Page:Forgotten Man and Other Essays.djvu/210

202 on to greater effects; and if the final effect is not reached it is because the force is not sufficient, not because there is an act of the legislature in the way. If then, silver entered the circulation, gold would leave it and be exported, if the exchanges allowed of any export, or would be hoarded and melted. The silver-producing countries would therefore gravitate towards a silver circulation only, and other countries towards a gold circulation.

Here another assumption of the bimetallists is involved. They assume that the metal to be exported would be the one which falls. Thus, if all nations had a bimetallic circulation, and if the supply of silver in the United States increased, it would be necessary that this silver should be proportionately distributed among all the nations in order to keep up the bimetallic system. No bimetallist has ever faced this question. They assume that Americans would pay their foreign debts with silver in that case, and they rely on the international legal tender law to secure this. This is one of the fallacies of legal tender referred to at the outset. Rates of exchange and prices would at once vary to counteract any such operation, just as they always counteract the injustice of a forced circulation and throw it back on those who try to perpetrate it. It may suffice to put the case this way. If we had both metals circulating together so that a merchant obtained both in substantially equal proportions, and if silver should fall ever so little in our markets, owing to increased production, and if a foreigner were selling his products here, intending to carry home his returns in metal, which metal would he retain to carry away? Obviously that one which at the time and prospectively had the higher value. Rates of exchange and prices would adjust themselves so as to bring about the same result through the mechanism of finance. This is one of the most subtle questions involved in the general issue, but it is vital to the bimetallic theory.