20 MODERN MONETARY SYSTEMS 
of silver with which to settle his accounts in a country 
where silver alone was admitted, had to send gold to France 
there to be converted into French currency and take in 
exchange the silver of its currency which was legal tender 
in the creditor country. 
11 is therefore easy to conceive that the London quotation for 
silver, 1.e., the rate on which all the calculations of the com- 
mercial ratio between the two metals are based—must have 
been directly influenced by the possibility either of silver having 
to be sent, e.g., to France in order to obtain its conversion in 
English legal tender currency or, on the contrary, of gold having 
to be sent there in order to obtain silver. 
Thus silver was bound to rise in value and stand at a 
premium whenever there was a possibility of gold having 
to be exported in order to obtain it. On the other hand, it 
was bound to fall in value and gold was bound to go to a 
premium whenever the latter could only be obtained at the 
expense of sending silver to a neighbouring bimetallist 
country, of exchanging it there into gold coin, and finally 
of bringing back this gold. England was the chief mono- 
metallist gold standard country and was also responsible 
for financing transactions between the greater part of 
Europe and distant countries. Therefore the necessity of 
converting gold into silver for settlements in countries 
which only admitted the latter put silver at a premium 
whenever England had a surplus of debts payable to 
countries with a silver currency. Conversely, the actual or 
potential necessity of converting silver into gold put gold 
at a premium whenever surplus debts due to Great Britain 
by silver standard countries had to be collected and there- 
fore converted into English legal tender currency. 
Hence we are led to the conclusion that variations in the 
commercial ratio between gold and silver during the period 
of bimetallism were closely bound up with the balance of 
trade as between monometallist gold-standard countries, 
chiefly represented by England, and monometallist silver- 
standard countries, chiefly represented by the Far East. 
And this explanation still leaves room for the factor 
of production in the determination of the respective prices