preventing the creation of unjust effects, which it was certainly foreseen might result under the Act of 1816 if kept in force.

Be this, however, as it may, the fact remains that even if King, Lords, and Commons all thoroughly understood the import of the Currency Acts of 1816 and 1870, they were carried at the instigation of the first Lord Liverpool, who considered that the constitutional prerogative of the Crown entitled King George to close the mint against silver without intervention of Parliament; and if such prerogative was then valid for that purpose, it is obviously still valid for the purpose of re-opening the mint to silver. And also, if Parliament was rightfully entitled to close the mint against silver, either in 1816 or in 1870, it has the same right now to re-open the mint to silver.

The Currency Act passed by the British Parliament in 1870 was followed by an Act to the same effect in the United States in 1873, around which a stormy discussion has recently been waged, and in which we have not yet heard the last word.

The Economist of October 31 says of that Act: 'It is perfectly true that the Act of 1873 demonetised silver . . . but Congress merely put in legal form the previous action of the people. In other words, silver had, through natural causes, dropped out of circulation.'

The whole question at issue between the monometallists and the advocates of the Double Standard may be summed up in the question as to whether the

Economist is right or wrong in asserting that silver had dropped out of circulation in 1873 through 'natural causes.'

The facts of the case are that whilst the United States mint had been open to silver and gold at the ratio of 16 to 1, the French mint was, at the same time, open to them at the ratio of 15 to 1.

Those relative rates made the French mint the better market for silver and the United States mint the better market for gold. The metals were, therefore, each taken to the mint which was relatively the best market for it.

It was thus the action of arbitrary laws in France and the United States respectively which made the United States relatively a better market for gold than for silver. If the United States law had made the ratio 15 to I, that country would then have been the better market for silver, and the money in circulation would have become chiefly silver. Besides this, as shown in Chapter I. of this book, though silver had dropped out of circulation, it had not dropped out of the standard.

By the Act of 1873 the United States Congress changed all current contracts from the Double Standard to a Gold Standard valuation, thus creating an artificial demand for gold which has gradually enhanced its value until the gold dollar has become worth double the value of the discarded silver dollar. That same artificial demand is still in action, and may gradually treble or quadruple the value of the gold dollar, to the benefit of

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some persons, to the detriment of other persons, and to the confusion of all industrial enterprise.'

An epoch-marking event which has occurred in the financial history of the world since the last edition of this book was issued is the abolition of the Silver Standard in India. The Government rupee, which has been substituted for silver as the Indian Standard of Value, differs at this moment from the Silver Standard valuation, giving a standard unit worth more than the unit of the discarded Silver Standard. An article in the Appendix to this edition comments on this matter. I will not here do more than call attention to the fact that one of the most important battle grounds between bimetallists and monometallists in the present campaign as regards theoretical discussion has been the quantitative theory. There is no bimetallist who is not an adherent of that theory, which has been argued against by the leading writers among the monometallists in complete forgetfulness or in despite of the writings of men who have gone to their graves after establishing for us the science of political economy. But whilst in argument opposing the quantitative theory, the monometallic party have utilised it in practice for their purposes in the Indian Empire, in a manner which has had no parallel in history since the Emperor Helio

President Grant, who signed the Act which demonetised silver in 1873, did not know six months later that any such legislation was even yet on the statute books. Having made the discovery, the President denounced the Act to the late Senator Beck, of Kentucky, as fraud."―Moreton Frewen, National Review, p. 403, November 1896.

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gabalus undermined the power of the Roman Empire by tampering with the standard of value for the purpose of enhancing the purchasing power of the money received for taxes. I say no parallel in history, because it was avowedly done for the purpose of making the money received for taxes, and stipulated to be paid away out of those taxes, worth more than under the discarded standard, whereas the legislation in England, Germany, France, and the United States in the years 1870 to 1873 was the practical application of the advice of the Paris Conference of 1867, for the avowed purpose of bringing about a unification of coinage, and the warning voices, pointing out that such legislation would cause a continuous appreciation of the standard of value, were disregarded on the avowed plea of their being expressions of erroneous theory.

This tampering with the standard for the purpose of enhancing its value is more dangerous and mischievous than depreciation.

Mr. Bryan has really understated his case when he says that the appreciation of the dollar is as unjust as its depreciation. This is quite true as far as it goes. McCulloch says: 'Equal injustice is always done to the poorest and not least numerous class of society, by increasing the value of money, that is done to the wealthier class by its depression.' But it must be borne in mind that a depreciating currency is often an indirect form of taxation which tends to reduce the necessity for

See reference in the Index.

direct taxation, and also the stimulus to trade and industry it creates brings recruits into the ranks of the taxpayers to share the current burdens of the national expenditure. The wealthy may, and in fact do, therefore, sometimes gain even more than they lose by the depreciation of money. Among the brightest emanations from the genius of David Hume are the words in which he says that under a currency increasing in volume more rapidly than commodities: 'Labour and industry gain life, the merchant becomes more enterprising, the manufacturer more diligent and skilful, and even the farmer follows his plough with greater alacrity and attention.'1

Perfect steadiness in the value of the standard is not attainable; the best that can be done is to leave the rise and fall of prices to alternately encourage and discourage mining for the standard metals. It is widely acknowledged that a tendency to excess in the production of those metals better suits the general interests of trade, industry, and agriculture than scarcity of supply; bimetallists, however, have never had that object in view, but opened the present campaign, in opposition to the Paris Conference of 1867, for the purpose of preventing the disastrous appreciation of gold which they foresaw and foretold would result from the attempt to carry out the suggestions of that Conference.2

The main point is really summed up in Mr. Bryan's words in his first speech at Chicago:

1 and 2 See references in the Index.