276 



CURRENCY, BIMETALLIC. 



out a fall In either metal. This implies that 

 the Government should permit "free coinage" 

 of both metals. Free coinage is the privilege 

 given to any person to bring bullion to the mint 

 to be coined at the legal rate. For example, 

 if the mint ratio is 16 : 1, every person having 

 silver or gold bullion is permitted to have it 



coined (by paying the usual charges, or seign- 

 iorage) into coins in which there are sixteen 

 times as many grains of pure silver as of pure 

 gold in equivalent denominations. When only 

 the Government is permitted to coin either 

 metal, then free coinage does not exist. Bi- 



metallism, moreover, implies that both gold and 

 silver should be unlimited legal tender in pay- 

 ment of public and private debts. This does 

 not permit any one to buy an article by offer- 

 ing legal-tender money, but only permits a per- 

 son to pay existing debts with that money. 

 Originally money was an artificial invention to 

 obviate the inconvenience of 

 barter, and the courts later 

 were obliged in suits between 

 debtor and creditor to decide 

 what was a legal satisfaction 

 for the debt. A legal-tender 

 law should properly carry out 

 the preferences of the com- 

 munity, and make as a legal 

 means of payment only that 

 which is sanctioned by gen- 

 eral use. 



Bimetallism depends on the 

 possibility of keeping the ra- 

 tio between gold and silver 

 in the bullion market, and 

 in the legal proportion, the 

 same. Its advocates hold 

 that a demand might be cre- 

 ated by law sufficient to keep 

 these ratios the same ; that 

 if many states should open 

 their mints to free coinage, 

 the demand thereby created 

 for a metal that showed a 

 tendency to decline in value 

 would keep it from falling. 

 On the other side, it is point- 

 ed out that in 1850 there was 

 generally free coinage of sil- 

 ver, at least in the United 

 States, Germany, France, and 

 the various states on the Con- 

 tinent ; but that in spite of it 

 a serious fall in silver has 

 taken place. " Opponents of 

 bimetallism assert that nat- 

 ural causes are constantly in 

 operation whose force can 

 not be nullified by the arti- 

 ficial action of law in cre- 

 ating a demand. They show 

 that the market ratio be- 

 tween gold and silver, which 

 depends on general forces, in- 

 dependent of law, has never 

 remained for any length of 

 time the same as the legal 

 ratio ; and they declare that, 

 for this reason, no case is 

 known where gold and silver 

 have been maintained for any 

 length of time in concurrent 

 circulation. The accompanying chart will show 

 what have been the facts as to the fall in the 

 ratio of silver to gold from 1500 to 1880. The 

 ratio is now 1 : 20. 



Whenever two metals are both legal tender, 

 as soon as there is a difference between the 



