The position, then, is this—that the supply of gold-money is now too small for the world’s needs, and that all commerce and international intercourse is being hampered by the restriction of the medium of exchange. At present, the sole practical medium is gold; and gold-money, as Mr Goschen has remarked, has three functions to perform: it has to supply the pocket and till-money of the people; it has to remain in the vaults of bankers as security for the notes issued against it; and it has to serve in settling the balances between nations. The larger the amount of trade which is being done, the larger must these balances necessarily be—although not in direct proportion—and the more gold must be required to adjust them. By analogy of reasoning, the less gold there is in the form of circulating money, the more must the trade be restricted. If the restriction does not operate on volume, it must operate on prices, and this in effect is what has happened.
The subject of concern, then, in the circles of finance throughout the world is how to rehabilitate silver, as it is termed—that is, how to replace it in the position which it is claimed the metal should occupy as money. If the supply of gold is too small for the world, then the only alternative is to utilise silver more largely, and to give it an official value in relation to gold. That value cannot now be placed in the ratio of fifteen-and-a-half to one; but it is thought that common agreement among the nations might enable the ratio to be fixed at something like seventeen to one.
The object of the bi-metallists is to bring about an arrangement between all the nations of Europe and the United States of the same principle and effect as that adopted by the Latin Union, which we have described. That is to say, they seek to have the free concurrent coinage of both gold and silver in a fixed ratio of value, and to have both metals everywhere decreed unlimited legal tender. The effect of this would be, they claim, to provide a supply of metallic coinage amply sufficient for the world’s present and increasing requirements, while it would prevent those violent fluctuations in exchange which do so much to disturb our trade with the silver-using countries of the East and of South America (where the Mexican silver dollar is the standard). Unless this be done, they assert, gold will become the sole currency of the world, and will have to perform the work of two metals. The effects of the consequent depreciation of silver upon India will be ruinous, and the effects of the consequent appreciation of gold will be to reduce the value of property in all commodities in this country still further. The final result, say some, must be panic and revolution.
The arguments pro and con. involve technicalities not quite suitable for our pages. It may be mentioned, however, that those opposed to bi-metallism say that there is no reason to conclude that the supply of gold has permanently fallen off; that fresh discoveries may be made any day; that the effects of the fluctuations of exchange on trade are exaggerated, and do not, in practice, prevent free commercial intercourse between countries of quite different currencies; and that the diminishing use of silver in the arts is an argument against its use as money. If silver becomes comparatively valueless as a commodity, how, it is asked, can the ratio of value as money between it and gold be maintained? The metal would be placed in the anomalous position of having two values—one at the mints, and another in the markets—and the consequence would be that the market value would rule, and people would refuse to take the silver money. This is the case at present in the United States, where the government is compelled by law to buy for coinage some five hundred thousand pounds-worth of silver every month, which silver money lies dead in the treasury because the people don’t want it.
On the other hand, it may be contended that the very fact of silver being legalised by all the great nations of the world would impart to it a value which might re-create a demand for it for other employment. It may be possible, too, to arrange not a permanent but an adjustable ratio, to be altered from time to time by joint agreement among the nations, according as the relative values of the metals are affected by supply and demand.
Be this as it may, it would seem that all the nations concerned, including even Germany, who acknowledges having made a mistake in demonetising silver, are more or less in favour of bi-metallism, and that all wait for the concurrence of England. In the United States, the present efforts of the government are directed towards repealing the law which compels them to coin a certain amount of silver—not that they do not want a dual currency, but simply because they cannot work it as long as England persists in adhering to the gold standard. Thus it would appear that in the great silver question England is, rightly or wrongly, not as yet prepared to come to a decision. In England, moreover, counsels are very much divided among experts, while the general public gives almost no attention to the question whatever. It is in the hope of stimulating the interest of our readers in a great, almost a vital matter, that we place this article before them.
IN ALL SHADES.
CHAPTER XX.
There was great excitement in the District Court at Westmoreland one sunny morning, a few days later, for the new judge was to sit and hear an appeal, West Indian fashion, from a magistrate’s decision in the case of Delgado versus Dupuy. The little courthouse in the low parochial buildings of Westmoreland was crowded with an eager throng of excited negroes. Much buzzing and humming of voices filled the room, for it was noised abroad among the blacks that Mistah Hawtorn, being a brown man born, was likely to curry favour with the buckras—as brown men will—by giving unjust decisions in their favour against the black men; and this was a very important case for the agricultural negroes, as it affected a question of paying wages for work performed in the Pimento Valley cane-pieces.
Rosina Fleming was there among the crowd; and as Louis Delgado, the appellant in the case, came into court, he paused for a moment to whisper hurriedly a few words to her. ‘De med’cine hab effeck like I tell you, Missy Rosina?’ he asked in an undertone.