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.
