Credit Money and the Precious Metals. 259 



It is not difficult to demonstrate the soundness of this 

 argument. If the silver bullion market is not depressed by 

 the potential offer of the vast stock of coined silver to the 

 silversmiths of London, but only by the surplus stock of 

 newly-produced silver, then, as I pointed out to Mr. Goschen 

 during the conference at the Treasury on February 11 th, 

 1 89 1, it would have paid the Indian Government to have 

 bought up the American stock of one or two millions' worth,, 

 and thrown it into the sea, for the loss by exchange to the 

 Indian Government in consequence of the decline has- 

 already exceeded the value of that stock. 



But this " depression " of demonetised silver is really the 

 same thing as an appreciation of gold, and it is for the same 

 reason common to all commodities in relation to gold. 

 Admitting then that gold money is artificially appreciated, 

 in consequence of the special power conferred on it by its 

 practical adoption as the sole international legal tender 

 money, we have to devise some legal arrangement which 

 would counteract this influence, in order to obtain true 

 monetary ions^ such as I have defined. The sufficiently 

 approximate solution of the problem will be found in 

 controlling the gold ion by placing it in definite monetary 

 relation with a suitably representative commodity ion — 

 silver. I speak of silver as a representative commodity, 

 because, during the trying period since the closing of 

 the French mint, it has fully justified Ricardo's opinion 

 as to its relative steadiness of exchangeable value, 

 and its submission to what I have referred to as the 

 economic law tending to maintain steadiness of mutual 

 exchangeable value between all commodities producible at 

 will. This will be seen from a glance at the following table, 

 showing the buying power of silver and gold respectively 

 during the last 20 years (embracing the period of the 

 demonetisation of silver) and at the present time in terms 

 of wheat : — 



