The history of the production of the precious metals in modern times begins from the year 1493, a date which marks the discovery of the American continent. Reviewing the results of the production from 1493 to 1893, a period in all of 400 years, we find that during the first hundred years the [pg 77] production of gold and silver rises at a uniform rate of progression. Assuming the annual average production of each during the first century (1493–1600) in the modern history of their production to be 100, it will be seen that in the next century (1601–1700) the index number for the production of gold rises to 130 and that of silver to 176. This rate of progression is also kept up in the succeeding century (1700–1800), during which the figure for both gold and silver approximates to 270, and continues without much disturbance up to 1840, when the respective index numbers stood at 228 for gold and 293 for silver. From this point onwards the relative production of the two metals underwent a complete revolution. During the next thirty years (1841–70) the production of gold reached unprecedented heights, while that of silver lagged behind, relatively speaking. The index number for silver production advanced only to 450, but that for gold went up to 2,124. This revolution was followed by a counter-revolution, as a result of which the position as it stood at the end of 1870 was well-nigh reversed. The production of gold received a sudden check, and though it had increased enormously between 1840–70 it remained stationary between 1870–93. On the other hand, the production of silver, which was steady between 1841–70, increased threefold between 1870–93, so that the index number for its average annual production during the latter period stood at 1,260. In the controversy which arose over the reasons which brought about this dislocation and decline in the value of silver in terms of gold, there were parties to whom one of these two factors was a sufficient cause. One side argued that had suspension or demonetization of silver not taken place its value could never have fallen. This position was vehemently challenged by the other side, which believed in the over-supply of silver as the primary cause of its depreciation. Now was the argument from relative over-supply sufficient to account for the fall in the gold value of silver? On the face of it the explanation has the plausibility of a simple proposition. It is one of the elementary theorems of political economy that the value of a thing varies inversely [pg 78] with its supply, and if the supply of silver had largely increased, what could be more natural than that its value in terms of gold should fall? The following were the relevant facts which formed the basis of the argument:— TABLE X _Gold and Silver_¹⁵³ _Relative Production and Relative Value_