Page:Coin's Financial School.djvu/43

 Rh Hence, Mr. Gage is a good banker—a specialist—but a poor statesman. Lincoln was a good statesman, but would have made a poor banker.

The audience was mostly in sympathy with Mr. Gage, except those who had been won over to the day before.

"I would like to ask a question," said Mr. Gage.

"Proceed," said

"How can you have, at any fixed ratio, the same commercial value on two separate metals, that are from time to time varying in the quantity of each produced?"

"This is the 'stock fallacy' of the gold monometallists," said "All commercial values are regulated by supply and demand. The commercial value of any commodity depends on supply and demand. If the demand for a particular commodity is continuously rising and the supply does not increase, the commercial value will continuously rise.

"When the mints of the world are thrown open and the governments say, 'We will take all the silver and gold that comes,' an unlimited demand is established. The supply is limited. Now with an unlimited demand and a limited supply, there is nothing to stop the commercial value of the two metals going up in the market, except the governments saying—'Hold on—these metals are for money—we fix the value at which they circulate. This unlimited demand is for silver at $1 for 371¼ grains, and $1 for 23 2-10 grains of gold—we stamp these into dollars respectively in those quantities.'

"While an unlimited demand has been established, the point at which the supply can take advantage of that demand is fixed. And the demand pulls them both plumb up to that point. At 16 to 1 and 371¼ grains of