to 652,000,000; then increased steadily and rapidly to 1887, and still more rapidly in 1888 and 1889 to $159,000,000.
The
ratio of total value of silver product (at United States coining value)
to that of the total of both gold and silver remained nearly constant,
about 24 per cent, until 1800, increasing irregularly to 30 per cent in
1867, then steadily to 57 per cent in 1889, becoming equal to gold, or
50 per cent, in 1881. Thus both the production of silver and the ratio
of silver production to total of silver and gold had a period of slow
increase from 1860 to 1867, and then a rapid increase, beginning in
1867 and lasting to the present time. The price of silver remained
nearly constant (at over 60 pence per ounce standard in London, equal
to over $1.32 per ounce fine) until 1872, being unaffected either by
the decrease in the gold production or by the increase in silver
production. In 1872 the rapid decrease in gold production, which had
taken place for four years previously was arrested, and for the next
four years the decrease was very slight, and in the ten years following
a considerable increase took place. At this time (1872) no change took
place in the rate of increase of silver production, this rate being
nearly the same from 1867 to 1877; yet in 1873 began the decrease in
price of silver, which has continued with but slight fluctuations to
the present time. During the twenty-three years (1850 to 1872) the
whole extent of the variation in price was only between $1.36 and $1.32
per ounce, or 3.8 cents, while in the seventeen years, 1872 to 1889,
inclusive, it declined from $1,322 to $0,935, or 38.7 cents, or over 26
per cent.
The
table does not reveal the cause of the decline in the price of silver,
for if it be assumed that the ratio of the production of silver to that
of gold controls the price of the former, then the decrease in the
price should have begun in 1860, when the ratio of silver product
began to increase, and the decrease would have been more pronounced in
1867, when the silver product increased more rapidly and the gold
production decreased. There is nothing in the figures or in the
diagram to explain why the decline began in 1873 instead of in 1860 or
1867. A study of Soetbeer's figures for 380 years, from 1193 to 1873,
will also show no relation between the relative production of gold and
silver, and from 1800 to 1870, although the value of the product of the
two metals varied from 3.227 silver to 1 of gold down to 0.44 silver to
1 of gold, the relative price varied only between 15.41 and 15.83 to 1.
From the year 1873 to the present time, however, there appears to be a
very close agreement between the product ratio and the price ratio, as
shown by the coincidence between the columns in the table representing
" gold production, per cent of total gold and silver," and price of
silver in pence in London. Thus, in 1873 the total value of the gold
product, expressed as a percentage of the total of the gold and silver,
was 59.9 per cent, and in 1889 it was 43 per cent; the price of silver
in London in 1873 was 59-1/4 pence, and in 1889, 42-11/16 pence.
