Washington standard. [volume] (Olympia, Wash. Territory) 1860-1921, 1898-11-25
&fashinqton Standard
TWO METAL. CURRENCY.
Its Effect Is to STEADY the Vol
uine Of Money.
PRETENT9 LOWERING OF PRICES.

PREVENTS LOWERING OF PRICES.
IN Z -'' E! :. >."E!, 1i.;al Currency Pro-
tu",~ the Grp"-it" E"-Dlt >hrinkage
ct tie Money Volume D.prr.,es Com
modify Wallace. Lessons Production and
Gut. Dow the Wages Paid Fer Labor.
III the act f $3.50 providing for al
lnor,ar ii III" purchase e silver bull
i Il Y III" :: 1y,rIIu'At !, VA. declared
t. J" "Il.r established Policy Of the
M!t,.i ;ja,,, t. maintain the TWO met
al. gold AID silver Oh Il parity with
,,.'h cti.,r Gl.' Il tie Present legal ratio
- such ratio as may he provided by
l.r III" fact that the method adopt
E. Y this act to maintain the parity If
ti,>r metals with each other was not
Successful docs not render this dcclara-
tion nu-atury ur III tie slightest degree
weaken lis force. 1t Is still the estab-
ID Iolicv # the United States to
,.ai,tain their rarity with each other
u n a l".al ratio. The value Of gold
"ml silver is dependent upon and is gov
or@.: ~ thcir use for monetary pur-
poses and to maintain their parity or
equality If their value upon legal IA
ito the law must provide for their equal
Us" rs money upon that ratio without
discriminating against either metal. In
other words, the law must place both
metals and provide for their unrcstrict-
cd coinage upon the ratio it prescribes
and equally cndow the coins struck
from them with the money function.
We have learned from experience that
their PARITY cannot be maintained by
purchasing n portion Of one of them as
r.: chandise for monetary use and con-
tinuing the other in the conditions of q
money metal. While the coin struck
from the metal so purchased will be on
parity with the coins struck from the
other metal, for the reason that they
are equally endowed with the money
function, there will be growing dis
parity between the coin and bullion val
Ne of the metal SO treated. We know
that for period of 20 years-to wit,
from 1903 to 1878. during which there
Were greater changes in the relative
production of the metals than during
any like period in the history-the two
metals, gold and silver, were practical
ly on q parity with each other, and that
during the whole of that time 1919
ounces OF silver would exchange for an
ounce of gold in all the markets of the
world, and this because the minis of
France were open to the unrestricted
coinage of both metals upon that ratio,
and the coins struck from them were
unlimited legal tender-that is, they
were equally endowed with the money
function.
For many centuries prior to 1873
both metals We're in the worlds money
stock, and their separation from each
other was SO gradual as not to practical
ly interfere with their joint use as mon
ey metals.
The way the bimetallic principles
bring the metals together and main
tain their parity with each other can
easily be understood. 1t is made plain
by tho following familiar illustration
Of Jevons: "When two receptacles for
fluids are separated from each other,
the height to which the fluids will rise
in each depends upon the quantity pour
ed into it. But when there is con-
Meeting pipe between them the fluid
will rise to the same level in both,
whichever receives the supply" And
this, says Jevons, exactly illustrates the
movement of the metals in western Eu-
rope under the bimetallic law of France
of 1903, which provided for the unre-
stricted coinage of both metals and gave
to the coin struck from each the office
of unlimited legal tender. Their legal
tender function, allowing the coins
struck from one Of the metals to freely
take the place Of the coins struck from
the other metal, for monetary purposes,
was the connecting pipe, and as the
fluid discharged from the common out
flow was single fluid, though in the
inflow the color of one of them may
have been white and that of the other
yellow, SO where the standard is bime.
tallic the resulting money is a single BIZ
metallic money, and its relation to COM
modities as expressive of value as is q
single standard, though it is called a
bimetallic or double standard because
two metals are selected for full none
tary use.
The effect Of the use of the two met.
ais in the currency is to steady the vol
unie Of money and consequently prices
Of commodities and prevent that great
depression of prices caused by shrink
age of the volume of primary money
and credits resting upon it which in
evitably takes place when only one
metal is used. William II. Crawford,
secretary of the treasury under Presi-
dent Monroe, said in his report, Feb.
20, 1920: Like fluids, the precious met.
ais, rs long as they are employed as the
great measure of value, constantly tend
to preserve a common level. Every de-
Walton from it will be promptly cor
rected without the intervention of
law" Their equilibratory action in the
currency will tend to an equipoise of
their value. If in the act of Feb. ~,
1878, instead of stealthily dropping out
the silver dollar and putting the gold
dollar in its place, we had changed our
ratio to the French ratio, which was
then the prevailing ratio of Europe. by
adding eight-tenths of a grain to the
weight of the gold coin or taking 1215
grains from the weight of silver coin,
France and the Latin union states
would not have closed their minis
against silver, and this silver question
would never have arisen. The accession
of this country to these bimetallic states
in the coinage Of both metals upon the
same ratio would have prevented their
rupture, and silver and gold would have
continued side by side upon a parity
with each other upon that ratio in the
worlds money stock as they had been
since 1903
NJ. Cernuschi, in expressing to our
monetary commission Feb. 8, 1877, his
opinion upon this subject Nomisma,
page 6S), said that if France and the
Latin union should then open their
minis IN tho fraa ooi,oon oT c;l,,o..