mints for its coinage, and the argument, arrived at only through a partial surrender to the arguments of bimetallists, that the long-continued low range of prices gives to this country a larger return on its foreign loans. The Index headings, Deluge of Silver, and Creditor Nation, indicate respectively the parts of this volume in which those two points are discussed. As regards the latter point, it will be seen that I endeavour to point out that the increased value of income reaped by the money-lending classes is gained at the cost of a very much heavier loss to the industrial, trading, and agricultural classes throughout the country. And, as regards the first point, it is not always sufficiently remembered that even ten times more than the previous average supply of silver would have to be continued for a long series of years before it could make any great impression on the accumulated supply of more than two thousand years.

Victor on Assaye's eastern plain,
Victor on all the fields of Spain,
Unconquered Wellington,

has just been marshalled into the ranks of bimetallists by the Earl of Stanhope.

It appears from the 'Notes of Conversations with the Duke 'of Wellington,' just published by Earl Stanhope, that the Duke repeatedly expressed his opinion to the effect that it was desirable to revert to the ancient practice of this country . . 'by making silver as well as gold a legal tender for large sums.' The subject had engaged the Duke's attention on the morning of the day on which he was struck down by the attack from which he never recovered.

And why should the Duke have kept this subject so frequently before him? Was it only that acquaintance with the writings of David Hume and Archibald Alison led him indirectly to the reflection that it was not right that the pound sterling, which had been supplied to support his achievements, should be charged on the country as gold sovereigns by an arbitrary piece of legislation unguided by any shadow of financial principle? Or was it, perhaps, that Sir Robert Peel's qualms of

conscience were more clearly expressed in private conversation with the Duke than in his public exclamation, 'What is a 'pound?'

The manner in which the Duke appears to have kept the subject constantly in mind makes it more evident than before that Sir Robert Peel had realised the fact that in guiding Parliamentary legislation in 1816 he had been misled by the writings of Earl Liverpool into a course which would sooner or later, if unrepealed, work mischief. It, at any rate, appears that the Duke of Wellington was at the time of his death bent on repealing Sir Robert Peel's Act of 1816. And there does not appear any shadow of an idea of treating the matter as an inter national question. He would, in fact, evidently have treated it as merely a home question.

The reason why the present leaders of bimetallism are endeavouring to make it an international rather than a home question is due to the circumstances under which the mischief, apparently in some measure foreseen by Peel and Wellington, chanced recently to be made effective. It was the International Congress held in Paris for the simplification of coinage that brought about the disorganisation of the double standard, and the present leaders on the question imbibed their first knowledge of it from international currency congresses.

There are no bimetallists who will not agree that it is better to re-establish the double standard by international legislation than not to re-establish it at all. I contend merely that by international legislation unnecessary complications and dangers are created outside the question of purely financial theory, which are not compensated by the firmer basis theoretically gained. And besides this, in making our action dependent on international agreement, we are indeed removing the bandage from the eyes of justice, as I have fully pointed out.

25 JERMYN STREET, W.: January 12, 1889.

In the Preface to the Second Edition of this work I alluded to the manner in which the First Edition had been treated as an attempt to revive a defunct controversy. That 'defunct 'controversy' has, however, since the issue of the Fourth Edition, formed the subject of a Royal Commission, who have, in two Reports, published the evidence submitted to them, but have not yet published their final Report giving their judgment on that evidence.

The most elaborate Paper against Bimetallism submitted to the Commission is that by Mr. H. D. Macleod, who says: 'In the first place it may be remarked that there is not, and 'there cannot be by the nature of things, a standard of value.'

And further: All economists acknowledge that credit has 'exactly the same effect on prices as money.

'Bank-notes, bills of exchange, and banking credits, pay'able in gold, have exactly the same effects as an equal amount ' of gold.' '

Mr. Macleod afterwards alludes to some of Adam Smith's arguments as having 'given rise to all the attempts to discover

1 Report of the Royal Commission on Gold and Silver, 1888, p. 226.

'an invariable standard of value: and, indeed, to the idea that 'there can be such a thing at all.' 1

The use of the term standard of value was explained in the First Edition of this work, but in reply to the above strictures it is perhaps expedient more fully to point out that it is mere matter of fact that leading writers on the subject have been quite conscious that all standards of value necessarily themselves fluctuate in value under the laws of supply and demand, in the same manner as the commodities whose relative values are estimated or measured by them.3

Mr. Macleod says: 'We may measure a tree with a yard, or a hogshead with a gallon, because they are each of them 'single quantities; but value is a ratio, and it is impossible to 'say a: b: x.

'It is manifestly absurd to say that four is to five as eight.' 4

Whether impossible, absurd, or merely incomplete, such a limited formula is not used in referring to a standard of value, or indeed in reference to any standard. To arrive at the relative values of an ox and a sheep, or, in other words, the ratio which the value of the ox bears to that of the sheep, the prices, or values in money, are referred to as a convenient steppingstone; and the market values being 207. and 47. respectively, the formula stands :ab: 20x: 4x.

The fact that the value of x fluctuates does not prevent its being used as a standard to arrive at the relative values of a and b. If gold doubled in value, then the statement would be :ab: 10x: 2x,

giving exactly the same result.5

1 Report of the Royal Commission on Gold and Silver, 1888, p. 239. 2 See Appendix, heading, Standard of Value.

Gold and Silver, like every other commodity, vary in their value, are sometimes cheaper and sometimes dearer, sometimes of easier and sometimes of more difficult purchase.' Adam Smith, Wealth of Nations, vol. i. p. 47. London: 1802.

• Report of the Royal Commission on Gold and Silver, 1888, p. 240. 5 On account of the variation in the value of gold and silver, the