CHANGES IN VALUES OF PRECIOUS METALS. 175 



fall has been extensively due to any decline in the value of silver or 

 any appreciation of gold. 



On the other hand, a more rational explanation of the decline since 

 1873 in the value of silver, and one Avhich the logic of subsequent 

 events is substantiating, would appear to be as follows : Since 1860 

 the annual product of silver has been rapidly increasing — i. e., from 

 $40,800,000 in 1800 to $51,950,000 in 1865 ; $61,050,000 in 1871 ; 

 880,500,000 in 1875 ; $96,000,000 in 1880 ; $124,900,000 in 1885.* 

 The aggregate product from 1860 to 1873, inclusive, was $990,000,- 

 000. Previous to 1871-72 neither France nor the Latin Convention 

 states of Europe had been large consumers of silver. In fact, from 

 about 1850 to 1864, France, instead of being a consumer, was really a 

 seller of silver, and during that period disposed of about £75,000,000 

 ($375,000,000). After 1864 the tide turned, and France began to take 

 back silver, but np to 1873-'74 her imports had by no means balanced 

 her previous exports. M. Victor Bonnet, writing in 1873 (" Revue 

 des Deux Mondes "), after the greater part of the French indemnity 

 had been paid, estimated the quantity of specie remaining in the pos- 

 session of the French people at 6,000,000,000 francs ($1,200,000,000). 

 China, also, which previous to 1864 had been a silver-imj^orting coun- 

 try, after 1864 and until up to about the time of the drop in silver, be- 

 came a silver-exporting country.f From 1853 to 1873, inclusive, the 

 United States furthermore coined but very little silver, and during this 

 whole period drew on the world's supply of silver for coinage purposes 

 to an extent (measured in dollars) of only $57,137,000 ; while, during 

 her long period of suspension of specie payments, subsequent to 1861, 

 her stock of silver coin entirely disappeared from circulation, and in 

 great pai-t was doubtless added to the supply of other countries. 



Under such circumstances, which were perfectly well known to the 

 custodians and dealers in silver everywhere, Germany entered the 

 world's market as a seller of silvei*. The amount offered at first was 

 absolutely very small and comparatively insignificant, but it neverthe- 

 less probably constituted a supply in excess of any current demand. 

 As the states of Europe and the United States could not at once in- 

 crease their consumption and import of the products of Asia, Africa, 

 and South America, and so increase their sales (exports) of silver, 

 and, as the price which the surplus of any commodity forced for sale 

 will command determines the price of the whole stock of such com- 

 modity, the price of the whole stock of silver bullion naturally began 

 to decline. The general policy of Germany respecting the use of sil- 

 ver for coinage, which was subsequently favored and adopted by 

 Sweden, Korway, Denmark, and Holland, with the concurrent suspen- 



* The average annual production of silver, according to M. Soetbeer, was $24,334,750 

 from 1811-'20; $20,725,000, 1S20-'31 ; $26,840,000, 1831-'40; $35,118,000, 1841-'50. 



f Testimony of Mr. Robert Giffen, First Report of the British Gold and Silver Commis- 

 sion, p. 29. 



