218 POPULAR SCIENCE MONTHLY. 



VI. Bimetallism. 



Bimetallism was eagerly taken up by writers as a means of in- 

 creasing what was once regarded as a . deficient supply of the 

 world's metallic circulation. The decline of prices, — which in this 

 country began in 18G6 and not in 1873 — was attributed to a scarcity 

 of ' money ' throughout the world. Therefore, if silver could be added 

 to, or retained with, the circulation of gold, the larger quantity of 

 metallic money would, it was believed, support, or even raise, the 

 general level of prices. The theory of prices, assumed as a matter of 

 course in this exposition of bimetallism, was the quantity-theory. 



Throughout the recent writing and speaking on monetary topics, 

 in both Europe and America — if not also in Asia — there has been a 

 very general subsidence of interest in bimetallism. The demand for 

 silver has been believed to be unnecessary because of the enormous 

 production of gold in recent years. That is, by the old quantity theory 

 on which bimetallism was based, some authorities — and more politi- 

 cians — have saved their consistency by accepting the gold standard. 



The logic and character of bimetallism can not escape so easily. 

 If the quantity-theory falls, the whole artificial structure of bimetallic 

 argument falls; and the gold standard can not possibly be supported 

 by intelligent minds on any such basis of theory. The facts are too 

 ugly. In the accompanying diagram it must appear to the most casual 

 student that if the fall of prices on or about 1873 was due to a scarcity 

 of gold, then not only because the supply of silver has been greatly 

 increased, but especially also because the supply of gold has been about 

 quadrupled since 1850, we ought to have witnessed a phenomenal rise 

 of prices in the last decade or two. The movement of prices on the dia- 

 gram, however, has been generally downward, or at least not seriously 

 rising, during all the ^years when the production of gold has been so 

 astonishingly large. The facts oblige us to question a theory which 

 presents such evident disparities as this ; and one is obliged, in all fair- 

 mindedness, to accept the truth that many other and potent influences, 

 besides the quantity of the media of exchange, have a powerful effect 

 upon the price-level. When this admission is made, then the in- 

 vestigator is in a position to understand the remarkable influences of 

 the great industrial revolution of the last thirty years upon the ex- 

 penses of production of all articles, and hence upon their market prices. 

 Thus, the sweep of economic forces, in the natural tide of events, is 

 bringing us to a saner and very different point of view than that of 

 the scientific bimetallist of past years. 



VII. Stability of Exchange. 

 Consistency is a jewel; but it may be questioned whether it is 

 always worth the price. The escape from the pitfalls of bimetallism 



