CHAPTER I

of the unit coin, or crying up its denomination, would have stopped any outflow caused by under-valuation as compared with foreign money value. The same if it had been only gold. But being combined of the two, being, as it was, both gold and silver, it was necessary, in the case of such outflow, not merely to call down one or both of them below the value of foreign gold or silver, but also and at the same time to establish such a ratio between the two metals for internal circulation as would give no advantage to exchangers acquainted with a different ratio prevailing in some particular part of the Continent. And just the same for the other European Page 48 money systems. If, for instance, the English sterling had been called down to a value which would of itself have forbidden export to the Continent, but at the same time such a ratio had been left standing between these sterlings and the gold nobles (say 12:1) as was so far in excess of the ratio prevailing in some parts of Europe (say 11:1) as to overlap the amount by which the sterling had been called down, then the result could, and doubtless would, be an outflow of silver, in face and spite of the apparent higher tariff of the English sterling, as against the continental silver coins. This is the historic, patent, undeniable defect and weakness in the bimetallic system of the Europe of that day. It must be borne well in mind how different the problem then was from that which now besets the monetary world. To-day the flow of the precious metals is natural, the indicator, facilitator, and safety-valve of international trade. Such a conception was an utter impossibility to the fourteenth century. The rulers of that age had only one idea, the maintenance or increase of the treasure of the realm, first for military purposes, and then for trade; and their mental horizon was limited by the boundaries of each their little dominion. They could not grasp the idea of Europe as a monetary whole, each fought for his own head or land, and each found a ready weapon to hand in the monetary confusion of the time. In any system so rough and so non-uniform as that of Europe in the fourteenth century, any variation of one metal served as a vantage-point against Page 49 the other,