Bimetallism

“ Bimetallism spreads the effect of any single fluctuation over the combined gold and silver markets.*78 The steadying power of bimetallism depends on the breadths of the reservoirs, and not on the position of the film f. It remains in full force, no matter what may be the proportions of gold and silver money, and is as great when only one nation is bimetallic as when the whole world adopts the system. ”

“ As soon as the legal ratio varies appreciably from the market value, only one of the metals will in fact be brought to the mint. National bimetallism is confined to a single country, as that in the United States before the Civil War, or in France before 1867. International bimetallism is an agreement among several nations to use two metals on the same terms, the only case in history being that of the Latin Union, which included France, Italy, Switzerland, and other countries. ”

“ If they say bimetallism is good, but that we cannot have it until other nations help us, we reply that, instead of having a gold standard because England has, we will restore bimetallism, and then let England have bimetallism because the United States has it. ”

“ The object of bimetallism is, by joining the two metals together in the coinage, at a fixed ratio, to diminish the extent of the fluctuations to which the value of each would be separately liable, by generating a compensatory action between the two, by which the cheapening metal shall receive a larger use, while the appreciating metal drops partially out of its former demand, thus making the two fall together, if there must be a fall, or rise together, in the opposite case: or, conceivably, making the tendency of one to fall precisely counteract the tendency of the other to rise. ”

“ With many political institutions, likewise, the consequences of failure would be so disastrous that the statesman seeks to introduce a high factor of safety; but in the case of bimetallism no catastrophe whatever is to be anticipated, even in the event of failure. At the worst, after the drain of the dearer metal, in consequence of changes in the conditions of supply, is completed, the bimetallic country is simply in the same position with the countries of the single standard using the cheapened metal. While the process of substitution is going on, it sells the dearer metal at a premium ”

“ Those who advocate a blind and headlong plunge to free coinage in the name of bimetallism, and professing the belief, contrary to all experience, that we could thus establish a double standard and a concurrent circulation of both metals in our coinage, are certainly reckoning from a cloudy standpoint. Our present standard of value is the standard of the civilized world and permits the only bimetallism now possible, or at least that is within the independent reach of any single nation, however powerful that nation may be. ”

“ Among the advocates of bimetallism there are sincere and earnest men, moved by a philanthropic impulse. To judge from their utterances many of them are haunted by a gloomy apprehension that the great mass of mankind is at present in a condition of exceptionally dreadful distress and mister, threatening to grow much worse. This calamitous state of things they ascribe to the paralyzing effect of the diminution of the world's money, which they think has been caused by the so-called demonetization of silver and the establishment of the gold standard. ”

“ Louis pledged themselves to promote international bimetallism, and then asserted, "until such an agreement can be obtained the existing gold standard must be preserved," they in effect, like the man with the horse, put their business in the other fellow's hands; for was not that clause simply another way of saying to the foreigner, if you will not give us bimetallism we will take the gold standard, although we prefer the bimetallic standard? ”

“ France, through her delegates, Magnin, the president of the conference, and Henri Cernuschi, at once and boldly declared for bimetallism. The United States, Italy, Austria, the Netherlands, and British India followed suit. On behalf of their states the British and German delegates declared that no change in the currency systems of their countries could be entertained, but in case of an agreement among the chief nations certain regulations to increase the monetary employment of silver might be devised. Belgium, Switzerland, Greece, and the Scandinavian kingdoms declared against bimetallism. ”

“ Even if only Switzerland had a system of bimetallism in successful operation, it would, until its breakdown, keep together and equalize the currencies of the whole world, wherever either gold or silver was standard. In fact, the world would have all the benefits of bimetallism enjoyed by Switzerland without its evils and dangers. ”

“ To the contention that bimetallism is the necessary condition for a universal coinage system the answer is, that the idea of universal coinage is premature, and that the gradual introduction of the gold standard is desirable as preparing the way for a future universal coinage based on gold monometallism. On the practical question as to the actual introduction of the system, the monometallists deny the possibility of forming a universal bimetallic league which would not be liable to be broken up by war, or impaired by some of the states which composed it issuing inconvertible paper. ”

“ BIMETALLISM. The very general employment of both gold and silver for currency purposes (see Money) has given rise to serious practical difficulties which have in turn led to keen theoretical discussion as to the proper remedies to be employed. Though every arrangement under which two metals form the money of a region may be described as “bimetallism,” the term—as often happens in economics—has received a specialized meaning. ”

“ The business of the world requires the use of both metals; but I do not see any prospect of gain, but much of loss, by giving up the present system, in which a full use is made of gold and a large use of silver, for one in which silver alone will circulate. Such an event would be at once fatal to the further progress of the silver movement. Bimetallism is the desired end, and the true friends of silver will be careful not to overrun the goal and bring in silver monometallism with its necessary attendants—the loss of our gold to Europe and the relief of the pressure there for a larger currency. ”

“ Monometallism, pure and simple, has never gained a foothold in the United States. We are all bimetallists. But there are many kinds of bimetallism. One kind favors the adoption of the cheaper metal for the time being as the standard of value. Silver being now the cheaper metal, they favor its free coinage at the present ratio, with the absolute certainty that silver alone will be coined at our mints as money; that gold will be demonetized, hoarded at a premium, or exported where it is maintained as standard money. ”

“ The battle is now renewed under the plea of bimetallism, and the advocates of the free coinage of silver seek to delude the people by asserting that they are in favor of bimetallism while its opponents are not. We have bimetallism to-day.
220“The free and unlimited coinage of silver at any of the ratios named will destroy bimetallism and will reduce this country to a single standard, that of silver, and that depreciated, and I am suspicious that for this very reason some gentlemen are anxious for its triumph. ”

“ If, just previous to the introduction of bimetallism, the silver level in Sb is below the gold level in Gb the statute introducing bimetallism will be inoperative, i.e. the silver bullion will not flow uphill, as it were, into the money reservoir; but if, as in Figure 6 a or in 7 a, the silver level is higher, then as soon as the mints are open to silver, it will flow into circulation. Being at first cheaper than gold, it will push out the gold money through the left tube (i.e. by melting) into the bullion market. ”

“ You ask ten persons whom you happen to meet whether it would not be a nice thing to have some arrangement by which silver and gold could be made safely to circulate together, thus giving the world about twice as much money as it has now — and nine of these persons, not having given the matter much careful thought, will probably reply that this would be a nice thing indeed. The propagandist of bimetallism then promptly registers them among the firm believers in his panacea, and thus puts down a majority of nine to one. ”

“ But the most characteristic delusion of the bimetallists is their belief that, excepting a small number of persons interested in the gold standard, all mankind is fairly hungering and thirsting for the realization of their scheme. The method by which the propagandist of bimetallism swells his roll of adherents is a very simple one. ”

“ Bimetallism, by an international agreement with the leading commercial nations of the world.
There is no business man, farmer or politician who has ever successfully accomplished any undertaking by adopting the idea most prominent in this plank, which is declaring bimetallism to be right, and then saying that we cannot and will not do anything to procure it if the leading commercial nations of the world do not consent to it. ”

“ He rejected the proposition that any metal represented an absolutely just standard of value, but he argued that bimetallism was better than monometallism because it made a nearer approach to stability, honesty, and justice than a gold standard possibly could. Any legislation lessening the stock of standard money increased the purchasing power of money and lowered the monetary value of all other forms of property. ”

“ For the cause of bimetallism must commend itself to the intellect and the conscience of the country or it cannot win. Those who have spent some time in an earnest and thoughtful investigation of the matter and are convinced that the success of silver coinage is the first step in a series of36 rational, safe, and necessary reforms, are ready to be judged as much by the reasonableness of their doctrine as by the sincerity of their motives. ”

“ Confronted by such practical questions, the majority of nine to one will instantly evaporate. Only some visionary who hopes against hope will remain, or some debtor who has a vague impression that bimetallism will in some way relieve him of his incumbrances. ”

“ Mr. Newlands has for many years been an active champion of bimetallism and has delivered several very strong speeches in support of the doctrine. Upon taking the chair he said:
See Mr. Newland's Speech. For permanent chairman the convention selected William P. St. John, Esq., of New York. Mr. St. John, until recently connected with one of the large banks of New York City, has been a most earnest advocate of free coinage and, in spite of the local opposition which he has encountered, has defended bimetallism with great courage and ability. ”

“ We present them the example of France as an unanswerable proof that one great nation can maintain bimetallism, and that by maintaining it she escaped the worst evils that have affected the monometallic countries, and assured for herself an extraordinary progress and prosperity. ”

“ Pacific States and a few special branches of business in the cities of the East and of the Middle, gold coins are not now in common circulation, the bank drawers crowded with silver dollars feel little of the weight and see little of the shine of the gold coins, and if any of these chance to be paid out to ordinary bank-customers they are pretty certain to return in speedy deposit. The theoretical bimetallism of the United States has been a practical though alternate monometallism with various incidental and concurrent disadvantages and losses. ”

“ Many of the American writers have been betrayed into error by not having examined these two plans and discriminated between them with sufficient care. It is very common to see arguments based upon the alternate standard and inferences drawn as to bimetallism which are entirely fallacious because they cross the gulf between the two theories without recognizing it. Bimetallism is so plainly opposed to fundamental doctrines of political economy that few European economists have felt called upon to discuss it. ”

“ These extracts shall suffice. I now repeat the assertion with which I introduced this topic, viz.: That in 1876 the majority of the Silver Commission put aside the most favorable opportunity, indeed the only opportunity, that the country has ever had for the organization of a universal system of bimetallism. ”

“ We declare our belief that the experiment on the part of the United States alone of free silver coinage and a change of the existing standard of value independently of the action of other great nations, would not only imperil our finances, but would retard or entirely prevent the establishment of international bimetallism, to which the efforts of the Government should be steadily directed. ”

“ The issues raised, however, both by the free traders and the bimetallists, are of a kind so complicated that exceedingly few people would be able even to describe their nature clearly enough to satisfy the most lenient examiner who should set them a paper in economics. The majority of those who declared for bimetallism in America had as little to do with forming their own opinions as the little boys would have in a preparatory school who should shout their approval of some new emendation made by one of their masters of a corrupt passage in Pindar ”