Evening star., 1933-06-21
BY ARTHUR CRAWFORD.


| perfections, the experience of the lead
| ing nations of the world point to the
| conclusion that 1t is superior to all
| others which have been tried or pro-
| posed.
| The United States. like other nations.
, has experimental with different none
! tary standards In the early Colonial
days metallic money came from both
England and Spain, with some gold and
silver but no uniform standard. The
ColonistS found it convenient to use
wampum, beaver skins, tobacco and even
| cows as legal tender.
After this Government was estab-
| lshed Alexander Hamilton, the first
Secretary of the Treasury, decided upon
bimetallism at ratio of IS to l. which
was about the current market ratio OF
silver and gold Increased production
of silver resulted before long in the
operation of Gresham's law that the
baser metal drives out the good, which
always has stood as the chief objection
to a bimetallic standard in the absence
OF an international agreement. The gold
could buy more silver as bullion than
as coins. Gold began to disappear from
circulation and the metallic money was
largely silver between 1920 and 1884,
when new coinage act was passed
There was a tendency at that time to
adopt a single silver standard, but in
stead the bimetallic ratio was changed
to 16 to l. The actual market ratio
at that time was 1877 to l. Silver thus
became worth more as bullion than as
coin and disappeared from circulation
while gold flowed to the mint. BY 184O
all American silver dollar was seldom
seen. The country was practically on
a single gold standard. An act OF 1887
fixed the gold content Of the dollar at
258 grains -tenthS fine, or 23.2
grains of pure gold, which standard
has remained unchanged in all the
monetary laws passed since that time
Double Standard Dropped.
In the act of 1853 the United States
abandoned the double standard in
recognition of the fact that it was ina-
possible to keep mint ratio in accord
with, a fluctuating market ratio Pro-
vision was made for a subsidiary coin
age of silver. The gold standard was
maintained until in the Civil War de-
preciated paper currency drove out all
metallic money.
The act of 1873 codifying mint laws
omitted from the list of silver coins sill
yer dollar pieces. This action, which
was unnoticed at the time, was later
described by silver partisans as "the
crime of 1873" on the theory that 1t
demonetized silver.
The Bland-Allison act of 1878, passed
over the veto of President Hayes, pro-
vided for the coinage into dollars Of not
less than 100000 nor more than So
900, 600 worth of silver monthly, these
dollars to be legal tender for all debts
and dues, public and private. Issuance
of nartifinotoc a0aincf the silver
dollar was authorized. Under this law
291 ,272,O18 fine ounces of silver were
purchased at cost of about $308, ,000,-
600. Declining prices Of silver made 1t
difficult to maintain the silver at par
with gold. Then followed the Sherman
act of 1890, which, according to author
tiles adverse to the silver partisans was
even more unsound than the act Of
1878. 1t provided for the monthly pur-
chase of 100000 ounces of silver with
Treasury notes. The amount of Treas
ury notes thus issued was about Sl55,-
600, ,000 The act was repealed in 1895
after the panic of that year had been
attributed to its effects.
The issue of free coinage OF silver as
we'll as gold on a ratio of 16 to l was
fought in the Bryan-McKinley cam
paign of 1896. The triumph Of the gold
forces led to the enactment Of the gold
standard act of 1900. That act provid
ing for maintenance of all currency at
parity with gold remains on the stat
ute books, although its operation has
been in fact suspended under the steps
taken during the present administra-
ton to prevent actual redemption in
gold.
Britain Tied to Gold.
Great Britain is tied to gold by long
years Of tradition. 1t was the first mod
ern country to adopt full gold stand
ard, the action being taken in 1874. Dur
ing the World War the British govern
ment maintained an artificial exchange
rate for the pound at $4.76 by a pegging
process in New York. When the peg
ging was discontinued after the war the
pound dropped to $500 in 1920. In
stability prevailed from 1919 to 1925,
when the British stabilized its currency
on gold basis with the pound at the
pre-war par Of s4.86. The gold stand
ard was abandoned In September, 1881,
when the reserves OF the Bank Of Eng
land were endangered in the financial
crisis Of that period
Most Of the other European countries
passed through experiences with stand
ards other than gold before the war.
Bimetallism proved unsatisfactory.
Prior to 1870 the German currency
was silver, supplemented by paper
money issued by the German states A
unified system based on gold was
adopted early in the 70s, silver coins
remaining legal tender 1t was known
as limping gold standard because of
Tree coinage Of gold and limited coin
age OF silver. The government took
over the Reichsbank, which had the
note-lssuing authority, during the war,
and prohibited exports of gold. The cur
rency system broke down after the war.
nnally being stabilized In 1924 on a
gold basis. Germany still remains on
gold standard, but maintains such ex-
cnange restrictions that it is virtually
of gold
The French monetary system origi-
mated IN bimetallism dating back to
l6u3. The French bimetallism was
pased on coinage ratio Of l5l2 to |
IN the 70s single gold standard was
introduced, but the standard was one of
a hmplng variety owing 10 the reten-
Iioh OF legal tender silver coins.
Between 1865 and the time of the
World War France participated with
beIslum, switzerland and Italy in what
was known as the Latin Monetary
Union. These countries had a silver
3-1ranc piece Of uniform value and
maintained the same degree of fine
ness.
France peeged In uyar