Three-quarters of the production of silver to-day is absorbed in the arts and the balance is used for coinage. As, year after year, more countries have been going in for gold the amount needed for coinage has been reducing in normal years; but even countries which have adopted gold are not able to do away with silver altogether. Countries like India, Russia, or the Argentine, that have adopted the gold or gold exchange standard, have had from time to time to buy large quantities of silver for coinage. When they bought for coinage, as was the case in 1907 or 1912, the adjustment of supply to demand was interfered with and prices moved up. In all South American countries, or even in Japan, where the standard is gold, the real currency is only paper and silver. In the Agrentine, Brazil, Chili and Peru the Governments and the people simply live upon inconvertible paper money and the currency difficulty in South America, in spite of the gold standard, is quite as great as, or even worse than, that of China. In Brazil or in the Argentine values fluctuate so heavily and exchange falls or moves up so rapidly that business with those countries is even a worse gamble than business with China. It follows, therefore, that the mere adoption of gold does not bring about in its wake steadiness in prices or in exchange; and if the South American countries had not jumped too rapidly to gold in order to conform to the practices of Europe, they would have certainly fared better.

I believe that the definite adoption of silver by China would bring about steadiness in the value of silver; and that it will also help towards maintaining the value of silver, which it has been the practice of gold standard countries to depreciate as much as possible. The ideal system would, of course, be the one that prevailed before 1870 when there was a certain amount of fixity in the ratio between gold and silver; as China is the only big country that has not gone over to gold, her silver standard would act as an equipoise and tend to bring about fixity in the ratio between the two metals.