stock of precious metals,
gold and silver, more than other products of mine and field, is at any
time the accumulation of many years' production, and is changed very
little, proportionally, by a large change of output in any year or
short period. It changes in volume as does a glacier fed by the snows
of many years, not as does a river, filled by a single rainfall. For
a short time after the discovery of America (from 1493 to about 1544)
the average coining value[1] of the world's production of gold,
nearly all found in America, was about 1-1/2 times as great as that of
silver; but thereafter for three centuries from about 1545, the annual
value of silver produced was between 1-1/2 to 4 times as great as that
of gold, averaging about twice as great. Silver was the money chiefly
in use in the ordinary transactions in all of the principal countries
of the world.

Sec. 2. #Gold production, first half of nineteenth century.# We have now
to note some great changes in the production of gold in the nineteenth
century, changes both absolute and relative to that of silver. The
market ratio of the two metals had been gradually changing before 1792
and continued to change. Gold was slowly becoming more valuable in
terms of silver and the legal ratio of 15 to 1 in the United States
(at which both metals were admitted free to the mint) proved to have
undervalued gold. Gold largely left circulation and silver and bank
notes formed the greater part of our circulating medium. Then, in
1834, soon after the production of gold had begun to increase somewhat
more rapidly than that of silver, the legal ratio of the United States
was changed to 16 to 1. This brought a good deal of gold back into
circulation and gradually drove out most of the silver (the heavier
coins disappearing first).

In the decade 1841-50 the average annual value of the gold production
had, for the first time since the early sixteenth century, exceeded
that of silver. Then, from 1848 to 1850, came the great gold
discoveries in California and in Australia. In 1851 the value of gold
produced was one and one-half times that of silver; in 1852 was three
times, and in 1853 four times as great; and then slowly declined, but
continued every year as late as 1870 to be over twice as great.
This caused the displacement of silver by gold and drove out a large
proportion of the silver coins of smaller denominations. This led to
the law of 1853, authorizing subsidiary coinage (o