THE PRESENT COMMERCIAL CRISIS. 493 



follow one another without interruption. Let us examine these vari- 

 ous opinions in succession. We first take up those of the silver par- 

 tisans ; but, without entering into a scientific discussion of the ques- 

 tions at issue, we shall only speak of the actual influence of recent 

 monetary facts on the price of goods and on commerce. There were 

 till recently two metals, sometimes rivals and sometimes allies, con- 

 tending for and occasionally sharing the monetary function of the 

 world gold and silver. Each of them had its peculiar territories, and 

 they sometimes spread over into common territories. Gold reigned in 

 England, the United States, and the Scandinavian countries ; silver, 

 in the Indies and Germany, and nominally in Austria and Russia ; 

 while both metals had undivided sway in France, Italy, Switzerland, 

 Belgium, and Greece, or the countries of the Latin Union, where they 

 had equal legal rights, and were rated in value at fifteen and a half 

 by weight to one a valuation which M. Cernuschi calls the bimetallic 

 par. This par exists only in some countries, not in all. After the 

 war with France of 1870-'71, Germany changed its single silver 

 standard for one of gold. The Scandinavian states followed suit. 

 France was restrained from following this example by the resistance 

 of the Bank of France, which foresaw ruin to itself in such a meas- 

 ure. The initiative of Germany although it had failed to make the 

 demonetization of silver complete, as it had intended coincided with 

 a profound change in the monetary situation of the world. The metal 

 silver began to depreciate and to grow less in value relative to gold. 

 The countries of the Latin Union, being the only ones in which the 

 two metals enjoyed a condominium at a ratio of values fixed at the 

 beginning of the century, took alarm at these signs of a widening of 

 the difference in values, and adopted an exclusive standard of gold. 

 The depreciation of silver continued, at an accelerating rate, till, in 

 1885, it took 18*63 grains of that metal to be the equivalent of one 

 grain of gold. Silver had lost nearly twenty-one per cent of the value 

 which it had maintained, as a rule, till 1871. At the present writing 

 the depreciation has reached twenty-two per cent. This depreciation 

 is regarded by MM. Laveleye, Cernuschi, and De Soubeyran, as the 

 result of the demonetization of silver by Germany and the Latin 

 Union ; but this demonetization, only partial in Germany, was merely 

 an incident in the matter, and inadequate to produce so great an 

 effect. A much more important factor is the increase in the produc- 

 tion of silver, which has been enormous during the last fifteen years, 

 accompanied by considerable reductions in the expense of the pro- 

 cesses for extracting it, the effect of which is also intensified by a 

 greatly diminished production of gold. With a tripled production of 

 silver, which the statistics show to have taken place, and a reduction 

 of one third in the amount of gold, also proved by the statistics, we 

 need go no further to find the explanation of the change which has 

 taken place in the relative value of the two metals. From 1851 to 



