BIMETALLISM. 559 



in regard to gold. This divergence, because of its uniformity, can 

 scarcely be attributed to a variety of causes, but must be the result 

 of some single action which affects all commodities in the same 

 way and at the same time. The operation of this action must 

 either be on silver and other commodities to reduce their value, or 

 on gold to enhance its value. To suppose that both have been 

 affected in different directions may still further com])licate the 

 question, but does not alter the direction of our search. The 

 usual causes of a fall in the price of any commodity are increased 

 facility of production, over-production, or a decreased demand, but 

 these causes, from their very nature, do not affect commodities 

 simultaneously, nor are they such as would operate continuously, 

 nor are they all, as a rule, disadvantageous to the producer. The 

 cheapening of any article of consumption from increased facility 

 of production is beneficial to all — producer, consumer, and worker. 

 Over-production, applying the term to all commodities, is an 

 economic impossibility, and a universal decreased demand means 

 only a decreased power to purchase, which is the result rather 

 than the cause of any widespread depression. We are, therefore, 

 driven to the conclusion that gold, as the sole measure of the value 

 of other commodities, has had its worth enhanced, and the question 

 arises, has the action of 1873, in the demonetisation of silver, had 

 the effect of so raising its value that its purchasing power in regard 

 to all exchangeable merchandise has been increased ? Before 

 replying to the question we must refer to one feature in regard to 

 the precious metals which distinguishes them from other com- 

 modities. 'J'heir volume is the accumulation of centuries, and the 

 annual supply does not materially increase or diminish it. There- 

 fore the exchangeable value of money and commodities is not 

 appreciably affected by the usual variations in the supply of the 

 currency, and, unless such a change be abnormal, its stability is 

 unaft'ected. The inquiry resolves itself into two questions — 

 Has there been any extraordinary decrease in the volume of the 

 currency, or any abnormal and continuously increased demand for 

 it ? The latter question, 1 think, we can answer in the negative, as 

 far as activity in trade and commerce is concerned, but on other 

 gsounds, presently to be noted, there has been an unusual demand. 

 To the first question we reply there has been an enormous decrease 

 in the volume of the currency. Before 1873 the world's currency 

 consisted of about £800,000,000 of gold and an equal quantity of 

 silver, which in times of commotion was supplemented by the large 

 accumvdation of both metals in private possession. Both stores 

 were available for currency purposes, both formed the basis on 

 which the vast structure of commercial credit was erected. But 

 when silver was demonetised in Germany, and free coinage sus- 

 pended over the rest of Eurojje and America, gold alone had to 

 perform the function which both had hitherto fulfilled in all inter- 

 national exchanges, and as the measure of value of all commodi- 



