BIMETALLISM

117
prices.  For,  if  the  result  of  a  free  flow  of  money  is  to
bring  about  an  increase  of  supply  and  a  merely  equivalent
increase  of  quantity  demanded  (effective  demand)  prices
must  remain  as  before.  If  it  be  alleged  that  in  commerce
buyers  only  buy  to  sell,  and  that  producers  who  obtained
use  of  a  freer  and  cheaper  supply  of  money  would  only
use  it  to  increase  their  rate  of  production  and  swell  the
total  of  supply,  the  answer  is  that  such  use  of  the  enhanced
supply  of  money  could  have  no  possible  influence  in  raising
prices.  Only  that  portion  of  the  increased  supply  of  money
used  by  consumers  of  commodities  in  enhanced  consumption ­
  would  operate  by  changing  the  quantitative  relation
between  the  aggregate  Supply  and  the  aggregate  Demand,
and  thus  raise  prices.  Therefore,  in  order  to  make  good
their  claim  that  a  bimetallic  coinage  would  raise  prices,
the  advocates  of  this  system  must  show  that  it  would
induce  consumers  to  spend  an  increased  proportion  of
their  incomes  in  a  demand  for  commodities.  This  I  need
hardly  say  they  make  no  pretence  to  do.  If  they  did
show  this  result,  it  would  be  tantamount  to  admitting  the
previous  existence  of  an  excessive  quantity  of  producingpower,
  i.e.,  a  condition  of  under-consumption.  In  other
words,  the  view  which  finds  in  the  state  of  currency  the
cause  and  the  cure  of  depressed  trade  and  prices  can
establish  its  position  in  no  other  wise  than  by  admitting
the  accuracy  of  the  analysis  which  refers  the  depression
to  under-consumption.  If  bimetallists  actually  claimed
that  their  system  of  currency  would  maintain  the  full  and
economic  adjustment  between  producing-power  and  consumption ­
  by  stimulating  the  latter,  it  might  be  necessary
to  consider  more  closely  the  nature  of  their  cure.  But
since  they  make  no  such  claim  no  such  necessity  emerges.