child who, in his opinion, has ceased to be a proper subject for support at public expense. The rules of the State Board of Charities can be changed at any time by that Board; the Charter can only be changed by the Legislature. It is well, therefore, to have these provisions embodied in the Charter as well as in the rules.

On the whole, capable officers would undoubtedly find the provisions of the Charities Chapter of the Charter an aid to efficient administration. Incompetent appointees would, however, be sure to find themselves in inextricable confusion and their helpless charges would suffer almost every conceivable distress.

State Charities Aid Association,
New York.

HOMER FOLKS.

Demand and The Ratio. After having been a student of political economy for a good deal more than thirty years, after having applied such knowledge as was thus gained to practical use in watching and officially reporting on the course of trade for more than a quarter of a century, and after having consistently advocated the importance of the law of supply and demand in the question of the ratio for some ten years, it is a bit hard to be held up to the readers of the REVIEW (August number, page 199), who do not know me well, as so ignorant of first principles that I could contend that value can be determined by demand alone, and it is not always affected by demand and supply together.

Supply after '70, however, tended to relatively cheapen gold and make silver dearer, so could not possibly have been a cause to make gold relatively dearer and silver cheaper, as we contend they have been made by demand, but must instead have tended to lessen the extent of that change. As an overwhelming opposing tendency of demand to make gold dearer would thus, as I contend it has, have completely nullified the tendency of supply, it seems proper for me to say that the changes in relative value since 1870gold dearer, silver cheaper-have been solely due to the changes in relative demand. This is a very different thing from writing, as is alleged against me, that their value has been solely determined by demand.

As regards the contention concerning supply, it is evident that in comparing the relative production of the two unequal things, gold and silver, increments must be compared with stocks, not with the increments of the other metal. Taking the stocks of 1850

as par, the stocks at the later dates named were approximately as follows:

That is to say, gold stock increased one hundred per cent., and silver 21, in the 25 years, 1851-75; 78 and 45 per cent., respectively, in the 20 years, 1876-95. Although the figures are necessarily only approximate, the difference between 78 and 45 is so great that it unquestionably bears out the contention that even the increment. after '70, to say nothing of the increment between 1851 and 1875, tended to make gold cheaper and silver dearer.

I entirely agree with the REVIEW (page 200) that the demand for silver under free coinage comes ultimately from those who sell for silver and that they will not sell for less than the highest price they can obtain; or in other words, for the lowest value of silver they can obtain, which, considered relatively with gold, is of course. the market ratio. It should be remembered, however, that under the general free coinage demand for both silver and gold, the market ratio was for centuries, within narrow limits, the same as the average of the legal ratios, notwithstanding that supply, increasing more for gold than for silver, tended to make less silver buy more gold, so that, as instead it took more silver to buy the gold, the steadying tendency must have come from demand.

To go into detail, by weight from 1492 to 1850, it would have taken on the average, but with many and great fluctuations, 31.5 silver to buy I gold; whereas the market ratio changed gradually from, say only 10.75 to 16 silver to one of gold, while from 1851 to 1875, with a weight ratio of only 6.5 to 1 (see the July "Bimetallist," page 126), the market ratio remained, say 16 to 1. This was under a free coinage demand. Under a limited coinage demand, from 1876 to 1896, with a weight ratio of only 17.7 silver to I of gold, so that less silver should have bought more gold than before 1850that is, supply tended to make the figures of the market ratio smaller the market ratio has changed rapidly in the other direction until now it takes say 35 silver to buy one of gold. As the. change cannot be attributed to supply, it seems only reasonable to contend that a free coinage demand of 16 to 1 has been proved to be vastly stronger for silver and weaker for gold than the limited coinage demand at 16 to 35 of silver to I of gold.

The REVIEW, on the contrary, contends that since '70 demand has not been increased for gold and has been increased for silver. The latter it tries to prove from coinage statistics. While the uncertainty caused by re-coinage of course applies to both metals, it has been regarded as a grave defect in the statistics of both by competent authorities, including at least one Director of the United States Mint; but even if the statistics were correct, it is safe to say that since 1875 no fresh silver has been brought to the mints for limited coinage that cost anything like 16 to 1. In other words, even if the volume of silver coinage has been greater than before '70, the demand measured by its effect on value must have been infinitely less. It also contends (page 199) that there has been "other legislation" that has increased the demand for silver; but what legislation has there been other than to provide fractional coinage as before, excepting the temporary and limited demands "at the market price thereof" under the Bland and Sherman Acts, and the Treasury took care that the "market price" should be (exclusive of freight charges) that of the world-market of London? None of these demands were at a rate nearly as good as 16 to 1!

It is further contended that the "use of bank notes and other substitutes" (page 199) has, in spite of the adoption of the gold standard, prevented an increase in the demand for gold; but between 1870 and 1875 there was no sudden and enormous increase in the use of these substitutes to correspondingly lessen (if credit moneys would on the whole lessen demand) the sudden and enormous increase in the demand for gold caused by largely taking the free coinage demand from silver and giving it to gold. In short, there is apparently no sufficient cause for the suddenly changed relative value of the two metals excepting this suddenly changed relative demand.

As the question is of very serious importance to the world, I feel justified in asking this further space in your valued REVIEW. F. E. WOODRUFF.

Montreal, September 18th, 1897.

We assure Mr. Woodruff that we had no intention of holding him up to our readers as ignorant of first principles, and we are now glad to learn, from the communication printed above, that he is in accord with us in holding that the price of silver is determined by supply and demand. The main point at issue, therefore, seems to be whether the change in price since 1873 has been mainly due to causes affecting demand or causes affecting supply. Mr. Wood

ruff lays emphasis on the former, and in order to show how powerfully the assumed falling off in demand has pressed upon the price, resorts to a new argument, and claims that the changes in supply, considered by themselves, would have tended to cheapen gold relatively to silver, so that if silver has fallen in spite of this tendency, there must have been a very great diminution of the demand. As explained in our August issue, we do not consider the mere amount of a metal actually brought to market to be any real measure of the supply, still less do we consider the statistics purporting to give the stocks of metal on hand at various periods to be anything more than clever guesses. They are certainly not as trustworthy as statistics either of coinage or of production; but assuming, for the sake of the argument, that Mr. Woodruff's figures printed above are correct, how far do they bear out his contention that the "increment after '70 * * * * * tended to make gold cheaper and silver dearer." Mr. Woodruff will pardon us for pointing out that his estimated increase in the gold stock of 78 in 200, is not an increase of 78%, but of 39%. The increase in the silver stock of 45 in 121, is not 45% but 37.1%. Thus the ratio of increase during these 20 years was, according to Mr. Woodruff's own figures, very nearly the same for the two metals. But the important point is, of course, to compare the ratio of increase in the two periods before and since 1875. Putting these together we have the following ratios of increase :

Comparing the ratios of increase, we thus see that in the case of gold the ratio has fallen from 100 to 39, or by 61%, while the ratio of increase of silver has risen from 21 to 37.1, or by 76%. If these figures show anything, therefore, they show that during the second period there was a marked change in the conditions of production, and that that change was in the direction of increasing the supply, and therefore cheapening the price, of silver relatively to gold. EDS. YALE REVIEW.

State Expenditure in Connecticut has had public attention called to it by the preliminary report of a special committee appointed by the State Legislature for the purpose of investigating the subject. The figures this committee have compiled from the

State Comptroller's Reports are an interesting commentary upon the rapid increase of public expenditure discussed by Professor Fiamingo in the last number of the YALE REVIEW.1 We have re-arranged these figures in the following table, which shows the absolute increase in dollars and the relative increase in percentages of the State's expenses for the various enumerated objects during the period of nine years ending with the fiscal year 1896. Owing to the biennial sessions falling on the odd years, the expenses of the State Legislature for 1889 and 1895 are compared. In the case of the expense of maintaining the militia, a comparison of the years 1888-9 with 1895-6 seemed desirable. Similarly, in the case of the cost of the State prisons, the simple average of the two years 1888 and 1889 was compared with the figure for 1895. A few minor items of expenditure are disregarded. The result of the computation is given below:

It is seen from these figures that during the nine years in question the total State expenditure increased about one-half. Practically no item of expenditure fell off in those years, for "contingent expenses" were in neither year considerable, and their falling-off amounts to nothing. The cost of maintaining the prison and reformatory system has increased least, which fact offers good ground for the complaint that the State has neglected to properly provide for it. The cost of maintaining the courts, the largest item among the figures for 1888, and the second largest in 1896, shows

1 YALE REVIEW, vi, 140, Aug. 1897.