Financial Legislation and its Limitations. 45 



lowering in the value of gold, that broke up the European 

 bimetallic union of 1866; not that the "Latin Union" was 

 formally dissolved, but the participating nations simply ceased 

 to coin the depreciating silver. They found that they were 

 losing their gold, and did not relish a possibly permanent cheapen- 

 ing of their money and degradation to the then existing monetary 

 standard of India, the Orient, and Mexico. 



With the exception of the single seesaw mentioned, there was 

 no other of any importance within the last century and the 

 production of silver was enormous. Recently the production of 

 gold has more than kept pace with advancing wealth and in- 

 dustry : but silver has failed to rise.^^ It is futile to predict what 

 is going to happen : whether silver or gold is destined to go down 

 at any particular future time. Hence it is useless to pass a 

 law on the supposition that the metals are fated to be produced 

 in such an alternating ratio as to cause the much admired seesaw 

 in their exchange values. In order to make bimetallism work 

 continuously, and to prevent it from becoming simply silver or 

 gold monometallism, it would be necessary to enact a new ratio 

 from time to time, for " silver legislation " enormously stimulated 

 the supply of silver. Instead of 16 to i, the nations would 

 need to adopt now the ratio of 38 to i. 



§11. It has been claimed, in political campaigns, that there 

 would be no difficulty in keeping up the price of silver, under no unlimited 

 bimetallism, because there would be an " unlimited " demand^® demand for 



silver possible. 



for it. Literal acceptance of the claim is out of the question. 

 It is cited in order to point out a certain self-contradiction in 

 the professed desire of some advocates of bimetallism to maintain 

 a high level of prices. In the background of the consciousness 

 of a number of them, in the " silver " campaigns, was a desire to 

 raise the level of prices, and really the same hallucination was 

 at the bottom of their notions as in greenbackism or inflationism. 



^ There was a temporary rise, 1903-1906, in the gold value of silver 

 E. W. Kemmerer, " The Recent Rise in the Price of Silver and Some of 

 its Monetary Consequences," Quarterly Journal of Economics, vol. XXVI, 

 No. 2, Feb., 1912. 



^° Coin's Financial School, p. 27. 



