29th Jan.
Tue Law or Theorem which is generally jkuown as Gresham's Law, because its truth was clearly perceived by Sir Thomas Gresham more than three centuries ago, is that bad money drives out
drive out bad money. We have only to good money, but that good money cannot see how we treat a bundle of local bank notes, or how the Chinamen treat {a string of cash to realise the universal truth of this. The local banks reissue their notes as long as they will hold together, however dirty and however much mended they may be, and whatever obscene or insulting remarks may be written on their backs; and we, when we get a bundle of them, are careful to pay out first the oldest and dirtiest, and those that have been stuck together with a bit of dirty paper, keeping the cleaner and more reputable notes as long as we can, and so the bad notes drive the good ones out of circulation. The Chinaman in the same way with a lot of cash picks out and on first the worst specimens, the small ones and those adulterated with iron, hoarding the largest and new ones; and when new good ones are linted, they are boordel aa long ea. powibla, and have no chance to drive out the bad ones. Gresham's remarks, as Jevons points out in his invaluable handbook on Money and the Mechanism of Exchange, only referred to monies of one kind of metal, but the same principle applies to the relations of all kinds of money, in the same circulation. Gold compared with silver, or silver with copper, or paper compared with gold, are subject to the same law, that. the relatively cheaper medium of exchange will be retained in circulation, and the relatively dearer will disappear. This is one great objection to the "double standard" which the bimetallists are 80 anxious to introduce.
The New York Nation of 18th December, in discussing the question, gives "some figures which show how rapidly Gresham's Lavw came into operation in the United States as soon as the Silver Bill was The most remarkable thing about it is that it came into operation on the mere apprehension that the United States were about to introduce the double standard, which the Silver Bill did not do, because "no man could get one of the new silver dollars without paying' 100 cents gold value for it," and " by paying 100 cents gold value he could, and can today, get a gold dollar." The mere apprehension, however, led to the disappearance of a quantity of gold from circulation, as is evident from the following official figures Tuly 1890. Dec. 1890.
easnry 5184, 092,000 $165,500,000 Specie in New! g0,367,000 67,898,000
$264,459,000 $233,398,000
Decrease in visible supply of gold $31,061,000
Text read from the printed page and cleaned; old type leaves the occasional error.