Joint-metallism conforms to the principle of our Constitution that gold and silver shall be our legal tender.1

It promotes the use of silver equally with gold as the metallic basis of currency, making that basis adequate without impairing the obligation of contracts.

It conveniently adjusts changes in market ratio by altering the number of silver standard coins to equal a gold standard coin of the same weight. These alterations can be made more or less frequent and exact according to whether a larger or smaller gold coin be taken as the gold standard coin.2

2

It permits nations establishing it to continue to use their own present gold coins and subsidiary silver coins, while it tends to the ultimate establishment of international gold and silver coins, and

1 "I am certainly of opinion that gold and silver, at rates fixed by Congress, constitute the legal standard of values in this country, and that neither Congress nor any State has authority to establish any other standard or to displace this standard."

DANIEL WEBSTER.

2 Such a proportion as 3 gold standard coins to equal 100 silver standard coins might also be admissible.

Equivalent as well as Measure. 125

promotes clear thinking and understanding of what money really is.1

It avoids entirely the principal accusations against bimetallism, which are : A dishonest impairment of the obligation of existing contracts. (2) A ratio that would be, at times, very different from the market ratio. Most of the arguments against bimetallism and against monometallism do not apply against jointmetallism.

It recognizes the principle that honest money must be "an equivalent as well as a measure."

It makes the measure of value more just and more stable because based on both precious metals jointly.

It

It prevents speculators from monopolizing the metallic basis of money. gives a proper elasticity to the volume of the metallic basis of currency, because the production of silver can always be largely

1 Money is a potentiality or stored up and readily available energy (see page 20).

2 P. 25. ""

for the gold."

'Surely there is a vein for the silver and a place

and promptly increased by labor, while the production of gold cannot.

Under joint-metallism, the relative coinage values of gold and silver would be neither permanently nor arbitrarily fixed; but would be variable according to their relative market values. This would obviate the present chief causes of disturbances in trade and finance; for these disturbances have resulted principally from a large change in the relative market values of gold and silver, while no provision had been made for changing the coinage ratio.

It is impossible, now, to determine the most proper ratio except by giving to both the precious metals equal access to a mint. The question of the ratio to be fixed arbitrarily, under present conditions, might break up any international convention. But if gold and silver together had thus equal access to the mints of even the United States alone, there would be established, soon, between them the true economic ratio of values, viz. : the relative costs of production in the poorest mines

Fluctuations would be Lessened. 127

of gold and of silver that could be worked at a profit.

The relative market values would then seldom change, and the Government ratio would probably not have to be changed for years, perhaps not for centuries. If, owing to discoveries of mines. or to improved metallurgy, the relative production of one precious metal were increased, whenever this appeared sufficient to affect the relative proportions of the world's stock of gold and silver, then one metal would have a tendency to decline in price; but against this tendency would be the knowledge that with any decline in price a larger proportion of this metal would be demanded at the mint and in payment of debts. Moreover, the market price of each being based on the two metals jointly, their relative fluctuations would be lessened, and besides this, the fact that a law was established which provided for adjusting the Government ratio to correspond with fluctuations in the market ratio, would have a strong tendency to obviate these fluctuations and

to prevent speculative attempts to monopolize either of the precious metals.

An international agreement would be advantageous but not necessary to jointmetallism.

The establishment of a legal coinage ratio by France, in 1803, was found sufficient to overcome the variations in the relative costs of production of the two precious metals so far that for sixty-two years the coinage ratio of 15 to I was maintained and the mint of France kept open at this same ratio, during this long period of most remarkable fluctuations in the production of both gold and silver.1

This fact does not contravene the law that market values are governed by supply and demand. It is an excellent illustration of the law. The principal demand for precious metals is for coinage. A coinage law can increase or diminish the demand for a precious metal and thus affect its market value.

The writings of John Locke and others

1 The French coinage was at times all gold and at times all silver. Joint-metallism would prevent such alternation.