Henry Hucks Gibbs

“ I have said above that the rise and fall of the money price of Silver in the market must depend on natural causes. These can be stated in three words, 'Supply and Demand.' Nothing else can affect price, whether of commodities in general or of the precious metals in particular. No human laws can affect it except through the medium of those joint forces. Man can regulate supply, and man can check or foster demand. If the supply exceed the demand the price will fall. If the demand exceed the supply the price will rise. ”

“ A time might possibly come (though in real life it never did come while the French law of 1803 was in full operation) when the commercial demand—that is to say the demand for the arts and for export—would slacken; no more Silver plate being needed at the price, and no need existing for export to the East. Then the Mint demand, as being the only other outlet for the Silver would became positively, as it had been negatively, effective; and Silver would flow to silver-coining countries for coinage. ”

“ The higher the exchange, i.e. the more of the minted francs each pound sterling absorbed, the less would be the net proceeds. It is obvious, therefore, that the smallest rise in the exchange, unless balanced by special demand for the metal, should operate adversely on the London price of Silver. It was impossible, then, that while the law remained intact, my lessening of demand or increase of supply (from whatever source [5] ) could cause my one to be willing to take less for his ounce of Silver than 60·232d. supposing him to count on exchange remaining at par. ”

“ The circulating medium, the measure of value, would accordingly increase, prices of all commodities, except Gold and Silver, would tend to rise, in other words the precious metals would tend to become depreciated, the demand for them for manufacturing purposes would tend to increase, and the result would be a cessation of the imports to the Mint. ”

“ If there were no gold to send there might be no limit to the rise of the exchange. If there were gold to send, but an agio on it, the rise of the exchange above 'Gold point' should be proportionate to that agio. ↑ The agio on Gold or Silver in a bimetallic country, where the measure of value is alternatively at the option of the payer a fixed weight of either Gold or Silver, merely represents the premium which the buyer may be willing to pay for a commodity which cannot be legally demanded in discharge of a debt. ”

“ That if the law of 1803 did nothing to prevent this fall, it was only because the price, notwithstanding the fall, was always above that which the French Mint at the existing exchange could offer to the English holder, and (3) that such fall as did take place was far too insignificant [12] to cause the French Government to contemplate the limitation of their coinage of Silver, whereas they had ample reasons for their act in the unprecedented influx of Silver from Germany, which, under the then condition of the law, was a forced import, onerous to their Mint and profitable to Germany. ”

“ Surely not in France, nor measured in francs; for it is inconceivable that in the absence of alterations of the échéances of the bons de monnaie, or of limitations of the quantity to be coined, any man who could by law demand 200 francs from the Mint for his kilogramme of Silver would be content to take 199 or any less quantity from any buyer. Just as it is inconceivable that an English holder of a like quantity of Silver would take less than 60d. ”

“ The only need of Gold is to rectify, from time to time, and instantly, a rising exchange—an exchange unfavourable to France; but the absence of Gold could only have any permanent effect on the value in England of the frs. 6·34033 per ounce on the assumption that there is no recuperative force in France, that her land has lost its productive power, and her people their genius for commerce. ”

“ I show that as the price of Silver, like that of all other commodities, must fluctuate with the Supply of it and the Demand for it, so the open Mint in France acted as a perpetual demand at a fixed price would act, and that accordingly the price here could never fall below what the seller believed was the equivalent of the frs. ”

“ It will not be difficult to show that, though there is a small portion of apparent truth in the statement, it does not at all dispose of my contention, but on the contrary serves to elucidate its accuracy. ”

“ It checks tendencies to irregularity of action, but it cannot check them until they begin to show themselves. In one case as in the other though we do not get absolute uniformity, we get uniformity which for all practical purposes is complete. ↑ The fall was but 1⁄2d. per ounce, as I have said above, and at no time within that twelvemonth could Silver bought in England have been remitted to France for coinage without incurring a loss, owing to the high exchange. ”

“ In France one receives a certificate called a bon de monnaie for the full coin value of the specie brought in, less Mint charges, but payable in coin, normally ten days from the date of import. This bon de monnaie was paid into one's bankers, and was, of course, discountable, the discount at 3 per cent. for ten days amounting to francs ·005215 per ounce, and increasing as the échéances (due-dates) were postponed. ”

“ L'une n'est que la conséquence de l'autre. En ce qui concerns les arrêtés ministériels que j'ai cites, qu'il soit question de limitation de la fabrication ou de prolongation de l'échéances des bons, le fait est qu'on a voulu retarder les échéances afin d'éloigner les porteurs de matières jusqu'à ce qu'on en soit arrivé à la suspension complète de la fabrication. ”

“ Now, a kilogramme of 900 fine is equal to 31·28179 standard ounces (2/2 2/4 2/0 fine) — (a kilogramme=32·150727 oz.) .
which sum is the most that the remitter of an ounce of silver to Paris would have there in cash at his disposal; and this, at the exchange of 25·2215 (par) , would produce in London 60·332d., [4] less transport and insurance charges, say 1/6 per cent. on the declared value = about ·100, leaving 60·232d. net. ”