There is really more chance of a great demand from individuals than from the banks. It is conceivable that the people of some of the countries which have reduced their paper currency to a laughing stock may refuse all paper and insist on having gold coins. But it seems more probable that they will be pleased enough to get better paper than they have recently been accustomed to, and will not ask for hard coin with sufficient insistence to get it. On the whole it seems fairly certain that the demand of Europe and [pg xv] European-colonised lands for gold will be less rather than greater than before the war, and that it will increase very slowly or not at all. Thus on the whole there is reason to fear a fall in the value of gold and a rise of general prices rather than the contrary. One obvious remedy would be to restrict the production of gold by international agreement, thus conserving the world’s resources in mineral for future generations. Another is to set up an international commission to issue an international paper currency so regulated in amount as to preserve an approximately stable value. Excellent suggestions for the professor’s classroom, but not, at present at any rate nor probably for some considerable period of time, practical politics. A much more practical way out of the difficulty is to be found in the introduction of gold currency into the East. If the East will take a large part of the production of gold in the coming years it will tide us over the period which must elapse before the most prolific of the existing sources are worked out. After that we may be able to carry on without change or we may have reached the possibility of some better arrangement. This argument will not appeal to those who can think of nothing but the extra profits which can be acquired during a rise of prices, but I hope it will to those who have some feeling for the great majority of the population, who suffer from these extra and wholly unearned profits being extracted from them. Stability is best in the long run for the community. EDWIN CANNAN. [pg xvii] Contents Author’s Preface .................................................. Foreword by Professor Edwin Cannan ................................ From a Double Standard to a Silver Standard ....................... The Silver Standard and the Dislocation of its Parity ............. The Silver Standard and the Evils of Its Instability .............. Towards a Gold Standard ........................................... From A Gold Standard to a Gold Exchange Standard .................. Stability of the Exchange Standard ................................ A Return to the Gold Standard .....................................