Delaware gazette and state journal. (Wilmington, Del.) 1883-1902, 1894-12-06

to tinanciers and statesmen. But they |
had no Oresme or Copernicus to explain |
it to them, and the only remedy they |
could suggest was to enact severe penal
ties Of mutilation to those who exported
good coin.
AT last Sir Thomas Gresham explained |
to Queen Elizabeth that good and bad |
coin cannot circulate together, but that |
the good coin disappears, and the bad |
coin alone remains current. As Sir
Thomas Gresham was the first in this
country to explain that permitting bad
coin to circulate was the cause of the |
disappearance of the good coin, sug-
gested in 1868 that this should be called
Gresham's law, which name has now
been universally accepted. But as
Oresme and Copernicus had both de.
clared this law before him, it ought to
be called the law Of Oresme, Copernicus
and Gresham.
This great fundamental law of the
coinage soon became common knowl-
edge. 1t is thus stated in a pamphlet in
1896:
"'When two sorts of coin are current
in the same nation of like value by de-
nomination but not intrinsically Ii. e.,
in market value), that which has the
least value will be current, and the
other as much as possible will be
hoarded,' or melted down, or exported,
We may add"
This great fundamental law of the
coinage has been found to be univer.
sally true in all ages and countries, and
was henceforth recognized and acknowl-
edged in all subsequent discussions on
the coinage.
1t applies in the following cases:
Q.) If the coins consist of one metal
only, and clipped, degraded, and de-
based coins are allowed to circulate
together with good coins, all the good
coins disappear; they are either boarded,
or melted down, or exported, and the
bad coin alone remains in circulation.
ca If coins of two metals, such as
| gold and silver, are allowed to circulate
together in unlimited quantities at
fixed legal ratio which differs from the
market ratio OF the metals, the coin
which is moderated disappears from
| circulation, and the coin which is over.
rated alone remains current
(S.) AS necessary corollary, it fol-
lows that it is impossible to maintain
fixed par of exchange between countries
which use different metals as their
standard unit.
The law is not confined to single and
separate States; it is not limited in time
or space; it is absolutely universal, and
it is equally impossible for the whole
world 10 maintain coins OF two or more
metals in circulation together in un-
limited quantities at fixed legal ratio
which differs from the natural, or
market, value of the metals, as it is for
single and separate States to do so.
The explanation of this problem,
which was an inscrutable mystery to
statesmen aud financiers for so many
ages, is extremely simple. II saillings
are allowed to circulate together, some
J of which are worth twelvepence and
others only ninepence, and everyone is
J allowed to pay his debts in which of
them he pleases, he will naturally pay
his debts with the shillings worth nine
pence and keep the shillings worth
J twelyepence in his pocket. Or, if shil.
} lings worth twelyepence have no more
t value than shillings worth ninepence.
/, bullion dealers collect all the heavy coins
: they can and melt them down into bull
g lion, in which form they have more
!, value, or they export them to foreign
? countries where they have their full
!. value. Thus, the underrated coins have
| invariably been found to disappear il
: one or other of these three ways.
1t is exactly the same In all cases il
o which persons are allowed to pay thei
:, debts in things which have nominalll
i the same value, but in reality are o
different values. When persons ar
@ allowed to pay their rents in kiad, the,
II naturally select the worse portions o
d the produce to pay their landlords, AM
5; keep the best portions for themselves.
Il Ii merchants received on order for s
many yards of cloth, and the lay
IS allowed two different yard measures t
'e be used, one of 3 feet and one of 2 fee
merchants would naturally fulfil thei
lie orders in yards of 2 feet rather than i
1t yards of feet. 1t is only natural tha
is persons should pay their debts in tn
r. cheapest form to themselves.
r So, if the law allows debtors to pa
their debts in coins of different metal
ID which are rated equally in law, BIT
II whose value differs in the market of th
Ill world, they will naturally pay thei
u. debts in the coin which is overrateC
as and keep the coin which is underrate
at home. Then inevitably the col
be which is moderated disappears froi
IN circulation, and the coin which is rate
he above its natural or market value alor
CHI remains current; and this is trr
NJ whether single and separate States do S
les or whether the whole world does so.
as then, the whole world were to agree
n rate coin below its market value,
would inevitably disappear from Giro
all lation for the whole world can no mo
JUS by universal agreement make MI
equal to twelve than any separate Stat
eu can.
lel For the very same reason it is impc
W sible to maintain fixed par of c
CT change between countries which u
US different metals as their standard, /
IS cause coins are only accepted in forei
iy countries according to the market val
ICY of the bullion they contain; and as t
nas value of the metals is constantly char
en- ing in the market of the world, /
value of the coins must equally do
az too
tho The truth of these principles, viii
" -. arc gathered from the experience
III, ages is incontroTertlble.
The bimetallists contend that If
nee fixed ratio between the metals W.
7 of established by international agreeme
the market value Of the metals wo,
can conform to it; that by so doing
fnll metals would circulate together in
ON limited quantities at the fixed ratio, 6
q to 30 augment the currency or ci7culGt
the medium of the world; that every
his would bring his gold and silver to
coined; that these might be used indit1
nil emily in the payment of debts, and t
ded stable ratio of exchange might
the established between all nations.
or Most unfortunately, the experience