation exists de facto. Total coinage (not published). China.— Silver valuation, but Gold also dealt in to a limited extent chiefly Gold leaf. ' Total coinage (not ascertainable), bars, dollars, &c., being in use. India.— Silver valuation. The Gold mohur has entirelv disap- peared from circulation, but British Gold to the extent of about ten million pounds is supposed to be present in India. Total coinage from 1835-36 to 1873-74 - . . . Ditto - in 1874-75 Coinages. Gold, £. Silver, 6,750,000 2,212,979 14,034 130,800.000 205,764,347 4,896,884 SELECT COMMITTEE ON DEPRECIATION OF SILVER. TABLE I. shewing the Nations and Populations (exclusive of so-called Savages) under the Three Systems in 1871. Appendix, No. 2, Under Gold System. England - Portugal Turkey - Persia - Australia Cape and Canada Brazils - Argentine Total Popu- lation - - Population. 32,000,000 4,000,000 27,000,000 4,400,000 1,950,000 4,370,000 10,200,000 1,800,000 Under Gold and Silver System. 85,720,000 France - Belgium - Switzerland Italy Spain Greece - Roumania United States Columbia Venezuela Chili Uruguay Paraguay Total Popu lation :} Population. 36,200,000 5,100,000 2,700,000 26,800,000 16,400,000 1,400,000 4,000,000 38,600,000 2,900,000 1,600,000 1,900,000 400,000 1,200,000 Under Silver System. 139,200,000 Germany Holland - Denmark Sweden - Norway - Austria - Russia Egypt - Mexico - West Indies - Central America Bolivia - Ecuador - Peru Japan China India, &c. Total Popu lation ■} Population. 41,100,000 3,700,000 1,800,000 4,300,000 1,700,000 36,000,000 76,000,000 4,500,000 9,200,000 600,000 2,600,000 1,800,000 1,300,000 3,400,000 33,000,000 425J000,000 195,000,000 841,000,000 This Table represents the status quo upon which, up to 1872, the supplies of both Gold and Silver were absorbed, the equilibrium, in accord with prices and requirements per head of population, being upheld by the three groups of equal aggregate weight each. The totals of Gold and Silver in use as money, viz., coin iu circulation, coin and bais held by banks and in the markets (exclusive of jewellery, plate, and quantities supposed to be hoarded), may be given as follows : — In 1871, Quantities in Millions sterling. Population. Under Gold, full Value. Silver, full Value. Silver, as Change. 85,720,000 139,200,000 841,000,000 Gold system Gold and Silver system - Silver system - - - Not accounted for - Since, to 1871 £. 160 340 133 68 49 14 121 354 16 26-5 31-5 87 750 505 145 Amoncr the Gold valuing states, England and Australia only have a fully effective national system. The stock in England may be given as amounting to 130,000,000/. of Gold and 15,000,000/. of Silver tokens. Of the other gold valuing states, Portugul is dependent on England ; the rest are under paper valuation or disorganisation ; and all, exceptini;; England and Australia, yet use between them about 14,000,000/. of foreign Silver coins of full value. 275 mafiy t*iA>-* ..*xj...^..y^ ... *-.«.w^-, - — --' — J 1^ J - j^ Q I — . w,.w other states of both the latter systems, some aie of second rank, others, like the United States, Russia, Italy, Austria, &c., have a paper valuation, and possess but little metal, or practical influence at the moment on that score. 0.77. L 4 The APPENDIX TO REPORT FROM THE Appendix, No. 2. The following figures shew the Population and Quantities for Europe alone in 1871 In Europe in 1871. Population, 48,000,000 92,600,000 164,500,000 Under Gold system - Gold and Silver system Silver system - Quantities in Millions sterling. Gold, full Value, 138 305 77 520 Silver, full Value. 4 116 85 205 Silver, as Change. 22 23-6 34-5 80 The following figures shew the Population and Quantiiies for the British Empire in 1871 : — In British Empire in 1871. Quantities in Millions sterling. Population. Under Gold, full Value, Silver, full Value, Silver, as Change. 38,000,000 196,000,000 Gold system - - - Silver system £. 146 15 170 16-9 25 161 170 41-9 In reality the equilibrium maintained up to 1872 depended on the four states, England, France, Geimany, and India. All other slates are of secondary importance, and in my opinion compelled to follow the lead taken by the four. So long as between England with gold valuation, France with Gold and Silver valuation, Germany with Sdver valutitioii ; both metals were upheld for the purposes of legal tender money. The interndtional value of Silver remained secure for India. The table now following shows the altered position and proportions of populations since 1871. For its appreciation the rem;irks following thtreon are of importance. TABLE II. shewing the Changes in the Three Systems decided by Law, and in abeyance since 1871. Under Und er Under Gold System. GoLn AND SiLVEii System. Silver System. Population. Population. Popnlaiinn. England 32,000,000 Spain - 16,400,000 Russia - 76,000,000 Portugal Turkey - 4,000,000 27,000,000 Greece - - 1,400,000 Egypt 4,500,000 Persia 4,400,000 Roumania - 4,000,000 Mexico - 9,200,000 Australia Cape and Canada 1,950,000 4,370,000 Columbia - 2,900,000 West Indies - 600,000 Brazils - 10,200,000 Venezuela - 1,600,000 Centra] America 2,600,000 Argentine 1,S00,000 Chili - - 1,900,000 Ecuador - 1,300,000 Joined ; Uruguay 400,000 Peru 3,400,000 Germany Denmark 41,100,000 1,800,000 Paraguay - 1,200,000 China 425,000,000 Sweden - 4,300,000 India 195,000,000 Norway - 1,700,000 In Abeyance : United States - 38,600,000 In Abeyance : Austria - - 36,000,000 Holland - 3,700,000 Japan - 33,000,000 France - 36,200,000 Belgium - 5,100,000 Switzerland 2,700,000 Italy Total Popu-"l lation ■ -J 26,800,000 Total Popu-) lation - -J Total Popu-\ lation - -j 247,720,000 98,800,000 717,600,000 SELECT COMMITTEE ON DEPEECIATION OF SILVER. 9 II is of paramount importance to bear in mind that Germany alone has actually succeeded Appendix, No. a. in effecting a real change, i. e-, in !i:;quiring Gold, and in disposing of a portion of its Silver; and that it has had a payment of war indemnity of 200 millions. But even in Germany the Gold valuation is not yet complete; more Gold is wanied, and Silver remains to be sold. The Scandinavian States have made but little piot^ress in selling silver and obtaining Gold. The United States have no power to hold Gold before they resume specie payments. Holland and the Latin Union have been added to the Gold valuing list "in abeyance," the steps taken so far justifying; this. Involved in the facts of the whole case is the con- sideration : are these States compelled to follow the course of Germany? It will be found that (unless Silver is remonttised) they nmst do so for the sake of self-preservation. And as soon as a final decision is arrived at, the matter can no longer remain in suspense, but must become a reality, not only with the States who have so far legally derived, but have done little as yet, but with those in abeyance and those who have not yet moved. The equilibrium dependent until 1872, as by Table I., on the proportions of, in Europe only: Population : In millions and decimals Actually changed, as by Table II., by law in 1S76, to - - And with the five States in abeyance, equal to .... Gold System. 48-0 103-0 177'5 Gold and Silver System. 92-6 92-6 21-8 Silver System. 164-5 109-5 106-8 The change, without reference to the States which have not yet moved, forms the basis or an estima'te as to the redistribution of Gold, and the sales of Silver required. As regards the Silver to be disposed of, it may be stated that, in 1871, Germany had a stock of 60,000,000/. to spare, the Latin Union 92,000,000 Z., and Holland 9,000,000 /. in hand. Since then, according to the Government statement, Germany has returned, or parted with, 31,000,000/. of French, Belgian, and Dutch pieces. This partly accounts for the rapid reduction of the German stocks, but increases those of France, Belgium, and Holland. Together with the new com^ges since made, the stock of full valued Silver liable to demonetisation in the L-atin Union and Holland is between 130,000,000/. to 140,000,000/. Besides this, Germany has yet Silver to sell, as well as Scandinavia, and that of other European States remains behind. Final Remarks. The true cause of the depreciation in the value of Silver is its demonetisation by law, and that only. England took the iniative in 1816; but as long as Germany maintained Silver, the equihbrium was maintained. Germany having followed England's course, that equi- librium is lost. An appeal to the natural laws nf supply and demand, as likely to settle this matter, or as tending' to shew that the depreciation must be due to an increased natural supply, cannot be made in this case ; for it is the demand which, not by any natural cause, but by deliberate legislation, has here been forcibly restricted to a very narrow limit. In all questions where the natural laws of supply and demand are invoked, that of the demand is as importaiit, if not more so, than that of the supply. ' Under the force of legislation, a matter under direct human control or intelligence, it is the case of ihe demand which here has precedence. If the demand had not been so influenced by an agency apart from the natural laws of supply and demand, and the status quo hitherto existing had not been forcibly changed thereby, it follows : Firstly, thai there would be no surplus stocks of Silver to dispose of. Secondly, that the fiesh natural supplies of Silver would be absorbed, as, together with those of Gold, they have always been absorbed before. Figuratively speaking;, if the abolition of the demand for Silver for tl)e purposes of legal tender money contributes 50 per cent, of tlie decline in its value, the secondary causes, that of the surplus stocks, contributes another 25 per c-nt., and that of the fresh supplies yet 12J per cent, to such decline; but the two latter causes would have no raison d'etre but for the first. ,• , , • • r oi This represents, in my opinion, the true order of the causes of the depreciation ot feilver ; in total independence of all matters of theory or practice involved in the general problem. 0.77. M 10 APPENDIX TO REPORT FROM THE Appendix, No. 3. PAPER handed in by Mr. Henry Waterfield. STATEMENT comparing the Figures relating to the Production of Gold and Silver throughout the Estimates of Average Annual Production for the Period from 1800 to 1848. A uthorit ies. Years. Countries. Gold. Silver. £. £. £. £. Humboldt 1800 Europe Northern Asia - ■ ■ 1 78,698 73,124 _ 468,177 192,968 : America *■ 2,382,316 - 2,634,137 7,071,831 - 7,732,976 Jacob - - 1809 to 1829 Europe and Asia (quoted from K umboldt) - 720,000 - 530,000 — Mexico, Guatemala, and South America 878,000 1 =^09 non 3,109,000 3,639,000 — i,jyo,uuu Average Annual Production from 1849 to 1875. - - - - . — GOLD. - - - - . RUSSIA AMERICA. AUSTRALIA. United California. Deposits at United Mexico and South Australia. Victoria and New South Net Exports from Australia, and CoiDage of States. States Mint. America. Wales. Sydney and M elbourn6 YEARS. Minis. (Tooke (Tooke (Tooke and and Newmarch, and Newmarch, (Reports of Director (Parliameotary taken from the " Econo- (" Econo- mist.") (Sir H. Hay.) (Sir H. Hay.' taken from the (" Econo- of the Mint, quoted from "Economist." (Sir H. Hay.) (Sir H. Hay.) Newmarch, taken from " Econo- Reports, quoted by "Economist.") mist.") mist") mist.") (L) (2.) (3.) (4.) (5.) (6.) (7.) (8.) (9.) (10.) £. £. £. £. £. £. 1 £. £. £. £. 1849 3,650,000 - - - 1,770,000 - _ _ 1 1850 3,390,000 - - 5,500,000 - _ » . _ % 1851 3,460,000 - - - 9,070,000 - - - 990,000 . 3 1852 3,460,000 2,450,000 12,000,000 12,870,000 1,000,000 20,600,000 10,700,000 4' 1853 2,840,000 - 2,450,000 13,000,000 13,760,000 1 000,000 14,140,000 11,480,000 _ i 1854 2,840,000 - 2,450,000 12,000,000 15,510,000 - I'OOO.OOO 9,540,000 9,930,000 _ ft 1855 2,840,000 - 2,450,000 11,000,000 14,740,000 1 '000,000 12,065,000 12,660,000 . 7 1856 2,840,000 - 2,750,000 11,000,000 15,400,000 _ I'OOO.OOO 14,270,000 14,010,000 _ 8 1857 3,549,000 2,750,000 11,000,000 - 12,000,000 l'000,000 11,405,000 12,096,000 » 1858 3,454,000 2,750,000 10,000,000 8,195,000 '000,000 10,680,000 12,762,000 10 1859 - 3,156,000 2,750,000 10,000,000 - 5,441,000 900,000 10,820,000 _ 12,861,000 11 1860 3,053,000 2,750,000 9,200,000 3,792,000 900,000 10,500,000 _ 11,838,000 12 1861 2,980,000 3,000,000 8,600,000 6,839,000 900,000 9,760,000 _ 12,635,000 15 1862 2,990,000 3,000,000 7,800,000* - 6,195,000 900,000 9,350,000 „ 12,933,000 U 1863 2,988,000 3,110,000 8,000,000 - 4,124,000 900,000 8,880,000 _ 13,003,000 15 1864 - 2,862,000 2,950,000 9,220,000 - 4,410,000 800,000 9,130,000 _ 11,724,000 11,805,000 16 1865 - 3,227,000 3,275,000 10,645,000 5,222,000 800,000 8,820,000 _ 17 1866 - 3,397,000 3,380,000 10,700,000 - 5,794,000 800,000 8,840,000 12,529,000 18 1867 - 3,377,000 3,350,000 10,34.5,000 6,139,000 700,000 7,910,000 - 11,184,000 19 1868 3,503,000 3,600,000 9,600,000 4,341,000 600,000 7,645,000 _ 11,670,000 20 1869 - 4,108,000 4,025,000 9,900,000 5,514,000 500,000 6,320,000 _ 11,661,000 9,457,000 21 1870 - 4,414,000 4,540,000 10,000,000 - 5,179,000 500,000 5,830,000 „ 22 1871 - 4,913,000 4,800,000 8,700,000 6,461,000 750,000 6,650,000 10,419,000 10,332,000 11,671,000 23 1872 4,771,000 4,650,000 7,200,000 - 2,466,000 750,000 6,810,000 24 1873 4,500,000 4,500,000 7,200,000 5,775,000 750,000 6,290,000 25 1874 4,035,000 4,500,000 1 6,400,000t - 5,947,000 750,000 6,000,000 _ 9,898,000 9,500,000 26 1875 - 4,000,000 4,500,000 8,000,000 - 6,853,000 750,000 5,750,000 - 27 / 25,320,000 69,277,000 80,730,000 231.510,000 88,620,000 110,687,000 19,950,000 228,005,000 59,770,000 219,978,000 28 Totals -■; in 8 years. in 19 years. in 24 years. in 24 years. in 8 years, in 19 years, in 24 years, in 24 years. in 6 years, 851 to 1856. in 19 years, 1857 to 1875. 29 849 to 1856. 1857 to 1875. l852to 1875. 1852 to 1875.' 1 1849 to 1856. 1857 tol875.1852tol875. 1 852 to 1875.1 1 30 Note—SiT H. Hay's figures from 1852 to 1873 are chiefly taken from the Report of the Director of the U.S. Mint for 1874-75 (see Question 12) • and the amounts for Gold are said to include the proportion of Gold contained in Silver. >. ~* i' * The amount 'for 1862 should apparently have been 7,840,000/. • \ I^A '"°=*nnn''noo\''^°/7*'? from the Director of the U.S. Mint (in continuation of the figures givenin Ms Report for 1874-75) gives the production m 1874 as 8,000,000 ?. (5^ee Appendix, No. 21, p. 138.) y s " = r' SELECT COMMITTEE ON DEPEECIATION OF SILVER. 11 Appendix, No. 3. PAPER handed in by Mr. Henry Waterfield. "World since 1848, as shewn in Statements laid before the Committee by Sir Hector Hay and Mr. Giffen. Estimates of Average Annual Production for the Period from 1800 to 1848. Authorities. Tooke's History of Prices. Chevalier Years. 1819 to 1828 (10 years) 1829 to 1846 (18 years) 1846 (1 yeai-) - Before 1848 Countries. Russia ... - ditto - - - . . - ditto . . . . Europe, excluding Russia - Russia, European and Asiatic Africa . - . America, North and South Archipelago of Asia and other Sources Gold. £. 3,503,039, giving au annual average of 25,847,215, giving an annual average of 360,000 4,100,000 550,000 2,100,000 3,000,000 £. 350,303 1 / 1 1,435,95 3,527,066 ,956 10,110,000 Silver. £. , Not given. 1,320,000 200,000 6,200,000 1,000,000 £. ;,720,000 Average Annual Production from 1849 to 1875. - GOLD. SILVER. GOLD AND SILVER. AMERICA. GRAND Other Othei!. Percentage ot TOTAL Silver produced to Countries TOTAL GOLD. RUSSIA. Mexico and Countries TOTAL each 100 I. of Gold, not United not SILVER. computed from South GOLD AND Tables p ut in by specified. States. America. specified. SILVER. Sir. H Hay. Years. (Tooke and Newmarch, and (Sir H. Hay.) Sir H. Hay.) (Sir H. Hay.) In each Year. From 1852 to (Sir H. Hay.) "Economist.") Total of 3, 4, (SirH.Hay.) (Sir H. Hay.) (Sir H. Hay.) (Sir H.Hay.) Total of 14, Total of 13 end of each Year. Totalof 1, 2, 7, 8, and 11. 15, 16, and 17. and 18. 5,6,9, and 10. (11.) (12.) (13.) (14.) (15.)t (16.) (17.) (18.) (19.) (20.) (21.) £. £. £. £. £. £. £. £. £. 1 _ 5,420,000 — _ — — — — — — 1849 n _ 8,890,000 . — — — — — — . — — — 1850 z _ 13,520,000 — — — — — — — — — 1851 4 500,000 27,030,000 36,550,000 120,000 6,000,000 2,000,000 8,120,000 44,670,000 22-22 22-22 1852— 5 600,000 28,080,000 31,090,000 120,000 - 6,000,000 2,000,000 8,120,000 39,210,000 26-12 24-01 1853 6 500,000 28,280,000 25,490,000 120,000 - 6,000,000 2,000,000 8,120,000 33,610,000 31-86 26-16 1854 7 500,000 30,240,000 27,016,000 120,000 - 6,000,000 2,000,000 8,120,000 35,135,000 30-05 27-03 1855 8 500,000 32,250,000 29,.520,000 130,000 - 6,000,000 2,000,000 8,130,000 37,650,000 27-54 27-13 1856 9 500,000 27,645,000 26,655,000 130,000 - 6,000,000 2,000,000 8,130,000 34,785,000 30-50 27-64 1857 10 500,000 24,411,000 24,930,000 130,000 - 6,000,000 2,000,000 8,130,000 33,060,000 32-61 28-26 1858 11 500,000 21,458,000 24,970,000 130,000 20,000 6,000,000 2,000,000 8,150,000 33,120,000 32-64 28-74 1859 1? 500,000 18,683,000 23,850,000 130,000 30,000 6,000,000 2,000,000 8,160,000 32,010,000 34-21 29-25 1860 13 500,000 22,454,000 22,760,000 140,000 400,000 6,000,000 2,000,000 8,540,000 31,300,000 37-52 29-95 1861 14 500,000 22,118,000 21,550,000 140,000 900,000 6,000,000 2,000,000 ^040,000 30,590,000 41-95 30-83 1862 LI 500,000 20,115,000 21,390,000 140,000 1,700,000 6,000,000 2,000,000 9,840,000 3i;230,000 46-00 31-86 1863"" 16 500,000 18,996,000 22,600,000 140,000 2,200,000 6,000,000 2,000,000 10,340,000 32,940,000 45-76 32-79 1864 17 500,000 20,254,000 24,040,000 140,000 2,250,000 6,000,000 2,000,000 10,390,000 34,430,000 43-22 33-48 1865 18 500,000 21,720,000 24,220,000 145,000 2,000,000 6,000,000 2,000,000 10,145,000 34,365,000 41-89 34-01 186Q^ iq 500,000 20,700,000 22,805,000 145,000 2,700,000 6,000,000 2,000,000 10,845,000 33,650,000 47-56 34-76 1867 ?0 500,000 19,514,000 21,945,000 145,000 2,400,000 5,500,000 2,000,000 10,045,000 31,990,000 45-78 35-32 1868 ^1 500,000 21,283,000 21,245,000 100,000 2,400,000 6,000,000 2,000,000 9,500,000 30,745,000 44-72 35-76 1869 9,9 500,000 500,000 19,050,000 21,370,000 115,000 3,200,000 5,000,000 2,000,000 10,315,000 31,685,000 48-29 36-33 1870 01, 21,793,000 21,400,000 110,000 4,600,000 5,500,000 2,000,000 12,210,000 33,610,000 57-06 37-22 1871 9\ 500,000 17,569,000 19,910,000 100,000 6,750,000 5,200,000 2,000,000 13,030,000 32,960,000 6555 38-32 1872 ?'i 500,000 21,946,000 19,240,000 100,000 7,150,000 4,800,000 2,000,000 14,050,000 33,290,000 73-02 39-56 1873 Vfi 500,000 500,000 19,880,000 18,150,000 100,000 7,200,000 5,000,000 2,000,000 14,300,000 32,450,000 78-79 40-83 1874 27 20,353,000 19,500,000 100,000 9,000,000§ 5,000,000 2,000,000 16,100,000 35,600,000 82-56 42-27 1875 98 12,000,000 573,652,000 572,195,000 2,990,000 53,900,0001 137,000,000 48,000,000 241,890,000 814,085,000 42 27 1 ?<» in 24 years, 1852 to 1875. in 27 years. in 24 years, in 24 years. in 18 years. in 24 years, in 24 years, in 24 years, in 24 years. U'otal. 30 1849 to 1875. 1852 to 1875. 1852tol875. 1858 to 1875. 1862 to 1875. 1852 to 1875. 1852 to 1875. 1852 to 1875. J X Said to exclude the proportion of Gold contained in Silver. § From a San Francisco Paper of January 1875. 0.77. M 2 12 APPENDIX TO REPORT FROM THE Appendix, No. 4. Appendix, No. 4. PAPEES handed in by Mr. R. Giffen, and referred to in his Evidence. — L — Estimated Annual Production of Gold and Silver at various Dates from 1800 to the present Time, shewing the Proportion of Silver to Gold. A. — Humboldt's Estimate of Average Annual Production at beginning of the Nineteenth Century. [As given at p. 400, Vol. III., of the " Essai Politique sur le Royaume de la Nouvelle Espagne." Paris. Jules Renouard, 1827.] (The francs are converted into sterling, at 25 per £.) Weight of Gc Id and Silver. Value of Gold and Silver. COUNTRIES. Gold. Silver. Gold. Silver. Kilogrammes. Kilogrammes. £. £. Europe ---... 1,297 62,670 178,698 468,177 Northern Asia - - - . - 538 21,709 73,124 192,968 America ----.- 17,291 795,581 2,382,315 7,071,831 Total - - . 19,1:36 869,960 2,634,137 7,732,976 According to this, the weight of Silver annually produced was as 46 to 1 of Gold, and the vain as 3 to 1. B.~Jacob's Estimate of Average Annual Production of Period 1809 to 1829. [Summarised from Vol. II. of " Jacob on Precious Metals," pp. 225-269. See Note.] countries. Gold. Silver. £. £. Mexico - - 105,000 2,135,000 Guatemala - - - 30,000 Columbia - - - 343,000 7,000 Peru - - 65,000 609,000 Buenos Ay res - - - 6.3,000 252,000 Chili - - 97,000 76,000 Brazil Total - - - £. 205,000 — Add,— 878,000 3,109,000 Europe and Asia * Total - - - £. 720,000 530,000 Grand 1,598,000 3,639,000 According to this the value of Silver produced in the period was as 2-3 to 1 of Gold. * IMr. Jacob quotes for this, a contribution of Humboldt's to Puflendorf's Annalen. 1 [5f'r/}^''Y^''7'''^°'''''''gV^''"y,^'''^''' '" this form, shewing the propoitions of Silver and Gold in the total production, but the table has bepn compiled rom Ij.s .tatem.nti, m detail, with the assistance, as re^atds Mexico, of the Parliamentary Paper copied in Table VII. subjoined, and the totals agree nearly with those in Mr. Jacob's General Sutnmary at the end SELECT COMMITTEE ON DEPRECIATION OP SILVER, 13 Appendix, No. 4. C. — M. Chevalier's Estimate of the Annual Production of the Silver and Gold Mines of the World prior to the Gold Discoveries of 1848. [As quoted in Tooke's " History of Prices," Vol. VI., p. 1 44, and repeated with minor alterations in the same volume. Appendix, p. 768.] CoUNTRIEji. North and South America - - - - - Europe, excluding Russia ----- Hussia (European and Asiatic) - - . - Africa ---.-... Archipelago of Asia and other sources Total According to this, the production of Silver was to Gold as 0'86 to 1. D. — Summary of Estimated Production of Gold and Silver in the Period 1852-75, handed in by Sir Hector Hay, with the Proportion of Silver to Gold. Annual Average of Five Years. Gold. Silver. Proporlicn of Silver to Gold. 1852-56 1857-61 - 1802-66 - 1867-71 - 1871-75 - - - Millions Sterling. 29-9 24-6 22"7 23-6 20-4 Millions Sterling, 8-1 8-2 9-9 10-6 13-9 0'27 to 1 0-33 to 1 0-44 to 1 0-41 to 1 0-68 to 1 2fote. The Estimates in the above Table are of course only put forward on the authority of the authors who are cited. It is proper to notice however, that the Estimate of Guld in 1^48 appears to be greater, as regards South America, and also as regards the Archipelago of Asia ari't other sources, than is quite easily accounted for on a comparison with the earlier and with the later Estimates. The item of S,000,000 Z. for Archipelago of Asia and other sources, appears to be especinlly inconsistent. But the reduction of this Estimate would raise ihe proportion of Silver to Gold at that time, and make the subsequent change in the proportions n-.ore striking. — II.— Movement of Gold and Silver In the English Market, at various Dates from 1800 to the present Time. A.— Exports of Gold and Silver from United Kingdom in Ten Years ending 1810. [From Appendix to Bullion Committee's Report in 1810, pp. 2-5.] years. Gold. Silver. years. Gold. Silver. 1801 1802 Oz. 28,112 103,377 2.%673 3,053 17,007 3,019 13,008 Oz. 2,070,425 2,123,884 3,793,15G 6,434,039 4,600.296 7,951,261 3,063,094 506,273 1809 - 1810 - Oz. 14,716 69,962 Oz. 3,570,783 3,190,742 1803 1804 275,927 37,303,953 1805 1806 1807 1808 = at£.3.17.9. per oz. £. 1,07 2,665 iziat 5s. per oz. £. 9,323,488 According to this, the value of Silver Exported in the above period was as 8-7 to 1 of Gold. 0.77. m3 14 APPENDIX TO REPORT FROM THK Appendix, No. 4. B.— Exports of Gold and Silver from United Kingdom in 1830-53. [As stated at p. 709 of Tooke's " History of Prices," Vol. VI. The figures there given are stated to be " as the entries appear in the Books of the Custom House."] Proportion YEARS. Gold. Silver. of Silver to Gold. Millions Sterling. Millions Sterling. 1830-34 6-22 19-56 3-1 to 1 1835-39 - 7-45 14-41 1-9 to 1 1840-44 4-72 17-84 3-8 to 1 1845-49 - 8-61 24-82 2-9 to 1 1850-53 24-35 21-57 0-9 to 1 C. — Imports and Exports of Gold and Silver into and from the United Kingdom in the Years 1858-74, shewing the Proportion of Silver to Gold, [Summarised from the two following Tables, which are compiled from the Board of Trade Annual Statements of Trade and Navigation.] GOLD. SILVER. Proportion of Y EAR S. Imports. Exports. Total Imports. Exports. Total Silver to Gold. 1858-61 - 1862-66 - 1867-71 - 1872-75 - Mlns.Sterling. 69-8 93-9 87-1 80-3 Mlns.Sterling. 57-5 65-8 59-8 68-3 Mlns.Sterling. 127-3 159-7 146-9 148-6 Mlns.Sterling. 38-4 51-2 49-6 46-5 Mlns.Sterling. 44-1 49-9 43-8 41-5 Mlns.Sterling. 72-5 lOl-l 93-4 88-0 0-57 to 1 0-63 to 1 0-63 to 1 0-59 to 1 III Imports and Exports of Gold into and from the United Kingdom in each Year, 1858-75, referred to in preceding Table II. [Compiled from the Board of Trade Annual Statements of Trade and Navigation, and from the Monthly Returns.] YEARS. Imports. Exports. YEARS. Imports. Exports. 1858- 1859- 1860 - 1861 - £. 22,793,000 22,298,000 12,585,000 12,164,000 £. 12,567,000 18,081,000 15,642,000 11,238,000 1867 - 1868- 1869 - 1870 - 1871 - 1867-71 - - 1872- 1873 - 1874 - 1875 - 1872-75 - - Total - £. £. 15,800,000 17,136,000 13,771,000 18,807,000 21,619,000 £. 7,889,000 12,708,000 8,474,000 10,014,000 20,698,000 1858-61 - - 09,840,000 57,528,000 87,133,000 59,783,000 1862 - 1863 - 1864 - 19,904,000 19,143,000 16,901,000 14,486,000 23,510,000 16,012,000 15,303,000 13,280,000 8,49.3,000 12,742,000 18,469,000 20,611,000 18,081,000 23,101,000 19,749,000 19,071,000 10,642,000 18,810,000 1865 - 1866 80,262,000 68,272,000 331,179,000 1 862-66 - - 93,944,000 65,830,000 251,413,000 SELECT COMMITTEE ON DEPRECIATION OF SILVER. 15 IV.— Appendix, No. 4. Imports and Exports of Silver into and from the United Kingdom, 1858-75, referred to in preceding Table II. [Compiled from the Board of Trade Annual Statements and Monthly Returns.] TEARS. Imports. Exports. TEARS. Imports. Exports. 1868 - 1859 - 1860 - 1861 - £. 6,700,000 14,772,000 10,394,000 6,583,000 £. 7,062,000 17,608,000 9,893,000 9,573,000 1867 - 1868 - 1869 - 1870 - 1871 - 1867-71 - - 1872 - 1873 - 1874 - 1875 - Total- - £. £. 8,021,000 7,716,000 6,730,000 10,649,000 16,522,000 £. 6,435,000 7,512,000 7,904,000 8,906,000 13,062,000 1858-61 - - 38,449,000 44,136,000 49,638,000 43,819,000 1862 - 1863 - 1864 - 11,753,000 10,888,000 10,827,000 6,977,000 10,777,000 13,314,000 11,241,000 9,853,000 6,,'i99,000 8,897,000 n, 139,000 12,988,000 12,298,000 10,124,000 10,587,000 9,828,000 12,212,000 8,907,000 I860 - 1866 ... 46,549,000 41,534,000 185,858,000 1862-66 - - 51,222,000 49,904,000 179,393,000 — V. — Statement as to Gold Peodtiction from Principal Countries from 1848 to 1875,. A. — Supplies of Gold from California, Australia, and Russia, during the Eight Years, 1849-56. [Extracted from Tooke and Newmarch's "History of Prices," Vol. VI., p. 150, the information- being chiefly obtained from the "Economist" of 24th January 1857.] TEARS. California. Victoria. New South Wales. Russia. Totals. £. £. £. £, £. 1849 1,770,000 - - 3,650,000 5,420,000 1850 5,500,000 - - 3,390,000 8,890,000 1851 - - . - 9,070,000 480,000 510,000 3,460,000 13,520,000 1849-51 - - 16,340,000 480,000 510,000 10,500,000 27,830,000 1852 12,870,000 6,740,000 3,960,000 3,460,000 27,030,000 1853 13,760,000 9,530,000 1,950,000 2,840,000 28,080,000 1854 15,510,000 9,080,000 850,000 2,840,000 28,280,000 1855 14,740,000 12,430,000 230,000 2,840,000 30,240,000 1856 15,400,000 13,900,000 110,000 2,840,000 32,250,000 1852-56 - - 72,280,000 51,680,000 7,100,000 14,820,000 145,880,001) 1849-56 - - - £. 88,620,000 52,160,000 7,610,000 25,320,000 173,710,000 0.77. M 4 16 APPENDIX TO EEPOET PKOM THE Appendix, No. 4. B.— Production between 1857 and 1875. [Extracted from " Economist" of 3rd August 1872, as to the Years 1857-71, and since revised and continued by Witness. See Note.] YEARS. Net Exports from Australia. 1. Coinage of Sidney Mint, and inclusive of MelbournH Mint after 1S72. 2. Deposits of Gold of Dumestic Production at United States Mint. 3. Production in Russia. 4. Totals. 5. 1857 - 1858 1859 - 1860 ... 1861 - - - - £. 11,329,000 11,419,000 11,640,000 10,186,000 10,916,000 £. 767,000 1,343,000 1,221,000 1,652,000 1,719,000 £. 12,000,000 8,195,000 6,441,000 3,792,000 6,839,000 £. 3,549,000 3,454,000 3,156,000 3,053,000 2,9S0,000 £. 27,645,000 24,411,000 21,458,000 18,683,000 22,454,000 1857-61 55,490,000 6,702,000 36,267,000 16,192,000 114,651,000 1862 - - - - 1863 - 1804 - 1865 . - - - 1866 10,455,000 11,468,000 9,025,000 9,-533,000 9,618,000 2,478,000 1,535,000 2,699,000 2,272,000 2,911,000 6,195,000 4,124,000 4,410,000 5,222,000 5,794,000 2,990,000 2,988,000 2,862,000 3,227,000 3,397,000 22,118,000 20,116,000 18,996,000 20,25 J ,000 21,720,000 1862-66 - - - 50,099,000 11,895,000 26,745,000 15,464,000 103,203,000 1867 - 1868 - - - - 1809 - - - - 1870 1871 8,783,(J00 9,351,000 10,382,000 8,237,000 7,605,000 2,401,000 2,319,000 1,279,000 1,220,000 2,814,000 6,139,000 4,341,000 5,514,000 5,179,000 0,461,000 3,377,000 3,603,000 4.108,000 4,414,000 4,913,000 20,700,000 19,514,000 21,283,000 19,050,000 21,793,000 1867-71 - - 44,358,000 10,033,000 27,634,000 20,316,000 102,340,000 1872 - 1873 - 1874 1875 - 7,591,000 9,359,000 6,500,000* 6,500,000* 2,741,000 2,312,000 3,398,000 3,000,000* 2,460,000 5,775,000 5,947,000 6,853,000 4,771,000 4,500,000" 4,0.35,000 4,000,000* 17,569,000 21,946,000 19,880,000 20,353,000 29,950,000 11,451,000 21,041,000 17,306,000 79,748,000 £. 179,897,000 40,081,000 110,687,000 69,277,000 399,942,000 * Estimates. [Note. ^The figures in Column 1 were taken from the Statistical Abstract for ttie Colonies ; in Column 2, from the Reports of the Master of the Mint (United Kingdom); in Column 3, from the Reports of the United States Director of the Mint ; and in Column 4, from information sup[)lied to tlie " Economist." A considerable part of the coinage of the Sydney Mint has been exported ; and the Australian production would probably be more than the amounts in the first column, on the average of years, though less thun the amounts in Columns 1 and 2 together.] — VI. — Statement of the Quantity of Gold produced in Russia during the 28 Years, 1819-46. [Extracted from Tooke's " History of Prices," Vol. IV. (1839-47), p. 452-4.] Poods. liv. zol. Poods, liv. sol. Poods, liv. zol. Year 1819- 40 9 bo Year 1829 314 31 1 Year 1840 - 585 15 60 1820- 44 3 1830 378 15 79 1821 - 52 4 85 1831 396 29 37 1841 681 20 34 1822 - 79 21 36 1832 410 8 61 1842 950 26 68 1823- 1824 - 125 228 19 13 79 38 1833 1S34 408 22 406 4 71 64 1843 - 1,283 2 60 1825- 257 12 54 1835 413 1 8 1844 1,341 25 60 1826- 1827- 257 ■307 2o 30 15 95 1830 426 3 74 1846 - 1,386 6 41 1828 - 317 39 44 1837 469 20 75 1846 1,722 29 87 1838 1839 524 36 525 6 69 38 1829-46 1819-28 1,711 21 12,624 28 24 E E S U M 6. Poods, liv. ml. 1,722 29 87 Equal to oz. Troy. 907,284 Value at 77s.9Ap'oz. Yield in 1846 - - £. 3,527,066 Yield from 1819 (the period when some golden sands were discovered in Oural) to 1828, iiiclusive - - - - Yield from 1829 (when a discovery was made in Siberia) to 1846, inclusive - ..... 1,711 21 12,624 28 24 901,101 6,648,801 3,503,029 25,847,215 Total 14,336 28 45 7,549,902 29,350,244 SELECT COMMITTEE ON DEPRECIATION OP SILVEE. 17 C g s ■p«a ^ n -1 >^ 05 O 0) p-l a o ■ i-H or O id ID o g o .2 03 CO CO t4-C O P-l Cm O ^ (M m CO Oi r-l bO ( vr O O 05 00 OQ ^* :^ --^ i— < ^ £ *^ o CO CO 6 s? o Oh CS a ^f^ <£ -*^ -2 O' CO ^ rt "a w (1h .2 . m d J ' — ■ to ^" ^ "^ 5 ea (I, a a> ^ a> t* o 5 P-fi t. -H ^ M S Tl c4 3 a n O 4* o ••-* « -o d — . 9 V ra JggOsS u -o o' ^ tJ .0 ■rt a O4 c « Tl a S - ti' 2 t^ ^^^■■5S '5E:§-'g C = c« -3 •J t>, a S K "^ - tl T-( rt CD -ij fli -;r' '^-'^ otal of I has and CD H-2 S •See! O o o to -^ o -' Ph O w p^ a n rti-iQoeocoaioi050o ■ . .C^S:*£?OC3coi^cocieo 1 I I l>^05^C35^r-H^f-H O^QD OS^O^CQ^ »-) CO in CO o c^ . 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CO « -^ s 1 1 1 • 1 , 1 Ol o l-H M Ol ■^ lO to !>. !>. t>. »>. t^ !>. 00 (—1 CD 1— 1 00 1—4 00 CO l-H 00 l-H CO rH o O o o r tC l-H in* to* to* lO S o o o o o r-l o o 5 o o o o o o o CO CM f?r o in o en' o o cm" id" s CO in o» CO S CO to I-H C^J 00 u a -1- 1— i' l-H I-i P a u s <« A o o o <-) o (-> o e ^ o o o ■— > (-) o o •^ « o CO" in o o o o^ o •s -^ CM^ to" CO to cs CO ■*" CO U m +■ CQ > ■ • • • 1 ' ' « ' 1 I " t « <) H tH ■ ( I » 1 « > 1—' (N CO ^ in tf) t^ CO to to 2 1— 1 GO CO 00 00 00 I-I r-t o O o O (-> o o o in o o o o l- Cfi --*■ ^ l-> o !->. m !>. to t* !>. 171 Eh to CM « O O r^^ to "* 'tti lO CO in lo H-> 1 (-> o o -3 o o o D2 ^ 1 cs W in r* ^ cq !>> 00 S rH & ■ ci ■- o8 o o o o".i! © o •5 5 ■^ . to 00 ■* 1^ 1 a> t^ CJ^ co^ CN j= CQ ■ a 1 I CQ M ->) f^ H w CO ■^ lO to ro c^ © in in »n GO f-C 00 00 l-H CO l-H CO ^H CO i-i CD 00 I-I 1-1 1 SELECT COMMITTEE ON DEPRECIATION OF SILVER. 19 Appendix, No. 5 a. PAPERS put in by Mr. S. Pixley, and referred to in his Evidence of 23rd March 1876. Appendix, No. 5 a. Export of Silver from Southampton to India, China, and the Straits. YEAR. INDIA. CHINA. STRAITS. Total. £. £. £. £, 1865 2,738,762 560,026 299,270 3,598,058 1866 2,009,580 303,196 52,850 2,365,626 1867 370,231 265,766 6,915 642,912 1868 1,000,635 474,945 160,062 1,635,642 1869 1,349,680 780,144 233,119 2,362,943 1870 187,600 887,212 504,661 1,579,473 1871 1,651,290 1,383,465 677,718 3,712,473 187-2 2,846,327 1,523,819 1,284,305 5,654,451 1873 420,290 768,416 1,308,870 2,497,576 1874 3,949,020 1,658,855 1,484,861 7,092,726 1875 2,120,390 723,894 870,120 3,714,404 1876, to date - 837,030 27,235 140,150 1,004,415 Total - - - £. 19,480,835 9,356,973 7,022,891 35,860,699 16 March 1876. Pixley ^ Abell, Sworn Brokers. 0.77. n2 20 APPENDIX TO EEPOKT FEOM THE Appendix, No. 5 b.- TABLE shewing the Monthly Fluctuations in London in the Peice o: Years. January. February. March. April. May. June. July. August. September. OAober. ,' d. d. d. d. d. d. d. d. d. d. 1833 58| 58f 58} 58| 581 58J 59J— 59i 591 h^ 59} 1 1834 59| 591 60 59} 59} 591 60^—60} 60} 60f 59} 2 1835 59| 60 60 591 69} 591-591 59} 59} 59^ 59f 3 1836 59^-59$ 591—60 59|-60^ 591-59} 60 60^ 60 —60} 60}-60f 60^-601 60^-60} 4 1837 60f-60| 60 60 59J-59J 594—69} 59} 59}— 59| 69 — 59f 59}— 594 59 -59} 5' 1838 59i 594 594 59g-594 591 59| 591 591 59J 59i 6 1839 60|— 60| 60| 60}— 60| 60 —60} 601—601 60|- 601—604 60-1 601 • 6O4 ; 1840 60|— 60J 60} 60}-60f 60}— 604 60^60} 60} 60^-60} 6O5— 60f 6O4— 60| 6O4-6OI 8 1841 601 60| 60 60 60} 60^60} 59I-6O 60i 6O5 59f-59J '9 1842 59f 591—59 J 591 59l-59i 591-594 591—60 59} 591-59} 59f-59| 59J-69} 10 1843 59^-59f 59 — 59i 59 -59i 59^ 59i 59^-59} 59} 591 59} 59i 1: 1844 59i— 59J 591 594- 59f 594 59| 591—59} 59f 59} 59f 12 1845 59J 59^59} 58J— 59J 58| 581-59} 59 —59} 59^-59} 59i— 59| 591 594-59J 13 1846 59i 59i 59} 59 59 59 59^ 59^ 59J 591-591 U 1847 60J-60I 60i 60| 581—601 581-59} 59 -591 591— 60 59f— 60 591—59} 59}-594 15 1848 59^— 59J 59|— 59J 591—59} 58 J— 594 594-60 594— 59f 594-591 59I-59J 591 59J-69J le 1849 59|— 59f 59} 60 —60^ 59J— 60 591 594-591 591—59} 59}— 59J 594—591 591-594 17 1850 59|-59|^ 594—591 591-59} 59| 69f 59| 591-591 59| 60 —60^ 60^601 18 1851 61f 614-611 614 614 61^614 6OI-6IJ 60}— 61 60}— 61 604—60} 60 -60| 19 1852 60i— 60f 604 60| 591—60 591 591—60} 60f 60f 60-1 60|-61i 20 1853 61| 611 61i 611 601-61-1 60|-61^ 61^-614 61^611 611-62^ 61|-62^ 21 1854 61J— 61J 61| 61J 61f-61i 601-611 61}— 614 61} 61} 61 — 6I4 611-61! 22 1855 614-611 614-611- 60| 60| 61}— 61| 61J 614-61f 61f 6I4 6I4 23 1856 COJ— 6U 61i— 61f 604—61 60J— 61 61 -611 601-61} 601 611—611 61|-62} 62 24 1857 62i 614—611- 611^1} 6If-61J 61 — 614 611 6I4— 611 61}— 62 6I4 61} 25 1858 61i 61|— 61J 61| 61}-61i 6I4-6II 611—614 61}— 61f 60}-61 60} 611— 6I4 25 1859 615—62 61} 61J— 62| 611-621 62}— 621 62 —62} 62 —621 61}-62 611—62 61|-62 27 1860 62 — 62f 62 —62^ 61J-62i 61} 61| 611—611 6H 61|— 61| 61| 61|— 61| 28 1861 6U-615 61^-61} 60|-61 601-61} 60J— 60| 601- 60| 60^601 60}— 604 60}— 60f 601—60} 2} 1862 61 — 61f 614—61$ 6U-61i 61J-61} 61}-61| 61 -61| 61 -61^ 6]}-61| 61}— 61f 61}_61i 30 1863 61|-61| 614-611 611-614 61 — 61f 61}-61| 61 — 61| 61 -61} 61 -61i 61^-611 61}-61| 31 1864 611-624 61}-61J 614—61} 611-61J 60I-61J 61^-611 61|-61,=5 61 — 61J 61i-61| 601-61} 32 1865 61i-61| 611—614 61 — 61| 60| 60^60} 604—60} 604—60} 601— 60f 60|— 61 611-61} 33 1866 61i— 61| 60J— 614 60J-61 61 —614 61 —62 61f-62} 60|— 61} 60i— 60| 601—61 601-61 34 1867 60| 60} 601-60} 60f— 61} 601—60} 601-604 6O4 60|— 6O4 60/8-601 60|—60J 35 1868 60|— 60f 60-1—604 604— 61J 604-60f 60-1—601 60-1 601— 60^5 60}— 60| 60^60} 60}-604 36 1869 60|—60i 60f-61 604—60} 604—601 60 — 60| 60 —60} 60}-60,| 601— 60f 60|— 6O4 601-60} 37 1870 60J— 60f 601-604 60|— 60| 60f-604 60|— 60} 60|— 604 60J— 62 601—601 60|— 60f 60f— 60f 3S 1871 604-601 604-60f 601-604 60f5-60} 60,3^-60} 601-60,1 60J— 60| 601-60} 60|— 60iJ 60}-60* 3» 1872 60|— 60^ 60i— 61| 60}-60| 60}— 601 6OV3-6O4 60 — 60J eoA-eofs 60 -60i 60i'5-60fB 60 -60} 40 1873 59|— 59|§ 59}-59}i 59S— 59| 591 591-591 59^594 59^^-591 581i-59^ 58JI-59J 584—59 41 1874 58 —594 584—59 584-591 58i^-59} 584— 58f 584—59 58}— 584 57I-58J 571—58 57|-57}i 42 1875 57i-57| 57i-574 57 —57} 574-571 564-57 554— 55J 559-555 56 -56| 56}J-56} 561-571 4} 1876 54|— 56J S3 — 54f 524-54} 63?,- 54 52 —64 50 —52 - — m ^ _ ^ • 44 SELECT COMMITTEE ON DEPRECIATION OF SILVER. 21 ------- Appendix, No. 5 a. Bar Silver per Ounce Standard, from January 1833 tp April 1876. November. d. 59| 59| 59^ 59J— 59i 59i— 59i 60i— 60J 60J 59i 59J— 59f 59} 59| 59f— 59J 59i 59i— 59| 59J 601— 6IJ 601 61^61i 61|-62f 61^61i 60 — 61f 62} 61J— 61| 61}-61i 62 6H-61I 60i-61i 61i-62j 61f-61J 60J -61i 61}— 61f 60i— 61 601— 60i 60f— 60i eof— 60i 60J— 60f 60f-61 59i— 59J 5H-5H 57J— 58J 56|-56{i December. d. 59J 59J— 59J 59| 591—60 59^ 60 — 60J 60} 60}— 60i 59i 59f-59} 59} 59 i 59^59} 60^ 59J 59} 59}— 59| 61} 60| 61}-61| 61|-61| 61| 61f 61^—61} 62 — 62f 61}~61f 62 61}— 611 61 —61} 61|— 61J 61I-61J 61| 61i»8-61i 60|— 60|- 60f-60J 60|— 60| 60|-60| 60J— 60| 60}— 60|- 591—59} 58 —58^ 57}-57f 56}— 56f Yearly Average. 59il 591S 59{J 60 59,^ 59} 60f 601 60,1, 59^ 59i'5 59} 59} 59^ 591J 59} ^1 60^ 61 60} 61} 61} 61A 61^ 61| 611^ 60ii 61ft 61| 61i 61ft 61* 60ft 60} 60ft 60ft 60} 60ft 59} 58ft 56| Silver Coined in England. 145 432,775 146,665 497,719 75,385 174,042 390,654 207,900 89,641 192.852 239,580 610,632 647,658 559,548 125,730 35,442 119,592 129,096 87,868 189,596 701,544 140,580 195,510 462,528 373,230 445,896 647,064 218,403 209,484 148,518 161,172 535,194 501,732 493,416 193,842 301,356 76,428 336,798 701,514 1,243,836 1,081,674 890,604 594,001 Amount of Bills Drawn in England on Indian Governments. Years ended 30 April. £. t55,510 398,253 732,803 2,045,254 2,042,232 1,706,184 2,346,592 1,439,525 1,174,450 2,589,283 1,197,438 2,801,731 2,516,951 3,065,709 3,097,042 1,541,804 1,889,195 2,935,118 3,236,458 2,777,523 3,317,122 3,850,565 3,669,678 1,484,040 2,819,711 628,499 25,901 4,694 797 1,193,729 6,641,576 8,979,521 6,789,473 6,998,899 Years ended 31 March. 5,613,746 4,137,285 3,705,741 6,980,122 8,443,509 10,310,339 13,939,095 13,285,678 *Export3 of Silver to the East. £. 1,895,023 2,146,465 2,036,167 2,610,101 3,010,190 1,945,264 1,786,253 1,841,335 3,143,292 4,794,678 3,752,472 2,495,959 2,939,922 1,973,391 4,204,503 3,396,807 3,811,809 5,052,059 1,715,100 2,447,450 3,117,980 3,095,490 6,431,733 12,113,991 16,731,915 4,753,933 14,828,521 8,478,739 6,824,807 10,091,460 8,263,011 6,254,004 3,598,058 2,365,626 642,912 1,635,642 2,362,943 1,579,473 3,712,473 5,654,451 2,497,576 7,092,726 3,714,404 Imports of Average Silver ia Bank Rate Bars of and Coin. Discount. £. f - 0} n a S u ^ CO o> rt ■s ^ h o o CO fl c" = -^s- a •> f.o ^t m O U +J an ^ "r (W f 5 4 J Ih o L .1* 3 „ *o 3*„{ 5.{ "es 3f „ 3 .,{ ^,, • 3 „ • 2 „ • 3}„ . 5 „ . 4|„ . 5f „ • 6|„{ 6,700,000 3}„ 14,772,460 2f „ 10,394,000 4}„ 6,590,000 11,753,000 2}..{ 10,888,130 ii»{ 10,827,300 n,, 6,980,000 4}„ 10,778,000 8,020,000 n„{ 7,716,420 2i „ 6,730,000 3}„ 10,649,000 3 „ 16,520,000 3}»{ 11,140,500 44 „{ 12,302,220 .,.{ 11,797,990 3|,.{ 9,505,757 3}„{ — - REMARKS. fContinuance of East India Company. Slavery J abolished ; compensation to owners, 20,000,000 /. I Renewal of Bank Charter ; Bank Notes a legal (_ tender. ( Great importation of Gold into New York. Substi- i tution of metallic currency for paper in the United I States. Extinction of United States National Debt. Bank of United States wound up, owing to refusal of Congress to re-charter it. / Banking and commercial embarrassments in United \ States. Spanish Civil War. ' Commencement of panic in London. Discounts re- fused. Many houses trading with the United States stop payment. Accession of Queen Victoria. Re- bellion in Canada. j" Resumption of specie payments in United States. < Famine in various parts of British India. Affghan I. War. Banks in United States suspend payments in specie' War with China. Misunderstanding with France. Treaty of London for settlement of Eastern Question. Great depression in every branch of manufacturing industry. Peace with China. Income Tax Act passed. Treaty of Commerce opens China to all nations. Bank Charter Act passed. Consols 101}. Prior to September this year, the Bank never reduced the rate below 4%. Railway Mania. Sikh War. Commercial and Railway Panic. Repeal of Corn Laws. Year of Panic. 10,000,000 Z. granted for relief of Famine in Ireland. Gold discovered in California. Sikh War. First importation of Californian gold into England. Annexation of the Punjaub. Average of Consols 96^. Discovery of Gold in Australia. Consols touched 102, and averaged 99f , Australian Mint established. Russian War began. Loan of 16,000,000 1. Fall of Sebastopol. Russian War ends. Panic. Suspension of Bank Act. Indian Mutiny. Loan of 1,000,000 1. to East India Company. End of Indian Mutiny. Loan of 5,216,528 I. to East India Company. Commercial Treaty with France. Financial depression in India, American Civil War begins. Great distress in cotton manufacturing districts. Panic. Large exports of Gold to the Continent to pay for Silver. 13,000,000 I. Silver exported from France. Close of American War. Commercial and Joint Stock Companies panic. Bank declined to sell bar Gold. Great decline in export of Silver, only 2,500,000 I. sent from France. Abyssinian Expedition. Distress in Lancashire. Franco-Prussian War. Panics. 8,500,000 I. Gold exported to Hanse Towns. Peace between France and Germany. 8,050,000 I. Gold exported to Hanse Towns. Com- mencement of decline in price of Silver. 10,000,000 1. Gold exported to Hanse Towns. Ger- man Government announce the demonetisation of Silver. Enormous increase of bullion in Bank of France 22,000,000 1., mostly Gold. Heavy commercial failures. Large export of Gold to Germany, Continued decline in price of Silver. 10,841,615 12,389,613 • The totals team 1833 to 1850 include exports from other countries as well as England ; from 1851 to the present time the exports from England only are ^t'tacluding Bills on China, for this ear only. (The East India Company had the monopoly of the trade with China up to 1833.) 0.77. 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Standard, £. £. £. £. £. £. d. 1852 36,550,000 8,120,000 44,670,000 2,630,000 - 2,630,000 m^ 1853 31,090,000 8,120,000 39,210,000 4,710,000 - 4,710,000 61tV 1854 25,490,000 8,120,000 33,610,000 3,130,000 1,460,000 4,580,000 61J 1855 27,015,000 8,120,000 35,135,000 6,410,000 1,520,000 7,980,000 61i J 856 29,520,000 8,130,000 37,650,000 12,120,000 2,000,000 14,120,000 6ItV 1857 26,655,000 8,130,000 34,785,000 16,800,000 3,350,000 20,150,000 61i 1858 24,930,000 8,130,000 33,060,000 4,780,000 910,000 6,690,000 «1tV 1859 24,970,000 8,150,000 33,120,000 14,830,000 1,520,000 16,350,000 62,V .1 860 23,850,000 8,160,000 32,010,000 8,040,000 2,760,000 10,800,000 mi 1861 22,760,000 8,540,000 31,300,000 6,840,000 2,020,000 8,860,000 60f 1862 21,550,000 9,040,000 30,590,000 10,140,000 4,460,000 14,600,000 m 1863 21,390,000 9,840,000 31,230,000 8,210,000 6,920,000 15,130,000 eij 1864 22,600,000 10,340,000 32,940,000 6,175,000 10,680,000 16,855,000 6li 1865 24,040,000 10,390,000 34,430,000 3,620,000 6,120,000 9,740,000 61 1866 24,220,000 10,145,000 34,365,000 2,370,000 4,700,000 7,070,000 6U 1867 22,805,000 10,845,000 33,650,000 640,000 1,410,000 2,050,000 60A 1868 21,945,000 10,045,000 31,990,000 1,650,000 1,910,000 3,560,000 60i 1869 21,245,000 9,500,000 30,745,000 2,340,000 4,220,000 6,560,000 60J 1870 21,370,000 10,316,000 31,685,000 1,920,000 300,000 2,220,000 60J 1871 21,400,000 12,210,000 33,610,000 3,650,000 250,000 3,900,000 60/^ 1872 19,910,000 13,050,000 32,960,000 6,280,000 250,000 6,530,000 60J 1873 19,240,000 14,050,000 33,290,000 3,360,000 110,000 3,470,000 59J 1874 18,150,000 14,300,000 32,450,000 6,840,000 930,000 7,770,000 58^ 1875 19,500,000 16,100,000 35,600,000 4,000,000 540,000 4,540,000 66| Totals 1852 tol 1875 - -J 572,195,000 241,890,000 814,085,000 141,485,000 58,330,000 199,815,000 60J 23 March IS 76. H.^ f . Hay. SELECT COMMITTEE ON DEPRECIATION OF SILVER. 25 Appendix, No. 6 b. PAPEK put in by Sir Hector Hay. Estimated Production of Gold and Silver througliout the ' WORLD- -Years 1852 to 1875. Austi'alia. United States. Mexico and South America. Russia. Other Countries, Say Totals. Geand Total. Years. Gold. Gold. Silver. Gold. Silver. Gold. Silver. Gold. Silver. Gold. Silver. Gold and Silver. £. £. • £. £. £. £. £. £. £. £. £. £. 1852 20,600,000 12,000,000 - 1,000,000 6,000,000 2,450,000 120,000 500,000 2,000,000 36,550,000 8,120,000 44,670,000 1853 14,140,000 13,000,000 - 1,000,000 6,000,000 2,450,000 120,000 500,000 2,000,000 31,090,000 8,120,000 39,210,000 1854 9,540,000 12,000,000 - 1,000,000 6,000,000 2,450,000 120,000 500,000 2,000,000 25,490,000 8,120,000 33,610,000 1855 12,065,000 11,000,000 - 1,000,000 6,000,000 2,450,000 120,000 500,000 2,000,000 27,015,000 8,120,000 36,135,000 1856 14,270,000 11,000,000 - 1,000,000 6,000,000 2,750,000 130,000 500,000 2,000,000 29,520,000 8,130,000 37,650,000 1857 11,405,000 11,000,000 - 1,000,000 6,000,000 2,750,000 130,000 500,000 2,000,000 26,65.5,000 8,130,000 34,785,000 1858 10,680,000 10,000,000 - 1,000,000 6,000,000 2,750,000 130,000 500,000 2,000,000 24,930,000 8,130,000 33,060,000 1859 10,820,000 10,000,000 20,000 900,000 6,000,000 2,760,000 130,000 500,000 2,000,000 24,970,000 8,150,000 33,120,000 1860 10,500,000 9,200,000 30,000 900,000 6,000,000 2,750,000 130,000 500,000 2,000,000 23,860,000 8,160,000 32,010,000 1861 9,760,000 8,600,000 400,000 900,000 6,000,000 3,000,000 140,000 500,000 2,000,000 22,760,000 8,540,000' 31,300,000 1862 9,350,000 7,800,000 900,000 900,000 6,000,000 3,000,000 140,000 500,000 2,000,000 21,550,000 9,040,000 30,690,000 1863 8,880,000 8,000,000 1,700,000 900,000 6,000,000 3,110,000 140,000 500,000 2,000,000 21,390,000 9,840,000 31,230,000 1864 9,130,000 9,220,000 2,200,000 800,000 6,000,000 2,950,000 140,000 500,000 2,000,000 22,600,000 10,340,000 32,940,000 1865 8,820,000 10,645,000 2,250,000 800,000 6,000,000 3,275,000 140,000 500,000 2,000,000 24,040,000 10,390,000 34,430,000 1866 8,840,000 10,700,000 2,000,000 800,000 6,000,000 3,380,000 145,000 500,000 2,000,000 24,220,000 10,145,000 34,365,000 1867 7,910,000 10,345,000 2,700,000 700,000 6,000,000 3,350,000 145,000 500,000 2,000,000 22,805,000 10,846,000 33,650,000 1868 7,645,000 9,600,000 2,400,000 600,000 5,500,000 3,600,000 145,000 500,000 2,000,000 21,945,000 10,046,000 31,990,000 1869 6,320,000 9,900,000 2,400,000 500,000 5,000,000 4,025,000 100,000 500,000 2,000,000 21,246,000 9,500,000 30,745,000 1870 5,830,000 10,000,000 3,200,000 500,000 5,000,000 4,540,000 115,000 500,000 2,000,000 21,370,000 10,315,000 31,685,000 1871 6,650,000 8,700,000 4,600,000 750,000 5,500,000 4,800,000 110,000 500,000 2,000,000 21,400,000 12,210,000 33,610,000 1872 6,810,000 7,200,000 5,750,000 750,000 5,200,000 4,650,000 100,000 500,000 2,000,000 19,910,000 13,050,000 32,960,000 1873 6,290,000 7,200,000 7,150,000 750,000 4,800,000 4,500,000 100,000 500,000 2,000,000 19,240,000 14,050,000 33,290,000 1874 6,000,000 6,400,000 7,200,000 750,000 5,000,000 4,500,000 100,000 500,000 2,000,000 18,150,030 14,300,000 32,450,000 1875 5,750,000 8,000,000 9,000,000 750,000 5,000,000 4,500,000 100,000 500,000 2,000,000 19,500,000 16,100,000 35,600,000 £. 228,005,000 231,510,000 53,900,000 19,950,000 137,000,000 80,730,000 2,990,000 12,000,000 48,000,000 572,195,000 241,890,000 814,085,000 23 March 1876. H. M. Hay 0.77. O 26 APPENDIX TO EEPOET FBOM THE )pendix, No. 7, Appendix, No. 7- PAPEES put m by Mr. G. Pietsch. (A.) Statistics of Old German Silver Coins coined by the separate States of Germany up to' the end of 1873, less such ami.unts as have been withdrawn from circulation up to the same peiiod at which such coinages finally ceased, in order to make room for the new Imperial coinage. As per official statements presented to the Reichstag (German Parliament) on 18th March 1873 and 4th April 1874. These statements, made out in thalers, are calculated here for simplicity's sake in round numbers, at exchange of 6^ thalers per £. Thalers - . - Florins - - - - Hanse Towns Currency - Small coin of low metallic value Say - £. 74,400,000 10,200,000 1,200,000 85,800,000 4,100,000 89,900,000 £. 90,000,000 (B.) Amount of Old German Silver Coins retired from circulation up to the end of February 1876, as per ofiicial statements published in the German newspapers of the period, and calculated here in round numbers at exchange of 20 marks per £. Eeichsmarks 396,217,079 = £.. 19,800,000. New German Silver Coins coined up to the 18th March 1876, as per above statements, and calculated in smnlar manner. ' Reichsmarks 195,845,377 = £.9,800,000. Total amount of New German Silver Coins to be coined at the rate of 10 s. per head for a population of 42 millions - - - . . _ Of which coined up to the present, as above Remains to be coined - - - £. £. 21,000,000 9,800,000 11,200,000 SELECT COMMITTEE ON DEPRECIATION OP SILVER. 27 Appendix, No. 7, (C.) Amount of Old German Silver Coins converted into Bars, and sold, as per Official Statement presented to the "Reichstag," under date of 30th November 1875. The Old Coins retired up to the end of September 1675, and consisting mostly of old thalers, florins, and small coin, produced 1,194,944 lbs. of fine b^rs, whicli have been almost entirely realised as follows : — Lbs. 696,194, of which account sales had been received, amounting to - (or about 87 marks per lb. loss of interest not deducted). 498,750, which had not yet been accounted for, but which were expected to give a much less favourable result, say, perhaps, 80 marks per lb. or --____ Total sales up to end of September 1875 Marks Say - - - £. Sales from end of September 1875, to March 1876, no returns published as yet, but presumably - - _ - _ Say £. Marks. 60,621,090 39,900,000 100,521,090 5,000,000 1 or 2,000,000 6 or 7,000,000 (D.) Statement of Silver Imported into London from Germany, and Exported from London to Germany, during 14| Years from 1st January 1861 to 30th June 1875. 'S Imports Exports o Imports Exports g During 6 Months, into from " During 6 Months, into from .n . London London .D London London gs ending as Tmder. from to Hs ending as under. from to iSa Hanse Towns. Hanse Towns. z 2 Hanse Towns. Hanse Towns. £. £. £. £. 1 30 June 1861 66,212 212,156 17 30 June 1869 483,350 2 31 Dee. » 9,675 108,342 18 31 Dec. 5» » 409,540 3 30 June 1862 786,962 99,110 19 30 June 1870 _ 23,780 4 31 Dec. 91 437,702 329,855 20 31 Dec. ?j _ 673,500 5 30 June 1863 549,120 316,070 21 30 June 1871 9,500 1,823,470 6 31 Dec. j» 94,450 151,800 22 31 Dec. » 1,205,300 1,574,350 7 30 June 1864 209,608 55,358 23 30 June 1872 1,288,500 186,728 8 31 Dec. '» 445,652 106,444 24 31 Dec, ') 8,500 1,092,500 9 30 June 1865 4,970 280,000 25 30 June 1873 104,800 242,340 10 31 Dec. V 104,250 250,279 26 31 Dec. J> 363,700 55,200 11 30 June 1866 817,732 186,683 27 30 June 1874 1,116,500 62,000 1-2 31 Dec. )» 3,900 1,304,143 28 31 Dec. ?j 950,700 104,760 13 30 June 1867 103,909 611,329 29 30 June 1875 559,980 96,630 14 31 Dec. 30 June J' 1868 87,780 491,651 674,040 15 16 31 Dec. V 193,280 252,666 Total - - £. 10,360,032 11,773,724 JV.B. — There is no evidence to shew how much of the 11,773,724 I. Silver imported into Germany during the above period has been converted into German coin, as the quantity so created is naturally included in the total sum of the old German Silver coin, amounting, as per Statement (A.), to 89,900,000 I., which sum therefore remains unaffected. As regards the 10,366,032 I. Silver exported from Germany, a great proportion of the same must have as a matter of course, consisted of coin which had been melted down and converted into bars, and the old Silver currency of the country, amounting, as stated in Table A, to 89,900,000 /., has consequently been diminished jpro tanto. 0.77. 02 28 APPENDIX TO REPORT FROM THE Appendix, No. 7*- PAPER put in by Mr. Pietsch. Supplemental Memorandum. .ppendix, No. 7*- In my former evidence on the German Silver Question, I had given the following figures : — Original amount of old coinage - - - Diminution by export, melting down, war, emigration, &c. Rest Containing, less alloy taming £. - 89,900,000 m, &c. 50,600,000 - £. 39,300,000 33,500,000 Fine Silver , cori- 18,900,000 - £. 14,600,000 Less required for new coinage 21,000,000/, con- Surplus Fine Silver To this calculation exception has been taken on the ground that 30 thalers having been coined out of one pound weight of fine Silver, no deduction ought to have been made for alloy. Supposing this to be the case, which I have not had the time to examine, the figures would stand as follows : — £. Surplus, as before mentioned Required for new coinage Equal to, at 37/40 standard fine Sales effected, 6 to 7 millions, say Balance to be sold - 39,300,000 fine. 21,000,000 „ 18,300,000 19,800,000 standard. 6,800,000 „ 13,000,000 London, 8 May 1 876. G. Pietsch. SEIECT COMMITTEE ON DEPRECIATION OF SILVER. 29 Appendix, No. 8. PAPER handed in by Mr. Henry Waterjidd. Extract from a Report on Statistics of Mines and Mining in the States and Territories west of the Rocky Mountains, for the Year 1874, by Rossiter W. Raymond, United States Commissioner of Mining Statistics. Appendix, No. 8. " History of the Relative Values of Gold and Silver. " I present several Tables, and remarks upon them, illustrating the History of the relative Value of Gold and Silver." Table I. — Ancient Period. Date. B.C. 1600 708 440 401) 400 404—336 338—326 323 — 343 218 100 100 58—49 29 A. D. 13-33 13-33 13-33 13-00 13-33 12 00 AUTHOUITT. [ 13-33 J 12-00 13-00 13-33 11-50 12-50 1714 11-91 8-00 8-93 12-UO Inscriptions at Karnac : tribute lists of Thutmosis (Brandis). Cuneiform inscriptions on plates found in foundation of Khorsabad. Ancient Persian coins, gold darics at 8-3 grams=20 silver siglos, at 5-5 sjrams. Herodotus's account of Indian tributes, 360 gold talents— 4,680 Silver. Standard in Asia, according to Xenophon. Standard in Greece, according to " Hipparchus," an alleged essay by Plato. Values in Greece, from the Peloponnesian War to the time of Alex- ander, accordinn- to hints in Greek writers. There were variations under special contracts. Unit, the silver drachma. Special contracts in Greece. Standard in Egypt under the Ptolemies. Rate at Rome, iixed for coinage of gold scruples. Violent and tem- porary. General rate of gold pound to silver sesterces at Rome to date. About this time sudden influx of Gold from Aquiieia,temporariiy re- ducing the relative value of the metal. Great sums of Gold brought by Cassar from Gaul. Normal rate in the last days of the Republic. During the reigns of these Em- perors, however, the Silver coinage was debased ; hence the value of the precious me- tals, pure, was as 1 to 11, and less. Tem- j 37 11-97 Rate under Augustus and Tiberius ^ 37 41 12-17 Rate under Caligula - 54 08 11-80 Rate under Nero 69 79 11-54 Rate under Vespasian - 81 96 11-30 Rate under Domitian - 138 161 11-98 Rate under Antoninus - 312 14-40 Rate according to coinage of Constantine and his successors, porary (?). j^fgte. In all tliese Tables the figures in the second column show how many times as valuable as a given weight of £ne Silver would be an equal weight of fine Gold. Remarks. It appears, from a study of this table, that the ancient and long-established relation between Silver and Gold in the Orient was 1 : 13-33. The stability of this rela- tion must be referred, probably, to the limited nature of commerce and its control by the sovereigns. Gold, by reason of its specific gravity and non-liability to oxidation, is found, as Silver is not, in alluvial deposits, and would naturally be first brought into use among barbarous nations. But the production of Silver by rude metallurgical processes (re- quiring much lower temperature than the metallurgy of iron), would not be a difficult discovery, and we find that, at a very early period, this metal also was in general use. The greater scarcity of Gold and its superior qualities, especially at a time when the chief uses of both metals were for jewelry and ornament, naturally established for it a higher value, and, in the absence of sudden demands or fluctuations in supply, such as active industry and free commerce would produce, the relative value of the two metals might remain, for purposes of trade or tribute, where it was once fixed by arbitrary authority. We see, however, that in Greece, Egypt, and Italy the value referred to did not vary, as a rule, very far from the ancient rule, and this may justify us in stapposing that the rela- tion of 1 : 12, or 1 : 13, approximately represented the cost of producing Silver as compared with Gold. The variations from this ratio, noted in the table, are generally due either to the sudden influx of Gold from new quarters, or to the arbitrary action of governments for purposes of profit in coinage. In those days the laws of political economy were not so well understood as now, and, indeed, until a very recent period, tampering with coinage has been a favourite method of replenishing the treasury of the sovereign. 0.77. 03 30 APPENDIX TO REPOET FROM THE Appendix, No. 8. Table II.— The Middle A^es. Date, A.D. 864 1104—1494 1260 1351 1375 1403 1411 1451 1463 1455—1494 1469—1508 1497 1500 12 9-12 10-5 12-3 12-4 12-8 12-0 11-7 11-6 10-5 9-2 10-7 10-5 Authority. Probable ratio, as shown by the Edictum Pisienie, under the Carlo- vingian dynasty. Variable, and apparently arbitrary mint edicts. Average ratio in the commercial cities of Italy. Ratio in North Germany, as shown by very accurate rules of the Lubeck Mint, corroborated, in the main, by the accounts of the Teutonic Order of Knights, averaged in periods of 40 years. Ratio aecoiding to the accounts of the Teutonic Order of Knights. Ratio established by Isabella, in Spain (Edict of Medina). Ratio in Germany, according to Adam Rieso's Arithmetic. Remarks — The data on which this Table is constructed are not at all of equal autho- rity. Particularly in England, there appears to have been a considerable undervaluation of Gold for purposes of coinage. This would tend to keep the Silver coinage at home, and to repay to the Government the cost of obtaining Silver for that purpose. But it is not necessary here to discuss the special meaning of the British figures. It is safe to say that, down to the 15th century, the general market ratio of Silver to Gold was not far from 1 : 12. Ihe serious variation shown in the 13th century, when, according to Italian economists, the average ratio in Milan, Florence, Lucca, Rome, and Naples was as low as 1 : 10-5, indicates a much greater supply of Gold in that region at that time than was available in the more warlike and less commercial parts of Europe. Indeed, at the period referred to, these Italian cities were notably prosperous in trade and manufactures ; and we may well believe that Gold flowed in abundance to them, as to points where it could be safely and profitably invested. There is no doubt, however, that, during the 15th century, the relative value of Gold declined from about 12 to the neighbourhood of 10, probably by reason of the scanty supply of Silver, and the growing demand for that metal in manufactures (especially by the silversmiths), and in oriental commerce. 1 he ancient sources of Silver in Thessaly and Spain had been to a great extent exhausted ; the New World had not begun to yield its argent treasure ; and the mines of Saxony and Bohemia had not reached their maximum productiveness. It will be seen in the following period, as at others in this history, that the development of new fields and new methods of history checked the ten- dency created by the currents of commerce, and i^estored the balance of value so eeriously disturbed. SELECT COMMITTEE ON DEPRECIATION OF SILVER. 31 Table III.— From the Discovery of America to the opening of the Mines California