about seven in a thousand, and therefore not coming into general use. But the influx of gold from Australia and California has reversed this state of things. The French mint has coined a very large amount of gold during the last five years, which has entered rapidly into circulation, displacing an equivalent amount of silver coin, which has been melted up and sent abroad. It is estimated, by well-informed French and English writers, that the silver thus set free in France alone amounts to thirty millions of dollars. To this was added for a time a very considerable supply from this country, obtained in a similar way, as we know that before the law was altered, in 1853, our American silver coins, of full weight, had generally disappeared, their place, for purposes of change, being supplied by the worn and clipped Spanish pieces. About fifteen millions in silver were thus set free in the United States for a year or two; but the new law of 1853 called it all back into circulation.

But any alteration, though a small one, in the relative value of the two precious metals, will be an inconvenience in every country where there is a double standard, or, in other words, where both gold and silver are a legal tender for the discharge of debts; for according to the law already explained, the metal which is overvalued in relation to the other will push that other out of circulation, and thus become the sole medium of exchange. A change must be made in the mint regulations, therefore, as we cannot do without silver for purposes of "small change," and it would be inconvenient to do without gold in making large payments. The question then arises, and it is a very important one, how the alteration in the coinage shall be made. Shall it be by adding to the quantity of gold, or by diminishing the quantity of silver, which now passes for a dollar? If the former course be adopted, the value of money will decline only in proportion to the depreciation of silver, the greater depreciation in the value of gold being obviated by the increased quantity of it which passes under the old denomination. If the latter course be preferred, money will fall in value as rapidly as the worth of gold is depreciated. In either case, several successive changes of the mint regulations will be necessary. If, for instance, gold is now worth two per cent less, when compared with silver, than it was four or

five years ago, the quantity of gold contained in an eagle must be increased two per cent, or the quantity of silver contained in a dollar must be diminished two per cent. In either case,

the relative value of the two precious metals still tending to change, the operation in a year or two must be repeated. The matter might be simplified, it is true, by giving up the double standard, and using in future but one metal for coinage. Thus, we might coin gold only, and at the present rate, putting 232.2 grains of pure gold into an eagle, or 23.22 grains into a dollar, and allow silver to be bought and sold only as bullion, or at whatever rate it might command in the market per ounce, Troy weight. Or, gold coins might be dispensed with, and only silver allowed to circulate as currency, and at its former rate, of 371.25 grains to a dollar. In this case, as so much more silver would be needed if all money was to be composed of it, its absolute value would probably be enhanced; it would be worth more, not only in relation to gold, but in relation to all other commodities.

The question which we are now considering is not one of mere convenience or expediency; we must also see what abstract justice requires in all dealings between debtors and creditors. Those who are in favor of increasing the quantity of gold, rather than of lessening the quantity of silver, which now passes for a dollar, may argue very plausibly, that a debt ought to be cancelled only by the payment of money equal in value to that in which it was contracted. If I have borrowed one thousand silver dollars, or something which could readily be exchanged for one thousand silver dollars, I ought not to be allowed to cancel the debt by paying one thousand gold dollars, after gold has fallen to one half of the value which it had when I obtained the loan.

This argument is plausible, but it is insufficient. All mercantile contracts must be construed literally, or must have a specific performance. The law never undertakes to guard either party against the evil consequences to himself of a change of values which he has not foreseen. Such changes are very frequent in mercantile transactions, and the maxim, Caveat emptor, applies to them all. If I pay one thousand dollars now, for one hundred barrels of flour to be delivered three months hence, and if the price of flour falls meanwhile to eight

dollars a barrel, I must not expect that one fifth of the purchase-money will be paid back to me; and if the price, on the other hand, rises to twelve dollars, the seller cannot require me to make up the difference. Each party must bear the consequences of his bargain, and of his own want of foresight. In like manner, if a landholder leases an estate for twenty years, at an annual rent of five hundred dollars, he cannot rightfully demand compensation, nor can the lessee ask an abatement, if, in the course of those twenty years, the value of the dollars should be altered by circumstances over which neither party had any control. According to the state of the law before 1853, when we suppose the lease was made, the annual payment was to be either five hundred times 23.22 grains of pure gold, or five hundred times 371.25 grains of pure silver. It was a part of the contract, that the lessee should have the option of paying his rent in either of these forms, the two metals in these proportions being both legal tender. It is the misfortune of the lessor, but certainly not the fault of the lessee, if, when the rent becomes due, the 23.22 grains of pure gold will no longer purchase so many commodities as before. The latter cannot, therefore, be obliged to pay silver; for he bargained to pay gold, if he saw fit. If, indeed, the government should arbitrarily "raise the standard," as it is termed, or decree that the dollar should in future contain only 200 grains of pure silver, instead of 371.25 grains, then equity, if not law, would require the lessee to pay his rent in coins of the old standard, or their equivalent; for the spirit, if not the letter, of his covenant is, not to pay what may be called a dollar at any future time, but what is really accounted to be a dollar at the time when the bargain was made. It is but another application of the same rule of equity to say, that he shall not be held to pay 40 grains of pure gold for a dollar, when he covenanted to pay only 23.22 grains.

Apart from all considerations of expediency, then, it would be an obvious violation of justice, in any country where a double standard exists, to seek, by altering the regulations of the mint, to prevent the present and the expected depreciation in the value of gold from affecting the value of all money to the full extent of such depreciation. In other words, it would be wrong to alter the law on any other principle than those on

which it was altered in 1853. The bill on that occasion was prepared in conformity with an able report from the Director of the Mint, and it passed both houses of Congress by a large majority. It provides, that the silver half-dollar, instead of 2061 grains of standard silver, one tenth being alloy, which was its former weight, should contain but 192 grains of such silver, the quarter of a dollar, dime, and other silver coins, being reduced in the same proportion. In other words, the silver dollar now contains only 345.6 grains of pure silver, instead of 371.25 grains, as formerly, the reduction being about 6.91 per cent. Thus the ratio of gold to silver in our coins, instead of being nearly 1 to 16, as before, is now as 1 to 14.884. The former ratio undervalued silver about two per cent; the present one overvalues it about five per cent, so that there will be no occasion to make any further change, till gold has fallen more than five per cent below the present ratio of its value to silver. At the same time, to prevent the new silver coin from driving the gold coin out of the currency, the law provides that the new coin shall be legal tender only to the amount of five dollars. As the silver bullion which can be purchased for $100 is coined at the mint into $105, the law prohibits silver from being deposited for coinage except by the Treasurer of the Mint, under the authority of the United States; and care is taken that no more of it shall be coined than is needed for the purposes of circulation, as otherwise the coin might be depreciated in the market to the extent of this five per cent.

The necessity for passing this law arose from the fact, that, in 1852, gold having fallen two per cent below its relative value to silver as established by the mint regulations then in force, that is, 23.22 grains of pure gold having fallen two per cent below the value of 371.25 grains of pure silver, though either of these sums was legal tender for a dollar, — all the former silver coins of full weight had been melted up or exported, and the public were thus exposed to great inconvenience from the want of "small change." The only small coins in circulation were the worn and defaced Spanish pieces, which had lost, by abrasion or clipping, from five to ten per cent of their nominal value; and as there were not enough even of these for the purposes of the currency, it had become very difficult to effect small purchases, or to obtain "change" for a dollar.

A profit of two per cent is enough to tempt the bullion-dealers to gather up the silver coin very eagerly and send it abroad. On every million of dollars thus sent, and we were then remitting millions to Europe every month, they made a gain of $ 20,000, if they could collect the sum in United States silver coin. Obviously, no gold would be sent so long as silver coin could be had; and though, since 1789, the mint had issued over 77 millions of dollars in such coin, in less than six months it had become so scarce that an American half-dollar of full weight was seldom seen. The question was not, then, whether we should fall from a silver coinage containing 371.25 grains of pure silver in the dollar, to one which is nearly seven per cent inferior to it in value, but whether we should rise from a worn and insufficient Spanish currency, which had lost. nearly 10 per cent of its value, to one that is degraded only about five per cent. The new law did not by its own efficacy debase or depreciate any kind of money; it only recognized a depreciation that had already taken place, from natural causes, over which human legislation had no control,- a depreciation of gold caused by the great increase in the annual supply of that metal, and a depreciation of silver money produced, so to speak, by its contact with the depreciated gold. The new law was a measure to prevent the necessary or inevitable decline in the value of money from proceeding in an irregular manner, or throwing our currency into unnecessary confusion. At present, the government obtains a considerable profit from the manufacture of silver coin; its over-valuation, amounting to five per cent, is also enough to prevent it from being exported or melted up, but is not so large as to afford any temptation to the counterfeiter.

The object of the new law was to introduce into this country the system of coinage which has been tried in England for over thirty years, and has been found to answer excellently well, especially during the last four or five years, when it has obviated the difficulty that would otherwise have arisen from the varying ratio of gold to silver. The English system is explained by McCulloch as follows:

"From 1666 down to 1817, no seigniorage was charged on the silver coin; but a new system was then adopted. Silver having been underrated in relation to gold in the mint propor