try and in the stock market. Involved as they are in various industrial enterprises which they have promoted, or which they are fostering, their interests may lie in the direction of expansion, or in that of gold exportation when those of the country as a whole, as interpreted by the Imperial Bank, lie in the opposite direction. In such a case the Imperial Bank may find control of the market through manipulation of the discount rate difficult if not impossible.

REFERENCES

In addition to the references on the workings of the banking machinery of the different countries given at the close of the chapters immediately preceding consult for the United States: Pratt, The Work of Wall Street; Conant, Wall Street and The Country; Nelson, Editor, The A B C of Wall Street; for England: Straker, The Money Market; Clare, The Money Market Primer and Key to the Exchanges; Bagehot, Lombard Street; Hankey, The Principles of Banking, its Utility and Economy with remarks on the Working and Management of the Bank of England; Flux, The Bank of England Reserve, Jour. Can. Banker's Assn. v. XI. p. 219; Hillauer, Die Zahlungsvermittlung der englischen Banken im Überseehandel; and Lecoffre, Banques Anglaises et Usages de Banque en Angleterre; for France: Sayous Les Banques de Dépot, les Banques de Crédit et les Sociétés Financières; Lepeltier, Le Portfeuille; Tavernier, Operations de Banque et de Bourse; Rosendorff, Die Goldprämien politik der Banque de France und ihre deutschen Lobredner, Conrads Jahrb. 3d F. v. 76. p. 632; and for Germany: Miscellaneous articles on German Banking published by the National Monetary Commission; Obst, Geld-, Bank-, und Börsenwesen; Buchwald, Technik des Bankbetriebes; Kautsch, Handbuch des Bank- und Börsenwesens; Weber, Depositenbanken und Spekulationsbanken; and Landmann, System der Diskontpolitik.

On bank rates see Palgrave, Bank Rate and the Money Market in England, France, Germany, Holland and Belgium 1844-1900; Steel, On Changes in the Bank Rate in Jour. Inst. of Bankers, 1890-91; Giffen, Gold Supply, the Rate of Discount and Prices and Bank Reserves in Essays on Finance, 2d Series; Jevons, Investigations in Currency and Finance, ch. v; Prion, Das deutsche Wechseldiskontgeschäft; and Scott, Rates on the New York Market 1896-1906, Jour. Pol. Econ. for May, 1908.

The financial periodicals of each country publish current statistical information such as bank reports and statements, money and exchange

rates, stock and bond quotations, etc., and many valuable articles on the workings of the money market machinery. Among these of especial value are the Commercial and Financial Chronicle, its annual summary, The Financial Review, Bradstreets, The Bankers' Magazine, The Wall Street Journal, and The New York Journal of Commerce for the United States; The Economist and the Bankers' Magazine for England; L'Economiste and Le Rentier for France; and Der deutsche Oekonomist and the monthly Volkswirthschaftliche Chronik of Conrad's Jahrbuch for Germany. See also Raffalovich, Le Marché Financier. The following public documents are also indispensible for the study of conditions in the United States: Reports of the Comptroller of the Currency; Reports of the banking departments of the States; Statistical Abstract of the United States; and Monthly Summary of Commerce and Finance of the United States. See also Special Report from the Banks of the United States published by the National Monetary Commission.

CHAPTER XVI

THEORY OF BIMETALLISM

UNTIL comparatively recent times there waged in this and some other countries a long controversy over the question of bimetallism vs. monometallism. Though it seems to have abated temporarily at least, its importance and the nature of the problems involved render a discussion of the subject desirable in a text book of this kind.

1. The nature and purpose of bimetallism.-The word bimetallism is used to describe a monetary system in which standard coins of both gold and silver are freely manufactured without any preference whatever being shown by the government toward either metal. It, therefore, involves three things: first, that the public authorities should decide upon some ratio between the two metals; second, that they should agree to accept all the gold and silver bullion of the proper standard presented, and mint it into certain or all classes of coins at the ratio selected; and third, that they should make such coins full legal tender for all payments public or private. This system is advocated as a substitute for monometallism, in which one of the metals only is used in the manufacture of standard coins, and in which the other occupies a subsidiary position in the sense that the coins made from it are minted only on government account and with limited legal-tender power, and are maintained at at par with the standard coins by being made redeemable directly or indirectly in them, and by being strictly limited in quantity to the public demand for them in those uses for

which they are best adapted. In order to avoid confusion and misunderstanding several points should be carefully noted.

First, the controversy over bimetallism versus monometallism does not involve the question whether both gold and silver shall be used for monetary purposes. In each system coins of both metals play an important part, and no monometallist whose opinion is worth considering proposes the demonetization of either silver or gold, as has often been charged. The question simply concerns the best method of fixing the relation between the two metals in the currency, the bimetallists claiming that both should be put upon a substantially equal footing by the methods of precedure above indicated, while their opponents claim that coin made of one of the metals should be made subsidiary by the processes described in Chapter II. The difference between the two parties in reference to this matter concerns the use of both metals in the manufacture of standard coins only.

Second, bimetallism does not involve the necessity of establishing an office for money-changing in the treasury department at which the government would freely exchange coins of the one metal for those of the other. It means only that it shall agree to coin all the silver bullion of the proper standard which people are pleased to bring to the mint into silver coins of the denominations, weight, and fineness established by law, and all the gold bullion brought, into gold coins; that it shall receive in payments coins of either or both kinds without discrimination, and pay out whichever variety of coins it pleases; and that it shall compel everybody else to do likewise by making both gold and silver coins full legal tender. Naturally the public treasurer is obliged to pay out the kind of money he receives, and it is entirely possible that under a bimetallic

system he might be compelled to conduct practically all his monetary operations in one of the metals, and thus be entirely unable to furnish coins of the other metal on demand. Bimetallists do not like to contemplate such a state of affairs, and do not believe that it would ever be realized, but there is nothing in the nature of their system to prevent it. Everything depends upon the mode of its operation.

Third, so far as the present practice of most nations is concerned, the proposition of the bimetallists is that some one of the silver coins, usually the largest, shall be freely minted by the government just as gold coins are now, and that all limitations on its legal-tender power shall be removed. A change in the raito sometimes is and sometimes is not advocated. In the United States, for example, the bimetallists propose that the silver dollar, which weighs sixteen times as much as would a gold dollar, if one were minted, shall be freely coined for all persons who bring silver bullion nine-tenths fine to any of our mints for that purpose. This coin already possesses full legal-tender power, and consequently no change in this particular is needed. With us, therefore, the question of bimetallism reduces itself to that of the free coinage of silver dollars as opposed to their present limited coinage and as opposed to the proposition made by many people that they be completely assimilated to our other subsidiary coins. In France and the other countries of the Latin Union the controversy concerns the status of the five-franc piece, the coinage of which was discontinued in 1878. The bimetallists propose that this coin, the weight of which is to that of a gold coin of the same nominal value as 151⁄2 is to I, shall be restored to the position it occupied after the monetary convention of 1865, in which France, Belgium, Switzerland, and Italy agreed to coin five-franc pieces as freely as gold. Inasmuch as no coin similar in status to our dollar and the