Tht RURAL. NEW 
A Primer of Economics 
By John J. Dillon 
Part XXXIV 
What do we understand by the free 
coinage of gold? 
By the free coinage of gold we mean 
that the Government will receive stand¬ 
ard gold (that is, gold nine-tenths pure 
and one-tenth silver) at the mints, and 
mold it into gold coin and return the gold 
coins to the owner of the gold without 
any cost to the owner. In practice the 
owner usually receives gold certificates or 
other form of paper money. 
What is bimetallism? 
When a country adopts both gold and 
silver as a standard of its money unit 
and provides for the unlimited coinage 
of both metals we say it has a bimetal 
standard. Our system is now based on a 
single gold standard, but we have used 
the double standard in the past. Other 
countries have also at different times 
used the double standard. The advocates 
of a double standard have been very in¬ 
sistent in their claims for its merits. 
They insist that a double standard is 
more stable than a single standard and 
affords less opportunity for manipulation 
than the single gold standard. The main 
defect of the double standard seems to 
be the difficulty of establishing a ratio 
between them that remains stable. At¬ 
tempts to do this have never been suc¬ 
cessful. By law Congress provides that 
a dollar may be so many grains of gold 
or so many grains of silver, and also pro¬ 
vides for the unlimited coinage of both 
metals. These standards may be fixed 
on the basis of the metal value of the 
two metals at the time; but any change 
in the bullion value of one of the metals 
will disturb this arrangement by making 
money, however, have more important 
bearing on time contracts or other long¬ 
time credits. If the value of money de¬ 
clines, that is, if general prices increase, 
the creditor receives less value at the 
time of settlement than he would have 
received if payment were made at the 
time of the transaction and his asset, is 
less valuable. If the value of money in¬ 
creases, that is, if the general prices fall, 
then the creditor receives more purchas¬ 
ing power than he would if paid prompt¬ 
ly, and his asset becomes more valuable. 
Following our Civil War, while prices 
were high and specie payments were sus¬ 
pended, many men bought farms or in¬ 
creased the acres they already had, giv¬ 
ing a mortgage in part payment. Later 
the Government resumed the payment of 
specie payments, almost doubling the 
value of the dollar, cutting prices in two 
and nearly doubling the burden of the 
mortgage. The author’s family bore the 
burden of one of these mortgages, and 
among the victims of the injustice were 
many who struggled without knowing the 
real cause of their misfortune. That 
change in value of money wrought 
tragedies in many an Eastern country 
home in the latter part of the last cen¬ 
tury. During the Civil War the country 
was on a paper currency, national notes 
to the amount of nearly a half billion 
dollars had been issued. These were 
mere promises of the Government to pay. 
They were not payable, however, in gold 
on demand, and as a matter of fact the 
Government for the time being did not 
redeem them at all. At the time of the 
resumption act they had passed into other 
hands, and largely into wealthy hands, 
and they were then, of course, worth par 
with gold. The wealthy profited at the 
expense of all. It was estimated that the 
depreciation of the greenbacks and its 
subsequent parity with gold added a bil¬ 
lion dollars to the cost of the Civil War. 
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one standard worth more or less than the 
other. For example, if after Congress 
had provided by law that a dollar should 
be 23.22 grains spure gold or 371.25 
grains of pure silver, aud provided for 
the free unlimited coinage of both, new 
gold mines were discovered or new and 
cheaper processes of extraction of gold 
from other metals had come into use, 
while conditions in the production of sil¬ 
ver remained the same, the value of gold 
would fall in reference to silver. No 
silver would then he coined, because St 
would he more profitable to coin gold, 
and the silver would be worth more to 
ship to foreign countries. This influence 
would drive the silver out of circulation 
and out of the couutry, and leave us 
practically on a single metal basis for 
the time being. Whatever may be the 
relative merits of bimetallism as com¬ 
pared with the single standard, the prin¬ 
cipal civilized governments of the world 
have now adopted the single system, and 
the basis of that system is gold. 
Have the precious metals—gold and 
silver—always been tised as money? 
Gold and silver have not been used 
exclusively as money. Auy commodity 
that is adopted by common cousent may 
be used as money. At various times in 
the history of the world blocks of tea, 
salt, shells and cattle have been used as 
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money. As civilization advanced and com¬ 
merce and international trade developed 
tin. iron, copper and silver were suc¬ 
cessively brought iuto use, and finally 
in our complex system of domestic and 
international trade gold has come to be 
the well-nigh universal standard. Gold 
and silver have properties that peculiarly 
fit them for use as money. They have 
value in the right proportion to bulk. They 
are easily tested for purity and readily 
identified. They are durable and easily 
divided into fractional units. Again, 
while gold and silver are by no means 
invariable in value, they are less variable 
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than most other commodities. The 
properties of the precious metals them¬ 
selves therefore are sufficient to account 
for their universal use as money by 
modern governments. 
Do variations in the value of the money 
standard cause injustice? 
The variation in the value of money 
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