countries over the sea were still in position to underbid German producers in the same proportion as formerly? I have already laid stress upon the fact that the difference in price could play only a comparatively secondary role in this competitive strife, and especially insisted that those financially disordered countries with paper standards would be quite unable to retain a metal currency under bimetallism as well as under the present regime.

Bimetallism, then, would only have this result, that it would make necessary an expenditure each year of 600,000,000 to 700,000,000 marks ($150,000,000 to $175,000,000) more for the creation of metallic money, simply to maintain prices nominally higher, the quantity of exchanges effected remaining unaltered.

It is this very increase in the dead weight pressing upon industrial exchanges which would stand in direct opposition to the natural perfection of a monetary system. This perfection of the monetary system involves the dependence of exchanges more and more upon a higher organization of banking functions, and less and less upon metallic money in circulation; and this makes possible a greater and greater economy in the quantity of money required to effect a given number of exchanges at a given range of prices. We see even now that England, which far exceeds all other European states in the amount of business transacted, nevertheless finds sufficient for her purpose an amount of metallic currency much smaller than that which France employs-much smaller even than the amount of Germany's circulation.

We may hope, however, that the perfection of the credit system for facilitating exchanges will in no great time attain in Germany the high development which it has already attained in England. That metallic money will come to perform in large transactions more and more the passive function of a standard of value. As a standard, however, but one only of the precious metals can be used in any one country. Whether some countries upon a lower stage of industrial development will in the future make use of silver for this purpose may yet be uncertain. In the more civilized states of the world, however, gold will undoubtedly remain the standard, even if silver, to a more or less considerable extent, is still retained in circulation in its secondary role as a medium of exchange. England will undoubtedly be guided in its course by its unerring instinct, and will not be won over to the support of any genuine bimetallic system, in spite of all the importunities of her silver friends. Germany, too, it is to be hoped, will refuse to take any such chances as are here involved, which could lead under present circumstances only to a disastrous end.

If now the next generation lives to see the time when the production of gold begins to fall off, that generation will find that it is not the gold standard of the great civilized countries which is threatened thereby, but bimetallism, at last deprived, as it will then be, of all rational grounds of justification. For certainly no bimetallic league would be able in the face of any such protracted discrepancy in the cost of

production of the two precious metals to maintain its legal ratio intact-it would gradually work over to an actual silver standard; while the countries upon a gold standard would have learned to economize in the use of metallic money, through a higher and better organization of their currency, and would in consequence require less and less new gold in order to keep prices at their normal height independently of every eccentric influence which might be exerted upon prices by the medium of circulation.

II.

INDIA AND THE SILVER QUESTION.1

The results of the experiment undertaken on June 26, 1893, by the British Indian Government cannot yet be fully determined; and it is hardly to be expected that any state will make further movements relative to silver until experience has finally settled whether the Indian mint shall remain permanently closed or not, and, in case it does, at what price a fairly stable equality between the production of silver and its consumption will be reached.

Hitherto the price of silver, though it has fallen greatly, has stood up better than might have been conjectured it would do under the two heavy blows dealt it in the passage of the Indian measure and in the cessation of American silver purchases. Silver of the standard fineness stood in the beginning of 1894 at 311⁄2 pence per ounce; but in the course of January, after the Indian government had determined to sell council bills2 at the exchange rate of 154 pence per rupee, silver fell to 27 pence per ounce. In April, however, the demand

1 First printed in the Neuen Freien Presse, February 8, 1895. 2 The Indian government collects it taxes in silver, and as this silver cannot be used in making foreign payments, the government sells "council bills" in London to raise a quantity of gold sufficient to pay interest charges and other sterling obligations. "Council bills" are government drafts calling for payment in silver rupees; they are bought chiefly by importers of Indian commodities.--Translator.

on the part of China and Japan quickened, and silver worked up again gradually to 29 pence. In August the outbreak of war between these two Eastern-Asiatic empires awakened new hopes that the flow of silver into them might be freer; as a consequence the price of silver was brought by the end of the month to 30 pence. Since that time, however, the movement of prices has been steadily downward; so that now we find it ranging between 274 and 271⁄2 pence. The average of the London prices of silver during the year 1894 was 2818 pence, against 355% pence for 1893, and 391 pence for 1892.

When one considers, however, that with the cessation of coinage in India and the discontinuance of American purchases, an assured market for from 2,750,000 to 3,000,000 kilos of silver was taken away, one can only wonder that 1894 presents so little contrast with 1893 in the current prices of silver. Even 27 pence, if there were any assurances that this price could be permanently maintained or maintained with only slight fluctuations, must be regarded under the circumstances as very favorable. If this price might be considered finally established some definite grounds would then at last be gained upon which to form an opinion how far silver is still available in the civilized world for monetary purposes. But whether or not this price, in fact, can be permanently maintained, can be best determined from some further observation of developments in the Indian monetary situation. To such an extent has the actual course of events in India proved all theoretical