966 REPORT— 1 898. 



4. The Qiiestion of the Ratio. By F. J. Faraday. 



As an ideal monetary system, bimetallism now holds the field amongst scien- 

 tific economists, as recent significant adhesions have proved. The principles of 

 free competition and reflex action, on which the theory rests, are not assailed by 

 any of its opponents. The arguments brought in opposition to its adoption are 

 mainly empirical and political, and a misconception of Gresham's Law. Jevons's 

 admissions and hnal objection examined. Farrer's plan of ' limping ' bimetallism — 

 with paper — demands the retention of silver as currency, and, through illicit 

 coinage implied in the system, tends to full bimetallism. Giffen's plan — or inde- 

 pendent standards of gold and silver — also retains both metals as money. Both 

 systems, equally with bimetallism, look to an ultimate steady relation of value 

 between the two precious metals, and contemplate their distribution in accordance 

 with the special monetary requirements of different countries. If the ultimate 

 objects to be attained are identical, Farrerists, Giffenists, and Bimetallists may be 

 equally satisfied by an arrangement which secures those objects. The attainment 

 of such objects by the Farrerist method demands the circulation of the token 

 coins throughout the British Empire as illustrated by the case of the Dutch 

 colonies, and that implies a common coinage ratio. Lord Liverpool's foresight. 

 The Giffenists contemplate the attainment of a ' natural ' ratio as the condition of 

 a permanently steady exchange with free mintage of each metal in different 

 countries. The bimetallists demand an international legislative ratio with free 

 coinage. In each case there is a question of ratio. If a ratio can be found which 

 will be in accordance with tlie practical and theoretic bases and requirements of 

 all three systems, agreement may be arrived at. The discussion of the ratio from 

 the bimetallist standpoint affords the best method of making clear the scientific 

 foundations of the system, and of demonstrating that bimetallism may be adapted 

 to fulfil tlie requirements alike of Farrerists and Giffenists. Objections to the 

 existing coinage ratios examined. The ' stimulus ' of a low-valued silver ratio, and 

 the apprehended commercial ' upheaval ' with a high-valued silver ratio. The 

 effects on the production of silver and on Indian exports and imports. Objections 

 to a low-valued silver ratio. Conclusion : That, whether considered theoretically, 

 statistically, geologically, or economically, retrospectively or prospectively, a legis- 

 lative ratio of 15| to 1 would be most likely to fulfil the aspirations of Farrerists, 

 Gifi'enists, and bimetallists, and that under an international agreement for the free 

 coinage of both metals at that ratio, gold rather than silver would accumulate in 

 banks as metallic reserves. 



SATURDAY, SEPTEMBER 10. 



The Section did not meet. 



MONDAY, SEPTEMBER 12. 

 The following Papers were read : — 



1. Municij)alities as Traders. By George Pearson. 



The writer of this paper points out the necessity of the performance of several 

 duties formerly considered private concerns now being performed by municipalities. 

 He then calls attention to the great growth of municipal trading as shown by the 

 great growth of municipal indebtedness, and points out the amount of municipal 

 indebtedness now represented by tr.ading concerns in the hands of municipalities. 

 He points out that municipal trading should be confined to the provision of those 

 necessities of civilisation which are so large as to be beyond the power of indi- 

 vidual effort to supply, and which do not form part of any Imperial Government 



