369 APPENDIX. A. VALUE OF THE AMERICAN DOLLAR. THE American dollar contains 3714 grains of pure silver, or 416 grains of standard silver. The American eagle of the old coinage, previous to the 31st of July, 1834, contained 247 grains of pure gold. The eagle of the new coinage contains 232 grains of pure gold. 18 The British sovereign, on leaving the mint, contains 11321 grains of pure gold, and, according to the mint valuation of the United States, is worth $4 87120• In commercial dealings, $4 444 has long, however, been assumed as the par of exchange on England, making the dollar equivalent to 4s. 6d. This practice began when the Spanish pillar dollar was in circulation, which was then nearly of this intrinsic value, the market price of gold compared with that of silver being less then than it is at present. While different standards existed in the two countries, the standard in the United States being at that time silver, the true par necessarily varied with every variation in the relative proportion of the value of gold to that of silver. It was estimated by Mr. Gallatin, writing in 1829, at 7 per B B cent. above the nominal par, and at the time of the passing of the gold bill, and for some time previous, it was about 1 per cent. higher, or at 8 per cent. premium. It was with reference to the change that had taken place in the true par, that by an act of Congress, of the 14th of July, 1832, the value of the pound sterling in calculations for duties was fixed at $4 80 instead of $4 444 as before. By the passing of the gold bill, on the 28th of June, 1834 (which was to take effect from the 31st of July following), the true par became about 976 per cent. above the old nominal par; and gold being by that act constituted the standard of the United States, as it is of England, this proportion will remain unaltered so long as the respective coins of the two countries remain of their present weight and fineness. The rate of exchange varies according as the balance of payments between the countries may be on one side or the other. The United States generally receive more in goods and merchandise from England than they send produce in return, and the exchange, owing to this and other circumstances, is usually above the real par; but it will be seen by the accompanying table that in 1834 the exchange fell to 2 per cent. discount, or to 10 per cent. below the real par. The drain of specie at this time from England to the United States, rendered profitable under these circumstances, has already been referred to. In 1837, during the suspension of specie payments, the exchange rose to 22 per cent. above the nominal, or 14 per cent. above the real par. TABLE showing the highest and lowest Rates of Exchange at New York on London, at 60 Days after Sight; and the Price of Sovereigns, in each Year, from January, 1825, to 1st May, 1838. |