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Let there be silver coins containing the same weight of silver as there is weight of gold in the present $5 gold-piece." Let those silver coins be called standards.” Let it be enacted that for all debts, public or private, of $10 and upward, contracted after six months from the passage of the act, it shall be lawful to pay half in gold coins and half in such number of standards* as shall be approximately equal thereto, according to the Government ratio to be fixed as follows:

On the first lawful day of each month.” after six months from the passage of the act, the Secretary of the Treasury shall declare what number of standards’ most nearly represent a $5 gold-piece, according to the average relative market values of gold and silver, from the first day of the third month after the passage of the act and based on the average market values of all the intervening months. This number is to be the ratio for that current month. A $5 gold-piece, plus said number of standards,” will constitute $10 in lawful money during said month.

* See page xi. * Or silver standards, * See page 198.

Let the mints be open to the coinage of standards, double standards, triple standards, and pieces containing IOOO standards, when the silver is presented accompanied by an equal value of gold, at the current Government ratio, to be coined into $5, $10, and $20 gold pieces.

Let the Treasury receive deposits of gold coin together with silver standards, the proportion of gold and silver in such deposits being according to the Government ratio current at the time, and issue therefor legal-tender joint certificates in denominations of $10, $20, $100, $500, and $1000, these certificates to be redeemable at the Treasury half in gold and half in standards, the number of standards to be according to the Government ratio in force at the time certificates are presented for redemption.

Changes in the Government ratio would become very infrequent, could always be calculated in advance, and would never exceed one standard at any one time. At present value of silver, this would make a difference of 15 cents on $10 lawful money, or 14 per cent.

The Economic Ražzo. 7

This plan would be a suitable basis for negotiating an international agreement for joint-metallism, with an international committee to make any changes in the ratio; but, as the plan is to maintain the full use of silver with gold on the basis of their relative market values, the United States, which is most interested, could safely undertake it alone.

The only possible loss would come from a decline in silver, and this is not probable when, under a system permanently binding the two metals together, silver would have substantially the same access as gold to the mints, even in this country alone. A small uniform minting charge of so much per ounce on both gold and silver might provide a fund to meet any possible loss; and, until an international agreement should be obtained, standards might be coined exclusively of silver mined in the United States after the passage of the act, the market price of all silver to be still used in fixing the ratio.

The Government ratio would soon come to be substantially the economic ratio which is the relative costs of production of gold and silver in the poorest mines that could be worked at a profit, when both metals had equal access to the mints. And the cost of production of the two precious metals tegether would naturally constitute the just and safe limit to the expansion of the currency and be the proper measure of its value. Owing to some exceptionally rich finds of limited extent, and to enormous expenditures for tunnels, plants, etc., not counted in the present cost of production, a small quantity of silver can be produced below even the present price, but this is equally true of gold and does not fix the cost of production of quantities sufficient to meet the requirements of the currency on a joint-metallic basis. . So long as credits throughout the world were expanding, a limited amount of coin would support a large amount of credit. But when there is danger of one money metal driving out the other, and credits are contracted, a larger quantity of coin is required or panic will result. Then pooling of credits and clearing-house certifiThe Only Possible Final Basis. 9

cates, etc., may save banks and delay or distribute disaster, but will not produce prosperity. The sobered sense of the people will make them long refuse to develop business until they are assured of an adequate and permanent supply of currency based on the only possible final basis of a sound and sufficient currency—the two precious metals together, limited by the quantities in existence and the cost of production. This can be obtained by the plan I have called joint-metallism.

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