All this, however, has little bearing on the beetsugar situation as it now stands. If protection to young industries was needed, it has been given. The initial stages of trial and unfamiliarity are certainly passed. The industry in the far West has quite passed the infant stage. Its difficulties in the farming region proper seem to be due to the competition of the other kinds of agriculture, which under the typical American conditions are more profitable. If this kind of agriculture needs protection, and if the familiar grain-growing, cattle-fattening and dairying, of the corn-wheat belt do not, the explanation is still to be found in the principle of comparative cost. F. W. TAUSSIG. HARVARD UNIVERSITY. THE RECENT RISE IN THE SILVER AND SOME OF ITS MONETARY SUMMARY - -- The mone I. Extent of Rise in Price of Silver, 216. - High price in 1905-07, 218. Peculiarities of the silver market, 219. Causes of rise in price; the supply, 220.—The demand, for industrial uses, outside India, 222. — The industrial consumption in India, 224. tary demand, for fiduciary coins, 226.- Germany, 227; France, 228; England, 229; United States, 229. The heavy Indian monetary demand, 230. The reserves built up by the Indian Government, 232. Silver standard countries, 234. - How far the rise in silver was a part of the depreciation of gold, 237. - Prices and index numbers, 238. II. Influences of the rise in price of silver on monetary systems, 239. The Philippines; difficulties from higher price of silver, 240. The export point of bullion, 241. Export of coins, 242. Prohibition of export in 1905, 244. - Other measures, 246. Recoinage in 1906-07, with lowered silver content, 248. Success of the measure, 252. — The Straits Settlements; gold standard in 1906, 254. Straits silver dollar in danger of exportation; measures to prevent, 256. Recoinage, 258. Gold-exchange standard adopted, 260. Japan; gold standard since 1897, 261.- Prompt recoinage of silver, 262. Mexico's fortunate experience, 263. — Gold standard plan of 1903, 264. - Adopted in 1905, 267. At first, export of old silver dollars by Government Commission, 269. — Rapid recoinage into new dollars, 271. - Gold certificates, 272. - Success of the operation, 273. The great and unexpected rise in the price of silver during the years 1905 to 1907, followed by an equally great and unexpected decline, was a phenomenon of unusual importance. It necessitated alterations in the monetary systems of a number of countries, led to the recoinage of hundreds of millions of dollars, yielded to the governments concerned seigniorage profits of tens of millions of dollars, and taught lessons which must prove of value to China and the South American countries which are at present contemplating important monetary reforms. Like the proverbial dog which licked the hand of the master who was about to beat it, silver rendered to several countries a most beneficent service at the very time they were discarding it as the standard money metal. It is the object of this paper to give a brief account of the silver market during the period in question, to consider the forces leading to the rise in the price of the white metal, and to trace some of the results as shown in the currency systems of the Philippine Islands, the Straits Settlements, Japan, and Mexico. I Extent of Rise in Price of Silver From 1872 until 1903 the gold price of silver had tended strongly downward - a fact made familiar to all by the bimetallic controversy. The average annual price of British standard silver (i.e., silver .925 fine) in London fell from 60% d. per ounce (giving a ratio with gold of 15.63 to 1) in 1872 to 24 d. (giving a ratio of 38.10 to 1) in 1903; a decline having taken place in twenty-two of the thirtyone years. In only one month, October, 1900, the time of the adjustment of the Boxer troubles in China, had silver been above 30d. since November, 1896,1 and the opinion had become quite general that silver had "come down to stay." There was much talk of the probabilities of a further decline; very little of 1 The figures for the price of silver are those for British standard silver in London as given in the annual circulars of Pixley and Abell, bullion brokers, London. For a brief general history of silver the reader is referred to Paul George, Die Bewegung des Silberpreises seit 1873. Jena: Gustav Fischer, 1908. the probabilities of a rise. The Mexican Commission on International Exchange in one of a series of valuable papers' treating the subject of silver submitted in June, 1903, to the British Commission said, after The papers are given in English in the 1903 Report of the Commission on International Exchange on Stability of International Exchange, pp. 173–196. outlining the more important events in the recent history of silver: " . . . All of these events have made such a deep moral impression that at present silver is a subject of very little or no importance whatever to the business community of the two continents, and it is almost a disagreeable topic of conversation." 1 The extent of the advance in silver from 1903 to 1907 and of the subsequent decline will be seen from the chart on preceding page. The average annual price which was 241 d. in 1902 rose to 24 d. in 1903, 26 d. in 1904, 271 d. in 1905, and 303d. in 1906. Silver reached 301d. an ounce in November, 1905, for the first time since October, 1896, while the high rate of November, 1906, i. e., 33 d., is the highest rate quoted from October, 1893, to the present time (October 18, 1911). For the period 1903 to 1906 inclusive the range was 52.7 per cent, that is from 211td. (January, 1903) to 33td. (November, 1906). The low point in the price of silver having been reached about the end of 1902, the upward movement began the fore part of 1903, continuing, altho with frequent interruptions, until November, 1906. A high level was then maintained until the great slump in the autumn and early winter of 1907 — a fall from an average price of 31.68d. for August, 1907, to 26.24d. for December, 1907, and to 22.49d. for December, 1908. The range from August, 1907, to December, 1908, represented a decline of 31.7 per cent. It was not, however, until the summer of -- 1 Ibid., p. 190. Figures for the high and low prices and for the annual average prices were taken from the Pixley and Abell circulars; those for monthly average prices were taken from the United States Director of the Mint's Reports. For 1909, the high, low, and average prices respectively were 24 d. (May), 23d. (March and October), and 231d.; and for 1910 they were 26 d. (October), 23d. (March), and 24 d. |