fall has been extensively due to any decline in the value of silver or any appreciation of gold.
On the other hand, a more rational explanation of the decline since 1873 in the value of silver, and one which the logic of subsequent events is substantiating, would appear to be as follows: Since 1860 the annual product of silver has been rapidly increasing—i. e., from $40,800,000 in 1880 to 151,950,000 in 1865; 61,050,000 in 1871; $80,500,000 in 1875; 896,000,000 in 1880; $124,900,000 in 1885. The aggregate product from 1860 to 1873, inclusive, was $990,000,000. Previous to 1871-'72 neither France nor the Latin Convention states of Europe bad been large consumers of silver. In fact, from about 1850 to 1864, France, instead of being a consumer, was really a seller of silver, and during that period disposed of about £75,000,000 ($375,000,000). After 1864 the tide turned, and France began to take back silver, but up to 1873-'74 her imports had by no means balanced her previous exports. M. Victor Bonnet, writing in 1873 ("Revue des Deux Mondes"), after the greater part of the French indemnity had been paid, estimated the quantity of specie remaining in the possession of the French people at 6,000,000,000 francs ($1,200,000,000). China, also, which previous to 1864 had been a silver-importing country, after 1864 and until up to about the time of the drop in silver, became a silver-exporting country. From 1853 to 1873, inclusive, the United States furthermore coined but very little silver, and during this whole period drew on the world's supply of silver for coinage purposes to an extent (measured in dollars) of only $57,137,000; while, during her long period of suspension of specie payments, subsequent to 1861, her stock of silver coin entirely disappeared from circulation, and in great part was doubtless added to the supply of other countries.
Under such circumstances, which were perfectly well known to the custodians and dealers in silver everywhere, Germany entered the world's market as a seller of silver. The amount offered at first was absolutely very small and comparatively insignificant, but it nevertheless probably constituted a supply in excess of any current demand. As the states of Europe and the United States could not at once increase their consumption and import of the products of Asia, Africa, and South America, and so increase their sales (exports) of silver, and, as the price which the surplus of any commodity forced for sale will command determines the price of the whole stock of such commodity, the price of the whole stock of silver bullion naturally began to decline. The general policy of Germany respecting the use of silver for coinage, which was subsequently favored and adopted by Sweden, Norway, Denmark, and Holland, with the concurrent suspen-
- The average annual production of silver, according to M. Soetbeer, was $24,334,'750 from 1811-'20; $20,725,000, 1820-'31; $26,840,000, 1831-'40; $35,118,000, 1841-'50.
- Testimony of Mr. Robert Giffen, First Report of the British Gold and Silver Commission, p. 29.