BIMETALLISM. 79 but not uniform action by contiguous countries which used the same coin, and were accustomed to regard all francs as identical, irrespective of the heads upon the coins, led to much inconven- ience, and finally, in 1805, to the Latin Monetary Union for a common basis of coinage among na- tions using the franc system. The 5-franc piece, then little coined, was not disturbed, but the sub- sefjuent fall in the price of silver led to such ex- cessive and unequal coinage by the several States composing the Union, that agreements were en- tered into restricting, and finally abolishing, in 1877. the further coinage of the .5-franc piece. By this action, France. Belgium, Switzerland, Italy, and Greece were added to the ranks of the gold-standard nations. Germany, which had been exclusively upon a silver basis until 1871, in that 'year adopted the gold standard as one of the elements of the unification of the coinage following the establishment of the Empire. In- deed, her action in throwing her stock of silver in the following years upon a market which was already falling, is deemed to have been an im- portant factor in lending the Latin L^nion States to al)andon silver. The Scandinavian countries and Holland followed the example of their neigh- bors in the seventies, while Russia and Austria, then in the toils of a paper currency, were un- able to take such action until the close of the century. The United States imtil the outbreak of the Civil War had been legally upon a bimetallic basis. As in France, the outflow of silver fol- lowing the gold discoveries of the middle of the century had led to laws making the silver frac- tional coins tokens of limited legal tender. In the revision of the coinage laws in 1873. when we were yet upon a paper basis, the silver dollar was dropped from the laws, and gold became the nominal standard. With the return to a metal- lic currency, a reaction in favor of silver set in. Various unsuccessful attempts were made to reestablish the free coinage of the silver dollar. The strength of the silver advocates was suffi- cient to bring about a series of compromise meas- ures which, Avithout removing all restrictions upon the coinage of silver, materially increased the volume of silver in the circulation of the country, and at times threatened the mainte- nance of the gold standard. The law of 1878 pro- vided for the purchase of not less than two mil- lion dollars' worth of silver monthly nor more than four million dollars' worth, and the coinage of the bullion thus purchased into silver dollars of A:_. grains standard silver nine-tenths fine. Under this law nothing more than the minimum amount was purchased and coined. In some re- spects the law of 1890 went further in providing that the Secretary of the Treasury should pur- chase monthly 4.500,000 ounces of silver bullion and issue Treasury notes for the purchase price of the .same. Both the silver dollars and the Treasury notes of 1890 enjoyed the full legal- tender ([uality. The policy of purchasing silver was aban<lone'd in 189.3. In 1890 the Presidential election hinged upon the declaration of the Dem- ocratic platf(irm in favor of the free coinage of silver by the United States in the ratio of 1(! to 1. The defeat of the Democratic candidate and suh>e<iuent adoption of the currency law in 1900 still further strengthened the gold standard leg- islation of the nation. These, with the cessation of silver coinage in India, and the adoption of BIMETALLISM. the gold standard by Japan, are in brief the salient features of the history of the standards among modern nations. For a more detailed ac- count of the historical aspects of the case, the reader should consult the articles Latin Union; Monetary Coiijiissions; Monetajry Confer- ence; and Money. The arguments advanced by the advocates of the opposing systems may now be passed in re- view. In the first place, it should be stated that in its modern form the question of bimetallism is one of standards and not of circulation. If in earlier days the problem was to secure the concurrent circulation of gold and silver coin to meet the needs of wholesale and of retail trade, this aspect of the question is no longer important, for means have been found to insure this result without a resort to bimetallism. Al- most equally irrelevant is the objection often heard to the use of silver as standard money be- cause of its bulk and weight. This is an objec- tion perfectly well founded, to be sure, against the circulation of silver coin, but not against sil- ver as standard money. For silver money may and does circulate through its paper representatives, as the notes of the Bank of France or the silver certificates of the United States amply testify. In the same line of argument, the contention that bimetallism exists everywhere in fact, be- cause wherever gold is used, silver must also be used in the monetary circulation, has no bearing upon the controversy. Only the most inexperi- enced in monetary affairs would attach the name bimetallism to the circulation of the two metals side by side, irrespective of the laws which gov- ern their coinage. For it is the essence of bi- metallism, as appears in our definition, not sim- ply that both metals should be coined, but that both should be coined on precisely the same legal footing, and possess the same legal-tender quali- ties. They may circulate together, yet stand upon a wholly difl'erent basis. Thus, in the United States, the subsidiary silver coins are limited both in amount and in legal tender, while the silver dollars, though unlimited in legal tender, are limited in amount. Both stand obviously upon a wholly different footing from gold, whieli not only possesses unlimited legal tender, but which can bo coined at the instance of individ- uals without restriction of amount. It is that element in the metallic currency which is freely expansible by law wOiich gives the standard. The advocates of bimetallism have laid stress upon two results which they sa}- would follow the adoption of their system: (1) The regulation of exchanges between the various nations; (2) the attainment of a more stable standard of value. They point out that the use by some nations of gold and others of silver as the monetary st.and- ard produces a fluctuating par of exchange be- tween gold and silver nations which impedes commerce and causes great uncertainty in their mutual relations. To the extent that uncertain- ty prevails as to the return when tlic prices at- tained in one country are translated into the standard of the country which has sold the goods, to that extent is trade rendered diflicult. The liability to loss through exchange enhances the prices of goods sold. It is further pointed out that the varying tendencies of prices under one standard, as compared with another, acts as an unnatural impediment or stinuilus to trade. If gold prices and the gold price of silver fall alike.
