Los Angeles herald., 1891-02-25
WEDNESDAY. FEBRUARY a5. 1891.
A TREATISE ON INTERNATIONAL BI
METALLISM.

The treatise on international bi-metal-
lism, which we announced few days
ago, has attracted the attention ofmoney
students in Los Angeles, both on &C
count of the fact that the views of the
author on this subject are always back
ed by close reasoning and subtle argu-
1nent, and because he is prominent
citizen of our city.
The essay was written in answer to
the question propounded by M. Ger
nuschi at the Paris monetary congress
in 1889: "What effect would be exert
ed, Immediately and in the future, on
the paying power of silver and on the
paying power of gold by the simulta-
neous adoption in England, France,
Germany and the United States of a
bi-metallic Just as legal tender for any
amount, the silver Just having the
weight and fineness of the silver five
franc piece, and the gold lust having
the weight and fneness of the United
States gold dollar, with mintage free to
everybody and gratuitous.''
Mr.. H. d. Barrows, the author of the
pamphlet, replies that the immediate
effect would be to give the two coins
equal paying power in the four countries
named, and to cause, through the right
of free coinage, silver and gold to at
once gravitate towards the proposed
ratio value of to 1885; it would also
have the future effect to bind these
two metals to this ratio as with hooks
of steel in perpetuity, or SO long as the
quadruple convention should endure.
Mr.. Barrows proceeds to prove his
postulates by line of reasoning, part
of which is striking for its originality.
He sets forth the well-known principle
that the tendency Of single standard
is to raise the value of that metal as
compared with the discredited metal.
There being nothing to check this ap-
probation, it may reach, as gold has in
this country, 40 to 45 per cent. as COM
pared with the price of silver and with
the worlds staple commodities. The
fact that gold appreciates and that silver
and staple commodities stand at almost
a parity, does not show that the fuctu-
ating standard records the true differ
ence between the value of commodities
and dollars, but it is rather proof that
the relation between the discredited
metal-that is, the metal which in spite
Of demonetization laws holds its place
with the people-and commodities, is
the true measure of fall or rise in the
price of those commodities. Gold, hav-
ing the legal field to itself, increases in
it's value from, first, the supply, and
second, the demand.
Now if the two metals were on an
equal footing as to free coinage and legal
tender, it is manifest that they would
exercise an influence of compensatory
action upon each other that would
check the upward movement of either
by the steady operation of anatural law.
The demand for that metal which from
Over-supply or other cause might tend to
drift away from and below the common
ratio would be effectively stimulated
and its value thereby enhanced; and
the other metal, which from a variety
OF causes, real or fictitious, might tend
10 drift away from and above the ratio,
would be in less demand, becoming idle
capital, earning its owner no interest,
which would cause it to decline in value,
or, in other words, to assimilate again to
the legal ratio. Thus, by reciprocal ac-
tiOn and reaction, unequal supply and
demand would, by operation of natural
law, correct each other, and the two
metals. being in vital connection and
doing Interchangeable each the work of
the other automatically, would be
welded together, as Mr.. Barrows de-
clares, in one fungible mass, which
would be vastly less liable to fuctuation
than is either metal when the two do
not exercise this reciprocal influence.
Mr.. Barrows has here stated princi-
pie which is proved by the history OF the
metals in this country. When silver was
fraudulently demonetized on the statute
books in 1873 (for no such measure ever
passed congress), gold became king, and
relative to the degraded metal has be-
come greatly more valuable. When,
however, a few years before, the two met
ais ran together on an equality at the
mints, and before the law, silver was at
1O3 to gold 100, and had it not been for
the reciprocal effects of the two metals,
gold would have gone farther down than
any point silver has ever reached after
three billion dollars worth of new metal
had been poured into the laps OF the
world from the mines of California and
Australia. The measure OF difference
between the fluctuations under bi-met-
allism and single standard, may be put
in this way: Gold, in spite of the
worlds sudden new stock of the metal
sxat LII ho da11lalo