[459] Cf. A. S. Johnson, "Davenport's Competitive Economics," Quart. Jour. of Econ., May, 1914, p. 431.
[460] The man who wishes to "break" a twenty dollar bill may well have to go through Menger's process, getting two tens from one man, breaking one of these into two fives with another, and so on. Or he may have to buy something which he does not want to get "change."
[461] Ridgeway, Origin of Metallic Currency, p. 327; Carlile, Evolution of Modern Money, p. 233. Grain is said to have been used in ancient China as money,—not as a standard of value, but as a medium of exchange. Chen Huan Chang, Economic Principles of Confucius and his School, vol. II, p. 437.
[462] Written in 1914.
[463] The Hindu law of inheritance is a factor here. The Hindu woman may retain, after the death of her husband, father or brother, the ornaments he has given her during his lifetime. But all of the rest of the family property must go to male heirs, even remote male heirs coming in before the closest female relatives.
[464] Cf. Carlile, Monetary Economics, introductory chapter. The whole question may hinge on terminology, so far as Carlile is concerned. It is not clear what he means by "value of gold."
[465] Cf. Conant, Principles of Money and Banking, I, ch. 7, esp. p. 102.
[466] I do not believe that we have sufficient agreement among the best students of the statistics of the precious metals to justify any statistical conclusions regarding the laws governing the industrial consumption of gold and silver. Even the facts as to the proportions of annual production of gold in recent years going to money and to the arts are in dispute. Thus, DeLaunay (The World's Gold, New York, 1908, p. 176), divides the annual output as follows: Exportation to the East, and loss, 16%; coinage, 44%; industry, 40%. The industrial employments are divided as follows: jewelry, 24% (of total annual gold production); watch cases, 10%; gold leaf, 2.25%; watch chains, 1.75%; plate, 0.75%; various uses, as pens, dentistry, chemical works, etc., 1.25%. DeLaunay's competence as an authority is attested by various writers, among them W. C. Mitchell (Business Cycles, p. 281). Mitchell, comparing DeLaunay's estimates with divergent estimates of other authorities, concludes that there is not sufficient evidence to justify definite conclusions. I do not think that anyone who has read the criticisms which Touzet has brought together (Emplois Industriels des Métaux Précieux, Paris, 1911, pp. 49-52) of the methods employed in the investigations by the Director of the United States Mint in 1879, 1881, 1884, 1886, and 1900, will have large confidence in the exactness of the results reached in those investigations. (See annual reports of the Director of the Mint for the years in question.) Touzet's careful and elaborate study employs the figures of these investigations as the best available, but with substantial misgivings. There are many indeterminate elements in the problem, as shown by both Touzet and DeLaunay, among them, the extent to which coin is melted down for industrial purposes.
The Director of the Mint would assign a much higher proportion of the annual output to coinage than would DeLaunay.
Earlier studies, by Soetbeer and Suess, seem quite out of harmony with these conclusions. (Suess, Eduard, The Future of Silver, Washington, Government Printing Office, 1893, pp. 51-53.) Suess thinks that virtually as much gold was going into the arts uses as was being produced, in 1892, and quotes Soetbeer (Litteraturnachweis, p. 285) as admitting that such a contention may not be demonstrable, but at the same time holding that it cannot be disproved.