OF GOLD AND SILVER.

Among the many plausible pleas of the monometallists, the most plausible,
perhaps, is the plea that the great divergence between the metals since
1873 has been due entirely to the increased production of silver. A very
brief examination, I think, will show its falsity, and that it is equally
false in fact and fallacious in logic; for, first, there has been no great
"depreciation" in silver, that metal having almost the same power to
command commodities, excepting gold, that it had in 1873; and, second, the
claim that the increased production of ten or twenty years would alone
greatly cheapen silver is flatly contradicted by all previous experience.
Of many statements of the fallacy, I take a recent one from the New York
_Times_ as the most terse and catchy for popular reading, and likewise
most ludicrously absurd:

"=Why Silver is Cheap.=

"In 1873 the total product of silver in the world was 61,100,000
ounces, and the silver in a dollar was worth $1.04 in gold.

"Last year the world's product of silver was 165,000,000 ounces,
and the silver in a dollar was worth only 50.7 cents.

"In 1894 the potato crop of the United States was, in round
numbers, 170,000,000 bushels, and the average price 53c.

"In 1895 the estimated potato crop was 400,000,000 bushels, and
the average price was 26c.

"The fall in both cases was due to the same cause."

Observe the assumptions: 1. That the output of one year determined the
value of silver as the crop of potatoes does their price for that year!
The schoolboy who does not know better deserves the rattan. If the theory
were correct, gold in 1856 should have been worth but a fourth what it was
in 1848, whereas the largest estimate of its decline in value puts it at
25 per cent.

2. That the increased silver production of twenty-two years would reduce
its value in the exact mathematical proportions of the increase. This
theory ignores the two most important facts determining the value of
money: that the silver or gold mined in any one year is added to the
existing stock, to which it is but a minute increase; and that wealth,
population, and production are also increasing rapidly, relative to which
the increase of silver is but a trifle indeed. The yield of the Monte Real
a thousand years ago may have cost five times as much labor per ounce, and
that of Laurium ten or even twenty times as much; but all of both which is