Page:Encyclopædia Britannica, Ninth Edition, v. 16.djvu/758

730 states in adopting a single gold standard, (2)the countries composing the Latin Union in limiting the coinage of silver, (3)the Indian Government by adopting a new method of drawing bills—proved to be the really influential causes for the decline in the value of silver as contrasted with gold.

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8.Miscellaneous Questions regarding Metallic Money.—The recent discussions of matters relating to currency, and the increased intercourse among the more advanced nations, have led to the raising of some questions with regard to the proper constitution of monetary systems. Each country possessing any claim to enlightenment has directed its attention to its own monetary arrangements, and compared them with those of others, while the effect which the currency system of any nation exercises on its neighbours leads to the exciting of a lively interest in its monetary legislation. The principal problems may be summed up under three heads: (1)The proper standard to use, the discussion of which in practice turns on the comparative merits of a single standard of gold or silver and of a double standard of gold and silver at a fixed ratio; (2)the system of subdividing the currency, which is generally discussed under the title of proposals for decimal coinage; (3)proposals made in many quarters to assimilate the various currency systems of the world. These take one of two forms. It is either desired that a group of nations shall assimilate their currencies, in which case the coinage may be called an international one; or a wider view is taken, and a single system is advocated for all states. This may be styled universal coinage. The question of the proper standard may be deferred for the present, as it is of a more complex nature than the others. Before discussing even the simpler of these questions it is desirable to state some elementary facts involved in all such points. Every currency system must be based on a standard unit of value which consists of a &ldquo;fixed quantity of some concrete substance defined by reference to the units of weight or space.&rdquo; Thus the English unit is the pound, which consists of a definite quantity of gold (123·27447 grs. standard fineness), while the French unit is the franc (composed of 5 grammes of silver ths fine). It is not, however, necessary that the standard unit shall be a coin. All that is needful is that the current coins shall be multiples or submultiples of the unit, or at all events easily reducible to it. The Portuguese rei is too small to be coined, and the pound of silver which formed the unit of the early French and English currency was too large. Distinct from both the actual coins and the unit of value is the money of account, though in practice it is usually identical with one of them. In Russia in early times the rouble was an imaginary money of account not coined, while the copper copeck was the unit of value. Another distinction must be pointed out, namely, that between standard and token money, the former being of the same value as the metal it is made of, while the latter is rated at a nominal value higher than that of its material. The silver and copper coins in England and the smaller silver coins in the Latin Union are merely tokens, being in the case of the English silver coins about 30per cent. below their nominal value. The French coins are of inferior fineness (835 per 1000). Token coins are only admissible in small payments, as otherwise—in accordance with an elementary principle to be presently explained—the standard coins would be driven out of circulation. The maximum amount in payment for which they are legal tender is in England 40s. One of the functions of money being to afford a standard for estimating deferred payments, it is generally used as the means of discharging obligations when they become due, and in this aspect is styled legal tender. The principal coinage of any country is legal tender to an unlimited amount, and, when offered, discharges any pecuniary obligation. It is only the standard coinage which possesses this property, or rather the standard coinage is that which does possess it. In discussing monetary questions it is also important to remember that a metallic currency has to circulate among the most diverse classes of society, and must be suited to the wants, and even to the prejudices, of the population using it. Many curious instances of the preference of a community for some particular coin could be given. The Austrian Maria Theresa dollar is a special favourite on the coast of Africa, and is still coined exactly as it was in 1780. The inhabitants of California refused to accept the greenbacks issued during the American civil war, and consequently gold was always used in payments in that State. Many apparently well-devised reforms have miscarried 