How fitly that describes the condition of the United States to-day.  This was written some years ago, and so rapid has been the subsequent decline in prices that it almost equals the decline he had estimated for the fifteen or twenty years preceding the date of his work.  And the end is not yet.

In his comments upon Mr. Goschen’s address, delivered in 1883, wherein he pointed out that in the decade from 1873 to 1883 the annual supply of gold had decreased in a marked degree, and concurrent with this there was a marked increase in the demands upon the world’s stock of gold, which was intensified by the substitution of gold for silver as money in Germany and other countries, Mr. Smith makes the following observations: 

“The gold production, which for some years exceeded L30,000,000 annually, has fallen to 19,000,000 a year; and the best continental authorities, such as Soetbeer and Laveleye, reckon that more than half that amount is consumed in the arts.

    “It may, therefore, be reckoned that since 1873 only some
    10,000,000 on the average has been available for currency
    purposes.

    “But Germany during that period has introduced a gold currency of
    80,000,000, the United States has used up 100,000,000, and Italy
    has drawn some 20,000,000 for a similar purpose.

    “So that 200,000,000 have been drawn for these special purposes,
    whereas the whole supply of new gold for coinage has not exceeded
    in that time 130,000,000.

    “The balance must have been drawn out of existing stocks.  Besides,
    a steady drain of some 4,000,000 a year has gone to India, further
    depleting stock in Europe.

“While trade and population constantly grow and demand more metallic currency, there is a steadily diminishing quantity to meet it.  If you put the present product of gold at L19,000,000 a year, and the requirements of the arts at 8,000,000 or 10,000,000 a year, while the India demand is 4,000,000, there is only left 5,000,000 to 7,000,000 a year for Europe, America, and the British Colonies.

“It will seem to subsequent ages the height of folly that just at this period, when gold was running short, the chief states of the world decided to close their mints against silver, and cut off, so to speak, one-half the money supply of the world from performing its proper functions.

“Had the world continued to use both metals as freely as before, the painful crisis we have passed through would have been much mitigated.  But by a suicidal policy silver was cut off at the very time it was most needed, and a double burden thrown upon gold just when it was able to bear only half of its former burden.

    “As Bismarck has well said, two men were struggling to lie under a
    blanket only big enough for one.”