Summary.

The doctrines of this report may be summed up thus:

The value of an inconvertible currency depends on its amount relatively to the needs of the country for circulating medium (only to a very subordinate degree on the security on which it is based or the credit of the issuer).

If gold is at a premium in paper the paper is redundant and depreciated. The premium measures the depreciation.

The limit of possible fluctuations in the exchanges is the expense of transmitting bullion from the one country to the other. If it costs 2 per cent, to transmit bullion, the fluctuations of the exchange due to the ratio of imports and exports never can exceed two per cent, above or below par. Par of exchange is the par of the metals, weight for weight, in the two coinages.

If there is a drain of the precious metals, It is due, aside from exportations to purchase food or pay armies, etc., to the presence of an inferior currency of some sort in the country it leaves.

If the inferior currency be removed, the exchanges will be turned, the outflow will stop, and, if any vacuum is created, gold will flow in to supply it.

Gold will not flow in while the inferior currency fills the channels of circulation.

In the presence of a panic the duty of the Bank is to discount freely for all solvent parties.

The still more fundamental laws involved are these:

The amount of gold in the world will suffice to perform the exchanges of the world. If there be more or less, it will only affect the average level of prices the world over.

Every nation will have that portion of the stock of gold in the world which is proportioned to its trade. Each nation will have just as much as it needs.

A better and a worse currency cannot circulate together. The worse will drive out the better.

The committee also incidentally condemn the usury law and the law forbidding the exportation of the precious metals.

The discussion of these doctrines in the House and by the public will be noticed below. The reader will have a more correct impression of the attitude in which the doctrines of the report came up for discussion, if we present the events in their chronological order.