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 £13,525,446,000. It seems highly probable that the next stage in improvement will be the extension of currency based on credit, after the Anglo-American pattern, to the other commercial countries of the world. But this movement can only be slow, it will not affect Eastern countries. For a long time they will remain in the metallic currency stage, with the moderate use of a guaranteed note circulation.

There are several plans which have been advocated as superior to any of the systems actually in use. Most of these schemes are undeserving of notice; a few, however, claim attention on the ground of theoretical or practical importance. The most conspicuous is that known as “international bimetallism,” which was designed to obviate the evils said to result from the demonetization of silver and the overflow of the established ratio between the precious metals. Its central idea was the creation of a monetary league, composed, if not of all, at least of the leading states (the larger the number the better), the members being bound to coin any amount of gold and silver at an agreed ratio. By such an agreement an adequate field for the use of both metals would be provided, and fluctuations in the relative value of silver and gold would be completely prevented. The expulsion of the cheaper metal would be impossible, owing to the absence of any place to which it could be driven. Variations in the production of the precious metals would act on both metals, not on one. Another plan for meeting the same set of difficulties is the composition of the monetary standard by taking assigned amounts of both metals in combination as the unit—say 1 oz. of gold with 10 oz. of silver. The title “symmetallism” has been given to this ingenious mode of trying to obtain a more stable standard than that afforded by the employment of a single metal. Amongst the many devices that the use of paper money has suggested the most noticeable are those that aim at the replacement of metallic money by some other basis. The socialist conception of a “labour note” may be paralleled by the idea of “commodity notes,” resting on a development of the clearing system. Viewed from the practical standpoint it may be said that the double standard in any form is condemned by the course of events; it has been defeated by the gold standard. In respect to the other proposed methods there is the almost insurmountable difficulty of making them in any way sufficiently popular to overcome the resistance that they must necessarily encounter. This criticism holds good, quite apart from the objections of principle to which they are all open, in very different degree it is true. The influence of custom in relation to money can never be set aside. For this reason it is certain that very gradual change is the only possible kind of monetary reform that can hope for success. It is essential to preserve as far as possible the old surroundings and avoid the intrusion of novel devices. The adoption of what Sir R. Giffen has styled “fancy monetary standards” is reserved for a distant future.

In the course of the development of monetary systems important theoretical problems have presented themselves. For the middle ages the great question was the best mode of securing an honest metallic currency. At the beginning of the modern national states the problem of keeping a parity between silver and gold was the most serious issue which each state attempted to solve independently. With the rise of credit there followed debate on the proper management of paper money in its various forms, which has not yet been completely closed. But the tendency in the last fifty years has been to concentrate attention on the meaning and due constitution of the monetary standard. In particular, the difficulties that result from an alteration in general prices, and the inconvenience to foreign trade from different currency standards have been exhaustively considered. It is therefore desirable to present in a concise form what

appears to be the outcome of these discussions. The first established conclusion is the impossibility of obtaining an absolute and invariable standard. The best that can be hoped is a near approximation by balancing the elements of fluctuation. The construction of the most suitable monetary system is a work of practical adjustment. The influence of the actual conditions, which has been already emphasized, helps to indicate the limits of profitable inquiry. In respect to the metallic basis the choice is between the single standard—gold or silver, and some combination of these. The single standard of silver can be set aside, though it has had influential supporters. On the other hand the only combinations that need be considered are those indicated above by the titles “bimetallism” and “symmetallism.”

The theory of the gold standard rests on the principle that one metal is a better criterion for measuring values than two, since the fluctuations that occur by the substitution of one metal for the other are certain to be disturbing. There is the further difficulty that no ratio can be permanently fixed between two metals, as their values must vary with the alterations in production. The inherent simplicity, and, so to speak, “naturalness,” of the single standard is best realized by embodying it in gold, which is universally desired, of high cost and yet found in sufficient amount to discharge the money work of the standard. The verdict of history is appealed to as confirming the theoretic presumption, for gold has been gaining ground from century to century. The struggles to reverse this process have only made it more pronounced (see ). Most of the objections to the gold standard rest on ideas which are the support of other economic fallacies. The attempts to supersede it involve the rejection of the rule of economic law. The foundation of the doctrine of “bimetallism” is the theory that the value of money is determined, not simply by cost of production, nor by unregulated supply and demand, but by the action of regulated demand, in conjunction with the actual conditions of production. States are the demanders of metal for monetary use, and by adjusting that demand they can powerfully influence the course of production, especially as the cost at which either 