Credit Money and the Precious Metals. 263 



the opening up of the South African gold fields, the total 

 for last year is only 27 per cent more than in 1871, while 

 the increase in the out-put of silver is upwards of 100 per 

 cent. The fact, that though the out-put of silver is now 

 ^double what it was even in 1875, the metal shows an 

 appreciation of 3 per cent in value, while, with an increase 

 of about 2734 per cent in the out-put of gold against the same 

 year, its buying power has risen 24 per cent, is a justification 

 of Ricardo's prediction of the relative steadiness of silver. 

 "On the other hand, the fact that silver has appreciated in terms 

 of commodities notwithstanding the great increase in the 

 out-put, is a sufficient answer to the " wheel-barrow " argu- 

 jnent that its re-monetisation would imply a vast rise of 

 prices, a supposition which was effectively met in the follow- 

 ing passage by Ricardo eighty years ago : " Coffee, sugar, and 

 jndigo are commodities for which, although there would be 

 an increased use if they were to sink much in value, still, as 

 they are not applicable to a great variety of new purposes, 

 the demand would necessarily be limited ; not so with gold 

 •and silver. These metals exist in a degree of scarcity, and 

 are applicable to a great variety of new uses ; the fall in 

 their price in consequence of augmented quantity would 

 always be checked, not only by an increased demand for 

 those purposes to which they had before been applied, but 

 to the want of them for entirely new employments." 



The facts also afford a sufficient answer to Jevons's con- 

 tention that the monetisation of silver in a fixed ratio to gold 

 would result in our getting to silver money, gold disappearing 

 from circulation, and that we should thus retrograde from a 

 more convenient to a less convenient form of currency. If 

 this were true, the answer is, that the tendency is to sub- 

 stitute for metal the most convenient form of currency, paper 

 notes or certificates representing the metal. It is to this 

 method that economists look forward, and it is in progress in 

 America, and in the development of our own cheque system. 



