THE UNITED STATES, I. UNTIL 1900 287 
about must have been quite different from that assumed in that 
theory. 
We have here, in fact, one phase of a set of problems quite differ- 
ent from those of specie prices and trade under specie ; the problems, 
namely, of paper money and of international trade between coun- 
tries not having the same monetary standards. On these other 
problems something will be said in the concluding chapters of this 
volume.2 Here I would point out that the episode of 1873 must 
lead us to pause and reflect. We find that the important sub- 
stantive results ensue, even tho there be not that succession of 
events, that course of causation, that working machinery, which 
are integral parts of the general reasoning. 
With the resumption of specie payments in 1879 there was a 
restoration of the monetary relations which the Ricardian theory 
of gold movements contemplates. The currency rested on a gold 
basis once more. Not only this: the system was again a sensitive 
one. The deposits, whose dominance in the circulating medium 
became more and more complete, constituted a structure which was 
easily swayed as alterations took place in the comparatively slender 
foundation of specie. 
None the less, conflicting and unusual factors entered, and the 
difficulties of tracing the specific influence of gold movements 
remain almost insuperable. A supply of gold was indeed 
accumulated ; one which, tho not large in relation to the mass of 
credit which it supported, was in itself substantial. In the first 
years after the resumption of specie payments, there was a heavy 
influx of specie from abroad, caused by a combination of circum- 
stances such as has frequently exercised a marked effect on the 
country’s economic fortunes. Large crops at home, with deficient 
crops in Europe, led to heavy exports and to an inpour of gold, 
the immediate result being that the resumption of specie payments 
1 It is curious that Cairnes, who pointed out (Leading Principles, Part 3, Ch. 3, 
Section 7) the effects which the great borrowings had on the excess of imports over 
exports in 1867-73, and predicted the crisis and the overturn, never referred to the 
existence of the paper money régime, and apparently never perceived that the 
problem arose under conditions quite different from those considered in the rest 
of his discussion of international trade. 
! See Part III, and especially Chapter 30.