[Footnote 2:  The faith (fides) is not always that the issuer of the money (whether it be a bank or the government) will redeem the money on demand at any future time; for fiduciary money may circulate while irredeemable, that is, either carrying no promise of redemption in the standard money or in fact not being redeemed.  Yet undoubtedly actual redemption on demand or a good prospect of future redemption is one of the circumstances stimulating the faith and the readiness of each person in turn to receive fiduciary money.]

[Footnote 3:  In the broad sense as above defined, ch. 3, sec. 10.]

[Footnote 4:  See next section on worn coins.]

[Footnote 5:  Receipts and Expenditures of Mint Service in 1914:]

[Footnote 6:  It makes no difference what may be deemed the cause of their acceptance; whether it be habit, public opinion in business circles, or the act of law making them a legal tender; the essential thing is that they continue to be accepted as money.]

[Footnote 7:  In this and following numerical examples no account is taken of the possibility that the standard metal may depreciate in the world market in terms of all other goods as a result of its diminished use as money in one or more countries.  This properly belongs in a complete theoretical treatment of the subject.]

[Footnote 8:  See “Modern Currency Reforms” (1916), by E.W.  Kemmerer, professor of Economics and Finance in Princeton University, for a detailed treatment of this remarkable series of monetary changes, probably unequaled in instructiveness to the student of monetary theory.]

CHAPTER 6

THE STANDARD OF DEFERRED PAYMENTS

Sec. 1.  Relative positions of gold and silver; historical.  Sec. 2.  Gold production, first half of nineteenth century.  Sec. 3.  Concept of the general price level.  Sec. 4.  Index numbers.  Sec. 5.  Gold production and monetary legislation, 1850 to 1879.  Sec. 6.  Definition of the standard of deferred payments.  Sec. 7.  Increasing importance of the standard.  Sec. 8.  Fluctuating standard and the interest-rate.  Sec. 9.  Notable changes in prices.  Sec. 10.  Nature and object of bimetallism.  Sec. 11.  The movement for national bimetallism in America.  Sec. 12.  Rising prices after 1896.  Sec. 13.  Defectiveness of the gold standard.  Sec. 14.  Various ideal standards suggested.  Sec. 15.  The tabular standard.

Sec. 1. #Relative positions of gold and silver:  historical.# It is not possible within the limits of our space to enter here into the details of the world’s monetary history.  It must suffice for our purpose to sketch briefly the period preceding the nineteenth century.  Both gold and silver were used as moneys in Europe in the Middle Ages, tho silver was much the more common.  The two metals continued to be used side by side in Europe and in the new settlements in America, silver for the smaller