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OBJECTIONS ANSWERED, AND HONEST LEGISLATION DEMANDED.

Criticisms of joint-metallism have been mostly favorable, but some objections have been raised.

All the principal objections seem to be comprised in the following two:

1. That under joint-metallism the mint ratio might have to be changed often.

2. That under joint-metallism the final standard would still be gold.

The reply to the first objection is that the ratio would not have to be changed often, because the world's stocks of the precious metals being the accumulation of many centuries, any change in their relative production for a few years, e. g. four times as much gold as silver in value, or four times as much silver as gold in value, makes little difference in the total proportion of gold to silver in the world's

stocks.1

As Adam Smith pointed out 118 years ago, their " durableness is the foundation of this extraordinary steadiness in price."

When once joint-metallism has been established and the economic ratio has been determined, i. e. the relative costs of production in the poorest mines of gold and of silver that can be worked at a profit, then, so long as it is known that both precious metals will have substantially free access to a mint, in some great country, the ratio of their market values is not likely to change for years,' and may not change for centuries, and, as I have more fully explained on page 127, joint-metallism, in still other ways, promotes steadiness in the ratio, as, for example, by the provision that, at the mint, gold and silver must be presented together in quantities of equal value.

But whenever it is found that, for a long period of time, the mint ratio is very

1 See page 88.

'See pages ft, 131-133.

The Principle of Joint-Metallism. 199

different from the relative costs of production, and if it be known that no provision exists to correct this, and that one metal is in danger of being demonetized, and thus the chief demand for it abolished, then there will ensue great fluctuations in the value of that precious metal as compared with the other; and speculation will come to deal with estimates and opinions and conjectures as to whether a mint will again be open to it, and when and at what ratio, etc.

It is precisely this condition that has existed since 1873, and which could not exist under joint-metallism.

In reply to the second objection: For the sake of convenient statement and illustration, I have commonly spoken of the ratio as being so many silver standard coins to equal one gold standard coin of same weight, and of changing, when necessary, the number of silver standard coins to equal the gold standard coin.

But the principle of joint-metallism is to have all debts, contracted after a certain fixed future date, payable half in gold and half in silver, i. e. in equal proportions of value of each precious metal, or in joint legal-tender certificates for such equal proportions; and a joint-metallic system micrht be so arranged that the silver standard coin would be more exactly as much the final standard as the gold standard coin. But this would be complicated, and a discussion of anything like compound ratios would be difficult in a popular treatise, and the form of jointmetallism herein set forth is sufficient for practical purposes, for so long as the Government ratio is kept at approximately the market ratio, and while there is an existing provision for changing the Government ratio when necessary, it will not frequently have to be changed.1

Supposing the principle of joint-metallism to be adopted this winter or next spring, to go into effect January i, 1896, the result would be as follows:

Silver would advance in value until the true economic ratio would be reached as

1 Seo page 127.

Legal-Tender Joint Certificates. 20r

nearly as could be generally estimated with the knowledge that both precious metals were about to have substantially equal access to our mints. So by January 1, 1896, or soon thereafter, the relative market values of gold and silver would become settled, and the Government ratio would then probably not change for many years.

It is also to be remembered that while the law would provide for payment in gold standards and silver standards jointly, the actual transactions would be in legaltender joint certificates. The buyer or seller would not be affected to any considerable extent by any change in the ratio, except that the security pledged for the Government legal-tender joint certificates might possibly be affected to the extent of about one and one half per cent.1 at any time of altering ratio, but this is too remote to have any practical bearing on the question so far as the buyer and seller are concerned. The Government would assume a small risk for

1 See page 6.

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