The Black Hills union. [volume] (Rapid City, Pennington County, Dakota [S.D.]) 1889-1904, 1899-03-24
GRESHAM LAW.
IN HARMONY WITH THE BIZ
METALLIC THEORY.
The Real Purpose OF Decentralization IL
tho Perpetuation of Debt-Parity to
DO Maintained Is Between Money and
Property.

vigorously take the offensive, in main
tanning the relations of the so-called
Gresham law to the double standard.
The substance Of that law is that
money Of an inferior purchasing power
dlsplaces money Of a superior purchas-
Ing power. The proposition is correct,
nor is there any mystery about it.
1t is only one exempliication Of the
law which is the corner stone of po-
litical economy, that men seek to graf
ify their desires with the least exer-
ton. Boys in the streets observe the
Gresham law. When they play keeps"
they use their cheaper marbles.
But when Gresham recited it, he did
not mean what nearly all of us, MONO
metallists and bimetallists alike, are
apt to think he meant. He did not re-
fer to coins made of two metals, gold
and silver. He referred to full weight
and light weight coins made Of the
same metal. He knew nothing of the
theory of b~imetallism. He knew moth
ing of the science of money. There
was no such science in those days.
There is no such science now. The
science Of money is like a new con-
tinent just emerging from the ocean,
and many of it's principles are still
hidden beneath the waters.
The visible principles Of the new
science are beginning to be studied;
but the Science of money" has not yet
been written.
If any gold standard advocate I'M
dertakes by bluff and brow beating to
make the reader think he understands
the science of money, and that 1t is
"just about deep enough for him." do
you not succumb to him. He does
not know any more about 1t than you
do; and the chances are, not as much.
Nobody knows very much about 1T.
We are just beginning to learn. But
when Gresham wrote the proposition,
he uttered better thar he knew. He
proclaimed the great fundamental law
Of the double standard. And when the
gold standard advocates cite the law
as against bimetallism, they have no
intention Of being consciously funny.
They simply walk over the law, so that
II it were a snake it would bite them,
without seeing it. But we must I'M
derstand the law, and the people must
understand it, If we ever expect to
make the double standard a part of our
monetary system.
What is b%imetallism? 1t is a mon
etary system in which each Of the two
metals has Cd an unrestricted right OF
coinage at a fixed legal ratio, and (2)
an unrestricted right Of legal tender
at that ratio.
That Is all there is of it. The en-
tire proposition is summed up in those
two conditions. Some persons might
add a third-that a debtor has the OPP
ton to pay with either metal. But
this IS already contained in the sec
ond; for if both metals are a legal ten
der. the debtor will naturally choose
the cheaper in discharging his debt.
Simple as these two inclusive propo-
sitions are, there is yet a worldwide
confusion Of the subject, endangering
the success of bimetallism at the next
election, in the belief which has almost
universal acceptance, which dominates
all economic thought, and pervades all
economic debate and literature, that
the essence of bimetallism is the con-
current circulation of the two metals
in the same country. This is not true.
The belief ignores the two points just
stated, either wholly or in part, which
two points constitute the entire theory
of bimetallism; and substitutes a false
theory. The concurrent circulation of
the two metals in the same country
has nothing to do with bimetallism,
so far as relates to the success Of the
principle. If the market ratio and the
mint ratio coincide, the two metals
will circulate concurrently in the same
country. Even If the two ratios do
not coincide, the two metals will cir
culate in the same country to a greater
or less degree, unless the divergence Of
the ratio is large or long continued.
If the market ratio and the mint ratio
do not agree, and even if one metal
should entirely leave the country, the
two metals will still circulate concur
rently, one in one country and vae
other in some other country; concur
rently in point of time. which is the
important point to us; even if not con
currently in point of geographical dis
tribution, which is a point of not the
slightest consequence to us.
If the United States were to open
the minis to the free coinage of both
metals at 16 to 1, and declare both to
be a legal tender; and if as a result
either silver or gold were to go out
of circulation and stay out of circula-
ton for a thousand years, leaving only
one metal in circulation all that time,
we should still be a bimetallic country;
and bimetallism would be in success
full operation here all the time. And
yet it is the commonest thing to hear
the gold standard adherents declare
that, under such conditions, W. should
Il ,tEEeMsN ---a - A. 49, sc 81 49,