Bimetallism
Bimetallism,
For scholarly purposes, "proper" bimetallism is sometimes distinguished as permitting that both gold and silver money are legal tender in unlimited amounts and that gold and silver may be taken to be coined by the government mints in unlimited quantities.[4] This distinguishes it from "limping standard" bimetallism, where both gold and silver are legal tender but only one is freely coined (e.g. the moneys of France, Germany, and the United States after 1873), and from "trade" bimetallism, where both metals are freely coined but only one is legal tender and the other is used as "trade money" (e.g. most moneys in western Europe from the 13th to 18th centuries). Economists also distinguish legal bimetallism, where the law guarantees these conditions, and de facto bimetallism, where gold and silver coins circulate at a fixed rate.
During the 19th century there was a great deal of scholarly debate and political controversy regarding the use of bimetallism in place of a
Historical creation
From the 7th century
Croeseids
Croesus (reigned c. 560–c. 546 BCE), king of Lydia, who became associated with great wealth. Croesus is credited with issuing the Croeseid, the first true gold coins with a standardised purity for general circulation,[1]
Herodotus mentioned the innovation made by the Lydians:[1]
"So far as we have any knowledge, they [the Lydians] were the first people to introduce the use of gold and silver coins, and the first who sold goods by retail"
— Herodotus, I94[1]
Achaemenid coinage
Many ancient bimetallic systems would follow, starting with
Sardis remained the central mint for the Persian Darics and Sigloi of Achaemenid coinage, and there is no evidence of other mints for the new Achaemenid coins during the whole time of the Achaemenid Empire.[13] Although the gold Daric became an international currency which was found throughout the Ancient world, the circulation of the Sigloi remained very much limited to Asia Minor: important hoards of Sigloi are only found in these areas, and finds of Sigloi beyond are always very limited and marginal compared to Greek coins, even in Achaemenid territories.[13]
Argentina
In 1881, a currency reform in Argentina introduced a bimetallic standard, which went into effect in July 1883.[14] Units of gold and silver pesos would be exchanged with paper peso notes at given par values, and fixed exchange rates against key international currencies would thus be established.[14] Unlike many metallic standards, the system was very decentralized: no national monetary authority existed, and all control over convertibility rested with the five banks of issue.[14] This convertibility lasted only 17 months: from December 1884 the banks of issue refused to exchange gold at par for notes.[14] The suspension of convertibility was soon accommodated[clarification needed] by the Argentine government, since, having no institutional power over the monetary system, there was little they could do to prevent it.[14]
France
A French law of 1803 granted anyone who brought gold or silver to its mint the right to have it coined at a nominal charge in addition to the official rates of 200 francs per kilogram of 90% silver, or 3100 francs per kilogram of 90% fine gold.
Latin Monetary Union
The national coinages introduced in Belgium (1832), Switzerland (1850), and Italy (1861) were based on France's bimetallic currency. These countries joined France in a treaty signed on 23 December 1865 which established the Latin Monetary Union (LMU).[16] Greece joined the LMU in 1868 and about twenty other countries adhered to its standards.[18] The LMU effectively adopted bimetallism by allowing unlimited free coinage of gold and silver at the 15.5 to 1 rate used in France, but also began to back away from bimetallism by allowing limited issues of low denomination silver coins struck to a lower standard for government accounts.[19] A surplus of silver led the LMU to limit free coinage of silver in 1874 and to end it in 1878, effectively abandoning bimetallism for the gold standard.[19]
United Kingdom
Medieval and early modern England used both gold and silver, at fixed rates, to provide the necessary range of coin denominations; but silver coinage began to be restricted in the 18th century, first informally, and then by an
United States
In 1792, Secretary of the Treasury
Political debate
In the United States, bimetallism became a center of political conflict toward the end of the 19th century. During the
Bimetallism and "
Bryan, the eloquent champion of the cause, gave the famous
Economic analysis
In 1992, economist Milton Friedman concluded that abandonment of the bimetallic standard in 1873 led to greater price instability than would have occurred otherwise, and thus resulted in long-term harm to the US economy. His retrospective analysis led him to write that the act of 1873 was "a mistake that had highly adverse consequences".[31]
See also
Notes
- ^ Formerly also written bi-metallism.[2]
- Charles Kindleberger[6] and Angela Redish[7] have argued against and Milton Friedman[8] and Marc Flandreau[9]for the inherent stability and usefulness of bimetallic standards.
References
Citations
- ^ ISBN 978-0-19-937218-8. Archivedfrom the original on 7 August 2022. Retrieved 16 November 2018.
- ^ Wilson, Alexander Johnstone (1880), Reciprocity, Bi-metallism, and Land-Tenure Reform, London: Macmillan & Co., archived from the original on 1 January 2017, retrieved 1 January 2017
- ^ "bimetallism, n.", Oxford English Dictionary, archived from the original on 11 January 2008, retrieved 1 January 2017.
- ^ Velde; et al., A Model of Bimetallism, Minneapolis: Federal Reserve Bank of Minneapolis Research Department.
- ^ "Bimetallism", Encyclopædia Britannica.[clarification needed]
- ^ Kindleberger, Charles (1984), A Financial History of Western Europe, London: Allen & Unwin
- ^ Redish, Angela (1995), "The Persistence of Bimetallism in Nineteenth Century France", Economic History Review, pp. 717–736
- ^ Friedman, Milton (1990), "Bimetallism Revisited", Journal of Economic Perspectives, vol. 4, American Economic Association, pp. 85–104
- ^ Flandreau, Marc (1996), "The French Crime of 1873: An Essay on the Emergence of the International Gold Standard, 1870–1880", The Journal of Economic History, vol. 56, pp. 862–897
- ISBN 978-0-521-20091-2. Archivedfrom the original on 15 January 2023. Retrieved 17 November 2018.
- ^ DARIC – Encyclopaedia Iranica. Archived from the original on 29 April 2011. Retrieved 20 November 2018.
- ^ ISBN 978-0-521-20091-2. Archivedfrom the original on 15 January 2023. Retrieved 20 November 2018.
- ^ ISBN 978-0-521-20091-2. Archivedfrom the original on 15 January 2023. Retrieved 20 November 2018.
- ^ a b c d e della Paolera, Gerardo; Taylor, Alan M. (2001). "The Argentine Currency Board and the Search for Macroeconomic Stability, 1880–1935" (PDF). University of Chicago Press. pp. 46–48. Archived from the original (PDF) on 16 January 2014.
- ^ a b Dickson Leavens, Silver Money, Chapter IV Bimetallism in France and the Latin Monetary Union, page 25
- ^ a b Dickson Leavens, op. cit. page 26
- ^ John Porteous, Coins in History, page 238
- ^ Robert Friedberg, Gold Coins of the World, fourth edition, page 11
- ^ a b John Porteous, op. cit. page 241
- ^ A. Redish, Bimetallism (2006) p. 67 and p. 205
- ^ B. Hilton, A Mad, Bad & Dangerous People? (Oxford, 2008) p. 303
- ^ É. Halévy, Victorian Years (London: Ernest Benn, 1961) p. 201
- ^ P. J. Cain, British Imperialism (2016) pp. 155–6 and p. 695
- ^ 2 Annals of Cong. 2115 (1789–1791), cited in Arthur Nussbaum, The Law of the Dollar Archived 15 November 2020 at the Wayback Machine, Columbia Law Review, Vol. 37, No. 7 (Nov., 1937), pp. 1057–1091
- ^ R. B. Nye, the Growth of the United States (Penguin 1955) p. 599-603
- ^ H. G, Nicholas, The American Union (Penguin 1950) p. 220
- ^ Quoted in R. B. Nye, the Growth of the United States (Penguin 1955) p. 603
- ^ R. B. Nye, the Growth of the United States (Penguin 1955) p. 603
- ^ R. B. Nye, the Growth of the United States (Penguin 1955) p. 604
- ^ H. G, Nicholas, The American Union (Penguin 1950) p. 222
- ^ Milton Friedman, Money Mischief (New York: Harcourt Brace Jovanovich, 1992) 78.
Bibliography
Primary sources
- Campaign Text-book of the National Democratic Party (1896) by Democratic Party (U.S.) National Committee: this is the Gold Democrats handbook; it strongly opposed Bryan.
- Walker, International Bimetallism (New York, 1896)
- Robert Giffen, Case against Bimetallism (London, 1896)
- Joseph Shield Nicholson, Money and Monetary Problems (London, 1897)
- Samuel Dana Horton, The Silver Pound (London, 1887)
- Walker, Money (New York, 1878)
- Francis Amasa Walker, Money, Trade and Industry (New York, 1879)
- Elisha Benjamin Andrews, An honest Dollar (Hartford, 1894)
- Helm, The Joint Standard (London, 1894)
- Frank William Taussig, The Silver Situation in the United States (New York, 1893)
- Horace White (writer), Money and Banking (Boston, 1896)
- James Laurence Laughlin, History of Bimetallism in the United States (New York, 1897)
- Langford Lovell Price, Money and its Relations to Prices (London and New York, 1896)
- Utley, Bimetallism (Los Angeles, 1899)
- Roger Q. Mills, What shall we do with silver? (The North American Review, Volume 150, Issue 402, May 1890.)
Secondary sources
- Epstein, David A. (2012). Left, Right, Out: The History of Third Parties in America. Arts and Letters Imperium Publications. ISBN 978-0-578-10654-0.
- James A. Barnes, "Myths of the Bryan Campaign", Mississippi Valley Historical Review, 34 (December 1947) online in JSTOR
- David T. Beito and Linda Royster Beito, "Gold Democrats and the Decline of Classical Liberalism, 1896–1900", Independent Review 4 (Spring 2000), 555–75.
- Bordo, Michael D. "Bimetallism". in The New Palgrave Encyclopedia of Money and Finance edited by Peter K. Newman, Murray Milgate and John Eatwell. 1992.
- Dighe, Ranjit S. ed. The Historian's Wizard of Oz: Reading L. Frank Baum's Classic as a Political and Monetary Allegory (2002)
- Flandreau, Marc, 2004, The Glitter of Gold. France, Bimetallism and the Emergence of the International Gold Standard, 1848–1873, Oxford, Oxford: Oxford University Press, 343 p.
- Friedman, Milton, 1990a, "The crime of 1873", Journal of Political Economy, Vol. 98, No. 6, December, pp. 1159–1194 in JSTOR
- Friedman, Milton, 1990b, "Bimetallism revisited", Journal of Economic Perspectives, Vol. 4, No. 4, Fall, pp. 85–104. in JSTOR
- Friedman, Milton, and Anna J. Schwartz, 1963, A Monetary History of the United States, 1867–1960 Princeton University Press. ISBN 0-691-00354-8.
- Jeansonne, Glen. "Goldbugs, Silverites, and Satirists: Caricature and Humor in the Presidential Election of 1896". Journal of American Culture 1988 11(2): 1–8. ISSN 0191-1813
- ISBN 9780226398259.
- Jones, Stanley L. (1964). The Presidential Election of 1896.
- Littlefield, Henry M., 1964, "The Wizard of Oz: Parable on Populism", American quarterly, Vol. 16, No. 1, Spring, pp. 47–58.
- Angela Redish, "Bimetallism"
- Rockoff, Hugh, 1990, "The Wizard of Oz as a monetary allegory", Journal of Political Economy, Vol. 98, No. 4, August, pp. 739–760. in JSTOR
- Velde, Francois R. "Following the Yellow Brick Road: How the United States Adopted the Gold Standard" Economic Perspectives. Volume: 26. Issue: 2. 2002.
- Richard Hofstadter (1996). "Free Silver and the Mind of "Coin" Harvey". ISBN 0-674-65461-7.
External links
- The Bimetallic Standard, a series of pages on bimetalism from Micheloud & cie.
- Speeches before the 51st Congress (1889–1891) regarding "free silver", digitized and available on FRASER (Federal Reserve Archival System for Economic Research).
- Speeches before the 52nd Congress (1891–1893) regarding "free silver", digitized and available on FRASER (Federal Reserve Archival System for Economic Research).
- Speeches before the 53rd Congress (1893–1895) regarding "free silver", digitized and available on FRASER (Federal Reserve Archival System for Economic Research).
- The French Crime of 1873: An Essay on the Emergence of the International Gold Standard, 1870–1880 (PDF)