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Government notes

Notes of Bank of Brazil

Gold, silver and copper coins

43,000,000 millreis.*



97,667,450 millreis.

In 1858 the Bank of Brazil made an ineffectual attempt to resume specie payments, and by 1865 the total of bank and government notes was reduced to an aggregate of 75,000,000 millreis. But in consequence of the Paraguayan war, which ended in 1870, the Brazilian government increased its issues of inconvertible paper money 122,000,000 millreis, and in 1875 the monetary circulation of the empire was stated as follows, viz.:

Government notes...

Notes of the Banks of Brazil, Maranham, Per

nambuco and Bahia..

Gold, silver and copper, estimated.


.159,000,000 millreis.


.204,000,000 millreis.

The total paper money circulation of Brazil was therefore equal to $52,204,230 in United States money in 1857, and increased to $106,380,000 by 1871, while the total coin circulation amounted to the insignificant sums of $2,700,000 in 1857 and $3,500,000 in 1871, at about which it has remained since.

The State of Paraguay was rendered totally bankrupt by the war with Brazil, and there can be but little coin of any kind in circulation.

The Argentine Republic resorted in 1866 to the issue of government treasury notes in denominations of $5, $10, $20, $50 and $100, and these have largely displaced coin of any kind.

*This word is the plural of real, and one real in Brazilian money is about half a mill. In Portuguese coin, however, it is about one mill. The modern Brazilian milréis (written 18000, one thousand reis) is equal to 54 cents in gold. The Portuguese millreis is worth about double that of Brazil.

In the republic of Peru the revenue of $23,499,653, collected from its population of 4,500,000 in 1873 ($5.22 per capita), would indicate an aggregate monetary circulation of about $76,000,000 to $80,000,000 (from $16 to $18 per capita); but there are banks of issue and also some issues of government money. The standard of values is exclusively silver, and whatever coin there is would be almost entirely of silver.

In the republic of Chili the revenue in 1871 was $11,788,500, or $5.89 per capita of the 2,000,000 of population, thus indicating an aggregate monetary circulation of from $18 to $20 per capita. Gold is the exclusive standard in Chili, and what circulation is not of paper or subsidiary coin would probably be of gold.

The revenue of $3,400,000 collected in the republic of Colombia for the year 1873 would indicate an aggregate monetary circulation of probably $12,000,000 to $15,000,000, but here the exclusive standard of values. is silver, and whatever of the monetary circulation was not either paper or subsidiary coins would be almost exclusively of silver.

We have thus glanced at the probable volume of money and the materials of which it is presumably composed in the six principal states of South America, the population in these comprising 18,000,000 of the 25,500,000 on the whole continent; and the conclusion seems unavoidable that there is not above $60,000,000 of gold in use as money on the whole continent of South America. There remains yet but the West Indies, with an aggregate population of 4,200,000, among whom there may be $15,000,000 of gold in circulation, thus making say $75,000,000 for South America and the West Indies. If now we add the very liberal estimate

of $175,000,000 for the whole of North America, we have a grand total of $250,000,000, which, added to the $1,872,500,000 estimated in the tables for Europe, gives a grand total of say $2,047,000,000 as the amount of gold coin and bullion in use as money in Europe and North and South America. Where then shall we look for the other $1,700,000,000 presumed by some to exist in the world as coin or bullion at the present time, or even for the remaining $600,000,000 estimated by Seyd to exist in 1872, and by Ruggles in 1867? If statistics are worth anything at all they prove beyond a doubt that no such sum of gold coin or bullion as even the smaller of these exists in Asia as money, though a much larger amount probably exists as ornaments. In India and China, whose populations compose 80 per cent of the entire 798,000,000 of population in Asia, silver is the exclusive standard of values, and gold does not circulate to any great extent as money. In Japan, the next largest state of Asia, gold is the exclusive standard of values, but Japan also has a system of national banks modeled after that of the United States, and a large part of the circulating medium is paper. The coin circulation is also composed largely of silver and copper coins.

Where then shall we look for the remaining $1,700,000,000 of gold presumed to exist in the world as money ere we are forced to the conclusion that it is, to a great extent, only a myth?

For all practical purposes, as a stock of gold coin upon which the commercial world may rely as a circulating medium or a reserve for the redemption of paper money, or for the payment of interest or principal of national or corporate debts, the entire amount is in

Europe and the United States. The total of what there is in South America is too small to be of any importance. As for what may have been produced in Asia or exported there in the last quarter of a century, it has been to a large extent, if not wholly, absorbed in the arts and in the manufacture of the personal ornaments of which the inhabitants of India and more particularly the semi-barbaric races of Asia Minor wear such a profusion-a characteristic which has in all ages imparted the glitter of romance to all oriental countries.*

* A whole volume might be filled with instances showing with how much greater profusion even the masses of the people in India, Afghanistan and Persia use the precious metals as personal ornaments than in the more highly civilized countries. Indeed the highest type of civilized man has almost abandoned personal adornment with gold as a relic of barbarism.

In the account of the embassy of Lord Mountstuart Elphinstone from the British Government of India to the King of Cabul in 1808, he describes the ornaments of the common people of Afghanistan as exhibiting this semi-civilized characteristic. "The ornaments of the women are strings of Venetian sequins worn round their heads, and chains of gold or silver, which are hooked up over the forehead. Ear-rings and rings on the fingers are also worn, as are pendants in the middle cartilages of the nose, which was formerly the custom in Persia, and still is in India and Arabia."

In an enumeration of the trades and occupations of the city of Cabul, Lord Elphinstone begins his list of seventy trades with "jewelers and goldsmiths," not as the most numerous, but as the most important.

It will perhaps be said that this was the condition of things seventy years ago, and that in the progress of the age all this has been changed. But the following synopsis of the testimony of Mr. J. T. Mackenzie, given in May, 1876, before a British parliamentary committee appointed to inquire into the causes of the decline in value of silver, will show that the customs of the people of India, and in all probability of those of Afghanistan and all Asia Minor, in the lavish use of gold and silver as personal ornaments, have not changed.

Mr. J. T. Mackenzie, of Kintail, said he was, when in India, a proprietor and merchant, and had been a merchant in Great Britain in the India trade. As a zemindar, or landowner, he had had considerable experience on this subject in Bengal. In every village there were a number of agents who acted as bankers for the farmers. Practically, a very small amount of silver passed in the transactions. The retail business in the villages was transacted by means of cowries, of which 200 were equivalent to 1 pice. A large quantity of the silver coined in India had been used for purposes of ornament. There was a silversmith in every village, who took his tools to the house of the man who wished the ornaments made. Among the peasantry the business was so small that gold did not enter into the settlement of the transactions. If gold

Whatever gold there may be in either Asia or Africa is practically almost as unavailable as any source of supply to Europe and the United States, as if it had not yet been dug out of the mines.

But there is another source of error in the commonly received estimates of the stock of gold and silver money

was procurable, probably it would also be turned into ornaments, as a gold ornament enhanced a man's importance. As a planter, witness received remittances of silver every month from Calcutta. If the amount received as rents had not been supplemented by remittances from the mint, the price of silver would have decreased and the value of commodities would have increased. In many districts the circulation was still totally inadequate to the wants of the people. The public works had not greatly affected the circulation. The only large amounts introduced in this way were in connection with the railways, but of the cost of the railways only 40 per cent was expended in India, and 60 per cent in England. The existing coinage, when introduced in 1835, was received with universal distrust, as the natives were extremely cautious in respect to any changes in the coinage. He believed but a small amount of silver left India for the interior of Asia, inasmuch as such a movement depended upon the excess of purchases over sales. He had heard the amount estimated at 5 per cent of the annual importation of silver. The balance of trade between India and Europe had been nearly always in favor of India. From 1834 to 1838 the export trade averaged £10,000,000 sterling a year, and from 1854 to 1858 it averaged £22,750,000; but from 1865 to 1874 the average increased to £56,000,000 per annum. The excess of imports over exports of bullion was £1,750,000 per annum from 1834 to 1838, £8,625,000 from 1854 to 1858, and £11,250,000 from 1865 to 1874. For the first five years, 1865-9, the average was £16,000,000; and for the last five years, 1870–4, £6,500,000, or an annual decrease of £9,500,000. The exports from India between the years 1865 and 1869 amounted to £279,000,000; from 1871 to 1874, £281,000,000, showing an increase of £2,000,000. The imports into India from 1865 to 1869 were £158,000,000, and from 1871 to 1874, £161,000,000, an increase of £3,000,000. The amount of bullion imported into India from 1865 to 1869 was £79,000,000, and from 1871 to 1874, £33,000,000, showing a decrease of £46,000,000; and the home requirements had increased between the two periods just named from £37,000,000 to £52,000,000, showing an increase of £15,000,000. The difference between the exports and imports for the ten years 1865-74 showed an excess of exports from India amounting to £240,000,000. The excess of treasure imports over exports in the same ten years was £112,000,000, and the home requirements were £89,000,000; and this total of £201,000,000 deducted from the £240,000,000 named above showed a difference in the adjustment of £39,000,000. The rapid increase in the home requirements was shown, the witness said, by the fact that prior to 1858 (when the Crown took over the government of India) they were about £4,500,000 yearly, while last year the amount was £10,000,000, exclusive of the £4,500,000 interest on the railway loans, or a total of £15,000,000. In other words, in the last five years the home requirements were £25,000,000 more than in the preceding five years.

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