ABSTRACT

The first is the system of the single gold standard, or gold monometallism. In this system, only gold is both the numéraire and money. The utility of gold as merchandise increases incessantly with the development of the population. Note, moreover, that, among all wants that form this utility, some can be satisfied only by the consumption of the commodity itself and not its service alone. The utility of gold as money also increases with the development of business. Does the quantity of gold increase in proportion, however? Far from it! The only gold ore that may quite advantageously be exploited is that which nature took the trouble to grind and can be found in the sand of alluvial terrains. We may certainly hope to find still more goldfields with this gold-bearing sand like those in California and Australia; but it is quite obvious that, as and when the surface of the earth becomes more and more familiar and inhabited, the lodes will be more difficult to find. Hence there will be an ever-growing increase in the rareté of gold, with some accidental, sudden falls. Consequently, there will be an ever-growing decrease in prices, with a few accidental, sudden rises in price: this is the monetary future that gold monometallism holds in stock for us. There will be a permanent industrial crisis. [108] No matter! The monomania for this system is rampant nearly everywhere, just as was the case earlier of monomania for themercantile system. England clings to it; Germanywas heading in that direction but had to stop half-way when it observed that it was selling its silver cheap to buy gold at higher and higher prices. The proceedings of the last monetary conference on the prolongation of the Latin Unionii confirm that

Belgium and Switzerland were imagining the gold standard and strove for it per fas et nefas [whether right or wrong]: Belgium, speculating on the absence of a clause concerning liquidation [of the Union], coined until suspension an excessive quantity of écus, intending to transfer them to the other States, collect gold in exchange and then leave the Union to fall to pieces while trying to claim that it was not obliged to reimburse its token. Switzerland, on the contrary, speculated on the introduction of such a liquidation clause, did not coin any money, letting itself be flooded with écus from other States to leave the Union at the first opportunity while getting these écus reimbursed in gold. All this was aimed at the splendid result of having very expensive money and therefore getting all merchandise at a ridiculously low price! It is true that scholars and statesmen in all these countries profess, with that kind of enthusiasm that is specific to gratuitous assertions, that payment by compensation would be more than sufficient to mitigate the exigencies of the monetary circulation. I leave this consoling hypothesis for what it is worth to agricultural, industrial and commercial entrepreneurs.