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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,
Belgium and Holland, and much of the coin thus drawn would soon gravitate back to the countries from whence it came, so that it is probable that the greatest addition to the aggregate of coin in Germany at any time from the payment of the war indemnity did not exceed $400,000,000, about the close of 1873.* We may, therefore, make the following estimate in United States money of the amount of gold and silver coin in Germany:
The foregoing estimates of the amounts of each gold and silver coins in Great Britain, France and Germany have been made after taking into consideration not only all previous estimates made by various acknowledged authorities, but also all official reports and documents that seem to have any important bearing on the question. But for the remaining countries of Europe even an approximate estimate of the total amount of coin in circulation and in banks is much more difficult, because there are no official data that give any trustworthy information on the subject. In proceeding, therefore,
*The London Economist of September 13, 1873, remarks that the indemnity has been paid with but slight use of bullion and without a drain of specie from France. This result has been achieved to a very great extent by a gigantic borrowing on the part of the French government and individuals abroad. A large part of the loan is still held out of France by the syndicates of bankers and other capitalists whose bills received in payment of installments have been handed over to the German government. Another part of the loan is held by individuals, who have, either directly or indirectly, exported securities which they held, and invested the proceeds in the loan.
France has thus avoided a large export of specie, but has permanently increased her foreign indebtedness. The suspension of specie payments has not in France had the same effect which was produced by suspension in this country, namely, that of driving the precious metals out of circulation.-Report U. S. Bureau of Statistics, September, 1873.
to the inquiry as to what may be the amounts of gold and silver coin in the other countries of Europe, there seems almost no method except to establish approximately the following premises, viz.:
First. The financial condition of the people in each country, and their consequent ability to possess money of any kind. This may be estimated, perhaps, as well by their ability to pay taxes as by any other general fact that can be made to apply to all nations; and though the pressure of taxation undoubtedly varies very much in different countries, the average annual revenue raised by the governments will indicate in some degree the ability of the people to have money.
Second. The extent to which coin may have been displaced by the use of paper money and suspensions of specie payments.
Third. The effect which the decline in the price of silver may have had to cause a substitution of silver coins for gold in countries where silver is the exclusive standard of values, as in Austria and Russia.
The table on page 78 of the populations and revenue of each country for some one of the last four or five years will aid in showing the ability of the people to pay taxes, though of course there are qualifying features in each case that will somewhat change this relative ability as presented at first glance. There is, however, a reasonable degree of correspondence between the pressure of taxation in France in 1873 and Austria and Russia in 1871 and 1874. It is true that the two latter countries have not so recently been engaged in great and expensive wars, but in both countries the annual expenditures of the governments have largely exceeded the revenue each year for about thirty years, and the
aggregate of annual deficits has piled up a great debt in each case. In Italy and Spain the financial affairs of the governments have been in even worse plight, but the government machinery for collecting taxes has not been so well organized and the amount of revenue raised has probably been no greater in proportion to the ability of the people to pay than it has been in Russia and Austria. If we find that in Sweden, for instance, where the government finances are in fair condition, the people pay nearly twice as much revenue per capita as in Russia, where there has always been a pressure to increase the revenue, we must conclude that the ability of the people of Sweden to pay taxes and possess money is at least double that of the people of Russia. Upon the same basis we may reasonably conclude that if the amount of revenue raised in Great Britain and France is about three times as great per capita as in Russia and Austria, the amount of money of any kind per capita in the latter countries is only one-third as great as in the former. These would be reasonable propositions even if there were no statistics by which they could be proven. But the definite knowledge of the amount of currency in use in the United States affords facts of great value in verifying the proportions of revenue to money in all countries.
No such facts have been at the command of economic science until within the last few years. Strenuous endeavors have been made in Great Britain and France to estimate the amount of money per capita; but it is only when corroborated by the experience of the United States that the law of the proportions can be eliminated from all the facts.
The following table of population in each country and the amount of national revenue per capita will serve as
a measure of the amount of money in circulation and in banks, per capita of the whole population:
The analogy between the proportions of revenue and estimated volume of money in the United States, Great Britain and France are very striking. Thus, taking the whole amount of paper money and coin in the United States in 1875 at $850,000,000 it gives $20 per capita, or just about three times the amount of annual revenue per capita. In the United Kingdom of Great Britain and Ireland the total of paper money and coin is $765,000,000, which gives $24.70 per capita, or a little more than double the ratio of revenue per capita. In France the total of paper money and coin was equivalent to $1,500,000,000, or $45 per capita, or just three times the ratio of average annual revenue per capita. Putting
*The official annual budget, or estimate of the revenue in Austria, is made under two different heads, one for the ordinary expenses of the empire at large and another for the separate countries-Austria and Hungary. The amount given above is an estimate made from both.
+ Besides the $178,000,000 of ordinary revenue, the Italian government raised an extraordinary revenue in 1870 of $190,000,000 from taxation of church property.