The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1896-07-31

The monetary history of the commercial
world shows that for nearly a hundred
years past it has been engaged in a con-
tinual and unsuccessful struggle to main
tain a double money standard. Really the
struggle has been going on much longer
than that, but modern commercial condi-
ions have accentuated and made promi-
nent that which before attracted but little
attention. 1t was not until comparatively
recent times that silver has fluctuated so
widely and become so cheap as to demon
strate the impossibility of maintaining a
fixed ratio between it and gold. but there
ate more or less. An authentic table show
ing the commercial ratio of silver to gold
in each year from 1857 to 1886 shows that
during that period the ratio was never the
same for more than two years in success
sion. and rarely ever so long. During this
value of silver changed nearly every year.
The change was for the most part slight,
sometimes TO a higher figure and some
times TO a lower; still. il was a change.
AS it takes but a very slight change in
the market value of either gold or silver TO
disturb the commercial and consequently
the monetary ratio OF the two metals, one
can easily see how difficult has been the
task OF maintaining a bimetallic standard.
In all the countries that have tried TT it
has resulted In constant monetary dis
turbances. each metal getting the advan-
tage by turns and each driving the other
out of circulation, as one or the other was
undervalued by a legal ratio which could
not adjust itself to a constantly shifting
commercial ratio.
When the United States entered the fam
lily of nations ali had the double standard.
though none of them had formally estab-
lished it by law. They all coined ard used
gold and silver money at as nearly as pos
sible the commercial ratio of the two met
ais, though even then it was hard to as
certain the exact ratio and still harder to
make the monetary ratio conform TO it.
In 1717 Sir Isaac Newton reported to the
British government that by the course of
trade and exchange between nation and
nation in all Europe fine gold is to fine
siiNCA 10 III To VI Il " L III q Ildlll-
ilton. in his report on the subject, said:
However accurate and decisive this au-
thority may be deemed in relation to the
period TO which ii applies. it cannot be
taken at the distance of more than seventy
years as n ratio for determining the exist
ing proportion" Those who think that
the ratio in coinage of gold and silver is
a fixed quantity. or can be determined by
one generation for another. should ponder
these words Of Hamilton. Ii was natural
that the United States should adopt the
idea. then prevalent in the commercial
world. of a double standard. and also that
it should adopt the commercial ratio of
both. and for n hundred years has been
trying 10 adjust the monetary ratio to
the market value. Since the first coinage
law Of 1892 was passed four others have
been enacted in a vain attempt to establish
a ratio that would stay established. The
Director of the Mint in his annual report
says:
As the monetary system recommended by
Hamilton In his report on the establish
ment OF a mint and enacted into law on
April 2. 1872. was the first instance in his
tory of the bimetallic system proper: so.
too. 1T was the first TO Illustrate the opera
lions of that system and to demonstrate
that what is called the double-standard
system of gold and silver. however well
poised and adjusted IL may be in the be-
ginning. necessarily in time evolves into a
single standard system OF either gold or
silycT-of gold. If silver be undervalued i'll
the ratio. and OF silver If gold be the I'M
d~ervalued metal-one of these standards
ever alternating with the other. in obedi-
ence TO Gresham's law that If debased
coin is attempted to be circulated with
full valued coin, all of the latter viii dis
appear from circulation and the overvalued
and debased coin will alone remain TO the
ruin of anne and business The
United States monetary system established
I'm 1892 is. indeed. as striking a demolstra-
ton as can be found in the entire history
OF monetary arrangement of the impossi-
bility of maintaining a fixed legal ratio be-
tween silver coin and gold coin.
OF all commercial countries Great Brit
ain was the first 10 recognize both the the
oretical Inconsistency and the practical
impossibility OF a double standard. and in
1916 1t adopted the single gold standard.
From that time TO the present Great
Britain's currency has been the soundes:
and It's entire monetary system the best
In the world. Other countries chung TO the
Notwithstanding idea much longer and tried
very hard to establish a ratio that would