In bimetallism the debtor always has the option. This is true, not because of a desire on the part of the government to favor the debtor, but because the parity can be maintained in no other way. The desire of all debtors to secure that metal which is the cheaper will, in itself, by increasing the demand for the cheaper metal, tend to equalize the commercial value of the metals with the legal value.
' Bimetallism has been declared to be theoreti cally better than monometallism (either of gold or silver), because under the double or bi metallic standard the volume of money changes less rapidly and less suddenly than under the single standard. As a rule the increase in the production of one metal has spread itself over the entire volume of money and has, therefore, caused a less proportionate increase than it would have caused had the world been using but one metal, either gold or silver, as standard money.
The practical argument advanced in favor of bimetallism is that neither metal alone fur nishes a sufficient quantity of money to support the world's commerce. This phase of the ques tion was not much considered until after 1873 because, prior to that date, there were sufficient mints open to the coinage of both metals to furnish a monetary use for every ounce pro duced. When all of the gold and silver avail able for coinage could go through the mints into the currency, each nation could consider the question from a purely theoretical stand point, because so long as the commercial world had the benefit of the entire volume of gold and silver, it did not make so much difference how many nations used one metal, or the other, or both. When, however, the gold standard for money systems came into favor and enough nations joined in it to reduce the demand for silver below the supply available for coinage, then each nation was compelled to consider not only its preference as to a standard, but whether — and it was a vital question — it was always sure of having a sufficient quantity of the chosen metal.
The advocates of bimetallism contended not only that the law of supply and demand regulates the value of the dollar — an increase in the demand, the supply remaining the same, raising the purchasing power of the dollar, and an increase in the supply, the demand remain ing the same, decreasing the purchasing power of the dollar, but they also asserted that supply and demand regulate the market price of the metals.
The contention of monometallists that it is impossible to fix a relation between two metals was met with the reply that the relation be tween two things of limited production, such as gold and silver, can be fixed by any nation or group of nations which can furnish a use for so much of both metals as is available for coinage.
The demand created by the government must be considered as added to the demand created by the arts. If the demand created by the government is sufficient to utilize the surplus over and above what the arts require, the commercial value can be kept up to the coinage value for the reason that each owner will seek the highest possible price, and so long as the government stands ready to con vert a given amount of metal into a given amount of money, he will not have to dispose of the metal to any one else for less than the government price. If the government, in stead of standing ready to convert one metal into money, stands ready to convert two met als into money, it can make the commercial ratio and the coinage ratio identical, if there is a use for the money. The changes in rela tive production would not affect this condition so long as the government was able to utilize all of the surplus of both metals.
Independent bimetallists and international bimetallists, though agreeing as to the theoret ical and practical benefits of the double stand ard, differed as to the ability of the United States alone to maintain the parity, the former contending, and the latter denying, that under conditions as they then existed the nation was able to utilize all the silver that could come to our mint.
The fear that, under bimetallism, our country would be flooded with the coined sil ver of the world was declared to be without foundation, for the reason that our ratio, 16 to 1, was more favorable to gold than the ratio existing between gold and silver in the nations that have a large quantity of silver coin. France, for instance, was the largest European holder of silver, but as her silver circulates on a parity with gold at a ratio of 15Y2 to I, it could only come here at a loss equivalent to about three cents on the dollar.