chapter  IV
The Supply of Metals
WithBarthold A. Butenschøn
Pages 42

The Banks, being important buyers of gold and silver, will be in a position to influence the market prices, the production and the supply of the metals, by increasing or decreasing their demand for the one metal or the other, or even by effecting "free" sales. As the output of the base metals as a rule rises with a general increase in the price level, the output of silver as a by-product will presumably, while fetching the same price in terms of money, increase at the same time as its price in terms of commodities decreases. The metal with the restricted elasticity of supply secures the Banks against an inflow of metals greater than they desire, because it is this metal which mainly decides the amount of obligatory purchases the Banks have to make. An increased supply of one of the metals, caused by an increased price, will therefore tend to decrease the supply of the other metal.