Birmingham state herald. (Birmingham, Ala.) 1895-1897, 1895-10-20
A B|METALL|SM ARGUMENT
The Advantages Of the BimetaI-
lie System.
A MUCH GREATER FACILITY
Of Exchange Between Gold and Silver Nations
Greater Stability IN the Worlds
Money-What France Did.


metallism is by Gen. Francis A. Walker,
president of the Massachusetts Institute
of Technology, Boston:
have been asked to state the case for
bimetallism, and have much pleasure in
doing so.
The great standing argument for bi-
metallsm has reference to the fact that
the world is made up of two groups of
nations, one of which uses gold, the 9TH
err silver as the principal or sole money
of full legal tender power. Contemplate
ing such a situation, the bmetallist de-
clares that it would be of great value to
the worlds trade. and by consequence.
to the worlds industry, If, by some ar
rangement an approximate par of ex-
change between gold and silver could be
created. Without such an arrangement,
while gold in one group of nations and
silver in the other group perform the
great and beneficent office of money rea-
Sonably we'll, trade between any country
of the one group and any country OF the
other group remains subject to grave diff
ficulty and embarrassment. When a mer-
chant of gold country sells goods to a
merchant of silver country he must In
turn sell the money which he receives for
the goods He must turn the silver into
gold with which to pay his own credi-
tors. If, then, the silver price of gold
or the gold price of silver has fallen or
risen, he will either reap an unearned
gain or SuHer an unUeSeTVeu ioSS' uSt
so long as the world remains divided
into silver using and gold using countries
international trade must, without BIZ
metallsm, be subject to this disadvant-
age. That Is a disadvantage no one can
question. No one can know much about
the larger operations of commerce and
not admit that this disadvantage is of
vast and far-reaching Importance. If. in
such situation, 1t were possible to eStaD-
lish system which should create an act
ual or even only an approximate par OF
exchange between gold and silver, so that
a given quantity of gold would always
bring nearly or quite given quantity
of siver-ten times, or fifteen and a
half times, or twenty times as great
commerce could not fail to be at once
wonderfully steadied and stimulated
thereby. In consequence. Industry would
be enabled to go forward confidently
and strongly to the limits Of the human
powers of production. The beneficial in
fiuences upon trade and industry would
resemble those due to the erection or
bridge connecting two commercial and
Manufacturing Cities. which had preyi--
aagSy oSsn r ysRa 81 an p & fhs Be
fore the construction Of the bridge travel
and transportation had been subject to
the greatest Uncertainties and to frequent
and considerable losses. At times the bay
or river would be covered by fogs or filled
with floating ice or altogether frozen
over. or swollen by floods. or swept by
destructive storms. No man could ever
tell in advance when he could take his
goods across; how long the passage would
require; what 1T would cost; how much
he might lose through collision. through
boats stove in by floating ice or sunk
by sudden squalls. The completion OF a
safe and speedy mode of transit and
transport could fail greatly to benent
both the cities thus connected.
Such is one of the advantages of per-
manent character which would result
from the establishment of the bimetallic
system. The other Of these advantages
would be found in the greater steadiness
of value which the compound mass Oh
gold and silver would possess, In compar-
ison with either of the constituent me-
tails. The history of the precious metals
is one Of spasmodic and often intermlt-
tent production. Not only has the pro-
duction of both gold and silver varied
greatly from age to age. but the produc-
ton of either metal has exhibited,
throughout the centuries. an even great
er degree of fiuctuation. At times 1t has
been gold which has fallen off rapidly;
at times silver. At times 1t has been
silver which poured in great floods from
newly opened mines: at times, gold. 1t
stands to reason, therefore, that, If the
two metals could be joined together in
the money function, at something closely
approaching a stable ratio the worlds
less from variations in value. The effect
of changes in the money supply would
be distributed over a larger mass; and
by consequence with a smaller proper
tional change. This last benefit, again,
to be obtained through the establish
ment of bimetallc system. is admitted
by all economists of reputation.
have stated the two standing argu-
ments for bimetalism: first. the estab-
lishment of par of exchange between
r.io o.
ondly, a greater stability in the COM
pound mass of the worlds money. But
it may be asked Is such a system eco
nomically practicable? Is 1T possible in
any way. by any arrangement, thus to
link gold and silver together? Is it not,
on the contrary, true that laws and
human devices arc impotent to affect
values? Are not values governed solely
by natural and commercial conditions of
supply and demand? This the Mono
metallists assert with great vehemence.
Well they may, for their whole case de-
ponds upon it, They point to numerous
Instances where law has undertaken to
control values without success; and they
deem these instances conclusive. But 1t
is easy to point to instances, far more
numerous where law has profoundly af-
fected values. Law has affected values
where 1t sought to do so; law has often
affected values when 1t was not intended
SO to do; law has often affected values
prevent such an effect. Indeed, It is very
difficult for congresses and pariaments
to legislate without affecting values.
With these contradictory instances in
view, what shall we say? Is there any
reason governing the case, or is 1t all a
matter of accident? / answer. the prin-
ciple is perfectly clear Law can affect
values law will affect values law must
affect values, whenever it sets an eco
nomic force in motion. Tariffs. currency
bills declarations of war or peace, and
many other legislative measures, set
powerful economic forces in motion; and,
whenever this occurs, values will be in
fluenced, often profoundly. Illustrations
of the principle are too numerous and
too near at hand to require that time be
taken in citing them.
Coming down, then, to our special
case, we ask can law set an economic
force in motion to influence or control
the relative values of gold or silver?
answer, 1t can do so by comforting upon
the two metals, legal tender power at
given ratio. OF this, we have a great
historical instance. a brief recital of
which will best set forth the operation