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The silver dollar, 371.25 grains, was 15 times as heavy as 

 the gold dollar, 24.75 grains. This was a bimetallic currency 

 at the ratio of 15 to 1. At that time the world ratio of silver 

 to gold was about 15 to 1 and our gold and silver dollars both 

 circulated. 



In a few years, however, silver became abundant and it 

 took 15.5 ounces of silver to buy one ounce of gold. This was 

 the market rate. The legal rate was still 15 to 1. The result 

 was about as follows: One could go to the treasury with 15 

 ounces of silver and get an ounce of gold. One could take 

 the ounce of gold to the bullion market and get 15.5 ounces 

 of silver. On the next trip to the treasury, the 15.5 ounces of 

 silver would exchange for 1.033 ounces of gold. After four 

 trips between the treasury and the bullion market, one could 

 make ten per cent as follows: 



Trip To treasury To bullion broker 



First 15 ounces of silver ex- 1 ounce of gold exchanges 



change for 1 ounce of for 15.5 ounces of silver 

 gold 



Second 15.5 ounces of silver ex- 1.033 ounces of gold ex- 

 change for 1.033 ounces change for 16.0 ounces of 

 of gold silver 



Third 16.0 ounces of silver ex- 1.067 ounces of gold ex- 



change for 1.067 ounces change for 16.5 ounces of 

 of gold silver 



Fourth 16.5 ounces of silver ex- 

 change for 1.100 ounces 

 of gold 



It would make no difference whether one exchanged ounces 

 of silver for ounces of gold or exchanged silver dollars for 

 gold dollars. It was a profitable operation to draw gold out 

 of the banks and treasury. It was not long before gold coins 



