increase in quantity and have their cost of production diminished, there would be no change of any kind in gold prices. Commodities would be more abundant, but the abundance would make itself felt in a rise of money wages, salaries, rents, and profits, and not in lower prices. That it is felt in lower prices now appears to be absolute proof that the relation between gold and commodities has changed, that they have not increased in quantity and had their cost of production diminished pari passu. In addition, however, while not denying that there has been a change on the commodities side of the balance, I would go farther and maintain that what has happened to gold in the way of diminished production and increased demands upon it, arising from other causes than the multiplication of commodities, must have had great effect."-ROBERT GIFFEN.

"But the result of carrying on larger and larger transactions on a narrow basis of coin or bullion is to magnify the rela

tive importance of changes on that article. It may still be true, and I believe it is true, that the bullion in a country under a given set of conditions is the final measure of prices in that country."-ROBERT GIFFEN.

"Population and production are constantly being increased, and the gold used for reserves and small change must be increased in proportion.”—Robert Gif

FEN.

"I should say also that, allowing for almost any progress in the modes of working the precious metals, and for further discoveries like those of Australia and California, the probabilities now are that on the whole this insufficiency of the supply of the precious metals is likely to be permanent."-ROBERT GIFFEN.

"A large and sudden abstraction from the money of a country, if that were conceivable, would be equally potent for mischief. The rich would become enormously richer, and the poor enormously poorer." -ROBERT GIFFEN.

"Prices are the expression of a relation of quality between commodities and gold of course what is said of gold would be true of any other metal used as money."-ROBERT GIFFEN.

"If we are right in holding the view which we unquestionably entertain, that the increase of the gold out-put of the world will soon bring about a rise of prices."-London -London Statist, February 3,

1894.1

The Banks of Venice and of Amsterdam issued certificates of deposit and promissory notes long before the Bank of England was established.

"At the commencement of the reign of Hian-Tsoung, of the Thang dynasty, in the year 807 of the Christian era, and on the occasion of a great famine, the Emperor decreed that all merchants and wealthy persons should deposit the whole of their gold and silver in the public

1 This is a very important and late admission as to the effect upon prices of any reduction in the total supply of money metals whether caused by demonitization or by lessened production.

treasury, and in return there were de-
livered to them notes called 'fey thsian,'
or flying money.' Three years after-
ward this paper money was called in at
Pekin, but its circulation continued to be
authorized in the provinces. In A. D. 906
the paper currency was revised by another
Emperor, merchants being permitted to
deposit their bullion in the exchequer,
and to receive in exchange notes called
'running money.' In 1021 this currency
represented a value of nearly three million
ounces of silver."-Klaproth Asiatic Four-
nal, for 1822.

Marco Polo found paper currency
money in China.

From Report of the Director of the Mint for 1894,

page 161.

Japan.... $1,319,525 $12,307,062 $1,306,070 $12,300,705 $1,576,440 $24,131,363 China.

6,000,000

3,500,000:

4,249,960

1 From Report for 1895.

"The Republican party is in favor of the use of both gold and silver as money, and condemns the policy of the Democratic administration in its efforts to demonetize silver." - Republican National Platform plank of 1888, reported by WILLIAM MCKINLEY, Chairman of the Committee on Resolutions.

"We know we cannot have free coinage now, except in the manner as provided in the bill. . . . I say that to defeat this bill means to defeat all silver legislation and to leave us with two millions a month only, when by passing this bill we would have four and a half millions a month of Treasury notes as good as gold. For one, Mr. Speaker, I will not vote against this bill and thus deprive my people, and my country, and the laborers, and the producers, and the industries of my country of thirty millions annually of additional cir culating medium." [Great applause on the Republican side.]-WILLIAM MCKINLEY, in his speech as Chairman of the Ways and Means Committee and leader of the House of Representatives, June 7, 1890.