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SHOWING THE APPROXIMATE AMOUNTS OF Gold and of GOLD AND SILV THE TOTAL VOLUME OF PAPER MONEY IN EUROPE
For full explanatio
LVER USED AS MONEY, THE ANNUAL INTEREST ON FUNDED DEBTS, AND PE AND NORTH AMERICA EACH YEAR SINCE 1845.
M No. 2.
sion see page 127.
CHANGES IN THE VALUES OF THE PRECIOUS
UST at present the commercial and financial world is perplexed with the causes of what is called the "low price of silver." Many are disposed to refer this almost wholly to the increase in the production of the metal; others more largely to the demonetization of silver in Germany; and still others claim that the decline in the value of silver, while it has been greatly increased by the above mentioned causes, was primarily an erroneous expression for a rise in the value of gold, this rise being shown not only in the decline in the gold price of silver, but of all commodities.
One of the most indisputable facts in connection with the vast increase in the production of gold from 1849 to 1854-5 was that it caused a general "rise of prices." I have made comparisons of the prices of a number of staple commodities in New York city in 1845 with those in 1854, and find that the average rise in that period was over 50 per cent (see tables of prices at the end of the book). This rise has been by some attributed to changes in the tariff, an assumption which I think is to a large extent erroneous. Aside from this there was no other feature of that period to which the rise could be attributed than the increase in the stock of gold in the world used as money. Professor Jevons compared the average of prices in 1849 with the average in 1865,
to 1873. Fourth, an increase in Italy of $300,000,000 from 1861 to 1876. Fifth, an increase of probably $200,000,000 in Russia in the last ten years. Besides these greatest additions, there was an increase of about $120,000,000 in Germany, and about $45,000,000 in Great Britain, in the whole period, and an increase in Switzerland of $11,000,000 to $12,000,000 from 1870 to 1873; $12,000,000 in Belgium from 1872 to 1873, etc.
Annual Interest. This line has been drawn with reference to such events as the civil war in the United States and the Franco-Prussian war, concurrent with the increase of railroad and municipal debts.
The courses of the lines in the diagram show the following changes in the percentage of money to debts, or promises to pay money, comparing 1845 with 1875, viz.:
Percentage of gold and silver to paper money.
Percentage of aggregate of gold and silver to annual
Percentage of gold to annual interest
Percentage of gold and silver to all obligations to pay
redeem paper money.
200 140 75 68