THE REIGN OF BIMETALLISM 21 
of the two metals. For instance, a fall in the stock of 
silver could create the necessity of seeking it in the cur- 
rency of bimetallist countries, and thus send it to a pre- 
mium. But, on this theory, the price of silver, or, in other 
words, the commercial ratio between the two metals, does 
not depend on the ratio between the amounts of gold and 
silver produced, or at least used for minting purposes, but 
on the ratio between the amount of each metal available 
for the payments for which it was required and the aggre- 
gate of these payments. 
As is well known, settlements between gold standard 
and silver standard countries were, in fact, always effected 
during the 19th century by shipments of white metal to 
the Far Eastern countries. Their accounts with Europe 
generally disclosed a credit balance ; but as this balance 
might stand more or less high, the silver on the market 
might be more or less than sufficient to meet it.! On the 
other hand, the amount of available silver depended, not 
only on the amount produced, even after deducting the 
requirements of industry, but also on the amounts which 
the trade balances of producing countries like Mexico 
caused them to throw on the London market.? 
1 In India, silver, like gold, has always been imported partly for industrial 
use, jewellery, etc. As, however, metal required for this purpose would 
have had to be paid for in coin if the trade balance had been unfavourable, 
the import of silver into India must be considered as payment in settlement 
of European debt to that country. 
2 Countries which produce precious metals do not export them merely 
because they have a surplus. It is true for various reasons that the pro- 
duction of precious metals may produce a trade balance which causes them 
to be exported; but the export from monometallist countries necessarily 
depends on the trade balance; for instance, no one will import gold specie 
if it has to be paid for in gold coin. 
The majority of silver-producing countries were bimetallist, and it was 
possible in theory to export gold to them in order to procure silver in the 
event of its not flowing naturally to the London market in payment of their 
debts. But this method of conversion would have been even more expensive 
than conversion into the currencies of neighbouring bimetallist countries, 
such as France, which were non-producing but possessed a large stock of 
both metals. We therefore conclude that the silver on the London market 
arrived there chiefly as a result of the payment of debts by producing 
countries, and that its amount did not depend directly on production, but 
on the quantities required for the trade balance of those countries.