MONETISING SILVER.

Star (Christchurch), Volume LXIV, Issue 740, 19 April 1933, Page 6

MONETISING SILVER.

BIMETALLISM, or the monetisation of silver, which is now in the forefront of discussions on the inflation of American currency, is a system under which both gold and silver are freely received by the mint, and are equally available as legal tender. The establishment of a definite ratio in value between the two metals—the old American ratio in which one ounce of gold equals sixteen ounces of silver —is what is known as rated bimetallism. Bimetallism has had its ups and downs for a century and a half, but has seldom been in favour in England. The collapse of the movement, about the beginning of this century, was traceable to the adoption of the gold standard by so many countries, the great increase in the output of gold, the difficulties surrounding any attempt to establish a common ratio where the interests of the different countries arc so opposed, and the great expansion of trade and industry concomitantly with the wider adoption of the gold standard. Nevertheless, the possession by both gold and silver of all the qualities needed in money has been forcibly put by Cantillon when he says that “ gold and silver alone are of small volume, of equal goodness, easy of transport, divisible without loss, easily guarded, beautiful and brilliant, endurable almost to eternity.” It has even been maintained that to proscribe silver by law from being used as money is a violation of the nature of things. That may be debatable, but it may be conceded that the scarcity of gold greatly strengthens the case for the monetisation of silver, and the attitude of the other great Powers to America’s proposals—assuming that these proposals are definite —may not be unsympathetic.