We are now prepared to resume our account of the history of bimetallism in France and the United States. Regarding the former country the most important facts to be noticed are connected with a monetary convention or agreement formed with Belgium, Switzerland, and Italy, December 23, 1865. The events leading up to this treaty are, briefly stated, as follows: -

For some years previous to 1865 the unit of value in all these nations had been the franc, and in other respects there was a general similarity between their coinage systems. When gold began to fall in value relatively to silver after the great discoveries of 1849 and 1850 they were all troubled by a scarcity of small coins. Silver money was being rapidly melted down and exported, and the gold coins which took its place were of too large denominations to serve the purposes of small change. The proper remedy for this difficulty was the issue of a subsidiary silver currency, and to this Switzerland resorted in i860 by an act which reduced the fineness of all her silver coins, except the five-franc piece, to eight-tenths, and made this latter coin her unit instead of the franc. Inasmuch as the similarity of their systems had made the circulation of the coins of each country common in all the others, these Swiss coins of low intrinsic value began to be substituted for the more valuable ones of the other states, and the latter to be brought to the Swiss mints for recoinage. In order to prevent this, April 14, 1865, the French government prohibited the receipt of Swiss coins at all public offices, and the government of Belgium suggested a conference of delegates from all the countries affected. This met in Paris on November 20, 1865, and the result of its deliberations was the treaty above mentioned.

In accordance with the agreement at that time made, a subsidiary coinage of silver .835 fine, limited in quantity to six francs per capita, was introduced into all these nations, but the five-franc piece was retained as a standard silver coin to be freely minted at the old ratio of 15 1/2 to 1. The double standard was thus retained, but its operation, so far as silver was concerned, was confined to the five-franc pieces.

The commercial ratio between silver and gold in 1865 was not far from 15 1/2 to 1, but, as we have seen, it began to change about two years later, and silver fell very rapidly in 1875 and subsequently. By 1873 this fact began to make itself evident in a large increase in the number of five-franc pieces struck from the mints, in France from 5,000,000 to 154,000,000 francs, and in Belgium from 33,000,000 to 111,000,000 francs.* In the same year Germany began the withdrawal of her old silver currency and the sale of a portion of the surplus, and the countries of the Latin Union with good reason began to fear that, unless speedy action were taken, their gold would disappear, and they would be reduced to a silver standard. Another meeting of delegates was, therefore, called, and, as a result, a supplementary treaty went into force in 1874, by which the number of five-franc pieces to be minted was limited in the case of each of the nations concerned to a definitely assigned quota. This policy of restriction was adhered to during the following three years, the assigned quotas, however, being considerably diminished in 1876 and Switzerland refraining from coining any of her quota in 1875 and 1876. These measures, however, were not sufficient to check the outward movement of gold, and in consequence in 1878 the states of the Latin Union completely suspended the coinage of five-franc pieces, and have adhered to this policy to the present day. A good many meetings of delegates have been held since 1878, but their deliberations have been chiefly concerned with the feasibility of placing the gold standard on a still more secure basis and with the obligation of each State to redeem its own silver coins in gold in case of a dissolution of the Union.

* Laughlin, p. 155.