International Bimetallism [pp. 422-426]

INTERNATIONAL BIMETALLISM.
BY THE PRESIDENT OF WELLS, FARGO & COMPANY.
HE Minister of Finance
of Belgium, M. Beer naert, opened the Brus sels International Bi Metallic Conference of
q ~~~~December, 1892, as fol
r a~ ~5~': The Conference in which
....: -'you are called upon to take
:A,~ part has for its object the
consideration of one of the mostserious, complex,
and arduous problems presented to modern
society. The subject of money touches all economic and social interests; it affects the commerce of the world, and is the real reason of
more than one unexplained crisis.
There were proposals as early as the
seventeenth century for a universal common ratio for the money metals, but
there is no trace in the writings of American statesmen of the peculiar monetary
theory on which bimetallism is now
based. Probably there is no later exposition of the theory of International Bimetallism than that contained in Archbishop Walsh's pamphlet of I892, and
Prof. E. B. Andrews's essays published
in book form in 1894, under the title of
"An Honest Dollar," which, condensed,
is Jevon's illustration of Wolloski's doctrine of two balancing hoards; really
based upon what is known as the quantitativetheory of money, which proceeds
on the assumption that there is a pool of
money into which a balance of the precious metals falls after other uses have
been satisfied, and that prices rise or fall
proportionately with an increase or diminution of the pool, otherwise stated thus: "Imagine two reservoirs of water, each sub 422
ject to independent variations of supply and de mand. In the absence of any connecting pipe
the level of the water in each reservoir will be
subject to its own fluctuations only, but if we
open a connection, the water in both will assume
a certain mean level: and the effects of any ex cessive supply or demand will be distributed over
the whole area of both reservoirs, which enables
one metal to take the place of the other as an
unlimited legal tender."
This theory is based on the conception
of governmental power, -first, as by
Archbishop Walsh, that "While legisla tioni cannot directly give value to a thing,
it can do so indirectly,-it can set up a de mand which is one of the factors of
value"; second, by Professor Andrews,
that, "While law cannot control value
independently of supply and demand, it
can set free an economic force which will
largely control supply and demand them selves."
"The bimetallist affirms, (I) that the mon etary demand and supply of gold and silver,
supposing both freely coined, in fixing the pur chasing power of given quantities of them, over whelmingly out-influence the commodity demand
and supply; (2) that law can at least establish a
legal-tender and debt-paying parity between a
given quantity of gold and a given quantity of
silver; which parity treaty could extend throughout any number of States; (3) that, since men
are wont to discharge their pecuniary obligations
as easily as they can, the existence of such legaltender and debt-paying parity would, in case this
legal parity should ever for any reason fail to
match the commercial parity, stimulate the demand for the cheaper metal, appreciate it, and so
tend to identify the parities again; (4) that if the
field of legal parity is large, embracing in its bi metallic basin a third or even a quarter of the
world's gold and silver, unless the value-ratio
between the two metals denoted by the legal
parity is widely at variance with the ratio in