New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1886-05-20
GIFFEN ON BIMETALLISM
THE EVILS OF MANAGED CURhEycrgs
CONFUSION CAUSED by THE BLAND ACT ASD Tuz
vACILLATING POLICY or FRAACF.

ORGANIZATION, ca
Leading members OF financial firms cad the man COR, .
important London and provincial banks carcfIr,
prepared paper read by SIR GiGen, the stats,ct
Of the Board OF Trade, the object Of which was IL ~
pose and refutc what he regards the iaacles q, -
metssm. Tho substance Of the paper al eaboy.,,
attempt 20 establish distinction bctwoen what -.
Gifen calls the automatic coinage OF monometal,
England ami what he calls manager Currency" sucl
as is involved in biiaetaism. Tho dsud,,ioa VA
clearer 70 Mr.. Gen than the most OF MS horrors Tina
late hour at which the reading OF the paper co.s
precuded adequate discussion by the May b!metsl
lists present. among whom were Henry HICKS Glib,
Henry Grenfell and Samuel Montague
The three points made By SIR Glifen were: Frst-bo,
it's, perhaps not the bushes, of to mel
die with coinage a. al. This point he based upon tho
views Of Herbert Spencer second-th1t tho stoslnes,
OF the ratio between gold and silver before 1872 vas nat
perhaps due, as Ccrnusci Asserts To the existence Of
the bmeta!llc ratio IN France. Third-hat It Il M,
certain tho fall OF prices during the las, fifteen ye,rs
due to rem-dable by general biinet,l.ism. II
cannot be SAID that Mr. Clifton convinced tho audieses
that he was right on any Of his points
The strongest impression made by Il,
contention that disturbances in prices were mainly
due to changes In an arbitrary manner mad. In
the currency OF great commercial rather than
to the specific character Of such changes Referring q
the question whether any arrangement in the ratio be-
tween metals arrest the ial IN prices. he said.
"Nothing that can be done by any cement Of IN,
ratio between the metals viii in the nature OF thing,
have any effect whatever in arresting further ian IN
prices. What has happened in the past will happen
again. Even with bimetaism there would have been A
10 per cent fall In prices during the last few years
Similar falls must be expected from period period
fall OF prices from perot period IS substantially due
as have moro than once pointed ont in
former years. to the necessary diniculfy
OF increasing the stock OF precious metal,
as to keep pace with the multiplication Of com.
modites and the multiplication OF the numbers o. the
people. The tendency a rule among communities
advancing so rapidly in numbers and in wealth
European communities do, including among them
people OF European descent Ike those OF the United
States and Australia. be for prices fall rapidly
from period period Exceptions only when you
have such tremendous changes those caused by CALI
fornan and Australian gold discoveries, believe,
by changes lie what took place at the end Of tho
last century, when there great expansion Of
note circulation in tho banks OF this country.
which doubt would have the effect Of
economizng the OF the precious metals and making
the metals 90 further than they did before Bat
and except any changes OF that kind which
are not to be looked for rule, the permanent ten
be for prices fall and whether there
metal in use whether there two metals have
effect whatever this permanent tendency II there
metals In about equally use. then there
must be equal supply OF tina two TO keep matters in
equilibrium. say, FOR instance, that there two
thousand million sterling in use altogether, haf
silver and half gold. and two per cent
per of new supply IL required to keep things
equilibrium. Clearly this supply IN the supposed
would have to be forty millions sterling. SLpposns
there were only metal snpposiny that either gold
silver TO be completely blotteI ous money,
and al nominal values were TO bo bayel, then the
supply OF the precious metals required 10 keep thngsa
equilibrium would be still per cent as before that IL
say. twenty millions sterling. and this supply would
just be fitted keep things in equilibrium the sup
nix NJ fortv mi IN
price, will be adjusted to that mass and the supply
will have to be increased proportonately 70 keep mat
in equilibrium What / have to urge then ia that
bimetasm is not adapted 10 be remedy for the evil
of persistent fall prices If is an evil AMI so FAR az
be evil such as has been going on for the past
few years. II there had not been the catastrophe
changes which have taken place is possible that
fall IN gold prices during tho last ten fifteen years
would have been great it Is But there would
have been fall OF prices of some KIND in future
there be similar fails far Judge
will in way be arrested By the use OF the two metals
together. any ratio that can be established.
The sgnc INT fact that silver prices have not risen
during the last fifteen years silverusng countries
ought to be lost sight OF 1t will be urged. however,
that in consequence OF compensatory action. the differ
from period TO period likely to be less with
metals in plan of international bImetalism
than II only to be in This is Mr. Bar
Dour's argument and 1t is not without interest Sup
pose two metals to be equally in use, but not tied by
ratio, and the addition to the one a given
period should be- say, 10 per cent. under which
certain fail OF prices takes place in countries thai
metal is used bit the addition to the other shouIi be,
say. 20 per cent under which prices in the countries
ing that metal remained IN equIibrum-b tying the twe
metals together there would be fall OF prices IN all
countries, but the fall would be less in using
the metal in which 10 per only is added-as com.
pared with 20 per cent added to the otherthan would
otherwise be. But, admitting all this what have to
point that the important fact In the tho
tall OF prices, and that that fall be prevented
the OF the difference between what is like
y to happen under aud what IS likely 10
happen under must DO taken before any estimate
be formed whether it is worth whilo remedy
ng that difference. the primary evil itself not being
remediabe The practical question at the moment will
this Surprising that in the next ten years a al OF
per prices is prob lble from the point which
hey would stand when a universal Dimetalic ratio Is
Introduced how much less per cent Will that fall be
nan the fall In gold from tho present pointf
ve leave things aonei II. IN the one case
is to be 10 per and IN tbs
ther IL or II per cent, IS the difference
etween 10 and IL or II per cent worth pre-
enting by elaborate Gevicesl The fail OF 10 per
lot being preyenabe the practical difficulty of the mat
er that the future cannot be foceseen. We do not
what will be the practical limits OF the oupcn.
atory action. We may be better OF by leaving
matters they Bat unless there is some reason TO
eleve that there will not only be compensatory action
compensatory action OF an important Kind. such as
o substitute f.ll OF or per cent only FOR Onr ot
% per cent something like that, should ~ S X
loubt IL compensatory action wero much worth
rying for in view OF the future fall OF prices The
events OF last fifteen have caused fall
II only 20 per the outside. Even total cessH
ion OF supply hardly another such fall IN
lmar period ana such a cessation 10 too improbable.
rne fall OF prices future will thus 90 limited ami Tho
Inference TO be made good by compensatory action
\ 70 still mltei. The conclusion thcn j. nat
alllsm Is remedy for the future fail OF prices
the limits within winch it could operate
eng partial remedy narrow as not e. Dc wOrtu
They not such odght 10
nduce government to violate the principle OF Al adIo
matte coinage.
ii have tuus dealt with the three points put form IN
ny programme. Let add oniy few words pJ way
II Summing up. WHAT have been DESTROYS % do Is 10
attention on man points which APP
,c.r 10 me to require great deal o. eluciaon before
he blnet allie controversy Itself can he entered ulon