18 MODERN MONETARY SYSTEMS 
metals were moderate, it was a temptation to explain them 
by reference to the state of production in each case. 
In accordance with this view, the years 1814-1819 and 
1851-1866 ought to show greater progress in the pro- 
duction of gold than of silver, whereas from 1820 to 18 50, 
and from 1857 to the end of our period, there ought to be 
greater progress in the production of silver than of gold. 
Now it 1s in fact! true that during the last section of our 
period 1867-73 silver takes a higher place in the respec- 
tive production of the two metals than it did in the preced- 
ing section. It is also true that in the section 1851-1866, 
taken as a whole, the amount by which silver was at a 
premium coincides with a marked decrease in the propor- 
tion of silver to the total production of the two precious 
metals.2 
On the other hand, a considerable decrease? in the pro- 
portion of silver to the total production of both metals had 
already occurred between 1820 and 18 50, and during this, 
the longest of our periods, gold and not silver stood at a 
premium. 
The theory that fluctuations in the commercial rate 
vary directly as the production of both metals would 
therefore tend to be invalidated for a period almost equal 
to that for which it is confirmed. Economic phenomena 
are no doubt so complicated that those who believe in 
general laws are neither surprised nor shaken by the 
appearance of anomalies. Nevertheless, the problem may 
in this case have been wrongly stated; for the argument 
that the relative value of the two metals varies directly as 
the quantities produced could only be fairly deduced from 
the law of supply and demand if these quantities were 
definitely intended for exchange with each other; and 
this is not the case. 
The factors on which the relative value of the two 
1 For these data, see Treasury Report by the Director of the Mint at 
Washington (1904, p. 145). 
2 The amount produced was worth only one-quarter of the value of both 
precious metals as against more than one-half during the preceding period. 
8 The proportion fell to 59%, as against 759, in the preceding period.