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BULLETIN OF THE 



has arisen is, under what laws and conditions is it possible to 

 secure the proper use of both ? Late in the eighteenth century 

 financiers and statesmen had learned that such use could not be 

 secure under existing laws, and proceeded to inquire what uses 

 it was possible to secure and what laws would effectuate such 

 uses. England was the first country to put in operation a prac- 

 tical and successful solution of the problem. Her statesmen 

 recognized that gold and silver would not circulate together so 

 long as the coinage of both metals was free, and both were un- 

 limited in volume and legal tender. She therefore closed her 

 mints in 1816 to the coinage of silver, leaving the status of gold 

 unchanged. Silver was coined by the government on its own 

 account, its volume limited to what was deemed necessary for 

 purposes of trade, and its legal tender limited to forty shillings. 

 The plan has worked to her perfect satisfaction ever since, and 

 her currency is universally admitted to be safe, secure, and con- 

 venient. She has all the gold and silver she needs, which is 

 the utmost that can be said in favor of any currency. 



The reasons for choosing gold for free coinage were chiefly 

 two. In the first place, it is important that the money unit 

 should maintain as nearly as practicable a constant value in 

 comparison with other commodities, taken as a whole. This 

 property belongs to gold in a higher degree than to any other 

 available money substance, and is therefore preferable for fur- 

 nishing the common denominator of value. In the second place, 

 the aggregate of large payments require more money than the 

 aggregate of small ones. Gold is much more convenient and 

 economical for large payments than silver, and is therefore the 

 best substance for the principal bulk of a currency. Silver is 

 utilized to the most advantage when used as the subsidiary of 

 gold. It should be its servant and not its master. 



In order, then, to keep the two metals in constant use, each 

 performing its own function, it is necessary to lay restrictions 

 upon the coinage of silver, while gold may be coined without 

 limit and freely. The quantity of silver must be limited and the 

 government must monopolize the right to send it to the mint. 

 It mast also be debased in coining it, to prevent it from flying 

 out of currency whenever the market price of silver is very high. 

 The question now arises, What quantity of silver should be put 

 into circulation ? should it be very large — say equal to the amount 

 of gold — or very much less ? The question which has concerned 

 the American bimetalists seems to be, What is the utmost amount 

 of silver which the country can be forced to absorb ? In reality 

 the evident true policy should be to ascertain what is the smallest 

 amount which can be used without inconvenience; and the same 

 is true of gold. Money is for the purpose of facilitating ex- 

 changes. A mechanic who knows that oil is good and useful for 

 facilitating the movements of machinery, would never undertake 

 to see how much oil he could use for lubrication, but how little. 



