In reply to these claims and assertions. the gold monometallists have taken several positions. In the first place, some have contended that the evils which bimetallists seek to redress are of no great consequence. In the second place. others have contended that as a plan of relief bimetallism is out of the question because it will not work in practice. And filially, granting the possibility of bimetallism, it is claimed that we have no guarantee that it would actually relieve the situation.
It. is an extreme view that the changes in prices. which constitute the chief stay of the bi metallic argument, have no relation to the money supply. if this, however, be true, a system which, like bimetallism, aims at working upon prices through the money supply is useless. If this extreme view has not been adopted by all monometallists, it is yet represented. Another and somewhat more moderate view of the same proposition is the claim that such changes in priers have worked far less disturbance than the himetallists have claimed, and that if they in volve some disadvantages, they have some coin pensations which the bimetallist in his ardor has overlooked.
More important, and occupying a larger place in the bimetallic controversy, is the standpoint that bimetallism will not work; that no legal enactment can so tix the relative values of silver and gold as to insure their concurrent circula tion. In this view bimetallism is not a double standard. but an alternating standard. Diver gencies between the legal ratio and the market ratio being bound to occur, Gresliam's Law imme diately enters into operation. The more valuable metal is no longer brought to the mint, and the existing stock in the circulation is exported. Monometallists claim this to be inevitable. They tell us that law cannot fix values; that the rela tive value of gold and silver in the market will be fixed by commercial considerations, especially by the cost of production. Any attempt on the part of governments to interfere with the opera tion of these laws must be fruitless. To these considerations the bimetallist replit-, by calling attention to the predominating influence of de mand as a factor affecting the value of the pre cious metals. He points out that the existing. stock is much greater than the annual accre tions, the cost of producing these cannot be the sole criterion of the value of the mass. lle points out further that the demand for the nse of the metals as money far outstrips any other demand. Ile therefore concludes that law can and does affect the value of the metals and is competent to fix the rates between them; that if the monetary demand thus created he strong enough, the commercial ratio must adjust itself to the legal ratio. Both sides of the contro versy appeal to the facts of history as bearing out their contentions. On the one hand, the monometallist points to the fact that the French law of ISOI which established the legal ratio of to I between gold and silver did not control the market ratio, but there was always a diver gency between them, leading now to a preference for gold and now to a preference for silver in the French coinage. The himetallists concede that
such divergence might have prevented both silver and gold being carried to the mint at the same time; that they might have determined which of the metals would be preferred for export ; but they strenuously deny that they caused the ex port of one metal or the other. If the French law gave but an imperfect picture of the work ings of the bimetallic system, it is only a proof to the advocates of the latter that the area within which it worked was too restricted. En large the scope of the law by an international agreement embracing the leading commercial na tions, and it would, they claim. be proof against fluctuations of ratio. Hence the agitation for a bimetallic standard has been for an international bimetallic system.
Finally, the monometallists are frequently willing, for argument's sake, to concede the prac ticability of bimetallism. that they put the further question, What would be gained? The evil to be remedied is an unstable standard. \\lint guarantee have we that two metals would be better than one? The bimetallists claim a compensatory action: that irregularities in the supply of one metal Nvi I I (imbalance those of the other. They avert that a greater stability would follow the introduction of their system from the fact that by distributing the variation over a wider area, the full supply of both metals offer ing a much more extensive surface, the effect would be far less perceptible. "Imagine," says Professor Jevons. "two reservoirs of water, each subject to independent variations of supply and demand. In the absence of any connecting pipe, the level of the water in each reservoir will be subject to its own fluctuations only. But if we open a connection, the water in both will as :lime a certain mean level, and the effects of any excessive supply will be distributed over the whole area of both reservoirs." They point to the experiences following the discovery of gold in the middle of the century as proof. In 1846 gold was produced to the extent of $30,000,000 and silver to that of $32,500,000. In 1852 the figures $150,000,000, and for silver $42, 500.000. In other words, gold was advanced five fold. but the combined product of gold and silver only threefold. This moderated the effect of the gold discoveries upon prices. The monometal lists contest this theory and deny that it rests on a sufficient basis of historical fact. They hold that there are no inherent reasons why the com bined production of gold and silver should not under a bimetallic system fluctuate quite as much as the production of gold alone.