SOME EXPERIENCES UNDER PAPER MONEY 403 
currency was not stable in volume. The amount in circulation 
expanded greatly, especially during the closing years of the up- 
swing stage. Between 1885 and 1891 the volume of paper out- 
standing more than tripled. The following figures summarize 
the story. 
1885 
1886 
L887 
[888 
1889 
1890 
[891 
1892 
1893 
1894 
895 
896 
897 
1898 
[R90 
PaPeEr IN CIRCULATION 
{MiLLiONS OF PESOS) 
74.8 
39.2 
04.1 
129.5 
163.7 
245.1 
261.4 
281.6 
306.7 
298.7 
296.7 
205.1 
202. 
202, 
201 
Price or GoLD 
iN Paper Pesos 
(YEARLY AVERAGE) 
137 
139 
135 
[48 
191 
251 
387 
332 
324 
357 
344 
296 
201 
258 
DOH 
The price of gold, it will be seen, rose in rough correspondence with 
the increase in the quantity of paper. The correspondence, how- 
ever, is no more than rough. During the earlier years, from 1885 
to 1889, the gold price rose less than did the volume of paper. In 
1891, immediately after the crash, it showed a sharp advance ; and 
it remained high until the middle of the decade, while the volume 
of paper remained nearly stationary. With the closing years of 
the century, a new era was ushered in. Proposals for return to a 
gold basis gradually crystallized, and in 1900 this salutary change 
was effected, the paper being stabilized on the basis of the market 
price of gold at the time — 227 of paper to 100 of gold. We have, 
then, a period of rapid inflation, a severe crisis, an ensuing stage of 
approximately stationary money and slowly declining gold pre- 
mium, and finally of stabilization at the close. 
The years which are of especial significance for the present 
purpose are those just before and just after the crisis. They show 
in what way the impact of demand and supply operated on the 
course of exchange and on the exports and imports of goods.