LETTERS TO THE EDITOR.
BIMETALLISM.
[To THE EDITOR Os THE " SPECTATOB:9 SIB,—Will you allow me to add a few words to Mr. Samuel Smith's comment on your interesting article on Bimetallism ? You say, and quite rightly, that "if silver is successfully tied to gold in the ratio, say, of 20 to 1, the volume of the gold currency will in practice be increased by one-twentieth of the whole volume of silver added and to be added." But you go on to say that all things would be so much the dearer by the increase of the measure of value. To gauge this correctly, we must see what would be the addition to the currency. I think, and I believe I said in my evidence before the Commis- sion, that the immediate addition would be little or none. Most of the silver in the world, not used in the arts, is circulating as money, either in coin or in certificates. All that I know of which is not so circulating is a sum of two or three millions of dollars in the United States Treasury, of which the certificates are in the possession of the Treasury itself. There is also whatever quantity may be hoarded in India, in the form of ornaments. But it is not at all certain that, though the law were changed, it would not still be hoarded.* So the quantity " added " would be very small; but there is yet another consideration, which, indeed, is one of the chief difficulties in the way of adopting a ratio of 20 to 1. All the silver circulating as legal-tender money in France and Germany stands in the ratio of 154 to 1. Its volume reckoned in gold would be reduced in proportion, if the ratio were made 20 to 1. The man who had 154 oz. of silver, with which to-day he could buy as much bread as he could with 1 oz. of gold, would find that on the morrow he would need 44 oz. more. So in the United States, where the ratio is 16 to 1, he would need 4 oz. more. On the whole, therefore, it is likely that there would be not an increase, but a diminution of the world's currency.
The other objection is that there is no ground for supposing that 20 to 1 would be the true market value. The mere suggestion (as Mr. Smith says) that the Americans are about to increase their monthly purchase, sends the market price from 44d. to 48d. an ounce. What would it be if they were to open their mint and cause a perpetual demand P Does not Mr. R. P. Smith give an example of what he thinks the dangers of bimetallism, drawn from a time when the bimetallic law was not in operation P Certainly dollars could not have been then legal tender, for if they were, the Bank would have had to receive them at their nominal value ; nor, I suppose, was there an open mint.—I am, Sir, &c., HENRY RUCKS GIBBS. St. Dunstan's, Regent's Park, May 5th.
[* We agree ; but has Mr. Gibbs any idea of the volume of this hoard ? It probably exceeds two hundred millions sterling.—En. Spectator.]
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