THE 



POPULAR SCIENCE 

 MONTHLY. 



SEPTEMBER, 1893. 



WHY SILVER CEASES TO BE MONEY. 



BY F. W. TAUSSIG, PH.D., 



PROFESSOR OF POLITICAL ECONOMY, HARVARD UNIVERSITY. 



THE striking fall in the price of silver and the unmistakable 

 tendency among civilized countries to cease using it as a 

 basis for currency, suggest the inquiry whether these results are 

 accidental or flow from causes so regular and continuous in their 

 application as to be analogous to physical law. Thirty years ago 

 most economists would have hesitated little in seeking analogies 

 of this sort. The general conclusions on which economists were 

 then agreed were often stated to be natural laws, as certain 

 and immutable in their application as the laws of the physical 

 universe. The general rate of wages was governed by natural 

 laws ; prices were determined by natural laws, which combina- 

 tions and speculators could not violate with impunity ; monetary 

 phenomena were subject to similar unalterable conditions. The 

 value of the precious metals, like that of other commodities, was 

 determined only by their cost of production, and legislative action 

 seeking to regulate their value and bring about their concurrent 

 circulation must of necessity be futile. 



Of late the language even of conservative economists has been 

 more guarded. The more ardent representatives of the new 

 movement in economic thought go further, and reject once for 

 all the notion of natural law in economic phenomena. Even 

 those who appeal with confidence to economic laws must admit 

 that their operation is in many ways unlike that of physical 

 law. They are stated to be tendencies ; they are conclusions 

 hypothetically true, or true only in the long run. Above all, 

 the play of human volition, and of legislation as reflecting 



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