CO882-(1-2) — Page 304

PUBLIC RECORD OFFICE

Reference :-

C.O. 882

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PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE COPYRIGHT PHOTOGRAPH-NOT TO BE REPRODUCED PHOTOGRAPHIC-

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75. (1.) It is asserted that only a very rich country can afford to have a gold circulation, "because it is of superior intrinsic value;" that as England is rich and Mauritius poor, the former can afford to have a gold circulation, while the latter can only afford to have a silver onc.

76. This objection is repeated in different forms by almost every witness. It seems never to have occurred to them that 1007. worth of gold costs no more than 1001. worth of silver; as 1001. worth of silver costs no more than 1007. worth of copper; and as 1001. worth of copper costs no more than 1001. worth of iron; and 1001. worth of iron costs no more than 1001. of coal; and, therefore, that a circulating medium of coins required for a commu- nity, say to the extent of 500,0001, will cost no more, if it consists of gold coins, with the subor- dinate silver coins, than if the whole were of silvercoins of full relative value. No doubt the intrinsic value

of a given weight of gold is greater than that of the same weight of silver; but an ounce of the one And goes as far as 15-7 ounces of the other.

a sovereign will cost no more than silver coin weighing 1774 grains, the relative value of a sove- reign in gold. The popular notion, then, of a gold circulation being dearer, and of a rich country only being able to afford it, is simply absurd.

77. (2.) The next most general remons against a gold circulation, are,—that “the premium on gold is too high;" that "it does not enter into the cir- culation;" that "the Government does not pro- vide it and that the community has no means ;" and that “it is an article of export."

78. It is undoubtedly true that ever since 1825, gold has commanded a premium in Mauritius, and has been an article of import and of export, and that it has never entered into the circulation.

How

could it be otherwise? I have shown that by law, a sovereign, being equal to 1774 grains of silver, was made to represent 5 dollars of Mauritius cur- rency, while the same law provided that the same 5 dollars could be paid with 1665 grains of diver in other coins. With the sovereign, the full quantity of 1774 grains of silver could be bought in any inarket of the world; and therefore silver could be imported at a profit of 109 grains to the pound, which when in Mauritius was as valuable for circula-

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tion as a sovereign. But if a sound gold ourrency had been established, with a limit of tender to British silver, and with other silver coins rated at 1774 grains to the pound, gold could never have been at a premium, simply because the sovereign cannot bear a premium on itself. Who would fear a pre- mium arising on gold in England? The rapidity with which the relative values of gold and silver are adjusted, has been shown in a striking way in France during the last year. As long as the rating

of the franc in silver—that is, as long as the intrinsic value of the silver contained in 20 francs was somewhat less than the intrinsic value of the gold contained in a 20-franc piece, the debts in France could be paid more cheaply in silver than in gold: the circulation consisted entirely of silver; gold commanded a premium and was exported, exactly as it has been, and for the same reasons, at Mauritius. But when, from a larger supply of gold, the in- trinsic value of the gold contained in a 20-franc piece became of less value than the silver con- tained in twenty 1-franc pieces, then gold went as rapidly into circulation as the Mint could fur- nish the coin; silver then commanded a pre- mium and was exported. But while gold can never command a premium where it is the sole standard of value, it may still be exported. But

that property is admitted to be an indispensable property of any coin that enters into a sound circulation. It is the best, if not the only means of rectifying the exchanges when deranged, and of avoiding other evils of a much more serious cha- racter, and in this respect gold and silver are the same. Then again, if the currency were gold, the Government must pay it in discharge of public services, and for all the purposes for which it now payı silver; the public, moreover, would have the same means of procuring gold that they have of procuring silver. The silver imported is in ex- change only for a portion of the sugar exported, but gold could be imported as well as silver; in- deed, in the evidence it is constantly stated that gold is regularly want from. England for the pur- chase of anger as the most profitable remittonen, while it in mid that sibpur has never been sewert Whatever there may be of truth, therefore, in the objections at present, it would entirely disappear L