THE LATIN MONETARY UNION.

THE Latin Monetary Convention has latterly been somewhat frequently the object of incidental notice and special paragraphs in the English financial papers. A share of attention, naturally larger, has been awarded it, in like manner, on the Continent. The cause of this is the approaching end of the period within which provision for its deliberate renewal must be made by the countries concerned ; failing which it may shortly cease to be; this latter contingency being eminently a case as to the diagnosis of which doctors disagree. The Latin Monetary Union first took shape in virtue of a Convention, dated December 23rd, 1865, between France, Italy, Belgium, and Switzerland; to which Convention Greece subsequently adhered, power having been reserved for the admission of other countries. Spain adopted, in 1868, a currency practically the same as that of the Union, without actually becoming a member thereof. One or two minor States followed the wake of Spain. Moreover, all European countries, except the United Kingdom, have now decimalized their

currency.

The Convention of 1865 contemplated the unlimited coinage, in all countries of the Union, of both gold and silver, with full legal tender force throughout those countries. It should be noted that, as regards silver, this applied only to five-franc pieces-these being twenty-five grammes in weight, nine-tenths fine, which is also the standard fineness for gold coins, as against eleven-twelfths for gold in England. Coins of smaller denominations, viz., 2 francs or under, were to be 8.35-tenths fine, and coined on Government account only; a quota being fixed for each country, so as to give a circulation, calculated at a ratio of 6 francs per head of the population, amounting to a total of 471,500,000 francs for the five countries; such smaller coins having legal tender force only to the extent of 50 francs in any one payment.

At the time when the Convention was signed, matters of metallic currency, throughout Europe, were under the influence of two parallel tendencies; the first tendency being towards the adoption of a universal metric standard of the French type; the second tendency towards a single standard, gold being generally favoured for the purpose. The course of events after 1865 may be said to have rendered these parallel tendencies convergent, although they have not, as yet, actually merged into one. In 1878 it was thought advisable to revise, consolidate, and renew the Convention; a fresh

Convention, dated November 5th of that year, being signed, to expire on the 1st January, 1886, should notice to that effect have been given by one of the nations concerned, before the end of the present year; or failing such notice, to remain in force from year to year, subject to one year's notice. Italy is generally credited with a settled intention not to let the present year run out without giving the necessary notice; whilst most of those who fear the effects the disruption of the Latin Union may have on the price of silver-and amongst them all who are interested in the keeping up of the rupee exchange-believe, or at any rate say, that the Union is sure to be renewed.

A short retrospect of the chief monetary events since 1865, over and above those already alluded to, will supply some useful data for understanding the causes which have brought about important modifications in the 1865 Convention, and now threaten to involve the repudiation of its original leading idea.

The Convention had scarcely been signed before Italy placed herself, in a measure, outside the pale of its operations, by instituting, on May 1st, 1866, a forced paper currency, which had sway for 17 years; the resumption of specie payments throughout the peninsula having only began in May last year. That the Convention was, nevertheless, beneficial to Italy appears hardly doubtful; the coining of silver, concurrently with the unchallenged circulation it found in the other countries of the Union, tending to alleviate the ill effects of a forced paper currency, as well as to somewhat check and steady the unfavourable rise in the foreign exchanges. Italy also found, in the profits attending the issue of legal tender silver coins, occasional means of ekeing out her sometime scanty budgetary resources. Whether the other countries of the Union might not have found it more to their own advantage to put in abeyance her rights under the Convention, until such time as she returned to a metallic currency, this is no opportunity to inquire.

In 1871, Germany determined upon a thorough reform of her currency, and, after due preliminaries, began, under the law of July, 1873, the issuing of a new gold decimal coinage. At the same time she resolved to demonetize silver, and instituted those sales of her old silver thalers, which have been both severely criticised and strenuously advocated, and which she felt compelled to suspend after a time, owing to the steadily falling price of silver having then entailed upon her a loss of some three millions sterling. The remaining stock of silver thalers is at present allowed to circulate as legal tender, but no coining of any silver money, other than subsidiary coins, is allowed by law.

In this same year, 1873, the United States adopted a single gold standard, and restricted the legal tender of silver dollars to five in any one payment. In 1873, also, the Scandinavian Monetary Union was formed, under which Denmark, Sweden, and Norway established a

single gold standard decimal coinage. Holland, likewise in the year 1873, suspended the coining of silver.

It is scarcely to be wondered at, that in the face of these antagonistic measures, the Latin Monetary Union should have taken alarm, and should have resorted to corresponding precautions. Belgium, at once, in that very year, 1873, stopped the coining of five-franc pieces, and France placed a limit upon the minting of them for the public. In 1874, the plan of apportioning a quota to each country of the Union, a plan already in existence, as we have seen, for subsidiary coins, was brought into force for five-franc pieces. Lastly, clause 9 of the Convention of November 5, 1878, declared that the coining of silver five-franc pieces should be entirely suspended until further agreement. Italy, here again, obtaining a respite, to the extent of some 20 millions of francs of additional coinage.

In this provisional state, things have remained since that time, the old proportion of 15 silver to 1 gold, viz., 200 francs-40 fivefranc pieces-to the kilo of silver and 155 twenty-franc pieces to the kilo of gold, subsisting legally. Five-franc pieces, therefore, retain full legal tender force within the limits of the Union, and are good remittance, as possessed of such, to the countries belonging to it; as witness the price quoted for them in London, in bullion brokers' lists, say, for instance, 3/118, on the 1st of the current month, giving a sterling parity of 25-33; the Paris cheque exchange quoted, on 'Change, on the same day, being 25.233 whilst their value at the market price of silver bullion, 501d. per oz. standard, also on the same day, would only have been 39 d., corresponding to a sterling parity of 30 283, at which no holder of them would think of selling them here. Practically, however, silver five-franc pieces are hardly ever available for remittance, the tendency being to confine them within Continental Bank vaults: the Bank of France alone holding a stock of them amounting to over £40,000,000.

It would be outside the limits of the present notice to refer to the various International Monetary Conferences held in 1867, 1878, 1881, and 1882, or the Committee of the House of Commons appointed in 1876, "to inquire into the causes of the depreciation of silver, and the effect of such depreciation upon the exchange between India and England;" as, notwithstanding the many important discussions they gave birth to, and the interesting documents in which these discussions are embodied, no tangible results accrued from them. Two of the more recent monetary events, contemporaneous with or posterior to the renewal of the Latin Union in 1878, may, however, be recalled here, as they are considerable factors in forming an opinion as to the advisability, or otherwise, of its prolongation.

Firstly, the compulsory issue of 2,000,000 silver dollars, monthly, in the United States, under the 1878 Bland bill; an empirical currency nostrum to keep up the price of silver, which no theory either of gold mono-metallism, or of bi-metallism, approves of.

Secondly, the negotiation, successfully completed, of a gold loan by Italy preparatory to resuming specie payments, and with a supposed view to the ultimate, if not proximate, setting up of a gold standard.

It may also be noted that Austria issued, in 1867, an 8-florin gold coin, exactly corresponding to the Latin Union 20-franc piece, and admitted to circulation in the Union. Spain, on the other hand, some ten years later, coined gold 25-franc pieces, to approximate the English sovereign. Lastly, it is also worthy of remark, by those who wish to appreciate the various bearings of the question, that India is, at present, the only country having her mints open to the public for the unlimited coining of silver.

CLEARING HOUSE RETURNS.

SIR JOHN LUBBOCK has published the subjoined statistics, which have been prepared by Messrs. Derbyshire and Pocock, the Inspectors of the Clearing House. They show the working of the Bankers' Clearing House for the year ended on the 30th April, 1884, which is the seventeenth during which these statistics have been collected.

1875-1876

5,407,243,000 240,807,000 1876-1877 4,873,000,000 231,630,000 1877-1878 5,066,533,000 224,190,000 1878-1879 4,885,091,000 212,241,000 1879-1880 5,265,976,000 218,477,000 1880-1881 5,909,989,000 240,822,000 1881-1882 6,382,654,000 256,654.000 1,379,194,000 1882-1883 6,189,146,000 242,581,000 1,169.315,000 253,545.000 1883-1884 5,838,158,000 238,915,000 1,005,052,000 257,171,000

962,595,000

242,245,000

718,793,000

223,756,000

745,665,000

233,385,000

811,072,000

221,264,000

965,533,000

233,143,000

1,205,197,000

265,579,000

299,788,000

The following remarks have been communicated:

The general features of this return have been foreshadowed by the weekly reports, and will therefore cause no surprise, and although with increasing population increased activity is desirable, an analysis of the figures will show that there is little cause for uneasiness. The whole decrease is £350,988,000, or 57 per cent. of the clearings of the previous year. Of this 164 millions, or 2.7 per cent., occurred on Stock Exchange Account Days, and the remaining 3 per cent. in the general working. The 4ths of the month shew a decrease of £3,666,000, which is almost exactly balanced by an increase of £3,266,000, in the clearings on Consols Settling Days. This latter is about equivalent to the average rise in the price of Consols; whilst as the decrease on the 4th is only £300,000 per day, and the general decrease is three times as much, it is probable that this particular class of transaction has increased. This is borne out by an estimate of the amount of the Country Cheque Clearing, calculated on the same basis as those supplied to this Journal for former years. The amount arrived at is £457,000,000, or an increase of 8 per cent.