and probably did, substitute an equal amount of coin paid to Germany; second, France borrowed nearly 4,000,000,000 francs, or $2,000,000,000, of the money to pay the indemnity, in Great Britain, Holland, Belgium and Germany; and though the foreign holding of this French loan had undoubtedly been considerably reduced by 1875, the average annual interest to be paid by France to foreign creditors during the four years to 1875 could not have been less than $50,000,000, or an aggregate of $200,000,000, in gold in the four years from 1871 to 1875.

If the constitution of the metallic reserve in the Bank of France at different periods may be accepted as an index of the relative proportions of gold and silver coins in circulation, it would show that even down to 1869 the coin in circulation in France was about three fourths silver, viz.:

In 1860, of the total of about 425,000,000 francs, average metallic reserve of the Bank of France, only 100,000,000 was gold. But in 1871 there was a great change in the policy of the bank in this respect. It sought to dispose of its silver and hoard gold. During the year 1875 the bank paid out a total of 1,127,500,000 francs in coin, of which 630,000,000 francs was gold and 495,000,000 francs was silver. The change in the proportions of gold and silver in the reserve of the bank is thus stated in an article in the Bankers' Magazine for December, 1874:

1869 (Dec. 23).. 704,000,000 501,000,000 1,266,000,000 253,200,000 1871 (Aug. 25).. 591,000,000 98,000,000 691,000,000 138,200,000 1872 (Dec. 18).. 657,000,000 133,000,000 792,000,000 158,400,000 1873 (June 5)... 690,000,000 125,000,000 820,000,000 164,000,000 1874 (Mar. 31).. 729,000,000 311,000,000 1,040,000,000 208,000,000 1874 (June 17).. | 884,000,000 318,000,000 1,163,000,000 232,600,000

Since the above dates the relative amount of silver in the bank reserve has remained at about one quarter of the whole.*

The proportions of gold and silver paid out by the Bank of France during 1875 afford ground for the presumption that the proportion of silver in circulation among the people is much larger than in the reserve of the bank. It is not probable that those who received metallic money from the bank would have accepted four ninths of it in silver coin if that was not about the proportion of silver in the general circulation of the country. But there is another fact which indicates the use of a large amount of silver coin in France, viz.: that the Bank of France issues very few notes of small denominations. Of the notes in circulation in 1875 the total value of those of denominations as small as 5 francs was only $1,342,000, and the total value (expressed in

* In reply to an inquiry of the Cincinnati Commercial on this point, the following letter was received by the editor of that paper from the banking house of Marcuard, Andre & Co. at Paris, viz.:

PARIS, June 23, 1876.

Sir,-We can reply as follows to the several inquiries conveyed by your letter of the 2d inst.: The 5-franc piece is an unlimited legal tender, and may, therefore, be employed to any extent for payments; the smaller silver coins are of inferior fineness, and acceptance of the same cannot be enforced beyond an amount of 50 francs per each payment. The Bank of France issues no more 5-franc notes, and destroys those which return to the bank in course of circulation. The bank has at present on hand 581,258,000 francs in silver coin and bullion, 1,468,340,000 francs in gold coin and bullion. In March, 1875, the bank held 495,000,000 francs in silver, and 1,325,000,000 francs in gold, which shows that the respective increase of the silver and gold paid in have taken place in proportions which do not differ so widely as might be anticipated from the great abundance of silver. From our previous remarks on 5-franc pieces it follows that, in case the bank resumes specie payments, these could be legally effected in silver coin, using the pieces inferior to 5 francs, to the maximum extent of 50 francs per payment. We will add, for your guidance, that 4-franc pieces have been withdrawn from circulation, and are replaced by 20-centime pieces (one fifth franc). The commercial value of gold and silver is as follows, viz.: Silver of 1,000-1,000 fineness, 218.89 francs per kilogramme; gold of 1,000-1,000 fineness, 3,434.44 francs per kilogramme. The kilogramme is equivalent to 32 1,543-10,000 ounces. It is on the above basis that silver and gold are quoted with so much per cent loss or premium. The mint receives, however, these two metals on the following footing: Gold, 3.437 francs per kilogramme; silver, 220.56 francs per kilogramme. In consequence of the international treaties, the mint, being provided with silver for its coinage till December, 1878, does not, for the present, receive any more of this metal. MARCUARD, ANDRE & Co.

United States money) of notes as low as 25 francs and including all those of smaller denominations was only $62,238,280. Now in the United States, with a population just about equal to that of France, the total amount of notes of denominations as small as one dollar and under, including the fractional currency, is about $75,000,000, or nearly sixty times as much as the 5 franc notes of the Bank of France. Comparing the amount of notes in the United States of the denomination of $5 and under with the amount of French notes of the denomination of 25 francs and under, we find $224,500,000 of the former in the United States against only $62,238,000 of the latter in France. This deficiency of small notes in France is undoubtedly supplied by silver coin. Still another fact, which has a bearing on this question, is that the total coinage of France in the four years from 1869 to 1872 inclusive was, of gold, 330,000,000 francs, and of silver 114,000,000 francs. The export of coin from France is probably more largely of gold than of silver.

Upon the above facts as a basis we may estimate the amounts of gold and silver coin in France at various periods approximately as follows, expressed in their equivalent in United States money:

There are no statistics, nor even any estimates, that are of any value in regard to the amount of coin in Germany. The entire lack of anything like uniformity

in the official reports of the different German States previous to their consolidation into the present empire makes it worse than useless to rely on them as a basis for estimating the amount of coin in the country.

In 1868, with a view to ascertaining the condition and amount of the monetary circulation of the North German Confederation, Bismarck, then chancellor, addressed circulars of inquiry to all the states of the confederation, which were the same as those in the present German Empire with the exception of Bavaria, Wurtemburg and Baden, which were not in the confederation. In response to these circulars a large mass of statistics of coinage was obtained, and upon these an estimate was made that the total amount of coin in the hands of the people and as reserves in the banks, in 1869, was 632,435,362 thalers, composed of 442,147,371 thalers of silver and 173,219,850 thalers of gold.

The utter unreliability of this estimate will be seen from the following facts: First, that the aggregate of 632,435,362 thalers is obtained by simply giving the coinage of eight different German mints for all sorts of periods, varying from thirty-three years to over one hundred years. From these sums were deducted the recoinages of their own coins by the same mints, and from the disjecta membra thus obtained, without making any allowance for either import or export of coin or bullion, was drawn the conclusion that in 1869 there was the above mentioned amounts of gold and silver coin in circulation and in banks in Germany. This estimate of coin in Germany has been used in Congress and in many political discussions in the United States, but the basis on which it was made was so incomplete as to be utterly worthless, and there is nothing to even

give countenance to the estimate except that it corresponded to the popular belief that there was not so much coin in Germany as in France. The estimate of $900,000,000 of coin in France in 1870 would give an average of about $18 per capita of the population (38,000,000 in 1866 and 36,000,000 in 1872), whereas the estimate of coin in Germany would give about $15 per capita of the estimated population of 30,000,000 in Germany in 1870. It is in view of these latter facts alone that the estimate of a coin circulation in Germany in 1869-70, equal to $455,000,000 in coin of the United States, is worthy of any consideration.

The reports of German coinage made to Bismarck in 1869 are, however, of some value in determining the proportion of silver to gold coins in circulation at about 40 per cent of gold coins to 60 per cent of silver.

If, therefore, we accept the estimate of $450,000,000 of coin in Germany in 1869–70, we must make a large addition for the effect of the payment of the French indemnity of 5,000,000,000 francs from 1870 to 1874.

France paid her indemnity to Germany somewhat as follows: 20 to 25 per cent of the whole in the actual transmission of coin from France to Germany; about 35 per cent of the whole amount was borrowed in England, Belgium and Holland, and bills on those countries. remitted to Berlin for the amounts borrowed, thus giving Germany the power to draw an aggregate of about $350,000,000 of coin. About 30 to 35 per cent more of the total indemnity was borrowed in Germany. This latter item would not cause any influx of coin into Germany except for the interest on the loans. It is also well known that the coin was not drawn very rapidly by Germany on the French bills on England,