42 



W. G. Lang-cvorthy Taylor 



Bimetallism 

 is founded 

 upon the 

 principle of 

 composite 

 supply, 



which mani- 

 fests itself or- 

 ganically and 

 without assist- 

 ance from 

 legislative en- 

 actment. 



States. These episodes show a preference on the part of persons 

 having large transactions for dealing in the more valuable money. 



§ 9. Bimetallism, therefore, is an attempt to force men to use, 

 in transactions of all sizes, the overvalued metal, whereas they 

 may prefer to use it only in the smaller. It is founded, in theory, 

 upon a simple principle of political economy, which is called by 

 Professor Marshall, " composite supply."^'' Whenever a certain 

 utility prominently emerges and is practiced in the way of con- 

 sumption of goods, or of their application to production, various 

 tools or materials will be offered, and that one, of course, will 

 be adopted which is the cheapest. It happens frequently, that 

 when that utility has been satisfied by one material up to a certain 

 point, then the price of the latter will rise so that another, in view 

 of the price at which it is sold, will be the more economical, and 

 so on. There can thus be a list of materials that will simulta- 

 neously satisfy a given want. 



This is also the principle of bimetallism : one material is 

 brought in to satisfy the utility or service of exchange, when 

 another becomes too expensive. This, be it noted, is an organic 

 law which does not arise from legislation. If a man feed oats 

 to his horse and the price of that grain rises, he will then feed 

 it corn, perhaps; and if corn thereupon also rises, he will feed 

 barley, and so on. He substitutes one article of fodder after 

 another so as to produce the most economical result, taking into 

 account the different technical efficiencies of oats, corn, and 

 barley, for the nourishment of horses. If silver went down in the 

 absence of any bimetallic legislation whatsoever, it would never- 

 theless be found that there were classes in the community which 

 chose to use more of it, and that quite considerable groups could 

 use it or gold indifferently, preferring, perhaps, gold, but able 

 to get along with the white metal very well; just as the horse 

 might thrive better on oats, but could still do good work on a 

 corn diet. 



Moreover, if silver declined in value, certain nations ac- 

 customed to its use would absorb more. This consumption would 



I 



^Principles of Economics, fifth ed., bk. V, ch. VI, §5. 



156 



