Financial Legislation and its Limitations. 43 



have the natural tendency to stop its fall in the market by the 

 application of spontaneous bimetallism; and hence, after it had 

 spttisfied a certain demand, no further would arise, because it 

 would then have ceased to be the shorter road to the utility for 

 which it had been wanted. It has been pointed out by Sir Robert 

 Giffen,^' that this natural bimetallism has always been in opera- 

 tion. Different nations, according to their grade of civilization. Bimetallic 

 or other circumstances and opportunities, prefer different lensffies°the"' 

 standards. Thus a market for both metals is offered, which is P^^ess of 



substituting 



more active for the one momentarily cheaper. the cheaper 



/-ni - , . ,,. . , ., , . .- means of pay- 



ihe passage of a bimetallic enactment is plausibly scientific; meat. 

 it is calculated to intensify the natural bimetallic law, by creating 

 a wider margin of common cases where silver or gold may in- 

 differently be demanded. If the enactment says that debts may 

 be paid in the ratio of 16 to i, no matter what they be, whether 

 incurred at the grocery store or on a contract for railroad sup- 

 plies, the field for the substitution of the falling metal is in- 

 creased; for, if silver drops so that it requires 17 ounces to buy 

 one of gold in the open market, then every debtor, whether he be 

 the railroad or the citizen with the account at the grocer's, will 

 buy silver with his gold at the rate of 17 to one, and then will 

 pay his creditors with 16 ounces of silver and have one ounce 

 left as profit. The effect of debtors' general seeking of silver for 

 payment in this way is to stop the fall of silver quicker than 

 would have been the case under the natural bimetallism already 

 described. 



§ 10. Apart from any question of the honesty or dishonesty of 

 such a proceeding — of the prescribing that a metal shall be used Bimetallic 

 for payment of debts which was not the intended and customary ^o'efficac '^ °^ 

 standard of value and means of payment in the business environ- ^^^^^ the 



1 • 1 • 1 1 1 1 < < . dearer metal 



ment in which the debt was contracted — ^^there are other draw- has been 

 backs to the bimetallic proposition. An objection ordinarily anr"n°"t*'he 

 made is that there can be practically no such thing as bimetallism meanwhile, it 



"^ '-' cannot be said 



in the sense that the two metals circulate at the same time. That that both 

 claim is but partly valid. The bimetallic hypothesis is that one drcuiate. 



" The Case Against Bimetallism. 



157 



