264 Mr. Faraday on 



Its latest expression is Mr. Goschen's proposal to issue one 

 pound and ten shilling notes. In the passage already 

 quoted, Ricardo foresaw this, and says, "I think with you that,,, 

 on the whole, silver would be a better standard than gold, 

 particularly if paper only were used. All objections against 

 its greater bulk would be removed " {Letters to Malthus).. 

 But it is inconceivable that gold could disappear from 

 circulation ; its major use is as money ; and the relatively 

 small consumption for the arts, which falls considerably 

 short of an annual production of only ;^2 1,000,000, could 

 as little expand so as to absorb the ^700,000,000 used as 

 currency, as the consumption of iron for nails could deprive 

 the market of the supplies of that metal required for 

 railway and engineering purposes, and lead to the sale of the 

 railway lines themselves to the manufacturers of tacks. The 

 annual out-put of gold from paying mines would not be 

 checked by a decline in its exchange value as money due 

 to the remonetisation of silver beyond any decline which — 

 for the reasons given by Ricardo — is at all likely to be 

 seen. And even if its production were likely to be checked 

 by a special increase in the cost of production due to in- 

 creasing rarity, it is contrary to all sound economic theory 

 to encourage its production by the taxation of the 

 producers of all other commodities, which is what the 

 continuance of its monopoly value as money implies. The 

 influence of an international monetary law declaring both 

 metals legal tender in a fixed ratio would therefore be 

 simply to control the artificial enhancement of the value of 

 o-old due to the exclusive currency power conferred on it 

 legislatively. In claiming for credit money this utility, 

 Sir Thomas Farrer practically admits the danger of 

 exclusive dependence on gold, and sees a remedy in what 

 I have described as a kind of temporary poly-metallism. 

 I have shown that such a system not only fails to remedy 

 the admitted evils, but, under given circumstances, tends to 



