278 



OURKENCY, BIMETALLIC. 



afforded of taking gold in place of silver. The 

 increased gold supply found its market in being 

 coined into money, and in this capacity it was 

 in direct competition with silver ; and as the 

 preferred metal, when either could be had, the 

 gold was accepted, and silver was willingly giv- 

 en up. Such, it is said, has been the cause of 

 the demonetization of silver in recent years ; 

 and as it has gone on only as the place of silver 

 was occupied by the rising tide of gold, it does 

 not imply any increase in the value of the lat- 

 ter ; that the willingness of all countries to take 

 gold in preference to silver has only saved gold 

 from falling instead of silver. The increased 

 quantity of either metal, if both are used for 

 the same purpose, must result in a decline of 

 value somewhere; and if the desires of man- 

 kind are best satisfied by the gold, they will 

 let silver go, and let it take care of itself, 

 whether its value falls or not. If flour and 

 oatmeal are both used for food, and if flour be- 

 comes abundant, so that people formerly using 

 oatmeal can have the more agreeable food, 

 there will be less demand for the poorer arti- 

 cle. That is, an increase in the supply of the 

 better of two articles used for the same pur- 

 pose, will result in a fall in the value of the 

 poorer. 



GOLD 



PRODUCED IN 

 25 YEARS, 



1851-1875, 

 $3,817,625,000. 



SILVER 



PRODUCED IN 

 857 TEARS, 



1498-1850, 

 $6,741,705,000. 



That the increase in the supply of gold since 

 1850 has been greater in proportion than silver 

 can be seen by the annexed diagrams, which 

 show the relative production of gold and silver 

 from the discovery of America to 1850, and the 

 same from 1850 to 1875. It will be seen from 

 this that, in twenty-five years after 1850, as 

 much gold was pro'duced in the world as had 

 been produced in the 357 years from the dis- 

 covery of America to 1850. This vast addi- 

 tion to the gold supply has produced great 

 perturbations in the monetary world, and has 

 had no little influence on the value of silver 

 itself. The diagrams give the production only 

 to 1875, because in the next year came the 

 great fall in the value of silver. The following 

 are the figures of the average annual produc- 

 tion of gold and silver as they are given by 

 Dr. Adolf Soetbeer: 



It will be seen that even in 1883 the gold 

 product was 2 times as great as in 1841-1850, 

 although it is not as high as in the exceptional 

 period from 1851-1860. From 1493 to 1883, 

 of the total production of gold, 56'1 per cent, 

 of it was produced in 1851-1883 ; while of the 

 total silver produced in the same period, only 

 25-6 per cent, was produced in 1851-1883. 

 These facts do not seem to indicate any reason 

 for thinking that the production of gold of late 

 years has been inadequate. And the value of 

 gold is determined by the relation between the 

 total supply (not the annual supply) and the 

 total demand of the world ; and as the stock 

 now available is increased by the $4,233,000,000 

 produced in 1851-1883, the fear of a gold fam- 

 ine is hardly justified. Additional demands 

 for gold have only been sufficient, if that, to 

 prevent its value from falling. But when sil- 

 ver is produced in large quantities, it does not 

 follow that it will be adopted instead of gold, 

 in the way that the gold has been adopted in- 

 stead of silver. This shows the different ways 

 in which gold and silver are viewed as regards 

 their commercial and monetary uses. Increase 

 the supply of gold, and an increased field for its 

 employment will be found among commercial 

 nations; but increase the quantity of silver, 

 and the world will not give up gold to make 

 room for it. Consequently, silver falls in value. 



As soon as the new gold supply produced a 

 change in its value relatively to silver (the ratio 

 falling below 1 : 15), France began to receive 

 gold and expel silver. Since 1803 France had 

 had a bimetallic system at a ratio of 1 : 15. 

 Of course, when the market value changed 

 after 1803, so that the ratio ran up to 1 : 15'7, 

 silver drove gold out of circulation in accord- 

 ance with Gresham's law, and the chief currency 

 of France to 1850 was virtually silver. After 

 1850 the reverse was true. The cheapened 

 gold changed the ratio until it fell below 1 : 15i r ' 



