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Page 19
[Illustration: The above diagram shows the course of the commercial ratio
of the values of gold and silver during the bimetallic period of France.
The upper dotted line (A) shows the extreme high limit of ratio, and the
lower dotted line (C) the extreme low limit reached from the years 1803 to
1873. The central line (B) is the mint ratio of 15.50 to 1 fixed by the
French Government in 1803. The variable line (D) is the commercial ratio
of the values of the two metals during that period. Note the slight
variation in this ratio from 1803 to 1873, during which time the
bimetallic action of the French law was operative, and then contrast it
with the sudden and swift descent of the ratio after the demonetization of
silver by the various nations in 1873 and 1875.]
Bimetallism and a rigid adherence to a specie basis were two of the means
adopted by Bonaparte to restore France, and during all his wars, with
their terrible expenses, he never once departed from the specie standard.
After the Act of 1803 France was still to have twelve years of war and
severe trial. She has subsequently had two revolutions and a foreign war,
singularly destructive in its course, and ending in her subjugation, the
occupation of her territory, and the loss of two of her wealthiest
provinces.
Seventy years of bimetallism had left France saturated with gold and
silver when her Emperor rashly provoked the war with Germany; her expenses
were enormously increased, and she had to pay, in addition, a fine of
nearly $1,000,000,000. She paid it with a rapidity that amazed the world,
but in her hour of weakness she consented to gold monometallism. She had
become a creditor nation, and could endure the new system better than any
other, except Great Britain; nevertheless, she has suffered. Her exports
had steadily increased during all her years of bimetallism, and never so
fast as during the very years in which she was exporting silver so heavily
because of the influence of cheap gold. The very year of demonetization
her exports began to decline, and but once since have they reached the old
figures.
The statistics are fearfully suggestive. In 1840 her exports were valued
at $202,231,000, and her imports at $210,413,000; in 1873 her exports were
$964,465,000, and her imports $915,285,000, and in only six of the years
after she began to be "flooded with cheap gold" did her imports exceed her
exports. In 1874 her exports began to decline, and ran rapidly down to
$822,360,000 in 1878; and 1890 is the only year since demonetization in
which they reached the figures of 1873, being $968,030,000. On the other
hand, her imports have steadily outrun her exports until the excess has
been as high as $300,000,000 in one year (1880), and has only once since
(1885) been as low as $100,000,000. Here, then, are the points
demonstrated by France's official figures:
During seventy years of bimetallism she gained steadily and rapidly in
wealth, her exports increasing much faster than her population.
During the eight years (1853-60) in which she was "ruined by cheap gold,"
importing 3,082,000,000 francs of it and exporting 1,465,000,000 francs of
silver, a bullion operation to the amount of $909,000,000, she increased
her exports most rapidly and with no corresponding increase in imports.
During the twenty years following demonetization her exports have been
stationary or declining, being $99,000,000 less in 1893 than in 1873,
while her imports have increased.
Let us turn for a moment and trace the effects of monometallism in England
as compared with bimetallism in France during the same period.
England had in 1816, when she adopted gold monometallism, about
$10,000,000,000 in property and had in 1873 about $40,000,000,000. In 1816
she had about 18,000,000 people and in 1873 about 32,000,000; her per
capita wealth, therefore, in 1816 was $555, and in 1873 $1,250, or 2-1/5
times as much. In 1803 the property of France was valued at
$8,000,000,000, and in 1873 at about $40,000,000,000; in the former year
she had 29,000,000 people, and in the latter a little over 36,000,000. Her
per capita wealth, therefore, in 1803 was $276, and $1,081 in 1873, or
very nearly four times as much.
Thus, despite the immeasurable advantages which England enjoyed,
political, social, and industrial, her great colonial possessions from
which she drew enormous wealth, and her exemption from destructive war;
despite also the distressing condition of France and her recent enormous
losses, we find that in seventy years of bimetallism the working Frenchman
had gained wealth almost twice as fast as the working Englishman had in
the same number of years of monometallism.
France became a creditor nation, and yielded to the general pressure for a
single gold standard; she has lost heavily, as shown in her table of
exports, but she still retains a large part of the momentum acquired
during seventy years of bimetallism. Her wealth is still rated at
something over $40,000,000,000; her people have accumulated stocks of the
precious metals far in excess of those of any other country; and their
business is so solidly founded that the storm which recently shook the
foundations of credit throughout the British Empire scarcely produced a
quiver in France. They have wisely avoided the excessive issues of faith
money (or check money) which are the ever-present danger of England,
America, and other monometallic countries; and as a result, they have
almost entirely escaped those fearful convulsions have that threatened the
political stability of great nations. In fact, it is no exaggeration to
say that France has only felt the convulsions of recent years by their
reflex action on her from other countries; and twice within very recent
years has the Bank of England been compelled to go to France for the coin
to stay the devastating work of panics resulting from over-expansion of
faith money on an insufficient metallic basis.
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