DOI Page / Citation link:
https://doi.org/10.11588/diglit.22140#0353
MOVEMENTS OF CURRENCY.
337
gold standard. It had a mass of rubbish to get rid of which had
been in circulation for more than a century. The means for the
purchase was partly obtained from the indemnity paid by France,,
partly from the sale of silver which it resolved on superseding.
In a short time the price of silver began to fall. The fall was
aggravated by the suspension of silver minting in the Latin
Union. Soon afterwards Italy retired her paper money and
established a gold standard. The same process was adopted in
Scandinavia and Denmark. As a consequence, the rest of the
Latin Union was constrained to virtually accept a gold standard,
and gold may be actually said to be standard throughout Europe,
except in Austria and Russia, where a forced paper currency is in
circulation. At present silver, as estimated in gold, has fallen from
5s .6d. an ounce to 3s. 6d. The fall is entirely due to the cessation
of silver minting and the abandonment of a silver standard,,
according to the law which I laid down in an earlier part of this
lecture, that the dominant factor in any one of the precious
■metals which determines its value is its use as currency. Had
European communities abandoned the mintage of gold, and had
held only to silver, gold, whether supplied plentifully or scantily,
would have fallen to the ratio in which it stood in England up to
'the reign of Edward I. Even now, if Austria and Russia were to
retire their paper, and issue metallic florins and roubles instead of
it, there would be an immediate rise in the gold price of silver ;
and if, furthermore, the vast Chinese Empire were to establish a
.silver currency for the whole population, it is more than probable
that the old ratio would be nearly, if not quite, restored.
There is, then, undoubtedly, as measured by the wants of
European communities, or as interpreted by their governments,
•an excess of silver capable of being employed as currency in the
world. But the curious thing is that in silver-currency countries
prices have not risen. The rupee of the Indian Government
used, on an average, to be worth 2s. on the English Exchange ;
is now worth little more than two-thirds that sum, or about
.is. 4d. But in the purchase of commodities and labour in India,
.the rupee goes just as far as it formerly did. We have been
told so on the highest authority. Of course there is one ex-
planation of this. The Indian Mint does not allow its issues
23
337
gold standard. It had a mass of rubbish to get rid of which had
been in circulation for more than a century. The means for the
purchase was partly obtained from the indemnity paid by France,,
partly from the sale of silver which it resolved on superseding.
In a short time the price of silver began to fall. The fall was
aggravated by the suspension of silver minting in the Latin
Union. Soon afterwards Italy retired her paper money and
established a gold standard. The same process was adopted in
Scandinavia and Denmark. As a consequence, the rest of the
Latin Union was constrained to virtually accept a gold standard,
and gold may be actually said to be standard throughout Europe,
except in Austria and Russia, where a forced paper currency is in
circulation. At present silver, as estimated in gold, has fallen from
5s .6d. an ounce to 3s. 6d. The fall is entirely due to the cessation
of silver minting and the abandonment of a silver standard,,
according to the law which I laid down in an earlier part of this
lecture, that the dominant factor in any one of the precious
■metals which determines its value is its use as currency. Had
European communities abandoned the mintage of gold, and had
held only to silver, gold, whether supplied plentifully or scantily,
would have fallen to the ratio in which it stood in England up to
'the reign of Edward I. Even now, if Austria and Russia were to
retire their paper, and issue metallic florins and roubles instead of
it, there would be an immediate rise in the gold price of silver ;
and if, furthermore, the vast Chinese Empire were to establish a
.silver currency for the whole population, it is more than probable
that the old ratio would be nearly, if not quite, restored.
There is, then, undoubtedly, as measured by the wants of
European communities, or as interpreted by their governments,
•an excess of silver capable of being employed as currency in the
world. But the curious thing is that in silver-currency countries
prices have not risen. The rupee of the Indian Government
used, on an average, to be worth 2s. on the English Exchange ;
is now worth little more than two-thirds that sum, or about
.is. 4d. But in the purchase of commodities and labour in India,
.the rupee goes just as far as it formerly did. We have been
told so on the highest authority. Of course there is one ex-
planation of this. The Indian Mint does not allow its issues
23